BABU LAL JAT, Jaipur V. ITO, BEHROR

ITA 302/JPR/2011

• Counselvise Citation: 30223114 RSA 2011
• Duration Of Justice: 6 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-10-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2005-2006
• Appeal Filed On: 01-04-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ROSHANTA MEENA
• Section: 68

Judgement Text

1 ITA 302(2)-11 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH A JAIPUR. ( BEFORE SHRI R.K. GUPTA AND SHRI N.L. KALRA ) ITA NO. 302 & 303/JP/2011 ASSTT. YEARS : 2005-06 & 06-07. SHRI BABU LAL JAT VS. THE INCOME-TAX OFFICER, S/O MUSA RAM JAT, VILLAGE : BHAINSLANA, BEHROR. TEHSIL : KOTPUTLI, DIST. JAIPUR. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SATISH GUPTA RESPONDENT BY : MS. ROSHANTA MEENA DATE OF HEARING : 27.09.2011 DATE OF PRONOUNCEMENT : 14.10.2011. ORDER DATED : 14/10/2011. PER R.K. GUPTA, J.M. THESE ARE TWO APPEALS BY ASSESSEE AGAINST THE ORDE RS OF LD. CIT (A) RELATING TO ASSESSMENT YEARS 2005-06 AND 06-07. 2. IN ASSESSMENT YEAR 2005-06 THE ASSESSEE HAS OBJE CTED IN CONFIRMING THE ADDITION OF RS. 56,844/- ON ACCOUNT OF LOW HOUSEHOLD WITHDRA WAL. 3. DURING THE ASSESSMENT PROCEEDINGS, THE AO NOTICE D THAT THE ASSESSEE HAS SHOWN HOUSEHOLD EXPENSES OF RS. 45,600/- WHICH INCLUDES L IC PREMIUM OF RS. 18,444/-. THE AO NOTICED THAT THERE ARE FOUR MEMBERS IN THE FAMIL Y WHICH INCLUDES WIFE AND TWO CHILDREN. HE FURTHER OBSERVED THAT THE CHILDREN ARE MINOR AND STUDYING IN NON-GOVERNMENT SCHOOL, AND AS THERE ARE SO MANY OTHER EXPENSES LIK E FEES, DRESS, BOOKS, NOTE BOOKS ETC., 2 THE EXPENDITURE SHOWN BY ASSESSEE IS NOT SUFFICIENT FOR HOUSEHOLD EXPENSES. ACCORDINGLY, HE ESTIMATED RS. 9,000/- PER MONTH WHICH RESULTED I N AN ADDITION OF RS. 80,884/-. IT WAS SUBMITTED BEFORE LD. CIT (A) THAT ASSESSEE BEING AG RICULTURIST, DID NOT INCUR ANY EXPENDITURE ON VEGETABLES AND CEREALS. NO RENT WAS PAID BY FAMILY, BEING THE FAMILY IS LIVING IN ANCESTRAL HOUSE. THE FAMILY IS LEADING A VERY SIMPLE LIVING STANDARD. REGARDING MAINTAINING BOLERO CAR, IT WAS STATED THAT THIS IS NOT A CAR BUT A JEEP AND IS BEING FULLY USED IN BUSINESS OF RUNNING OF TRUCKS ONLY. IT WAS ALSO SUBMITTED THAT THE CHILDREN ARE GOING IN GOVERNMENT SCHOOL AND NOT IN NON-GOVERNMEN T SCHOOL AND THE EDUCATIONAL EXPENSES WERE LESS THAN RS. 2000/- FOR BOTH THE CHI LDREN FOR FULL YEAR. THE ASSESSEE HAS NOT ORGANIZED ANY SOCIAL FUNCTION DURING THE YEAR U NDER CONSIDERATION. KEEPING IN MIND ALL THESE FACTS, THE LD. CIT (A) WAS OF THE VIEW TH AT IF HOUSEHOLD EXPENSES IS RESTRICTED TO RS. 7000/- PER MONTH, THAT WILL MEET THE ENDS OF JU STICE. IN THIS WAY, RELIEF OF RS. 24,000/- WAS ALLOWED BY LD.CIT (A). 4. THE CONTENTIONS RAISED BEFORE LD. CIT (A) WERE R EITERATED HERE BEFORE THE TRIBUNAL BY LD. A/R. 5. ON THE OTHER HAND, THE LD. D/R PLACED RELIANCE O N THE ORDER OF LD. CIT (A). 6. AFTER CONSIDERING THE ORDER OF LD. CIT (A), WE A RE OF THE VIEW THAT HOUSEHOLD WITHDRAWAL ESTIMATED BY LD. CIT (A) IS ON HIGHER SI DE. NO MATERIAL WHATSOEVER HAS BEEN BROUGHT ON RECORD TO HOLD THAT ASSESSEE IS ENJOYING A LEVISH STYLE OF LIVING. THE ASSESSEES FAMILY IS LIVING IN VILLAGE AND BOTH THE CHILDREN, WHO ARE MINOR, STUDYING IN GOVERNMENT SCHOOL. THEREFORE, WE ARE OF THE VIEW THAT IF HOUSE HOLD EXPENSES ARE ESTIMATED AT RS. 3,500/- PER MONTH THAT WILL MEET THE ENDS OF JUSTIC E. IN THIS WAY ASSESSEE WILL GET RELIEF OF 3 RS. 40,000/- OVER AND ABOVE THE RELIEF ALLOWED BY L D. CIT (A). THE REMAINING AMOUNT OF RS. 14,000/- OR SO IS SUSTAINED. 7. NEXT ISSUE IS AGAINST SUSTAINING THE ADDITION OF RS. 6,81,764/- UNDER SECTION 69. 8. DURING THE ASSESSMENT PROCEEDINGS, THE AO NOTICE D THAT ASSESSEE IS AN INDIVIDUAL, WHO DRIVES INCOME FROM TRUCK HIRING. THE AO NOTICED THAT ASSESSEE HAS SHOWN INCOME OF RS. 1,29,500/- UNDER SECTION 44AE OF THE ACT. IT W AS OBSERVED BY AO THAT FROM THE BALANCE SHEET ENCLOSED WITH THE INCOME-TAX RETURN, IT IS SEEN THAT ASSESSEE HAS PURCHASED TWO TRUCKS AND ONE BOLERO CAR IN THE RELEVANT ASSES SMENT YEAR. ON QUERY IT WAS SUBMITTED THAT TRUCK NO. HR 47-A-0689 AND TRUCK NO. HR 47-B-0 689, TROLLEY FOR BOTH THE TRUCKS WERE PURCHASED FROM SHRI QUAYUM BHAI KABADI, RAWAN KA MAIDAN, NASIRABAD. HOWEVER, NO BILL WAS AVAILABLE WITH THE ASSESSEE. THE ASSESSEE WAS REQUIRED TO PRODUCE SHRI QUAYUM BHAI FOR VERIFICATION. HOWEVER, IT WAS SUBMITTED THAT ASSESSEE IS UNABLE TO CONTACT SHRI QUAYUM BHAI AS HE WAS NOT AVAILABLE. THE AO NOTICED THAT THE TRUCK CHASSIS WAS PURCHASED AND ASSESSEE HAS SHOWN LOAN OF RS. 11 LACS ON PURCHASE OF TRUCK NO. HR- 47-A-0689. HOWEVER, AO WAS NOT SATISFIED WITH THE EXPLANATION AND HE DEPUTED HIS INSPECTOR FOR VERIFYING THE ACTUAL EXPENDITURE INCU RRED BY THE ASSESSEE ON TRUCK BODY, TROLLEY ETC. THE AO ESTIMATED THE INVESTMENT IN TH IS TRUCK AT RS. 15,25,882/- ON THE BASIS OF REPORT OF INSPECTOR WHO MADE SURVEY IN THE AREA AND ENQUIRY WAS MADE FROM CARPENTER OF KOTPUTLI, SHAHPURA AND PAOTA WHO SUGGESTED INVES TMENT IN CABIN AND BODY AT RS. 5,30,000/- AND RS. 5,45,000/- ON CABIN AND BODY/TRO LLEY/PLATFORM. IT WAS ALSO STATED IN THE REPORT THAT RATES WERE SAME BEFORE ONE YEAR ALS O AND BECAUSE WOOD AND IRON MAINLY USED IN CABIN AND IT WAS GIVEN ON THE BASIS OF INQU IRY MADE FROM CARPENTER OF KOTPUTLI, SHAHPURA AND PAOTA. THE AO NOTED THAT THERE IS A D IFFERENCE IN VESTMENT SHOWN BY 4 ASSESSEE. THEREFORE, HE DREW AN INFERENCE AND IN TH IS WAY AN ESTIMATED OF RS. 15,25,882/- WAS MADE IN RESPECT TO THIS TRUCK. SIMILARLY ESTIM ATE WAS MADE FOR ANOTHER TRUCK AT RS. 15,25,882/- AGAINST WHICH INVESTMENT WAS SHOWN BY A SSESSEE AT RS. 12,85,000/-. ON THE SAME BASIS, INVESTMENT IN BOLERO JEEP WAS ALSO ESTI MATED BY AO AT RS. 4,50,900/- AGAINST INVESTMENT SHOWN BY ASSESSEE AT RS. 4,35,90 0/-. IN THIS WAY A TOTAL ADDITION OF RS.6,81,764/- WAS MADE BY THE AO ON ACCOUNT OF TWO TRUCKS AND ONE BOLERO JEEP. 9. DETAILED SUBMISSIONS WERE FILED BEFORE LD. CIT ( A). THE BILL OF CHASSIS, INSURANCE, REGISTRATION, CABIN MAKING ETC. WERE FIL ED TOTALING TO RS.11,00,000/- AND SIMILARLY THE TOTAL OF THESE ITEMS FOR ANOTHER TRUC K I.E. HR 47-B-0689 WAS STATED TO BE RS. 12,85,000/-. IT WAS SUBMITTED THAT AO HAS VALUED T HE INVESTMENT ON HIGHER SIDE I.E. AT RS. 15,25,882/- FOR BOTH THE TRUCKS AND BOLERO JEEP AT RS. 4,50,900/-. IT WAS EXPLAINED THAT THE INSPECTOR WHO MADE ENQUIRY AFTER TWO YEARS OF P URCHASE OF TRUCKS AND ENQUIRY WAS MADE FROM A THIRD PARTY FROM WHOM TRUCK WAS NOT PUR CHASED. THE ENQUIRY WAS MADE ON THE BASIS OF RATES OF CURRENT YEAR AND, THEREFORE, THEY CANNOT BE RELIED UPON. IT WAS ALSO SUBMITTED THAT THE INSPECTORS REPORT NEITHER WAS C ONFRONTED TO THE ASSESSEE NOR ASSESSEE WAS ALLOWED ANY OPPORTUNITY FOR FILING THE REPLY IN RESPECT TO THE REPORT OF THE INSPECTOR. RELIANCE WAS PLACED ON THE DECISIONS OF ACIT VS. AM OLAK CHAND JAIN, 36 TAX WORLD 263 AND ACIT VS. RADHEY SHYAM GANESH LAL SARRAF, 26 TAX WORLD 313. AN AFFIDAVIT OF THE ASSESSEE IN RESPECT TO INVESTMENT MADE ON THE TRUCK S WAS ALSO FILED. IT WAS ALSO SUBMITTED THAT ASSESSEE DID NOT MAINTAIN PROPER BOO KS OF ACCOUNT, THEREFORE, PROFIT HAS BEEN SHOWN IN VIEW OF PROVISIONS OF SECTION 44AE. AFTER CONSIDERING THE SUBMISSIONS AND PERUSING THE MATERIAL ON RECORD, THE LD. CIT (A ) WAS NOT SATISFIED WITH THE 5 EXPLANATION OFFERED ON BEHALF OF THE ASSESSEE. ACC ORDINGLY THE ORDER OF AO WAS CONFIRMED. 10. SIMILAR CONTENTIONS WERE MADE BEFORE TRIBUNAL A S MADE BEFORE LD. CIT (A). A BRIEF WRITTEN NOTE WAS ALSO FILED. IT WAS SUBMITTE D THAT WITHOUT ALLOWING OPPORTUNITY TO CONTROVERT THE REPORT OF THE INSPECTOR, NO ADVERSE INFERENCE CAN BE DRAWN AGAINST ASSESSEE. IT WAS ALSO SUBMITTED THAT CONTENTS OF A FFIDAVIT FILED BY ASSESSEE WERE NOT FOUND INCORRECT AND, THEREFORE, THEY CANNOT BE BRUSHED AS IDE. RELIANCE WAS PLACED ON THE DECISIONS IN THE CASE OF MEHTA PAREEK & CO, 30 ITR 181 (SC), IN CASE OF KISHINCHAND CHELLA RAM, 125 ITR 713 (SC) AND ALSO ON THE DECISI ONS OF TRIBUNAL ON WHICH RELIANCE WAS PLACED BEFORE THE TRIBUNAL. 11. ON THE OTHER; HAND, THE LD. D/R PLACED RELIANCE ON THE ORDERS OF THE AO AND LD. CIT (A). 12. AFTER CONSIDERING THE SUBMISSIONS AND PERUSING THE MATERIAL ON RECORD, WE FIND THAT ASSESSEE DESERVES TO SUCCEED IN THIS GROUND. UNDISPUTEDLY, THE REPORT OF THE INSPECTOR WAS NOT CONFRONTED TO THE ASSESSEE BEFORE DRAWING ANY ADVERSE INFERENCE. IT IS ALSO A MATTER OF FACT THAT THE REPORT OBTAINED THRO UGH INSPECTOR WAS OBTAINED AFTER TWO YEARS OF FILING OF RETURN I.E. DURING ASSESSMENT PR OCEEDINGS AND WAS NOT OBTAINED FROM THE PERSON FROM WHOM THE TRUCKS WERE PURCHASED, RATHER THE REPORT WAS OBTAINED FROM THE OPEN MARKET TO ESTIMATE THE INVESTMENT IN THE TRUCK S SHOWN BY ASSESSEE. THEREFORE, THERE IS NO DIRECT EVIDENCE AGAINST ASSESSEE THAT ASSESSE E HAS INVESTED OVER AND ABOVE THE AMOUNT SHOWN IN THE BALANCE SHEET. THE HONBLE SUP REME COURT IN CASE OF KISHNICHAND CHELA RAM, 125 ITR 713 (SC) HAS CLEARLY HELD THAT W ITHOUT CONFRONTING THE MATERIAL ON WHICH BASIS THE ADDITION HAS BEEN MADE, NO ADVERSE INFERENCE CAN BE DRAWN AGAINST THE 6 PERSON AGAINST WHOM THE MATERIAL IS USED. ASSESSEE HAD FILED AFFIDAVIT SHOWING INVESTMENT IN THE TRUCKS AND DETAILS OF INVESTMENT WAS ALSO MENTIONED IN THE AFFIDAVIT. CONTENTS OF THE AFFIDAVIT WERE NOT FOUND INCORRECT BY BRINGING ANY POSITIVE MATERIAL ON RECORD. THEREFORE, IN OUR CONSIDERED VIEW THE ESTI MATE MADE BY AO IN RESPECT TO PURCHASE OF TWO TRUCKS AND A BOLERO JEEP OVER AND A BOVE THE INVESTMENT SHOWN BY ASSESSEE WAS NOT JUSTIFIED. ACCORDINGLY, THE ADDIT ION MADE BY AO AND CONFIRMED BY LD. CIT (A) AT RS. 6,81,764/- IS DELETED. THIS GROUND OF THE ASSESSEE IS ALLOWED. 13. REMAINING GROUND OF THE ASSESSEE IS AGAINST SUS TAINING ADDITION OF RS. 20,500/- OUT OF AGRICULTURAL INCOME IGNORING EVIDENCES. 14. THE ASSESSEE HAS SHOWN AGRICULTURAL INCOME OF R S. 30,500/- ON AGRICULTURAL LAND OF 2.25 BIGHA. THE ASSESSEE WAS ASKED TO FILE DETA ILS IN RESPECT TO AGRICULTURAL PRODUCE AND EXPENDITURE INCURRED. HOWEVER, NO DETAILS WERE FILED BUT ASSESSEE PRODUCED JAMABANDI. THEREFORE, THE AO HELD THAT THERE CANNO T BE AGRICULTURAL INCOME MORE THAN RS. 10,000/-. ACCORDINGLY REMAINING AMOUNT OF RS. 20,500/- WAS ADDED AS INCOME FROM OTHER SOURCES. THE LD. CIT (A) CONFIRMED THE ACTIO N OF THE AO. 15. AFTER CONSIDERING THE ORDERS OF THE AO AND LD. CIT (A) AND WRITTEN SUBMISSIONS FILED ON BEHALF OF THE ASSESSEE, IN OUR VIEW, THE E STIMATION OF AGRICULTURAL INCOME AT RS. 10,000/- IS ON LOWER SIDE AND IF WE HOLD THE ESTIMA TE OF AGRICULTURAL INCOME AT RS. 25,000/-, THAT WILL MEET THE ENDS OF JUSTICE. THE REMAINING AMOUNT OF RS. 5,500/- IS SUSTAINED ON ACCOUNT OF INCOME FROM OTHER SOURCES. 16. IN THE APPEAL FOR ASSESSMENT YEAR 2006-07, THE FIRST GROUND IS AGAINST SUSTAINING RS. 1,33,932/- UNDER SECTION 68 ON ACCOUNT OF INVES TMENT IN THE TRUCK BODY WHICH WAS BASED ON THE BASIS OF INSPECTORS REPORT. 7 17. SIMILAR ADDITION WAS MADE IN EARLIER YEAR AND W E HAVE DELETED THE ADDITION BY HOLDING THAT THE ADDITION MADE ON THE BASIS OF INSP ECTORS REPORT WHICH WAS NOT CONFRONTED TO THE ASSESSEE CANNOT BE BASIS FOR DRAW ING ANY ADVERSE INFERENCE AGAINST THE ASSESSEE. SINCE FACTS ARE SIMILAR IN THE YEAR UNDE R CONSIDERATION ALSO AS THE ADDITION HAS BEEN MADE AND SUSTAINED ON THE BASIS OF INSPECTORS REPORT, THEREFORE, ON THE REASONING GIVEN BY US WHILE DISPOSING THE GROUND FOR ASSESSME NT YEAR 2005-06 THE ADDITION IS DELETED. 18. REMAINING GROUND IS AGAINST SUSTAINING THE ADDI TION OF RS. 22,100/- OUT OF AGRICULTURAL INCOME. 19. SIMILAR GROUND WAS INVOLVED IN THE EARLIER YEAR . WE HAVE SUSTAINED THE ADDITION OF RS. 5,500/-. THEREFORE, ON THE SAME REASON HERE ALSO WE SUSTAIN THE ADDITION OF RS. 5,500/- FOR THE YEAR UNDER CONSIDERATION. 20. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED IN PART. 21. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 14 .10.2011. SD/- SD/- ( N.L. KALRA ) ( R.K. GUPTA ) ACCOUNTANT MEMBER JUDICIAL MEMBER JAIPUR, D/ COPY FORWARDED TO :- SHRI BABU LAL JAT, KOTPUTLI, DIST. JAIPUR. THE ITO BEHROR. THE CIT (A) THE CIT THE D/R GUARD FILE (ITA NO. 302(2)/JP/2011) BY ORDER, AR ITAT JAIPUR. 8