Shri Maheshbhai H. Pansora, RAJKOT-GUJARAT V. The Dy. Commr. of Income Tax, Cir.-2(3), RAJKOT-GUJARAT

ITA 34/RJT/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 1318 (ITAT-RAJKOT)
• Duration Of Justice: 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-04-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 07-04-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 21-01-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: DM RINDANI
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH , RAJKOT BEFORE: S H RI ANIL CHATURVEDI , ACCOUNTANT MEMBER AND SHR I S. S. GODARA , JUDICIAL MEMBER [CONDUCTED THROUGH E - COURT AT AHMEDABAD] SHRI MAHESHBHAI HIMATLAL PANSORA LAV - KUSH, 12, SHARDANAGAR KALAWAD ROAD, STREET NO. 3, RAJKOT PAN: ACPPP6286L (APPELLANT) VS THE DCIT, CIRCLE - 2(3), RAJKOT (RESP ONDENT) REVENUE BY : S H RI PRASOON KABRA , D . R. ASSESSEE BY: S H RI D.M. RINDANI , A.R. DATE OF HEARING : 07 - 04 - 2 016 DATE OF PRONOUNCEMENT : 29 - 04 - 2 016 / ORDER P ER : S. S. GODARA , JUDICIAL MEMBER : - THI S ASSESSEE S APPEAL FOR A.Y. 2008 - 09 , AR ISES FROM ORDER OF THE CIT(A) - 2, RAJKOT DATED 30 - 12 - 2015 IN APPEAL NO. CIT(A) - I T A NO . 34 / RJT /20 16 A SSESSMENT YEAR 200 8 - 09 I.T.A NO. 34 /RJT /20 16 A.Y. 2008 - 09 PAGE NO SHRI MAHESHBHAI H. PANSORA VS. DCIT 2 2/0161/2014 - 15 , IN PROCEEDINGS UNDER SECTION 143(3) R.W.S. 147 OF THE INCOME TAX AC T, 1961; IN SHORT THE ACT . 2. ASSESSEE S TWIN SUBSTANTIVE GROUNDS CHALLENGE TO VALIDITY OF THE IMPUGNED REOPENING FOLLOWED BY HIS PLEA THAT BOTH THE LOWER AUTHORITIES HAVE ERRED IN MAKING UNDISCLOSED INCOME ADDITION OF RS. 2 LACS OF HOUSEHOLD EXPENDITU RE. THE FORMER LEGAL GROUND IS NOT PRESSED IN THE COURSE OF HEARING. WE ACCORDINGLY COME TO THE MERITS OF THE CASE. 3. THIS ASSESSEE IS STATED TO BE A MEDICAL OFFICER IN STATE GOVERNMENT. HE FILED HIS RETURN ON 09 - 07 - 2008 ADMITTING INCOME OF RS. 7,9 1,350/ - . THE SAME STOOD PROCESSED. THE ASSESSING OFFICER THEREAFTER FORMED AN OPINION ON REASONS TO BELIEVE THAT THE ASSESSEE S INCOME LIABLE TO BE ASSESSED HAD ESCAPED ASSESSMENT. HIS REASON WAS THAT AT THE TIME OF ORIGINAL STATEMENT ASSESSEE S CASH FL OW STATEMENT WOULD SHOW AGGREGATE DEPOSIT OF RS. 15,17,500/ - FOLLOWED BY WITHDRAWAL OF RS. 15,55,400/ - AND CLOSING BALANCE OF RS. 37,900/ - . HE NOTICED ALLEGED HUGE CASH DEPOSIT IN BANK ACCOUNT , MORE PARTICULAR ON 24 - 01 - 2008 OF RS. 1,50,000/ - AND DATED 28 - 01 - 2008 TO THE TUNE OF RS. 49,000/ - HE WAS OF THE VIEW THAT ALL THIS RESULTED IN NEGATIVE FIGURE OF ASSESSEE S CASH IN HAND. THE ASSESSING OFFICER TOOK NOTE OF THE FACT THAT THE ASSESSEE HAD INCURRED HOUSEHOLD EXPENDITURE OF RS. 2 LACS IN THE RELEVANT PRE VIOUS YEAR WHICH INDICATED THAT THE SAME WAS MET FOR UNDISCLOSED INCOME. THE ASSESSEE FAILED IN CONVINCING THE ASSESSING OFFICER ABOUT SOURCE OF I.T.A NO. 34 /RJT /20 16 A.Y. 2008 - 09 PAGE NO SHRI MAHESHBHAI H. PANSORA VS. DCIT 3 THE EXPENDITURE EVEN AFTER PLACING ON RECORD THE CASH FLOW STATEMENT AND DOCUMENTS . ALL THIS RESULTED IN THE IMPUGNED ADDITION OF RS. 2 LACS BEING MADE IN RE - ASSESSMENT FRAMED ON 20 - 11 - 2014. 4. THE CIT(A) HAS DECLINED ASSESSEE S ARGUMENT BY HOLDING AS UNDER: - 6. CONSIDERING THE ABOVE FACTUAL AS WELL AS LEGAL POSITION OF THE CASE, YOUR APPELLANT PRAYS FOR CONSID ERING THE EXPLANATION FURNISHED DURING THE COURSE OF ASSESSMENT PROCEEDINGS, COPIES FURNISHED TO YOUR HONOUR AS ABOVE, AND REQUESTED FOR QUASHING THE PROCEEDINGS AND DELETE THE ADDITION OF RS.2,00,000/ - . THEREFORE, YOUR HONOUR IS REQUESTED TO KINDLY DELETE THE ADDITION BY QUASHING THE PROCEEDINGS AND REQUESTED TO STAND THE ORIGINAL ASSESSMENT MADE U/S 143(3) OF THE ACT. 1. REGARDING HOUSEHOLD EXPENSE, IT IS TO SUBMIT THAT I HAVE MY OWN RESIDENTIAL HOUSE AT RAJKOT AND THEREFORE, I HAVE NOT INCURRED ANY EXP ENDITURE FOR HOUSE RENT. IN MY FAMILY, I AM FOUR FAMILY MEMBERS. I HAVE NO ANY FOUR WHEEL VEHICLE. I AM HAVING ONE SCOOTER ONLY. THEREFORE, THERE IS NO NEED TO EXPENDITURE FOR PETROL AND OTHER. CONSIDERING THE ABOVE FAMILY BACKGROUND, THERE WAS ONLY AROUND RS.10,000/ - FOR HOUSEHOLD EXPENDITURE FOR A MONTH, WHICH WAS ALREADY SUBMITTED DURING THE COURSE OF ASSESSMENT PROCEEDINGS BEFORE THE AO. 2. CASH FLOW STATEMENT FOR THE AGGREGATE DEPOSIT OF RS.15,17,500/ - AND AGGREGA TE WITHDRAWALS OF RS. 15,55,400/ - SHO WS A CL OSING BALANCE OF ONLY RS.37,900/ - . FOR THIS, I HAVE ALREADY SUBMITTED A CASH FLOW STATEMENT FOR THE A.Y.2007 - 08 (FY 2006 - 07) IN WHICH, IT CAN BEEN SEEN THAT ON 01.06.2006 - RESERVE FOR HOUSEHOLD EXP. OF RS.50,OQO/ - , ON 28.08.2006 - RESERVE FOR HOUSEH OLD EXP. OF RS.25,0007 - AND ON 15.10.2006 - RESERVE FOR HOUSEHOLD EXP. OF RS.50,000/ - TOTALING TO RS.1,25,000/ - OVER AND ABOVE REGULAR WITHDRAWALS FOR HOUSEHOLD EXPENSES. THE COPY OF THE SAME HAS ALREADY BEE N SUBMITTED WITH YOUR HONOUR WITH MY SUBMISSI ON V IDE PAGE NO.21 TO 24. DURING THE YEAR UNDER CONSIDERATION , I HAVE BALANCE OF RS.1,57,900/ - AS ON 31. 01 .2008 FOR HOUSEHO LD E XPENSES. I.T.A NO. 34 /RJT /20 16 A.Y. 2008 - 09 PAGE NO SHRI MAHESHBHAI H. PANSORA VS. DCIT 4 CONSIDERING THE ABOVE FACTS, IT I S SUBMITTED THAT RS. 1,25,000/ - + RS.1,57, 900/ - = RS. 2, 82,900/ - BALANCE FOR HOUE HOLD EXPENSES. 3. I N VIEW OF THE ABOVE FACTUAL POSITION, IT IS SEEN BY YOUR HONOUR THAT I HAVE INCURRED HOUSEHOLD EXPENDITURE FROM RS. 2, 82, 900/ - AND NO OTHER EXPENDITURE INCURRED FOR HOUSEHOLD EXPENSES FROM OTHER SOURCES. IT IS, THEREFORE, PRAYED THAT YOUR HONOUR IS KINDLY REQUESTED TO DELETE THE ADDITION OF RS. 2, 00, 000/ - MADE ON ACCOUNT OF UNDISCLOSED HOUSEHOLD EXPENDITURE. ALTERNATIVELY, I HAVE OBJECTED THE REOPENING PROCEEDINGS AT THE ASSESSMENT STAGE AS WELL AS DURING THE PRESENT PROCEEDINGS. THEREFOR E, YOUR HONOUR IS REQUESTED TO CONSIDER MY EARLIER SUBMISSION AS WELL AS FURTHER SUBMISSION WHILE DECIDING THE MATTER IN TOTO. 5. DECISION: I HAVE CONSIDERED THE ISSUE INVOLVED SUBMISSIONS OF THE APPELLANT AND DISCUSSIONS MADE IN THE ASSESSMENT ORDER. TH E ASSESSING OFFICER NOTICED FROM THE CASH FLOW STATEMENT OF THE ASSESSEE REFLECT THE AGG REGATE DEPOSIT OF RS.15, 17,500/ - AND AGGREGATE WITHDRAWAL OF RS. 15,05,400/ - WITH A CLOSING BALANCE OF RS.37, 900/ - . THE ASSESSING OFFICER HAS FURTHER OBSERVED INSTANCE S OF CASH DEPOSIT OF RS.1, 50,000/ - AND RS.49,000/ - ON 24 - 01 - 2008 AND ON 28 - 01 - 2008 RESPECTIVELY, RESULTING IN NEGATIVE CASH BALANCE IN THE HANDS OF THE ASSESSEE. THE ASSESSING OFFICER HAS FURTHER POINTED OUT THAT THE ASSESSES HAS ALSO CLAIMED AN EXPENDITU RE OF RS.2, 00,000/ - AGAINST HOUSEHOLD EXPENSES BUT FAILED TO EXPLAIN THE SOURCE. ACCORDINGLY, THE ASSES SING OFFICER CONTENDED THAT THE ASSESSEE HAS MADE THE HOUSEHOLD EXPENSES FROM UNDISCLOSED SOURCES AS NONE OF THE CASH WITHDRAWALS HAS BEEN USED TOWARDS HOUSEHOLD EXPENSES. THE APPELLANT CLAIMED HOUSEHO LD EXPENDITURE OF RS. 2, 00,000/ - BUT DIDN'T PRODUCE DOCUMENTARY EVIDENCES OF THE SOURCES TO MEET OUT THE SAID HOUSEHOLD EXPENSES EITHE R IN THE COURSE OF ASSESSMENT PROC EEDINGS OR IN THE APPELLATE PROCEEDIN GS. SINC E THE APPELLANT HAS PRODUCED ANY DOCUMENTARY EVI DENCES IN SUPPORT OF CLAIM OF HOUSEHOLD EXPENSES DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND AGAINST THE FINDING OF THE ASSESSING OFFICER ON THE ISSUE. IN THE OF APPELLANT CASE THE FACT MATERIAL IS THAT THERE WERE NO EVIDENCE TO EXPLAIN THE SOURCE OF ACCOUNTED FUNDS AVAILABLE TO MEET OUT THE HOUSEHOLD EXPENSES AS DISCUSSED ABOVE. I.T.A NO. 34 /RJT /20 16 A.Y. 2008 - 09 PAGE NO SHRI MAHESHBHAI H. PANSORA VS. DCIT 5 AC CORD ING THE AO HAS ASSESSED THE SAID EXPENSES AS INCOME FROM UNDISCLO SED SOURCES. CO NSIDERING THE FACTS OF THE CASE, I UPHELD THE DECISION OF THE ASS ESSING OFFICER AND REJECT THE CONTENTION OF THE APPE LLANT. THE GROUND OF APPEAL IS DISMI SSED. 5. WE HAVE HEARD BOTH SIDES. RELEVANT FACTS NARRATED IN THE PRECEDING PARAGR APHS ARE NOT REPEA TED FOR THE S AKE OF BREVITY. S UFFICE TO SAY, BOTH THE LOWER AUTHORITIE S HAVE ADDED THE IMPUGNED SUMS OF RS. 2 LACS BY HOLDING THAT THE SAME HAS BEEN MET FROM UNDISCLOSED SOURCES. THE ASSESSEE STRONGLY ARGUES INTER ALIA THAT TH E RE IS NO DISPUTE ABOUT HIS BEING A SALARIED EMPLOYEE. HE INVITES OUR ATTENTION TO PAGES 22 TO 23 OF HIS CASH FLOW STATEMENT FORMING PART OF PAGE 7 OF THE LOWER APPELLATE ORDER AS EXTRACTED HEREINABOVE. IT IS STATED THAT THE SAME MAKES IT CLEAR THAT THE ASSESSEE HAD WITHDRAWN AN A MOUNT OF RS. 1,20,000/ - FOR MEETING THE IMPUGNED HOUSEHOLD EXPENDITURE AND THE BALANCE SUM OF RS. 80,000/ - HAS COME FROM PAST SAVING. THE REVENUE FAILS IN REBUTTING THESE FACTS BY TAKING US TO THE ASSESSEE S CASH FLOW STATEMENT REFERRED HEREINABOVE . WE F IND THAT THE CIT(A) HAS ALSO NOT SPECIFICALLY DEALT WITH ALL INSTANCES OF ASSESSEE S WITHDRAWALS AND DEPOSITS IN QUESTION. HE HAS SIMPLY AFFIRMED ASSESSING OFFICER S WITHOUT GIVING ANY INDEPENDENT FINDINGS. IT HAS COME ON RECORD THAT THIS ASSESSEE IS A S ALARIED EMPLOYEE. WE DEEM IT A FIT CASE FOR ACCEPTING HIS PLEA THAT THE ABOVE STATED SUM OF RS. 80,000/ - REPRESENTS HIS PAST SAVINGS KEEPING HIS SOCIO - ECONOMIC STATUS. WE TAKE INTO ACCOUNT ALL THESE FACTS AND CIRCUMSTANCES TO HOLD THAT THE IMPUGNED HOUSE HOLD EXPENDITURE OF RS. 2 LACS HAS NOT COME FROM UNDISCLOSED SOURCES INCOME. THE CORRESPONDING ADDITION IS ACCORDINGLY DELETED. I.T.A NO. 34 /RJT /20 16 A.Y. 2008 - 09 PAGE NO SHRI MAHESHBHAI H. PANSORA VS. DCIT 6 6. THIS ASSESSEE S APPEAL IS PARTLY ALLOWED. ORDER PR ONOUNCED IN THE OPEN C OUR T ON 29 - 04 - 201 6 SD/ - SD/ - (ANIL CHATURVEDI ) ( S. S. GODARA ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD : DATED 29 /04 /2016 AK / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, RAJKOT