Umesh Kumar, New Delhi V. ITO, New Delhi

ITA 394/DEL/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 61685 (ITAT-DELHI)
• Duration Of Justice: 3 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-05-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Assessment Year: 2008-2009
• Appeal Filed On: 25-01-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR B R R KUMAR
• Keywords: Unexplained cash credit; Business income; Source of fund
• Section: 80C; 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH `H NEW DELHI BEFORE SHRI A.N. PAHUJA, ACCOUNTANT MEMBER AND SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER I.T.A.NO.394/DEL/2012 ASSESSMENT YEAR : 2008-09 SHRI UMESH KUMAR, VS INCOME TAX OFFICER, 7/16, 3 RD FLOOR, WARD 33(3 ), EAST PATEL NAGAR, NE W DELHI. NEW DELHI. (PAN AALPK7503R) (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI K.V.S. GUPTA RESPONDENT BY : DR. B.R.R. KUMAR, SR. DR O R D E R PER CHANDRA MOHAN GARG, JUDICIAL MEMBER THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST T HE ORDER OF THE LD. CIT(A) DATED 11.10.2011 CONFIRMING THE ORDER OF THE ASSESSING OFFICER DATED 21.12.2010 BY WHICH, BESIDES THE OTHER ADDITIONS, T HE AO MADE AN ADDITION OF RS.1,63,000 BY OBSERVING THAT THE ASSESSEE DID N OT HAVE SUBSTANTIAL WITHDRAWALS TO SUPPORT THE HOUSEHOLD EXPENDITURE. 2. THE GROUNDS OF APPEAL ARE OF DESCRIPTIVE AND ARG UMENTATIVE NATURE, THEREFORE, WE DRAW THE ATTENTION OF THE AR TOWARDS THIS OBSERVATION. THE AR AGREED THAT THE SOLE AND MAIN GROUND HAS BEEN ME NTIONED IN PARA ONE OF ITA NO.394/DEL/2012 2 THE GROUNDS OF APPEAL AND REMAINING PART IS REJEC TED UNDER RULE 8 OF THE ITAT RULES. THE SOLE GROUND READS AS UNDER:- THE LD. CIT(A) WHILE DISPOSING OF THE APPEAL HAS ERRED BOTH ON LAW AND IN THE FACTS AND CIRCUMSTANCES OF T HE CASE IN UPHOLDING THE ADDITION OF RS.1,63,000/- MADE BY THE ASSESSING OFFICER ON IMAGINARY AND WHIMSICAL GROUND S, ON ACCOUNT OF LOW WITHDRAWALS FOR HOUSEHOLD EXPENSES. 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSING OFFICER CONCLUDED THE ASSESSMENT WITH THE REMARKS AND ADDIT IONS AS UNDER:- WITH THESE REMARKS THE INCOME OF THE ASSESSEE COMP UTED AS UNDER: - INCOME DECLARED RS. 1,23,770/- 1. ADDITION ON ACCOUNT OF UNEXPLAINED CREDITS AS DISCUSSED IN PARA NO. 2 RS. 72,128/ - 2. ADDITION ON ACCOUNT OF LOW HOUSEHOLD WITHDRAWALS AS DISCUSSED IN PARA NO. 3 RS. 1,63,00 0/- 3. ADDITION AS NO DETAILS GIVEN IN RESPECT OF BUSINESS INCOME EARNED FROM M/S MITUIS RUBIA SHOP AND TO COVER UP ANY POSSIBLE LEAKAGE IN THE REVENUE AS DISCUSSED IN PARA NO. 4 RS. 1,50 ,000/- 4. ADDITION ON ACCOUNT OF INTEREST INCOME EARNED ON SAVING A/C MAINTAINED WITH ICICI BANK LTD. AS DISCUSSED IN PARA NO. 5 RS. 879/- 5. ADDITION ON A/C OF NO EVIDENCE OF DEDUCTION U/S 80C AS DISCUSSED IN PARA NO. 6 RS. 6,22 0 /- TAXABLE INCOME RS. 5,15,997 /- ROUNDED OFF RS. 5,16,000/- ASSESSED AT RS. 5,16,000/-. ISSUE NECESSARY FORMS. CHARGE INTEREST U/S 234A, 234B AND 234D. INITIATED PENALTY PROCEEDINGS U/S 2 71(1)(C) OF THE I.T. ACT, 1961. ITA NO.394/DEL/2012 3 4. BEING AGGRIEVED BY THE ABOVE ASSESSMENT ORDER, T HE ASSESSEE INVOKED THE CIT(A) AND HE DELETED THE ADDITION PERTAINING T O UNEXPLAINED CREDIT AND BUSINESS INCOME OF THE ASSESSEE BUT ON THE OTHER HA ND, HE CONFIRMED THE ADDITION PERTAINING TO LOW HOUSEHOLD EXPENDITURE WI THDRAWALS AMOUNTING TO RS.1,63,000, INTEREST FROM SAVING BANK ACCOUNT OF R S.879/- AND ON ACCOUNT OF INABILITY OF THE ASSESSEE TO FURNISH ANY DOCUMEN TARY EVIDENCE TO SUBSTANTIATE THE ALLOWANCE OF RS.6220/- U/S 80C OF THE ACT AND, ACCORDINGLY, THE APPEAL OF THE ASSESSEE WAS PARTLY DISALLOWED BY THE LD. CIT(A). HENCE, THIS APPEAL BEFORE US BY THE ASSESSEE. 5. AT THE OUTSET, WE OBSERVE THAT THE ASSESSEE HAS NOT AGITATED CONFIRMATION OF ADDITION OF INTEREST OF RS.875/- IN THE BANK ACCOUNT OF THE ASSESSEE AND DISALLOWANCE OF RS.6220 REGARDING CLAI M U/S 80 OF THE ACT. THEREFORE, WE HOLD THAT THE ASSESSEE HAS NOTHING TO SAY, PER SE, NO OBJECTION REGARDING ABOVE ADDITIONS MADE BY THE AO AND CONFIR MED BY THE LD. CIT(A). 6. AS PER SOLE GROUND OF APPEAL, THE ASSESSEES REP RESENTATIVE SUBMITTED FOLLOWING ARGUMENTS BEFORE THE CIT(A) WHICH READ AS UNDER:- REGARDING THE ADDITION ON ACCOUNT OF LOW HOUSEHOLD EXPENSES OF RS. 1,63,000/- THE ASSESSEE I S SUBMITTING THE PROOF OF FILLING THE INCOME TAX RETU RN OF HIS FATHER AND MOTHER WHO ARE REGULAR ASSESSEE AND THE ASSESSEE IS THE ONLY SON JOINTLY LIVES WITH HIS PAR ENTS (ANNEXURE IV & V). FATHER IS RETIRED ADDITIONAL COMMISSIONER OF INCOME TAX AND HAVING PENSION AND OTHER SAVING INCOMES, HE HAS WITHDRAWN RS. 80,136/- ITA NO.394/DEL/2012 4 FROM HIS SAVING ACCOUNT (ANNEXURE III) AND RS. 1,08,000/- FROM POST OFFICE MONTHLY PLAN (ANNEXURE VI). THE MOTHER OF THE ASSESSEE HAS ALSO RENTAL INCOME O F RS. 1,86,000/- PER ANNUM AND OUT OF WHICH SHE HAS ALSO CONTRIBUTED FOR THE HOUSE HOLD FAMILY EXPENSE. SO T HE TOTAL AMOUNT USED BY ALL THE FAMILY OF 5 PERSONS I. E. (ASSESSEE HIMSELF, HIS WIFE, ONE CHILD. FATHERS M OTHER) AMOUNTING TO MORE THAN RS. 3.00 LACS IS SUFFICIENT FOR SUCH FAMILY. THE ASSESSEE HAS ALSO MADE THE PAYMEN T FOR THE SCHOOLING OF HIS ONLY DAUGHTER THROUGH THE BANK ACCOUNT SUBMITTED DURING THE PROCEEDING (BANYAN TRE E SCHOOL) WHICH HAS ALSO BEEN IGNORED BY THE LD. ITO. 7. ON OPENING OF APPEAL, THE AR ALSO SUBMITTED BEFO RE US THAT THE LD. CIT(A) HAS NOT PROPERLY APPRECIATED THE INFORMATION AND EVIDENCE PLACED BEFORE HER AS SHE CONSIDERED THE EVIDENCE RELATING TO CASH WITHDRAWALS OF RS.80136/- ONLY BUT SHE DID NOT NOTICE THE CASH WIT HDRAWAL OF RS.1,08,000 MADE BY THE FATHER OF THE ASSESSEE AND EVIDENCE OF POST OFFICE MIS PASS BOOK RELATED TO THE SAME WITHDRAWALS. THEREFORE, S HE IGNORED AND FAILED TO APPRECIATE THE FACT THAT THE TOTAL WITHDRAWALS MADE BY THE FATHER OF THE ASSESSEE WAS AMOUNTING TO RS.1,86,136/- WHICH ARE M UCH HIGHER THAN THE ESTIMATED AMOUNT OF RS.1,65,000 AS COMPUTED ON THE BASIS OF ESTIMATION BY THE AO. 8. THE AR ALSO SUBMITTED THAT THE FACT IS THAT THE APPELLANT DULY FILED A COPY OF THE POST OFFICE MIS PASS BOOK MARKED AS ANN EXURE VI BEFORE THE LD. CIT(A) WHICH CLEARLY REVEALS THE WITHDRAWALS OF RS.1,08,000 BUT ITA NO.394/DEL/2012 5 SOMEHOW THIS DOCUMENT ESCAPED THE NOTICE AND SIGHT OF THE LD. CIT(A) BUT SHE MENTIONED IN THE IMPUGNED ORDER THAT THE FATHER OF THE ASSESSEE RECEIVED INTEREST FROM POST OFFICE SAVINGS ACCOUNT. HE FURT HER SUBMITTED THAT THE MOTHER OF THE ASSESSEE HAS SUFFICIENT RENTAL INCOME AND SHE HAS ALSO MADE SUBSTANTIAL WITHDRAWALS TO MEET HOUSEHOLD EXPENDITU RE AND HER RETURN OF INCOME WAS ALSO FILED BEFORE LD. CIT(A). HOWEVER, THE ASSESSEE DID NOT FILE COPY OF THE PASS BOOK OF SAVING BANK ACCOUNT AS THE ASSESSEE CONSIDERED THAT THE LD. CIT(A) HAS FOUND THE WITHDRAWALS OF THE FAT HER OF ASSESSEE AS SUFFICIENT TO MEET THE HOUSEHOLD EXPENSES. THE AR CONCLUDED HIS ARGUMENT BY LASTLY SUBMITTING THAT THE LD. CIT(A) DID NOT TA KE CARE TO PROVIDE SET OFF OF RS.80,136/- DESPITE THE FACT THAT SHE ACCEPTED THE SAME WITH THE FINDING READ AS UNDER:- THEREFORE, THE WITHDRAWAL OF RS. 80,136/- MADE BY THE APPELLANTS FATHER FROM HIS BANK ACCOUNT IF AT ALL WERE ACCEPTED WAS FOR HOUSEHOLD, THE WITHDRAWAL MADE WAS NOT SUFFICIENT ENOUGH FOR MAINTAINING A FAMILY OF FIVE PERSONS. ACCORDINGLY I SEE NO JUSTIFICATION TO INTERFERE WIT H ADDITION MADE BY THE AO ON ACCOUNT OF LOW HOUSEHOLD WITHDRAW AL. IN VIEW OF THIS THE AOS OBSERVATION IS CORRECT THA T THE APPELLANT DID NOT HAVE SUBSTANTIAL WITHDRAWALS TO S UPPORT THE HOUSEHOLD EXPENDITURE AND THEREFORE ADDED AN AM OUNT OF RS. 1,63,000/-. SINCE IT IS A JUSTIFIED APPROAC H BY THE AO AND THE APPELLANT DID NOT FURNISH ANY MATERIAL CONTRADICTING THE SAME, NO INTERFERENCE IS MADE ON THIS ISSUE AND ADDITION MADE BY THE ASSESSING OFFICER IS HEREBY CONFIRMED. ITA NO.394/DEL/2012 6 9. REPLYING TO THE ABOVE ARGUMENTS, THE LD. DR SUPP ORTED THE ACTION OF THE AO AND ITS CONFIRMATION BY THE IMPUGNED ORDER R EGARDING ADDITION MADE ON ACCOUNT OF LOW WITHDRAWALS FOR HOUSEHOLD EXPENSE S. THE LD. DR ALSO SUBMITTED THAT THE ASSESSEE FAILED TO SUBSTANTIATE HIS ARGUMENTS REGARDING SUFFICIENT WITHDRAWALS OF AMOUNT TO MEET HIS HOUSEH OLD EXPENSES AS THE ASSESSEE DID NOT FURNISH THE COPIES OF FATHERS POS T OFFICE MIS ACCOUNT AND HIS MOTHERS BANK PASS BOOK STATEMENTS. ACCORDINGL Y, THE LD. CIT(A) WAS JUSTIFIED IN CONFIRMING THE ADDITION MADE BY THE AO IN THIS REGARD. 10. WE HAVE CONSIDERED RIVAL ARGUMENTS OF BOTH TH E PARTIES AND ALSO CAREFULLY PERUSED THE MATERIAL AND EVIDENCE PLACED BEFORE US ON THE RECORD. THE LD. DR DID NOT DISPUTE THE FACT THAT THE FAMILY OF THE ASSESSEE ALSO INCLUDES HIS MOTHER AND FATHER AND ALL RESIDE TOGET HER AS ONE JOINT FAMILY. IT IS ALSO NOT IN DISPUTE THAT THE FATHER OF THE ASSES SEE IS A RETIRED GOVERNMENT OFFICER, HAVING VARIOUS SOURCES OF INCOME SUCH AS P ENSION, RECEIPTS FROM MONTHLY INCOME SCHEME OF THE POST OFFICE AND INTERE ST THEREON AND THE MOTHER OF THE ASSESSEE HAVING RENTAL INCOME ALSO SU BMITS RETURN OF INCOME TO THE DEPARTMENT. 11. ON BARE READING OF THE IMPUGNED ORDER, WE OB SERVE THAT THE LD. CIT(A) TOOK NOTE OF WITHDRAWALS BY THE FATHER OF TH E ASSESSEE AMOUNTING TO RS.80,136 BUT HE DID NOT SET OFF THIS AMOUNT TOWARD S ESTIMATED HOUSEHOLD ITA NO.394/DEL/2012 7 EXPENSES. SHE ALSO NOTED THE FACT THAT THE FATHER OF THE ASSESSEE MADE MEAGER WITHDRAWALS FROM BANK ACCOUNT AND IT WAS ALS O SUBMITTED BEFORE HER THAT THE FATHER OF THE ASSESSEE ALSO OPERATES A POS T OFFICE MIS ACCOUNT AND THE MOTHER OF THE ASSESSEE IS DERIVING RENTAL INCOM E AND IS ALSO CONTRIBUTING TOWARDS THE HOUSEHOLD EXPENSES BUT THE LD. CIT(A) D ID NOT CONSIDER THE ABOVE SUBMISSION WITH A MENTION THAT NO EVIDENCE HA S BEEN FILED TO SUBSTANTIATE ABOVE ARGUMENTS. BUT THE AR CERTIFIED THE FACT THAT ALL THE PAPERS FILED IN THE PAPER BOOK SPREAD ON 73 PAGES W ERE ALSO FILED BEFORE THE LOWER AUTHORITIES MEANING THEREBY BEFORE THE LD. CI T(A) AND THE AO. THE LD. DR DID NOT DISPUTE THIS FACT THAT ALL PAPERS AV AILABLE IN THE PAPER BOOK WERE VERY WELL PLACED BEFORE THE LD. CIT(A) AND THE AO. 12. IN VIEW OF ABOVE AND IN THE FACTS AND CIRCUMSTA NCES OF THE CASE, WE OBSERVE THAT THE LD. CIT(A) FAILED TO CONSIDER AND APPRECIATE THE EVIDENCE PLACED BY THE ASSESSEE. SHE WAS ALSO NOT JUSTIFIED IN DISBELIEVING THE FACT THAT THE FATHER AND MOTHER OF THE ASSESSEE RESIDE W ITH THE ASSESSEE, THAT THEY HAVE SOURCES OF INCOME AND OUT OF THE INCOME, THEY ALSO MADE WITHDRAWALS FROM THEIR BANK AND POST OFFICE SAVING ACCOUNTS TO MEET HOUSEHOLD EXPENSES SUPPORTING THE ASSESSEE. IT IS WORTH MENTIONING TH AT EVERY FAMILY HAS ITS OWN STYLE OF LIVING AND MAKING HOUSEHOLD EXPENSES AND T HERE IS NO SPECIFIC TEST METHOD TO ESTIMATE HOUSEHOLD EXPENSES OF A FAMILY B UT THE TAXATION ITA NO.394/DEL/2012 8 AUTHORITIES MAY TAKE NOTE OF INCOME AND RESOURCES A VAILABLE TO THE FAMILY MEMBERS OF THE ASSESSEE IN QUESTION. IN THIS REGAR D, THEY HAVE TO TAKE NOTE OF RESOURCES OF INCOME OF ALL FAMILY MEMBERS WITH T HEIR CONTRIBUTION TOWARDS HOUSEHOLD EXPENSES, THEN ONLY A REASONABLE ESTIMATION OF HOUSEHOLD EXPENSES MAY BE DONE. 13. IN THE CASE IN HAND, ON THE BASIS OF FOREGOING DISCUSSIONS, WE ARE OF THE VIEW THAT THE LD. CIT(A) GROSSLY ERRED IN HOLD ING THAT THERE WERE LOW HOUSEHOLD WITHDRAWALS BY THE ASSESSEE AS SHE DID NO T APPRECIATE AND CONSIDER RELEVANT EVIDENCE PLACED BEFORE HER, PERTA INING TO WITHDRAWALS MADE BY FATHER AND MOTHER OF THE ASSESSEE. ACCORDI NGLY, WE ARE INCLINED TO HOLD THAT THE ASSESSEE SUCCEEDED TO SUBSTANTIATE HI S CLAIM, PERTAINING TO HOUSEHOLD EXPENSES, THAT HIS RETIRED GOVERNMENT SER VANT FATHER AND RENTAL INCOME EARNING MOTHER CONTRIBUTED TOWARDS HOUSEHOLD EXPENSES AND THE LD. CIT(A) DID NOT PROPERLY CONSIDER THIS FACT THAT THE FATHER OF THE ASSESSEE HAS WITHDRAWN RS.80,136/- FROM SAVING BANK ACCOUNT AND HE HAS ALSO WITHDRAWN RS.1,08,000 FROM HIS POST OFFICE MIS ACCOUNT, TOTAL AMOUNTING TO RS.1,86,136/-, WHICH IS MUCH HIGHER THAN THE ESTIMA TED HOUSEHOLD EXPENSES OF RS. 1,63,000 AS ADDED BY THE AO. 14. ACCORDINGLY, AFTER OBSERVING ABOVE PERVERSIT Y, WE FIND IT APPROPRIATE TO SET ASIDE THE FINDINGS OF THE CIT(A) IN REGARD T O ADDITION OF RS.1,63,000 ITA NO.394/DEL/2012 9 TOWARDS LOW WITHDRAWALS TOWARDS HOUSEHOLD EXPENSES. ACCORDINGLY, WE ARE INCLINED TO ALLOW THE APPEAL OF THE ASSESSEE AND WE ALLOW THE SAME, SETTING ASIDE IMPUGNED ORDER ONLY UP TO THE EXTENT TO THE G ROUND RAISED IN THE APPEAL. 14. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED AS INDICATED ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 24-05-2012. SD/- SD/- (A.N. PAHUJA) (CHANDRA MOHAN GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DT. 24 TH MAY, 2012 GS COPY FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR BY ORDER ASSTT. REGISTRAR