Sh. Sunil Kumar, Ludhiana V. ACIT, Ludhiana

ITA 42/CHANDI/2016

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 0128 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-04-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2006-2007
• Appeal Filed On: 25-01-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K MITTAL
• Assessee Lawyers: AMIT BHALLA; PANKAJ BHALLA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE SHRI H.L.KARWA, VICE PRESIDENT AND MS. RANO JAIN, ACCOUNTANT MEMBER ITA NO.42/CHD/2016 (ASSESSMENT YEAR : 2006-07) SH. SUNIL KUMAR VS. THE A.C.I.T., PROP. M/S SUNIL AGENCY CIRCLE-II, NEAR SHINGAR CINEMA, LUDHIANA. SAMRALA ROAD, LUDHIANA. PAN: AFBPK4387C (APPELLANT) (RESPONDENT) APPELLANT BY : S/SHRI PANKAJ BHALLA & AMIT BHALLA RESPONDENT BY : SHRI S.K. MITTAL, DR DATE OF HEARING : 28.03.2016 DATE OF PRONOUNCEMENT : 05.04.2016 O R D E R PER RANO JAIN, A.M . : THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-I, LUDHIANA DATED 30.12.2015, RELATING TO ASSESSMENT YEAR 2006-07. 2. BRIEFLY, THE FACTS RELEVANT TO THE EXTENT OF ADJUDICATING THIS APPEAL, ARE THAT DURING THE RELEV ANT ASSESSMENT YEAR THE ASSESSEE HAD SHOWN HOUSEHOLD EXPENSES OF RS.1,44,000/-. THE ASSESSING OFFICER OBSERVED THAT FOR A FAMILY OF FIVE PERSONS IT COMES TO 2 RS.12,000/- PER MONTH, OUT OF WHICH THE EDUCATION EXPENSES OF THE MINOR DAUGHTER ARE STATED TO BE RS. 9000/- WHICH LEAVES RS.1,35,000/- FOR OTHER HOUSEHOLD EXPE NSES. THEREFORE, THE ASSESSING OFFICER MADE AN ADDITION O F RS.40,000/- TO HOUSEHOLD EXPENSES. THE CIT (APPEAL S) AS WELL AS THE I.T.A.T. CONFIRMED THE ADDITION STATING THAT THE ESTIMATION MADE BY THE ASSESSING OFFICER IS REASONA BLE. THE ASSESSING OFFICER IMPOSED PENALTY UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 (IN SHORT TH E ACT), ON THE SAID ADDITION. THE CIT (APPEALS) CONFIRMED THE PENALTY LEVIED BY THE ASSESSING OFFICER STATING THA T SINCE THE ASSESSEE FAILED TO PRODUCE ANY EXPLANATION REGA RDING HOUSEHOLD EXPENSES, THE ASSESSING OFFICER WAS JUSTI FIED IN IMPOSING THE PENALTY. 3. AGGRIEVED BY THIS, THE ASSESSEE HAS COME IN APPEAL BEFORE US, RAISING THE FOLLOWING GROUNDS OF APPEAL : 1. THAT THE LD. CIT(A)-I, LUDHIANA HAS WRONGLY PASSED THE ORDER U/S 250(6) OF THE INCOME TAX ACT, 1961 ('THE AC T') AGAINST LAW & FACTS OF THE CASE. 2. THAT THE LD. CIT(A)-I, LUDHIANA ERRED IN LAW & FA CT IN CONFIRMING IMPOSITION OF PENALTY U/S 271(L)(C) OF THE INCOME TAX ACT, 1961 ON ACCOUNT OF 'DISALLOWANCE OF HOUSEHOLD EXPENSES' TO THE TUNE OF RS. 40,000/-. 3. THAT THE LD. CIT(A)-I, LUDHIANA FAILED TO APPRECIATE THAT THE PENALTY WAS IMPOSED BY THE LD. A.O. IN A SUMMARY MANNER WITHOUT RECORDING ANY SATISFACTION WITH REGARD TO CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. 3 4. THAT THE LD. CIT(A)-I, LUDHIANA FAILED TO APPRECIATE THAT THE ADDITION HAS BEEN DONE ON ESTIMATE BASIS AND ON WHIMS AND FANCIES OF THE LD. A.O. SO NO PENALTY U/S 271(L)(C) OF THE ACT IS IMPOSABLE AS SUCH. 5. THAT THE LD. CIT(A)-I, LUDHIANA FAILED TO APPRECIA TE THAT MERELY BECAUSE THE ASSESSEE DID NOT APPROACH T HE HIGHER FORA IN APPEAL AGAINST THE IMPUGNED ADDITION, I T IS NO REASON TO HOLD THAT ADDED AMOUNT IS CONCEALED INCOME PARTICULARLY WHEN THE REVENUE HAVE NO MATERIAL TO JUSTIFY THE CONCLUSION DRAWN. 6. THAT THE APPELLANT CRAVES, LEAVE TO VARY, ALTER OR AD D ANY GROUNDS OF APPEAL. 4. THE LEARNED COUNSEL FOR THE ASSESSEE MADE LENGTHY ARGUMENTS BEFORE US. THE CRUX OF HIS ARGUM ENTS WAS THAT THE ADDITION HAS BEEN MADE ON AN ESTIMATE BASIS ONLY AND, THEREFORE, PENALTY SHOULD NOT BE LEVIED. THERE IS NO FINDING AS REGARDS CONCEALMENT OF INCOME OR FURN ISHING OF INACCURATE PARTICULARS. 5. THE LEARNED D.R. RELIED ON THE ORDERS OF THE LOWER AUTHORITIES AND FURTHER STATED THAT THE ASSES SING OFFICER HAD TO MAKE THE ADDITION AS THE ASSESSEE FA ILED TO FURNISH DETAILS AND EVIDENCES OF HIS HOUSEHOLD EXPE NSES. 6. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF BOTH THE PARTIES, PERUSED THE FINDINGS OF THE AUTHO RITIES BELOW AND CONSIDERED THE MATERIAL AVAILABLE ON RECO RD. THE ONLY ISSUE TO BE DECIDED BY US IS WHETHER THE P ENALTY UNDER SECTION 271(1)(C) OF THE ACT CAN BE LEVIED ON AN ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT O F LOW HOUSEHOLD WITHDRAWAL. THE ASSESSEE HAD SHOWN CERTA IN AMOUNTS AS HIS HOUSEHOLD WITHDRAWALS, WHICH IN THE 4 OPINION OF THE ASSESSING OFFICER WERE NOT ENOUGH TO RUN THE FAMILY OF FIVE PERSONS. THE ASSESSING OFFICER ASKED THE ASSESSEE TO PRODUCE THE DETAILS AND EVIDENCES O F HIS HOUSEHOLD EXPENSES, WHICH THE ASSESSEE COULD NOT. THE ASSESSING OFFICER, IN THE RESULT, ESTIMATED THE HOU SEHOLD EXPENSES AND MADE THE ADDITION. THE ADDITION IN SU CH A CASE MAY BE JUSTIFIED, BUT THIS IS CERTAINLY NOT A CASE OF LEVYING PENALTY UNDER SECTION 271(1)(C) OF THE ACT. THERE IS NO FINDING IN THE ORDER OF THE ASSESSING OFFICER WITH REGARD TO CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS ON THE PART OF THE ASSESSEE. NOTHING IS COMING OUT OF THE ORDER OF THE ASSESSING OFFICER, NEITHER IN ASSESSMENT NOR IN PENALTY PROCE EDINGS THAT THE ESTIMATED HOUSEHOLD EXPENSES WERE IN FACT ANY UNDISCLOSED INCOME OF THE ASSESSEE. THE ASSESSING OFFICER HAS JUST ESTIMATED THE SAID EXPENSES. IN VIEW OF T HIS, WE DIRECT THE ASSESSING OFFICER TO DELETE THE PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE ACT. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 5 TH DAY OF APRIL, 2016. SD/- SD/- (H.L.KARWA) (RANO JAIN) VICE PRESIDENT ACCOUNTANT MEMBER DATED : 5 TH APRIL, 2016 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/THE CIT/THE D R. ASSISTANT REGISTRAR, ITAT, CHANDIGARH