Shri Naivedya Sharma, Delhi V. ITO, New Delhi

ITA 4695/DEL/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 3725 (ITAT-DELHI)
• Duration Of Justice: 6 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-06-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 14-06-2010
• Assessment Year: 2006-2007
• Appeal Filed On: 11-12-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: B L GUPTA ITP
• Keywords: Set aside

Judgement Text

ITA NO. 4695/DEL/2009 A.Y. 2006-07 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F. NEW DELHI BEFORE SHRI A.D. JAIN, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER I.T.A. NO. 4695/DEL/2009 A.Y. : 2006-07 SHRI NAIVEDYA SHARMA, VS. INCOME TAX OFFICER, B-284, MIG FLATS, WARD-34(2), LONI ROAD, SHAHDARA, NEW DELHI DELHI 110 093 (PAN: AAYPS 2221H) [APPELLANT] (RESPONDENT) ASSESSEE BY : SHRI BL GUPTA, ITP DEPARTMENT BY : SHRI H.K. LAL, SR. DR PER SHAMIM YAHYA: AM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) DATED 15.9.200 9 AND PERTAINS TO ASSESSMENT YEAR 2006-07. 2. THE FIRST ISSUE RAISED READS AS UNDER:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) WAS INCORRECT AND UNJUSTIFIED IN SUSTAINING THE ADDITION INCORRECTLY MADE BY THE ASS ESSING OFFICER ON ACCOUNT OF CELLULAR EXPENSES, TELEPHONE EXPENSES, V EHICLE EXPENSES, ELECTRICITY EXPENSES AND MISC. EXPENSES FOR PERSONA L USE. 3. THE ASSESSING OFFICER IN THIS CASE MADE DISALLO WANCE OF CERTAIN EXPENSES LIKE TELEPHONE, VEHICLE MAINTENANCE ETC. THE DISALL OWANCES WERE MADE BY MENTIONING THAT THE DETAILS, EVIDENCE FURNISHED HAD BEEN GONE THROUGH BY THE ITA NO. 4695/DEL/2009 A.Y. 2006-07 2 ASSESSING OFFICER AND PERSONAL USE CANNOT BE RULED OUT. HENCE TOKEN ADDITION WERE MADE. 4. LD. COMMISSIONER OF INCOME TAX (APPEALS) UPON AS SESSEES APPEAL SUSTAINED THE ADDITION BY HOLDING AS UNDER:- IT IS ALSO NOTED FROM THE ASSESSMENT ORDER THAT T HE ASSESSEE HAS PRODUCED HIS BOOKS OF ACCOUNTS. AFTER VERIFYING TH E SAME, THE ASSESSING OFFICER CAME TO THE REASONABLE CONCLUSI ON REGARDING THE ELEMENT OF PERSONAL NATURE IN THE EXPENDITURE INCUR RED BY THE ASSESSEE AFTER GOING THROUGH DETAILS /EVIDENCE FURN ISHED BY THE ASSESSEE. IN VIEW OF THIS, I AM OF THE OPINION THAT A RIGHTFUL DISALLOWANCE HAS BEEN MADE BY THE ASSESSING OFFICE R. ACCORDINGLY, THE DISALLOWANCE MADE UNDER THE FOLLOWING HEADS IS SUSTAINED: NATURE OF EXPENDITURE AMOUNT OF EXPENDITURE DEBITED BY THE ASSESSEE AMOUNT OF EXPENDITURE DISALLOWED BY THE ASSESSING OFFICER AMOUNT SUSTAINED IN APPEAL CELLULAR EXPENSES 44,869/- 8,975/- 100% TELEPHONE EXPENSES 30,881/- 4,000/- 100% VEHICLE EXPENSES 1,65,203/- 20,650/- 100% ELECTRICITY EXPENSES 27,931/- 3,000/- 100% MISC. EXPENSES (SHORT EXCESS) 2,854/- 2,854/- 100% 5. AGAINST THE ABOVE ORDER THE ASSESSEE IS IN APP EAL BEFORE US. 6. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE R ECORDS. LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT ADDITIONS HAVE BEEN MAD E WITHOUT BRINING ON RECORD ANY MATERIAL. IN THIS REGARD HE REFERRED TO THE DE CISION OF MUMBAI TRIBUNAL REFERRED IN 5 SOT 393 WHEREIN TOKEN ADDITIONS WHIC H ARE NOT BASED ON ANY COGENT MATERIAL, WERE DELETED. ITA NO. 4695/DEL/2009 A.Y. 2006-07 3 6.1 LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER HA ND RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 6.2 UPON CAREFUL CONSIDERATION, WE FIND THAT THE AD DITIONS IN THIS REGARD HAVE BEEN MADE BY THE ASSESSING OFFICER WITHOUT BRINGIN G ON RECORD ANY COGENT MATERIAL. THE ASSESSING OFFICER ONLY MENTIONED T HAT ELEMENT OF PERSONAL NATURE IN THIS REGARD CANNOT BE RULED OUT. IT IS NOT HI S CASE THAT THE BOOKS OF ACCOUNTS AND VOUCHERS WERE NOT PRODUCED. HE HAS NOT S PECIFIED A SINGLE INSTANCE WHERE HE FOUND SHORTCOMINGS IN THE VOUCHERS. UNDER THE CIRCUMSTANCES, IN OUR CONSIDERED OPINION, THESE ADDITIONS ARE BASED ON SU RMISE AND ARE LIABLE TO BE DELETED. ACCORDINGLY, WE SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND DELETE THE ADDITIONS ON THIS ISSUE. 7. THE NEXT ISSUE RAISED READS AS UNDER:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) WAS INCORRECT AND UNJUSTIFIED IN SUSTAINING THE INCORRECT ADDITION OF RS. 3,41,707/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF PURCHASE OF TATA SAFARI. 8. THE ASSESSING OFFICER ON THIS ISSUE NOTED THAT ASSESSEE HAS PURCHASED TATA SAFARI. THE TOTAL COST OF THE SAME WAS RS. 8,41,60 6/-. FOR THIS RS. 5 LACS WAS OBTAINED AS LOAN THROUGH HDFC BANK AND THE ASSESSEE HAD PUT IN CASH OF RS. 3,41,707/- IN THIS REGARD. ASSESSEE EXPLAINED HE H AS WITHDRAWN RS. 2 LACS FROM HIS SAVINGS BANK ACCOUNT ON 20/8/2005, BUT THE ASSESSI NG OFFICER DID NOT ACCEPT THIS BECAUSE THE PAYMENT WAS SHOWN ON 28.10.2005 AND IN ASSESSING OFFICERS OPINION THIS AMOUNT MIGHT HAVE BEEN UTILIZED FOR H OUSEHOLD EXPENSES. HE FURTHER OPINED THAT THERE WAS NO NECESSITY TO KEE P CASH IN HAND FOR TWO MONTHS, WHEN THE AMOUNT WAS LYING SAFE IN BANK. ASSESSEE FURTHER EXPLAINED THAT ITA NO. 4695/DEL/2009 A.Y. 2006-07 4 RS. 1,04,000/- WAS UTILIZED OUT OF AMOUNT RECEIVE D IN CASH FROM SALE OF PLOT. ASSESSING OFFICER DID NOT ACCEPT THE SAME, AS HE N OTED THAT NO EVIDENCE WAS PRODUCED IN THIS REGARD. 9. BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEA LS) THE ASSESSEE REITERATED THE SUBMISSIONS AS REGARDS RS. 2 LACS C ASH WITHDRAWN FROM HIS SAVINGS BANK ACCOUNT. AS REGARDS THE SUM OF RS. 1,04,000/ -, IT WAS STATED THAT ASSESSEE WHILE SELLING THE PLOT HAD RECEIVED A SUM OF RS. 1 ,04,000/- FROM THE BUYER ON ACCOUNT OF TRANSFER CHARGES WHICH THE ASSESSEE HAS PAID AT RS. 2,08,000/-. IT WAS ALSO SUBMITTED THAT THE PAY MENTS WERE EVIDENCED FROM THE PAPERS ENCLOSED. HOWEVER, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) DID NOT ACCEPT THE EXPLANATION AND SUSTAINED THE ADDITI ONS MADE BY THE ASSESSING OFFICER. 10. AGAINST THIS ORDER THE ASSESSEE IS IN APPEAL BE FORE US. 11. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. AS REGARDS THE EXPLANATION FOR RS. 2 LACS, WE FIND THAT ASSESSEE HAD MADE OUT A CASE THAT HE HAS WITHDRAWN A SUM OF RS. 2 LACS FROM THE BANK ACCOUNT AND UTILIZED THE SAME FOR THE PURCHASE. ASSESSEE ALSO SUBMITTED THE NECE SSARY BOOKS OF ACCOUNTS IN THIS REGARD. HOWEVER, THE AUTHORITIES BELOW HAVE DI SREGARDED THIS EXPLANATION HOLDING THAT THERE WAS NO NEED TO KEEP A SUM OF RS. 2 LACS IN CASH FOR TWO MONTHS AND THIS AMOUNT MIGHT HAVE BEEN USED FOR HOUSEHOLD EXPENSES. IN OUR CONSIDERED OPINION, THE ACTION OF THE REVENUE IN TH IS REGARD IS BASED ON SURMISES. ASSESSING OFFICER HAS NOT MADE OUT THE CASE THAT A SSESSEES DRAWINGS WERE NOT SUFFICIENT TO COVER HOUSEHOLD EXPENSES. AS A MATT ER OF FACT, THERE IS NO MENTION WHATSOEVER ON THIS ISSUE. HENCE THE ADDITION MADE IS PURELY BASED ON ITA NO. 4695/DEL/2009 A.Y. 2006-07 5 CONJECTURES IN THIS REGARD. HENCE WE HOLD THAT T HE EXPLANATION OF RS. 2 LACS AS CASH AVAILABLE FROM BANK WITHDRAWALS IS COGENT ENOU GH AND NO DISALLOWANCE ON THIS ACCOUNT IS REQUIRED. 11.1 AS REGARDS THE EXPLANATION OF RS. 1,04,000/- AS RECEIPT ON ACCOUNT OF TRANSFER CHARGES RECEIVED BY THE ASSESSEE ON SALE OF PLOT, WE FIND THAT ASSESSEE HAS NOT PRODUCED ANY MATERIAL BEFORE THE ASSESSING OFFICER. IN THE LD. COMMISSIONER OF INCOME TAX (APPEALS)S ORDER THERE IS MENTION OF THE ASSESSEES SUBMISSIONS IN THIS REGARD AND ALSO OF EVIDENCES EN CLOSED. HOWEVER, LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS NOT GIVEN ANY FINDING ON THE SAME. IN OUR CONSIDERED OPINION, INTEREST OF JUSTICE WILL BE SERVED IF THIS ISSUE OF AVAILABILITY OF RS. 1,04,000/- ON ACCOUNT OF SALE O F PLOT IS REMITTED TO THE FILES OF THE ASSESSING OFFICER TO EXAMINE THE SAME AFRESH I N LIGHT OF THE ABOVE EVIDENCE PRODUCED BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEALS). ACCORDINGLY, THIS ISSUE STANDS REMITTED TO THE FILES OF THE ASSESSING OFFICER. NEEDLESS TO ADD THAT THE ASSESSEE SHOULD BE GIVEN ADEQUATE OPPORTUNITY O F BEING HEARD. 12. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 18/06/2010. SD/- SD/- [A.D. JAIN] [SHAMIM YAHYA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATE 18./06/2010 SRB COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT ITA NO. 4695/DEL/2009 A.Y. 2006-07 6 TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT, DELHI BENCHES