Arvind Sehmay, New Delhi V. ITO, New Delhi

ITA 5483/DEL/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 66052 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-12-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 05-12-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 06-12-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: BHIM SINGH
• Assessee Lawyers: G S SACHDEV
• Keywords: Unexplained cash credit; Unexplained investment; Unexplained expenditure; Source of fund
• Section: 69C

Judgement Text

I.T.A. NO. 5483/DEL/2010 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A, NEW DELHI BEFORE SHRI U.B.S. BEDI, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER I.T.A. NO. 5483/DEL/2010 A.Y. : 2006-07 ARVIND SEHMAY, C/O G.S. SACHDEV AND CO., 23/5-E, 3 RD FLOOR, MAIN MARKET, EAST PATEL NAGAR, NEW DELHI 110008 (PAN : AYJPS7836F) VS. I.T.O. (OSD), RANGE - 5, CR BUILDING, NEW DELHI (APPELLANT ) (APPELLANT ) (APPELLANT ) (APPELLANT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) ASSESSEE BY : SH. G.S. SACHDEV, CA DEPARTMENT BY : SH. BHIM SINGH, SR. D.R. ORDER ORDER ORDER ORDER PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-VIII, NEW D ELHI DATED 20.9.2010 PERTAINING TO ASSESSMENT YEAR 2006-07. 2. THE ISSUE RAISED IN THE APPEAL READ AS UNDER:- I) NET CASH WITHDRAWALS OF THE ASSESSEE AMOUNTING ` 5,94,900/- ARISING OUT OF HIS SOURCES OF INCOME, AR E ADEQUATELY SUFFICIENT TO MAKE SMALL INVESTMENT OF ` 90,000/- BUSINESS IN BUSINESS. II) THAT THE UNEXPLAINED EXPENDITURE OF ` 1,50,000 /- ARE BASED ON ESTIMATES AND EVEN IF THESE ARE ASSUMED OCCURRED T HE I.T.A. NO. 5483/DEL/2010 2 ASSESSEE HAD ENOUGH CASH CAPACITY AVAILABLE WITH HI M TO PAY FOR THESE EXPENSES. III) THE ADDITIONS MADE BEING WRONG AND UNJUSTIFIE D NEED BE CANCELLED AND DELETED. 3. IN THIS CASE THE ASSESSING OFFICER MADE THE FOL LOWING ADDITIONS TO THE INCOME RETURNED BY THE ASSESSEE. DISALLOWANCE OF HELPER ALLOWANCE THE ASSESSEE HAS CLAIMED HELPER ALLOWANCE OF ` 56400/-. AS ASKED FOR HE WAS NOT ABLE TO SUBSTANTI ATE HOW HELP WAS EXTENDED TO HIM BY THE ALLEGED HELPER I N PERFORMANCE OF HIS OFFICIAL DUTIES. FURTHER HE WA S NOT ABLE TO EXPLAIN FROM WHERE THE PAYMENT WAS MADE TO ALLEGED HELPER. AS SPECIFICALLY ASKED FOR THE ALL EGED HELPER WAS ALSO NOT PRODUCED BEFORE THE UNDERSIGNED . AS ALSO PARTICULARLY ASKED FOR THE ASSESSEE WAS NOT ABLE TO PRODUCE THE BOARDS RESOLUTION ALLOWING HIM THE USE OF A HELPER. IN THESE CIRCUMSTANCES, THE EXEMPTION IN R/O THE HELPER ALLOWANCE OF ` 56400/- I S NOT BEING ALLOWED TO ASSESSEE. UNEXPLAINED CASH DEPOSIT/INVESTMENT SINCE THE CASH DEPOSIT AGGREGATING TO ` 30000 (15000+13000+3000) AS ON 23.8.2005 IN CITY BANK ACC OUNT AND SOURCE OF INTRODUCTION OF CASH AMOUNT OF ` 60000 /- IN M/S IMPETUS TRAVELS, AS ON 1.4.2005 REMAINED TO BE EXPLAINED, ADDITIONS OF ` 90000(30000+60000) ARE BE ING MADE AS UNEXPLAINED CASH CREDITS/ INVESTMENTS. I.T.A. NO. 5483/DEL/2010 3 UNEXPLAINED INVESTMENT IN MUTUAL FUND AS DESPITE SPECIFIC ASKING THE ASSESSEE WAS NOT AB LE TO EXPLAIN THE SOURCE OF INVESTMENT OF ` 200000/- AS O N 6.4.2005 WITH HDFC MUTUAL FUND, THE SAID INVESTMENT OF ` 200000/- IS BEING TREATED AS UNEXPLAINED. UNEXPLAINED EXPENDITURE U/S. 69C THE ASSESSEE WAS NOT ABLE TO JUSTIFY HIS WITHDRAW ALS VIS-A- VIS PERSONAL AND HOUSEHOLD EXPENSES. MOREOVER NO DE TAILS REGARDING VEHICLE EXPENSES, MEDICAL EXPENSES, TRAVEL LING EXPENSES, RENOVATION / FURNISHINGS, FUNCTIONS, ENTE RTAINMENT AND TELEPHONE AND ELECTRICITY EXPENSES AS SPECIFIC ALLY CALLED HAVE BEEN FILED AND THE SOURCE OF THE SAME ALSO REMAINED TO BE EXPLAINED. FURTHERMORE, THE ASSESSE E WAS ALSO NOT ABLE TO FURNISH THE COPY OF RENT AGREEMENT FOR TAKING ON RENT PREMISES LOCATED AT B-27, ARAVALI KUN J, SECTOR-13, ROHINI AND TO EXPLAIN THE SOURCE OF PAYM ENT OF THE RENT. ACCORDINGLY, KEEPING IN VIEW OF THE TO TALITY OF FACTS, AN ADDITION OF ` 150000/- U/S. 69C IS BEING MADE. 4. UPON ASSESSEES APPEAL LD. COMMISSIONER OF INCO ME TAX (A) DELETED THE ADDITION ON ACCOUNT OF HELPER ALLOWANC E & UNEXPLAINED INVESTMENT IN MUTUAL FUNDS. 4.1 AS REGARDS ADDITION OF ` 30000/- DEPOSITS IN TH E BANK, ASSESSEE CLAIMED THE DEPOSITS ARE MADE OUT OF SAVINGS AND SALA RY INCOME, BUT NO CREDIBLE EVIDENCE IN THIS REGARD WAS FILED. HEN CE, LD. COMMISSIONER OF INCOME TAX (A) CONFIRMED THE ADDITION IN THIS REG ARD. I.T.A. NO. 5483/DEL/2010 4 4.2 AS REGARDS THE BALANCE ADDITION OF ` 60000/-, L D. COMMISSIONER OF INCOME TAX (A) SUSTAINED THE ADDITION BY HOLDING TH AT NO DOCUMENTARY EVIDENCE SUGGESTING PERSONAL SAVINGS AND REGULAR IN COME OF CURRENT AND EARLIER YEAR WAS FILED. 4.3 AS REGARDS ADDITION ON ACCOUNT OF UNEXPLAINED E XPENDITURE U/S. 69C, LD. COMMISSIONER OF INCOME TAX (A) HELD THAT ON THIS ISSUE ALSO ASSESSEE HAS NOT FILED ANY CREDIBLE EVIDENCE IN SUP PORT OF TOTAL PERSONAL HOUSEHOLD EXPENSES AND SOURCE THEREOF. 5. AGAINST THE ABOVE ORDER THE ASSESSEE IS IN APPEA L BEFORE US. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORDS. LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT THE ADDIT ION OF ` 90000/- BEING MADE FOR LACK OF SOURCE IS NOT SUSTAINABLE. H E SAID THAT THE SAME IS DULY COVERED BY ASSESSEES PREVIOUS YEAR IN COME AND OTHER SOURCE. HOWEVER, HE FAILED TO SUBMIT ANY COGENT EV IDENCE IN THIS REGARD BEFORE US. HENCE, WE DO NOT FIND ANY INFIR MITY IN THE ADDITION OF ` 90000/- IN THIS REGARD. ACCORDINGLY, WE CONFI RM THE SAME. 6.1 AS REGARDS THE ESTIMATED ADDITION OF ` 1.50 LACS ON ACCOUNT OF PERSONAL HOUSEHOLD EXPENSES, WE FIND THAT THERE HAS BEEN NO BASIS BROUGHT ON RECORD BY THE ASSESSING OFFICER TO MAKE THIS ADDITION AND NO COGENT MATERIAL HAS BEEN BROUGHT TO SIGNIFY ` 1 .50 LACS EXPENDITURE WAS DONE BY THE ASSESSEE. UNDER THE CIRCUMSTANCES, ORDERS OF THE AUTHORITIES BELOW NEEDS TO BE REVERSED. ACCORDING LY, WE SET ASIDE THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (A) IN T HIS REGARD AND DECIDE THE ISSUE IN FAVOUR OF THE ASSESSEE. I.T.A. NO. 5483/DEL/2010 5 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 14/12/2012. SD/ SD/ SD/ SD/- -- - SD/ SD/ SD/ SD/- -- - [U.B.S. BEDI] [U.B.S. BEDI] [U.B.S. BEDI] [U.B.S. BEDI] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER DATE 14/12/2012 SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES