Smt. Kamlesh Kumari, Ambala City V. ITO, Ambala

ITA 58/CHANDI/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 90254 (ITAT-CHANDIGARH)
• Duration Of Justice: 6 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-07-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 16-07-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 12-01-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S K MITTAL
• Assessee Lawyers: SAPANDEEP SHARM A
• Keywords: Gift; Depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES SMC CHANDIGARH BEFORE SHRI H.L.KARWA, HON'BLE VICE PRESIDENT ITA NO. 58/CHD/2015 (ASSESSMENT YEAR: 2009-10) SMT.KAMLESH KUMARI, VS. THE INCOME TAX OFFICER, PROP. M/S AMAN & CO. WARD 4, RAILWAY ROAD, AMBALA CITY. AMBALA. PAN NO. ALSPK9823A (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SAPANDEEP SHARMA RESPONDENT BY : SHRI S.K.MITTAL, DR DATE OF HEARING : 17.07.2015 DATE OF PRONOUNCEMENT : 20.07.2015 O R D E R PER H.L.KARWA, VP : THIS APPEAL FILED BY THE ASSESSEE IS DIR ECTED AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS), PANCHKULA DATED 18.9.2014 RELATING TO AS SESSMENT YEAR 2009-10. 2. GROUND NOS. 1 TO 6 OF THE APPEAL, READ AS UNDER : 1. THAT THE APPELLANT SMT. KAMLESH KUMARI IS PROPRIE TOR OF M/S AMAN & CO., RAILWAY ROAD, AMBALA HAS COMMON RESIDENCE 2 WITH HUSBAND, SON AND DAUGHTER-IN-LAW OWNED BY HER HUSBAND , LIVING ON COMMON POOL OF HOUSEHOLD WITHDRAW ALS BY ALL THE SAID MEMBERS WHICH RUNS ABOUT RS. 3,00,00 0.00 PER YEAR. 2. THAT THE SON SH. AMIT KUMAR HAS HIS OWN PROPRIETORSHIP BUSINESS IN THE NAME OF M/S BIO-PHAR MA AND M/S AMIT & CO. AND DAUGHTER-IN-LAW SMT. ANITA N AGPAL RUNS ANOTHER PROPRIETORSHIP NAMED M/S ANITA ENTERPRIS ES, ALL BASED IN AMBALA. 3. THAT THE APPELLANT PURCHASED A PROPERTY FOR AN AMOUNT OF RS.14,84,000.00 ON 29 - 04 - 2008 OUT OF WHICH RS.12,00,000.00 WERE WITHDRAWN FROM HER FIRM, RS. 2,46,000.00 WERE GIFTED BY HER SON AFTER WITHDR AWALS FROM HIS BUSINESS CONCERNS AND RS. 38,000.00 WERE SP ENT OUT OF SAVINGS FROM HOUSEHOLD WITHDRAWALS AND OTHER SHAGUNS ETC. 4. THAT THE ASSESSING OFFICER ADDED BACK TO THE RETU RNED INCOME THE TOTAL AMOUNT OF GIFT FROM SON, RS. 38,000 .00 OUT OF SAVINGS AND RS.10,000.00 SPENT BY THE SELLER AS REGISTRATION FEES , BESIDES THESE ADDITIONS, BUSINE SS EXPENSES LIKE CAR EXPENSES, DEPRECIATION ETC. AND HOUSEHOLD EXPENSES. 5. THAT THE C.I.T. HAS ERRED TO UPHOLD THE ILLEGAL AN D ARBITRARY DISALLOWANCE OF GIFT AMOUNT OF RS. 2,46,000.00 MADE BY THE SON IN THE FACE OF CLEAR EVIDENCE OF WITHDRAWAL OUT O F BOOKS MADE WITHIN SPAN OF 28 DAYS AND DOCUMENTARY EVIDENCE. 6. THAT THE SAID C.I.T. HAS ILLEGALLY AND ARBITRARILY U PHELD THE ADDITIONS OF RS. 38,000.00 SPENT BY THE APPELLANT OUT OF HER SAVINGS OUT OF HOUSEHOLD WITHDRAWALS AND SHAGUN ETC. OF HER LIFETIME WHICH BELIES ALL COMMON SENSE , NA TURAL JUSTICE AND JUDICIAL CANONS. 3 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF SUPPLY OF NO N-VEGETABLE EATABLES TO ARMY. THE ASSESSEE FILED HER RETURN O F INCOME ON 23.9.2009 DECLARING TOTAL INCOME AT RS.3,23,420/-. THE SAID RETURN WAS PROCESSED UNDER SECTION 143(1) OF THE I NCOME TAX ACT, 1961 (IN SHORT THE ACT) ON 11.1.2011. SUBS EQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY AND STATUTORY NO TICES WERE ISSUED TO THE ASSESSEE. DURING THE COURSE OF ASSE SSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT IN THE BALANCE SHEET, THE ASSESSEE HAS SHOWN LAND AT RS.16,50,00 0/- AS AN ASSET. AS PER THE CONVEYANCE DEED OF THE PROPERTY , THE INVESTMENT MADE WAS AT RS.14,94,000/-, WHICH INCLUD ED RS.84,000/- AND RS.10,000/- INCURRED ON ACCOUNT OF STAMP DUTY AND REGISTRATION CHARGES. HOWEVER, THE ASSES SING OFFICER ASKED THE ASSESSEE TO EXPLAIN THE SOURCE OF INVESTMENT, THE ASSESSEE SUBMITTED THAT RS.12 LACS WERE PAID OUT OF BOOKS, HER SON SHRI AMIT KUMAR HAS PROVIDED RS.50,000/- AND RS.1,96,000/- OUT OF HIS WITHDRAWAL S FROM HIS PROPRIETARY BUSINESS, M/S AMIT & CO. MADE ON 31 .3.2008 AND 27.4.2008 RESPECTIVELY AND RS.38,000/- WERE INV ESTED BY THE ASSESSEE FROM HER OWN SAVINGS. AS REGARDS THE AMOUNT OF RS.10,000/-, NO EXPLANATION WAS GIVEN. THE ASSESS ING OFFICER DID NOT ACCEPT THE EXPLANATION PUT-FORTH BY THE ASSESSEE. ACCORDING TO THE ASSESSING OFFICER, SHR I AMIT KUMAR (SON OF THE ASSESSEE) MADE NO WITHDRAWALS FOR HIS HOUSEHOLD OR PERSONAL EXPENSES DURING THE YEAR 2007 -08 4 EXCEPT THE AMOUNT OF RS.50,000/- DEBITED ON 31.3.20 08. THE ASSESSING OFFICER ALSO POINTED OUT THAT SIMILAR WAS THE POSITION WITH REGARD TO THE AMOUNT OF RS.1,96,000/- , WHICH WAS THE ONLY WITHDRAWAL DURING THE RELEVANT FINANCI AL YEAR EXCEPT OTHER SMALL ENTRY OF RS.10,483/- ON ACCOUNT OF MEDI- CLAIM. THE ASSESSING OFFICER DOUBTED THE EXPLANAT ION OF THE ASSESSEE STATING THAT IT IS NOT BELIEVABLE AT ALL T HAT SHRI AMIT KUMAR WOULD HAVE MADE THE ONLY WITHDRAWAL FOR THE P URPOSE OF GIVING IT TO THE ASSESSEE FOR PURCHASE OF THE PR OPERTY IN QUESTION, AND WOULD NOT WITHDRAW EVEN A SINGLE RUPE E FOR HIS PERSONAL PURPOSES THROUGH OUT THE YEAR. HE ALSO OBSERVED THAT THE ASSESSEE HERSELF HAS STATED THAT HER SONS ARE LIVING SEPARATELY SPENDING ON THEIR OWN FOR THEIR HOUSEHOL D. THEREFORE, THE ASSESSING OFFICER HELD THAT THE EXPL ANATION REGARDING RS.2,46,000/- (RS.50,000/- + RS.1,96,000/ -) GIVEN WAS NOT SATISFACTORY. AS REGARDS THE AMOUNT OF RS .38,000/-, THE ASSESSING OFFICER OBSERVED THAT NO EVIDENCE WA S TENDERED TO PROVE THAT THE SAID AMOUNT WAS SPENT BY THE ASS ESSEE FROM HER OWN SAVINGS. THE ASSESSING OFFICER ALSO OBSER VED THAT NO EXPLANATION HAS BEEN GIVEN FOR THE AMOUNT OF RS.10 ,000/- PAID ON ACCOUNT OF REGISTRATION CHARGES OF THE CONV EYANCE DEED. THUS, THE ASSESSING OFFICER MADE THE ADDITI ON OF RS.2,94,000/- IN THE HANDS OF THE ASSESSEE AS UNEXP LAINED INVESTMENT MADE IN THE ASSET. 4. ON APPEAL, THE LEARNED CIT (APPEALS) CONFIRMED THE ADDITION, AND HENCE THE ASSESSEE IS IN APPEAL BEFOR E THE TRIBUNAL. 5 5. I HAVE HEARD THE LEARNED REPRESENTATIVES OF BOT H THE PARTIES AT LENGTH AND ALSO PERUSED THE MATERIALS AV AILABLE ON RECORD. IT IS APPARENT FROM THE RECORDS THAT SHRI AMIT KUMAR SON OF THE ASSESSEE HAS HIS OWN PROPRIETARY BUSINES S IN THE NAME OF M/S BIO PHARMA AND M/S AMIT & CO. AND HER DAUGHTER-IN-LAW SMT.AMITA NAGPAL HAS OTHER PROPRIET ARY BUSINESS IN THE NAME OF M/S AMITA ENTERPRISES, ALL BASED IN AMBALA. THERE IS NO DISPUTE THAT THE PROPERTY OF RS.14,84,000/- WAS PURCHASED BY THE ASSESSEE ON 29. 4.2008, OUT OF WHICH RS.12 LACS WERE WITHDRAWN BY THE ASSES SEE FROM HER BOOKS AND THE ASSESSING OFFICER HAS ACCEPTED TH E SAME. AS REGARDS THE AMOUNT OF RS.2,46,000/-, THE ASSESSE E CLAIMED THAT THE SAID AMOUNT WAS GIVEN BY SHRI AMIT KUMAR, SON OF THE ASSESSEE BY WAY OF TWO SEPARATE GIFTS OF RS.50, 000 AND RS.1,96,000/- OUT OF WITHDRAWALS FROM HIS PROPRIETA RY BUSINESS IN THE NAME OF M/S AMIT & CO. THE AMOUNT OF RS.50,000/- WAS WITHDRAWN BY SHRI AMIT KUMAR ON 31. 3.2008 AND RS.1,96,000/- ON 27.4.2008. BOTH THE AUTHORIT IES BELOW HAVE NOT DOUBTED THE CREDITWORTHINESS OF SHRI AMIT KUMAR. HOWEVER, THE AUTHORITIES BELOW HAVE REJECTED THE EX PLANATION OF THE ASSESSEE MERELY ON THE GROUND THAT SHRI AMIT KUMAR MADE NO WITHDRAWALS FOR HIS HOUSEHOLD OR PERSONAL E XPENSES DURING THE YEAR 2007-08 EXCEPT THE AMOUNT OF RS.50, 000/- DEBITED ON 31.3.2008. IT IS ALSO OBSERVED BY THE AUTHORITIES BELOW THAT SIMILAR WAS THE POSITION WITH REGARD TO THE AMOUNT OF RS.1,96,000/- WITHDRAWN ON 27.4.2008, WHICH WAS THE ONLY 6 WITHDRAWAL MADE BY SHRI AMIT KUMAR DURING THE RELEV ANT FINANCIAL YEAR. IN MY OPINION, THE AUTHORITIES BE LOW HAVE REJECTED THE EXPLANATION OF THE ASSESSEE ON FLIMSY GROUNDS. THE FACT OF THE MATTER IS THAT ASSESSEES SON HAS T WO DIFFERENT PROPRIETARY BUSINESS IN THE NAME OF M/S BIO PHARMA AND M/S AMIT & CO. AND HER DAUGHTER-IN-LAW SMT.AMITA NAGPAL RUNS ANOTHER PROPRIETARY BUSINESS IN THE NAME OF M/S AMI TA ENTERPRISES, ALL BASED IN AMBALA. IT IS OBSERVED THAT THE ASSESSEE HAD FURNISHED A STATEMENT OF HOUSEHOLD WIT HDRAWALS OF ALL FAMILY MEMBERS BEFORE THE AUTHORITIES BELOW. IT APPEARS THAT BOTH THE AUTHORITIES BELOW HAVE CONVEN IENTLY IGNORED THE SAME. A COPY OF THE SAID STATEMENT IS AVAILABLE AT PAGE 9 OF ASSESSEES PAPER BOOK, WHICH IS REPRODUCE D HEREINBELOW : STATEMENT OF HOUSEHOLD WITHDRAWLS OF SMT.KAMLESH KUMARI AND FAMILY FOR THE ASSESSMENT YEAR 2008-09 AND 2009-10. NAME 2008-09(A.Y.) 2009-10(A.Y.) 1.SMT.KAMLESH KUMARI 90,101.00 96,000.00 (M/S AMAN & CO.) 2. SH.OM PRAKASH 84,000.00 1,22,192.00 (M/S OM PRAKASH) 3. SH.AMIT NAGPAL 48,000.00 72,000.00 (M/S BIO-PHARMA) 4. SMT.AMITA NAGPAL 48,000.00 59,192.00 (M/S AMITA ENTERPRISES) --------------------------------------------------- -------------------- TOTAL = 2,70,101.00 3,49,912.00 --------------------------------------------------- -------------------- 7 6. FROM THE ABOVE STATEMENT OF HOUSEHOLD WITHDRAWA LS, IT IS CLEAR THAT SHRI AMIT KUMAR HAD MADE HOUSEHOLD WITHDRAWALS OF RS.48,000/- FROM HIS OWN PROPRIETARY BUSINESS; NAMELY M/S BIO PHARMA DURING THE PERIOD R ELEVANT TO ASSESSMENT YEAR 2008-09. SIMILARLY, SHRI AMIT KUMAR HAD MADE HOUSEHOLD WITHDRAWALS OF RS.72,000/- DURING TH E PERIOD RELEVANT TO ASSESSMENT YEAR 2009-10. THUS, IT IS C LEAR THAT SHRI AMIT KUMAR HAS MADE HOUSEHOLD WITHDRAWALS FROM HIS PROPRIETARY CONCERN I.E. M/S BIO PHARMA AND THE AMO UNT OF RS.2,46,000/- WAS WITHDRAWN FROM HIS ANOTHER PROPRI ETARY CONCERN I.E. M/S AMIT & CO. THEREFORE, THE AUTHOR ITIES BELOW WERE NOT JUSTIFIED IN HOLDING THAT SHRI AMIT KUMAR MADE NO WITHDRAWAL FOR HIS OWN HOUSEHOLD OR PERSONAL EXPENS ES DURING THE FINANCIAL YEARS 2007-08 AND 2008-09. SHRI AMI T KUMAR HAS ASSESSED TO INCOME TAX AND THE ASSESSING OFFICE R HAS ACCEPTED THE RETURNS OF INCOME SUBMITTED BY HIM FOR THE ASSESSMENT YEARS 2008-09 AND 2009-10. CONSIDERING THE MATERIALS AVAILABLE ON RECORD, THERE WAS NO JUSTIFI CATION IN MAKING THE ADDITION OF RS.2,46,000/- WHICH WAS GIFT ED BY SHRI AMIT KUMAR TO HIS MOTHER SMT.KAMLESH KUMARI. 7. AS REGARDS THE ADDITION OF RS.38,000/-, THE ASS ESSEE CLAIMED THAT THE SAME WAS INVESTED IN THE PROPERTY IN QUESTION OUT OF HER PAST SAVINGS. SHRI SAPANDEEP S HARMA, LEARNED COUNSEL FOR THE ASSESSEE STATED THAT THE AS SESSEE RECEIVED SMALL GIFTS IN CASH ON VARIOUS OCCASIONS, SUCH AS BIRTHDAY OF HIS CHILDREN, FESTIVALS AND OTHER SOCIA L OCCASIONS. THE LEARNED COUNSEL FOR THE ASSESSEE FURTHER SUBMIT TED THAT 8 KEEPING IN VIEW THE SOCIAL STATUS OF THE ASSESSEE, THE AMOUNT OF RS.38,000/- SHOULD BE ACCEPTED AS EXPLAINED. I N MY OPINION, THERE IS A MERIT IN THE SUBMISSIONS MADE B Y THE LEARNED COUNSEL FOR THE ASSESSEE AND, THEREFORE, TH E ADDITION OF RS.38,000/- ALSO DESERVES TO BE DELETED. AS RE GARDS ADDITION OF RS.10,000/- BEING THE AMOUNT INCURRED O N ACCOUNT OF REGISTRATION CHARGES OF THE SALE DEED, IT IS STA TED THAT THE SAME WAS INCURRED BY THE VENDOR. ON THE CONTRARY, THE LEARNED D.R SUBMITTED THAT THE REGISTRATION CHARGES ARE ALWAYS BEING PAID BY THE PURCHASER OF THE PROPERTY. IN MY OPINION, THERE IS NO MERIT IN THE CONTENTION OF THE LEARNED D.R. BECAUSE THERE IS NO MATERIAL ON RECORDS TO SHO W THAT THE REGISTRATION CHARGES WERE INCURRED BY THE ASSESSEE. ACCORDINGLY, I DO NOT SEE ANY JUSTIFICATION IN MAKI NG THE ADDITION OF RS.10,000/-. 8. IN VIEW OF THE ABOVE, I DELETE THE ADDITION OF RS.2,94,000/- MADE BY THE ASSESSING OFFICER AND CON FIRMED BY THE LEARNED CIT (APPEALS). 9. GROUND NO.7 OF THE APPEAL IS DIRECTED AGAINST T HE DISALLOWANCE MADE ON ACCOUNT OF CAR DEPRECIATION, I NTEREST ON CAR LOAN, INSURANCE AND TELEPHONE EXPENSES. IT IS OBSERVED THAT THE ASSESSEE CLAIMED TOTAL EXPENDITURE UNDER T HE ABOVE HEADS AT RS.4,52,399/-. THE ASSESSING OFFICER D ISALLOWED 1/5 TH OF THE ABOVE EXPENSES ON ACCOUNT OF PERSONAL USE O F CAR AND TELEPHONE. ON APPEAL THE LEARNED CIT (APPEALS) RESTRICTED THE DISALLOWANCE TO 1/10 TH ONLY. IN MY OPINION, THE DISALLOWANCE MADE BY THE LEARNED CIT (APPEALS) APPEARS TO 9 BE REASONABLE AND JUSTIFIED. IN THIS CASE, THE US E OF CAR AND TELEPHONE FOR THE ASSESSEES PERSONAL/NON-BUSINESS PURPOSES CANNOT BE RULED OUT. ACCORDINGLY, I REJECT THIS GR OUND OF APPEAL. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 20 TH DAY OF JULY, 2015. SD/- (H.L.KARWA) VICE PRESIDENT DATED : 20 TH JULY, 2015 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/TH E CIT/THE DR. ASSISTANT REGISTRAR, ITAT, CHANDIGARH 10