RANJEET SINGH YADAV, Jaipur V. ACIT, Jaipur

ITA 594/JPR/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 5380 (ITAT-JAIPUR)
• Duration Of Justice: 10 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-04-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2009-2010
• Appeal Filed On: 09-06-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAJ MEHRA JCIT DHK
• Keywords: Business income; Corroborative evidences

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JUDICIAL MEMB ER VK;DJ VIHY LA-@ ITA NO. 594/JP/2015 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2009-10. SHRI RANJEET SINGH YADAV, 146, AVADH PURI, KALWAR ROAD, JAIPUR. CUKE VS. THE ACIT, CENTRAL CIRCLE-1, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AAOPY 4757 G VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI RAJEEV SOGANI (C.A.) JKTLO DH VKSJ LS@ REVENUE BY : SHRI RAJ MEHRA (JCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 16/02/2016 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 27/04/2016. VKNS'K@ ORDER PER R.P. TOLANI, JM THIS IS ASSESSEES APPEAL FILED AGAINST THE ORDER OF THE LD. CIT (A), ALWAR DATED 09.03.2015 FOR THE ASSESSMENT YEAR 2009-10. T HE FOLLOWING GROUNDS ARE RAISED :- 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW THE LD. CIT (A) HAS ERRED IN CONFIRMING THE ACTION OF THE LD. A O IN ESTIMATING THE BUSINESS INCOME AT RS. 5,60,000/- AGAINST THE D ECLARED INCOME OF RS. 3,08,779/-. THE ACTION OF LD. CIT (A) IS ILL EGAL, UNJUSTIFIED, ARBITRARY AND AGAINST THE FACTS OF THE CASE. RELIEF MAY PLEASE BE GRANTED BY DELETING THE SAID ADDITION OF RS. 2,51,2 21/-. 2. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW THE LD. CIT (A) HAS ERRED IN CONFIRMING THE ACTION OF THE LD. A O IN MAKING ADDITION OF RS. 2,76,000/- ON ACCOUNT OF HOUSEHOLD EXPENSES TO THE TOTAL INCOME OF THE ASSESSEE. THE ACTION OF LD. CI T (A) IS ILLEGAL, UNJUSTIFIED, ARBITRARY AND AGAINST THE FACTS OF THE CASE. RELIEF MAY PLEASE BE GRANTED BY DELETING THE SAID ADDITION OF RS. 2,76,000/-. 2 ITA NO. 594/JP/2015 SHRI RANJEET SINGH YADAV VS. ACIT JAIPUR. 2. BRIEF FACTS ARE THAT THE ASSESSEE DERIVES INCOME FROM BROKERAGE OF PROPERTY DEALINGS AND RENTAL INCOME. ACCORDING TO AO, ASSESS EE COULD NOT PRODUCE ANY EVIDENCE TO SUPPORT THE RECEIPTS OF BROKERAGE OF RS . 6,60,000/- AND THE EXPENSES OF RS. 3,51,221/- INCURRED IN THIS BEHALF. WHEN ASKED ABOUT THE ADDRESS OF OFFICE AND THE PERSONS TO WHOM SALARY PAID, NOTHING WAS SUBMIT TED BY THE LD. A/R. VEHICLE EXPENSES ARE MAINLY FOR LUXURY VEHICLE CAR PURCHASE D FOR RS. 10,10,330/- DURING THE YEAR AFTER DISPOSING OFF THE OLD CAR. ADMITTEDLY NO LOG BOOK IS MAINTAINED FOR USE OF CAR SO AS TO DETERMINED EXACT USE OF THIS VEHICLE F OR BUSINESS. APPARENTLY, THE CAR WAS USED MAINLY FOR PERSONAL PURPOSES RATHER THAN B USINESS OF THE ASSESSEE. SIMILARLY PURCHASE OF FURNITURE OF RS. 55,000/- CLA IMED BUT NO DETAILS OR BILLS ETC. WERE PRODUCED NOR THEIR USE IS EXPLAINED. CONSIDERI NG ALL THESE FACTS THE EXPENDITURE CLAIM OF THE ASSESSEE IS NOT FULLY ALLOWABLE. SINCE DETAILS OF RECEIPTS HAS NOT BEEN FURNISHED, TOTAL RECEIPTS ARE ESTIMATED AT RS. 8 LA CS AS AGAINST RS. 6,60,000/- DISCLOSED AND EXPENDITURE OF RS. 1,00,000/- IS ALLO WED FOR INCIDENTAL EXPENSES RELATED TO EARNING OF BROKERAGE AND NET INCOME FROM THIS BUSINESS IS ESTIMATED AT RS.7,00,000/-. 3. SIMILARLY, THE AO FOUND THAT THE HOUSEHOLD WITHD RAWALS WERE VERY LOW AND AS PER THE DETAILS IN THIS BEHALF, THE AO MADE ADDITIO N OF RS. 2,76,000/- AS UNDISCLOSED HOUSEHOLD EXPENSES BY FOLLOWING OBSERVATIONS : NO DETAILS OF STATUS AND STRENGTH OF FAMILY HAVE BEEN FURNISHED. HOWEVER, IT MAY BE SEEN THAT THE LIFE ST YLE OF THE ASSESSEE IS QUITE GOOD. IT IS EVIDENT FROM THE FACT THAT HE IS USING A LUXURY VEHICLE COSTING MORE THAN RS. 10 LAC S. HE HAS PAID LIC PREMIUM OF RS. 1,35,000/- DURING THE YEAR. NO CAPITAL ACCOUNT OR BALANCE SHEET IS FILED SO AS TO FURTHER JUDGE THE STATUS OF THE ASSESSEE. CONSIDERING THESE FACTS ASS ESSEES DRAWINGS ARE ESTIMATED AT RS. 50,000/- PER MONTH I. E. RS. 3 ITA NO. 594/JP/2015 SHRI RANJEET SINGH YADAV VS. ACIT JAIPUR. 6,00,000/- PER ANNUM. IT MAY FURTHER BE SEEN THAT O UT OF TOTAL RECEIPTS OF BROKERAGE, THE ASSESSEE HAD DEPOSITED R S. 4,66,700- 15,000 I.E. RS. 4,51,700/- IN CASH IN BANK ACCOUNT WHICH HAS BEEN USED FOR PAYMENT OF LIC PREMIUM, INSTALMENTS O F CAR LOAN, AND ADVANCE OF RS.1,00,000/- TO ONE SHRI NARENDRA Y ADAV. AS SUCH THE AMOUNT AVAILABLE FOR HOUSEHOLD DRAWINGS OU T OF ESTIMATED BUSINESS INCOME AND RENTAL INCOME WAS OF RS. 7,00,000 + RS. 75,000 RS. 4,51,700 = RS. 3,24,000 /- ONLY AS AGAINST ESTIMATED HOUSEHOLD EXPENSES OF RS. 6 LACS AS ABOVE. ACCORDINGLY AFTER GIVING SET OFF OF BUSINESS INCOME AVAILABLE FOR HOUSEHOLD, AN AMOUNT OF RS. 2,76,000/- IS FURTHER C ONSIDERED AS UNDISCLOSED EXPENDITURE OF THE ASSESSEE ON ACCOUNT OF HOUSEHOLD EXPENDITURE AND ADDED ACCORDINGLY. 4. AGGRIEVED, ASSESSEE PREFERRED FIRST APPEAL WHERE ALSO NO FURTHER EVIDENCE WAS FILED TO SUPPORT THE RECEIPTS SHOWN FROM THE BROKER AGE OF PROPERTY AND THE DETAILS OF EXPENDITURE. CONSIDERING THE ENTIRETY OF FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT (A) GAVE PART RELIEF BY FOLLOWING OBSERVATIONS :- 5.5. HAVING CONSIDERED THE SUBMISSIONS PLACED ON RECORD, I FIND THAT THE APPELLANT HAS CONTINUED WITH THE POLICY OF NON- COMPLIANCE EVEN IN THE COURSE OF APPELLATE PROCEEDINGS AS THE FIRST NO TICE WAS ISSUED ON 16.09.2014 FOR WHICH NO COMPLIANCE WAS MADE. AGAIN NOTICE WAS ISSUED ON 17.10.2014 AND IN RESPONSE TO THIS NOTICE ADJOURNMENT WAS SOUGHT ON 07.11.2014 AND AGAIN ADJOURNMENT WAS SOUG HT ON 10.12.2014, AGAIN ON 30.12.2014. FINALLY, NOTICE WA S ISSUED ON 11.02.2015 AND AGAIN ADJOURNMENT WAS SOUGHT TO 03.0 3.2015 AND IN RESPONSE TO THIS THE SUBMISSIONS WERE FILED BUT WIT HOUT ANY SUPPORTING EVIDENCE. 5.6. CONSIDERING THE EVIDENCE PLACED ON RECORD, I F IND THAT APPELLANT HAS FAILED TO ADDUCE ANY EVIDENCE IN SUPPORT OF ITS CONTENTIONS. NO DETAILS OF RECEIPT OF INCOME AND CLAIM OF EXPENSES HAVE BEEN FILED EVEN IN THE COURSE OF APPELLATE PROCEEDINGS. THE APPELLA NT HAS DECLARED TOTAL RECEIPTS OF RS. 6,60,000, WHICH WERE ESTIMATE D BY THE AO AT RS. 8 LACS. IN THE ABSENCE OF ANY BASIS FOR ESTIMATING TH E FIGURE OF RECEIPTS FROM BUSINESS, I HOLD THAT IT WOULD BE FAIR TO TAKE THE RECEIPTS AT RS. 6,60,000 AS DECLARED BY THE APPELLANT. AS REGARDS T HE CLAIM OF EXPENSES IS CONCERNED, IN THE ABSENCE OF ANY EVIDEN CE HAVING BEEN PRODUCED IN THE COURSE OF APPELLATE PROCEEDINGS TO CONTROVERT THE FINDINGS GIVEN BY THE AO, I HOLD THAT AN AMOUNT OF RS. 1 LACS ALLOWED BY THE AO ON THIS GROUND IS FAIR AND REASONABLE. 4 ITA NO. 594/JP/2015 SHRI RANJEET SINGH YADAV VS. ACIT JAIPUR. 5.7. IN VIEW OF THE ABOVE FACTS, THE BUSINESS INCOM E OF THE APPELLANT WOULD BE RS. 5,60,000/- AS AGAINST RS. 7 LACS ESTIM ATED BY THE AO. IN RESPECT OF HOUSEHOLD EXPENSES, THE LD. CIT (A) C ONFIRMED THE ADDITION OF RS. 2,76,000/- BY FOLLOWING OBSERVATIONS :- 6.3. I HAVE GONE THROUGH THE ASSESSMENT ORDER AS W ELL AS SUBMISSIONS MADE BY THE APPELLANT AND FIND THAT AN ADDITION OF RS. 2,76,000/- HAS BEEN MADE BY THE AO ON ACCOUNT OF LO W HOUSEHOLD WITHDRAWALS. NO DETAILS WERE PROVIDED BY THE APPELL ANT BEFORE THE AO ON THIS ISSUE. THE ADDITION HAS BEEN MADE ON THE BA SIS OF ENTRIES RECORDED IN THE BANK ACCOUNT SHOWING CASH DEPOSITS AND UTILIZATION OF FUNDS FOR THE PURPOSES OF PAYMENT OF LIC PREMIUM. 6.4. THE APPELLANT HAS FAILED TO FURNISH ANY SUCH D ETAILS EVEN IN THE COURSE OF PRESENT PROCEEDINGS. THEREFORE, I UPHOLD THE QUANTUM OF HOUSEHOLD WITHDRAWALS ESTIMATED BY THE AO. ACCORDIN GLY, THE ADDITION OF RS 2,76,000/- MADE BY THE AO UNDER HEAD IS CONFI RMED. 5. NOW THE ASSESSEE IS BEFORE US. 5.1. LD. COUNSEL FOR THE ASSESSEE CONTENDS AS UNDER :- LD. CIT (A) APPRECIATED THE FACT THAT IN PROPERTY D ALAALI BUSINESS, THERE IS HIGH INCIDENCE OF EXPENDITURE BECAUSE OF ONLY FE W DEALS ULTIMATELY BEING MATERIALIZED. LD. CIT (A) KEPT THE DISALLOWAN CE OF EXPENSES MADE BY LD. AO INTACT ALTHOUGH REDUCED THE ESTIMATE D RECEIPTS FROM RS. 8,00,000/- ESTIMATED BY LD. AO TO RS. 6,60,000/ - AS OFFERED BY THE ASSESSEE. EVEN THE NEW WORKINGS RESULTS INTO EXPENDITURE BEIN G 15.15% [(1,00,000/6,60,000)*100] ONLY AGAINST THE EXPENDIT URE OF 53.21% [(3,51,221/6,60,000)*100] CLAIMED BY THE ASSESSEE. A FURTHER RELIEF IS PRAYED FOR TO BRING THE EXPENDITURE TO A REALISTIC FIGURE. IT WAS EXPLAINED TO THE LOWER AUTHORITIES THAT THE ASSESSEE HAILS FROM A RURAL BACKGROUND. HIS LIFESTYLE IS NOT LAVISH. HE G ETS SUPPORT FROM HIS 5 ITA NO. 594/JP/2015 SHRI RANJEET SINGH YADAV VS. ACIT JAIPUR. FAMILY AT HIS NATIVE PLACE BY WAY OF SUPPLEMENTING THE KITCHEN NEEDS (WHEAT, GHEE, ETC.). LOWER AUTHORITIES HAVE NOT DISPUTED THIS FACT BUT H AVE FAILED TO FACTOR THIS FACT IN THEIR ESTIMATION OF HOUSEHOLD EXPENSES . AT THE END OF THE ARGUMENTS, LD. COUNSEL CONTENDED THAT ADDITIONS ARE EXCESSIVE AND PRAYED THAT A REASONABLE VIEW MAY BE ADOPTED. 5.2. ON THE OTHER HAND, THE LD. D/R VEHEMENTLY CONT ENDED THAT THE ASSESSEE HAS BEEN NON-COOPERATIVE AND EVASIVE AND HAS NOT GIVEN ANY CORROBORATIVE EVIDENCE IN SUPPORT OF HIS OWN CLAIM AND LUXURIOUS HOUSEHOLD LI FESTYLE. 5.3. I HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IT EMERGES FROM RECORD THAT THE ASSESSEE HAS NOT BE EN DILIGENT IN COMPLYING WITH THE REQUIREMENTS OF THE AO AND COULD NOT IMPROVE HI S CASE BEFORE LD. CIT (A). HOWEVER, IN THE INTEREST OF SUBSTANTIAL JUSTICE, IT IS DESIRABLE THAT A RELIEF OF RS. 1,00,000/- IN RESPECT OF ESTIMATED BUSINESS ADDITIO N AND RS. 50,000/- IN RESPECT OF ESTIMATED HOUSEHOLD EXPENSES IS GRANTED. REMAINING ADDITIONS ARE CONFIRMED. 6. IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALLOW ED. ORDER PRONOUNCED IN THE OPEN COURT ON 27/04/201 6. SD/- VKJ-IH-RKSYKUH (R.P.TOLANI) U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 27/04/2016. DAS/ 6 ITA NO. 594/JP/2015 SHRI RANJEET SINGH YADAV VS. ACIT JAIPUR. VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI RANJEET SINGH YADAV, JAIPUR. 2. IZR;FKHZ@ THE RESPONDENT- THE ACIT, CENTRAL CIRCLE-1, JAIPUR . 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 594/JP/2015) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR