Shri Yogesh Raojibhai Patel, Anand V. The Income Tax Officer, Ward-1, Anand

ITA 631/AHD/2014

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 7681 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 1 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-04-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 06-06-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 03-03-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Unexplained investment; Depreciation; Corroborative evidences
• Section: 143(3); 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD SMC BENCH BEFORE: SHR I RAJPAL YADAV , JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER YOGESH RAOJIBHAI PATEL PROP. SHREE YOGI AUTO FUEL, H. P. PETRO PUMP, BHALEJ ROAD, ANAND - 388001 PAN: AEIPP4490D (APPELLANT) VS THE IT O , WARD - 1, ANAND (RESPONDENT) REVENUE BY : S H RI SOMOGYAN PAL , SR. D . R. ASSESSEE BY: MS. ARTI SHAH, A.R. DATE OF HEARING : 02 - 04 - 2 019 DATE OF PRONOUNCEMENT : 08 - 04 - 2 019 / ORDER P ER : AMARJIT SINGH, ACCOUNTANT MEMBER : - THIS ASSE SSEE S APPEAL FOR A.Y. 2009 - 10 , ARI SES FROM ORDER OF THE CIT(A) - IV, AHMEDABAD DATED 09 - 1 2 - 2 013 , IN PROCEEDINGS UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . I T A NO . 631 / A HD/20 14 A SSESSMENT YEAR 200 9 - 10 I.T.A NO. 631 /AHD/20 14 A.Y. 2009 - 10 PAGE NO YOGESH RAOJIBHAI PATEL VS. IT O 2 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: - 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - IV, BARODA HAS ERRED IN LAW AND ON FACTS OF THE CASE BY CONFIRMING THE ADDITION OF RS.91,917/ - MADE BY THE ASSESSING OFFICER ON ESTIMATION BASIS IN RESPECT OF HOUSEHOLD EXPENDITURE. 2. THE LEARNED COMMISSIONER OF INCOM E TAX (APPEALS) - IV, BARODA HAS ERRED IN LAW AND ON FACTS OF THE CASE BY CONFIRMING THE ADDITION OF RS.85,255/ - MADE BY THE ASSESSING OFFICER IN RESPECT OF VEHICLE EXPENSES. 3. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - IV, BARODA HAS ERRED IN LAW AND ON FACTS OF THE CASE BY CONFIRMING THE ADDITION OF RS .5,00,000/ - BY THE ASSESSING OFFICER U/S 69 IN RESPECT OF INVESTMENT IN PROPERTY. 4. THE APPELLANT PRAYS FOR THE FOLLOWING: (1) TO DELETE THE DISALLOWANCE OF HOUSEHOLD EXPENSE OF RS 91,9 17/ - . (2) TO DELETE THE DISALLOWANCE OF VEHICLE EXPENSES OF RS 85,255/ - . (3) TO DELETE THE DISALLOWANCE OF RS 5,00,000/ - MADE U/S 69 IN RESPECT OF INVESTMENT MADE IN PROPERTY. 3 . IN THIS CASE, RETURN OF INCOME DECLARING INCOME OF RS. 3 , 23 , 110/ - WAS FILED ON 30 TH SEP, 2009. SUBSEQUENTLY, THE CASE WAS SELECTED UNDER SCRUTINY BY ISSUING OF NOTICE U/S. 143(2) OF THE ACT ON 20 TH AUGUST, 2010. DURING THE COURSE OF ASSESSMENT PROCEE DINGS, THE ASSESSING OFFICER NOTICED THAT ASSESSEE HAS SHOWN HOUSEHOLD EXPEND ITURE INCURRED DURING THE YEAR TO THE AMOUNT OF RS. 1 , 48 , 083/ - . THE ASSESSING OFFICER HAS CALLED FOR JUSTIFICATION OF THE REASONABLENESS OF THE AFORESAID EXPENDITURE CLAIMED TO BE INCURRED BY THE ASSESSEE. THE ASSESSEE HAS EXPLAINED THAT HIS FAMILY HAS C ONSISTED OF FOUR MEMBERS, SELF, WIFE AND TWO CHILDREN WHO WERE STUDYING , THEREFORE , LOOKING TO THE SIZE OF THE FAMILY , THE HOUSEHOLD EXPENDITURE WERE PROPERLY SHOWN. THE ASSESSING OFFICER HAS NOT AGREED WITH THE EXPLANATION OF THE ASSESSEE. HE WAS OF THE VIEW THAT LOOKING TO THE SOCIAL STATUS OF THE ASSESSEE, TWO SCHOOL GOING CHILDREN , THE EXPENDITURE @ 1 , 4 8, 083/ - TOWARDS HOUSEHOLD WERE NOT PROPER AND REASONABLE. THE ASSESSING OFFICER HAS ALSO TAKEN INTO CONSIDERATION THE PETROL EXPENDITURE, ELECTRI C IT Y EXPENSES ETC. AND COMPUTED I.T.A NO. 631 /AHD/20 14 A.Y. 2009 - 10 PAGE NO YOGESH RAOJIBHAI PATEL VS. IT O 3 THE TOTAL HOUSEHOLD EXPENDITURE @ 20 , 000/ - PER MONTH AND ADDED THE DIFFERENT AMOUNT OF RS. 91 , 917/ - TO THE TOTAL INCOME OF THE ASSSESSEE. 4 . DURING THE CO URS E OF ASSESSMENT , THE ASSESSING OFFICER HAS ALSO NOTICED THAT ASSESSEE HAS DEBITED VEHICLE EXPENSES AT RS. 8 , 999/ - , VEHICLE INSURANCE EXPENSES RS. 41 ,34 4/ - , VEHICLE LOAN INTEREST AT RS. 21 , 524/ - , AND DEPRECIATION OF CAR AT RS. 3 , 54 ,353/ - . T HE TOTAL OF T H E SE EXPENSES WAS RS. 4 , 26 ,220/ - . THE ASSESSING OFFICER WAS OF THE VIEW THAT THE PERSONAL U S E OF M OTOR CAR CANNOT BE RULED OUT. THEREFORE, ASSESSING OFFICER HAS DISALLOWED 20% OF T HESE EXPENSES TO THE AMOUNT OF RS . 85 , 244/ - AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 5 . DURING THE COURSE OF ASSESSMENT , THE ASSESSING OFFICER FURTHER NO TICED THAT ASSESSEE HAS PURCHASED A PROPERTY TO THE WROTH OF RS . 7 8 , 87 , 000/ - DURING THE YEAR UNDER CONSIDERATION . THE ASSESSING OFFICER ASKED THE ASSESSEE TO EXPLAIN THE SOURCE OF PURCHASE OF THIS PROPERTY. THE ASSESSEE EXPLAINED THAT THIS PROPERTY WAS J OINTLY PURCHASED AND H E WAS HAVING 25% SHARES IN THE PROPERTY . THE ASSESSEE HAS CONTRIBUTED AS PER HIS SHARE TO THE AMOUNT OF RS . 22,50,000/ - . THE ASSESS EE EXPLAINED THAT THE INVESTMENT WAS MADE OUT OF AGRICULTURAL INCOME EARNED BY HIS FAT H ER SHR I RAOJ IBHAI NAYARBHAI PATEL WHO WAS HAVING MORE THAN 30 BIGHAS OF AGRICULTURAL LAND. THE ASSESSING OFFICER HAS NOT AGREED WITH THE EXPLANATION OF THE ASSESSE. HE STATED THAT THE ASSESEE HAS FAILED TO SUBSTANTIATE WITH THE RELEVANT SUPPORTING EVIDENCES I.E. SAL E OF BILLS OF AGRICULTURE PRODUCE, BILLS OF EXPENDITURE FOR AGRICULTURE ACTIVITY ETC. TO ESTABLISH THAT THE SOURCE OF CASH DEPOSIT WAS FROM OUT OF THE AGRICULTURE INCOME EARNED BY HIS FATHER. THEREFORE, THE ASSESSING OFFICER HAS DISALLOWED I.T.A NO. 631 /AHD/20 14 A.Y. 2009 - 10 PAGE NO YOGESH RAOJIBHAI PATEL VS. IT O 4 TO THE EXTENT OF RS. 5 LACS OUT OF TOTAL CASH DEPOSIT OF RS. 22,50,000/ - CLAIMED BY THE ASSESSEE OUT OF AGRICULTURE INCOME OF HIS FATHER. 6 . AGGRIEVED ASSESSEE HAS FILED APPEAL BEFORE THE LD. CIT(A). IN RESPECT OF D ISALLOWANCE OF HOUSEHOLD EXPENDITURE , THE LD. CIT(A) HAS DISMISSED THE APPEAL OF THE ASSESSEE STATING THAT THE ASSESSEE HAS NOT SHOWN WITHDRAWAL BY ANY OF HIS FAMILY MEMBERS AND ASSESSEE HAS NOT SHOWN ANY PETROL EXPENDI TURE IN SPITE OF THE FACT THAT HE HAS PURCHASE D A NEW VEHICLE DURING THE YEAR UNDER CON SIDERATION. THE LD. CIT(A) HAS ALSO SUSTAINED THE DISALLOWANCE OF VEHICLE EXPENSES MADE BY THE ASSESSING OFFICER ON THE GROUND THAT ASSESSEE HAS NOT ESTABLISHED THAT THE VEHICLE WAS USED EX CLUSIVELY FOR HIS BUSINESS PURPOSE . THE LD. CIT(A) HAS ALSO SUSTA INED THE ADDITION OF R S. 5 LACS MADE BY THE ASSESSING OFFICER U/S. 69 OF THE ACT AS UNACCOUNTED INVESTMENT IN THE PROPERTY ON THE GROUND THAT AS SESSEE COULD NOT FULLY EXPLAIN WITH SUPPORTING EVIDENCES THAT THE ENTIRE CASH DEPOSITS IN THE BANK ACCOUNT WAS OUT OF AGRICULTURAL INCOME OF HIS FATHER . 7 . DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE US, WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MATERIAL ON RECORD CAREFULLY. IN RESPECT O F DISALLOWANCE OF HOUSEHOLD TO THE AMOUNT OF R S. 91,917/ - , WE OBSE RVED THAT ASSESSEE HAS FAILED TO JUSTIFY THE HOUSEHOLD EXPENDIT URE CLAIM ED BY HIM AND ASSESSEE HAS NOT GIVEN ANY BREAK - UP OF THE EXPENDITURE INCURRED IN RESPECT OF ELECTRICITY, TELEPHONE AND PETROL EXPENDITURE ETC . THE ASSESSEE HAS ALSO PURCHASED A NEW VE HICLE DURING THE YEAR UNDER CONSIDERATION . WE HAVE FURTHER NOTICED THAT NO OTHER FAMILY MEMBER OF THE ASSESSEE HAS MADE ANY WITHDRAWAL DURING THE YEAR UNDER CONSIDERATION . AFTER CONSIDERING THE ABOVE I.T.A NO. 631 /AHD/20 14 A.Y. 2009 - 10 PAGE NO YOGESH RAOJIBHAI PATEL VS. IT O 5 FACTS AND ELABORATE FINDING OF THE LD. CIT(A), WE DO N OT FIND ANY REASON TO INTERFERE IN THE DECISION OF LD. CIT(A) ON THIS ISSUE, THEREFORE , THIS GROUND OF APPEAL OF T HE ASSESS EE IS DISMISSED. REGARDING DISALLOWANCE OF 20% OF VEHICLE EXPENSES OUT OF TOTAL EXPENSES OF RS. 460220/ - , IT IS NOTICED THAT MAJOR P ART OF VEHICLE EXPENSES PERTAINED TO INSURANCE, DEPRECIATION, VEHICLE LOAN. WE ARE OF THE VIEW THAT IT WILL BE REASONABLE TO RESTRICT THE DISALLOWANCE TO 10% OF THESE EXPENDITURE AS AGAINST 20% OF THE EXPENDITURE DISALLOWED BY THE ASSESSING OFFICER, T HER EFORE, WE RESTRICT THE DIS ALLOWANCE TO THE AMOUNT OF RS. 4262 0 / - . ACCORDINGLY, THIS GROUND O F APPEAL OF THE ASSESSEE IS PARTLY ALLOWED . REGARDING THIRD GROUND OF APPEAL OF THE ASSESSEE, PERTAINING TO ADDITION OF RS. 5 LACS U/S. 69 OF THE ACT AS UNACCOUNT ED INVESTMENT IN THE PROPERTY, WE HAVE GONE THROUGH THE MATERIAL ON RECORD. IT IS NOTICED THAT ASSESSEE HAS CONTRIBUTED RS. 22,50,000/ - TOWARDS PURCHASE OF THE LAND SITUATED NEAR LAKASA HOTEL, ANAND. THE ASSESSEE HAS EXPLAINED THAT THE SOURCE OF INVESTME NT WAS OUT OF AGRICULTURAL I NCOME OF HIS FATHER SHRI RAOJIBHAI PATEL. HOWEVER, WE FIND THAT IN SPITE OF GIVING A NUMBER OF OPPORTUNITIES DURING THE COURSE OF ASSESSMENT AND APPELLATE PROCEEDINGS, THE AS SESSEE HAS FAILED TO SUBSTANTIATE THE GENUINENESS OF CASH DEPOSIT AGGREGATING TO RS. 22,50,000/ - IN THE BANK ACCOUNT OUT OF THE AGRICULTURAL INCOME . T HE ASSESSEE HAS F A I LED TO FURNISH THE COMPLETE SUPPORTING BI L LS AND VOUCHERS FOR SALE OF AGRICULTURAL PRODUCE AND CORRESPONDING EXPENDITURE INCURRED TO EARN AGRICULTURAL INCOME. T HE ASSESSEE HAS ALSO NOT FILED ANY RETURN OF INCOME WHICH TO DEMONSTRATE EARNING OF AGRICULTURAL INCOME OUT OF WHICH THE CASH WAS DEPOSITED IN THE BANK FOR PURCHASING OF THE AFORESAID PROPERTY IN THE NAME OF THE ASSESSEE. I N THE LIGHT OF THE ABOVE MATERIAL FACT, I.T.A NO. 631 /AHD/20 14 A.Y. 2009 - 10 PAGE NO YOGESH RAOJIBHAI PATEL VS. IT O 6 WE DO NOT FIND ANY INFIRMITY IN THE DECISION OF LD. CIT(A), THEREFORE, THIS GROUND OF APPEAL OF THE ASSESSEE IS ALSO DISMISSED. 8 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PR ONOUNCED IN THE OPEN C OURT ON 08 - 04 - 201 9 SD/ - SD/ - ( RAJPAL YADAV ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 08 /04 /2019 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,