Sri. N. Jayaraman, Bangalore V. ITO, Bangalore

ITA 757/BANG/2010

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 1633 (ITAT-BANGALORE)
• Duration Of Justice: 7 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-01-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 07-06-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K HARIPRA SAD RAO
• Assessee Lawyers: BALARAM R RAO
• Section: 144; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH B BEFORE SMT. P.MADHAVI DEVI, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ITA NO.757(BANG)/2010 (ASSESSMENT YEAR: 2006-07) SHRI N.JAYARAMAN, NO.112/12, 1 ST FLOOOR, 11 TH CROSS (NEAR 5 TH MAIN) MALLESHWARAM, BANGALORE-560 003. VS. APPELLANT INCOME-TAX OFFICER, WARD 5(1), BANGALORE. RESPONDENT APPELLANT BY: SHRI BALARAM R. RAO. RESPONDENT BY : SHRI K. HARI PRASAD RAO. O R D E R PER SM T. P.MADHAVI DEVI, JM: THIS IS AN ASSESSEES APPEAL AND IS DIRECTED AGAIN ST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-I I [CIT(A)], BANGALORE, DATED 19-2-2010 FOR THE ASSESSMENT YEAR 2006-07. THE ASSESSEE IS AGGRIEVED BY THE ORDER OF THE CIT(A ) IN CONFIRMING THE ORDER OF THE AO IN MAKING DISALLOWAN CE OF RS.75,000/- ON ACCOUNT OF DEFICIENCY IN DRAWINGS. ITA 757(BANG)/2010 PAGE 2 OF 5 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S AN INDIVIDUAL AND IS A LEGAL PROFESSIONAL. HE FILED HI S RETURN OF INCOME FOR THE ASSESSMENT YEAR 2006-07 DECLARING IN COME OF RS.2,41,120/-. THE RETURN WAS INITIALLY PROCESSED U /S 143(1) OF THE INCOME-TAX ACT, 1961 [HEREINAFTER REFERRED TO A S 'THE ACT'] AND SUBSEQUENTLY TAKEN UP FOR SCRUTINY AND NOTICE U /S 143(2) WAS ISSUED ON 13-7-2007. AS NONE APPEARED FOR THE ASSESSEE AND THERE WAS NO RESPONSE IN SPITE OF SERVICE OF NO TICE AND AS THE ASSESSMENT WAS GETTING TIME-BARRED, THE AO COMP LETED THE ASSESSMENT U/S 144 OF THE ACT BY DISALLOWING AN AD HOC AMOUNT OF RS.75,000/- ON THE GROUND THAT THE ASSESSEE DID NOT FURNISH THE DETAILS OF CONSULTANCY CHARGES AND MISCELLANEOU S EXPENSES SAID TO HAVE BEEN INCURRED ALONG WITH BANK PASSBOOK AND BOOKS OF ACCOUNT AND ALSO DEFICIENCY IN DRAWINGS. 3. AGGRIEVED BY THE SAME, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) WHO CONSIDERED THE ASSESSE ES SUBMISSIONS THAT HE IS AN OLD AGED PERSON OF 71 YEA RS AND IS LIVING WITH HIS SON AND HAS VERY LESS PERSONAL EXPE NSES AND ALSO THE TOTAL DRAWINGS FROM THE BANK FOR THE YEAR END I S RS.1,23,866/-. BUT HE OBSERVED THAT AS PER STATEME NT OF ACCOUNT OF THE ASSESSEE, HIS WITHDRAWAL IS RS.48,00 0/- OUT OF WHICH THE ASSESSEE IS ALSO PAYING CONTRIBUTION TOWA RDS PPF OF RS.15,000/-PER ANNUM, INTEREST ON HOUSING LOAN OF R S.25,686/- BOTH TOTALING RS.40,686/-. THUS OBSERVING, THE CIT (A) HAS HELD THAT THIS AMOUNT IS TOO LOW FOR HIS SUSTENANCE AND THE ASSESSEE HAS NOT GIVEN THE DETAILS OF HIS SON WITH WHOM HE I S LIVING AND ITA 757(BANG)/2010 PAGE 3 OF 5 HIS SOURCE OF INCOME ETC., AND THEREFORE, HE CONFIR MED THE DISALLOWANCE OF RS.75,000/- AS INSUFFICIENT WITHDRA WAL. AGGRIEVED BY THE SAME, THE ASSESSEE IS IN SECOND AP PEAL BEFORE US. 4. SHRI BALARAM, THE LEARNED COUNSEL FOR THE ASSES SEE, WHILE REITERATING THE SUBMISSIONS MADE BEFORE THE C IT(A), HAS ALSO FILED BEFORE US PAPER BOOK CONSISTING OF COPIE S OF ICICI BANK ACCOUNT, STATEMENT OF TRANSACTIONS AND ALSO CO PY OF BALANCE-SHEET AS ON 31-3-2006 AND PROFIT & LOSS ACC OUNT AND STATEMENT OF AFFAIRS FOR THE PERIOD 31-3-2006. HE DREW OUR ATTENTION TO THE VARIOUS TRANSACTIONS WITH ICICI BA NK TO DRIVE HIS POINT THAT THERE ARE DRAWINGS OF AT LEAST RS.10 ,000/- PER MONTH FOR THE PERSONAL EXPENSES OF THE ASSESSEE. H E ALSO DREW OUR ATTENTION TO THE PROFIT & LOSS ACCOUNT FOR THE YEAR ENDING 31-3-2006 SHOWING PROFESSIONAL RECEIPTS OF RS.7,24, 593/- OUT OF WHICH THERE ARE EXPENSES TO THE TUNE OF NEARLY RS.6 ,80,000/- AND THE NET PROFIT FOR THE YEAR ENDING 31-3-206 IS RS.44,078/-. HE ALSO DREW OUR ATTENTION TO THE BALANCE SHEET AS ON 31-3-2006 AND SUBMITTED THAT THE DRAWINGS OF RS.48, 000/- ARE FROM THE CAPITAL ACCOUNT AND NOT FROM THE BANK ACCO UNT. THIS, ACCORDING TO HIM, IS IN ADDITION TO THE DRAWINGS FR OM THE BANK ACCOUNT. THUS, ACCORDING TO HIM, THE ASSESSEE WHO IS 71 YEARS OLD AND LIVING WITH HIS SON NEEDS VERY LESS PERSONA L EXPENSES AND THIS AMOUNT OF NEARLY RS.1,20,000/- AND RS.48,0 00/- IS MUCH MORE THAN ENOUGH TO SUSTAIN HIMSELF AND HIS FA MILY AND ALSO PAY THE INTEREST AND THE PPF. THUS, ACCORDING TO HIM, THE ITA 757(BANG)/2010 PAGE 4 OF 5 CIT(A) HAS NOT PROPERLY APPRECIATED THE EVIDENCE FI LED BY HIM AND THE DISALLOWANCE OF RS.75,000/- CONFIRMED BY TH E CIT(A) NEEDS TO BE DELETED. SHRI K. HARI PRASAD RAO, THE LEARNED DR, HOWEVER, SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW AND S UBMITTED THAT THE ASSESSEE HAS NOT PRODUCED EVIDENCE BEFORE THE AO AND ALSO BEFORE THE CIT(A) TO SUBSTANTIATE HIS CLAIM TH AT HE IS LIVING WITH HIS SON AND DOES NOT NEED MUCH DRAWINGS FOR HI S OWN SUSTENANCE AS PER HIS STANDARD OF LIVING. 5. HAVING HEARD BOTH THE PARTIES AND HAVING CONSID ERED THE MATERIAL ON RECORD. WE FIND THAT UNDISPUTEDLY T HE ASSESSEE IS A PROFESSIONAL AND IS 71 YEARS OLD. BEING AN OL D AGED PERSON, IT IS NOT UNCOMMON TO BE LIVING WITH HIS SON OR WIT H HIS OWN OFFSPRING. IN SUCH CASES, MOST OF THE PERSONAL EXP ENSES OF THE ASSESSEE WOULD BE MET OUT OF COMMON FUNDS OF THE FA MILY. EVEN OTHERWISE, THE ASSESSEE IS DRAWING CASH FROM T HE BANK ACCOUNT ITSELF OF NEARLY RS.1,20,000/-AND RS.48,000 /- FROM THE CAPITAL ACCOUNT WHICH ITSELF IS SUFFICIENT TO SUSTA IN HIMSELF AND ALSO TO PAY THE PPF AND INTEREST ON HOME LOAN. IN VIEW OF THE SAME, WE ARE OF THE OPINION THAT THERE IS NO DEFICI ENCY OF ANY DRAWINGS AND THE ADDITION MADE ON ACCOUNT OF THE SA ME IS TO BE DELETED. ITA 757(BANG)/2010 PAGE 5 OF 5 6. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 20TH JANUARY , 2011. SD/- SD/- (A. MOHAN ALANKAMONY) ACCOUNTANT MEMBER (SMT. P.MADHAVI DEVI) JUDICIAL MEMBER EKS COPY TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A) CONCERNED 4. CIT 5. DR, ITAT, BANGALORE 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE