Sh. H.S Chawla, Mohali V. ITO, Mohali

ITA 818/CHANDI/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 57739 (ITAT-CHANDIGARH)
• Duration Of Justice: 7 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-03-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 22-03-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 19-08-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Salary income
• Section: 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES SMC CHANDIGARH BEFORE SHRI H.L.KARWA, HON'BLE, VICE PRESIDENT ITA NO. 818/CHD/2011 ASSESSMENT YEAR: 2007-08 SHRI H.S. CHAWLA VS THE ITO, CHAWLA COMPLEX, WARD 6(1), CHANDIGARH KHARAR ROAD, MOHALI VILLAGE-DAUN, DISTRICT MOHALI PAN NO. ACJPC2658R (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI PARIKSHIT AGGARWAL RESPONDENT BY : SHRI AKHILESH GUPTA DATE OF HEARING : 22.03.2012 DATE OF PRONOUNCEMENT : 22.03.2012 ORDER THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF CIT(A), CHANDIGARH DATED 16.6.2011 RELATING TO ASSE SSMENT YEAR 2007-08. 2. IN THIS APPEAL, THE ASSESSEE HAS CHALLENGED THE ACTION OF THE CIT(A) IN CONFIRMING THE ADDITION OF RS. 2,00,000/- ON ACCOUN T OF LOW HOUSEHOLD WITHDRAWALS. 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE IS AN INDIVIDUAL. THE SOURCE OF INCOME OF THE ASSESSEE I S SALARY INCOME FROM A 2 COMPANY BEING DIRECTOR OF M/S RELIANT INFRASTRUCTUR E PVT. LTD FIRM, SALARY AS PARTNER OF M/S DR. SAHIB SINGH & SONS, INTEREST INC OME AND SHARE INCOME FROM THE FIRM M/S DR. SAHIB SINGH & SONS. FOR THE ASSESSMENT YEAR UNDER CONSIDERATION, THE ASSESSEE HAD DECLARED INCOME FRO M THE COMPANY AND FIRM AT RS. 1,00,000/- AND RS. 1,20,000/- RESPECTIVELY. INTEREST INCOME HAS BEEN SHOWN AT RS. 744/-. THE SHARE INCOME FROM M/S DR. SAHIB SINGH & SONS HAS BEEN DECLARED AT RS. 6,16,296/- AND THE SAME HAS BE EN CLAIMED EXEMPT U/S 10 OF THE INCOME TAX ACT, 1961 (IN SHORT 'THE ACT'). DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER REQUIRED THE ASS ESSEE TO FURNISH THE DETAILS OF THE HOUSE HOLD EXPENSES AND DETAILS OF CLUB MEMB ERSHIP OF THE ASSESSEE. IN RESPONSE TO ABOVE QUERY, THE ASSESSEE VIDE LETTE R DATED 16.11.2009 INFORMED THE ASSESSING OFFICER THAT HE IS A MEMBER OF CHANDIGARH CLUB AND CHANDIGARH GOLF CLUB. THE ASSESSING OFFICER ALSO R EQUIRED THE ASSESSEE TO PROVIDE WITH THE DETAILS OF EXPENSES INCURRED IN CH ANDIGARH CLUB AND CHANDIGARH GOLF FLUB. THE ASSESSING OFFICER ALSO ASKED THE ASSESSEE TO FILE THE DETAILS OF DOMESTIC EXPENSES, TELEPHONE EXPENSE S, PETROL EXPENSES ETC. ON 19.11.2009, THE COUNSEL OF THE ASSESSEE APPEARED BE FORE THE ASSESSING OFFICER AND REITERATED THE SOURCE OF INCOME OF THE ASSESSEE FROM SALARY, INTEREST INCOME AND SHARE OF PROFIT FROM THE FIRM. IT WAS A LSO STATED THAT THE SON OF THE ASSESSEE WAS NOT STUDYING IN ANY SCHOOL. REGAR DING THE CLUB EXPENSES AND DETAILS OF HOUSE HOLD EXPENSES CALLED FOR, IT W AS STATED THAT THESE DETAILS ARE NOT AVAILABLE. HOWEVER, THE ASSESSEE OFFERED A N ADDITION OF RS. 1,00,000/- ON ACCOUNT OF CLUB EXPENSES AND HOUSE HO LD EXPENSES. THE ASSESSING OFFICER DID NOT ACCEPT THE ABOVE EXPLANAT ION OF THE ASSESSEE FOR THE REASONS STATED IN PARA 4 OF THE ASSESSMENT ORDER. THEREFORE, THE ASSESSING OFFICER MADE ADDITION OF RS. 2,00,000/-. 3 4. ON APPEAL, THE CIT(A) CONFIRMED THE ADDITION, OB SERVING AS UNDER:- 3.3 I HAVE CONSIDERED THE SUBMISSION OF THE LD. CO UNSEL FOR THE APPELLANT. A PERUSAL OF THE BREAK UP TO WIT HDRAWALS OF RS. 1,61,721/- REVEALS THAT WHOLE OF THIS AMOU NT WAS SPENT THROUGH CHEQUES OF SCHOOL FEES, LIC PREM IUM, CLUB PAYMENT, MEDI-CLAIM AND PERSONAL EXP ENDITURE OF RS. 47,699/-. FURTHER, THE APPELLANT HAD HIMSE LF OFFERED RS. 1,00,000/- FOR TAXATION DURING THE COURSE OF ASSESSMENT PROCEEDINGS, BUT THE APPELLANT HAD NOT CONVEYED TO THE A.O. THAT ALL THE PAYMENTS MADE OUT OF THE AMOUNT .OF RS. 1,61,721/- WERE THROUGH CHEQUES. THU S, AMOUNT WHICH IS LEFT FOR HOUSE HOLD PURPOSES IS ONL Y RS. 2,32,000/- (RS. 1,00,000/- + RS. 1,32.000/- CONTRIB UTED BY THE WIFE OF THE APPELLANT) FOR THE WHOLE YEAR, WHIC H WORKS OUT TO LESS THAN RS. 20,000/- PER MONTH. THIS AMOUN T IS QUITE LOW KEEPING IN VIEW THE STATUS OF THE APPELLA NT, THE LIVING STANDARD AND THE FACT THAT HE IS MEMBER OF T WO MOST PRESTIGIOUS CLUBS OF CHANDIGARH AND EXCEPT RS. 520/ -, NO CLUB EXPENSES HAVE BEEN DECLARED. IN MY CONSIDERED VIEW, THE ADDITION MADE BY THE A.O. OF RS. 2,00,000/- IS QUITE REASONABLE KEEPING IN VIEW THE STATUS OF THE APPELL ANT AND THE SAME IS CONFIRMED. GROUND OF APPEAL NO.3 IS DISMISSED. 5. I HAVE HEARD THE LD. REPRESENTATIVES OF BOTH THE PARTIES AT LENGTH AND HAVE ALSO PERUSED THE MATERIALS AVAILABLE ON RECORD . IT IS APPARENT FROM THE RECORD THAT THE ASSESSEE HAD HIMSELF WITHDRAWN AN A MOUNT OF RS. 1,61,721/- FROM THE FIRM AND RECEIVED SALARY OF RS. 1,00,000/ -. FURTHER, HIS WIFE HAD ALSO RECEIVED SALARY OF RS. 1,32,000/- FROM DR. SAH IB SINGH & SONS, IN CASH, AND THIS AMOUNT WAS UTILIZED FOR HOUSE HOLD PURPOSE S. IT IS AN ADMITTED FACT THAT ASSESSEES FAMILY CONSISTED OF SELF, HIS WIFE AND ONE SCHOOL GOING CHILD. BOTH THE AUTHORITIES BELOW HAVE HELD THAT RS. 2,32, 000/- (RS. 1,00,000/- + RS. 1,32,000/- CONTRIBUTED BY THE WIFE OF THE ASSESSEE) WAS AVAILABLE FOR THE PURPOSES OF HOUSE HOLD EXPENSES. IT IS CLEAR FROM T HE ORDERS OF THE LOWER AUTHORITIES THAT THE ADDITION OF RS. 2,00,000/- WAS MADE MERELY ON THE GROUND 4 THAT THE ASSESSEE IS A MEMBER OF TWO MOST PRESTIGIO US CLUBS OF CHANDIGARH AND EXCEPT RS. 520/-, NO CLUB EXPENSE HAVE BEEN DEC LARED. IT IS SEEN THAT THE TOTAL WITHDRAWALS MADE BY THE ASSESSEE AND HIS WIFE AGGREGATED TO RS. 3,93,721/- (RS. 1,61,721/- + RS. 1,00,000/- BEING S ALARY FROM M/S RELIANT INFRASTRUCTURE PVT LTD + RS. 1,32,000/- CONTRIBUTED BY THE WIFE OF THE ASSESSEE). IT IS OBSERVED THAT DURING THE COURSE O F ASSESSMENT PROCEEDINGS, THE ASSESSEE HIMSELF HAD OFFERED RS. 1,00,000/- FOR TAXATION BUT THE ASSESSING OFFICER DID NOT ACCEPT THE SAME. IT MAY BE RELEVAN T TO OBSERVE HERE THAT BOTH THE AUTHORITIES BELOW HAVE NOT STATED ANYTHING ABOU T THE PAST HISTORY OF THE ASSESSEES CASE. IN FACT, NO COGENT REASONS HAVE B EEN GIVEN BY THE LOWER AUTHORITIES WHILE MAKING THE ADDITION OF RS. 2,00,0 00/- ON ACCOUNT OF LOW HOUSE HOLD WITHDRAWALS. CONSIDERING THE ENTIRE FAC TS AND CIRCUMSTANCES OF THE PRESENT CASE, I AM OF THE VIEW THAT THE ADDITIO N MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE CIT(A) IS HIGHLY EXCES SIVE AND DESERVES TO BE REDUCED. IN MY VIEW, THE ADDITION OF RS. 1,00,000/- IN THIS CASE WILL MEET THE ENDS OF JUSTICE KEEPING IN VIEW THE PECULIAR FACTS AND CIRCUMSTANCES AND HENCE THE ASSESSEE GET A RELIEF OF RS. 1,00,000/-. THE GROUND OF APPEAL IS ALLOWED PARTLY. 6. IN THE RESULT, APPEAL IS ALLOWED PARTLY. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 22 ND DAY OF MARCH, 2012. SD/- (H.L.KARWA) VICE PRESIDENT DATED : 22 ND MARCH, 2012 RKK 5 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR TRUE COPY BY ORDER ASSISTANT REGISTRAR