Shri Anilkumar Mithalal Jain, Ahmedabad V. The Asstt. Comm. of Income Tax (OSD) Cir-10, Ahmedabad

ITA 943/AHD/2009

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 1668 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-03-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 28-03-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 27-03-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R K TOPIWALA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH C AHMEDABAD BEFORE SHRI D.K.TYAGI, HONBLE JUDICIAL MEMBER, AND SHRI D. C. AGRAWAL, HONBLE ACCOUNTANT MEMBER ITA NO.943/AHD/2009 ASSESSMENT YEAR:2004-05 DATE OF HEARING:8. DRAFTED:0..11 ANILKUMR MITHALAL JAIN, 221, MANEK BAUG SOCIETY, AMBAWADI, AHMEDABAD PAN NO.AAXPJ8826G V/S . ASSTT. COMMISSIONER OF INCOME-TAX (OSD), CIRCLE-10, 1 ST FLOOR, NARAYAN CHAMBERS, ASHRAMA RD. AHMEDABAD (APPELLANT) .. (RESPONDENT) APPELLANT BY :- WRITTEN SUBMISSION RESPONDENT BY:- SHRI R.K. TOPIWALA, DR O R D E R PER D.K.TYAGI, JUDICIAL MEMBER:- THIS IS ASSESSEES APPEAL AGAINST THE ORDER OF COM MISSIONER OF INCOME-TAX(APPEALS)XVI, AHMEDABAD IN APPEAL NO.CIT( A)XVI/CIR.10/168/ 2006-07 DATED 15-01-2009 FOR THE ASSESSMENT YEAR 20 04-05. 2. THE ASSESSEE HAS TAKEN FOLLOWING GROUND:- 1.0 THE ORDER PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) IS BAD IN LAW SINCE IT IS CONTRARY TO THE PROVISIONS O F THE LAW AND THE FACTS OF YOUR APPELLANTS CASE. IT IS SUBMITTED THAT IT B E SO HELD NOW. 2.0 THE COMMISSIONER OF INCOME TAX(APPEALS) ERRED I N UPHOLDING ADDITION OF RS.1,01,000/- MADE BY THE ASSESSING OFF ICER ALLEGING LOW OF HOUSEHOLD EXPENSES. THE APPELLANT WAS DULY ACCOUNTE D FOR AND REFLECTED IN THE BOOKS OF ACCOUNT. THE APPELLANT HA D NOT INCURRED ANY ITA NO.943/AHD/009 A.Y. -05 ANILKUMR M JAIN V. ACIT (OSD)CIR-10ABD PAGE 2 EXPENDITURE WHICH WAS NOT REFLECTED IN THE BOOKS OF ACCOUNT. THE ADDITION OF RS.1,01,000/- MADE BY THE ASSESSING OFF ICER IS BAD IN LAW AND BE DELETED. 2.1 THE APPELLANT WITHOUT PREJUDICE TO ABOVE FURTHE R SUBMITS THAT ADDITION OF RS.1,01,000/- IS EXCESSIVE. THE ADDITIO N BE RESTRICTED TO NOMINAL AMOUNT AND RELIEF BE ALLOWED. 3. THE ASSESSEE HAS DEBITED HOUSEHOLD EXPENSES TO T HE TUNE OF RS.1,99,110/-. ON PERUSAL OF RETURN OF INCOME OF TH E ASSESSEE IN HUF CAPACITY ASSESSING OFFICER NOTICED THAT ASSESSEE HAD DEBITED RS.1.48 LAKH TOWARDS FEES FOR HIS SON, WHO STUDIES IN DOON SCHOOL. THE A SSESSEE WAS ALSO HAVING A MINOR DAUGHTER AND SHE MUST BE STUDYING IN AHMEDABA D IN AN ENGLISH MEDIUM SCHOOL FOR EXPENDITURE TOWARDS HER EDUCATION WOULD NOT BE LESS THAN RS.50,000/- BESIDES. THE ASSESSING OFFICER WHILE MA KING THE ADDITION OF RS.1,01,000/- FOR LOW WITHDRAWALS FOR HOUSEHOLD EXP ENSES HAS OBSERVED AS UNDER:- AS REGARDS THE HOUSEHOLD EXPENSES, THE ASSESSEE HA S DEBITED HOUSEHOLD EXPENSES TO THE TUNE OF RS.1,99,110/-. ON PERUSAL OF THE RETURN OF INCOME OF THE ASSESSEE IN HUF CAPACITY, I T IS NOTICED THAT THE ASSESSEE HAD DEBITED RS.1,48,000/- TOWARDS THE FEES FOR HIS SON WHO IS STUDYING IN DOON SCHOOL. THE ASSESSEE IS ALSO HAVIN G A MINOR DAUGHTER AND SHE MUST BE STUDYING IN AHMEDABAD IN A N ENGLISH MEDIUM SCHOOL AND HER EXPENSES TOWARDS THE EDUCATIO N WOULD NOT BE LESS THAN RS.50,000/-, BESIDES TO GO FROM AHMEDABAD TO DOON BY THE SON AND THE FAMILY MEMBERS WOULD HAVE ALSO TO BE CO NSIDERED FOR HOUSEHOLD EXPENSES. THE ASSESSEE IS RESIDING IN A H OUSE FOR WHICH HE IS PAYING HOUSE RENT OF RS.3,60,000/- I.E. RS.30,00 0/- PER MONTH. THEN AN ASSESSEE WHO IS PAYING A SUBSTANTIAL HOUSE RENT ALLOWANCE, THE HOUSE MUST BE EQUIPPED WITH ELECTRICAL APPLIANCES L IKE T.V., FREEZE, AIR- CONDITIONERS AND OTHER HOUSEHOLD ELECTRICAL APPLIAN CES AND MUST BE USING CARS. CONSIDERING THE STANDARD OF LIVING AND THE EXPENSES INCURRED FOR THE EDUCATION OF THE CHILDREN, THE HOU SEHOLD WITHDRAWAL OF THE ASSESSEE APPEARS TO BE INADEQUATE. THEREFORE HO USEHOLD EXPENSES ARE ESTIMATED AT RS.3 LAKHS AND RS.1,01,000/- IS BE ING ADDED TO THE TOTAL INCOME OF THE ASSESSEE FOR UNACCOUNTED EXPENS ES INCURRED FOR HOUSEHOLD EXPENSES. 4. BEFORE LD. CIT(APPEALS) IT WAS SUBMITTED ON BEHA LF OF ASSESSEE THAT ASSESSEE, HIS WIFE AND ONE OF THE MINOR DAUGHTER AR E STAYING AT AHMEDABAD ITA NO.943/AHD/009 A.Y. -05 ANILKUMR M JAIN V. ACIT (OSD)CIR-10ABD PAGE 3 ANOTHER CHILD OF ASSESSEE IS STUDYING IN DOON SCHOO L FOR WHOM FEES OF RS.1.85 LAKH IS PAID. FOR THREE MEMBERS OF FAMILY THE WITHD RAWAL OF RS.1,99,110/- SHOWN BY ASSESSEE WAS SUFFICIENT AFTER CONSIDERING THE FACT THAT ASSESSEE HAD BEEN REIMBURSED BY M/S NAVKAR SYTHICOM PVT. LTD (A COMPANY IN WHICH THE ASSESSEE IS A DIRECTOR) GAS AND ELECTRICITY EXPENSE S TO THE TUNE OF RS.80,557/- AND HOUSE RENT ALLOWANCE OF RS.1.20 LAKH. ACCORDING TO ASSESSEE TOTAL EXPENSES TOWARDS HOUSEHOLD EXPENSES COMES TO RS.3,9 9,667/- INCLUDING GAS AND ELECTRICITY EXPENSES AND HRA. IT WAS FURTHER CO NTENDED THAT THIS AMOUNT WAS SUFFICIENT TO RUN A FAMILY OF THREE MEMBERS. LD . CIT(A), HOWEVER, WITHOUT VERIFYING THE CONTENTION OF ASSESSEE DISMISSED THE APPEAL OF ASSESSEE. 5. FURTHER, AGGRIEVED NOW ASSESSEE IS IN APPEAL BEF ORE US. 6. AT THE TIME OF HEARING NONE APPEARED ON BEHALF O F ASSESSEE, HOWEVER, WRITTEN SUBMISSIONS ARE ON RECORD WITH THE REQUEST THAT SAME MAY BE CONSIDERED WHILE DECIDING THE APPEAL. SO WE HAVE PR OCEEDED TO DECIDE THIS APPEAL AFTER GOING THROUGH THE WRITTEN SUBMISSION A ND AFTER HEARING LD. DEPARTMENTAL REPRESENTATIVE. 7. THE WRITTEN SUBMISSION OF THE ASSESSEE READS AS UNDER:- 1.0 THE APPELLANT VIDE GROUND NO.2 HAS CONTESTED T HE ADDITION OF RS.1,01,000/- ALLEGING TO BE LOW HOUSEHOLD EXPENSE. THE APPELLANT SUBMITS THAT AS IN RESPECT OF HOUSE HOLD EXPENSES H AS BEEN MADE ON BASIS OF PRESUMPTION ON THE PART OF THE ASSESSING O FFER AND THE ADDITION IS MERELY ATTRIBUTABLE TO CASUAL AND ARBITRARY APPR OACH ON THE PART THE ASSESSING OFFICER RATHER THAN EXAMINATION OF THE FA CTS. 1.1 THE APPELLANT SUBMITS THAT HIS FAMILY CONSISTED OF FOUR PERSONS AND SINCE HIS SON WAS STAYING OUT OF AHMEDABAD THE EXPE NSE WERE INCURRED ONLY FOR THREE PERSONS I.E. APPELLANT, HIS WIFE AND HIS MINOR DAUGHTER. THE APPELLANT SUBMITS THAT HE WAS A MANAGING DIRECT OR IN METROCHEM INDUSTRIES LTD AND HOUSE RENT OF RS.3,60,000/- WAS BORNE BY THE SAID COMPANY AND WAS CONSIDERED AS TAXABLE PERQUISITES I N THE HANDS OF THE APPELLANT. 2.2 THE APPELLANT FURTHER SUBMITS THAT EXPENDITURE ON GAS, ELECTRICITY ETC, AGGREGATING TO RS.80,557/- WAS CONSIDERED AS A TAXABLE PERQUISITES ITA NO.943/AHD/009 A.Y. -05 ANILKUMR M JAIN V. ACIT (OSD)CIR-10ABD PAGE 4 IN THE HANDS OF THE APPELLANT ON WHICH THE APPELLAN T HAD MADE PAYMENT OF TAX. THE APPELLANT SUBMITS THAT UNDER THE CIRCUM STANCES HIS AGGREGATE HOUSEHOLD EXPENSES IN RESPECT OF THREE PE RSONS IS AS UNDER:- WITHDRAWALS BY THE APPELLANT RS.1,99,110/- GAS ELECTRICITY EXPENSES, REIMBURSED BY METRO AND CONSIDERED AND TAXABLE PERQUISITES RS. 80,557/- HOUSE RENT ALLOWANCE CONSIDERED AS TAXABLE RS.1,20 ,000/- PERQUISITES AFTER CONSIDERING EXEMPTION U/S.10 ___ ________ RS.3,999,667/- 2.3 THE APPELLANT SUBMITS THAT EACH AND EVERY EXPEN DITURE ON EDUCATION OF MINOR CHILD IN AHMEDABAD HAS BEEN REFL ECTED IN THE BOOKS OF ACCOUNT. THE APPELLANT FURTHER SUBMITS THAT NO E XPENDITURE ON TRAVELING HAS BEEN INCURRED BY THE APPELLANT. THE A DDITION HAS BEEN MADE ON BASIS OF PRESUMPTIONS AND ALLEGATION BY THE ASSESSING OFFICER WITHOUT MATERIALS IN HIS POSSESSION. 2.4 IT IS SUBMITTED THAT SINCE HOUSE HOLD EXPENSES AMOUNTS TO RS.2,79,667 + RS.1,20,000/-FOR TWO MAJOR AND ONE MI NOR THE QUESTION F ANY FURTHER ADDITION DOES NOT ARISE AS IT IS REASON ABLE. THE ADDITION HAS BEEN MADE BY THE ASSESSING OFFICER WITHOUT ANY MATE RIAL IN HIS POSSESSION AND THEREFORE ALSO ADDITION IS BAD IN LA W. THE ADDITION BE COMPLETELY QUASHED. THE CONTENTS OF PARA-1.1 AND 2.2 OF THE WRITTEN SUBMISSION OF ASSESSEE REQUIRES VERIFICATION AT THE END OF ASSESSING OFFIC ER. THE MATTER IS RESTORED BACK TO HIS FILE FOR THE LIMITED PURPOSES OF VERIFY ING THESE FACTS AND IF THE HOUSE RENT OF RS.1.20 LAKH AND EXPENDITURE ON GAS AND ELE CTRICITY OF RS.80,557/- HAS BEEN CONSIDERED AS TAXABLE PERQUISITES IN THE HANDS OF ASSESSEE NO SEPARATE ADDITION FOR HOUSEHOLD IS CALLED FOR. THE ASSESSING OFFICER IS DIRECTED ACCORDINGLY. 8. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED FOR STA TISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON 31/03 /2011 SD/- SD/- (D.C.AGRAWAL) (D.K. TYA GI) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) AHMEDABAD, DATED : 31/03/2011 ITA NO.943/AHD/009 A.Y. -05 ANILKUMR M JAIN V. ACIT (OSD)CIR-10ABD PAGE 5 *DKP COPY OF THE ORDER FORWARDED TO :- 1. THE ASSESSEE. 2. THE REVENUE. 3. THE CIT(APPEALS)-XVI, AHMEDABAD 4. THE CIT CONCERNS. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, /TRUE COPY/ DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD