SHRI ISHWARBHAI SOMABHAI PARMAR, V. THE ACITCENT CIR.2(1),

ITSSA 184/AHD/1997

• Counselvise Citation: [2011] 124 COUNSELVISE.COM (IT) 8291 (ITAT-AHMEDABAD)
• Duration Of Justice: 13 year(s) 9 month(s) 29 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 28-07-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 21-07-2011
• Assessment Year: misc
• Appeal Filed On: 29-09-1997
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ALOK JOHRI
• Assessee Lawyers: B T THAKKAR
• Keywords: Salary income; Block assessment
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD, B BENCH (BEFORE S/SHRI G.D. AGARWAL, VICE-PRESIDENT AND D.K. TYAGI, JUDICIAL MEMBER) IT(SS)A NO.184 /AHD/1997 [BLOCK PERIOD A.Y.: 1987-88 TO 1996-97 AND 01-04-96 TO 01-08-1996] SHRI ISHWARBHAI SOMBHAI PARMAR 11, KRISHNANAGAR SOCIETY B/H. RATNADEEP SOCIETY MODASA. VS. ACIT, CENT.CIR.2(1) AHMEDABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI B.T. THAKKAR REVENUE BY : SHRI ALOK JOHRI O R D E R PER G.D. AGARWAL, VICE-PRESIDENT : THIS IS ASSESSEES APPEAL AGAINST THE ORDER OF THE ACIT, AHMEDABAD DATED 18.8 .1997 ARISING OUT OF THE ORDER UNDER SECTION 158BC R.W.S. 143(3) OF THE INCOME TAX ACT, 1961. 2. THIS APPEAL WAS ORIGINALLY ADJUDICATED BY THE IT AT. HOWEVER, THE ASSESSEE FILED MISC. APPLICATION AND POINTED OUT TH AT GROUND NO.3 AND 4 OF THE ASSESSEES APPEAL WERE OMITTED TO BE ADJUDIC ATED. THE ITAT IN MA NO.341/AHD/2006 VIDE ORDER DATED 13-5-2011 ACCEP TED THE ASSESSEES CONTENTION AND RECALLED THE ORDER OF THE ITAT FOR THE LIMITED PURPOSE OF ADJUDICATING THE GROUND NO.3 AND 4 OF TH E ASSESSEES APPEAL. ACCORDINGLY, THIS APPEAL WAS FIXED FOR ADJUDICATING THE GROUND NO.3 AND 4 OF THE ASSESSEE APPEAL WHICH READ AS UNDER: 3. THE LEARNED ACIT ERRED IN LAW AND ON FACTS IN MA KING ADDITIONS OF RS.27,000/- U/S.69 OF THE ACT IN RESPE CT OF CREDIT ENTRIES APPEARED IN BANK PASS BOOK OF THE ASSESSEE FOR THE BLOCK PERIOD. IT(SS)A NO.184 /AHD/1997 -2- 4. THE LEARNED ACIT ERRED IN LAW AND ON FACTS N MAK ING ADDITIONS OF RS.80,500/- U/S.69C OF THE ACT FOR LOW WITHDRAWALS OF HOUSE HOLDING EXPENSES. 3. AT THE TIME OF HEARING BEFORE US, THE LEARNED CO UNSEL FOR THE ASSESSEE WITHDREW GROUND NO.3 OF THE ASSESSEES APP EAL. ACCORDINGLY, THE SAME IS REJECTED. 4. WITH REGARD TO GROUND NO.4, IT WAS POINTED OUT B Y THE LEARNED COUNSEL THAT AT THE RELEVANT TIME, THE ASSESSEE WAS AGED ABOUT 23 YEARS LIVING WITH HIS FATHER. THE ONLY SOURCE OF INCOME WAS A MEAGRE SALARY. THAT THE AO MADE THE ADDITION ON ACCOUNT OF LOW HOU SEHOLD EXPENDITURE AS UNDER: ASSTT.YEAR AMOUNT (RS.) 1994-95 19,000/- 1995-96 22,500/- 1996-97 27,000/- 1997-98 12,000/- THAT DURING THE ABOVE PERIOD, THE SALARY OF THE ASS ESSEE FROM NAGAR PALIKA OF MODASA WAS UNDER: ASSTT.YEAR AMOUNT (RS.) 1994-95 8,640/- 1995-96 14,400/- 1996-97 14,818/- 1997-98 NIL THAT DUE TO HIS MEAGRE INCOME, HE WAS UNABLE TO CON TRIBUTE MUCH TOWARDS HOUSE-HOLD EXPENDITURE WHICH WAS MAINLY MAD E BY ASSESSEES IT(SS)A NO.184 /AHD/1997 -3- FATHER. THAT THE CONTRIBUTION OF THE ASSESSEE TOWA RDS THE HOUSEHOLD EXPENDITURE OF THE FAMILY WAS AS UNDER: ASSTT.YEAR AMOUNT (RS.) 1994-95 5,000/- 1995-96 7,5000/- 1996-97 9,000/- 1997-98 NIL THAT THE AO MADE ADDITION SOLELY ON THE BASIS OF PR ESUMPTION WHICH WOULD BE EVIDENT FROM HIS WORKING WHICH IS AS UNDER : ASSTT.YEAR AMOUNT (RS.) 1994-95 [24,000 5,000] = 19,000/- 1995-96 [30,000 7,500] = 22,500/- 1996-97 [27,000 9,000] = 27,000/- 1997-98 12,000 NIL ] = 12,000/- FROM THE ABOVE, IT IS EVIDENT THAT WHILE THE AO EST IMATED THE HOUSEHOLD EXPENDITURE AT RS.36,000/- FOR A.Y.1996-97, BUT FOR A.Y.1997-98 HE ESTIMATED THE SAME AT RS.12,000/-. THERE CANNOT BE ANY PRESUMPTION THAT HOUSEHOLD EXPENDITURE REDUCED IN SUBSEQUENT YEAR. HE THEREFORE SUBMITTED THAT THE ADDITION FOR HOUSE-HOLD EXPENDIT URE HAS BEEN MADE IN THE BLOCK ASSESSMENT WITHOUT ANY BASIS AND ON THE B ASIS OF PRESUMPTION AND SUSPICION ONLY. HE THEREFORE REQUESTED THAT TH E ADDITION MADE BY THE AO FOR LOW HOUSEHOLD EXPENDITURE SHOULD BE DELETED. 5. THE LEARNED DR, ON THE OTHER HAND, RELIED UPON T HE ORDERS OF THE AUTHORITIES BELOW. IT(SS)A NO.184 /AHD/1997 -4- 6. WE HAVE CAREFULLY CONSIDERED ARGUMENTS OF BOTH T HE SIDES AND PERUSED THE MATERIAL PLACED BEFORE US. WE FIND THA T THE AO MADE ADDITION PURELY ON THE BASIS OF PRESUMPTION WITHOUT ANY EVIDENCE OR MATERIAL ON RECORD. IT IS A CASE OF BLOCK ASSESSME NT NOT REGULAR ASSESSMENT. IN THE BLOCK ASSESSMENT UNDISCLOSED IN COME OF THE BLOCK PERIOD IS TO BE DETERMINED ON THE BASIS OF MATERIAL OR EVIDENCE GATHERED AS A RESULT OF SEARCH OR DURING THE ASSESSMENT PROC EEDINGS. ADMITTEDLY, NO MATERIAL WAS FOUND BY THE REVENUE EITHER DURING THE COURSE OF SEARCH OR DURING THE ASSESSMENT PROCEEDINGS SO AS TO ESTAB LISH THAT THE ASSESSEE INCURRED MORE HOUSEHOLD EXPENDITURE THAN SHOWN BY T HE ASSESSEE. THE ASSESSEE HAD MEAGRE INCOME FROM SALARY WHICH WAS AP PROXIMATELY RS.1,000/- PER MONTH ONLY IN THREE YEARS AND HE HAD NO OTHER SOURCE OF INCOME. IF THE ASSESSEE HAD NO OTHER SOURCE OF INC OME NATURALLY HE CAN NOT SPENT MORE THAN HIS INCOME. IT IS NOT IN DISPU TE THAT HE WAS LIVING WITH HIS FATHER. THE AO ESTIMATED THE HOUSEHOLD EXP ENDITURE AT RS.36,000/- FOR A.Y.1996-97 BUT HAS REDUCED THE SAM E TO RS.12,000/- FOR A.Y.1997-98. THIS ITSELF SHOWED THAT THE ESTIMATIO N OF HOUSEHOLD EXPENDITURE WAS PURELY ON GUESS WORK. IN VIEW OF T HE ABOVE, WE FIND NO JUSTIFICATION FOR SUSTAINING THE ADDITION MADE BY T HE AO FOR LOW WITHDRAWAL FOR HOUSE-HOLD EXPENDITURE, THE SAME IS DELETED. THIS GROUND OF THE ASSESSEES APPEAL IS ALLOWED. 7. IN RESULT, GROUND NO.3 IS REJECTED AND GROUND NO .4 IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 28 TH JULY, 2011 SD/- SD/- (D.K. TYAGI) JUDICIAL MEMBER (G.D. AGARWAL) VICE-PRESIDENT IT(SS)A NO.184 /AHD/1997 -5- PLACE : AHMEDABAD DATE : 28-07-2011 C OPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT. BY ORDER DR/AR, ITAT, AHMEDABAD 1. DATE OF DICTATION : 21-07-2011 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER. : 25-07-2011 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P.S./P.S : 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT. : 5. DATE ON WHICH FAIR ORDER PLACED BEFORE OTHER MEMBER : 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P.S./P.S. : 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK. : 28-07-2011 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK. : 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER. : 10. DATE OF DESPATCH OF THE ORDER :