Mrs. Maheswari, Villupuram V. ACIT, Cuddalore

MA 64/CHNY/2012

• Counselvise Citation: [2012] 123 COUNSELVISE.COM (IT) 8576 (ITAT-CHENNAI)
• Duration Of Justice: 22 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 13-07-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 13-07-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 21-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: K BALASUBR AMANIAN
• Section: 143(3); 147; 2; 11

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL C BENCH, CHENNAI. BEFORE DR. O.K. NARAYANAN, VICE-PRESIDENT & SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER M.P. NO. 64/MDS/2012 [IN I.T.A. NO. 589/MDS/2011] & I.T.A. NO. 589/MDS/2011 ASSESSMENT YEAR: 2005-06 MRS. MAHESWARI, LAKSHMI HOSPITAL PHARMACY, 41, TRICHY TRUNK ROAD, VILLUPURAM. [PAN:AALPM4994Q] VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE II, CUDDALORE. (PETITIONER/APPELLANT) (RESPONDENT) APPELLANT BY : SHRI K. BALASUBRAMANIAN, ADVOCATE RESPONDENT BY : SHRI SHAJI P. JACOB, ADDL. CIT DATE OF HEARING : 13.07.2012 DATE OF PRONOUNCEMENT : 13.07.2012 ORDER PER CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER IN THIS MISCELLANEOUS PETITION, THE ASSESSEE SUBMIT S THAT THIS TRIBUNAL BY ITS COMMON ORDER DATED 23.04.2012 IN I.T.A. NOS. 583 TO 589/MDS/2011 FOR THE ASSESSMENT YEARS 1999-2000 TO 2005-06 DISPO SED OF THESE APPEALS HOLDING THAT THE ASSESSMENTS MADE FOR ALL THESE YEA RS UNDER SECTION 143(3) READ WITH SECTION 147 OF THE INCOME TAX ACT ARE NOT SUSTAINABLE IN LAW. THE ASSESSEE SUBMITS THAT THE APPEAL FILED FOR THE ASSE SSMENT YEAR 2005-06 IN I.T.A. NO. 589/MDS/2011 IS AGAINST THE ASSESSMENT O RDER PASSED UNDER M.P. NO. 64/M/12 & M.P. NO. 64/M/12 & M.P. NO. 64/M/12 & M.P. NO. 64/M/12 & I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.58 5858 589 99 9/M/ /M/ /M/ /M/11 1111 11 2 SECTION 143(3) DATED 29.12.2006, BUT NOT UNDER SECT ION 143(3) READ WITH SECTION 147 OF THE ACT. DUE TO TYPOGRAPHICAL ERROR, IT WAS WRONGLY MENTIONED IN COL.5 IN FORM NO. 36 THAT THE ASSESSMENT WAS COM PLETED UNDER SECTION 143(3) READ WITH SECTION 147 THOUGH THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) OF THE ACT. THEREFORE, THE ASSESSEE PLEADED FOR RECALLING THIS TRIBUNALS ORDER DATED 23.04.2012 AND FOR DECIDING THE GROUNDS OF APPEAL FILED FOR THE ASSESSMENT YEAR 2005-06 IN I.T.A. NO. 589/MDS/2011 ON MERITS. 2. THE COUNSEL FOR THE REVENUE HAS NO OBJECTION FO R DECIDING THE GROUNDS OF APPEAL ON MERITS. 3. THIS TRIBUNAL HAD DISPOSED OFF ALL THE APPEALS OF THE ASSESSEE FOR THE ASSESSMENT YEARS 1999-2000 TO 2005-06 IN I.T.A. NOS . 583 TO 589/MDS/2011 ON THE GROUND THAT ALL THESE APPEALS WERE FILED AGA INST THE ASSESSMENTS MADE UNDER SECTION 143(3) READ WITH SECTION 147 OF THE ACT. HOWEVER, AS RIGHTLY POINTED OUT BY THE ASSESSEE, THE APPEAL FIL ED FOR THE ASSESSMENT YEAR 2005-06 IN I.T.A. NO. 589/MDS/201, THE ASSESSMENT W AS COMPLETED UNDER SECTION 143(3), BUT NOT UNDER SECTION 143(3) READ W ITH SECTION 147 OF THE ACT. HENCE, WE RECALL OUR ORDER DATED 23.04.2012 FOR THE ASSESSMENT YEAR 2005- 06 IN I.T.A. NO. 589/MDS/2011 AND DISPOSE OFF ON ME RITS HEREUNDER. I.T.A. NO. 589/MDS/2011 4. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER PASSED BY M.P. NO. 64/M/12 & M.P. NO. 64/M/12 & M.P. NO. 64/M/12 & M.P. NO. 64/M/12 & I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.58 5858 589 99 9/M/ /M/ /M/ /M/11 1111 11 3 THE COMMISSIONER OF INCOME TAX (APPEALS) XII, CHENN AI DATED 20.01.2011 ARISING OUT OF THE ORDER PASSED UNDER SECTION 143(3 ) OF THE ACT DATED 29.12.2006 FOR THE ASSESSMENT YEAR 2005-06. THE ASS ESSEE HAS RAISED THE FOLLOWING GROUNDS: 1. ORDER OF THE CIT(A) IS CONTRARY TO LAW, WEIGHT OF EVIDENCE AND PROBABILITIES OF THE CASE. 2.1 LEARNED CIT(A) ERRED IN AGREEING WITH THE ASSES SING OFFICER IN HIS METHOD OF ESTIMATED ADDITION TOWARDS INSUFFICIE NCY OF DRAWINGS, AT ` .1,96,000 IN THE ABSENCE OF ANY SUPPORTING SURVEY MATERIAL THOUGH HE WAS KIND ENOUGH TO AGREE THAT ONLY 50% OF SUCH ESTIMATE CAN BE ASSESSED IN THE HANDS OF THE A PPELLANT WHEN BOTH THE APPELLANT AND HER HUSBAND ARE INCOME- TAX ASSESSEES. 2.2 HE FAILED TO OBSERVE THAT, WITHOUT PREJUDICE TO THE ABOVE GROUND, THE APPELLANT HAD RETRACTED HER STATEMENT RECORDED AT THE TIME OF SURVEY AND THAT THE APPELLANTS HUSBANDS INCOME , EXPENDITURE, OWNING OF CARS BY HIM ETC., HAVE NOTHI NG TO DO WITH THE APPELLANT IN ESTIMATING HER DRAWINGS ESPECIALLY WHEN THE APPELLANT HAD SEPARATELY DEBITED HER CAPITAL ACCOUN T WITH LIP, ADVANCE TAX, SCHOOL FEES & MUNICIPAL TAX. 5. THE ASSESSING OFFICER WHILE COMPLETING THE ASSE SSMENT MADE AN ADDITION OF ` .1,96,000/- TOWARDS INSUFFICIENCY OF FAMILY DRAWING S. THE ASSESSING OFFICER IN THE ASSESSMENT ORDER OBSERVED THAT THE ASSESSMENT ORDER DATED 29.12.2006 RELATING TO THE ASSESSMENT Y EAR 1999-2000 IS THE BASIS FOR MAKING ADDITION IN RESPECT OF INSUFFICIEN T DRAWINGS FOR THE ASSESSMENT YEAR 2005-06. 6. ON APPEAL, THE COMMISSIONER OF INCOME TAX (APPE ALS) RESTRICTED THE ADDITION TO 50% AND GRANTED RELIEF OF ` .98,000/- HOLDING AS UNDER: M.P. NO. 64/M/12 & M.P. NO. 64/M/12 & M.P. NO. 64/M/12 & M.P. NO. 64/M/12 & I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.58 5858 589 99 9/M/ /M/ /M/ /M/11 1111 11 4 GROUND NO.2 - INSUFFICIENT DRAWINGS: THE ASSESSING OFFICER HAS MADE DISALLOWANCE ON ACCOUNT OF INSUFFICIENT DRAWINGS. T HE CONTENTIONS OF THE AUTHORISED COUNSEL OF THE APPELLANT THAT ASSESSING THE ENTIRE DRAWINGS IN THE HANDS OF THE APPELLANT WITHOUT ALLOCATING CERTAIN P ORTION IN THE HANDS OF THE APPELLANT'S HUSBAND, DR. J. MOHAN, WHO IS ALSO ASSE SSED TO INCOME-TAX IS NOT CORRECT ACCEPTABLE AND THE STAND OF THE AUTHORISED COUNSEL OF THE APPELLANT THAT THE ADDITION MADE BY THE ASSESSING OFFICER IN THE HANDS OF THE APPELLANT'S HUSBAND IN THE ASSESSMENT YEAR 2006-07 TOWARDS INSU FFICIENCY OF DRAWINGS IS INDEPENDENT OF SUCH AN ADDITION IN THE HANDS OF THE APPELLANT, I.E. DR. J. MOHAN'S WIFE. THE ONE CONTENTION OF THE AUTHORISED COUNSEL OF THE APPELLANT THAT THE ESTIMATE BY THE ASSESSING OFFICER WAS ON THE HIGH S IDE HAS SOME MERIT AND REQUIRES CONSIDERATION. IT IS TRUE THAT IN THE ASSE SSMENT ORDER THE ASSESSING OFFICER HAD STATED THAT THE DRAWINGS ISSUE WAS CONS IDERED AS A COMBINED ONE, TAKING INTO ACCOUNT THE DRAWINGS OF APPELLANT AND H ER HUSBAND, DR; MOHAN. HOWEVER, ADDITIONS HAVE BEEN MADE IN THE HANDS OF T HE APPELLANT. WHEN THE APPELLANT AND HER HUSBAND, DR. J. MOHAN, ARE TWO DI FFERENT ENTITIES UNDER THE INCOME-TAX ACT, 1961, THE APPROACH OF THE ASSESSING OFFICER IN MAKING THE ADDITION TOWARDS DEFICIENCY IN FAMILY EXPENSES IN T HE HANDS OF THE APPELLANT IS NOT CORRECT. IN VIEW OF THE ABOVE, I HOLD THAT THE ADDITION ON A CCOUNT OF DRAWINGS IN THE HANDS OF THE APPELLANT BE RESTRICTED TO 50% OF ` .1,96,000/- I.E. ADDITION MADE TO THE EXTENT OF ` .98,000/- IS SUSTAINED AND THAT THE APPELLANT GETS A RELIEF OF AN EQUAL AMOUNT. AND HENCE, THE ASSESSING OFFICER IS DIRECTED TO REVISE THE IMPUGNED ORDER ACCORDINGLY. THUS, THE AP PELLANT PARTLY SUCCEEDS IN THIS GROUND OF ITS APPEAL. 7. AGAINST THIS ORDER OF THE COMMISSIONER OF INCOM E TAX (APPEALS), THE ASSESSEE IS IN APPEAL BEFORE US. 8. WE HAVE HEARD BOTH SIDES, PERUSED THE MATERIALS AVAILABLE ON RECORD AND ORDERS OF LOWER AUTHORITIES. IN OUR COMMON ORDE R DATED 23.04.2012 IN I.T.A. NOS. 583 TO 589/MDS/2011 HELD THAT THE REASS ESSMENT ORDER DATED 29.12.2006 MADE UNDER SECTION 143(3) READ WITH SECT ION 147 FOR THE M.P. NO. 64/M/12 & M.P. NO. 64/M/12 & M.P. NO. 64/M/12 & M.P. NO. 64/M/12 & I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.58 5858 589 99 9/M/ /M/ /M/ /M/11 1111 11 5 ASSESSMENT YEAR 1999-2000 IS NOT SUSTAINABLE IN LAW . THEREFORE, SINCE WE HAVE HELD THAT THE REASSESSMENT FOR THE ASSESSMENT YEAR 1999-2000 IS NOT SUSTAINABLE IN LAW, THE ADDITION MADE TOWARDS INSUF FICIENCY OF FAMILY DRAWINGS IN THE ASSESSMENT YEAR 2005-06 BASED ON TH E REASSESSMENT MADE FOR THE ASSESSMENT YEAR 1999-2000 HAS NO LEGS TO ST AND. THE COMMISSIONER OF INCOME TAX (APPEALS) HAS ALREADY DELETED 50% OF THE ADDITION OF ` .1,96,000/- MADE BY THE ASSESSING OFFICER. THEREFOR E, WE DELETE THE REMAINING ADDITION OF ` .98,000/- MADE BY THE ASSESSING OFFICER TOWARDS INSUFFICIENCY OF FAMILY DRAWINGS FOR THE ASSESSMENT YEAR 2005-06. THE GROUNDS OF APPEAL OF THE ASSESSEE ARE ALLOWED. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ON FRIDAY, THE 13 TH JULY, 2012 AT CHENNAI. SD/ - SD/ - (DR. O.K. NARAYANAN) VICE-PRESIDENT (CHALLA NAGENDRA PRASAD) JUDICIAL MEMBER CHENNAI, DATED, THE 13.07.2012 VM/- TO: THE ASSESSEE//A.O./CIT(A)/CIT/D.R.