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Income Tax Appellate Tribunal, ALLAHABAD BENCH ‘SMC’ ALLAHABAD
Before: SHRI.VIJAY PAL RAO
PER SHRI VIJAY PAL RAO, JUDICIAL MEMBER:
This appeal by the assessee is directed against the order dated 07.02.2019 of ld. CIT(A)-Allahabad for the AY 2013-14. The assessee has raised a solitary ground as under: “Because the CIT(Appeals) Allahabad is not justified on the facts and circumstances of the case in confirming the addition of Rs.1,00,000/- made by the Assessing Officer.”
The assessee is an individual and filed her return of income for the year under consideration on 15.09.2014 declaring total income of Rs.6,14,440/-. While completing the scrutiny assessment, the Assessing Officer made addition of Rs.3.00 lacs to the return
Rajni Gupta income of the assessee on account of low drawings for household expenses. The assessee challenged the action of the Assessing Officer before the CIT(A), who has restricted the addition to Rs.1.00 lacs and thereby granted the relief of Rs.2.00 lacs. Before the Tribunal, the ld. AR of the assessee has submitted that the Assessing Officer has made an addition of Rs.3.00 lacs without any basis but merely on estimation, which is a purely a guess work of the Assessing Officer. He has further contended that the aggregate income earned by the assessee was more than the estimated drawings and withdrawals during the year therefore, the addition sustained by the ld. CIT(A) on adhoc basis is not justified being arbitrary. The Assessing Officer has presumed the household expenditure and personal drawings without any reasonable and proper basis and therefore, the addition made by the Assessing Officer is based on his own estimate which is subjective and not objective. He has also the questioned the power of the Assessing Officer and contended that the Income Tax law does not have any scope for making assessment on the basis of estimates and status of the assessee. Thus, the ld. AR of the assessee submitted that the addition sustained by the CIT(A) may be deleted.
On the other hand, ld. DR has submitted that there is no withdrawal by the assessee for household expenses. The CIT(A) has given the details of the cash withdrawal from the bank account and noted that the last withdrawal made by the assessee was on 01.02.2013 and thereafter no withdrawal up to 31st March.
I have considered the rival submissions as well as relevant material on record. The ld. CIT(A) has considered the withdrawals made by the assessee from various bank accounts and then given its finding in Para 5 as under: “5. Decision; I have gone through the facts and the order of AO and submissions made by appellant. AO made the addition on account of household withdrawals as the Assesses in her Balance Sheet had not shown any drawings during the year AO added Rs.3 lacs in the head of drawing on pure guess work. During the concerned previous year 2012-13. the appellant had earned salary of Rs.7,20,000/- from M.S. Services Pvt. Ltd., net commission of Rs.34,286/- from Rajni Gupta LIC agency, partners remuneration and profit of Rs. 54,000/- and Rs.33.091/-, respectively, from the partnership firm M/s Mercury Security Services and Rs.7,527/- as interest from bank accounts. Appellant submitted that the aggregate of these incomes earned by the appellant was Rs.8,66,047/- was more than enough to cover the estimated drawing of Rs.3,00,000/- and the addition made by the Assessing Officer is merely an estimate and is not based on facts and circumstances of the case. Appellant submitted the details of cash withdrawals made by the appellant from the bank accounts during the relevant financial year 2012-13 aggregated to Rs. 3,52,500/- as per the table reproduced above. A perusal of the same shows that the appellant has systematically withdrawn this amount till February 2013 and no withdrawals thereafter hence the addition made by AO is not correct for the balance of the year. Therefore, In view of the above, the addition of Rs. 3 Lakhs made by the Assessing Officer is reduced to Rs. l.,00.000/- and the appeal filed by the appellant is partly allowed.”
The ld. CIT(A) has noted that aggregate of cash withdrawal during the year under consideration comes to Rs.3,52,500/- and after considering this amount of withdrawal the addition made by the Assessing Officer was restricted to Rs.1.00 lacs as against Rs.3.00 lacs. Thus, it is clear that more than Rs.3,50,000/- was withdrawn from the bank account during the year under consideration and it is not the case of NIL withdrawal by the assessee for household expenditure. Therefore, having regard of the facts and circumstances of the case, once the assessee has shown reasonable amount of cash withdrawals from the bank and the income of the other family members of the assessee is also not ruled out then the addition confirmed by ld. CIT(A) of Rs.1.00 lacs on account of short withdrawal for household expenditure is not justified and the same is deleted.
In the result, appeal filed by the assessee is allowed.