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Income Tax Appellate Tribunal, DELHI BENCH “SMC”: NEW DELHI
Before: SHRI KUL BHARAT
O R D E R PER KUL BHARAT, JM:
This appeal, by the assessee, is directed against the order of the learned Commissioner of Income-tax (Appeals)-14, New Delhi, dated 28.06.2019, pertaining to the assessment year 2016-17. The assessee has raised following grounds of appeal:
“1(i) That on facts and circumstances of the case, the Ld. CIT(A) was not justified in confirming addition of Rs. 8,52,890/- being unexplained expenditure u/s 69C of Income Tax Act, 1961 on the basis of erroneous estimation of house hold drawings. (ii) That the estimation of drawings and consequential addition is even without taking into consideration house hold drawings of wife and son being Chandergupt Goyal Vs. ITo family members. (iii) That the Assessing Officer has not placed any material on record regarding the alleged lavish life style of the appellant and the addition of unexplained expenditure is merely on presumption and surmises.
2. That even otherwise, the Ld. CIT(A) has passed the appellate order without giving proper and reasonable opportunity of being heard and as such the same is against the principle of natural justice.
That the orders of the lower authorities are not justified on facts and the same are bad in law.
That the assessee craves leave to add, amend, alter or forgo any or all of the grounds as may be necessary and in the interest of justice.
At the time of hearing no one attended the proceedings. It is seen from the records that there is no representation on behalf of the assessee since 4.2.2021.
Various opportunities have been given. The notice of hearing sent through registered post is returned with remark “no such person”. The assessee has not provided any other address to the Registry. Therefore, the appeal of the assessee was taken up for hearing in the absence of the assessee and is being decided on the basis of the material available on record.
3. Facts giving rise to the present appeal are that in this case the Assessing Officer (AO) while framing the assessment u/s 143(3) of the Income-tax Act, 1961 (in short “the Act”), made addition of Rs. 8,52,890/- on account of low house-hold withdrawals. Aggrieved against this the assessee preferred appeal before the learned CIT(Appeals), who also confirmed the addition made by the Assessing Officer. Aggrieved against this the assessee is in appeal before this Tribunal.
Chandergupt Goyal Vs. ITo 4. Learned CIT(Appeals) has confirmed the action of the Assessing officer by observing as under:
The assessee is carrying on the business of wholesale and retail trading as well as running licker business through eleven retail outlets in Haryana. The AO observed that the appellant had showed net profit @ 0.75%. Further, from the P&L account and the balance sheet AO observed that no drawings for household expenditure was made, while basic expenses for running of the business had not been debited to the P&L account. However, the assessee during the course of assessment proceedings submitted the total drawings as Rs. 1,47,110/-. The AO after making a detailed discussions estimated the expenses for running the business and withdrawals for his family needs at Rs. 10,00,000/-. Thus, the addition of Rs. 8,52,890/- (10,00,000-l,47,110) was made by the AO u/s 69C. The appellant has mentioned in the statements of facts that the AO has not considered the withdrawals made by his wife and son who were also income tax assesses. He has also contended that the total withdrawal was sufficient for household requirements. However, the appellant has failed to substantiate his contention with any cogent evidences during the course of the appellate proceedings. He has not even filed the copy of the ITR of his family members to support the contention. Considering the fact that there is no document/evidence filed by the appellant and the fact that his shown in his P&L account are very low, I find no reason to interfere with the decision of the AO. In view of the above, addition of Rs. 8,52,890/- made by the AO is confirmed.
Learned DR supported the orders of the authorities below.
I have heard learned DR and perused the material available on record. The only effective ground raised in this appeal is against sustaining the addition made on account of low withdrawal for house-hold expenses. Before the lower authorities it was stated that other family members were also contributing into the household expenses. The plea of the assessee was rejected by the learned
Chandergupt Goyal Vs. ITo CIT(Appeals) on the ground that there was no supporting evidence. I find that learned CIT(Appeals) failed to take note of the fact that there is no finding by the AO regarding expenditure incurred by the assessee. In the absence of such finding, the addition made on account of low house-hold withdrawal cannot be sustained.
Therefore, looking to the facts and material available on record, the lower authorities have made addition purely on presumption basis. Therefore, the same is hereby deleted.
Assessee’s appeal is allowed.
Order pronounced in open court on 30th August, 2022.