SHRI PANKAJ AGARWAL,JAIPUR vs. INCOME TAX OFFICER, WARD-4-3, JAIPUR

PER VIJAY PAL RAO, JM : This appeal by the assessee is directed against the order dated 25TH January,

2018 of ld. CIT (A)-2, Jaipur for the assessment year 2009-10. The assessee has

raised the following grounds :-

“ 1. Under the facts and circumstances of the case the learned CIT (Appeals) has erred in confirming the estimate of income Rs. 2,50,000/- as against the returned income Rs. 1,35,150/-, kindly delete estimated addition.

declaring income of Rs. 1,35,150/- comprising of salary income and business

income. The AO during the scrutiny assessment noted that the assessee is unable

2 ITA No. 610/JP/2018 Shri Pankaj Agarwal, Jaipur.

to produce any Salary Certificate, hence the AO found that the salary income is not

verifiable. Further, the deduction claimed under section 80C of Rs. 56,997/- on

account of LIC premium was also not found to be allowable for want of proof of

payment. The AO accordingly estimated the total income of the assessee at Rs.

3,00,000/- as against the returned income of Rs. 1,35,150/-. The assessee

challenged the action of the AO before the ld. CIT (A). The ld. CIT (A) restricted the

estimation of income to Rs. 2,50,000/- as against Rs. 3,00,000/- made by the AO.

material on record. We note that in the return of income the assessee has declared

total income of Rs. 1,35,150/- comprising of Rs. 72,000/- as salary income and Rs.

1,20,150/- as business income. After claiming the deduction under section 80C, the

assessee offered the said amount to tax. The AO doubted the salary income of the

assessee though no question was raised against the business income of the

assessee. In the assessment order the AO has recorded the proceedings that in

response to notices, the assessee attended office from time to time and submitted

necessary details and explanations which are placed on record. Further, requisite

information and bank statements, books of accounts were also produced which have

been put to test check by the AO as well as the case was discussed with him. Thus

it is manifest from the assessment order that the assessee produced all the requisite

details and books of accounts for examination of the AO which were examined by

the AO. The AO has raised the doubt about the salary income declared by the

assessee for want of salary certificate. Even if the salary income was doubted by

the AO, the same can be treated as income from other sources. However, there

would be no tax effect as the assessee did not claim any deduction against the

3 ITA No. 610/JP/2018 Shri Pankaj Agarwal, Jaipur.

salary income. So far as the claim of deduction under section 80C, the assessee

could not produce any evidence of payment, therefore, the same was disallowed by

the AO. In the facts and circumstances of the case, we do not find any cogent

reason to estimate the income of the assessee when the books of accounts of the

assessee were not questioned by the AO or rejected. The ld. CIT (A) has also

sustained the addition on adhoc basis as it was done by the AO. Therefore, the

estimation of income by the AO at Rs. 3,00,000/- as well as the estimation of income

by the ld. CIT (A) at Rs. 2,50,000/- is without any basis and highly arbitrary in

nature. Accordingly, we find that except the disallowance of claim under section 80C

for want of production of the supporting evidence, no other addition is called for in

the case of the assessee. Accordingly we delete the addition made by the AO by

estimating the income of the assessee which was sustained by the ld. CIT (A) by

restricting the same to Rs. 2,50,000/- and direct the AO to compute the total income

of the assessee by disallowing the claim of deduction under section 80C.

Order is pronounced in the open court on 13/08/2018.

Sd/- Sd/- (foØe flag ;kno) (fot; iky jkWo ½ (VIKRAM SINGH YADAV ) (VIJAY PAL RAO) U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member

Jaipur Dated:- 13/08/2018. Das/

4 ITA No. 610/JP/2018 Shri Pankaj Agarwal, Jaipur.

आदेश की प्रतिलिपि अग्रेषित@ब्वचल वf जीम वतकमत वितूंतकमक जवरू

सहायक पंजीकार@ Aेेपेजंदज. त्महपेजतंत

5 ITA No. 610/JP/2018 Shri Pankaj Agarwal, Jaipur.