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Income Tax Appellate Tribunal, “SMC” BENCH, AHMEDABAD
Before: SHRI WASEEM AHMED&
PER Ms. MADHUMITA ROY - JM: The instant appeal filed by the assessee is against the order dated 12.12.2014 passed by the Commissioner of Income Tax (Appeals) – Gandhinagar, Ahmedabad under section 143(3) r.w.s. 153A(1)(b) of the Income Tax Act, 1961 (hereinafter referred as to ‘the Act’) arising out of the order dated 27.11.2013 passed by the Income Tax Officer, Ward – 3, Mehsana for the Assessment Year 2012-13 on the following grounds:
ITA No.649/Ahd/2015 Jitendra Ambalal Patel vs. ITO Asst. Year. 2012-13 - 2 - “ADDITION OF RS. 2.50.000 U/s. 69A 1.1 That on the facts and in the circumstances of the case and as per law learned CIT (Appeals) erred in sustaining additions of Rs.2,50,000 under section 69A of the I.T. Act, 1961. 1.2 That learned CIT (Appeals) was ought to have consider the fact that during the course of assessment proceedings, appellant had submitted all the evidences in support of source of loan received from various parties including copies of their I.T. Returns, Bank statements etc. Only fault on the part of the appellant was that he had not furnished the confirmation letter. Learned CIT (Appeals) failed to appreciate the fact that when appellant had furnished the copies of I.T. Returns, Bank statements etc. of partied from whom advances were received, to the A.O., he could have asked for confirmations and / or issued summons to them. Ground No. 2 ADDITION OF RS. 2,52,890 ON THE GROUND OF LOWER HOUSE HOLD WITHDRAWALS
2.1 That on the facts and in the circumstances of the case and as per law learned CIT (Appeals) erred in sustaining additions of Rs.2,52,890 on the ground of lower house hold expenses. 2.2 That learned CIT (Appeals) was ought to have accepted the submission of the appellant that during the year under consideration, wife of the appellant had, out of her sources of income for which she is filing returns, contributed towards House hold expenses. Hence, no addition was called for on the ground of lower house hold withdrawals. 2.3 That learned CIT (Appeals) was ought to have consider the fact that learned A.O. was applying straightway formula of 10% increase in each year, which he started from A.Y. 2007-08, to reach to estimate of House hold expenses to Rs. 2,52,890 for the year under consideration. He, should have consider the family size of the appellant, place of his residence etc. for house hold expenses estimation. Hence, addition is not sustainable as per the facts of the case and as per law.
ITA No.649/Ahd/2015 Jitendra Ambalal Patel vs. ITO Asst. Year. 2012-13 - 3 -
Appellant craves for leave to add, amend, modify and/or delete any of the grounds aforesaid, as and when it is necessary to do so.” 2. An amount of Rs.4,00,000/- was seized from the assessee during the course of survey proceeding on 28.03.2012 conducted in the case of M/s. Shanti Corporation at their site office of their scheme of flats “Shanti Residency” and “Shanti Villa”. The assessee was unable to explain the source of cash brought to the aforesaid site and a warrant of authorization u/s 132 of the Act was issued and such cash was seized. The assessee filed its return of income on 08.06.2012 showing his total income at Rs.5,15,430/-. Upon scrutiny the notice u/s 143(2) of the Act dated 01.01.2013 was issued. Subsequently, another notice u/s 142(1) along with questionnaire was issued on 02.08.2013. The assessee duly submitted his explanation before the Learned AO in order to explain the source of cash seized of Rs. 4,00,000/- along with supporting evidences. The plea of the assessee was this that he booked a residential flat in the name of his wife Sarojben Patel in “Shanti Residency” developed by M/s. Shanti Corporation situated at Gandhinagar. The total cost of the flat was of Rs. 19,57,500/- for the total area of 145 Sq. Yds. Till 28.03.2012 i.e. the date of search the assessee paid Rs.10,00,000/- by cheque. Further payment of Rs.4,00,000/- was brought by the assessee to the builders when the search took place. The following details were also submitted by the assessee in order to justify the source of cash seized of Rs. 4,00,000/- is as under: Sr. Amount Rs. Source Remarks No. 1 1,50,000 Wife: Patel Sarojben Copy of return of income Jitendrakumar for A.Y. 2011-12
ITA No.649/Ahd/2015 Jitendra Ambalal Patel vs. ITO Asst. Year. 2012-13 - 4 - PAN:ATTPP 8135F attached copies of sales bills of ornaments are also submitted herewith. 2 1,00,000 Brother: Copy of return of income Rajendrakumar for A.Y. 2011-12 Amabalal Patel attached. PAN:AXHPP 3223 E 3 50,000 Agent: Patel Copy of return of income Ashkkumar for A.Y. 2011-12 and Jagjivandas bank passbook from PAN: which cash withdrawn. AIAPP0299AA 4 50,000 Agent: Dipakkumar Copy of return of income Parsottamdas Patel for A.Y. 2011-12 and PAN: AIAPP 0278 P bank passbook from which cash withdrawn 5 50,000 Agent: Kalpesh Copy of return of income Karshanbhai Patel for A.Y. 2011-12 and PAN: AIAPP 0264 bank passbook from H which cash withdrawn. 4,00,000 Total Amount Rs.
The cash receipt of Rs.1,50,000/- from Smt. Sarojben Patel was accepted by the Learned AO. Rest of the amount being Rs. 2,50,000/- was added to the income of the assessee u/s 69A of the Act since the explanation offered by the assessee regarding the nature and source of the money was not found satisfactory. Further that, an amount of Rs. 2,52,890/- was also added to the income of the assessee on account of house hold expenses. Both additions were confirmed by the appellate authority. Hence, the appeal before us.
None appeared on behalf of the assessee at the time of hearing of the matter. However, the written submission filed on behalf of the assessee is on
ITA No.649/Ahd/2015 Jitendra Ambalal Patel vs. ITO Asst. Year. 2012-13 - 5 - record before us. The Learned DR relied upon the orders passed by the authorities below.
We have heard the representative of the revenue and perused the written submission filed on behalf of the assessee along with the relevant materials available on record. It appears that the PAN No. and the Bank details of each of the parties mentioned in Serial No.2 to 5 of the chart provided by the assessee along with the reply were duly provided by the assessee before the authorities below. The Learned AO rejected such contention of the assessee in the absence of confirmation or bank statement of those parties on the plea that there was no sufficient withdrawal from the bank to advance the amount of Rs. 50,000/- to the assessee. However, we find that before making addition to the tune of Rs. 2,50,000/- in respect of four parties the Learned AO has not made any deliberation to enquire into the matter to ascertain the actual fact. None of the parties were summoned by the assessing Officer particularly inspite of having the details of those parties with him. Further that, no further details and/or explanations were called for by the Learned AO or even by the appellate authority to substantiate the advances from the aforesaid parties. Further that, a copy of the order dated 28.03.2016 passed u/s 271(1)(c) of the Income Tax Act, 1961 imposing penalty against the assessee has also been submitted by the assessee before us wherefrom it appears that the copy of bank statement as well as the confirmation of each of the parties were duly submitted by the assessee during the penalty proceeding. If that be so, we can safely conclude that had there been any opportunity given to the assessee to provide further details or explanation regarding the advances obtained from the parties as claimed by the assessee, the assessee could have positively furnished
ITA No.649/Ahd/2015 Jitendra Ambalal Patel vs. ITO Asst. Year. 2012-13 - 6 - the said documents/evidences being the copy of bank statements and confirmation in respect of all parties to the Learned AO which he had submitted during the penalty proceeding. We further note that appellate authority before confirming such addition not asked for any remand report from the Assessing Officer providing a scope to make further enquiry into the matter. We find that the assessee has duly provided the details of the parties from whom advances was taken by giving bank statement, PAN No. etc. The assessee has discharged its primary onus but the Assessing officer neither issued summons on those parties nor conducted enquiries about the genuineness or otherwise of the advances taken by the assessee though the permanent account numbers of those parties were available with him and thus the submissions of those parties were not recorded by the Learned AO. Therefore, the authorities below without discharging their duties by making further enquiry into the matter as discussed above erroneously made additions not in accordance with the letter and spirit of law and also the ratio laid down by the judgment passed by the Jurisdictional High Court in the matter of DCIT-vs-Rohini Builders.
In that view of the matter, we are of the considered view to delete the said addition made by the authorities below. Hence this ground of appeal filed by the assessee is allowed.
The next ground of appeal relates to addition of Rs.2,52,890/- on the ground of lower house hold withdrawals.
ITA No.649/Ahd/2015 Jitendra Ambalal Patel vs. ITO Asst. Year. 2012-13 - 7 - 6. On the basis of the A.Y. 2010-11 the Assessing Officer assumed that the house hold expenses of Rs. 2,29,900/- to be reasonable considering 10% increase of expenses of Rs. 2,52,890/- determined as reasonable house hold expenses for the year under consideration since the cash withdrawal of the assessee in this regard was only of Rs. 31,600/- and the claim of the assessee that the major portion of the house hold expenses were met from the income of his wife was not found tenable. The Learned AO rejected such plea of the assessee and made the said addition of Rs. 2,52,890/- which was confirmed by the Learned Appellate Authority. Hence the instant appeal before us.
The plea of the assessee was this that there was no fixed pattern of withdrawals for house hold expenses. The funds whenever needed for house hold expenses, the assessee either withdraw the sum from the bank or from his wife out of her own source of income. The assessee’s wife filed the return of income declaring total income of Rs. 1,82,990/- after claiming deduction under chapter VIA wherein she had declared cash income from the tuition income and beauty parlour income aggregating to Rs.1,52,850/-. The house hold expenses shown in the return of income found to be reasonable for a small family taking into consideration the explanation rendered by the assessee before us. This particular aspect of the matter has not been considered by the Learned CIT(A). The Assessing Officer failed to bring on record any other source of income earned by the appellant which was utilized for contribution to house hold expenses and therefore he ought to have accepted the explanations rendered by the assessee that during the year under consideration his wife contributed to the house hold expenses out of her income which is also supported by her return of income.
ITA No.649/Ahd/2015 Jitendra Ambalal Patel vs. ITO Asst. Year. 2012-13 - 8 -
In that view of the matter, the addition made to the tune of Rs. 2,52,890/- only on the sole ground that lower house hold withdrawals has been made by the assessee is not found feasible and hence dismissed.
In the result, assessee’s appeal is allowed. This Order pronounced in Open Court on 04/03/2019
Sd/- Sd/- ( WASEEM AHMED ) ( Ms. MADHUMITA ROY ) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 04/03/2019 Priti Yadav, Sr.PS
आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��यथ� / The Respondent. 3. संबं�धत आयकर आयु�त / Concerned CIT 4. आयकर आयु�त(अपील) / The CIT(A)-Gandhinagar, Ahmedabad. 5. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड� फाईल / Guard file. आदेशानुसार/ BY ORDER, स�या�पत ��त //True Copy// उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपील�य अ�धकरण, अहमदाबाद / ITAT, Ahmedabad 1. Date of dictation 04/03/2019 (Dictation Pages 9) 2. Date on which the typed draft is placed before the Dictating Member 04/03/2019 3. Other Member… 4. Date on which the approved draft comes to the Sr.P.S./P.S … 5. Date on which the fair order is placed before the Dictating Member for pronouncement… 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………………… 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………………