LALIT MOHAN DHANDA,MUMBAI vs. DCIT CEN CIR 39, MUMBAI

आदेश / O R D E R

Per Jason P. Boaz, AM This appeal by assessee is directed against the order of CIT(A)- 36, Mumbai dated 18.10.2011 for A.Y. 2007-08.

2.3 Aggrieved by the order of assessment for A.Y. 2007-08 dated 29.12.2010, assessee preferred an appeal before CIT(A)-36, Mumbai.

The learned CIT(A) disposed the appeal allowing assessee partial relief, by sustaining the addition on an adhoc basis to the extent of 30% thereof and thereby deleting 70% of the addition of `1,50,000/-.

Shri Lalit Mohan Dhanda 3. Aggrieved by the order of the CIT(A)-36, Mumbai dated 18.10.2011 assessee has preferred this appeal raising the following grounds: -

“Ground No. 1: On the facts and in the circumstances of the case and in law, the Hon'ble CIT(A) erred confirming the action of the Learned Assessing Officer of initiating proceedings u/s.153A of the Income Tax Act, 1961 ('the Act') even though no assessment or re- assessment proceedings in relation to this year were pending as on the date of the search u/s.132 of the Act. The appellant prays that such action of the Learned Assessing Officer may please be treated as had in law and the same may please he deleted. Ground No.2: On the facts and in the circumstances of the case and in law, the Hon'hle CJT(A) erred in confirming the addition (i.e. 30% of Rs. 1,50,000) made by the Learned Assessing Officer on account of alleged low household expenses. The appellant prays that the confirmation by Hon He CIT(A) of 30% of addition made by the Learned Assessing Officer on account of alleged low household household expenses may please he deleted. Ground No. 3: On the facts and in the circumstances of the case and in law, the Hon'hle CIT (A) erred in confirming the action of the Learned Assessing Officer of charging interest u/s 234B and 234C of the Act, having regard to the fact of the case. The appellant denies its liability for payment of interest u/s. 234B and 234C of the Act.” 3.1 In the course of proceedings, assessee, vide letter dated 24.11.2015, filed the following additional grounds of appeal: -

“1. The appeal for the aforesaid assessment year was filed before your honours on 08.05.2012 by the appellant. In the said appeal, Ground No. 1 was raised, challenging the proceedings initiated u/s 153A of the Act. In this regard, it is submitted that the said ground was erroneously, phrased, whereby the validity of assessment order was challenged instead of the addition made.

Shri Lalit Mohan Dhanda 2. During the course of search action undertaken u/s 132 of the Act on 0503.2009, no incriminating material was found in respect of the household expenses made by the appellant during the year. However, inspite of the said fact, addition was made in the assessment order u/s 143(3) r.w.s. 153A on account of insufficient household expenses.

Shri Lalit Mohan Dhanda 7. In view of the above, it is most humbly submitted that the enclosed additional ground may kindly be admitted, adjudicated and decided by Your Honours.” 4. Additional grounds of Appeal: In the course of proceedings, before us, the learned A.R. for the assessee submitted that the additional grounds of appeal raised by the assessee vide letter dated 24.11.2015 (supra) are not being pressed and has signed the acknowledgement thereof on the said letter. In view of the additional grounds not being pressed before us in this appeal, they are rendered infructuous and accordingly dismissed.

5. Ground No. 1: Before us, the learned A.R. for the assessee did not urge or press ground No. 1 and hence the same is dismissed as infructuous.

6. Ground No. 2: In respect of this ground, the learned A.R. for the assessee submitted that assessee and his family members had withdrawn sufficient money for household expenses during the year under consideration. It is submitted that AO did not consider the withdrawals made by assessee’s family members while making the adhoc addition of `1,50,000/- on this count. It was further submitted that assessee and his family members had withdrawals amounting to `5,65,632/- which were sufficient in the assessment year under consideration; out of which assessee’s withdrawals were approximately `4.33 lakhs. It is contended by the learned A.R. for the Shri Lalit Mohan Dhanda assessee that the addition made by AO was unwarranted and that even the learned CIT(A)’s order confirming the above adhoc addition to the extent of 30% of `1,50,000/-, i.e. 45,000/-, is unsustainable in the facts of the case as the combined withdrawals of assessee and his family members at `5.65 lakhs is far in excess of the withdrawals for household expenses determined at `4.78 lakhs as per the impugned order of the learned CIT(A).

6.1 In these factual circumstances of the case as narrated above (supra), in our considered opinion, the learned CIT(A)’s order confirming the addition on account of low withdrawals for household expenses to the extent of 30% of `1,50,000/- (viz., `45,000/-) is factually unsustainable and is therefore to be deleted. We find that the authorities below have not brought on record any material evidence to establish that assessee has incurred insufficient withdrawals; especially by ignoring the size and status of assessee and his family members and their respective withdrawals. Both the AO in making the adhoc addition of `1,50,000/- on account of low withdrawals and the learned CIT(A) in upholding the same to the extent of 30% thereof, in our opinion, have not given any convincing justification or reasons for their finding/action and have made the same purely on estimate and without any basis. In these circumstances, we are of the view that the addition made by the AO

Shri Lalit Mohan Dhanda and partly upheld by the learned CIT(A) has no legs to stand and therefore direct the AO to delete the said addition on account of low withdrawals for household expenses. Consequently ground No. 2 of assessee’s appeal is allowed.