The ACIT, Circle-1,, Surat v. Shri Tarachand B.Shah, Surat

ITA 2027/AHD/2008 | 2005-2006
Pronouncement Date: 31-08-2010 | Result: Partly Allowed

Appeal Details

RSA Number 202720514 RSA 2008
Bench Ahmedabad
Appeal Number ITA 2027/AHD/2008
Duration Of Justice 2 year(s) 3 month(s) 2 day(s)
Appellant The ACIT, Circle-1,, Surat
Respondent Shri Tarachand B.Shah, Surat
Appeal Type Income Tax Appeal
Pronouncement Date 31-08-2010
Appeal Filed By Department
Order Result Partly Allowed
Bench Allotted B
Tribunal Order Date 31-08-2010
Date Of Final Hearing 18-08-2010
Next Hearing Date 18-08-2010
Assessment Year 2005-2006
Appeal Filed On 29-05-2008
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD AHMEDABAD B BENCH (BEFORE S/SHRI G.D. AGARWAL VICE-PRESIDENT AND T.K. SHARMA JUDICIAL MEMBER) ITA.NO.3780/AHD/2007 WITH CO NO.177/AHD/2010 [ASSTT. YEAR: 2004-2005] AND ITA NO.2027/AHD/2008 [ASSTT.YEAR : 2005-2006] DCIT CIR.1 SURAT. VS. SHRI TARACHAND B. SHAH OPP: M/S.JAYCO CHEMICALS A-29 LILADHAR SOCIETY TADWADI RANDER ROAD SURAT. ITA.NO.1792 /AHD/2008 [ASSTT. YEAR: 2005-2006] DCIT CIR.1 SURAT. VS. SHRI TARACHAND B. SHAH OPP: M/S.JAYCO CHEMICALS A-29 LILADHAR SOCIETY TADWADI RANDER ROAD SURAT. (APPELLANT) (RESPONDENT) REVENUE BY : SHRI ANILKUMAR ASSESSEE BY : SHRI TUSHAR P. HEMANI O R D E R PER G.D. AGRAWAL VICE-PRESIDENT: THESE ARE THREE APPEALS TWO BY THE REVENUE AND ONE BY THE ASSESSEE AND ONE CROS S OBJECTION BY THE REVENUE IN ASSESSEES APPEAL AGAINST RESPECTIVE ORD ERS OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-I SURAT. SINCE ASSESSEE BEI NG SAME AND COMMON ISSUES ARE RAISED ALL THESE APPEALS ARE DISPOSED O F BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. ITA NO.3780/AHD/2007 (REVENUES APPEAL : A.Y.2004-2 005) 2. THE FIRST TWO GROUNDS OF THE REVENUES APPEAL RE ADS AS UNDER: DCIT VS. SHRI TARACHAND B. SHAH -2- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD.CIT(A) ERRED IN DELETING THE ADDITION OF RS.31 00 303/- MADE ON ACC OUNT OF DISALLOWANCE OF INTEREST PAID TO S.N.ENTERPRISES. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD.CIT(A) ERRED IN DELETING THE ADDITION OF RS.85 163/- MADE ON ACCOUN T OF DISALLOWANCE OF INTEREST PAID TO JAYCO SYNTHETICS PVT. LTD. 3. AT THE TIME OF HEARING BEFORE US IT IS SUBMITTE D BY THE LEARNED DR THAT THE ASSESSEE IS A COMMISSION AGENT FOR SODA ASH MAN UFACTURED BY NIRMA LTD. AND THE ASSESSEE IS GETTING COMMISSION FOR THE ABOV E WORK. THEREFORE THERE IS NO REQUIREMENT OF FUND FOR THE PURPOSE OF BUSINESS. THE ASSESSEE HAS CLAIMED HUGE BORROWING ON WHICH THE PAYMENT OF INTEREST OF RS.31 00 303/- WAS MADE TO M/S.S.N. ENTERPRISES AND RS.85 163/- TO JAYCO SY NTHETICS PVT. LTD. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE WAS ASKED TO ESTABLISH THAT THE BORROWINGS FROM THE ABOVE TWO CONCERNS WERE FOR THE PURPOSE OF BUSINESS. HOWEVER THE ASSESSEE DID NOT ESTABLISH THAT THE AM OUNT BORROWED FROM THESE TWO CONCERNS WERE UTILISED FOR THE PURPOSE OF THE B USINESS. THE ASSESSEE CLAIMED THAT THE AMOUNT BORROWED FROM S.N. ENTERPRI SES IS BLOCKED UP IN SALES- TAX REFUND. HOWEVER NO EVIDENCE WAS PRODUCED TO S UBSTANTIATE SUCH CLAIM THAT THE MONEY WAS BORROWED FROM S.N. ENTERPRISES FOR MA KING PAYMENT OF SALES- TAX. THAT THE CIT(A) DELETED THE DISALLOWANCE WITH OUT PROPERLY APPRECIATING THE FACTS OF THE CASE. THE CIT(A) HAS ALSO RELIED UPON DECISION OF THE HONBLE APEX COURT IN THE CASE OF S.A. BUILDERS 288 ITR 1 WHICH WAS NOT APPLICABLE ON THE FACTS OF THE ASSESSEES CASE. HE THEREFORE SUBMITTED THAT THE ORDER OF THE CIT(A) SHOULD BE REVERSED AND THAT OF THE AO MAY BE RESTORED. 4. THE LEARNED COUNSEL FOR THE ASSESSEE ON THE OTH ER HAND STATED THAT THERE WAS OPENING CREDIT BALANCE IN THE ACCOUNT OF S.N. E NTERPRISES AMOUNTING TO RS.255.08 LAKHS. THE CLOSING CREDIT BALANCE WAS RS .265.19 LAKHS. THUS THE FRESH BORROWING IF ANY DURING THE YEAR UNDER CONS IDERATION WAS RS.10 LAKHS ONLY. THAT NO DISALLOWANCE OF INTEREST WAS MADE IN THE PRECEDING YEARS AND THEREFORE MONEY BORROWED IF ANY IN THE EARLIER Y EAR WAS ACCEPTED TO HAVE DCIT VS. SHRI TARACHAND B. SHAH -3- BEEN UTILISED FOR THE PURPOSE OF BUSINESS. THEREFOR E WITH REFERENCE TO BORROWING OF RS.255.08 LAKHS NO INTEREST CAN BE DI SALLOWED BY THE AO. IN SUPPORT OF THIS HE RELIED UPON THE DECISION OF HON BLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. SRIDEV ENTERPRISES 192 ITR 165 . IT IS SUBMITTED BY THE LEARNED COUNSEL THAT THE MONEY BORROWED FROM S.N. E NTERPRISES AS WELL AS JAYCO SYNTHETICS PVT. LTD. WAS UTILISED FOR THE PUR POSE OF BUSINESS. THAT THE SALES-TAX REFUND WAS RECEIVED ALONG WITH INTEREST A ND SUCH INTEREST WAS DULY OFFERED TO TAX. HE ALSO RELIED UPON THE DECISION O F HONBLE APEX COURT IN THE CASE OF S.A. BUILDERS (SUPRA) TO SUPPORT HIS CONTEN TION THAT THE COMMERCIAL EXPEDIENCY IS TO BE CONSIDERED FROM THE BUSINESSMAN S POINT OF VIEW. 5. WE HAVE CAREFULLY CONSIDERED THE ARGUMENTS OF BO TH THE SIDES AND PERUSED THE MATERIAL PLACED BEFORE US. THE AO HAS REPRODUCED THE COPY OF THE ACCOUNTS OF THE ASSESSEE WITH M/S.S.N.ENTERPRISES. FROM THE PERUSAL OF THE ABOVE COPY OF THE ACCOUNT IT IS EVIDENT THAT THERE IS HUGE DEBIT AND CREDIT DURING THE YEAR UNDER CONSIDERATION. TOTAL BORROWI NG FROM S.N.ENTERPRISES DURING THE YEAR UNDER CONSIDERATION WAS RS.7.25 CRO RES AND THE TOTAL REPAYMENT WAS RS.7.15 CRORES. THEREFORE WHATEVER OPENING CR EDIT BALANCE WAS THERE IN THE ACCOUNT OF M/S.S.N.ENTERPRISES STOOD REPAID AND THE CLOSING BALANCE WAS OUT OF THE BORROWING OF THE YEAR UNDER CONSIDERATIO N. THEREFORE THE CONTENTION OF THE LEARNED COUNSEL THAT THE AO CAN CONSIDER THE DISALLOWANCE OF INTEREST ONLY WITH REFERENCE TO THE BORROWING OF RS.10 LAKHS CANNOT BE ACCEPTED. HOWEVER THE QUESTION STILL REMAINS WHETHER THE MON EY BORROWED FROM S.N.ENTERPRISES WAS UTILISED FOR THE PURPOSE OF BUS INESS. WE FIND THAT NEITHER OF THE LOWER AUTHORITIES HAS EXAMINED THE FACTS. T HE AO HELD THAT THE BORROWING WAS NOT UTILISED FOR THE PURPOSE OF BUSIN ESS WHILE THE CIT(A) HAS ACCEPTED THE ASSESSEES CONTENTION THAT THE BORROWI NG WAS UTILISED FOR THE PURPOSE OF BUSINESS. MONEY BORROWED ON EACH DATE W AS OF HUGE AMOUNT IN LAKHS. THEREFORE IF THE AO WOULD HAVE VERIFIED TH E ASSESSEES BOOKS OF ACCOUNTS IT WAS VERY EASY TO ASCERTAIN HOW THE BOR ROWED MONEY WAS UTILISED. DCIT VS. SHRI TARACHAND B. SHAH -4- THE CONTENTION OF THE ASSESSEE THAT THE BORROWED MO NEY IS BLOCKED UP FOR THE PAYMENT OF SALES-TAX CANNOT BE ACCEPTED WITHOUT PRO PER VERIFICATION. CONSIDERING THE FACTS OF THE CASE AND THE ARGUMENTS OF BOTH THE SIDES IN OUR OPINION IT WOULD MEET ENDS OF JUSTICE IF THE MATT ER IS SET ASIDE TO THE FILE OF THE AO FOR PROPER VERIFICATION OF UTILISATION OF AMOUNT BORROWED DURING THE YEAR UNDER CONSIDERATION SO AS TO ASCERTAIN WHETHER THE MONEY WAS UTILISED FOR THE PURPOSE OF BUSINESS OR NOT. WE THEREFORE SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW ON THIS POINT AND RESTORE THE MATTER BACK TO THE FILE OF THE AO. WE DIRECT HIM TO ASCERTAIN FROM THE ASSESSEE HOW THE BORROWED MONEY WAS ACTUALLY UTILISED. THEREAFTER THE AO WILL RE-ADJUDICATE TH E MATTER IN ACCORDANCE WITH THE LAW. 6. GROUND NO.3 OF THE REVENUES APPEAL READS AS UND ER: 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD.CIT(A) ERRED IN RESTRICTING THE ADDITION OF RS.3 00 000/- MADE ON A CCOUNT OF LOW WITHDRAWALS FOR HOUSEHOLD EXPENSES TO RS.2 50 000/- THEREBY GIVING RELIEF OF RS.50 000/- 7. THIS GROUND IS CONNECTED WITH THE GROUND NO.3 OF THE CO WHEREIN THE ASSESSEE HAS CHALLENGED THE ADDITION OF RS.2 50 000 /- ON ACCOUNT OF LOW HOUSE- HOLD WITHDRAWAL. THE FACTS OF THE CASE ARE THAT DU RING THE YEAR UNDER CONSIDERATION THE ASSESSEE HAD DISCLOSED THE TOTAL WITHDRAWAL OF RS.77 000/- FOR HOUSEHOLD EXPENDITURE. THE AO CONSIDERED THE W ITHDRAWAL TO BE LOW AND HE MADE ADDITION OF RS.3 00 000/- ON ACCOUNT OF LOW HOUSEHOLD WITHDRAWALS. ON APPEAL THE CIT(A) REDUCED THE SAME TO RS.2 50 0 00/-. THE REVENUE IS IN APPEAL AGAINST THE RELIEF ALLOWED BY THE CIT(A) WHI LE THE ASSESSEE IS IN CO AGAINST THE ADDITION SUSTAINED. 8. AFTER CONSIDERING THE ARGUMENTS OF BOTH THE SIDE S AND FACTS OF THE CASE IN OUR OPINION THE ADDITION MADE BY THE AO AS WELL AS SUSTAINED BY THE CIT(A) ARE EXCESSIVE. IN OUR OPINION IT WOULD MEET ENDS OF JUSTICE IF THE HOUSEHOLD DCIT VS. SHRI TARACHAND B. SHAH -5- EXPENDITURE OF THE ASSESSEE IS ESTIMATED AT RS.15 0 00/- PER MONTH. ACCORDINGLY THE TOTAL HOUSEHOLD EXPENDITURE WORKED OUT TO RS.1 80 000/-. THE ASSESSEE ALSO DISCLOSED THE HOUSEHOLD EXPENDITURE O F RS.77 000/-. THEREFORE THE ADDITION WORKS TO RS.1 03 000/-. CO NO.177/AHD/2010 (BY THE ASSESSEE) 9. THE FIRST GROUND OF THE CO READS AS UNDER: 1. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ACTION OF LEARNED AO IN DISALLOWING THE BUSINESS DE VELOPMENT EXPENDITURE OF RS.51 000/- 10. DURING THE YEAR UNDER CONSIDERATION THE ASSESS EE PAID A SUM OF RS.51 000/- TO SHRI FENIL B. SHAH AT TIME OF HIS MA RRIAGE. THE SAME WAS CLAIMED AS BUSINESS DEVELOPMENT EXPENDITURE. THE E XPLANATION GIVEN BY THE ASSESSEE BEFORE THE AO READS AS UNDER: IN PARA NO.4 OF YOUR ABOVE REFERRED LETTER YOUR H ONOUR HAS ASKED OUR EXPLANATION AS TO WHY THE CLAIM OF RS.51 000/- CLAI MED AS BUSINESS DEVELOPMENT EXPENDITURE SHOULD NOT BE DISALLOWED. AS AGAINST THIS WE WOULD LIKE TO SUBMIT AS UNDER: I) WE HAVE SUBMITTED COPY OF ACCOUNT OF BUSINESS DEVEL OPMENT EXPENSES ON PAGE NO.16 OF OUR LETTER DD.4.10.2006. WE HAVE ALSO EXPLAINED NATURE OF BUSINESS DEVELOPMENT EXPEN SES IN POINT NO.14 OF OUR LETTER DTD. 4.10.2006. II) FROM THE PERUSAL OF ACCOUNT IT IS SEEN THAT RS.51 0 00/- WAS GIVEN BY CH.NO.525267 DTD.8.3.2004 OF RAJKOT NAGARIK SAHA KARI BANK LTD. ON OCCASION OF MARRIAGE OF SHRI FENIL B. SHAH A COMMISSION AGENT OF M/S.JAYCO CHEMICALS. III) SHRI FENIL B. SHAH IS A COMMISSION AGENT THROUGH WH OM THE SALES WERE EFFECTED DURING ACCOUNTING YEAR 2000-2001 200 1-02 AND 2002-03 AND EARLIER YEARS ALSO. A SUMMARY CHART SH OWING ACCOUNTING YEAR TURNOVER EFFECTED THROUGH FENIL B. SHAH BY M/S.JAYCO CHEMICALS AND COMMISSION PAID TO HIM IS A TTACHED HEREWITH AS BELOW: DCIT VS. SHRI TARACHAND B. SHAH -6- ACCOUNTING YEAR TURNOVER COMMISSION 2000-2001 418581735.00 4185817.00 2001-2002 496296437.62 4962964.00 2002-2003 421808364.00 3374467.00 V) LOOKING TO THE BUSINESS RECEIVED THROUGH FENIL B. S HAH AND BUSINESS RELATION WITH HIM CHEQUE OF RS.51 000/- G IVEN ON OCCASION OF HIS MARRIAGE AS BUSINESS DEVELOPMENT EX PENSES IS REQUIRED TO BE CONSIDERED AS REASONABLE. THERE IS NO PERSONAL ELEMENT INVOLVED IN MAKING THESE PAYMENT. HENCE S UCH EXPENDITURE IS REQUIRED TO BE ALLOWED AS CLAIMED. THE AO DID NOT ACCEPT THE ASSESSEES EXPLANATION WI TH THE FOLLOWING FINDINGS: 6.5 THE CONTENTIONS OF THE ASSESSEE ARE NOT ACCEPT ABLE AS DURING THE YEAR UNDER CONSIDERATION THERE WAS NO SALE. THE A SSESSEE CARRIED OUT ACTIVITIES OF COMMISSION AGENT. MOREOVER IN ANY CASE IF A PERSON ACTED AS COMMISSION AGENT AND HELPED TO PROCURE BUS INESS IN THE PAST WOULD NOT MAKE HIM ENTITLED TO A HUGE AMOUNT OF RS. 51 000/- AS HE JUST GETS MARRIED. THERE WAS NO BUSINESS OBLIGATION UPO N THE ASSESSEE AS WAS INTIMATED TO THE ASSESSEE THAT ON THE OCCASION OF MARRIAGE A REASONABLE AMOUNT WHICH CAN BE GIVEN AS GIFT CAN BE RS.51 RS.101 RS.501 OR SO. 6.6 SINCE THE ASSESSEE WAS NOT UNDER ANY BUSINESS O BLIGATION TO INCUR SUCH EXPENDITURE I AM SATISFIED THAT THE CLAIM OF EXPENDITURE OF RS.51 000/- IS NOT AN ALLOWABLE EXPENDITURE. ACCOR DINGLY THE SAME IS DISALLOWED AND ADDED TO THE TOTAL INCOME OF THE ASS ESSEE. THE CIT(A) ALSO UPHELD THE FINDING OF THE AO HOLDIN G THE EXPENDITURE TO BE PERSONAL EXPENDITURE. 11. AT THE TIME OF HEARING BEFORE US IT IS STATED BY THE LEARNED COUNSEL THAT SHRI FENIL B. SHAH IS NOT RELATIVE OF THE ASSESSEE. THE ASSESSEE HAS ONLY BUSINESS RELATIONSHIP WITH HIM. HE IS COMMISSION A GENT AND PROCURED BUSINESS FOR THE ASSESSEE AND THE ASSESSEE ALSO EARNED HUGE COMMISSION THEREFROM. THE FINDING OF THE AO THAT ON THE OCCASION OF MARRIAGE A REASONABLE AMOUNT OF GIFT DCIT VS. SHRI TARACHAND B. SHAH -7- CAN BE RS.51/- RS.101/- OR RS.501/- NOT RS.51 000/ -. HE HAS STATED THAT IT WOULD DEPEND UPON THE FACTS OF EACH CASE AND STATUS OF THE PERSONS WHO IS GETTING MARRIED. HERE THE ASSESSEES AGENT HIMSELF WAS GETTING MARRIED NOT HIS RELATIVE. MOREOVER SINCE THE AGENT WAS GIVING SUB STANTIAL BUSINESS AND CONSIDERING THE FACTS OF THE CASE THE ASSESSEE DEC IDED TO MAKE THE GIFT OF RS.51 000/-. THE AMOUNT WAS PAID BY CHEQUE AND TH EREFORE THE GENUINENESS OF THE EXPENDITURE INCURRED IS NOT IN DOUBT. IN VI EW OF THE ABOVE IT IS SUBMITTED BY THE LEARNED COUNSEL THAT THE DISALLOWA NCE MADE BY THE AO MAY BE DELETED. THE LEARNED DR ON THE OTHER HAND STATED THAT THE GIFT GIVEN AT THE TIME OF MARRIAGE IS CERTAINLY PERSONAL EXPENDITURE AND THEREFORE THE DISALLOWANCE WAS RIGHTLY MADE BY THE AO AND SUSTAIN ED BY THE CIT(A). 12. WE HAVE CAREFULLY CONSIDERED THE ARGUMENTS OF B OTH THE SIDES AND PERUSED MATERIAL PLACED BEFORE US. CONSIDERING THE FACTS OF THE CASE IN OUR OPINION THE EXPENDITURE WAS INCURRED FOR THE PURPO SE OF BUSINESS. IT IS NOT THE CASE OF THE REVENUE THAT SHRI FENIL B. SHAH WAS REL ATIVE OF THE ASSESSEE AND THE ASSESSEE DID NOT HAVE ANY BUSINESS CONNECTION WITH HIM. ON THE OTHER HAND IT WAS STATED BY THE LEARNED COUNSEL THAT SHRI FENIL B . SHAH WAS NOT RELATIVE OF THE ASSESSEE AND HUGE BUSINESS WAS MADE THROUGH HIM. O N THE OCCASION OF MARRIAGE OF BUSINESS ASSOCIATE WHAT GIFT WOULD BE R EASONABLE IS TO BE DECIDED BY THE BUSINESSMAN CONSIDERING VARIOUS ASPECTS. IT IS NOT FOR THE AO TO DECIDE WHAT AMOUNT OF GIFT IS TO BE MADE AT THE TIME OF MA RRIAGE OF A BUSINESS ASSOCIATE. THE GENUINENESS OF THE GIFT GIVEN IS NO T IN DOUBT BECAUSE THE AMOUNT WAS GIVEN BY CHEQUE. CONSIDERING TOTALITY OF THE F ACTS OF THE CASE WE ARE UNABLE TO ACCEPT THE CONTENTION OF THE REVENUE THAT THE EXPENDITURE WAS PERSONAL EXPENDITURE OF THE ASSESSEE. WE THEREFORE DELETE THE DISALLOWANCE OF RS.51 000/-. 13. GROUND NO.2 OF THE CO IS AGAINST THE DISALLOWAN CE OF RS.3 000/- OUT OF INTEREST. AT THE TIME OF HEARING BEFORE US IT IS SUBMITTED BY THE LEARNED DCIT VS. SHRI TARACHAND B. SHAH -8- COUNSEL THAT THE ASSESSEE PAID INTEREST AT THE RATE OF 18% TO MITUL K. SHAH. HE HAS STATED THAT THE RATE OF 18% IS FAIR AND REASONA BLE AND EVEN THE ITAT HAS ACCEPTED THE INTEREST PAID AT THE RATE OF 21% TO BE REASONABLE. HOWEVER WE FIND THAT BEFORE THE AO THE ASSESSEE DID NOT GIVE A NY EXPLANATION WHY THE INTEREST WAS PAID AT THE RATE OF 18% TO SOME RELATI VE WHEN THE ASSESSEE COULD BORROW THE MONEY FROM S.N.ENTEPRISES AT THE RATE OF 12%. HOWEVER WHILE ADJUDICATING GROUND NO.1 OF THE REVENUES APPEAL W E HAVE ALREADY SET ASIDE THE ISSUE RELATING TO THE PAYMENT OF INTEREST TO S. N.ENTERPRISES. IN OUR OPINION IT WOULD ALSO MEET ENDS OF JUSTICE IF THE ISSUE RE LATING TO THE PAYMENT OF INTEREST AT THE RATE OF 18% TO SHRI MITUL K. SHAH I S ALSO SET ASIDE TO THE FILE OF THE AO. WE ORDER ACCORDINGLY AND DIRECT THE ASSESS EE TO FURNISH HIS EXPLANATION ABOUT THE REASONABLENESS OF 18% OF INTE REST BEFORE THE AO. THE AO WILL RE-ADJUDICATE THE SAME IN ACCORDANCE WITH T HE LAW. 14. GROUND NO.3 OF THE CO HAS ALREADY BEEN ADJUDICA TED WHILE CONSIDERING THE REVENUES APPEAL. 15. GROUND NO.4 OF THE CO READS AS UNDER: 4. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ACTION OF THE AO IN ADDING RS.43 499/- ON ACCOUNT O F LOW MOTOR CAR EXPENDITURE. 16. DURING THE YEAR UNDER CONSIDERATION THE ASSESS EE DISCLOSED THE MOTOR EXPENDITURE AT RS.6 501/-. THE AO WAS OF THE OPINI ON THAT THE EXPENDITURE CLAIMED BY THE ASSESSEE IS VERY MEAGER HE THEREFOR E ESTIMATED THE CAR EXPENDITURE OF THE ASSESSEE AT RS.50 000/- AND MADE ADDITION OF RS.43 499/-. THE SAME IS ALSO SUSTAINED BY THE CIT(A). 17. AFTER CONSIDERING THE ARGUMENTS OF BOTH THE SID ES AND PERUSAL OF THE MATERIAL PLACED ON RECORD WE DO NOT FIND ANY JUSTI FICATION FOR UPHOLDING THE SAID DISALLOWANCE. IF THE ASSESSEE HAS INCURRED LE SS CAR EXPENDITURE IT CANNOT DCIT VS. SHRI TARACHAND B. SHAH -9- BE PRESUMED IN THE ABSENCE OF ANY EVIDENCE TO THE C ONTRARY THAT THE EXPENDITURE WAS INCURRED BY THE ASSESSEE OUTSIDE THE BOOKS. TH ERE IS NO EVIDENCE ON RECORD OF ANY EXPENDITURE OUTSIDE THE BOOKS. EVEN OTHERWI SE FOR ANY BUSINESSMAN CAR EXPENDITURE IS REVENUE EXPENDITURE AND THEREFOR E NORMALLY THERE WOULD NOT BE ANY MOTIVE TO SUPPRESS THE CAR EXPENDITURE. IN ANY CASE THERE IS NO EVIDENCE OF INCURRING OF ANY EXPENDITURE OUTSIDE BO OKS. WE THEREFORE DO NOT FIND ANY JUSTIFICATION FOR SUSTAINING THE ADDITION OF RS.43 499/- THE SAME IS DELETED. 18. GROUND NO.5 IS AGAINST THE CHARGING OF INTEREST UNDER SECTIONS 234A 234B AND 234C. BOTH THE PARTIES AGREED THAT THE CH ARGING OF INTEREST UNDER THE SECTIONS IS CONSEQUENTIAL IN NATURE. ACCORDINGLY WE DIRECT THE AO TO RECALCULATE THE INTEREST AFTER GIVING EFFECT TO OUR ABOVE ORDER. ITA NO.2027/AHD/2007 (REVENUES APPEAL) 19. THE ONLY GROUND IN THIS APPEAL BY THE REVENUE I S AGAINST DELETION OF DISALLOWANCE OF INTEREST AMOUNTING TO RS.13 02 981/ -. THIS GROUND IS IDENTICAL TO THE GROUND NO.1 OF THE REVENUE FOR THE A.Y.2004- 205. FOR THE DETAILED DISCUSSION IN THE ASSESSMENT YEAR 2004-2005 WE SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND RESTORE THE MATTER BACK TO TH E FILE OF THE AO TO BE RE- ADJUDICATED AS PER OUR DIRECTION IN A.Y.2004-2005. ITA NO.1792/AHD/2008 (ASSESSEES APPEAL) : A.Y.2005 -2006 20. THE GROUND NO.1 OF THE ASSESSEE IS SIMILAR TO G ROUND NO.2 OF THE ASSESSEES CO FOR A.Y.2004-2005. FOR THE DETAILED DISCUSSION THEREIN THE ORDER OF THE AUTHORITIES BELOW ON THIS POINT IS SET ASIDE AND THE MATTER IS RESTORED BACK TO THE FILE OF THE AO FOR RE-ADJUDICA TION AS PER OUR DIRECTION FOR THE A.Y.2004-2005. DCIT VS. SHRI TARACHAND B. SHAH -10- 21. GROUND NO.2 OF THE ASSESSEE IS SIMILAR TO GROUN D NO.3 OF THE CO FOR A.Y.2004-2005. IN THE ORDER WE HAVE HELD THAT IT WOULD BE FAIR AND REASONABLE IF THE HOUSE-HOLD EXPENDITURE IS ESTIMATED AT RS.1 80 000/-. DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE HAS DISCLOSED A WI THDRAWAL OF HOUSEHOLD EXPENDITURE AT RS.1 29 270/-. ACCORDINGLY THE ADD ITION FOR LOW HOUSE-HOLD EXPENDITURE IS WORKED OUT AT RS.50 730/- (RS.1 80 0 00 MINUS RS.1 29 270/-). WE THEREFORE SUSTAIN THE ADDITION OF RS.50 730/-. 22. IN THE RESULT THE REVENUES APPEALS AS WELL AS ASSESSEES APPEAL AND COS ARE PARTLY ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 31 ST AUGUST 2010. SD/- SD/- (T.K. SHARMA) JUDICIAL MEMBER (G.D. AGARWAL) VICE-PRESIDENT PLACE : AHMEDABAD DATE : 31-08-2010 VK* COPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR ITAT. BY ORDER DR/AR ITAT AHMEDABAD