Sh. Dilbag Singh,, Mandi Gobindgarh v. ITO,, Mandi Gobindgarh

ITA 878/CHANDI/2010 | 2007-2008
Pronouncement Date: 07-01-2011 | Result: Partly Allowed

Appeal Details

RSA Number 87821514 RSA 2010
Assessee PAN ASFPS4036F
Bench Chandigarh
Appeal Number ITA 878/CHANDI/2010
Duration Of Justice 7 month(s)
Appellant Sh. Dilbag Singh,, Mandi Gobindgarh
Respondent ITO,, Mandi Gobindgarh
Appeal Type Income Tax Appeal
Pronouncement Date 07-01-2011
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted SMC
Tribunal Order Date 07-01-2011
Date Of Final Hearing 03-01-2011
Next Hearing Date 03-01-2011
Assessment Year 2007-2008
Appeal Filed On 07-06-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL: SMC BENCH: CH ANDIGARH (BEFORE HONBLE SHRI D K SRIVASTAVA AM) ITA NO.878/CHANDI/2010 (AY 2007-08) SH.DILBAG SINGH V. THE INCOME-TAX OFFICER S/O SH. JOGINDER SINGH MANDI GOBINDGARH. 99 IQBAL NAGAR MANDI GOBINDGARH (PAN: ASFPS4036F) (APPELLANT-ASSESSEE) (RESPONDENT) APPELLANT BY: NONE (WRITTEN SUBMISSIONS FILED) RESPONDENT BY: SHRI N.K.SAINI DR ORDER THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINS T THE ORDER PASSED BY THE COMMISSIONER OF INCOME-TAX (A) ON 10. 3.2010 ON THE FOLLOWING GROUNDS:- 1. THAT THE ORDER OF THE FIRST APPELLANT HAS FAILE D TO TAKE INTO CONSIDERATION THE ARGUMENTS FILED BY THE APPEL LANT. 2. THAT THE APPEAL IS WITHIN LIMITATION. 3. THAT THE APPEAL FEES OF RS.3250/- DEPOSITED WITH BANK AND CHALLAN ATTACHED WITH THE APPEAL. 4. THAT IT IS INCORRECT TO SAY THAT THE ASSESSEE HA D NOT EXPLAINED THE AMOUNT OF RS.1 50 000/- ON ACCOUNT OF ADDITIONS MADE INTO THE CAPITAL OUT OF THE TOTAL AD DITIONS MADE TO THE TUNE OF RS.2 25 000/-. 5. THAT THE ASSESSEE WHO RESIDES AT V.DANI IN ROPAR DISTRICT AND FINDS IT DIFFICULT TO DAILY UP-DOWN TO MANDI GOBINDGARH WITHDRAWS RS.60 000/- FROM HIS SAVING ACCOUNT WITH PUNJAB & SIND BANK FOR PURCHASE OF A RESIDENTIAL HOUSE AT MANDI GOBINDGARH AND KEPT THE MONEY I.E. RS.60 000/- WITH HIM BUT THE ASSESSEE F INDS IT DIFFICULT TO PURCHASE THE SUITABLE HOUSE. IN TH E MEAN TIME THE ASSESSEE HAS STARTED HIS BUSINESS IN THE N AME OF M/S RAJAN STEEL INDS. AND HE DEPOSITED RS.50 00 0/- OUT OF RS.60 000/- KEPT WITH HIM INTO HIS SAVING AC COUNT WITH PUNJAB & SIND BANK AND AFTERWARDS TRANSFERRED THE SAME INTO HIS NEW BUSINESS FIRM. 6. THAT THE ASSESSEE BELONGS TO JOINT HINDU FAMILY AND HIS FAMILY RESIDES AT V. DANI TEHSIL ANANDPUR SAHIB DI STT. ROPAR. HE RESIDES WITH HIS FATHER WHO IS AN EMPLOY EE IN 2 PUNJAB STATE ELECTRICITY BOARD AND CONTRIBUTES RS.84 000/- ANNUALLY. THE FAMILY HAS ITS ANCESTRAL HOUSE AND ALSO THE STANDARD OF VILLAGE LIFE AND CITY LIFE DIFFERS. 7. THAT WHEN THE ASSESSEE FILED HIS CORRECT INCOME TAX RETURN SO PENALTY PROCEEDINGS INITIATED BY THE ASS ESSING AUTHORITY IS AGAINST LAW AND NATURAL JUSTICE. 8. THAT IT IS INCORRECT TO SAY THAT THE ASSESSEE CO NCEALED HIS INCOME. 2. NOTICE OF HEARING WAS ISSUED FIXING THE APPEAL F OR HEARING ON SEVERAL DATES NAMELY 3.8.2010 7.9.2010 1.11.201 0 8.12.2010 AND 3.1.2011. NEITHER THE ASSESSEE NOR HIS REPRESENTATI VE EVER ENTERED PERSONAL APPEARANCE BEFORE THIS TRIBUNAL. HOWEVER LETTER DATED 29.10.2010 CONTAINING WRITTEN SUBMISSIONS IN SUPPOR T OF APPEAL HAS BEEN RECEIVED AND IS AVAILABLE ON RECORD. 3. THE ASSESSEE DEALS IN PURCHASE/SALE OF IRON AND STEEL MATERIALS. HE FILED HIS RETURN OF INCOME ON 31.10.2007 RETURNING TOTAL INCOME AT RS.18 761/-. TURNOVER DISCLOSED BY HIM STOOD AT RS. 1 52 20 626/- ON WHICH THE ASSESSEE RETURNED NET PROFIT OF RS.1 18 7 61/-. DURING THE COURSE OF SCRUTINY THE ASSESSING OFFICER NOTICED A DDITION OF RS.2 25 000/- IN HIS CAPITAL ACCOUNT OUT OF WHICH H E TREATED A SUM OF RS.1 50 000/- AS UNEXPLAINED AND CONSEQUENTLY ADDED THE SAME TO THE INCOME OF THE ASSESSEE. ON APPEAL THE LEARNED COMM ISSIONER OF INCOME- TAX (A) ACCEPTED A SUM OF RS.1 LAKH OUT OF TOTAL AD DITION OF RS.1 50 000/- . AS REGARDS THE NATURE AND SOURCE OF THE SAID SUM OF RS.50 000/- IT WAS THE CASE OF THE ASSESSEE BEFORE THE ASSESSING OFFIC ER AND THE COMMISSIONER OF INCOME-TAX (A) THAT THE ASSESSEE HA D WITHDRAWN A SUM OF RS.60 000/- ON 4.4.2006 FROM HIS BANK ACCOUNT FO R PURCHASE OF PROPERTY BUT THE PURCHASE OF PROPERTY COULD NOT MAT ERIALIZE AND HENCE A SUM OF RS.50 000/- OUT OF SUCH CASH LYING WITH HIM WAS DEPOSITED IN HIS BANK ACCOUNT ON 24.6.2006 FROM WHICH THE IMPUGNED S UM WAS TRANSFERRED TO HIS CAPITAL ACCOUNT. THE ASSESSING OFFICER AND T HE LEARNED COMMISSIONER OF INCOME-TAX (A) HAVE NOT ACCEPTED TH E SUBMISSION OF THE 3 ASSESSEE THAT IT WAS THE SAME AMOUNT WHICH WAS WITH DRAWN ON 4.4.2006 THAT WAS DEPOSITED IN THE BANK ON 20.4.2006. 4. IN SUPPORT OF HIS APPEAL THE ASSESSEE HAS MADE THE FOLLOWING WRITTEN SUBMISSIONS:- THE ASSESSEE HAS DEPOSITED RS.50 000/- IN PUNJAB & SIND BANK ON 24.6.2006 AGAINST WITHDRAWALS OF RS.60 000. 00 FROM SAME BANK ACCOUNT ON 4.4.2006. THE ASSESSEE HAS GI VEN RS.60000.00 AS AN ADVANCE TO SH.JASWANT SINGH S/O S H.MADHO SINGH RESIDENT OF WARD NO.13 STREET NO.10 NEAR LE ELA MANDHIR SANGATPURA MOHALLA MANDI GOBINDGARH FOR P URCHASE OF PROPERTY (COPY OF AGREEMENT ENCLOSED) BUT DUE T O CERTAIN UNAVOIDABLE REASON THE AGREEMENT CANNOT BE COMPLETE D. HENCE RS.60000.00 HAS BEEN RECEIVED BACK FROM SH.JA SWANT SINGH S/O SH.MADHO SINGH ON 20.6.2006 (DOCUMENTARY EVIDENCE ENCLOSED) AND OUT OF RS.60 000.00 RS.50 0 00.00 HAS BEEN DEPOSITED INTO THE SAVING ACCOUNT AND TRANSFE RRED THE AMOUNT FROM HIS SAVING ACCOUNT TO M/S RAJAN STEEL I NDS MANDI GOBINDGARH AS HIS CAPITAL CONTRIBUTION. AS I HAVE SATISFACTORILY EXPLAINED THE SOURCE OF DE POSIT OF RS.50000/- ON 24.6.2006 IN MY SAVING ACCOUNT AND RE ASON OF WITHDRAWAL ON 4.4.2006 AND DEPOSIT OF RS.50000/- ON 24.6.2006 I HEREBY REQUEST YOU TO KINDLY ALLOW ME A RELIEF OF RS.50000/- AND THE ADDITION OF RS.50000/- MADE TO M Y INCOME IS UNJUSTIFIED. 5. IN REPLY THE LEARNED DR SUPPORTED THE ORDERS PA SSED BY THE ASSESSING OFFICER AND THE COMMISSIONER OF INCOME-TA X (A). 6. I HAVE HEARD BOOTH THE PARTIES. IT IS NOT IN DI SPUTE THAT A SUM OF RS.60 000/- WAS WITHDRAWN BY THE ASSESSEE FROM HIS BANK ACCOUNT ON 4.4.2006. IT CANNOT THEREFORE BE SAID THAT THE AF ORESAID SUM WAS NOT AVAILABLE WITH THE ASSESSEE. IT IS THE CASE OF THE ASSESSEE THAT A SUM OF RS.50 000/- OUT OF WITHDRAWALS OF RS.60 000/- MADE ON 4.4.2006 WAS DEPOSITED IN HIS BANK ACCOUNT WITH PUNJAB & SIND BA NK ON 24.6.2006. THERE IS A GAP OF ABOUT 80 DAYS BETWEEN THE DATE OF WITHDRAWAL (RS.60 000/-) AND THE DATE OF DEPOSIT (RS.50 000/-) . THERE IS NO 4 MATERIAL ON RECORD TO SHOW THAT THE AMOUNT WITHDRAW N BY THE ASSESSEE ON 4.4.2006 WAS EITHER UTILIZED BY HIM OR OTHERWISE NOT AVAILABLE WITH HIM ON THE DATE OF DEPOSIT I.E. 24.6.2006. THE EX PLANATION OF THE ASSESSEE DOES NOT SEEM TO BE IMPROBABLE OR UNSATISF ACTORY. IN THIS VIEW OF THE MATTER THE IMPUGNED ADDITION IS DELETED. GR OUND NOS. 4 AND 5 ARE ALLOWED. 7. APROPOS THE ORDER OF THE COMMISSIONER OF INCOME- TAX (A) CONFIRMING THE ADDITION OF RS.30 000/- ON ACCOUNT O F LOW HOUSEHOLD EXPENSES THE ASSESSEE HAS A FAMILY OF THREE PERSON S. HE HAS SHOWN MERE WITHDRAWALS OF RS.27 000/- FOR MEETING HIS HOUSEHOL D EXPENSES. EVEN IF HIS CASE THAT HIS PARENTS HAVE ALSO CONTRIBUTED TO THE RUNNING OF HIS HOUSEHOLD EXPENSES IS ACCEPTED THE OVERALL WITHDRA WAL MADE BY THE ASSESSEE APPEARS TO BE ON LOWER SIDE. THE ASSESSEE HAS SHOWN TURNOVER OF MORE THAN RS.1.50 CRORES. HE BELONGS TO UPPER S TRATA OF SOCIETY AND THEREFORE THE HOUSEHOLD EXPENSES DECLARED BY HIM D O NOT APPEAR TO BE REASONABLE. THE ORDER OF THE COMMISSIONER OF INCOME -TAX (A) CONFIRMING THE ADDITION OF RS.30 000/- ON ACCOUNT OF LOW WITHD RAWALS TOWARDS HOUSEHOLD EXPENSES IS REASONABLE ON THE FACTS OF TH E CASE. GROUND NO.6 IS DISMISSED. 8. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED ON 7 TH JANUARY 2011 SD/- (D K SRIVASTAVA) ACCOUNTANT MEMBER DATED; THE 7 TH JANUARY 2011 *RATI* COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. CIT(A) PATIALA 4. CIT PATIALA 5. DR ITAT CHANDIGARH BENCH TRUE COPY BY ORDER 5 ASSISTANT REGISTRAR ITAT CHANDIGARH