Mr Yogesh Sanghvi, v. The DCIT 4(1),

ITSSA 38/IND/2009 | 2003-2004
Pronouncement Date: 30-12-2010 | Result: Allowed

Appeal Details

RSA Number 3822716 RSA 2009
Bench Indore
Appeal Number ITSSA 38/IND/2009
Duration Of Justice 1 year(s) 10 month(s) 17 day(s)
Appellant Mr Yogesh Sanghvi,
Respondent The DCIT 4(1),
Appeal Type Income Tax (Search & Seizure) Appeal
Pronouncement Date 30-12-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted DB
Tribunal Order Date 30-12-2010
Date Of Final Hearing 30-12-2010
Next Hearing Date 30-12-2010
Assessment Year 2003-2004
Appeal Filed On 12-02-2009
Judgment Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH INDORE BEFORE SHRI JOGINDER SINGH JUDICIAL MEMBER AND SHRI R.C. SHARM ACCOUNTANT MEMBER IT(SS)A NOS. 36 & 38/IND/2009 A.YS. 2001-02 & 2003-04 YOGESH SANGHVI INDORE PAN AERPS-1815-G APPELLANT VS DY. COMMISSIONER OF INCOME TAX 4(1) INDORE RESPONDENT APPELLANT BY : SHRI PRAKASH JAIN RESPONDENT BY : SHRI K.K. SINGH CIT DR O R D E R PER JOGINDER SINGH JM THESE APPEALS ARE BY THE ASSESSEE AGAINST THE COMMO N ORDER OF THE LEARNED CIT(A) DATED 11.11.2008 FOR DIFFERENT A SSESSMENT YEARS ON THE GROUND THAT ON THE FACTS AND IN THE CIRCUMSTANC ES OF THE CASE THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN UPHOLDING THE ESTIMATED ADDITION OF RS.45 000/- AND RS.55 000/- RESPECTIVELY TOWARDS ALLEGED LOW HOUSEHOLD EXPENSES WITHOUT APPRECIATING THE FACTS. DURING HEARING OF THESE APPEALS THE LD. COUNSEL FO R THE ASSESSEE SHRI PRAKASH JAIN CONTENDED THAT THE IMPUGNED ISSU E IS COVERED BY THE 2 DECISION OF THE TRIBUNAL DATED 31 ST MAY 2010 IN THE CASE OF THE ASSESSEE ITSELF (IT(SS) NOS. 37 AND 39/IND/2009). O N THE OTHER HAND THE LEARNED CIT DR DID NOT CONTROVERT THE ASSERTI ON OF THE ASSESSEE BEING A MATTER OF RECORD. . 2. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF LD. REPRESENTATIVES OF BOTH SIDES AND PERUSED THE MATER IAL AVAILABLE ON RECORD. IN VIEW OF THE AFORESAID ASSERTION/FACTUAL POSITION WE ARE REPRODUCING HEREUNDER THE RELEVANT PORTION OF THE A FORESAID ORDER OF THE TRIBUNAL DATED 31 ST MAY 2010 :- THESE APPEALS ARE BY THE ASSESSEES AGAINST THE COMMON ORDER OF THE LEARNED CIT(A) DATED 11.11.2008 FOR DIFFERENT ASSESSMENT YEARS ON THE GROUND THAT ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN UPHOLDING THE ESTIMATED ADDITION OF RS.50 000/- AND RS.60 000/- RESPECTIVELY TOWARDS ALLEGED LOW HOUSEHOLD EXPENSES WITHOUT APPRECIATING THE FACTS. DURING HEARING OF THESE APPEALS THE LD. COUNSEL FO R THE ASSESSEE SHRI PRAKASH JAIN CONTENDED THAT THE IMPUGNED ISSUE IS COVERED BY THE DECISION OF THE TRIBUNAL IN THE CASE OF BROTHER OF THE ASSESSEE SH RI BHUPESH SANGHVI (IT(SS) A NOS. 21 TO 26/IND/2009) VIDE ORDER DATED 29.4.2009. ON THE OTHER HAND THE SENIOR DEPARTMENTAL REPRESENTATIVE THROUGH DEFENDED THE IMPUGNED ORDER BY CONTENDING THAT DETAILED FINDING HAS BEEN MENTIONED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) BUT DID NOT CONTROVERT THE ASSERTION MADE BY THE LD. COUNSEL FO R THE ASSESSEE TO THE EFFECT THAT THE IMPUGNED ISSUE IS COVERED BY THE AFORESAID DECISION OF THE TRIBUNAL. 2. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF LD. REPRESENTATIVES OF BOTH SIDES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN VIEW OF THE AFORE SAID 3 ASSERTION/FACTUAL POSITION WE ARE REPRODUCING HEREUNDER THE RELEVANT PORTION OF THE AFORESAID ORD ER OF THE TRIBUNAL DATED 29.4.2009 :- ALL THE APPEALS BY THE ASSESSEE ARE DIRECTED AGAIN ST DIFFERENT ORDERS OF THE LEARNED COMMISSIONER OF INC OMETAX (APPEALS)-II INDORE DATED 3 RD OCTOBER 2008 FOR THE ABOVE ASSESSMENT YEARS. 2. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF THE PA RTIES AND PERUSED THE FINDINGS OF THE AUTHORITIES BELOW A ND THE MATERIAL AVAILABLE ON RECORD. 3. ALL THE APPEALS ARE DECIDED ISSUEWISE AS UNDER. ISSUE NO. 1 - HOUSEHOLD EXPENSES 4. THIS ISSUE ARISES IN ALL THE APPEALS IN WHICH THE A SSESSEE HAS CHALLENGED THE ADDITIONS MADE BY THE ASSESSING OFFICER IN A SUM OF RS.35 000/- RS.40 000/- RS.45 000/- RS.50 000/- RS. 55 000/- AND RS.60 000/- IN ALL T HE ASSESSMENT YEARS RESPECTIVELY ON ACCOUNT OF LOW H OUSEHOLD EXPENSES. 5. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSESSI NG OFFICER IN ALL THE ASSESSMENT YEARS ON GOING THROUG H THE CAPITAL ACCOUNT OF THE ASSESSEE NOTICED THAT WHATEV ER HOUSEHOLD EXPENDITURE HAS BEEN SHOWN BY THE ASSESSE E AS COMPARED TO THE STANDARD OF LIVING AND FEES PAID FO R SCHOOL AND COLLEGES DOES APPEAR TO BE ON LOWER SIDE. THE ABOVE ADDITIONS WERE ACCORDINGLY MADE. 6. THE ADDITIONS WERE CHALLENGED BEFORE THE LEARNED COMMISSIONER OF INCOMETAX (APPEALS) AND IT WAS BRIE FLY SUBMITTED THAT THE ASSESSEE WAS RESIDING JOINTLY WI TH HIS PARENTS AND FAMILIES OF BROTHERS. THE FAMILY COMPR ISED OF 18 MEMBERS. ALL THE FAMILY MEMBERS MADE THEIR RESP ECTIVE WITHDRAWALS FOR MEETING OUT DAY TO DAY HOUSEHOLD EXPENDITURE. THE FAMILY WAS RESIDING IN THE PARENTA L HOUSE FOR WHICH NO RENT WAS PAID. THE TOTAL WITHDRAWALS WERE EXPLAINED. BESIDES THE SCHOOL FEE OF THE CHILDREN CLAIMED TO BE DEBITED SEPARATELY IN THE BOOKS OF ACCOUNTS OF T HE ASSESSEE WERE ALSO EXPLAINED. IT WAS THEREFORE S UBMITTED THAT THE HOUSEHOLD EXPENSES OF THE ASSESSEE WERE RE ASONABLE. 4 IT WAS ALSO EXPLAINED THAT DURING SEARCH NO EVIDENC E WAS FOUND TO ESTIMATE THE HOUSEHOLD EXPENDITURE. SUCH ADDITION IS WITHOUT ANY BASIS. 7. THE LEARNED COMMISSIONER OF INCOMETAX (APPEALS) HAS GIVEN HIS MAIN FINDING IN THE ASSESSMENT YEARS 1999- 00 AND 2000-01. HE CONSIDERING THE EXPLANATION OF THE ASSESSEE NOTICED THAT THE EXPENDITURE SHOWN BY THE ASSESSEE FOR HOUSEHOLD EXPENSES IS NOT REASONABLE A ND THAT IT IS WELL KNOWN THAT NO ASSESSEE WOULD KEEP T HE DETAILS OF PERSONAL EXPENSES AND HOUSEHOLD EXPENDIT URE. THEREFORE THERE IS NO REASON TO RECOVER ANY INCRIMINATING MATERIAL DURING THE COURSE OF SEARCH. THE LEARNED COMMISSIONER OF INCOMETAX (APPEALS) ALSO NOTED THAT THE ASSESSEE HAS NOT BEEN ABLE TO ESTABLISH THE ADEQUACY OF THE HOUSEHOLD EXPENDIT URE. THE ADDITIONS WERE ACCORDINGLY CONFIRMED. IT MAY BE NOTED THAT THE DETAILED FINDINGS HAVE BEEN GIVEN BY THE LEARNED COMMISSIONER OF INCOMETAX (APPEALS) IN THE ASSESSMENT YEARS 1998-99 TO 2001-02. ALL THE APPEA LS OF THE ASSESSEE WERE ACCORDINGLY DISMISSED ON THE ABOV E ISSUE. 8. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND REFERRED TO SEVERAL PAGES FROM THE PAPER BOOK IN SU PPORT OF THE CONTENTION RAISED BEFORE THE LEARNED COMMISSIONER OF INCOMETAX (APPEALS) AND FILED DETAI LS SHOWING WITHDRAWALS MADE FOR HOUSEHOLD EXPENDITURE AND THE ADDITIONS MADE FOR LOW WITHDRAWALS IN ALL T HE ASSESSMENT YEARS. THE SAME ARE REPRODUCED BELOW :- 9. DETAILS OF STATEMENT SHOWING WITHDRAWALS MADE FOR H OUSEHOLD EXPENSES AND ADDITION MADE FOR LOW WITHDRAWALS S.NO. ASST.YEAR WITHDRAWALS OF JOINT FAMILY FOR HOUSEHOLD EXPENSES RS. WITHDRAWAL PER PERSON RS. ADDITION MADE RS. PAPER BOOK PAGE NO. 1 1999-00 4 25 536 23 641 35 000 9 2 2000-01 4 62 878 25 715 40 000 32 3 2001-02 5 70 175 31 676 45 000 43 4 2002-03 11 39 241 63 291 50 000 59 5 2003-04 17 21 580 95 643 55 000 66 6 2004-05 14 20 906 78 939 60 000 75 HE HAS FURTHER SUBMITTED THAT ALL THE FAMILY MEMBER S CONTRIBUTED TOWARDS HOUSEHOLD EXPENSES AND THAT FEE S PAID FOR 5 EDUCATION OF THE CHILDREN ARE SEPARATELY PAID WHICH ARE NOT INCLUDED IN THE ABOVE HOUSEHOLD EXPENSES. HE HAS SU BMITTED THAT THE ASSESSING OFFICER WITHOUT ANY BASIS MADE T HE ADDITION ON AD HOC BASIS WHICH IS NOT WARRANTED UNDER THE LA W. 10. ON THE OTHER HAND THE LD DEPARTMENTAL REPRESENTAT IVE RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 11. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF THE PARTIES AND PERUSED THE FINDINGS OF THE AUTHORITIES BELOW A ND THE MATERIAL AVAILABLE ON RECORD. WE FIND FROM THE AS SESSMENT ORDER THAT THE ASSESSING OFFICER WITHOUT BRINGING A NY MATERIAL ON RECORD MADE THE AD HOC ADDITION. THE ASSESSING OFFICER HAS REFERRED TO CAPITAL ACCOUNT OF THE ASSESSEE BUT NO DETAILS HAVE BEEN MENTIONED IN THE ASSESSMENT ORDER AS TO H OW THE ASSESSING OFFICER FOUND THAT THE EXPENDITURE OF THE ASSESSEE FOR HOUSEHOLD PURPOSES WAS ON LOWER SIDE. THE ASSE SSING OFFICER WITHOUT ANY BASIS NOTED THAT HOUSEHOLD EXPE NSES OF THE ASSESSEE ARE ON LOWER SIDE AS COMPARED TO THE STAND ARD OF LIVING AND THE FEES PAID FOR EDUCATION OF THE CHILD REN. THE ASSESSING OFFICER HAS NOT BROUGHT ANY EVIDENCE ON R ECORD AS TO WHAT WAS THE STANDARD OF LIVING OF THE ASSESSEE AND HOW HE CAME TO THE CONCLUSION THAT HOUSEHOLD EXPENSES WERE ON LOWER SIDE. THE ASSESSEE EXPLAINED THAT THE EDUCAT IONAL FEES HAVE BEEN SEPARATELY PAID APART FROM HOUSEHOLD EXPE NSES SHOWN ABOVE. IT WOULD THEREFORE SHOW THAT THE ASS ESSING OFFICER WITHOUT ANY BASIS AND WITHOUT BRINGING ANY MATERIAL ON RECORD MERELY ON SURMISES AND CONJECTURES MADE T HE ADDITION TOWARDS THE HOUSEHOLD EXPENSES. THE ASSES SEE SUBMITTED DETAILS BEFORE THE LEARNED COMMISSIONER O F INCOMETAX (APPEALS) AND IT WAS ALSO EXPLAINED THAT DURING THE COURSE OF SEARCH NO MATERIAL WAS FOUND FOR JUSTIFYI NG THE ESTIMATE OF HOUSEHOLD EXPENSES. THE LEARNED COMMIS SIONER OF INCOMETAX (APPEALS) NOTED THAT NO ASSESSEE WOULD KEEP SUCH DETAILS OF HOUSEHOLD EXPENSES AND THAT NO EVID ENCE WAS FOUND FOR HOUSEHOLD EXPENSES INCURRED BY THE ASSESS EE DURING THE COURSE OF SEARCH. THESE FACTORS SHOULD HAVE BE EN APPRECIATED BY THE LEARNED COMMISSIONER OF INCOMETA X (APPEALS) WHILE CONSIDERING THE ISSUE ON MERIT BECA USE IF THERE WAS NO EVIDENCE AVAILABLE ON RECORD AND NO SP ECIFIC FINDING HAS BEEN GIVEN BY THE ASSESSING OFFICER TH ERE WAS NO PURPOSE IN CONFIRMING THE AD HOC ADDITION MADE BY T HE ASSESSING OFFICER. IN THIS CASE THE ADDITION IS M ADE BY THE ASSESSING OFFICER AS AGAINST THE HOUSEHOLD EXPENSES . 6 THEREFORE IT WAS THE DUTY OF THE ASSESSING OFFICE R TO BRING SUFFICIENT MATERIAL ON RECORD TO JUSTIFY HIS FINDIN G. IT WAS THEREFORE NOT THE DUTY OF THE ASSESSEE TO ESTABLIS H ADEQUACY OF THE HOUSEHOLD EXPENSES IN THE ABSENCE OF ANY FINDIN G OF FACT BROUGHT ON RECORD BY THE ASSESSING OFFICER. IT WAS ALSO EXPLAINED THAT SCHOOL FEE WAS PAID SEPARATELY. THE ASSESSEE WAS LIVING IN THE FAMILY HOUSE. THEREFORE WHATEVE R HOUSEHOLD EXPENSES WERE SHOWN BY THE ASSESSEE SHOUL D NOT HAVE BEEN DISTURBED BY THE AUTHORITIES BELOW. 12. CONSIDERING THE FACTS AND CIRCUMSTANCES NOTED ABOVE AND MORE PARTICULARLY THE FINDING OF THE ASSESSING OFFI CER WE ARE OF THE VIEW THAT THE AD HOC ADDITION IS MADE BY THE ASSESSING OFFICER WITHOUT ANY MATERIAL ON RECORD. WE THEREFO RE DO NOT SUBSCRIBE THE VIEW TAKEN BY THE AUTHORITIES BELOW I N MAKING OR CONFIRMING THE ADDITION. WE ACCORDINGLY SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND DELETE ALL THE ADDITIO NS IN ALL THE ASSESSMENT YEARS. 13. AS A RESULT ALL THE ADDITIONS ON THIS ISSUE ARE DE LETED. IN THE AFORESAID ORDER THERE IS A CLEAR FINDING TH AT THE ASSESSEE WAS LIVING IN A JOINT FAMILY SYSTEM/HOUSE AND WHATEVER HOUSEHOLD EXPENSES WERE SHOWN BY THE ASSESSEE SHOULD NOT HAVE BEEN DISTURBED BY THE AUTHORITIES. EVEN OTHERWISE AD HOC ADDITION HAS B EEN MADE BY THE ASSESSING OFFICER WITHOUT BRINGING ANY EVIDENCE ON RECORD. AT INTERNAL PAGE 7 OF THE ORDER OF THE TRIBUNAL (PAGE 32 OF THE PAPER BOOK) THE NECESSARY DETAILS WERE DULY FURNISHED BY THE ASSESS EE AND NO MATERIAL WHATSOEVER WAS FOUND JUSTIFYING THE ESTIMATION OF HOUSEHOLD EXPENSES AND ON THE CONTRAR Y NO ADVERSE MATERIAL WAS FOUND BY THE REVENUE DURING THE COURSE OF SEARCH EVIDENCING THAT ANY EXTRA HOUSEHOLD EXPENSES WERE INCURRED BY THE ASSESSEE IN COMPARISON TO WHAT WAS SHOWN BY THEM. EVEN OTHERWISE NO SUCH FINDING IS AVAILABLE IN THE ASSESSMENT ORDER/IMPUGNED ORDER. RESPECTFULLY FOLLOWING THE AFORESAID ORDER OF THE TRIBUNAL AND ESPECIALLY WHEN NO CONTRARY DECISION/FACTS WERE BROUGHT TO OUR NOTICE BY THE REVENUE CONTRADICTING THE STAND OF THE ASSESSEE THEREFORE BOTH THESE APPEAL S OF THE ASSESSEE ARE ALLOWED. 7 FINALLY BOTH THE APPEALS OF THE ASSESSEE ARE ALLOW ED. ORDER PRONOUNCED IN OPEN COURT IN THE PRESENCE OF LEARNED REPRESENTATIVES OF BOTH THE SIDES AT THE CONCLUSION OF HEARING ON 31 ST MAY 2010. KEEPING IN VIEW THE ASSERTION MADE BY THE LEARNED R ESPECTIVE COUNSELS AND THE AFORESAID ORDER OF THE TRIBUNAL IT IS CLEA R THAT THE ASSESSEE WAS LIVING IN A JOINT FAMILY SYSTEM/HOUSE AND WHATEVER HOUSEHOLD EXPENSES WERE SHOWN BY THE ASSESSEE SHOULD NOT HAVE BEEN DIS TURBED BY THE LOWER AUTHORITIES. IT IS FURTHER SEEN THAT THE ADD ITION HAS BEEN OTHERWISE MADE BY THE ASSESSING OFFICER WITHOUT BRINGING ANY COGENT MATERIAL ON RECORD. THE TRIBUNAL IN THE AFORESAID ORDER HAS AL READY DISCUSSED ALL THESE ASPECTS THEREFORE WITHOUT DELIBERATING FURT HER IN THE ABSENCE OF ANY CONTRARY DECISION/FACTS THE ORDERS OF THE AUTH ORITIES BELOW ARE SET ASIDE AND THESE APPEALS OF THE ASSESSEE ARE ALLOWED . FINALLY BOTH THE APPEALS OF THE ASSESSEE ARE ALLO WED. ORDER PRONOUNCED IN THE OPEN COURT IN THE PRESENC E OF LEARNED REPRESENTATIVES FROM BOTH THE SIDES AT THE CONCLUSION OF THE HEARING ON 30 TH DECEMBER 2010. (R.C. SHARMA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER 30 TH DECEMBER 2010 COPY TO: APPELLANT RESPONDENT CIT CIT(A) DR G UARD FILE DN/- 8