Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: ARTICLES ON INPUT TAX CREDIT IN VAT :: empanelment :: articles on VAT and GST in India :: VAT Audit :: VAT RATES :: list of goods taxed at 4% :: cpt :: due date for vat payment :: Central Excise rule to resale the machines to a new company :: ACCOUNTING STANDARDS :: ACCOUNTING STANDARD :: TAX RATES - GOODS TAXABLE @ 4% :: TDS :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: form 3cd
 
 
From the Courts »
  Micro Spacematrix Solution P Ltd vs. ITO (ITAT Delhi)
 Micro Spacematrix Solution P Ltd vs. ITO (ITAT Delhi)
 CIT vs. Greenfield Hotels & Estates Pvt. Ltd (Bombay High Court)
 IndiaBulls Financial Services Ltd vs. DCIT (Delhi High Court)
 Maharao Bhim Singh of Kota vs. CIT (Supreme Court)
 Ravneet Takhar Vs. Commissioner Of Income Tax Ix And Ors.
 Jaiprakash Associates Ltd. Vs. Commissioner Of Income Tax
 Formula One World Championship Limited Vs. Commissioner Of Income Tax, International Taxation-3 And Anr.
 Commissioner Of Income Tax International Taxation-3 Delhi Vs. Formula One World Championship Ltd. And Anr.
 Reliance Communications Ltd vs. DDIT (ITAT Mumbai)
  Sushila Devi vs. CIT (Delhi High Court)

Shri Sohan Lal Sharma, Flat No. 90, Kargil Apartments, Sector-18, Dwarka, N. Delhi. Vs. DCIT, Circle-26 (1), New Delhi.
November, 13th 2013
              IN THE INCOME TAX APPELLATE TRIBUNAL
                   (DELHI BENCH `G' NEW DELHI)

           BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER
                               AND
             SHRI T.S. KAPOOR, ACCOUNTANT MEMBER

                   I.T.A. No.120 to 126/Del/2012
               Assessment years : 2003-04 to 2009-10

           Shri Sohan Lal Sharma,                  DCIT,
           Flat No. 90, Kargil Apartments,         Circle-26 (1),
           Sector-18, Dwarka, N. Delhi.       V.   New Delhi.

                (Appellant)                   (Respondent)

                         /GIR/No.AWWPS-
                                 AWWPS-1200-
                     PAN /GIR/No.AWWPS 1200-J

                 Appellant by : Dr. Rakesh Gupta, Advocate.
                 Respondent by : Shri Ramesh Chandra, CIT-DR.

                                   ORDER

PER TS KAPOOR, AM:

     This is a bunch of seven appeals filed by the assessee against
separate CIT(A)'s order all dated 24.10.2011 relating to assessment
years 2003-04 to 2009-10. All impugned orders were passed against
the assessment order passed by the Assessing Officer u/s 153A/u/s
143(3) of the Income Tax Act, 1961. The grounds of appeals taken by
the assessee in the seven appeals are as under:-


Assessment year 2003-04:


     1. That on the facts and circumstances of the case and in law,
        the Ld CIT(A) has erred in upholding the assessee order u/s
        153A /143(3) of the Income Tax Act, 1961       as none of the
                                    2          ITA No120 TO 126/Del/2012


        provisions of section 132(1)(a)(b) and (c ) are applicable in
        case of the appellant.
     2. That on the facts and circumstances of the case and in law
        the   Ld   CIT(A)   has   erred   in   upholding   the   impugned
        assessment completed in individual capacity.
     3. That on the facts and circumstances of the case and in law,
        the Ld CIT(A) has erred in sustaining the addition of
        `.23,38,396/- on wrong and infirm interpretation of facts.
     4. That the appellant craves leave to add/amend any ground(s)
        of appeal before and or at the time of hearing.


                  2004-05:
Assessment year : 2004-


      1. That on the facts and circumstances of the case and in law,
      the Ld CIT(A) has erred in upholding the assessee order u/s
      153A /143(3) of the Income Tax Act, 1961             as none of the
      provisions of section 132(1)(a)(b) and (c ) are applicable in case
      of the appellant.
     2. That on the facts and circumstances of the case and in law
        the   Ld   CIT(A)   has   erred   in   upholding   the   impugned
        assessment completed in individual capacity.
     3. That the appellant craves leave to add/amend any ground(s)
        of appeal before and or at the time of hearing.
                  2005-06:
Assessment year : 2005-


     1. That on the facts and circumstances of the case and in law,
        the Ld CIT(A) has erred in upholding the assessee order u/s
        153A /143(3) of the Income Tax Act, 1961           as none of the
        provisions of section 132(1)(a)(b) and (c ) are applicable in
        case of the appellant.
                                    3          ITA No120 TO 126/Del/2012


     2. That on the facts and circumstances of the case and in law
        the   Ld   CIT(A)   has   erred   in   upholding   the   impugned
        assessment completed in individual capacity.
     3. That on the facts and circumstances of the case and in law,
        the Ld CIT(A) has erred in sustaining the addition of
        `.1,63,720/- on account of low household expenses.
     4. That the appellant craves leave to add/amend any ground(s)
        of appeal before and or at the time of hearing.
                  2006-07:
Assessment year : 2006-


     1. That on the facts and circumstances of the case and in law,
        the Ld CIT(A) has erred in upholding the assessee order u/s
        153A /143(3) of the Income Tax Act, 1961           as none of the
        provisions of section 132(1)(a)(b) and (c ) are applicable in
        case of the appellant.
     2. That on the facts and circumstances of the case and in law
        the   Ld   CIT(A)   has   erred   in   upholding   the   impugned
        assessment completed in individual capacity.
     3. That on the facts and circumstances of the case and in law,
        the Ld CIT(A) has erred in sustaining the addition of
        `.1,63,720/- on account of low household expenses.
     4. That the appellant craves leave to add/amend any ground(s)
        of appeal before and or at the time of hearing.
                  2007-08:
Assessment year : 2007-


     1. That on the facts and circumstances of the case and in law,
        the Ld CIT(A) has erred in upholding the assessee order u/s
        153A /143(3) of the Income Tax Act, 1961           as none of the
        provisions of section 132(1)(a)(b) and (c ) are applicable in
        case of the appellant.
                                    4          ITA No120 TO 126/Del/2012


     2. That on the facts and circumstances of the case and in law
        the   Ld   CIT(A)   has   erred   in   upholding   the   impugned
        assessment completed in individual capacity.
     3. That on the facts and circumstances of the case and in law,
        the Ld CIT(A) has erred in sustaining the addition of
        `.1,94,130/- on account of low household expenses.
     4. That the appellant craves leave to add/amend any ground(s)
     of appeal before and or at the time of hearing.
                  2008-09:
Assessment year : 2008-


     1. That on the facts and circumstances of the case and in law,
        the Ld CIT(A) has erred in upholding the assessee order u/s
        153A /143(3) of the Income Tax Act, 1961           as none of the
        provisions of section 132(1)(a)(b) and (c ) are applicable in
        case of the appellant.
     2. That on the facts and circumstances of the case and in law
        the   Ld   CIT(A)   has   erred   in   upholding   the   impugned
        assessment completed in individual capacity.
     3. That on the facts and circumstances of the case and in law,
        the Ld CIT(A) has erred in sustaining the addition of
        `.1,94,130/- on account of low household expenses.
     4. 4. That on the facts and circumstances of the case and in law,
        the Ld CIT(A) has erred in sustaining the addition of
        `.3,00,000/- on account of alleged business income on
        estimated basis.
     5. That the appellant craves leave to add/amend any ground(s)
     of appeal before and or at the time of hearing.


                  2009-10:
Assessment year : 2009-
                                     5          ITA No120 TO 126/Del/2012


      1. That on the facts and circumstances of the case and in law,
         the Ld CIT(A) has erred in upholding the assessee order u/s
         153A /143(3) of the Income Tax Act, 1961           as none of the
         provisions of section 132(1)(a)(b) and (c ) are applicable in
         case of the appellant.
      2. That on the facts and circumstances of the case and in law
         the   Ld   CIT(A)   has   erred   in   upholding   the   impugned
         assessment completed in individual capacity.
      3. That on the facts and circumstances of the case and in law,
         the Ld CIT(A) has erred in sustaining the addition of
         `.1,96,664/- on account of low household expenses.
      4. 4. That on the facts and circumstances of the case and in law,
         the Ld CIT(A) has erred in sustaining the addition of
         `.3,06,000/- on account of alleged business income on
         estimated basis.


      5. That the appellant craves leave to add/amend any ground(s)
      of appeal before and or at the time of hearing.





2.    The brief facts of the case are that a search u/s 132 of the Act
was conducted on 21.7.2008 at the residence of the assessee at Flat
No.90, Kargil Apartments, Sector-18, Dwarka, New Delhi. The search
was in the name of the assessee and his wife Smt. Taruna Sharma. In
view of the search notices under sub section(1)(a) of section 153A of
the Act were issued to the assessee and he was asked to file return of
income for seven assessment years including six assessment years
relating to years preceding the year of search and one for the year in
which search took place and in compliance the assessee filed returns
of income declaring income of `.46,800/-, `.49,120/-, `.52,500/-,
`.1,05,698/-, `.1,34,580/-, `.1,34,555/- and `.1,81,855/- respectively for
                                      6       ITA No120 TO 126/Del/2012


the above assessment years. During assessment proceedings for
assessment   year   2003-04   the     Assessing   Officer   observed   that
assessee in the statement of affairs as on 31.3.2003 had declared
assets amounting to `.23,38,396/- consisting of jewellery, investments,
loans and advances, sundry deposits, cash and bank balances etc. The
assessee was confronted to prove and substantiate the source of these
investments and in reply the assessee submitted as under:-


     "The assessee had kept her part of capital in the form of loans
     and advances, investment and jewellery etc. and part of the
     capital has been invested in the current assets alongwith some
     obligation shown in the current liabilities heads. The loans and
     advances has been made from and investments are belonging to
     financial year 1999-2000, books of accounts are not readily
     available to produce before your goodself due to time gap and
     paucity of time. In support of the statement of affairs as on
     31.3.2002 showing the opening balance is submitted. The loans
     and advances are still outstanding till date in the books of
     assessee. Further would like to submit that as the assessee had
     kept the said investments for the long term purpose, hence
     merely earning the maximum income on this investment is not
     the sole purpose of the assessee, rather the safety is the main
     criteria for such investment."


3.   The Assessing Officer, however, held that assessee did not
provide any evidence with respect to dates and years in which the
investments and advances were made by the assessee and therefore
in the absence of any supporting evidence, the Assessing Officer
treated the entire amount of `.23,38,396/- as his unexplained
                                       7           ITA No120 TO 126/Del/2012


investment u/s 69 of the Income Tax Act, 1961 and made addition
thereof.


4.    The Assessing Officer further observed from the photo copy of a
diary maintained by the assessee that for the period 1.11.2007 to
19.7.2008 the assessee had shown net income at the end of each
month out of which the income was shown to have been distributed
among three persons namely Shri Jagdish, Shri Bhuwan and the
assessee and therefore the assessee was asked vide letter dated
13.12.2010 to explain as to why the income from the said firm should
not be estimated on the basis of income distributed in each month in
which the income varied from `.23,600/- to `.1,12,700/- for the period
November, 2007 to June, 2008. The assessee in reply submitted that
he was proprietor of the firm M/s Ganesh Documents and payment to
other two persons was made with the understanding to procure work
through them.        The Assessing Officer estimated the average income
for the period from November 2007 to July 2008 @ `.85,000/- per
month and arrived at an annual figure of `.10,20,000/-. Out of which he
attributed as income of the assessee to the extent of `.3,06,000/-.
Therefore, considering the income in the year 2008-09 he calculated
the   income    of    the   assessee   for   the   assessment     year   under
consideration at `.2,40,000/- and therefore made an addition thereof.


5.    In assessment year 2004-05, the Assessing Officer's again
estimated the income at `.2,40,000/- on the same basis as in
assessment year 2003-04 and made addition thereof. Further addition
of `.4,20,000/- was made in this assessment year on account of the
fact that assessee had made an investment in plot for a consideration
of `.4,20,000/- which was sold for `.5,60,000/- in the year 2005. The
assessee was asked to explain the source of investments of
                                      8           ITA No120 TO 126/Del/2012


`.4,20,000/- which he could not explain and therefore the Assessing
Officer made the addition.


6.    During   assessment      year   2005-06,      the    Assessing   Officer
estimated the business income at `.3,00,000/- and also made an
addition of `.1,63,720/- on account of low household drawings. The
Assessing Officer observed that assessee had declared household
drawings of `.16,280/- only whereas looking at the status of assessee
and investment in various companies it was estimated to be at
`.1,80,000/- and therefore the difference was added to the income of
assessee. The Assessing Officer had further observed that assessee
had sold some property which was purchased by him in the year 2003
therefore in the absence of any explanation a short term capital gain of
`.1,40,000/- was added to the income of assessee.


7.    In assessment year 2006-07, the Assessing Officer made an
addition of `.1,63,720/.- on account of low household drawings and
`.3,00,000/- on account of business income earned by him.


8.    In assessment year 2007-08, the Assessing Officer estimated the
house   withdrawals   of     `.2,16,000/-   and     made    an   addition     of
`.,1,94,130/- on account of difference between estimated household
expenses and declared household drawings. Similarly, an addition of
`.3,00,000/- was made on account of estimated business income.


9.    In assessment year 2008-09, similar addition of `.1,91,250/- was
made on account of low household drawings and `.3,00,000/- on
account of estimated business income.
                                   9         ITA No120 TO 126/Del/2012


10.   In assessment year 2009-10, the addition on account of low
household drawings was made at `.1,96,664/- whereas the business
income was estimated at `.3,06,000/-.


11.   Aggrieved with the assessment order the assessee filed appeals
before Ld CIT(A). The Ld CIT(A) upheld the addition of `.23,38,396/- in
assessment year 2003-04 on account of failure of the assessee to
prove the veracity of statement of affairs as on 31.3.2003. However,
with respect to other additions of `.2,40,000/- on account of estimation
of business income, the Ld CIT(A) deleted the addition and restricted
the business income to `.46,800/- as declared by assessee in
pursuance of notice u/s 153A.


12.   In the year 2004-05, the Ld CIT(A) deleted the estimation of
business income of `.2,40,000/- and accepted the business income
declared at `.49,120/-. Further he deleted the addition of `.4,20,000/-
which was made by the Assessing Officer on account of unexplained
investment in the plot.


13.   As regards assessment year 2005-06, the Ld CIT(A) deleted the
estimation of business income oat `.3,00,000/- and accepted the
business income of `.52,500/- as declared by assessee in his return of
income. Further addition on account of short term capital gain of
`.1,40,000/- on account of sale of plot was sustained.


14.   In assessment year 2006-07 the Ld CIT(A) again deleted the
estimated business income of `.3,00,000/- and accepted the business
income of `.1,05,698/- as declared by assessee. However, he sustained
the addition of `.1,63,720/- which was made by the Assessing Officer
on account of low household drawings.
                                   10        ITA No120 TO 126/Del/2012




15.   In assessment year 2007-08, the Ld CIT(A) again deleted the
estimated business income of `.3,00,000/- and accepted by the
business income of `.1,34,580/- as declared by assessee However, the
addition of `.1,94,130/- was upheld.


16.   In assessment year 2008-09, the Ld CIT(A) upheld the addition
on account of estimated income          from business    amounting to
`.3,00,000/- against `.1,345,555/- as declared by assessee and
similarly upheld the addition on account of low household drawings
amounting to `.1,91,250/-.


17.   In assessment year 2009-10, the Ld CIT(A) upheld the estimation
of business income at `.3,06,000/- against `.1,81,855/- as declared by
the assessee and also upheld the addition of `.1,96,664/- which was
made on account of low household drawings.


18.   Aggrieved with the order of Ld CIT(A) in respect of all years, the
assessee has preferred appeals before this Tribunal.


19.   At the outset, the Ld AR submitted that appeal for the
assessment year 2004-05 is not being pressed and further submitted
that in assessment year 2005-06, 2006-0-7 and 2007-08 there is
grievance of the assessee against the common issue of estimated
addition on account of lower withdrawal for household expenses and in
assessment year 2008-09 and 2009-10 besides the grievance of the
assessee on account of addition on account of lower household
expenses, the assessee was further aggrieved with the estimation of
business income in these two years. Commenting upon assessment in
assessment year 2003-04, he argued that the Assessing Officer had
                                   11        ITA No120 TO 126/Del/2012


made the addition on account of assets as appearing in the statement
of affairs as on 31.3.2003 which was not justified in view of the fact
that the entire assets cannot be said to have been acquired in a single
year.


20.     Further arguing for assessment year 2003-04 the Ld AR
submitted that Ld CIT(A)'s action on confirming the addition made by
the Assessing Officer on account of addition of all assets was not
justified as all assets were purchased by the assessee in earlier years.
In this respect our attention was invited to paper book page 102 & 103
wherein copy of letter written by Ld AR of assessee to Assessing Officer
was placed in which the Ld AR had submitted that investments were
belonging to earlier years.. Our attention was also invited to paper
book page 104 wherein the statement of affairs as on 31.3.2002 was
placed and further we were taken to paper book page 4 where a
statement of affairs as on 31.3.2003 was placed. Our attention was
invited to jewellery and investment and loans and advances account as
appearing at the same figure as on 31.3.2002 & 31.3.2003 and in view
of the above it was argued that the assets belonged to earlier years
instead of assessment year under consideration. In support of his
argument our attention was invited to paper book page 5 & 6 where
copies of bills of jewllery dated 19.8.2001 and 27.5.2001 was placed
and similarly our attention was invited to paper book pages 7 to 23
wherein the detail of investment along with confirmation from persons
with whom investments were made was placed. We were also taken to
pages 24 to 48 wherein detail of loans and advances as on 31.3.2003
along with confirmation from persons to whom these were made was
placed. Similarly we were taken to page 112 onwards wherein the
break up of loans and advances as on 31.3.2000 along with their
confirmation was placed. Our attention was also invited to paper book
                                    12         ITA No120 TO 126/Del/2012


pages 173 to 176 wherein copy of remand report was placed and
further to page 177 to 178 where a reply to remand report was placed.
In view of the reply to remand report, the Ld AR submitted that the
findings of Assessing Officer in his remand report that it was difficult to
verify the correctness of claims of assessee were not correct as all
material was already filed with Assessing Officer during assessment
proceedings.


21.   Regarding addition on account of household withdrawals the Ld
AR argued that the Assessing Officer had made the addition on
account of low household drawings in a mechanical manner which is
apparent from the identical wording of assessment order in these
years. The Ld AR relied upon the following case laws:-


   1. Raj Kumar Jain v. ACIT 50 ITD 1 (TM) (Kol.)
   2. Shyam Lata Kaushikj v. ACIT 114 TTJ 940 (Del.).
   3. Bajrang Lal Bansal v. DCIT 94 TTJ 107.


22.   He     further   submitted   that   during   search   operation      no
incriminating material was found and therefore additions in the years
where assessments were completed cannot be made. Reliance in this
respect was placed on the following case laws:-


   1. 137 ITD 287 (Mum.) (SB) in the case of Alcargo Global Logistic (P)
      Ltd.
   2. 28 Taxmann 328 In the case of Gurinder Singh Bawa v. DCIT
      (Bom.).
   3. 28 Taxmann 246 In the case of Pratibha Industries Ltd.
                                   13        ITA No120 TO 126/Del/2012


23.   Arguing for assessment year 2008-09 and 2009-10, the Ld AR
submitted that in both the years, the addition        on account of low
household expenses was made as well as addition on account of
estimation of business income was made whereas the assessee should
have been given benefit of telescoping as both additions cannot be
made simultaneously.     Reliance in this respect was placed in the
following case laws:-





   1. 100 ITD 301 (Indore) In the case of Eagle Biotech Ltd. v. ACIT
   1. 52 TTJ 21 (Del.). In the case of Ram Lubhiya v. ACIT
   2. 149 ITR 127 (Mad.). in the case of CIT v. KSM Guruswamy Nadar
      & Sons.


24.   The Ld DR, on the other hand, submitted that for assessment
year 2003-04 onus was on the assessee to prove statement of affairs
as on 31.3.2002 and in this respect he read from para 4.7 of Ld
CIT(A)'s order and argued that statement of affairs submitted before ld
CIT(A) was also not supported by evidences in respect of investments
as assessee had not filed returns for earlier years and further books of
accounts for earlier years were not provided to Assessing Officer or Ld
CIT(A). Therefore, he argued that in the absence of explanation of
source of investments in earlier years the addition on account of
unexplained investments was justified. Regarding addition on account
of low household withdrawals the Ld DR submitted that withdrawals
were too low and therefore on the basis of surrounding circumstances
Ld Assessing Officer estimated the household expenses approximately
and further argued that for making addition there is no requirement of
incriminating material u/s 153A and reliance in support of his
arguments was placed on the following case laws:-
   1. Mital Ice & Cold Storage v. CIT 25 Taxmann 1.
                                    14      ITA No120 TO 126/Del/2012


  2. Shivnath Rai Harnarain (India) Ltd., v. DCIT (New Delhi) 117 ITD
      74.


25.   Regarding telescoping the Ld DR submitted that income was
estimated on the basis of a diary found during search and Ld AR had
not taken any plea or ground before Ld CIT(A) for telescoping and
before Hon'ble ITAT also no such ground has been taken and therefore
the plea of the Ld AR for telescoping has to be rejected or in the
alternative the same may be remitted back to the Assessing Officer.


26.   In his rejoinder, the Ld AR submitted that assessee was a deed
writer and was not required to maintain books of accounts and
therefore the contention of Ld DR that books of accounts were not
produced does not hold any force.


27.   We have heard the rival submissions of both the parties and
have gone through the material available on record. We find that the
first two grounds of appeal in all the seven years are similar on which
the Ld AR had not submitted any argument. Therefore, the first two
grounds in all appeals are dismissed as not pressed. The Ld AR also
did not press appeal for assessment year 2004-05 and hence the same
is dismissed. Ground No.3 in assessment year 2003-04 is against
sustaining of addition of `.23,38,396/- u/s 69 of the Act. We find that
this addition was made by Assessing Officer and was further confirmed
by Ld CIT(A) because the assessee did not submit evidence of his
income or sources for purchasing the assets in different years. The Ld
AR had drawn our attention to various documents/confirmations in
support of claim of the assessee that these were acquired in earlier
years. The Ld CIT(A) had observed that the assessee had failed to
prove the sources of investment of `.23,38,396/-, therefore, a further
                                  15         ITA No120 TO 126/Del/2012


opportunity was given to assessee to explain his case. The Assessing
Officer during remand proceedings again vide letter dated 29.9.2011
asked the assessee to furnish details relating to return of income of
assessee for assessment year 1999-2000 to assessment year 2002-03
along with copy of bank account and all supporting documents to
prove the correctness of investment. In reply, the Ld AR through letter
dated 10.10.2011 had submitted that he had not filed return of income
for the above assessment years and further copy of bank accounts was
not available due to long time gap. The Ld AR of the assessee during
remand proceedings was again directed to file gift deed if any from
father of assessee and bank statements and income tax returns for the
earlier years which the assessee did not reply.     In reply to remand
report, the Ld AR submitted that all queries made by the Assessing
Officer and replies given by the assessee were already on the file of
the Assessing Officer as these replies were given by the appellant
during assessment proceedings itself and therefore it was submitted
that the Assessing Officer's finding that it was difficult to verify the
capacity and genuineness of transaction should not be accepted as the
Assessing Officer was not able to find anything wrong or missing from
third party evidence. From the facts and circumstances of the entire
case, we find that the assessee had tried to explain the investment in
earlier years in the form of confirmations/evidences from third parties
which the Assessing Officer did not consider as assessee was not able
to explain the source of these investments. The Assessing Officer
without going through the third party evidences filed by the assessee
continued to direct assessee to file proofs of income tax returns of
earlier years in support of his acquiring assets ion earlier years and
made additions because of non compliance which is not justified
specially in view of the fact that he did not find any defect in the
documents filed by the assessee. In view of the above, we set aside
                                   16        ITA No120 TO 126/Del/2012


the case to the file of Assessing Officer for re-adjudication who on the
basis of any enquiries      from third parties     in respect of their
confirmations may arrive at the conclusion of addition if any u/s 69 of
the Act. Needless to say that necessary opportunity will be given to
assessee of being heard.


28.    As regards assessment year 2005-06 to 2007-08, 2008-09 &
2009-10 the only common issue is with respect to addition on account
of lower household drawings. The Ld AR has argued that addition on
account of lower household drawings cannot be made u/s 153A of the
Act in view of the fact that no incriminating document was seized
during search proceedings. The Ld AR had relied upon various case
laws in support of his claim that where during search proceedings no
incriminating document is recovered, addition cannot be made in the
years of which assessment was completed. We find from the
submissions of assessee before Ld CIT(A) for assessment year 2004-
05, 2005-06, 2006-07 & 2007-08 placed at paper book page 179, 196,
213 & 231 that assessee had not filed his return of income u/s 139 of
the Act in these years and had filed returns of income only in response
of notice u/s 153A of the Act. Therefore, the question of completed
assessment in respect of these years does not arise at all as the
assessee had not filed any return of income u/s 139 and therefore the
case laws relied upon by the Ld AR do not apply to the facts and
circumstances of these cases as in those cases the returns were filed
u/s 139 of the Act. The return for assessment year 2003-04 was also
not filed u/s 139 as is apparent from paper book page 179. Similarly
returns for assessment year 2008-09 & 2009-10 were also not filed u/s
139.
                                   17        ITA No120 TO 126/Del/2012


29.   Regarding merits of the cases regarding addition on account of
lower household drawings, we feel that there is no other yard stick to
measure household expenses of a person other than on the basis of
facts and circumstances of that person with respect to size of the
family, school going children, assets owned by that person and other
surrounding circumstances. The Assessing Officer has estimated the
household expenses of `.15,000/- p.m. in assessment year 2005-06 &
2006-07 and `.18,000/- p.m. in assessment year 2007-08 & 2008-09
and further `.20,000/- p.m. in assessment year 2009-10 which have
been estimated on a very reasonable basis keeping in view the fact
that assessee had two school going children and had reasonable
investments in assets. The case law of Raj Kumar Jain v. ACIT 50 ITD1
is not applicable to the facts and circumstances of the present cases as
in that case, the figure of household expenses of assessee for earlier
years were available with the Department and Department had
accepted that figure in earlier years therefore it was held in that case
that household expenses without any material could not be estimated
without considering household expenses in earlier years. In the other
case law of Shri G.S. Bhatia 59 TTJ 91 relied upon by Ld AR the
conclusion was that unless and until it is established with evidence that
it was only the assessee who had incurred all the household expenses,
revenue was not justified in invoking the deeming provision of section
69A and whereas in the present case, Ld AR did not bring to our notice
any drawings made by wife of assessee for contribution to household
expenses. Therefore the case laws relied upon by Ld AR do not hold
force as the facts and circumstances of the present cases are
distinguishable. Therefore, in view of our findings, we uphold the
addition made by the Assessing Officer and confirmed by ld CIT(A) in
respect of lower household drawings. In view of the above ground No.3
                                   18         ITA No120 TO 126/Del/2012


in respect of assessment year 2005-06, 2006-07 and 2007-08, 2008-09
& 2009-10 are dismissed.


30.   As regards the argument of Ld AR regarding benefit of
telescoping to be given to assessee in assessment year 2008-09 and
2009-10, we find that Assessing Officer has estimated business income
as well as the household expenses in these two years. The assessee
had not contested on the ground of benefit of telescoping before Ld
CIT(A) nor any ground has been taken before us but we still feel that
on the basis of equity the assessee deserves to be given benefit of
telescoping as the undeclared estimated business income can always
be said to have been used for meeting undeclared household
expenses. Provided the assessee had not invested such income or part
of such income in some new assets. In the present cases assessee has
not filed statement of assets as on 31.3.2007, 31.3.2008 & 31.3.2009,
therefore, we are unable to arrive at a conclusion as to whether any
part of estimated business income besides used for undeclared
household drawings was used for creating further assets. Therefore,
we set aside this issue to the office of Assessing Officer for re-
adjudication who on the basis of further information from assessee and
on the basis of statement of assets as on 31.3.2007, 31.3.2008 &
31.3.2009 can arrive at the amount of benefit of telescoping to be
given to the assessee if any on the basis of increase in net assets viz-a-
viz estimated business income and household drawings in these years.
In view of the above ground No.4 in appeals relating to assessment
year 2008-09 and 2009-10 are allowed for statistical purposes.


31.   In view of the above, appeal for assessment year 2003-004 is
partly allowed for statistical purposes whereas appeals for assessment
year 2004-05, 2005-06, 2006-07 & 2007-08 are dismissed. Appeal for
                                 19       ITA No120 TO 126/Del/2012


assessment year 2008-09 & 2009-10 are partly allowed for statistical
purposes.


32.     Order pronounced in the open court on 12th day of November,
2013.



    Sd/-                                           Sd/-
 (RAJPAL YADAV )                          (T.S. KAPOOR)
JUDICIAL MEMBER                         ACCOUNTANT MEMBER

Dt. 12.11.2013.
HMS

Copy forwarded to:-
   1. The appellant
   2. The respondent
   3. The CIT
   4. The CIT (A)-, New Delhi.
   5. The DR, ITAT, Loknayak Bhawan, Khan Market, New Delhi.
True copy.
                                                   By Order


                                                   (ITAT, New Delhi).


Date of hearing                              23.10.2013

Date of Dictation                            6.11.2013

Date of Typing                               6.11.2013

Date of order signed by
both the Members &
pronouncement.
Date of order uploaded on net
& sent to the Bench concerned.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Organic SEO Outsourcing Organic Search Engine Optimization Outsourcing Organic Website SEO Organic SEO India Website SEO India Organic Search Engine Optimization India Organic Internet SEO India Organic Web

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions