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Shri Lalit Mohan Dhanda A-703, Shree Krishna Mahavir Nagar Kandivali (W), Mumbai 400067 Vs. DCIT, Central Circle -39
December, 01st 2015
                 ""   
     IN THE INCOME TAX APPELLATE TRIBUNAL "A" BENCH, MUMBAI

           .,                           ,      
      Before Shri Jason P. Boaz, AM and Shri Pawan Singh, JM

                   ./ITA No. 3180/Mum/2012
                 ( /Assessment Year: 2007-08)

 Shri Lalit Mohan Dhanda
 A-703, Shree Krishna Mahavir Nagar
                                                      /Appellant
 Kandivali (W), Mumbai 400067
                       / Vs.
 DCIT, Central Circle -39
                                                          /Respondent
 Mumbai

       ./PAN - AACPD4292R

         / Appellant by:              Shri Vijay Mehta
        / Respondent by:              Ms. Amrita Misra

              /Date of Hearing      : 26.11.2015
             /Date of Pronouncement : 30.11.2015

                             / 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.     The facts of the case, briefly, are as under: -

2.1    There was a search and seizure action under section 132 of the

Income Tax Act, 1961 (in short `the Act') on 05.03.2009 in the cases

of the Jai Corp group, its employees and close associates, one of

whom was the assessee in the case on hand. In the order of
                                   2
                                                    ITA No. 3180/Mum/2012
                                                     Shri Lalit Mohan Dhanda

assessment it was observed that assessee and Shri Jeevan Anant

Surve directly supervised the group's transactions of aggregation of

land through one Shri Madan Kolambekar. Apart from this, there

appears to be no other allegation against assessee in the order of

assessment.

2.2   For A.Y. 2007-08, assessee filed return of income on 14.01.2007

declaring income of `3,64,480/-. Consequent to notice issued under

section 153A of the Act, issued after the search action under section

132 of the Act, assessee requested that the original return of income

filed on 14.01.2007 be treated as filed in response to the aforesaid

notice under section 153A of the Act. Assessing Officer (in short AO)

completed the assessment under section 143(3) r.w.s. 153A of the Act

vide order dated 29.12.2010 wherein the income of the assessee was

determined at `5,14,480/- in view of AO making an adhoc addition of

`1,50,000/- to the returned income on account of low and insufficient

withdrawals towards assessee's household expenses taking into

account the size and status of assessee's family.




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/-.
                                      3
                                                     ITA No. 3180/Mum/2012
                                                      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.
                               4
                                              ITA No. 3180/Mum/2012
                                               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.
3. It is worthwhile to note that, the Return of income u/s 139(1)
   of the Act for the captioned assessment year was filed on
   14.12.2007. Further, the return was accepted u/s 143(1) of
   the Act [i.e. prior to search action undertaken on 05.03.2009]
   and no notice u/s 143(2) of the Act was issued in case of the
   appellant. Chart showing relevant dates in relation to the
   additional ground to be filed is reproduced under:
   Sr.    Particulars                               Date
   No.
   1      Date of filing return u/s 139(1) of the 14.12.2007
          Act
   2      Due date for issuing notice u/s 143(2) 30.09.2008
          of the Act
   3      Date of Search                          05.03.2009

4. Thus, it is submitted that, in absence of any incriminating
   material found during the search, the addition so made by
   the A.O. on account of low household expenses is bad-in law
   and thus should be deleted.
5. In this regard, we would like to place reliance on the
   decision of jurisdictional Bombay High Court in the case of
   Commissioner of Income Tax vs. All Cargo Global
   Logistics Ltd reported in 374 ITR 645.
6. It is submitted that the additional ground of appeal raised is
   purely a question of law and no new facts are required to be
   brought on record. It is humbly prayed that the additional
   ground of appeal may kindly be admitted and adjudicated
   by Your Honours. In this regard, we rely upon the following
   decisions rendered by various Courts.
   i.     National Thermal Power Corporation v. CIT [229 ITR
          383 (SC)]
   ii.    Jute Corporation of India Ltd. v. CIT [187 ITR 688
          (SC)]
   iii.   Ahmedabad Electricity Co. Ltd. v. CIT [199 ITR 351
          (Bom) (FB)]
                                    5
                                                     ITA No. 3180/Mum/2012
                                                      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
                                      6
                                                      ITA No. 3180/Mum/2012
                                                       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
                                     7
                                                      ITA No. 3180/Mum/2012
                                                       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.




7.    In   ground   No.3    assessee     challenges   the   action   of   the

authorities below in charging him interest under sections 234B and

234C of the Act. The charging of interest is consequential and

mandatory and the AO has no discretion in the matter. This

proposition has been upheld by the Hon'ble Apex Court in the case of

Anjum H. Ghaswala in 252 ITR 1 and we therefore uphold the action

of the AO in charging the said interest. The AO is, however, directed

to re-compute the interest chargeable under sections 234B and 234C

of the Act, if any, while giving effect to this order.

8.    In the result, assessee's appeal for A.Y. 2007-08 is partly
allowed.
                  

Order pronounced in the open court on 30th November, 2015.
       30.11.2015    
          Sd/-                                  Sd/-
      (Pawan Singh)                        (Jason P. Boaz)
       /Judicial Member                    /Accountant Member

  Mumbai,  Dated 30th November, 2015
                             8
                                         ITA No. 3180/Mum/2012
                                          Shri Lalit Mohan Dhanda

            /Copy of the Order forwarded to :

1.      / The Appellant
2.      / The Respondent
3.       () / The CIT(A) - 34, Mumbai
4.       / The CIT - 24, Mumbai
5.      ,   ,  / DR, "A" Bench ITAT, Mumbai
6.       / Guard file.

                                        / By Order
              //True Copy//

                              /Asstt. Registrar)
                             ,  /ITAT, Mumbai

n.p.

 
 
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