""
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.
|
