TMI Blog2013 (11) TMI 829X X X X Extracts X X X X X X X X Extracts X X X X ..... view of the above, set aside 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. Addition u/s 69A on the ground of household expenses – Held 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 – Assessee relied upon the case of Shri G.S. Bhatia [1997 (5) TMI 402 - ITAT MUMBAI], wherein it was held 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 - 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 – Addition upheld – Decided against the As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpugned 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. Assessment year : 2006-07: 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. Assessment year : 2007-08: 1. That on the facts and circumstances of the case and in l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /- 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 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, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ₹ 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 ₹ 1,63,7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 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 assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 01 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 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 identica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wing case laws:- 1. Mital Ice Cold Storage v. CIT 25 Taxmann 1. 2. Shivnath Rai Harnarain (India) Ltd., v. DCIT (New Delhi) 117 ITD 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 submissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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