TMI Blog2016 (11) TMI 949X X X X Extracts X X X X X X X X Extracts X X X X ..... he learned Commissioner of Income-tax (Appeals) is without any basis and deserves to be deleted. In view of the facts and circumstances of the case, the order of the learned Commissioner of Income-tax (Appeals) is reversed on this issue. - Decided in favour of assessee Disallowance of household expenses and marriage expenses of the daughter - Held that:- We find from the record that the assessee has not been able to substantiate the household expenses and marriage expenses of the daughter to the satisfaction of the lower authorities. In this view of the matter, we find no reason to interfere with the order of the learned Commissioner of Income-tax (Appeals) which is sustained - Decided against revenue - I. T. A. No. 1090/JP/2011 - - - Dated:- 27-6-2016 - Bhagchand (Accountant Member) For the Appellant : Mahendra Gargieya, Advocate For the Respondent : O. P. Bhateja ORDER Bhagchand (Accountant Member) 1. The assessee has filed an appeal against the order of the learned Commissioner of Income-tax (Appeals)- Ajmer dated October 14, 2011, for the assessment year 2007-08 raising therein the following grounds : (1)(a) On the facts and in the circumstan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quiry and found that no such concern existed at the address given in Ahmedabad. The letter sent by the Assessing Officer at the address given by the assessee was returned with the postal remarks not known . The Assessing Officer further observed that the assessee had shown purchases of cement and iron from Shreenath Enterprises of Baroda. This party was also not found in existence at the given address. The Assessing Officer thus concluded that the assessee has not made any purchases from these three parties and only arranged bills for claiming bogus depreciation. These facts were brought to the notice of the assessee by the Assessing Officer, vide his letter dated December 17, 2009. The assessee, vide his reply letter dated December 24, 2009, argued that the enquiry had been made behind the back of the assessee and, therefore, the same is not acceptable. However, no details were furnished by the assessee to prove the genuineness of the purchases made from these three parties and finally the Assessing Officer disallowed depreciation of ₹ 4,31,432 and added the same to the income of the assessee. 2.2 Being aggrieved, the assessee carried the matter before the learned Commis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ised representative of the assessee prayed that the amount of ₹ 4,31,432 disallowed by the Assessing Officer and confirmed by the learned Commissioner of Income-tax (Appeals) may kindly be deleted. The learned authorised representative of the assessee also prayed that the additional evidences raised before the Bench may kindly be considered for disposal of the issue. The assessee has also filed the written submission to this effect. 2.4 I have heard the rival contentions and perused the materials avail able on record. I find that in the interest of justice, the application filed by the assessee under rule 29 of the Income-tax (Appellate Tribunal) Rules, 1963, as to additional evidence should be taken into consideration for deciding the appeal first. In the application dated September 15, 2014, the assessee filed the additional evidences for consideration and admission of the same as under : (1) Copy of the site plan of the industrial building of Aggressive Polyweave situated at plot No. 5, Gate No. 123, Maniyar Estate, Jalgaon measuring 920.74 square metres. (2) Copy of the registration as small scale industries issued by the District Centre, Jalgaon, dated Decem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of plastic of 30422 kgs was also declared as closing stock. In such a situation the observation of the Assessing Officer that no stock register was produced for verification is not relevant. The Assessing Officer did not make any independent enquiry to prove that the job work receipts declared by the appellant are not correct. No specific defects have been pointed out in the books of account of the appellant. Therefore, there is no justification for rejection of the books of account by invoking the provisions of section 145. The addition of ₹ 2,00,000 is also without any basis and the same is directed to be deleted. Grounds Nos. 2 and 3 are, thus, allowed. It is noted that the above finding recorded by the Commissioner of Income-tax (Appeals) has become final in the absence of any further challenge by the Revenue. Thus, on one hand, the Revenue accepted the findings of the Commissioner of Income-tax (Appeals) whereby he has already quashed the invoking of section 145 accepting the books of account. However, the Revenue is disbelieving the balance-sheet prepared for the subjected year based on the same books of account by doubting the investment made in the building, plan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mencement of production, the Assessing Officer made enquiry in the subjected year and merely proceeding on suspicion, disallowed the claim of depreciation made by the assessee and, therefore, of a considered view that the claim of the depreciation disallowed by the Assessing Officer and confirmed by the learned Commissioner of Income-tax (Appeals) is without any basis and deserves to be deleted. In view of the facts and circumstances of the case, the order of the learned Commissioner of Income-tax (Appeals) is reversed on this issue. The claim of depreciation of ₹ 4,31,432 is, accordingly, allowed and, thus, the ground of Appeal No. 1 of the assessee on this issue is allowed. 3. 3.1 As regards ground No. 2 of the assessee, the Assessing Officer required the assessee, vide order-sheet entry dated May 12, 2009, to submit the details of the expenses of quantum of household expenses of her own and her husband as well as the details of the schooling children. The same was provided by the assessee, vide letter dated June 2, 2009, indicating that the assessee has family consisting of self, her husband, Shri Yogesh Malpani, her son, Shri Harshit Malpani, and her daughter, Miss. Kh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #8377; 38,251 during the year. He has business interest in various concerns such as Maniyar Plant, Ganesh Traders, Malpani Bros, and Shanti Jewellers. The appellant belongs to respect able middle class family maintaining car and other amenities. In such a situation, the total drawings of ₹ 65,000 for the entire year are grossly inadequate. Similarly, the explanation that no expenses were incurred on marriages of daughter by the parents and only amount lying in her credit was utilised for the same is not acceptable. Addition of ₹ 1,50,000 is reasonable and the same is confirmed. Ground No. 5 is thus dismissed. 3.3 The learned authorised representative of the assessee submitted that looking to the size of the family the household expenses of ₹ 65,000 was reasonable. Her son is doing chartered accountancy course and getting stipend of ₹ 750 per month. All family members live in their Mama's house. Hence, electricity, water, rent, etc., are not payable by her. The Assessing Officer has not brought on record any expenses which was incurred and not shown by her. It cannot be said that the household expenses and marriage expenses are not sufficient. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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