Income Tax Appellate Tribunal - Indore
Hemant Kumar Jadhav, vs Assessee
IN THE INCOME TAX APPELLATE TRIBUNAL
INDORE BENCH : INDORE
BEFORE SHRI N.K.SAINI, A.M. AND SHRI BHAVNESH
SAINI, J.M.
PAN NO. : ADOPJ9832G
I.T.A.No.02/Ind/2008.
A.Y. : 2004-05
Shri Hemant Kumar Jadhav, ITO,
EK-296, Scheme No. 54, vs Ward 5(2),
Indore. Indore.
Appellant Respondent
Appellant by : Shri S.S.Deshpande,
C.A.
Respondent by : Smt. Aparna Karan,
Addl. CIT DR
ORDER
PER N. K. SAINI, A.M.
This is an appeal by the assessee against the order of the CIT(A)-II, Indore, dated 26.10.2007 for assessment year 2004-05.
2. The first issue in this appeal relates to the confirmation of addition towards the additional conveyance allowance amounting to Rs. 2,13,947/-.
3. The facts relating to this issue in brief are that the assessee received a gross salary of Rs. 7,89,400/-. During the assessment -: 2 :- proceedings, the AO noticed that the assessee claimed conveyance allowance of Rs. 2,13,947/-u/s 10(14) read with Rule 2BB(C). The AO asked to submit the relevant documents. The assessee claimed that expenses of Rs. 2.50 lakhs were incurred over conveyance. According to the AO, no supportive bills or vouchers were produced. He, therefore, disallowed the claim of the assessee and added Rs. 2,13,947/- to the total income.
4. The assessee carried the matter to the ld.CIT(A) and submitted that the assessee had not maintained any record or voucher/bills in proof of conveyance expenditure incurred, however, claimed that this amount was incurred in the form of petrol and taxi fare. The assessee during the appellate proceedings also furnished certificates for the expenditure issued by the Agents. The ld.CIT(A) did not entertain the additional evidence by stating that no request was made to entertain those evidence u/s 46-A(1) of the Income-tax Act, 1961.
5. As regards to the reliance placed by the assessee on the judgment of the Hon'ble M.P. High Court in the case of CIT vs. A.K. Ghosh reported in 263 ITR 536, the ld.CIT(A) observed that 2 -: 3 :- the facts of the assessee's case were different from the facts of the case relied upon, since the assessee miserably failed to prove that the expenses claimed to be incurred on conveyance were actually incurred. The ld.CIT(A) also distinguished the judgement of the Hon'ble Rajasthan High Court in the case of LIC vs. Union of India & Others, 260 ITR 41, relied upon by the assessee by stating that emphasis by the Hon'ble Court was that it was for the assessee claiming exemption to establish that the expenditure was actually incurred for discharge of duties. Accordingly, the ld.CIT(A) confirmed the disallowance made by the Assessing Officer. Now the assessee is in appeal.
6. The learned counsel for the assessee reiterated the submissions made before the authorities below and also furnished a copy of the fund flow statement, which is placed at page no.44 of the assessee's compilation. On the basis of said statement, it was stated that a sum of Rs. 1,84,000/- was incurred on account of conveyance expenses through Agents and Rs. 66,000/- were incurred by self. It was admitted that the aforesaid statement was not placed before the AO, however, the same was furnished to the ld.CIT(A). It was 3 -: 4 :- contended that the expenses were incurred by the assessee, so the claim was allowable.
7. In her rival submission, the learned Departmental Representative strongly supported the orders of the authorities below and further submitted that the claim of the assessee was not verifiable. Therefore, the ld.CIT(A) was fully justified in confirming the addition made by the Assessing Officer.
8. We have carefully considered the submissions of both the parties and gone through the material available on record. In the instant case, it is noticed that the certificates from the Agents were not furnished to the AO, so he was not in a position to verify the claim of the assessee. The ld.CIT(A) has also not admitted the additional evidence on technical ground, since the assessee has not made specific request to admit the additional evidence u/s 46A of the Income-tax Act, 1961, but it is undisputed fact that the certificates from the Agents were furnished to the ld.CIT(A). We, therefore, considering the totality of the facts deem it proper to set-aside this issue back to the file of the AO for fresh adjudication after 4 -: 5 :- considering the material on record and providing due and reasonable opportunity of being heard to the assessee.
9. The next issue vide ground no. 2 relates to the confirmation of addition towards the two Bank deposits of Rs. 38,600/-.
10. The AO made this addition by observing that Rs. 20,000/- was deposited in cash on 29.4.2003 while Rs. 18,600/-by cheque on 27.10.2003. According to the AO, the explanation of the assessee that he had advanced temporary loans to various Agents was not acceptable, since the assessee could not establish the date of advance, name of such person and genuineness of such advances. He, therefore, made the addition. When the matter was taken to the ld.CIT(A), the explanation of the assessee was that the sufficient balance was available with him to advance the same to the agents. It was also stated that the cheque of Rs. 18,600/- deposited in the Bank was refund of the loan amount advanced by him prior to 2003 to some agents. The ld.CIT(A) did not find merit in the submissions of the assessee and confirmed the addition.
11. Before us, the contention of the learned counsel for the assessee was that the sufficient funds were available to the assessee for making the deposit in the Bank. However, neither the AO nor the 5 -: 6 :- ld.CIT(A) appreciated this fact in right perspective. In her rival submissions, the learned Departmental Representative supported the orders of the authorities below.
12. After considering the submissions of both the parties, it is noticed that in the instant case the assessee claimed that sufficient funds were available for making the deposits in the Bank. However, the fund flow statement was not furnished to the AO by the assessee. We, therefore, deem it proper to set aside this issue also back to the file of the AO for fresh adjudication in accordance with law.
13. The last issue vide ground no. 3 relates to the confirmation of addition of Rs. 90,000/- made by the Assessing Officer on account of low house hold expenses.
14. The facts related to this issue in brief are that the AO asked the assessee to furnish the evidence of withdrawal for house hold expenses. The claim of the assessee was that a sum of Rs. 2,02,266/- was withdrawn for house hold expenses. The AO pointed out that the withdrawals included mutual fund purchase, NSC purchases, house hold items purchase amounting to Rs. 30,000/-, Rs. 20,000/- and Rs. 30,000/- respectively. According to him, the assessee 6 -: 7 :- incurred house hold expenses from income generated by other sources, which were not disclosed. He estimated the house hold expenses @ Rs. 7500/- per month and made the addition of Rs. 90,000/-. The assessee carried the matter to the ld.CIT(A) and submitted that the AO had not afforded the proper opportunity to explain the house hold expenses. It was stated that his family consists of himself, his wife and minor daughter. It was further stated that his father was not living with him and he is income tax payee filing his income tax return regularly. It was further stated that the parents of the assessee were not dependent on him for the livelihood and, thus, the contention of the AO that the assessee was bearing the expenses of five family members was not correct. It was also stated that medical expenses were reimbursed by LIC and as such there were no medical expenses incurred by the assessee from his pocket.
15. The ld.CIT(A) after considering the submissions did not find merit in the contention of the assessee for the reasons stated in para 5.1 of the impugned order and confirmed the addition. Now the assessee is in appeal.
7 -: 8 :-
16. The learned counsel for the assessee reiterated the submissions made before the authorities below and further submitted that the AO as well as the ld.CIT(A) without appreciating the facts and explanation given by the assessee made the addition. It was submitted that the assessee was having sufficient funds to meet out the house hold expenses. So, no addition was called for.
17. In her rival submissions, the learned Departmental Representative strongly supported the orders of the authorities below.
18. After considering the submissions of both the parties, it appears that the AO made the addition considering that the assessee was not having any withdrawal to meet out house hold expenses. On the other hand, the contention of the assessee was that he was having sufficient funds to meet the family needs. In the present case, it is also noticed that the AO estimated the house hold expenses considering that the family of the assessee was having 5 members. On the other hand, the claim of the assessee was that his father was retired officer and was not dependent upon him, so his family was having three members. The ld.CIT(A) confirmed the action of the 8 -: 9 :- AO by observing that as per Indian custom and tradition, the son is supposed to serve and help the father after his retirement instead of otherwise. In our opinion, that observation may be correct , but the vital fact that the father of the assessee was a retired Government servant and was separately assessed to tax had not been considered by the ld. CIT(A). Furthermore, inspite of the specific explanation given by the assessee that his parent were living separately at Dewas, while the assessee was living at Indore had also not been considered by the ld.CIT(A). We, therefore, considering the totality of the facts deem it proper to set-aside this issue also back to the file of the AO for fresh adjudication after providing due and reasonable opportunity of being heard to the assessee.
19. In the result, the appeal is allowed for statistical purposes.
This order has been pronounced on 21st July, 2009.
(BHAVNESH SAINI) (N. K. SAINI)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Dated : 21st July, 2009.
CPU*
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