Rajasthan High Court - Jaipur
Govind Ram Chhugani vs Asstt. Cit on 13 September, 2002
Equivalent citations: (2002)77TTJ(NULL)339
ORDER
S.R. Chauhan, J.M. ITA Nos. 1267/Jp/94 and 1405/Jp/94 are two cross-appeals by assessee and revenue respectively for assessment year 1990-91 and are directed against the common order of Commissioner (Appeals), Jodhpur, dated 6-4-1994.
2. I have heard the arguments of both the sides and have also perused the records including the written statement of assessee placed on record.
3. First I take up ITA No.1267/Jp/94 being assessee's appeal. Ground No. (a) and (b) dispute of the addition of Rs. 50,000 on account of surrender in respect of debtors. The learned authorised representative of assessee, has relied on his written statement. In the written statement of assessee, it has been contended that the addition has been made solely on the basis of surrender made by assessee during search conducted from 17-8-1990 to 23-8-1990. It has been contended that in assessee's statement recorded on 23-8-1990, the assessee surrendered Rs. 50,000 towards deposits with the parties, but the surrender was wrong as in fact the assessee is not having any debtor. It has been contended that the assessee had explained to the assessing officer that the company in which the assessee is director was having huge liabilities, and he cannot have any deposit with the parties. It has also been contended that the assessee's wife also stated in her statements (p. 47 of PB) that no money was lying with any third party. It has been contended that the assessee accordingly retracted from the surrender in respect of the deposits with the parties, i.e., sundry debtors. It has been contended that the assessing officer has not pointed out any material or basis for making justifying the surrender. It has been contended that the addition has been made without any basis/justification although the surrender stands retracted and there is no material whatsoever to support the same. He has relied on the following decisions :
1. Deepchand & Co. v. Asstt. CIT (1995) 51 TTJ (Bom) 421;
2. Lalchand & Co. v. ITO (1983) 15 TTJ (Chd) 155; and
3. Pushpa Vihar v. Asstt. CIT (1994) 48 TTJ (Bom) 389.
4. As against the above, the learned Departmental Representative of revenue has contended that the assessing officer added on the basis of assessee's surrender. He has contended that the assessee has also shown this surrender amount in the revised return filed on 17-2-1993. He has relied on the orders of authorities below.
5. I have considered the rival contentions, the relevant material on record, as also the cited decisions. In (1995) 51 TTJ (Bom) 421 (supra) Tribunal, Bombay, has held that when there was no supporting evidence to confirm the addition except statement of two partners recorded at the time of search, when the search had continued for more than 2 days and 2 nights, and the statements could not be considered to be free, fearless and voluntary, and were retracted, and there being evidence supporting retraction, the additions could not be sustained on merits. In (1983) 15 TTJ (Chd) 155 Tribunal, Chandigarh, has held that when surrender has been made by assessee under misunderstanding, the same cannot be included in his income. In (1994) 48 TTJ (Bom) 389, Tribunal, Bombay, has held that it is otherwise open to the assessee to demonstrate the correct facts. It has also been held therein that in the absence of any other material, apart from original admission, there was nothing to support the addition, and so the addition was deleted. From the perusal of record, it is revealed that apart from the surrender statement made by assessee, there is no material on record to establish the existence of sundry debtors or deposits by assessee with the parties. In the instant case, the search continued from 17-8-1990, to 23-8-1990. The assessee's plea regarding the statement having been made under pressure and force and the same being not free and voluntary, cannot be gainsaid, particularly when the same has been retracted by the assessee and there is no material/evidence on record to substantiate the existence of sundry debtors/deposits with the parties by assessee, so as to support the surrender. In that view of the matter, considering all the facts and circumstances of the case, as also the legal position, I find no justification for making this addition and so the same is deleted accordingly.
6. Ground No. 2 (a) and (b) dispute the addition of Rs. 26,700 on account of low withdrawals for household expenses. The learned authorised representative of assessee has contended that this addition has been made only on the basis of estimate made on the higher side. He has relied on his written statement. In the written statement of assessee it has been contended that the assessee was living in his own house and was not paying any rent. His children were going to government schools. It has been contended that the assessee is not very qualified and is not having any relations in high society nor is he a member of any club, nor is he maintaining any car. It has been contended that the assessing officer's estimate of household expenses at Rs. 4,000 per month is quite excessive and not based on any material. It has also been contended that there was no reason to deduct monthly deposits, aggregating to Rs. 7,200 by the assessee's sons in their RD accounts from the cash available (Rs. 28,200) with the assessee as the children made deposits out of savings and gifts received from relatives on various occasions. It has been contended that as such, the cash available with the assessee was Rs. 28,500 and not Rs. 21,300. It has been contended that the assessee's wife Smt. Seema has stated in her statement (pp. 45 to 47 of PB), as recorded during search, that the household expenses were Rs. 1,000 to Rs. 1,200 per month. As against this, the learned Departmental Representative of revenue has supported the orders of authorities below.
7. I have considered the rival contentions as also the relevant material on record. From the perusal of record, I find the estimate of assessee's household expenses made by assessing officer to be quite excessive and that too without any basis, and the assessing officer has not even considered the material available on record being the statement of assessee's wife Smt. Seema wherein the household expenses have been stated to be between Rs. 1,000 to 1,200 per month. That being the position, the annual household expenses as per the statement of house lady will come to Rs. 12,000 to Rs. 15,000 per month. In the situation, I find it not justified to estimate the assessee's household expenses at a sum of Rs. 4,000 which is too excessive. As such, considering all the facts and circumstances of the case, I find the assessee's withdrawals for household expenses at Rs. 21,000, even if the same were not accepted at Rs. 28,500 to be quite reasonable/adequate. As such, I find the addition to be uncalled for and not justified. I, therefore, delete this addition.
8. Ground Nos. 3 and 4 are general.
9. In the result, the assessee's appeal No. 1267/Jp/94 is allowed.
10. Now I take up revenue's appeal No. 1405/Jp/94. The sole ground raised by the revenue disputes the addition of Rs. 16,552 on account of interest on deposits of assessee's family members. The learned Departmental Representative of revenue has contended that this addition has been made in respect of interest on deposits of assessee's family members, assessee's wife, Smt. Seema and assessee's three sons. He has relied on the orders of assessing officer. As against this, the learned authorised representative of assessee has contended that the assessee has furnished details of interest and the source has also been examined by the assessing officer in assessment year 1988-89, and in this regard he has referred to per p. 59 and 60 of paper book being the assessment order for assessment year 1988-89. He has taken me through last para on p. 60 of paper book wherein the assessing officer has observed in respect of assessee's three minor sons that the deposits have been explained satisfactorily as the same are supported by relevant copies of accounts and declaration of gifts, etc. He has relied on his written statement. In the written statement of assessee it has been contended that as regards the addition of interest income of Rs. 16,552 pertaining to assessee's wife and his three sons, the same has been made on protective basis. He has contended that the assessee's wife Smt. Seema is an existing assessee since long and in the proceedings under section 148 in the case of Smt. Seema for the year under appeal, this interest income was taxed on protective basis but the same has been directed by Deputy Commissioner (Appeals) in appeal to be treated as substantive and not protective, and there has been no further appeal by revenue. He has, as such, contended that now the matter has become final and the department has virtually accepted the interest income shown to be of Smt. Seema to be her own income and not that of assessee.
11. It has also been contended that the interest income has accrued to the three sons of assessee on deposits owned by them and belonging to them. It has been contended that the copies of account of deposits with Mahendra Oil Industries, gifts deeds and R.D. account pass book were also furnished. It has been contended that the children have filed their return of income and were duly assessed. It has also been contended that in assessing officer's order for assessment year 1988-89, the assessing officer has accepted that the deposits of the children have been satisfactorily explained. It has also been contended that even otherwise, no specific opportunity was provided by assessing officer to assessee before making the said addition. The learned authorised representative of assessee has relied on the following :
1. CIT v. Zafrul Hasan Iraqi (1998) 62 TTJ (Jp) 795;
2. Madholal v. ITO (1991) 40 TTJ (Jp) (TM) 333; and
3. CIT v. Smt. Durgawati Singh (1998) 234 ITR 249 (All).
12. I have considered the rival contentions the relevant material on record as also the cited decisions. Considering all the facts and circumstances of the case together with the elaborate contention made in the written statement of assessee, I consider it to be not justified on the part of the assessing officer to have made addition in respect of the aforesaid interest income being in the name of assessee's wife and his three sons. In the circumstance, the deletion of addition by learned Commissioner (Appeals) is found to be quite proper and justified. I therefore, decline to interfere with the same.
13. In the result this appeal of revenue being ITA No. 1405/Jp/94 is dismissed.