Case Law Details
Late Sh. Brij Kishoare Vs DCIT (ITAT Delhi)
Introduction: The case of Late Sh. Brij Kishoare Vs DCIT brought before the Income Tax Appellate Tribunal (ITAT) Delhi centered around a dispute over an addition of Rs. 4.80 lacs on account of household drawings by the Assessing Officer (AO). The appellant contested the addition, which had been upheld by the CIT(A).
Analysis: During the scrutiny assessment proceedings, the AO made an estimated addition to the household drawings as the assessee did not provide a plausible reply to justify the expenses considering their family’s constitution and standard of living. Despite the appeal to the CIT(A), the addition was upheld, leading to further appeal to the ITAT.
The counsel for the assessee outlined detailed expenses totaling Rs. 396735, highlighting the fact that the assessee, a senior citizen, was living alone with his wife and had no other liabilities. Although the CIT(A) considered additional evidence in the form of a bank statement and called for a remand report from the AO, the addition was still confirmed.
The ITAT, upon thoughtful consideration, found no merit in the addition made by the AO given the age of the assessee and the nature of the expenses provided. It was determined that the expenses paid by cheque for electricity, gas, and medical expenses were reasonable, and no adverse inference was drawn from these details. AO is directed to delete the addition of Rs.4.80 lacs. The appeal of the assessee is accordingly allowed.
FULL TEXT OF THE ORDER OF ITAT DELHI
This appeal by the assessee is preferred against the order of the CIT(A)-27, New Delhi dated 28.03.2019 pertaining to A.Y.20 13-14.
2. The solitary grievance of the assessee is that the CIT(A) erred in confirming the action of the AO in making the addition of Rs.4.80 lacs on account of house hold drawings.
3. Briefly stated the facts of the case are that during the course of the scrutiny assessment proceedings the assessee was asked to furnish details of drawings made for house hold purposes and its justification keeping in view the constitution of family and standard of living. On receiving no plausible reply the AO went on to estimate the house hold drawings at Rs.40,000/- per month and made addition of Rs. 4.80 lacs.
4. Assessee carried the matter before the CIT(A) but without any success.
5. Before us the Counsel for the assessee drew our attention to the details furnished before the CIT(A) and explained the total expenses / withdrawal were as under :-
| Cash | 3,07,000 |
| Electricity Expenses (BRPL)- Paid by cheque | 36,720 |
| Water Charges (DJB) – Paid by cheque | 5,387 |
| Gas for kitchen – Paid by cheque | 1,488 |
| Telephone Expenses (MTNL) – Paid by cheque | 2,361 |
| Mobile expenses – Paid by cheque | 1,779 |
| Medical Expenses – Paid by cheque | 42,000 |
| Total | 3,96,735/- |
6. It was explained that the assessee was living alone with his wife and was of old age and, therefore, the details of expenses for house hold withdrawals is sufficient to meet the ends. The assessee also filed additional evidences before the CIT(A) which were in the form of bank statement. The CIT(A) called for remand report from the AO and in the remand report the AO mentioned that the withdrawals of Rs.3.07 lacs is insufficient and the addition of Rs. 4.80 lacs should be upheld. After considering the facts and the submissions and the remand report the CIT(A) confirmed the addition.
7. Before us the Counsel vehemently stated that the additions were made for low house hold expenses but while confirming the addition the CIT(A) changed the colour of low withdrawals for medical expenses. The Counsel stated that the withdrawals made by the assessee are sufficient looking to his age.
8. Per contra the DR strongly supported the findings of the lower authorities.
9. We have given a thoughtful consideration to the orders of the authorities below. The undisputed fact is that the assessee being a senior citizen was living at his own house with his wife with no other liabilities. The details of expenses mentioned elsewhere totaling to Rs.396735/- appears to be very reasonable as the expenses relating to electricity, gas, telephone were paid by account payee cheque also the medical expenses have been paid by cheque and no adverse inference have been drawn in respect of this detail. The AO has simply estimated the expenses whereas the assessee has furnished the actual details, therefore, considering the age of the assessee we do not find any merit in the addition made by the AO and the AO is directed to delete the addition of Rs.4.80 lacs. The appeal of the assessee is accordingly allowed.
Order pronounced in the open court on 25.05.2023.
