2012 (6) TMI 851 - AT - Income Tax

Summary

Issues involved: Challenge to impugned orders of Ld. CIT (A) u/s.132 of Act for alleged household expenses addition.

Controversy in Assessment Years 2007-08 and 2008-09:
The appeals were filed challenging the addition of Rs. 1,50,000/- made by the A.O. for alleged household expenses, sustained at 30% by Ld. C.I.T.(A).

Facts and Observations:
- Search and seizure action u/s.132 of Act on 05.03.2009 in the cases of Jai Corp Group.
- A.O. observed the group's substantial land purchase through the assessee.
- Assessee's return declared total income of Rs. 1,50,426/- with no undisclosed income.
- A.O. made an addition of Rs. 1,50,000/- to total income based on family status.
- Ld. CIT (A) sustained 30% addition ad-hoc and deleted 70% addition.

Judicial Analysis and Decision:
- Ld. Counsel withdrew ground no.1 in both appeals.
- Lack of evidence on family size, monthly expenditure, and status led to deletion of 30% addition.
- Judicial propriety required justification for any addition, leading to deletion of Ld. CIT (A)'s sustained addition.
- Ground no.2 allowed, and Ground no.3 deemed consequential.
- Both appeals of the assessee were allowed.

Conclusion:
The addition of Rs. 1,50,000/- for alleged household expenses was deleted in both assessment years, and the appeals of the assessee were allowed.