2014 (7) TMI 467 - AT - Income Tax

Addition of low household expenses Held that - Following Sandeep Tatode Versus DCIT, Cen. Cir 39, Mumbai 2014 (7) TMI 123 - ITAT MUMBAI - CIT(A) as well as the AO has not denied the fact that the assessee was a minor in the relevant financial year and he became major only on 28/03/2003 - He was staying with his mother, who was managing the house by preparing tiffin and homemade food for the various persons - There is no further material or information on record that the assessee in the relevant financial year has incurred any expenditure which has not been disclosed - In absence of any material on record, there is no reason for estimating any kind of household withdrawals specially, on the facts stated that sums was shown by his mother and himself for the household expenses Decided in favour of Assessee. Unexplained money u/s 69A of the Act - Credits in bank account of other persons Held that - Following Sandeep Tatode Versus DCIT, Cen. Cir 39, Mumbai 2014 (7) TMI 123 - ITAT MUMBAI - the assessee made a specific request that enquiry can be done from the respective bank u/s 131 or 133(6) so as to look into the factum of ownership of the bank accounts - the authorities should have made an enquiry when the assessee has categorically denied the ownership of the bank account u/s 292C onus is upon the assessee to prove that any asset or books of accounts etc. found from the possession of the assessee, the presumption is raised against the assessee - the assessee has clearly stated that the bank officials have refused to divulge the information about the clients - the AO should have carried out the enquiry from the banks thus, the matter is to be remitted back to the AO for ascertainment of whether the accounts belongs to the assessee or not Decided in favour of Assessee.

Summary

Issues:
1. Low household expenses addition
2. Credits in bank accounts of other persons addition

Issue 1 - Low household expenses addition:
The appeal was filed against the order of the CIT(A) for the assessment year 2006-07, challenging the addition made by the AO on the assumption of low household expenses. The Assessee's family had shown total household expenses of &8377; 82,685, with &8377; 50,000 by the mother and &8377; 32,685 by the Assessee. The AO added &8377; 2,70,000 for low household expenses, which the CIT(A) reduced to &8377; 1,30,000. The Assessee contended that a similar issue arose for the assessment year 2003-04, where the addition was ultimately deleted by the Tribunal. The Tribunal observed that there was no material to support the addition and deleted it. The Assessee argued for the deletion of the sustained addition, which was allowed by the Tribunal based on the earlier decision.

Issue 2 - Credits in bank accounts of other persons addition:
Regarding the addition of &8377; 56,073 in bank accounts of other persons, the Assessee's representative referred to a previous Tribunal order for the assessment year 2003-04 where a similar addition was restored back to the AO for further inquiry. The Tribunal noted that the Assessee had denied owning any bank account, and the authorities had relied on a presumption under section 292C. The Tribunal opined that an inquiry should have been made by the authorities from the respective bank to verify the ownership of the accounts. Consequently, the Tribunal decided to restore this issue back to the AO for necessary investigation, following the previous decision. The appeal filed by the Assessee was allowed in both instances, with the Tribunal directing the deletion of the sustained additions.

In conclusion, the Tribunal ruled in favor of the Assessee, deleting the additions made by the AO and CIT(A) for both low household expenses and credits in bank accounts of other persons, based on the precedent set by earlier Tribunal orders.