2012 (11) TMI 96 - AT - Income Tax

Addition on account of low withdrawals towards household expenses Held that - Assessee is submitting the proof of filling the Income Tax Return of his father and mother who are regular assessee and the assessee is the only son jointly lives with his parents - assessee succeeded to substantiate his claim, pertaining to household expenses, that his retired government servant father and rental income earning mother contributed towards household expenses and the ld. CIT(A) did not properly consider this fact that the father of the assessee has withdrawn Rs.80,136/- from saving bank account and he has also withdrawn Rs.1,08,000 from his post office MIS account, total amounting to Rs.1,86,136/-, which is much higher than the estimated household expenses of Rs. 1,63,000 as added by the AO In favor of assessee

Summary

Issues:
Assessment order additions - Unexplained credits, low household withdrawals, business income, interest income, deduction u/s 80C.

Analysis:
The appellant challenged an assessment order that confirmed additions made by the assessing officer, including Rs.1,63,000 for low household withdrawals. The CIT(A) deleted some additions but upheld the Rs.1,63,000 addition, leading to the appellant's appeal. The appellant argued that the withdrawals were sufficient for family expenses, citing family members' incomes and withdrawals. The AR highlighted that the father's withdrawals were higher than estimated by the AO. The AR also noted that relevant documents were submitted but not considered by the CIT(A). The CIT(A) upheld the addition, stating the withdrawals were insufficient for a family of five. The DR supported the CIT(A)'s decision, emphasizing the lack of evidence for sufficient withdrawals. The Tribunal observed that the CIT(A) failed to consider evidence of family members' contributions to household expenses. The Tribunal noted that the CIT(A) erred in disregarding evidence of withdrawals by the father and mother. Considering the evidence, the Tribunal concluded that the appellant substantiated household expense claims. As a result, the Tribunal set aside the CIT(A)'s decision on the Rs.1,63,000 addition, allowing the appellant's appeal.