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TMI Blog2006 (1) TMI 475X X X X Extracts X X X X X X X X Extracts X X X X ..... I deem it sufficient to hold that without proper material inference of expenditure on various alleged items could not be drawn. Thus the onus that lies on the Revenue u/s 69C cannot be taken to be discharged in these cases. Evidently either the assessee had withdrawn more than Rs. 5,000 per month from bank or had some other source of withdrawal which was utilized and thus sufficient cash was left with the assessee for months of October 1995 to March 1996. If we go by withdrawal of Rs. 5,000 per month as observed by Assessing Officer, the total amount should have been Rs. 30,000 and not Rs. 73,127. Therefore, some source of cash available for utilization for household expenses at Rs. 73,127 was definitely there. This was not examined. Therefore on facts it is not possible to reject the assessee s claim that his wife had sufficient cash with her to last through the year. Revenue authorities brought no material on record to show why the withdrawal could not be accepted. No comparative case was cited to justify the estimated expenditure of Rs. 1,44,000 in the two years under appeal. Therefore, on facts and circumstances of the case, I am of the view that revenue authorities did not bri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case to award costs of Rs. 20,000, which is equivalent to the institution fee paid by the assessee for the two years under consideration? 2. The facts of the case briefly are that the assessee individual during the relevant period was Managing Director I.T.C. Bhadrachalam Paper Boards Ltd. and submitted returns disclosing incomes at Rs. 14,22,340 and Rs. 16,68,010 for assessment years 1996-97 and 1997-98 respectively. The Assessing Officer on scrutiny of the cases was not satisfied with the household expenses disclosed by the assessee at Rs. 73,127 and Rs. 1,03,029 in the two returns. Vide order sheet entry dated 18-11-1998 and show-cause notice dated 8-2-1999, he asked the assessee to give details with sources of expenditure as under : . . . electricity bill, water bill, telephone bill including mobile, food and drinks, gas bill, petrol bill, newspaper bill, household help, maid/house servant, house rental, children school fee and other expenditure, gifts, clothing, footwear, toiletries, doctor/chemists, house furnishing, Compact Disc, Video, books unexpected expenditure, repairs, other taxes, credit card expenditure, holiday expenditure, religious ceremonies, marriage expenditure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so referred to the decision of the Hon ble Delhi High Court in the case of Yadu Hari Dalmia v. CIT [1980] 126 ITR 48 1 wherein it is observed as under : We would like to make it clear that an estimate without details will not be upheld in all circumstances and we would suggest that the department should give some definite basis for arriving at an estimate of expenditure whenever it can He deleted the additions and imposed a cost of Rs. 20,000 with the following observations : To highlight the fallacy in the observations of the CIT(A), we prefer to take the best understandable example of income tax officials who are residing at Banjara Hills Quarters allotted by the Government. We are concerned herein with the period beginning from 1-4-1995 onwards. Before 5th pay commission recommendations were implemented, the salary of a Senior-most Government functionary was between Rs. 12,000 to Rs. 15,000 per month and the take-home pay was between Rs. 6,000 to Rs. 9,000. If the basis as adopted by the learned CIT(A) is applied to the Government Officers who enjoy social status similar or better as compared to MD of a Company residing in a Company provided accommodation, the take home pay of e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3,127 is taken to have been spent for six months, the expenditure per month would work out to more than Rs. 12,000. In the above view of the matter, the estimate of the Assessing Officer as confirmed by the Commissioner of Income-tax (Appeals) was fully justified. On the above basis, the learned Accountant Member upheld the addition made in the two assessment years under appeal. Having upheld the impugned order of revenue authorities, there was no question of imposing cost on the Revenue. The learned Accountant Member accordingly held that this is not a fit case in which costs are required to be awarded . He accordingly proposed that appeals for both the years should be dismissed. 7. In the above circumstances, two questions noted above have been referred to me. 8. The case was fixed for hearing and accordingly I have heard the arguments of Shri Samuel Nagadesi on behalf of the assessee and Shri K. Satyanarayana, CIT-DR on behalf of the Revenue. 9. The learned counsel for the assessee submitted that during the course of assessment proceedings, the Assessing Officer had asked the assessee to furnish details of expenses connected with engagement and marriage of assessee s son Mr. Raj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome-tax (Appeals) was quite justified in her approach as on certain other points she remanded the matter back to the Assessing Officer, as reasonable opportunity was not afforded to the assessee. She confirmed the addition on account of low household withdrawals on sound grounds. Learned Departmental Representative further submitted that there was no reason to impose cost on the Revenue in this case. 11. I have given careful thought to the rival submissions. Before commenting on the proposed orders of my learned Brothers, I deem it appropriate to reproduce the relevant extract from the impugned order of the Commissioner of Income-tax (Appeals) on the issue involved before me. These are as under : 5.( i ) The last ground of appeal pertains to the addition of Rs. 70,000 being house-hold expenses. The arguments of the Assessing Officer contained in para 7 of the assessment order which reads as under : 7. House-hold expenses - Vide this office note sheet entry dated 18-11-1998, and show-cause notice dated 8-2-1999, the assessee was asked to furnish the following details of household expenditure with sources thereof. electricity bill, water bill,. Telephone bill including mobile, food a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... em. There were no unexplained expenditure. So far as withdrawals from Bank is concerned, assessee was doing so according to his wife s requirement. His wife had cash carried forward from the earlier withdrawals which was sufficient to last through the year. Hence, there were no withdrawals after September 1995. Amount drawn in first half of the year was for certain contingencies. These contingencies did not arise and surplus cash was enough to meet domestic expenditure. When queried where the assessee was living, it is submitted that the assessee is living at Road No. 14, Banjara Hills, Hyderabad. The assessee had relinquished the office of the MD of ITC Bhadrachalam Paper Boards Ltd. on 31-12-1998. 5( iii ) After due consideration of the facts, I am more inclined to agree with the Assessing Officer that a minimum of Rs. 12,000 is required to run the household given the social status of the assessee who was MD of M/s. ITC Bhadrachalam Paper Boards Ltd. This is in lieu of the following reasons:- ( a ) The appellant stays at Banjara Hills where the cost of living is much higher in comparison to the other locations of Hyderabad. ( b ) The AR s arguments are general and not specific an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot be taken to be discharged in these cases. 11.2 Having regard to the fact that various facilities were provided to the assessee by his employer and that only personal expenses were incurred on two persons and the stand that his average estimated expenses were approximately Rs. 6,000 per month, could be rejected by the Revenue only by bringing some material on record. It was open to the Assessing Officer to question the assessee on various doubts arising in his mind as was done for expenses incurred on son s engagement/marriage. But the same approach was not adopted in respect of household and personal expenses. It has been observed that the assessee was withdrawing Rs. 5,000 per month from his bank for household and personal expenses but then expenditure for the assessment year 1996-97 was admittedly shown at Rs. 73,127. Evidently either the assessee had withdrawn more than Rs. 5,000 per month from bank or had some other source of withdrawal which was utilized and thus sufficient cash was left with the assessee for months of October 1995 to March 1996. If we go by withdrawal of Rs. 5,000 per month as observed by Assessing Officer, the total amount should have been Rs. 30,000 and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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