2015 (7) TMI 610

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.... addition made by the AO and confirmed by the ld. CIT(A), on account of inadequate house hold expenses. The AO in the assessment years has held as follows: "4. From the statement of drawings, it is observed that the assessee has shown drawings of Rs. 1,14,480/-. Further, it is observed that the assessee has shown less drawings as compared to his status. Also very low drawings have been shown by his family members. The assessee has shown his income from salary from the partnership firm M/s Shri Ram Hari Ram, wherein the assessee is also a partner and getting share out of profit. The assessee has also shown income from other sources which include interest income from partnership firm as well as from other parties. As during the year, the assessee has not furnished any statement of affairs, no drawings have been made for house hold expenses, living in posh area of Delhi with luxurious style of living, therefore, gives a clear picture of assessee's earnings out of undisclosed sources of income. Hence, in the absence of any Statement of Affairs and books of account, it is presumed that the assessee is meeting out the personal expenses out of undisclosed sources of his income. H....

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..../s 153A is misconceived and illegal being without jurisdiction, contrary to facts and provision of law and hence the assessment based thereon must be quashed as erroneous and void. 3. On the facts and circumstances of the case the Ld. Commissioner of Income Tax (Appeal) is not justified in confirming an ad hoc addition of Rs. 2.40,000/- on account of household expenses made by Ld. AO without any basis which is based on surmises and conjectures, contrary to the principles of natural justice and applicable law, as such the action of Ld. CIT(A) need to be undone and the addition confirmed by him needs to be deleted. 4. On the facts and circumstances of the case the Ld. Commissioner of Income Tax (Appeal) is not justified in holding that assessment cannot be concluded on processing of return under section 143(1) of the Income Tax Act, 1961 and intimation u/s 143(1) does not amount to assessment which can abate which is based on surmises and conjectures and contrary to provisions of law, as such the action of Ld. CIT(A) needs to be undone and it is to be held that assessment is concluded on processing of return u/s 143(1) of the Income Tax Act, 1961 if no notice u/s 14....

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....h seven adult members, without considering the two HUFs were also having drawings and that there were only five family members. He argued that drawings of all member and HUFs during the year 2008-09 was Rs. 9,74,555/- which is more that adequate as the assessee is an orthodox and conservative family, with no club membership. He submitted that no evidence found during the course of search evidencing huge domestic personal expenses. He prayed that the addition be deleted. 11. Mr. Vivek Wadekar, the ld. CIT DR relied on the orders of the first appellate authority. He drew the attention of the bench to the nature of luxurious cars owned and maintained by the assessee and also the fact that the assessee has not given any details sought by the first appellate authority and submitted that the ld. CIT(A) was right in upholding the order of the AO. While agreeing that no material or document/evidence, was found regarding household expenditure, he submitted that the valuables found during the course of search are given in Annexure to the ld. CIT(A)'s order and submitted that this material is found during the course of search and based on this material an inference was drawn by the AO in a....

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....0 Toyota Carolla 4. DL 3CY 5111 Honda City 5. DL 2F BH 0900 Toyota Innova 6. HR 07 OD 9000 S-350, Mercedes 7. HR 7 OH 5555 Rover   6.1 The details submitted by the appellant further shows that their joint household withdrawals during different assessment years are as under and hence the monthly withdrawal per family members are depicted in following table:- Particulars Assessment Years (Amount in Rs.) 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 Withdrawal per annum 3,91,050 4,48,745 5,80,745 5,48,000 5,64,000 9,65,080 9,74555 Therefore withdrawal per month will be 32,587 37,395 48,395 45,666 47,000 80,423 81,171 Hence withdrawal per family member per month will be 4,555 5,342 6,913 6,523 6,714 11,489 11,595   6.2 From the above chart it is quite surprising to note that the appellant who is living with 7 adult family members in a mansion at Prithvi Raj Road, New Delhi and driving best of the vehicles, can meet their household expenses in approx. Rs. 32,000 p.m. during the assessment year 2002-03 and....

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....i's poshest locality i.e. Prithviraj Road, * driving the best of luxurious cars ranging from Mercedes, Land rover, Cruiser etc. * having a billiards table, piano expensive paintings, chandlier, centrally air-conditioned house etc. (refer to panchnama filed by the appellant alongwith its submissions) I hold that it is impossible to believe that the appellant and his family can maintain themselves on a monthly expenditure ranging from Rs. 32,000 p.m. to Rs. 47,000 p.m. during the assessment year 2002-03 to 2006-07 and around Rs. 80,000 p.m. in the assessment years 2007- 08 and 2008-09. 6.7 Taking into consideration all the above facts and circumstances and also the fact that the appellant is avoiding in giving the requisite details viz. details of insurance policies, electricity expenses, copy of passport and also considering that the appellant is having a luxurious life style (refer to valuables which were found during the search and the copy of Annexure A-6 of Panchnama is part of this order), I come to the inevitable conclusion that the appellant cannot survive on a monthly expenditure of Rs. 32,000 approximately which is just around approximate....