This detailed analysis reviews the decision of the Income Tax Appellate Tribunal (ITAT) Delhi Bench ‘A’ on the appeal filed by the legal heir of Late Sh. Brij Kishore Kochar for the assessment year 2013-14 against the order of the CIT(A)-27, New Delhi.
The case revolves around the addition of Rs. 4.80 lakhs by the Assessing Officer (AO) under the head of household drawings. The AO estimated monthly household expenses at Rs. 40,000 without plausible justification from the assessee, resulting in the said addition.
The appellant contested the addition at the CIT(A), providing detailed accounts of household expenses paid by cheque, including utilities and medical expenses, which totaled to Rs. 3,96,735. Despite these submissions, the CIT(A) upheld the AO’s addition after considering a remand report that suggested the withdrawals were insufficient.
The ITAT, after reviewing the submissions and expenses detailed, noted that the assessments of household expenses were reasonable given the age and living situation of the assessee. The Tribunal highlighted that the payments made by cheque supported the credibility of the declared expenses. Consequently, the Tribunal directed the AO to delete the addition of Rs. 4.80 lakhs, thereby allowing the appeal in favor of the assessee.
This case highlights the importance of proper documentation and justification of household expenses in scrutiny assessments, especially for senior citizens with no significant liabilities. It also underscores the Tribunal’s role in providing relief against arbitrary additions not supported by the facts on record.
The ITAT’s decision brings to light the crucial aspects of dealing with estimated assessments by tax authorities, advocating for a reasoned approach based on actual expenses and circumstances of the taxpayer.
Manage the increasing number of hearings effortlessly by leveraging the legal AI revolution We are India's Leading revolutionary AI-powered legal platform where you can get enough insights into top cases and judgements.
Research Platform