Additions on account of lower withdrawals

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yashdeepk (Querist)

19 June 2013 The assessing officer has made an addition to the returned income of assessee on account of lower withdrawals for household purpose.he has made this addition on the basis of societal status of the assesee and number of dependent family members. Whether addition sustainable in law and whether this can be termed as concealment?

Jai Bajaj

Jai Bajaj (Expert)

19 June 2013 Considering the social status and normal living expenses should be withdrawn from your capital. If amount withdrawn is not as per societal status and no. of dependent persons then it might raise the concern over that the assessee might have not show the entire income and earned some black money otherwise it is not possible to survive in that lower amount of withdrawal. Therefore it is not advisable to go for appeal and assessee should show reasonable amount of withdrawal from his/her capital considering his status and no. of dependent person etc.

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yashdeepk

yashdeepk (Querist)

19 June 2013 Appeal hearing already due:DPlease provide ur opinion on this submission:

7.1 The assessing officer has made an addition of Rs./- for low withdrawals from capital of household expenses. During the year under appeal the withdrawals amounted to Rs./- for household expenses.
7.2 This clearly means that the assessing officer intends to tax the income which is not withdrawn by the assessee and which is included in the capital of the assessee.
7.3 It may kindly be noted that such withdrawals including the said addition has already been brought to tax, before including it in the capital of the assessee, in the return of income filed by the assessee under the head ‘Income from business and profession’. The same income cannot be subjected to double taxation under the same provision of law.
7.4 Therefore, the said addition is not sustainable in law.
Since this addition is on estimation basis therefore, it cannot be termed as concealment.

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