Concept Securities Pvt. Ltd., Surat V. The ACIT, Circle-1, Surat

ITA 1068/AHD/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 5945 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-05-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Assessment Year: 2010-2011
• Appeal Filed On: 27-04-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: KAILASH RATNOO
• Keywords: Corroborative evidences

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CAMP AT SURAT BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ./ ITA NO. 1068/AHD/2015 / ASSTT. YEAR: 2010-11 CONCEPT SECURITIES PVT. LTD., 401, EMPIRE STATE BUILDING, UDHANA DARWAJA, RING ROAD, SURAT 395002 PAN : AABCC 6956 F VS. ACIT, CIRCLE-1, SURAT / (APPELLANT) / (RESPONDENT) ASSESSEE BY : MR. HIREN VEPARI REVENUE BY : MR. KAILASH RATNOO, SR. DR / DATE OF HEARING : 24/04/2017 / DATE OF PRONOUNCEMENT: 01/05/2017 / O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAIN ST THE ORDER OF LD. CIT(A)-I, SURAT DATED 24.02.2015 PASSED FOR AY 2010 -11. 2. IN THE FIRST GROUND OF APPEAL, THE ASSESSEE HAS PLEADED THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF RS.35,000/- WHICH WAS MADE BY THE ASSESSING OFFICER BY MAKING THE DISALLO WANCE OUT OF STATIONERY AND PRINTING EXPENDITURE. THE LD. COUNSEL FOR THE ASSESSEE DID NOT PRESS THIS GROUND OF APPEAL; HENCE, IT IS REJECTED. ITA NO. 1068/AHD/2015 CONCEPT SECURITIES PVT LTD VS. ACIT AY : 2010-11 2 3. IN GROUND NO.2, THE GRIEVANCE OF THE ASSESSEE IS THAT LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS.2,77,000/-. 4. THE BRIEF FACTS WITH REGARD TO THIS ISSUE ARE TH E ASSESSEE HAS FILED ITS RETURN OF INCOME ON 23.09.2010 ELECTRONICALLY. IT HAS DECLARED TOTAL INCOME OF RS.1,10,67,621/-. THE ASSESSEE HAS PURCHASED A NEW CAR, I.E., COROLLA ALTIS. ON VERIFICATION OF THE BILL OF THE CAR, IT WAS NOTI CED BY THE ASSESSING OFFICER THAT THE AMOUNT SHOWN IN THE BILL IS OF RS.12,20,55 7/-, BUT IN THE LEDGER ACCOUNT AND IN THE SCHEDULE OF FIXED ASSET, THE VAL UE OF THE CAR IS SHOWN AT RS.9,51,000/-. THUS, THERE WAS A DIFFERENCE OF RS.2 ,69,557/-. THE CASE OF THE ASSESSEE IS THAT IT HAS AN OLD CAR WHICH WAS GIVEN TO THE DEALER WHO HAS ESTIMATED THE VALUE OF THAT CAR AT RS.2,77,000/- AN D AFTER REDUCING THE VALUE OF OLD CAR, THE ASSESSEE HAS PAID ONLY RS.9,51,000/ -. THUS, THE ASSESSEE HAS DIRECTLY CREDITED THE BLOCK OF MOTOR CAR IN THE SCH EDULE OF FIXED ASSET AT A SUM OF RS.9,51,000/- INSTEAD OF RS.12,20,557/- THE LD. REVENUE AUTHORITIES DID NOT ACCEPT THIS CONTENTION OF THE ASSESSEE ON T HE GROUND THAT THE ASSESSEE COULD NOT FURNISH SUPPORTING EVIDENCE, I.E., WHETHE R THE REGISTRATION OF THE OLD CAR WAS TRANSFERRED IN THE NAME OF THE ALLEGED DEALER OR SOME REPRESENTATIVE ETC. LD. ASSESSING OFFICER HAS MADE THE ADDITION OF RS.2,69,557/-. APPEAL BEFORE THE LD. CIT(A) DID NO T BRING ANY RELIEF TO THE ASSESSEE. 5. WE HAVE DULY CONSIDERED THE RIVAL CONTENTIONS AN D GONE THROUGH THE RECORD CAREFULLY. IT WAS PLEADED BY THE ASSESSEE T HAT A CAR NAMELY OPTRA WAS SHOWN AS A PART OF BLOCK OF ASSET BY THE ASSESS EE. THIS CAR WAS SOLD AND IN LIEU OF THIS CAR, NEW COROLLA ALTIS WAS PURCHASE D. A CREDIT OF RS.2,77,000/- FOR THE OLD CAR WAS GIVEN. ON DUE CO NSIDERATION OF THESE FACTS, WE ARE OF THE VIEW THAT THIS ASPECT REQUIRES VERIFI CATION AT THE END OF THE ITA NO. 1068/AHD/2015 CONCEPT SECURITIES PVT LTD VS. ACIT AY : 2010-11 3 ASSESSING OFFICER. THE LD. ASSESSING OFFICER SHALL VERIFY THE BLOCK OF MOTOR CAR IN THE SCHEDULE OF FIXED ASSETS. HE WOULD VERI FY WHETHER ANY CAR, WHICH WAS PART OF THE BLOCK OF THE ASSETS IN THE OPENING BALANCE OF WRITTEN DOWN VALUE OF THE FIXED ASSETS, HAS BEEN EXTINGUISHED AT THE CLOSE OF THE ACCOUNTS. IF THAT BE SO, THEN HE WOULD CONSIDER THE WRITTEN D OWN VALUE OF THAT CAR FOR REDUCTION FROM THE BLOCK OF ASSETS. THIS FACT WOUL D HELP HIM TO DETERMINE WHETHER THE ASSESSEE HAS ACTUALLY AVAILED THE CREDI T OF RS.2,77,000/- FOR ALLEGED SALE OF OLD CAR OR NOT. IN OTHER WORDS, IT IS TO BE VERIFIED WHETHER THE ASSESSEE HAS RECEIVED SOMETHING REPRESENTING THE WR ITTEN DOWN VALUE OF THE OLD CAR OR NOT; IF THE ASSESSEE HAS RECEIVED SOMETH ING MORE THAN THE WRITTEN DOWN VALUE, IT IS TO BE DEALT WITH IN ACCORDANCE WI TH THE PROVISIONS OF INCOME-TAX ACT. THE ASSESSEE SHOULD HAVE NOT DIREC TLY ADDED THE VALUE OF NEW ASSET BY A REDUCED PRICE; RATHER, THE VALUE OF THE NEW ASSET OUGHT TO BE ADDED AT RS.12,20,557/-. THE TREATMENT OF ELIMINAT ED ASSET IS TO BE GIVEN SEPARATELY. THE LD. ASSESSING OFFICER SHALL VERIFY THIS ASPECT AND DEAL WITH IT IN ACCORDANCE WITH THE LAW. THUS, THIS GROUND OF A PPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 6. IN THE NEXT GROUND OF APPEAL, THE GRIEVANCE OF T HE ASSESSEE IS THAT THE LD. CIT(A) HAS ERRED IN UPHOLDING THE DISALLOWANCE OF RS.1,74,327/-. 7. WITH THE ASSISTANCE OF LEARNED REPRESENTATIVES, WE HAVE GONE THROUGH THE RECORD CAREFULLY. IT EMERGES OUT FROM THE RECO RD THAT THE ASSESSEE HAS INCURRED A SUM OF RS.1,74,327/- TOWARDS CLUB EXPENS ES. THE LD. ASSESSING OFFICER HAS NOTICED THE DETAILS OF SUCH EXPENDITURE S IN PARAGRAPH 7 OF THE ASSESSMENT ORDER. ON VERIFICATION OF THE DETAILS, LD. ASSESSING OFFICER FOUND THAT THESE EXPENSES WERE NOT INCURRED FOR THE PURPO SE OF BUSINESS AND ACCORDINGLY HE DISALLOWED THE SAME. ITA NO. 1068/AHD/2015 CONCEPT SECURITIES PVT LTD VS. ACIT AY : 2010-11 4 8. ON APPEAL BEFORE THE LD. CIT(A), THE ASSESSEE HA S MADE DETAILED WRITTEN SUBMISSIONS AND HAS RELIED UPON VARIOUS DEC ISIONS OF THE TRIBUNAL NAMELY:- I. 109 TTJ 631 (BANG A) INFOSYS TECHNOLOGIES LTD; II. 19 DTR 295 (DEL) SAMTEL COLOR LTD; III. (2005) 3 SOT 572 (DEL) HERO HONDA MOTORS LTD; IV. 57 SOT 317 (MUM) JINDAL IRON & STEEL COMPANY LTD; V. 26 ITR (TRIB) 406 (MUM) IOT INFRASTRUCTRE & ENERG Y SER. LTD. 9. THE LD.CIT(A) HAS CONSIDERED ALL THESE DECISIONS AND CONFIRMED THE ORDER OF THE ASSESSING OFFICER ON THIS POINT BY MAK ING FOLLOWING OBSERVATIONS:- 6.3. THE SUBMISSION OF THE APPELLATE IS DULY CONS IDERED IN THE LIGHT OF FACTS OF THE CASE AND CASE LAWS CITED BY THE ASSESSEE HAV E BEEN PERUSED. THE CASE LAWS RELIED UPON BY THE ASSESSEE ARE RELATING TO C ORPORATE MEMBERSHIP WHICH IS NOT THE CASE HERE. THE DIRECTOR HAS BECOM E THE MEMBER OF THE CLUB AND HE IS THE DIRECT BENEFICIARY NOT THE BUSINESS. IF AT ALL ANY BENEFIT HAS ACCRUED TO THE BUSINESS, THE SAME MIGHT BE INCIDENT AL. NONETHELESS, THE ONUS IS SQUARELY ON THE ASSESSEE TO DEMONSTRATE WITH THE HELP OF SUPPORTING EVIDENCES THAT BUSINESS MEETING/CONFERENCE WERE HEL D THERE AND THE EXPENSE INCURRED HELPED THE BUSINESS GROW. THE ASSESSEE DI D NOT FURNISH ANY SUCH EVIDENCE AND THEREFORE THE ARGUMENT OF EXPENSES BEI NG FOR BUSINESS PURPOSE REMAINED UNFOUNDED AND A MERE HOLLOW ASSERTION. IN VIEW OF THIS, THE DISALLOWANCE OF RS.1,74,327/- IS UPHELD AS NON-BUSI NESS/PERSONAL EXPENSE. THIS GROUND OF APPEAL RAISED BY THE ASSESSEE FAILS. 10. LD. COUNSEL FOR THE ASSESSEE HAS REITERATED HIS CONTENTIONS AS WERE RAISED BEFORE THE REVENUE AUTHORITIES BELOW. THE A SSESSEE IS FUNCTIONING HAS A BROKER OF BOMBAY STOCK EXCHANGE AND NATIONAL STOCK EXCHANGE. IT IS A MEMBER OF BOTH THESE STOCK EXCHANGES. THE EXPEND ITURES INCURRED IN THESE CLUBS ARE NOT AT ALL RELATED IN ANY MANNER TO THE BUSINESS CARRIED ON BY ITA NO. 1068/AHD/2015 CONCEPT SECURITIES PVT LTD VS. ACIT AY : 2010-11 5 THE ASSESSEE. BOTH THE REVENUE AUTHORITIES HAVE RE CORDED CATEGORICAL FINDINGS AND DISTINGUISHED THE DECISIONS RELIED UPO N BY THE ASSESSEE. AFTER GOING THROUGH THE FINDINGS OF THE LD. CIT(A), WE DO NOT FIND ANY MERIT IN THE CONTENTIONS OF THE LD. COUNSEL FOR THE ASSESSEE IN THIS REGARD. THUS, THIS GROUND OF THE ASSESSEE IS DISMISSED. 11. IN VIEW OF THE ABOVE DISCUSSION, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 1 ST MAY, 2017 AT AHMEDABAD. SD/- SD/- (AMARJIT SINGH) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 01/05/2017 *BT ! '! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. # / THE RESPONDENT. 3. & ( / CONCERNED CIT 4. ( ( ) / THE CIT(A) 5. ! & , & / DR, ITAT, 6. , / GUARD FILE. / BY ORDER, TRUE COPY / (DY./ASSTT.REGISTRAR) & , / ITAT, AHMEDABAD