PRADEEP KUMAR HIMMATRAMKA, Jaipur V. ITO, JHUNJHUNU

ITA 140/JPR/2017

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2120 (ITAT-JAIPUR)
• Duration Of Justice: 2 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-04-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 13-02-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: POONAM RAI DCIT DR DHK
• Keywords: Business income; Depreciation; Opportunity of being heard
• Section: 54B; 145; 54

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH HKKXPUN] YS[KK LNL; DS LE{K BEFORE: SHRI BHAGCHAND, ACCOUNTANT MEMBER VK;DJ VIHY LA-@ ITA NO. 140/JP/2017 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2010-11 SHRI PRADEEP KUMAR HIMATRAMKA P.O. CHIRAWA -333 026 CUKE VS. THE ITO WARD- 2, JHUNJHUNU LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AACPH 7933 D VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY: SHRI MANISH AGARWAL, CA JKTLO DH VKSJ LS@ REVENUE BY :SMT. POONAM RAI, DCIT-. DR LQUOKBZ DH RKJH[K@ DATE OF HEARING : 13/04/2017 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 18 /04/2017 VKNS'K@ ORDER PER BHAGCHAND, AM THE ASSESSEE HAS FILED AN APPEAL AGAINST THE ORDER OF THE LD. CIT(A)-35, NEW DELHI (CAMP OFFICE AT JAIPUR), DATED 13-10-2016 FOR THE ASSESSMENT YEAR 2010-11 RAISING THEREIN FOLLOWING G ROUNDS:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LD. CIT(A) ERRED IN UPHOLDING THE REJECTION OF BOOK S OF ACCOUNT BY AO BY INVOKING PROVISIONS OF SECTION 145 (3) OF THE I.T. ACT, 1961. APPELLANT PRAYS THE REJECTION O F BOOKS OF ACCOUNT MAY PLEASE BE HELD BAD IN LAW. ITA NO.140/JP/2017 SHRI PRADEEP KUMAR HIMMATRAMKA VS. ITO, WARD- 2 , JHUNJHUNU . 2 1.1 THAT THE LD. CIT(A) HAS FURTHER ERRED IN NOT APPRECIATING THE FACT THAT ASSESSEE HAS MAINTAINED DAY TODAY STOCK RECORDS WHICH WERE PRODUCED BEFORE AO AND NO DEFECT WHATSOEVER WAS POINTED OUT IN THE SAME, THUS THE OB SERVATION OF THE AO AND LD. CIT(A) THAT THE ASSESSEE HAS NOT MAINTAINED STOCK RECORDS DESERVES TO BE EXCLUDED AN D IGNORED 1.2 THAT THE LD. CIT(A) HAS ERRED IN UPHOLDING THE TRADING ADDITION OF RS. 2,22,042/- MADE BY AO BY APPLYING G ROSS PROFIT RATE OF 3.52% INSTEAD OF 2.56% DECLARED BY A SSESSEE. APPELLANT PRAYS ADDITION SO MADE MAY PLEASE BE DELE TED. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LD. CIT(A) ERRED IN CONFIRMING THE AD HOC DISALLOWA NCE OF RS. 43,321/- MADE BY AO OUT OF TELEPHONE AND CAR EX PENSES (INCLUDING DEPRECIATION) BEING 20% OF TOTAL EXPENSE S I.E. TELEPHONE EXPENSES RS. 48,683/, TRAVELING EXPENSES RS. 27,852/- AND DEPRECIATION RS. 64,158/-). APPELLANT PRAYS ADDITION SO MADE MAY PLEASE BE DELETED. 2.1 THAT THE LD. CIT(A) HAS FURTHER ERRED IN CONFIR MING DISALLOWANCE OUT OF DEPRECIATION CLAIMED ON CAR WHI CH IS A LEGAL DISALLOWANCE AND THUS COULD NOT BE DISALLOWED . 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LD. CIT(A) HAS GROSSLY ERRED IN NOT ALLOWING THE NE CESSARY CREDIT U/S 54B AND UPHELD THE CAPITAL GAINS OF RS. 49,574/- AS ASSESSED BY THE AO, ARBITRARILY. 2.1 APROPOS GROUND NO. 1 TO 1.2 OF THE ASSESSEE, BR IEF FACTS OF THE CASE ARE THAT THE DURING THE YEAR UNDER CONSIDERATION TH E ASSESSEE IS ENGAGED IN THE BUSINESS OF TRADING OF SUGAR, BUILDING MATERIAL AND ARRANGEMENT OF VEHICLES IN THE NAME AND STYLE OF M/S. PRADEEP KUMA R BANSAL TRADERS AND ITA NO.140/JP/2017 SHRI PRADEEP KUMAR HIMMATRAMKA VS. ITO, WARD- 2 , JHUNJHUNU . 3 M/S. SHYAM MARBLES AT CHIRAWA. THE AO ON PERUSAL OF THE BOOKS OF ACCOUNT OF THE ASSESSEE NOTICED THAT THE ASSESSEE D URING THE YEAR UNDER CONSIDERATION HAD DECLARED THE GROSS PROFIT OF RS. 5,93,203/- ON DECLARED TOTAL SALES OF RS. 2,31,60,371/- IN M/S. PRADEEP KU MAR BANSAL TRADERS TRADING ACCOUNT BY SHOWING A GROSS PROFIT RATE OF 2 .56%% WHICH IS VERY LOW AS COMPARED TO LAST YEARS DECLARED GROSS PROFI T RATE @ 3.52%. THE AO ON SCRUTINY OF BOOKS OF ACCOUNT NOTICED VARIOUS DEFECTS THAT THE ASSESSEE HAD NOT MAINTAINED DAY TO DAY STOCK REGIST ER. THE AO FURTHER NOTED THAT THE ASSESSEE HAD NOT FURNISHED COMPLETE BILLS AND VOUCHERS REGARDING PURCHASE EXPENSES IN TRADING ACCOUNT. THE AO NOTED THAT THE AUDITOR IN AUDIT REPORT HAD COMMENTED THAT NO INTER NAL VOUCHERS HAD BEEN MAINTAINED FOR CASH EXPENSES. THE AO OBSERVED THA T IN THE ABSENCE OF THESE DEFECTS, TRADING RESULTS DECLARED BY THE ASS ESSEE CANNOT BE ASCERTAINED AND TRUE GROSS PROFIT AND CLOSING STOCK CANNOT BE DEDUCED. IN SUCH A SITUATION, THE ASSESSEE WAS OFFERED OPPORTUN ITY BY THE AO TO SHOW CAUSE AS TO WHY PROVISIONS OF SECTION 145(3) OF THE ACT MAY NOT BE INVOKED AND GROSS PROFIT @ 3.52% AS DECLARED IN LAS T YEAR MAY NOT BE APPLIED ON DECLARED TURNOVER OF RS. 2,31,60,371/- . THE ASSESSEE SUBMITTED THE REPLY BEFORE THE AO WHO OBSERVED THE REPLY OF THE ASSESSEE AS ROUTINE REPLY AND IT HAD NO FORCE. THE AO ALSO N OTED THAT THE ASSESSEE ITA NO.140/JP/2017 SHRI PRADEEP KUMAR HIMMATRAMKA VS. ITO, WARD- 2 , JHUNJHUNU . 4 HAD NEITHER PRODUCED THE DAY TO DAY STOCK REGISTER NOR QUANTITATIVE DETAILS OF THE COMMODITIES. IN SUCH A SITUATION, THE AO HAD INVOKED THE PROVISIONS OF SECTION 145(3) OF THE ACT AND APPLIED THE GROSS PROFIT RATE @ 3.52% ON DECLARED TURNOVER OF RS. 2,31,60,371/- . THE AO THUS WORKED OUT THE GROSS PROFIT AT RS. 8,15,245/- INSTE AD OF RS. 5,93,203/- DECLARED BY THE ASSESSEE. THE AO THUS ADDED THE DIF FERENCE AMOUNT OF RS. 2,22,042/- ( RS. 8,15,245 MINUS RS. 5,93,203) TO TH E TOTAL INCOME OF THE ASSESSEE WHICH IN FIRST APPEAL THE LD. CIT(A) HAS C ONFIRMED THE ACTION OF THE AO. 2.2 DURING THE COURSE OF HEARING, THE LD. AR OF THE ASSESSEE SUBMITTED THAT THE AO HAS WRONGLY APPLIED THE PROVISIONS OF S ECTION 145(3) OF THE ACT . THE LD. AR OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE IS ENGAGED IN THE TRADING OF SUGAR FOR THE LAST 15 YEARS. THE BOO KS OF ACCOUNT ARE AUDITED AND THE AUDITORS HAVE NOT MADE ANY ADVERSE REMARK IN PARTICULAR NOR HAVE THEY QUESTIONED THE RELIABILITY OF THE BOO KS OF ACCOUNT OF THE ASSESSEE. HE SUBMITTED THAT THOUGH NO SEPARATE STOC K REGISTER WAS MAINTAINED YET A COMPLETE STOCK TALLY WAS AVAILABLE AND THE SAME WAS DULY FILED BEFORE BOTH THE AO AND THE LD. CIT(A) (A PB 22 AND 25). THE LD. AR FURTHER SUBMITTED THAT THE AO WHILE REJECTIN G THE PLEA OF THE ASSESSEE HAS NEITHER POINTED OUT A SPECIFIC DISCRE PANCY IN THE QUANTITATIVE ITA NO.140/JP/2017 SHRI PRADEEP KUMAR HIMMATRAMKA VS. ITO, WARD- 2 , JHUNJHUNU . 5 DETAILS SO SUBMITTED NOR HE HAD GIVEN ANY COMPARABL E CASE WHEREIN A HIGHER GROSS PROFIT RATE THAN THE ASSESSEE HAD BEEN SHOWN. THE LD. AR OF THE ASSESSEE RELIED ON THE DECISION OF HON'BLE JURI SDICTIONAL HIGH COURT IN THE CASE BHAWANI SILICATE INDUSTRIES , 236 TAXMAN 5 96. THE LD. AR OF THE ASSESSEE SUBMITTED THE GROSS PROFIT RATE CHART FOR THE LAST THREE YEARS AS UNDER:- PARTICULARS A.Y. 2008-09 A.Y. 2009-10 A.Y. 2010-11 SALES 2,09,02,160 69,97,165 2,31,60,371 GROSS PROFIT 3,33,478 2,46,345 5,93,203 G.P. RATE 1.59% 3.52% 2.56% THE LD. AR OF THE ASSESSEE RELIED ON FOLLOWING CAS E LAWS:- 1. MALANI RAMJIVAN JAGANNATH VS.ASST. CIT (RAJ.) (2 009)316 ITR 120 2. HARIDAS PARIKH V ITO [2009] 29 SOT 13 (JODH.)(UR O) 3. ASHOK KUMAR & CO. V. ITO [2004] 2 SOT 518 (ASR.) (SMC) 4. CM. FRANCIS & CO. (P.) LTD. V. CIT [77 ITR 449] (KER) 5. ASSTT. CIT V. L.M.P. TRACTORS (P.) LTD. [2005] 1 48 TAXMAN 52 (MAG.) (AHEMDABAD) CONCLUSIVELY, THE LD. AR OF THE ASSESSEE PRAYED THA T THE LOWER AUTHORITIES HAVE WRONGLY INVOKED THE PROVISIONS OF SECTION 145( 3) OF THE ACT. HE FURTHER SUBMITTED THAT THE RESULTS DECLARED BY THE ASSESSEE MAY BE ACCEPTED AND THE TRADING ADDITION OF RS. 2,22,042/- MADE BY THE AO BY ITA NO.140/JP/2017 SHRI PRADEEP KUMAR HIMMATRAMKA VS. ITO, WARD- 2 , JHUNJHUNU . 6 ESTIMATING THE GROSS PROFIT RATE AT 3.52% AS AGAIN ST 2.56% AS DECLARED BY THE ASSESSEE MAY BE DIRECTED TO BE DELETED. 2.3 ON THE OTHER HAND, THE LD. DR RELIED ON THE ORD ERS OF THE LOWER AUTHORITIES. 2.4 I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IT IS NOTED FROM THE RECORDS T HAT THE ASSESSEE HAD NOT MAINTAINED THE DAY TO DAY STOCK REGISTER. IT IS ALS O NOTED FROM THE ASSESSMENT ORDER THAT THE AUDITOR IN THE AUDIT REPO RT HAD COMMENTED THAT NO INTERNAL VOUCHERS HAD BEEN MAINTAINED FOR CASH E XPENSES. IT IS ALSO NOTED THAT THE ASSESSEE HAD NOT FURNISHED COMPLETE BILLS AND VOUCHERS REGARDING PURCHASES CLAIMED IN TRADING ACCOUNT. THE AO THUS INVOKED THE PROVISIONS OF SECTION 145(3) OF THE ACT AND APPLIED THE GROSS PROFIT RATE OF 3.52% ON TOTAL TURNOVER OF RS. 2,31,60,371/- DECLA RED BY THE ASSESSEE ON WHICH GROSS PROFIT COMES TO RS. 8,15,245/-. HOWEVER , THE ASSESSEE HAD DECLARED THE GROSS PROFIT RATE AT 2.56% ON WHICH GR OSS PROFIT COMES TO RS. 5,93,203/-. THE AO THUS ADDED A DIFFERENCE OF RS.2, 22,042/- (RS. 8,15,245 MINUS RS. 5,93,203) WHICH IN FIRST A PPEAL HAS BEEN CONFIRMED BY THE LD. CIT(A). IN APPEAL BEFORE THE T RIBUNAL, IT IS OBSERVED FROM THE FACTS AVAILABLE ON RECORDS THAT THE LOWER AUTHORITIES HAVE RIGHTLY INVOKED THE PROVISIONS SECTION 145(3) OF THE ACT. A S REGARDS THE ITA NO.140/JP/2017 SHRI PRADEEP KUMAR HIMMATRAMKA VS. ITO, WARD- 2 , JHUNJHUNU . 7 SUSTENANCE OF ADDITION OF RS. 2,22,042/-, IT IS NOT ED THAT THE GROSS PROFIT RATE OF THE ASSESSEE FOR THE LAST THREE YEARS I.E. 2008-09-, 2009-10 AND 2010-11 ARE AT 1.59%, 3.52% AND 2.56% RESPECTIVELY. THUS LOOKING TO THE PAST HISTORY OF THE ASSESSEE AND ASSESSEE BEING EN GAGED IN THE TRADING OF SUGAR, BUILDING MATERIALS AND ARRANGEMENT OF VEHICL ES, THE ADDITION IS SUSTAINED TO THE EXTENT OF RS. 50,000/- ONLY. THUS THE ASSESSEE WILL GET THE PARTIAL RELIEF OF RS. 1,72,042/-. 3.1 APROPOS GROUND NO. 2 AND 2.1, BRIEF FACTS OF TH E CASE ARE THAT AO DURING THE YEAR UNDER CONSIDERATION HAD OBSERVED TH AT THE ASSESSEE HAD DEBITED A SUM OF RS. 48,683/- ON ACCOUNT OF TELEPH ONE EXPENSES, DEBITED RS. 27,852/- ON ACCOUNT OF TRAVELING EXPENSES, CLA IMED RS. 64,158/- ON ACCOUNT OF DEPRECIATION OF TWO CARS AND MOTOR CYCL E AND CLAIMED RS. 75,910/- ON ACCOUNT OF VEHICLE EXPENSES. THE AO OB SERVED THAT THE ASSESSEE HAD NEITHER MAINTAINED THE CALL REGISTER I N RESPECT OF TELEPHONE NOR MAINTAINED THE LOG BOOK FOR RUNNING OF CARS. TH E AO FURTHER NOTED THAT THE ASSESSEE HAD NOT FURNISHED COMPLETE BILLS, VOUCHERS AND DOCUMENTS IN SUPPORT OF CLAIM OF THESE EXPENSES AND THUS THE USE OF TELEPHONE, CARS & MOTOR CYCLE AND VEHICLE AND TRAVE LING EXPENSES EXCLUSIVELY FOR BUSINESS PURPOSES COULD NOT ASCERTA INED.. THE AO ASKED THE ASSESSEE TO SUBMIT THE COMPLETE DETAILS / DOCUM ENTS AND VOUCHERS IN ITA NO.140/JP/2017 SHRI PRADEEP KUMAR HIMMATRAMKA VS. ITO, WARD- 2 , JHUNJHUNU . 8 RESPECT OF THESE EXPENSES BUT THE ASSESSEE COULD NO T FURNISH COMPLETE BILL, DETAILS/ VOUCHERS/DOCUMENTS IN SUPPORT OF THESE EXP ENSES CLAIMED BY HIM IN THE PROFIT AND LOSS ACCOUNT. THE AO FURTHER OBSE RVED THAT IN THE ABSENCE OF COMPLETE DETAILS/ VOUCHERS AND CONSIDERI NG THE NATURE OF THESE EXPENSES, PERSONAL USAGE OF THE SAME CANNOT BE RULE D OUT AND THUS THERE ARE CHANCES OF INFLATING THE EXPENSES BY THE ASSESS EE AND IN ORDER TO COVER UP ANY POSSIBLE LEAKAGE ON THIS ACCOUNT, HE DISALL OWED 20% OUT OF THE ABOVE EXPENSES I.E. RS. 43,321/- (20% OF RS. 2,16,6 03/-, [48683+27852+64158+75910] AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE WHICH IN FIRST APPEAL HAS BEEN CONFIRM ED BY THE LD. CIT(A) BY OBSERVING AS UNDER:- 5.6 GROUND NO. 3: IS WITH RESPECT TO ADHOC DISALLOWANCE OF RS. 43,321/- ON ACCOUNT OF PERSONAL USE. THE APPELLANT HAS SUBMITTED THAT: STANDARD OF LIVING IS SIMPLE. THERE IS NO PLACE AT CHIRAWA WHERE EXPENSES CAN BE INCURRED. EXPENSES ARE NOT EXCESSIVE AS COMPARED TO LAST YEAR. DURING THIS YEAR VOLUME OF BUSINESS WAS INCRE ASED 324% HENCE EXPENSES ARE REASONABLE. REGARDING THE SE DISALLOWANCES, IT IS A COMMON BELIEF THAT, IN ABSEN CE OF PROPER RECORDS, THE POSSIBILITY OF INVOLVEMENT OF P ERSONAL USAGE IN SUCH TYPE OF EXPENSES CANNOT BE RULED OUT. THE HON'BLE RAJASTHAN HIGH COURT IN THE CASE OF SHRI K ANHIYA LAL JANGID (217 CTR 354) ALSO APPROVED THE CONCEPT OF ADHOC DISALLOWANCE ON LUMP SUM BASIS, IF THE RELEVA NT DETAILS ARE NOT FOUND AVAILABLE TO SUPPORT OF THE EXPENSES CLAIMED BY THE ASSESSEE. CONSEQUENTLY, GROUND NO. 3 OF APPEAL IS DISMISSED. ITA NO.140/JP/2017 SHRI PRADEEP KUMAR HIMMATRAMKA VS. ITO, WARD- 2 , JHUNJHUNU . 9 3.2 DURING THE COURSE OF HEARING, THE LD. AR OF THE ASSESSEE PRAYED FOR DELETION OF ADHOC DISALLOWANCE OF RS. 43,321/- CONF IRMED BY THE LD. CIT(A). THE LD. AR OF THE SUBMITTED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE BOOKS OF ACCOUNT WERE SUBMITTED BE FORE THE AO WHO HAD NOT POINTED OUT ANY SPECIFIC DEFECT AND GENERALIZED THE SAME BY DISALLOWING THE EXPENSES. THE EXPENSES WERE INCURRE D WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS AND UNDER THE BUSINESS EXPEDIENCY. THE LD. AR OF THE ASSESSEE FURTHER SUBM ITTED THAT THE PROPORTION OF EXPENSES TO THE TOTAL TURNOVER DECLAR ED AND ACCEPTED ALSO REVEALS THAT THE SAME ARE QUITE REASONABLE AND THER E IS NO ROOM FOR ANY PERSONAL EXPENSES BEING INCLUDED IN THE SAME FOR WH ICH HE SUBMITTED THE DETAILS AS UNDER:- NAME OF EXPENSES AMOUNT CLAIMED % OF TURNOVER RS. 2,31,60,371/- TELEPHONE EXPENSES 48,683/- 0.00002% DEPRECIATION ON CAR AND MOTORCYCLE 64,158/- 0.00 002% TRAVELLING EXPENSES 27,852/- 0.00001% THE LD. AR OF THE ASSESSEE TO THIS EFFECT RELIED ON FOLLOWING CASE LAWS:- 1. ITO VS. TRIVENI FARMA, 35 TW 64 (JAIPUR BENCH) 2. MUKESH K SHAH VS. ITO, 92 TTJ 1060 (MUMBAI BENCH) ITA NO.140/JP/2017 SHRI PRADEEP KUMAR HIMMATRAMKA VS. ITO, WARD- 2 , JHUNJHUNU . 10 3. S.A. BUILDERS LTD. VS. CIT , 288 ITR 1 (SC) 4. EMPIRE JUTE CO. LTD. VS. CIT , 124 ITR 1 (SC) 3.3 ON THE OTHER HAND, THE LD. DR RELIED ON THE ORD ERS OF THE LOWER AUTHORITIES. 3.4 I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IT IS NOTED FROM THE ASSESSMEN T RECORDS THAT THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION HAD AS SESSEE HAD DEBITED A SUM OF RS. 48,683/- ON ACCOUNT OF TELEPHONE EXPENS ES, DEBITED A SUM OF RS. 27,852/- ON ACCOUNT OF TRAVELING EXPENSES, CLA IMED A SUM OF RS. 64,158/- ON ACCOUNT OF DEPRECIATION ON TWO CARS AN D MOTOR CYCLE AND CLAIMED A SUM OF RS. 75.910/- ON ACCOUNT OF VEHICL E EXPENSES. THE AO FOR WANT OF COMPLETE BILLS, DETAILS/ VOUCHERS, DOCU MENTS AND CONSIDERING THE NATURE OF THESE EXPENSES DISALLOWED 20% OF THE TOTAL EXPENSES OF RS. 2,16,603/- WHICH COMES TO RS. 43,321/- AND IN FIRST APPEAL THE LD. CIT(A) HAS CONFIRMED THE ACTION OF THE AO. IN APPEAL BEFOR E THE TRIBUNAL, IT IS NOTED THAT SINCE THE BOOKS OF ACCOUNT OF THE ASSESS EE HAS BEEN REJECTED, THEREFORE, THE ESTIMATED ADDITION HAS BEEN MADE. IT IS ALSO NOTED THAT THE LD. AR OF THE ASSESSEE TO THIS EFFECT RELIED ON VAR IOUS CASE LAWS INCLUDING THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF S.A. BUILDERS VS. CIT , 288 ITR 1 AND EMPIRE JUTE CO. LTD. VS. CIT,12 4 1. THEREFORE, IN ITA NO.140/JP/2017 SHRI PRADEEP KUMAR HIMMATRAMKA VS. ITO, WARD- 2 , JHUNJHUNU . 11 VIEW OF ABOVE DECISIONS AND VARIOUS OTHERS DECISION S OF HON'BLE HIGH COURT, NO SEPARATE ADHOC DISALLOWANCE OUT OF THE EX PENSES DEBITED IN THE PROFIT AND LOSS ACCOUNT UNDER THE HEADS TELEPHONE EXPENSES, DEPRECIATION ON CAR AND MOTORCYCLE, TRAVELING EXPENSES AND VEHIC LE EXPENSES IS NOT JUSTIFIED.. HENCE, LOOKING TO THE PRESENT FACTS AND CIRCUMSTANCES OF THE CASE, I DIRECT TO DELETE THE ADHOC DISALLOWANCE OF RS. 43,321/- CONFIRMED BY THE LD. CIT(A). THUS GROUND NO. 2 AND 2.1 OF THE ASSESSEE ARE ALLOWED. 4.1 APROPOS GROUND NO. 3 OF THE ASSESSEE, IT IS NOT ED THAT THE LD. CIT(A) HAS DISMISSED THIS GROUND OF THE ASSESSEE RA ISED BEFORE HIM BY OBSERVING AS UNDER:- 5.9. GROUND NO. 6: THE ORDER OF THE AO DOES NOT SPEAK OF ANY ACCEPTANCE OF REBATE OF CAPITAL GAIN O F RS. 49,674/- U/S 54 OF THE ACT. HENCE, THIS GROUND IS D ISMISSED. 4.2 DURING THE COURSE OF HEARING, THE LD. AR OF THE ASSESSEE PRAYED THAT THE LD. CIT(A) HAS GROSSLY ERRED IN NOT ALLOWING TH E NECESSARY CREDIT CLAIMED U/S 54 OF THE ACT AND UPHELD THE CAPITAL GA INS OF RS. 49,574/- AS ASSESSED BY THE AO. THE LD. AR OF THE ASSESSEE FILE D THE FOLLOWING WRITTEN SUBMISSION WHICH HAS BEEN TAKEN INTO CONSIDERATION. ITA NO.140/JP/2017 SHRI PRADEEP KUMAR HIMMATRAMKA VS. ITO, WARD- 2 , JHUNJHUNU . 12 BRIEF FACT OF THE MATTER IS THAT THE APPELLANT HAD SHOWN A LONG TERM CAPITAL GAIN OF RS. 49,674/- ON SALE OF LAND I N HIS RETURN OF INCOME. THE SAID LTCG WAS INADVERTENTLY TAXED @ 20% , WITHOUT CLAIMING THE ELIGIBLE EXEMPTION U/S 54B OF THE ACT, AVAILABLE DUE TO AN AGRICULTURAL LAND PURCHASED BY THE APPELLANT FROM T HE SALE OF THE ABOVE LAND. THEREFORE DURING THE ASSESSMENT PROCEEDINGS, THE SAID CLAIM OF EXEMPTION U/S 54B WAS MADE VIDE AN UNDATED LETTER, DULY FILED BEFORE THE LD. AO [APB 23-24]. HOWEVER, IN THE ASSESSMENT ORDER, NO REFERENCE WAS MADE BY THE LD. AO REGARDING THE CLAI M MADE BY THE APPELLANT. ALSO FURTHER THAT, WHILE COMPUTING THE A SSESSED INCOME, THE LTCG WAS WRONGLY INCLUDED IN THE RETURNED TOTAL INC OME TAXABLE AT NORMAL RATES (I.E.30%). AGGRIEVED, THE APPELLANT RA ISED THE ISSUE BEFORE THE LD. CIT(A), WHICH WAS AGAIN NOT ADJUDICATED, BY REFERRING TO ITS OMISSION IN THE ASSESSMENT ORDER. IN THIS REGARD, I T IS HUMBLY PRAYED THAT THE ISSUE MAY KINDLY BE RESTORED BACK TO THE F ILE OF THE LD. AO FOR PROPER ADJUDICATION. 4.3 ON THE OTHER HAND, THE LD. DR RELIED ON THE ORD ER OF THE LD. CIT(A). 4.4 I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IT IS NOTED FROM THE ORDER OF THE LD. CIT(A) THAT THE AO DID NOT SPEAK OF ANY ACCEPTANCE OF REBATE OF CAP ITAL GAIN OF RS. 49,674/- U/S 54 OF THE ACT AND THUS THE LD. CIT(A) DISMISSED THE ABOVE GROUND OF THE ASSESSEE. HOWEVER, IN THE INTEREST OF EQUITY AND JUSTICE THE ISSUE IN QUESTION IS RESTORED TO THE FILE OF THE AO TO DECIDE IT AFRESH BY PROVIDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. IF THE CLAIM OF THE ASSESSEE APPEARS GENUINE AT THE LEVEL OF THE AO ON VERIFICATION OF THE RELEVANT RECORDS/ DOCUMENTS THE N THE BENEFIT OF SECTION 54 OF THE ACT MAY BE EXTENDED TO THE ASSESSEE BY TH E AO. THUS GROUND NO. 3 OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PU RPOSES. ITA NO.140/JP/2017 SHRI PRADEEP KUMAR HIMMATRAMKA VS. ITO, WARD- 2 , JHUNJHUNU . 13 5.0 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS P ARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 18 /04/2017 . SD/- HKKXPUN ( BHAGCHAND) YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 18 /04/ 2017 *MISHRA VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI PRADEEP KUMAR HIMATRAMKA 2. IZR;FKHZ@ THE RESPONDENT- THE ITO, WARD- 2, JHUNJHUNU 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 140/JP/2017 ) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ @ ASSISTANT. REGISTRAR