Dr. P. Srinivasan, Mysore V. ACIT, Mysore

ITA 1418/BANG/2008

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 9524 (ITAT-BANGALORE)
• Duration Of Justice: 9 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2009
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 17-08-2009
• Assessment Year: 2005-2006
• Appeal Filed On: 24-11-2008
• Court: TRIBUNAL
• Department Lawyers: V S SREELEKHA
• Assessee Lawyers: S LOKANATH
• Keywords: Depreciation
• Section: 37(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH B BEFORE SHRI K.K. GUPTA, A.M. AND SHRI SHAILENDRA KUMAR YADAV, J.M. ITA NO.1418(BNG)/08 (ASSESSMENT YEAR : 2005-06) DR. P. SRINIVASAN, NO.1378, C & D BLOCKS, KUVEMPUNAGAR, MYSORE. . ... APPELLANT. VS. ASST. COMMISSIONER OF INCOME TAX, CIRCLE 2(1), MYSORE. ..... RESPONDENT. APPELLANT BY : SHRI S. LOKANATH. RESPONDENT BY : SMT. V.S. SREELEKHA. O R D E R PER SHRI K.K. GUPTA, A.M. : THE ASSESSEE IS IN APPEAL AGITATING T HE ACTION OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IN PARTLY CONFIRMING THE DISA LLOWANCES FRAMED BY THE ASSESSING OFFICER BY RESTRICTING THE CLAIM OF EXPENSES TO 1/3 RD ON ACCOUNT OF ASSESSEE NOT ABLE TO ESTABLISH 100% INCURRING OF EXPENSES FOR HIS MED ICAL PROFESSION. THE LEARNED CIT(A) HAD PARTLY REDUCED THE DISALLOWANCE FROM 50% OF THE EXPENSES SO CLAIMED PARTLY HOLDING THAT THE ASSESSEE HIMSELF HAD AGREED TO INC URRING OF EXPENSES ON PERSONAL ACCOUNT COULD NOT BE RULED OUT IN THE CLAIM. 2. THIS APPEAL WAS DISPOSED OFF BY THE TRIBUNAL ON AN EARLIER OCCASION EX PARTE WHEN THE ASSESSEE WAS NOT ABLE TO PRESENT HIMSELF B EFORE THE TRIBUNAL ON THE DATE OF ITA NO.418(BANG)/08 2 HEARING I.E. ON 25.3.2009. ON A MISC. PETITION FIL ED BY THE ASSESSEE, THAT ORDER WAS RECALLED FOR HEARING AFRESH VIDE MISC. PETITION ORD ER DT.22.6.2009. 3. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THE APPELLATE AUTHORITY REDUCED THE DISALLOWANCE FROM 50% TO 33% BASED ON T HE ASSESSING OFFICERS COMMENT THAT THE ASSESSEE HAD ACCEPTED THE DISALLOWANCE OF SAME AS THE CLAIM COULD NOT BE SUBSTANTIATED FOR WANT OF EVIDENCES ETC IN ACCORDAN CE WITH NATURE INVOLVED THEREIN. HE ARGUED THAT IT WAS NEVER THE CASE OF THE ASSESSE E FROM THE BEGINNING BEING A DOCTOR WHO HAD TO INCUR EXPENSES FOR HIS PROFESSION ONLY. THE ASSESSEE HAD SHOWN SUFFICIENT DRAWINGS FOR INCURRING PERSONAL EXPENSES, IF ANY, A ND THEREFORE INSISTENCE BY THE ASSESSING OFFICER TO PRODUCE VOUCHERS FOR ALL THE E XPENSES INCURRED AND CLAIMED HAD TO BE SPECIFIED. IT WAS CLAIMED THAT AN EFFORT HAD BE EN MADE TO SEGREGATE PERSONAL EXPENSES FROM THOSE AS CLAIMED TO EARN THE PROFESSI ONAL INCOME INDICATED IN THE INCOME AND EXPENDITURE ACCOUNT AND THE BALANCE SHEET FILED WITH THE RETURN INDICATED THAT THE ASSESSEE HAD SUFFICIENT DRAWINGS AMOUNTING TO RS.6, 69,000 TO MEET SUCH EXPENSES INCLUDING DRAWINGS BY CHEQUE FOR SPECIFIC PURPOSE. HE SUBMITTED THAT IN THE REPLY GIVEN TO THE ASSESSING OFFICER WHICH IS PLACED ON PAGE 16 OF PAPER BOOK WAS TO INDICATE THAT THE EXPENDITURE OF 50% EXPENSES ON PERSONAL ACCOUNT WOULD RENDER THE ASSESSEE DEVOTING MORE TIME TO HIS PERSONAL ACTIVITY THAN PR OFESSION. THE LEARNED CIT(A), ON THE OTHER HAND, CONSIDERED THE ASSESSING OFFICERS CONT ENTION WITHOUT RELATING TO THE FACTS OF THE ASSESSEES DEVOTION OF TIME IN SO FAR AS SUB MISSIONS BY THE ASSESSEE RESULTED IN PART RELIEF TO THE ASSESSEE. THE LEARNED COUNSEL P RAYED THAT A CONSIDERATION FOR THE ITA NO.418(BANG)/08 3 CLAIM OF EXPENSES ON ACCOUNT OF PERSONAL NATURE MAY KINDLY BE ALLOWED ON THE FACTS AND CIRCUMSTANCES AS ARE MADE AVAILABLE TO THE AUTHORIT IES BELOW. 4. THE LEARNED DEPARTMENTAL REPRESENTATIVE POINTED OUT THAT THE ASSESSEE OUGHT TO HAVE SUBSTANTIATED THE NATURE OF DRAWINGS FOR IN CURRING SUCH EXPENSES IN SO FAR AS NOT AN IOTA OF EXPENSES HAS BEEN INDICATED IN THE D RAWINGS SO CLAIMED BY THE ASSESSEE WHICH REQUIRED CLARIFICATION BY THE AUTHORITIES BEL OW. THE ASSESSEE HAD CLAIMED THE FOLLOWING EXPENSES IN THE INCOME AND EXPENDITURE A CCOUNT : SL.NO. HEAD OF EXPENSES AMOUNT (RS.) 1. ELECTRICITY CHARGES 10,973 2. TELEPHONE CHARGES 31,472 3. TRAVELLING CHARGES 2,457 4. CAR HIRE CHARGES 93,000 5. CAR MAINTENANCE 59,946 6. DEPRECIATION OF LAPTOP 55,080 TOTAL : 2,55,928 THE ABOVE CLAIM WAS FILED ALONG WITH THE RETURN OF INCOME FOR THE IMPUGNED ASSESSMENT YEAR. THE ASSESSING OFFICER ON THE BASIS OF DISCUS SION IN HIS ORDER DISALLOWED A SUM OFRS.1,04,209 UNDER SECTION 37(1) AND ALSO DISALLOW ED RS.27,540 UNDER SECTION 38(2) HOLDING THE SAME AS NOT WHOLLY AND EXCLUSIVELY INCU RRED FOR THE PURPOSE OF HIS PROFESSION. BEFORE THE APPELLATE AUTHORITY ALSO TH E ASSESSEE WAS NOT ABLE TO SUBSTANTIATE THE CLAIM OF PERSONAL EXPENSES THAT CO ULD NOT BE RULED OUT FORMING PART OF THE SAME BUT WHO GAVE RELIEF TO THE EXTENT OF REST RICTING THE DISALLOWANCE TO 1/3 RD THEREOF. SHE FULLY SUPPORTED THE ORDERS OF THE AUT HORITIES BELOW. ITA NO.418(BANG)/08 4 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. ON OUR CAREFUL PERUSAL OF THE FACTS AND CI RCUMSTANCES, WE ARE INCLINED TO HOLD THAT THE ASSESSEES INABILITY TO ESTABLISH INCURRIN G OF EXPENSES OF PERSONAL NATURE CLAIMED IN THE INCOME AND EXPENDITURE ACCOUNT HAS BEEN MADE DUE TO ASSESSEES INABILITY TO FURNISH THE DETAILS OF THE DRAWINGS AM OUNTING TO RS.6,69,000 AS SUBMITTED IN THE PAPER BOOK. THE ASSESSEE HAS BEEN INCURRING /EARNING VARIOUS INCOME ON CONSULTANCY WHICH WAS THE AMOUNT DECLARED BEFORE TH E ASSESSING OFFICER AS WELL AS THE CIT(A) ON ACCOUNT OF A FINDING DURING THE COURSE OF SURVEY CONDUCTED IN THE CASE OF M/S. BGS APOLLO HOSPITAL WHERE THE ASSESSEE IS A CO NSULTANT. THE LEARNED COUNSEL FOR THE ASSESSEE AS OF NOW HAS NOT BEEN ABLE TO ESTABLI SH THAT THE EXPENSES COULD NOT BE RELATED AS PERSONAL IN THE ABSENCE OF RECORDS MAINT AINED BY THE ASSESSEE ON THAT COUNT. THE INDIRECT METHOD OF COMPUTING THE EXPENSES INCUR RED ONLY FOR THE PROFESSION THEREFORE WOULD SERVE NO USEFUL PURPOSE BY COMPUTIN G MILEAGE FROM RESIDENCE, USE OF TELEPHONE, CAR HIRE CHARGES, CAR MAINTENANCE IN SPI TE OF HAVING MAINTAINED A CAR AND A CLAIM OF DEPRECIATION ON A LAPTOP WHICH ALL CULMINA TE TO THE FACT THAT THE ASSESSEE BEING PART OF MEDICAL PROFESSION, A DOCTOR, HAS TO INCUR SUCH EXPENSES FOR ITS PROFESSION ONLY. BOTH THE AUTHORITIES BELOW FAILED TO RECOGNIZE THE FACT THAT EVEN WHEN A MEDICAL PROFESSIONAL INCURS EXPENSES ON PERSONAL ACCOUNT DO ES NOT DISENTITLE HIMSELF FOR CLAIMING SUCH EXPENSES WHEN HE IS REQUIRED TO RENDE R DUTY TO ITS PROFESSION 24X7 AND IN EMERGENCIES. HOWEVER, KEEPING IN VIEW OF THE FACTS OF THE ASSESSEES CASE, WE ARE INCLINED TO RESTRICT THE DISALLOWANCE TO 10% CLAIME D ON ACCOUNT OF THEY BEING PERSONAL IN ITA NO.418(BANG)/08 5 NATURE AS WAS ALSO PUT FORTH TO THE LEARNED COUNSEL AT THE TIME OF HEARING WHICH HE HAS CONCEDED AS NO SUBSTANTIVE MATERIAL COULD BE FURNIS HED TO RULE OUT 100% INCURRED FOR PROFESSION ONLY. 6. IN THE RESULT THE DISALLOWANCE ON ACCOUNT OF PER SONAL EXPENSES CLAIMED IN THE INCOME AND EXPENDITURE ACCOUNT IS RESTRICTED TO 10 % AS NOTED IN THE DEPARTMENTAL REPRESENTATIVE SUBMISSIONS ABOVE. IN THE RESULT THE APPEAL IS PARTLY ALLOWED. PRONOUNCED IN THE OPEN COURT ON 28 TH AUGUST, 2009. SD/- SD/- (SHAILENDRA KUMAR YADAV) (K.K.GUPTA) JUDICIAL MEMBER ACC OUNTANT MEMBER BANGALORE, DT.28-09-2009. COPY TO : 1. THE ASSESSEE. 2. THE ASSESSING OFFICER. 3. CIT(APPEALS) 4. CIT 5. DEPARTMENTAL REPRESENTATIVE, ITAT, BANGALORE. 6. GUARD FILE, ITAT, BANGALORE. 7. GUARD FILE, ITAT, NEW DELHI. GPR* BY ORDER ASSISTANT REGISTRAR, ITAT