Shri Brij Mohan, Ambala City V. DCIT, Ambala

ITA 1451/CHANDI/2010

• Counselvise Citation: 145121514 RSA 2010
• Duration Of Justice: 1 year(s) 1 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-02-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 30-01-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 27-12-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Depreciation
• Section: 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES B CHANDIGARH BEFORE SHRI H.L.KARWA, HON'BLE, VICE PRESIDENT AND SHRI D.K.SRIVASTAVA, ACCOUNTANT MEMBER ITA NO. 1451/CHD/2010 ASSESSMENT YEAR: 2007-08 SHRI BRIJ MOHAN, VS THE DCIT, PROP. M/S BHAGWAN DASS JAGAN NATH, AMBALA AMBALA CITY PAN NO. AAPPM8810M (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI TEJ MOHAN SINGH RESPONDENT BY : SHRI AKHILESH GUPTA DATE OF HEARING : 02.02.2012 DATE OF PRONOUNCEMENT : 02.02.2012 ORDER PER H.L.KARWA, VP THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF CIT(A), PANCHKULA DATED 25.10.2010 RELATING TO ASSE SSMENT YEAR 2007-08. 2. VIDE GROUND NO.1 OF THE APPEAL, THE ASSESSEE HAS CHALLENGED THE ACTION OF THE CIT(A) IN DISALLOWING 1/10 EXPENSES DEBITED UNDER THE HEADS CAR EXPENSES, SCOOTER EXPENSES, GENERATOR EXPENSES AND TELEPHONE EXPENSES. AT THE TIME OF HEARING OF THE APPEAL, SHRI TEJ MOHAN S INGH, LD. COUNSEL FOR THE ASSESSEE POINTED OUT THAT 1/10 OF THE DISALLOWANCE OUT OF TELEPHONE EXPENSES SEEMS TO BE REASONABLE AND, THEREFORE, TO THIS EXTE NT, THIS GROUND WAS NOT PRESSED. AS REGARDS EXPENSES UNDER THE HEAD SCOOTE R EXPENSES, GENERATOR EXPENSES AND CAR EXPENSES, SHRI TEJ MOHAN SINGH, LD . COUNSEL FOR THE ASSESSEE SUBMITTED THAT THESE EXPENSES WERE INCURRE D WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS AND NO DISALLOWANCE SHO ULD BE MADE. WE FIND FORCE IN THE ABOVE SUBMISSIONS OF SHRI TEJ MOHAN SI NGH, LD. COUNSEL FOR THE 2 ASSESSEE. IN FACT THE ASSESSING OFFICER HAS NOT PO INTED OUT ANY INSTANCE WHEN THE EXPENSES WERE INCURRED FOR NON BUSINESS PURPOSE S. THEREFORE, NO DISALLOWANCE UNDER THE HEADS SCOOTER EXPENSES, G ENERATOR EXPENSES AND CAR EXPENSES, IS WARRANTED. WE ALSO DIRECT THE A SSESSING OFFICER TO ALLOW THE DEPRECIATION ON CAR, SCOOTER AND GENERATOR AS C LAIMED BY THE ASSESSEE. HOWEVER, 1/10 TH DISALLOWANCE UNDER HE HEAD TELEPHONE EXPENSE IS UP HELD. 3. GROUND NO.2 OF THE APPEAL READS AS UNDER:- 2. THAT THE LD. CIT(A) HAS FURTHER ERRED IN UPHOLDING THE ADHOC DISALLOWANCE TO THE EXTENT OF RS. 15,000/- IN THE C ASE OF FREIGHT & CARTAGE AND RS. 8,000/- IN THE CASE OF REPAIRS WHIC H IS ARBITRARY AND UNJUSTIFIED. 4. WHILE FRAMING THE ASSESSMENT, THE ASSESSING OFFI CER NOTICED THAT THE ASSESSEE HAS CLAIMED EXPENSES OF RS. 1,79,772/- AND RS. 34,232/- UNDER HE HEAD FREIGHT AND CARTAGE AND REPAIR. ACCORDING TO ASSESSING OFFICER, THESE EXPENSES WERE NOT FULLY VOUCHED AND MOSTLY IN CURRED IN CASH. HE, THEREFORE, DISALLOWED A SUM OF RS. 20,000/- AND RS. 10,000/- AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE. ON APPE AL, THE CIT(A) REDUCED THESE ADDITIONS TO THE EXTENT OF RS. 15,000/- IN TH E CASE OF FREIGHT AND CARTAGE AND RS. 8000/- IN THE CASE OF REPAIRS. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE ALS O PERUSED THE MATERIALS AVAILABLE ON RECORD. WE FIND THAT THE ASSESSING OFFICER HAS MADE AN ADHOC DISALLOWANCE UNDER THE ABOVE HEADS. IN FA CT HE HAS NOT POINTED OUT WHICH OF THE EXPENSES WAS INCURRED FOR NON BUSINESS PURPOSES. IN FACT, ON ESTIMATION BASIS, THE ASSESSING OFFICER HAS DISALL OWED A SUM OF RS. 20,000/- AND RS. 10,000/- UNDER THE HEAD FREIGHT AND CARTAG E AND REPAIR. THE CIT(A) HAS ALSO NOT PROPERLY APPRECIATED THE FACTS OF THE PRESENT CASE. CONSIDERING THE ENTIRE FACTS AND CIRCUMSTANCES OF T HE PRESENT CASE, WE ARE OF THE VIEW THAT A PART OF DISALLOWANCE IS REQUIRED TO BE MADE. WE, THEREFORE, 3 REDUCE THE ADDITIONS TO THE EXTENT OF RS. 7,000/- I N THE CASE OF FREIGHT AND CARTAGE AND RS. 4,000/- IN THE CASE OF REPAIRS. T HUS, THE ASSESSEE GETS A FURTHER RELIEF OF RS. 8,000/- IN THE CASE OF FREIG HT AND CARTAGE AND RS. 4000/- IN THE CASE OF REPAIRS. THIS GROUND OF AP PEAL IS ALLOWED PARTLY. 6. GROUND NO.3 OF THE APPEAL READS AS UNDER:- 3. THAT THE LD. CIT(A) HAS FURTHER ERRED IN UPHOLDING THE ADDITION OF RS. 20,000/- OUT OF SALARY CLAIMED FOR WANT OF M AINTENANCE OF SALARY REGISTER WHICH IS AGAIN ARBITRARY & UNJUSTIF IED. 7. THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS CLAIMED EXPENSES 2,91,400/- UNDER THE HEAD SALARY AND THE ASSESSEE HAS DENIED HAVING MAINTAINED ANY SALARY REGISTER. NO PROPER VOUCHERS WERE BEING MAINTAINED. HE, THEREFORE, DISALLOWED A SUM OF RS. 20,000/-. O N APPEAL, THE CIT(A) CONFIRMED THE ADDITION. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS. SHRI TEJ M OHAN SINGH, LD. COUNSEL FOR THE ASSESSEE VEHEMENTLY ARGUED THAT THE ENTIRE AMOUNT OF RS. 2,91,400/- WERE PAID TO THE EMPLOYEES AS A SALARY. HE, THEREFORE, SUBMITTED THAT THERE WAS NO JUSTIFICATION IN MAKING ADHOC DIS ALLOWANCE UNDER THIS HEAD. ALTERNATIVELY, LD. COUNSEL FOR THE ASSESSEE SHRI TE J MOHAN SINGH SUBMITTED THAT THE ADHOC DISALLOWANCE MADE BY THE ASSESSING O FFICER AND CONFIRMED BY THE CIT(A) IS ON HIGHER SIDE. 9. CONSIDERING THE ENTIRE FACTS AND CIRCUMSTANCES O F THE PRESENT CASE, WE ARE OF THE VIEW, THAT THERE IS NO JUSTIFICATION I N MAKING THE DISALLOWANCE OF RS. 20,000/- OUT OF SALARY. THE DISALLOWANCE MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE CIT(A) APPEARS TO BE ON HIGHER SIDE. IN OUR VIEW, THE ADDITION OF RS. 10,000/- IN THIS CASE WILL MEET THE ENDS OF JUSTICE. THUS, THE ASSESSEE GETS A RELIEF OF RS. 10,000/- UNDER THIS H EAD. THIS GROUND OF APPEAL IS ALLOWED PARTLY. 4 10. GROUND NO.4 OF THE APPEAL READS AS UNDER:- 4. THAT THE LD. CIT(A) HAS FURTHER ERRED IN UPHOLDING THE DISALLOWANCE UNDER HE HEADS ELECTRICITY EXPENSES, G ENERATOR EXPENSES AND DEPRECIATION ON GENERATOR CLAIMED AT R S. 1,20,155/- WHICH IS ARBITRARY & UNJUSTIFIED AS NO P ART OF THE EXPENDITURE IS OF ANY PERSONAL NATURE INCLUDED THER EIN. 11. DURING THE YEAR UNDER CONSIDERATION, THE ASSESS EE CLAIMED RS.98,187/-, RS.21,340/- AND RS.628/- RESPECTIVELY UNDER THE HEA D ELECTRICITY, GENERATOR AND DEPRECIATION ON GENERATOR RESPECT IVELY AND CONSIDERING THE USE OF ELECTRICITY AND GENERATOR AT THE RESIDENCE O F THE ASSESSEE FOR PERSONAL PURPOSES, A DISALLOWANCE @ 1/5 TH OF THE ABOVE SAID EXPENSES I.E. RS. 24,031/- WAS MADE TO COVER EXPENSES OF PERSONAL AND INADMISS IBLE NATURE. ON APPEAL, THE CIT(A) REDUCED THE DISALLOWANCE OF TO 1/10 TH FOR THE REASONS STATED IN PARA 8.2 OF THE IMPUGNED ORDER. 12. WE HAVE HEARD THE RIVAL SUBMISSIONS. IT APPEAR S THAT THE ASSESSEE HAS WRONGLY MENTIONED THE FIGURES OF RS.120,155/- IN TH IS GROUND OF APPEAL INSTEAD OF RS. 12,015/-. LD. COUNSEL FOR THE ASSES SEE, SHRI TEJ MOHAN SINGH SUBMITTED THAT THE DISALLOWANCE SUSTAINED BY THE CI T(A), PURELY ON ADHOC BASIS, IS LIABLE TO BE DELETED. ACCORDING TO SHRI TEJ MOHAN SINGH, LD. COUNSEL FOR THE ASSESSEE, THE EXPENSES INCURRED BY THE ASSESSEE IS NEITHER PERSONAL NOR INADMISSIBLE IN NATURE. ASSESSING OFF ICER HAS NOT BROUGHT ANY EVIDENCE OR MATERIAL ON RECORD FOR MAKING SUCH DISA LLOWANCE. SHRI TEJ MOHAN SINGH, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT ELECTRICITY AND GENERATOR ARE EXCLUSIVELY USED FOR BUSINESS PURPOSE S AND AS SUCH NO DISALLOWANCE IS WARRANTED. IN OUR VIEW, THERE IS A MERIT IN THE ABOVE SUBMISSIONS OF SHRI TEJ MOHAN SINGH, LD. COUNSEL FO R THE ASSESSEE. WE, THEREFORE, DELETE THE DISALLOWANCE OF RS. 12,015/- SUSTAINED BY THE CIT(A). THUS, GROUND NO.4 OF THE APPEAL STANDS ALLOWED. 5 13. GROUND NO. 5 OF THE APPEAL READS AS UNDER:- 5. THAT THE LD. CIT(A) HAS FURTHER ERRED IN UPHOLDI NG THE CHARGING OF THE INTEREST UNDER SECTION 234B OF THE ACT WHICH IS NOT CHARGEABLE IN THE INSTANT CASE. 14. SHRI TEJ MOHAN SINGH, LD. COUNSEL FOR THE ASSES SEE SUBMITTED THAT THIS GROUND OF APPEAL IS CONSEQUENTIAL IN NATURE AND WE, THEREFORE, DIRECT THE ASSESSING OFFICER TO GIVE CONSEQUENTIAL RELIEF TO T HE ASSESSEE. 15. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOW ED PARTLY. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 2ND DA Y OF FEBRUARY, 2012 SD/- SD/- (D.K.SRIVASTAVA) (H.L.KARWA) ACCOUNTANT MEMBER VICE PRESIDENT DATED : 2 ND FEBRUARY, 2012 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR TRUE COPY BY ORDER ASSISTANT REGISTRAR