Ashok Kumar Dosaj, New Delhi V. ACIT, New Delhi

ITA 1707/DEL/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 3646 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 7 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-11-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2011-2012
• Appeal Filed On: 31-03-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: SUNIL BAKSHI
• Keywords: Business expenditure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: D NEW DELHI BEFORE SHRI G.D. AGRAWAL, HONBLE PRESIDEN T & SHRI K. NARSIMHA CHARY, JUDICIAL MEMBER ITA NO.-1707/DEL/2016 ( ASSESSMENT YEAR: 2011-12) ASHOK KUMAR DOSAJ, UNIT NO. 311, EMPIRE PLAZA, M.G. ROAD, SULTANPUR, NEW DELHI. AACPD7276K VS ACIT CIRCLE 32(1) 13 TH FLLOR, E-2, CIVIC CENTRE, NEW DELHI. ASSESSEE BY SH. SUNIL BAKSHI, CA REVENUE BY SH. AMIT JAIN, SR. DR ORDER PER SHRI K.N. CHARY, J.M. AGGRIEVED BY THE ORDER RELEVANT TO THE ASSESSMENT YEAR 2011- 12 PASSED BY THE LD. COMMISSIONER OF INCOME TAX (AP PEALS)-11, NEW DELHI (HEREINAFTER FOR SHORT REFERRED TO AS THE LD. CIT(A)). ASSESSEE FILED THIS APPEAL ON THE FOLLOWING GROUNDS : 1. THAT THE ORDER OF THE LD. ACIT IS BAD IN LAW BASED ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE. 2. THAT THE LD. ACIT HAS GONE WRONG IN DISALLOWING EXP ENSES OF RS. 25,000/- FROM TOTAL EXPENDITURE INCURRED ON TELEPHO NE ARBITRARILY ON THE GROUND THAT THE SAME HAS BEEN INCURRED FOR PERS ONAL PURPOSES. DATE OF HEARING 15.11.2017 DATE OF PRONOUNCEMENT 16.11.2017 2 ITA NO. 1707/DEL/2016 3. THAT THE LD. ACIT HAS GONE WRONG IN DISALLOWING THE EXPENSE OF RS. 50,000/- FROM THE TOTAL EXPENDITURE INCURRED ON VEH ICLE RUNNING & MAINTENANCE ARBITRARILY ON THE GROUND THAT THE SAME HAS BEEN INCURRED FOR NON-BUSINESS ACTIVITIES. 4. THAT THE APPELLANT CRAVES LEAVE TO ADD , TO ALTER, AMEND, MODIFY, SUBSTITUTE, DELETE AND/OR RESCIND ALL OR ANY OF THE GROUNDS OF APPEAL ON OR BEFORE THE FINAL HEARING, IF NECESSITY SO ARI SES. 2. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE IS AN INDIVIDUAL DERIVING INCOME FROM THE BUSINESS OF GOVERNMENT EXP ORTER, HOUSE PROPERTY AND INCOME FROM OTHER SOURCES. FOR THE AY 2011-12 ASSESSEE FILED HIS RETURN OF INCOME ON 29.09.2011 D ECLARING A TOTAL INCOME OF RS. 2,60,07,860/- AND DURING SCRUTINY AO FOUND THAT THE ASSESSEE INCURRED THE EXPENSES OF RS. 39,78,969 /- UNDER THE FOLLOWING HEADS: S.NO. HEAD OF EXPENSES AMOUNT 1. STAFF WELFARE 6,62,614/- 2. TELEPHONE 15,41,180/- 3. CONVEYANCE 17,75,175/- TOTAL 39,78,969/- AO RECORDED THAT THE ASSESSEE FAILED TO JUSTIFY THA T SUCH AN AMOUNT WAS EXCLUSIVELY SPENT FOR THE PURPOSE OF BUSINESS A CTIVITIES, AS SUCH, AO DISALLOWED 10% OF SUCH EXPENSES TOWARDS NO N-BUSINESS EXPENSES AND SUCH DISALLOWANCE WAS RS. 3,97,896/- . AO DISALLOWED A FURTHER SUM OF RS. 1,45,170/- ON THE G ROUND THAT THE ASSESSEE WAS NOT MAINTAINING LOG BOOK IN RESPECT OF THE VEHICLE RUNNING AND MAINTENANCE AND PERSONAL USAGE OF THE V EHICLE CANNOT 3 ITA NO. 1707/DEL/2016 BE RULED OUT, AS SUCH, 10% OUT OF 14,51,706/- WAS T O BE DISALLOWED. IN APPEAL LD. CIT (A) FOUND THAT THERE IS NO SPECIFIC ADVERSE FINDING BY THE AO IN RESPECT OF THE EXPENSE S OF RS.6,62,614/- ON STAFF WELFARE AND RS. 17,75,175/- INCURRED TOWARDS CONVEYANCE EXPENSES, AS SUCH, SUCH AN ADDIT ION IS NOT JUSTIFIED. HOWEVER, IN RESPECT OF THE TELEPHONE EX PENSES OF RS. 15,41,180/- LD. CIT (A) OBSERVED THAT THE POSSIBLE PERSONAL USAGE CANNOT BE RULED OUT AND ON THAT GROUND HE CONFIRMED THE ADDITION TO A TUNE OF RS. 25,000/-. IN RESPECT OF THE VEHIC LE RUNNING AND MAINTENANCE CHARGES LD. CIT (A) FOUND THAT A SUM OF RS. 50,000/- WOULD BE A REASONABLE DISALLOWANCE, AS SUCH, HE GAV E RELIEF TO A TUNE OF RS. 95,170/- WHILE CONFIRMING THE DISALLOWA NCE OF RS.50,000/-. CHALLENGING THE CONFIRMATION OF RS. 2 5,000/- AND RS.50,000/- THE ASSESSEE IS IN APPEAL BEFORE US. 3. WE HAVE CAREFULLY GONE THROUGH THE RECORD AND HE ARD THE COUNSEL ON EITHER SIDE. ORDER OF THE LD. CIT (A) O N THESE TWO GROUNDS IS VERY REASONABLE AND THE LD. CIT (A) HAS TAKEN CARE TO SEE THAT THE DISALLOWANCE IS CONFINED ONLY TO THE E XPENSES WHERE THERE IS POSSIBILITY OF PERSONAL USE AND HE EXCLUDE D THE EXPENSES 4 ITA NO. 1707/DEL/2016 LIKE THE EXPENSES ON ACCOUNT OF THE STAFF WELFARE A ND CONVEYANCE EXPENSES OF OFFICE STAFF MEMBERS. EVEN IN RESPECT OF THE TELEPHONE EXPENSE LD.CIT (A) CONFINED THE DISALLOWANCE TO RS. 25,000/- AND THEREBY OUT OF RS. 3,72,896/- HE CONFIRMED ONLY RS. 25,000/-. SO ALSO IN RESPECT OF THE VEHICLE RUNNING AND MAINTENA NCE CHARGES, IN THE ABSENCE OF ANY LOG BOOK BEING MAINTAINED BY THE ASSESSEE, BY NO STRETCH OF IMAGINATION CAN WE SAY THAT THERE IS NO POSSIBILITY OF PERSONAL USAGE OF THE CAR. RS. 50,000/- ON THAT SC ORE CONFIRMED BY THE LD. CIT (A) IS QUITE REASONABLE. WE, THEREFORE , UPHOLD THE FINDINGS OF THE LD. CIT (A) AND FIND THE GROUNDS OF APPEAL ARE DEVOID OF MERITS. CONSEQUENTLY THE APPEAL IS LIABLE TO BE DISMISSED. 4. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 16.11.2017 SD/- SD/- (G.D. AGRAWAL) (K. NARSIMHA C HARY) PRESIDENT JUDICIAL ME MBER DATED: 16.11.2017 *KAVITA ARORA 5 ITA NO. 1707/DEL/2016 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT TRUE COPY ASSISTANT REGISTRAR ITAT NEW DELHI