JCIT (OSD), New Delhi V. Sh. A. Sandeep, New Delhi

ITA 2010/DEL/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 53008 (ITAT-DELHI)
• Duration Of Justice: 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-10-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 14-10-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 21-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SRUJANI MOHANTIDR
• Assessee Lawyers: PRAKASH NARAIN; HIMSELF
• Keywords: Business income; Depreciation; Business expenditure; Salary income; Condonation of delay
• Section: 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL,DELHI BENCH A : NEW DELHI SHRI I.P. BANSAL, JM & SHRI A.N. PAHUJA, AM ITA NO.2010/DEL./2011 WITH CO NO.194/DEL/2011 ASSESSMENT YEAR:2006-07 J.C.I.T.CIRCLE-26(1), ROOM NO. 206D,VIKAS BHAWAN, NEW DELHI V/S . SHRI A. SANDEEP, 24 B, DDA (MIG) FLATS, RAJOURI GARDEN, NEW DELHI [ PAN: ADQPA8522Q ] (APPELLANT) (RESPONDENT) ASSESSEE BY SHRI PRAKASH NARAIN, AR AND THE ASSESSEE HIMSELF REVENUE BY SMT. SRUJANI MOHANTI,DR DATE OF HEARING 14-10-2011 DATE OF PRONOUNCEMENT 21-10-2011 ORDER A.N. PAHUJA : THIS APPEAL FILED ON 21.04.2011 BY THE REVENUE AND THE CORRESPONDING CROSS OBJECTION[CO] FILED ON 15.06.20 11 BY THE ASSESSEE, AGAINST AN ORDER DATED 11 TH FEBRUARY, 2011 OF THE LD. CIT (APPEALS)-XXIV, NEW DELHI, RAISE THE FOLLOWING GROUNDS :- ITA NO.2010/DEL./2011 (REVENUE) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD . CIT (A) ERRED IN 1. TREATING THE RECEIPTS RECEIVED FROM PCPL AS BUSI NESS RECEIPTS AS AGAINST THE FINDING OF THE AO THAT THE SAME PARTOOK THE CHARACTER OF SALARY. 2. IGNORING THE FACT THAT THE ASSESSEE HAD NOT RECE IVED ANY OTHER RECEIPTS EXCEPT FROM PCPL WHICH SHOWS THAT HE WAS E MPLOYED WITH THE COMPANY AND THE AO HAS RIGHTLY TAKEN THE RECEIP TS AS SALARY RECEIPTS. THE APPELLANT CRAVES THE RIGHT TO AMEND/ADD OTHER GROUND OF APPEAL. ITA NO.2010/DEL./2011 CO NO.194/DEL/2011 2 CO NO.194/DEL/2011 (ASSESSEE) 1. THE LEARNED C.I.T. (A) HAS ERRED IN DISALLOWING DEPRECIATION, INSURANCE EXPENSES, INTEREST AND RUNNING MAINTENANC E EXPENSES OF LAND CRUISER CAR AGGREGATING `RS.3,67,888/-. 2. WHILE DISALLOWING THE ABOVE EXPENSES ETC. THE LD . C.I.T. (A) FAILED TO APPRECIATE THAT THE LAND CRUISER CAR WAS EXCLUSIVELY USED BY THE APPELLANT FOR BUSINESS/PROFESSIONAL PURPOSES AN D NOT BY HIS THREE EMPLOYEES. 3. THE ORDER OF THE LD. C.I.T. (A) IS THUS AGAINST LAW AND FACTS OF THE CASE. 2. ADVERTING FIRST TO GROUND NOS.1 AND 2 IN THE APP EAL OF THE REVENUE, FACTS, IN BRIEF, AS PER RELEVANT ORDERS ARE THAT RETURN DECL ARING INCOME OF RS.6,70,210/- FILED ON 31.10.2006 BY THE ASSESSEE, WAS SELECTED FOR SC RUTINY WITH A SERVICE OF A NOTICE UNDER SECTION 143(2) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) ON 22.10.2007. DURING THE COURSE OF ASS ESSMENT PROCEEDINGS, THE ASSESSING OFFICER [AO IN SHORT] NOTICED THAT THE ASSESSEE RECEIVED AN AMOUNT OF RS.20,19,119/- FROM M/S. PLANMAN CONSULTANT (INDIA) (P) LTD. [PCPL IN SHORT] REFLECTED UNDER THE HEAD BUSINESS INCOME. SINCE TH ERE DID NOT EXIST ANY WRITTEN AGREEMENT BETWEEN THE ASSESSEE AND PCPL, IN ORDER T O ASCERTAIN AS TO WHETHER OR NOT THE ASSESSEE ACTUALLY EARNED PROFESSIONAL O R BUSINESS INCOME, THE AO DEPUTED HIS INSPECTOR FOR ENQUIRIES. ON VISIT TO TH E SAID PREMISES AT M-1,CHITRANJAN PARK, THE INSPECTOR NOTICED THAT THERE WAS NO SUCH OFFICE AS WAS CLAIMED BY THE ASSESSEE AT THE SAID ADDRESS. THEREAFTER, THE AO IS SUED A NOTICE DATED 20.10.2008 U/S 133(6) OF THE ACT TO PCPL ,SEEKING AGREEMENT WITH SHRI A. SANDEEP, DETAILS OF REMUNERATION AND OTHER PAYMENTS AS ALSO OF FOREIGN TRIPS UNDERTAKEN BY THE ASSESSEE AND HIS FAMILY MEMBERS B ESIDES ASKING AS TO IN WHICH CAPACITY SHRI SANDEEP WORKED WITH THE COMPANY. IN RESPONSE, THE SAID COMPANY REPLIED AS UNDER: 1. MR. A. SANDEEP HAS BEEN WORKING AS A CONSULTANT UNDERTAKING VARIOUS RESPONSIBILITIES. OUR COMPANY HAD NOT ENTERED INTO ANY WRITTEN AGREEMENT WITH HIM GOVERNING THE TERMS OF HIS ASSOCIATION; 2. THE REMUNERATION PROVIDED TO MR. A. SANDEEP WAS CALCULATED ON A FAIR VALUE OF THE NATURE OF WORK THAT HE WAS DOING FOR US, KEEPIN G IN VIEW HIS PAST EXPERIENCE, HIS NUMBERS OF YEARS OF ASSOCIATION WITH US, HIS SE NIORITY AND ALSO THE NUMBER OF PEOPLE THAT HE WAS LEADING WITH RESPECT TO HIS WORK ; ITA NO.2010/DEL./2011 CO NO.194/DEL/2011 3 3. DETAILS OF PAYMENTS MADE TO MR. A. SANDEEP BY US HAS BEEN ATTACHED AS A COPY WITH THIS LETTER ]; AND 4. WE DID SPONSOR A FOREIGN TRIP UNDERTAKEN BY MR. A. SANDEEP AND HIS WIFE. IT WAS A FULLY SPONSORED WEEK LONG TRIP TO SOUTH ASIA IN T HE MONTH OF JANUARY 2006. THE NATURE OF EXPENSES COVERED IN THE SPONSORSHIP INCLU DED AIR TRAVEL, CRUISE TRAVEL ABOARD STAR CRUISE (SINGAPORE), BOARDING AND LODGIN G, OTHER TRAVEL EXPENDITURE ON LAND, ADDITIONAL FOOD EXPENDITURE APART FROM SUNDRY MISCELLANEOUS EXPENDITURE. 2.1 INTER ALIA, COPIES OF TDS CERTIFICATES WERE ALSO APPENDED TO THE AFORESAID REPLY. AFTER CONSIDERING THE AFORESAID REPLY, THE AO ISSUED A SHOW-CAUSE NOTICE TO THE ASSESSEE AS TO WHY HIS RECEIPTS FROM THE AFORES AID COMPANY PCPL BE NOT TREATED AS SALARY, THERE BEING NO OFFICE OR INFRAST RUCTURE IN SUPPORT OF BUSINESS ALLEGEDLY CARRIED ON BY THE ASSESSEE. IN RESPONSE, THE ASSESSEE REPLIED ALONG WITH A CLARIFICATION FROM THE COMPANY THAT THE ASSE SSEE WAS CARRYING ON THE PROFESSIONAL INTERACTIONS AT HIS OFFICE AT M-1, CHI TRANJAN PARK, NEW DELHI WITH THE REPRESENTATIVES OF THE COMPANY. AS REGARDS THE NAT URE OF PAYMENTS, THE COMPANY REPLIED THAT THESE WERE PROFESSIONAL PAYMENTS AND N OT ON ACCOUNT OF SALARY, THE RELATIONSHIP BETWEEN THE COMPANY AND ASSESSEE BEING NOT OF EMPLOYER AND EMPLOYEE. REGARDING NATURE OF WORK, IT WAS EXPLAIN ED BY THE COMPANY THAT THEY HAD PUBLISHED MANY MAGAZINES AND SHRI SANDEEP RENDE RED HIS PROFESSIONAL SERVICES FOR PUBLISHING THE MAGAZINES LIKE BUSINE SS & ECONOMY, 4 PS BUSINESS & MARKETING AND THE SUNDAY INDIAN. IT WAS FURTHER POI NTED OUT THAT SHRI SANDEEP ISSUED DIRECTIONS TO EMPLOYEES OF THE COMPANY BESID ES UNDERTAKING MARKETING PROMOTION ACTIVITIES, ETC. HOWEVER, THE AO DID NOT ACCEPT THE SUBMISSIONS OF THE ASSESSEE AND ASSESSED THE AMOUNT RECEIVED FROM THE AFORESAID COMPANY UNDER THE HEAD SALARY IN THE LIGHT OF DECISIONS IN THE CA SE OF DHARAGADHRA CHEMICAL WORKS LTD. VS. STATE OF SAURASHTRA AIR 1957 SC 264, INDIAN MEDICAL ASSOCIATION VS. SHANTHA(VVP) (1995) 6 SSC 651(SC),PIYARE LAL AD ISHWAS LAL VS. CIT 40 ITR 17 (SC) AND CIT VS. LAKSHMIPATI SINGHANIA 92 ITR 59 8 (ALL.). ACCORDINGLY, THE AO DISALLOWED EXPENSES OF RS.18,48,739/- ON ACCOUNT OF VEHICLE RUNNING AND MAINTENANCE, DEPRECIATION ON BUILDING AND INTEREST, ETC. 3 .ON APPEAL, THE LEARNED CIT (A) DIRECTED TO ASS ESS THE AMOUNT RECEIVED FROM PCPL UNDER THE HEAD PROFESSIONAL RECEIPTS AND REDUC ED THE DISALLOWANCE ON ACCOUNT OF EXPENSES IN THE FOLLOWING TERMS :- ITA NO.2010/DEL./2011 CO NO.194/DEL/2011 4 4. I HAVE CONSIDERED THE FACTS OF THE CASE, AO'S F INDINGS AND SUBMISSION OF THE APPELLANT. THE APPELLANT IS A GRO UP EDITOR OF FOUR MAGAZINES, NAMELY, BUSINESS & ECONOMY, 4PS BUSINESS & MARKETING, THE SUNDAY INDIANS AND THE INDIAN PC MAG AZINE OF PCPL AND THUS DID ALL WORK REQUIRED FOR AN EDITOR. HERE, THE DISPUTE WHAT I AM SUPPOSED TO DECIDE IS THAT WHETHE R THE APPELLANT, AS A GROUP EDITOR, IS AN EMPLOYEE OF THE PCPL OR NOT. THE APPELLANT HAS FILED ALL DETAILS CALLED FOR BY T HE AO INCLUDING THE PARENTS' INVESTMENT DETAILS. THE APPELLANT HAS SPEC IFICALLY ADMITTED VIDE HIS SUBMISSION DATED 10.12.2008 THAT HE HAS VA CATED THE CHITARANJAN PARK PREMISES IN AY 2007-08 SINCE NOV. 2006. THE APPELLANT HAS NOT CLAIMED ANY DEPRECIATION ON THIS PREMISE FROM AY 2008-09 ONWARDS IN HIS REGULAR RETURNS OF INCOME . THESE FACTS DO SUBSTANTIATE THE APPELLANT'S CLAIM THAT THE ABOV E PREMISES HAVE BEEN USED FOR BUSINESS PURPOSES DURING THE RELEVANT YEAR. 4.1 THE APPELLANT, DURING THE APPELLATE PROCEEDINGS , WAS DIRECTED TO PRODUCE AT LEAST ONE OF THE EMPLOYEES B EFORE ME FOR VERIFICATION. SHRI S. P. WARNER WAS PRODUCED ON 02. 02.2011, WHO REITERATED SAME FACTS RELATING EXISTENCE OF THE OFF ICE PREMISES AT CHITARANJAN PARK WHAT HAD BEEN ALREADY CERTIFIED DU RING THE ASSESSMENT PROCEEDINGS. THE APPELLANT HAD FILED CER TIFICATES OF NEIGHBOURS AFFIRMING THE EXISTENCE OF THE OFFICE AT CHITARANJAN PARK PREMISES DURING THE ASSESSMENT PROCEEDINGS. BUT THE AO RELIED UPON THE ITI'S REPORT, WHICH, ACCORDING TO ME IS NO T SPECIFIC AND WITHOUT CONDUCTING ANY SPECIFIC ENQUIRY FROM ANY NE IGHBOUR. EVEN THE NAMES OF NEIGHBOURS OR ANY OTHER PERSON WHO HAV E STATED THE FACT AS MENTIONED IN THE REPORT HAVE NOT BEEN POINT ED OUT IN THE ITI'S REPORT. WHY THE AO HAS NOT CARRIED OUT ENQUIR IES FROM NEIGHBOURS AFTER RECEIVING THEIR CERTIFICATES THROU GH THE ASSESSEE IS ALSO NOT UNDERSTANDABLE. 4.2 ON THE BASIS OF THE APPELLANT'S SUBMISSION BEFO RE ME & SUBMISSION DATED. 10.12.2008 OF THE ASSESSEE FILED BEFORE THE AO AND THE AO'S INDIRECT ADMISSION OF EXISTENCE OF THE OFFICE AT CHITARANJAN PARK PREMISES IN THE IMPUGNED ORDER, I HERE BY HOLD THAT THE CHITARANJAN PARK PREMISES HAS BEEN USED FO R THE OFFICE PURPOSES OF THE APPELLANT SUBJECT TO THE FACT THAT THE ENTIRE PROPERTY WAS NOT WHOLLY AND EXCLUSIVELY UTILIZED FO R THE BUSINESS PURPOSES/OFFICE. THIS INFERENCE GETS BUTTRESSED BY THE FACT THAT THE APPELLANT, IN SUBSEQUENT YEARS, WAS ABLE TO DO SAME WORK FROM HIS PARENT'S PLACE, I.E. AN MIG FLAT, RAJOURI GARDEN, N EW DELHI, WHICH WAS ALSO UTILIZED BY THE APPELLANT AND HIS PARENTS AS RESIDENCE. 4.4 THE PCPL HAS SPECIFICALLY ADMITTED, AS MENTIONE D IN THE IMPUGNED ORDER THAT THERE IS NO AGREEMENT IN WRITIN G FOR MAKING PAYMENTS TO THE APPELLANT, THOUGH THE APPELLANT HAS FILED A PHOTOCOPY COPY OF A LETTER OF PCPL CLAIMED TO HAVE BEEN SUBMITTED BEFORE THE AO ON 30.12.2008 (AFTER THE AS SESSMENT AS ITA NO.2010/DEL./2011 CO NO.194/DEL/2011 5 EVIDENT FROM THE STAMP OF THE AO ON THIS LETTER) EN CLOSING THE COPY OF THE AGREEMENT DATED 02.04.2004 BETWEEN THE PCPL AND THE ASSESSEE. AS PER THIS AGREEMENT, THE APPELLANT WAS ENGAGED IN GIVING PROFESSIONAL CONSULTANCY TO THE PCPL. I HAVE CAREFULLY CONSIDERED THE SUBMISSION OF THE APPELLANT, FACTS M ENTIONED ABOVE AND CASE LAWS RELIED UPON BY THE APPELLANT AND CAME TO CONCLUSION THAT THERE IS NO EMPLOYEE AND EMPLOYER R ELATIONSHIP BETWEEN PCPL AND THE APPELLANT. THEREFORE, RECEIPTS FROM PCPL ARE HELD TO BE BUSINESS RECEIPTS. 4.5 THE P & L ACCOUNT OF THE APPELLANT FOR RELEVANT YEAR SHOWS MAJOR EXPENSES ONLY ON ACCOUNT OF DEPRECIATION OF B UILDING & CARS, INTEREST ON HOUSING AND CAR LOANS IN ADDITION TO OT HER ROUTINE BUSINESS EXPENSES. THE EXPENSES/DEBITS, IN AGGREGAT E, ON ACCOUNT OF DEPRECIATION OF BUILDING & CARS, INTERES T ON HOUSING AND CAR LOANS ARE RS.12,73,543/- AS AGAINST PROFESSIONA L RECEIPTS OF RS.20,19,119/-. SHRI WARNER AND THE APPELLANT ADMIT TED BEFORE ME THAT LAND CRUISER VEHICLE WAS NOT UTILIZED BY THREE EMPLOYEES OF THE APPELLANT FOR PCPL WORK. FURTHER, THE APPELLANT FAILED TO ESTABLISH AND DEMONSTRATE USE OF LAND CRUISER CAR F OR BUSINESS PURPOSES. THEREFORE, DEPRECIATION ON LAND CRUISER C AR, INSURANCE ON LAND CRUISE CAR, INTEREST ON LAND CRUISER CAR AN D RUNNING MAINTENANCE OF LAND CRUISER CAR AGGREGATING RS.3,67 ,888/- IS HELD DISALLOWABLE. SIMILARLY, ON THE BASIS OF ABOVE FACT S, 25% OF INTEREST ON BUILDING LOAN (RS.93,949/-) AND BUILDING DEPRECI ATION FOR CHITARANJAN PARK PROPERTY (RS.1,18,463/-) ARE DISAL LOWED IN ACCORDANCE OF SECTIONS 36(1)(III) AND 38(2) OF THE ACT, WHICH, IN AGGREGATE, WORKS OUT TO RS.2,12,406/-. THUS BUSINES S INCOME OF THE APPELLANT WORKS OUT TO RS.7,50,674/- (RS.1,70,3 80/- PLUS RS.3,67,888/- PLUS RS.2,12,406/-) AS AGAINST THE AO 'S FINDING TREATING PROFESSIONAL RECEIPTS FROM PCPL AS SALARY INCOME. THE AO IS THEREFORE, DIRECTED TO ASSESS RS.7,50,674/- A S BUSINESS INCOME DERIVED FROM PROFESSIONAL RECEIPTS FROM PCPL AS AGAINST HIS FINDING OF SALARY INCOME AND ACCORDINGLY ALLOW THE CONSEQUENTIAL RELIEF. 4. THE REVENUE IS NOW IN APPEAL BEFORE US AGAINST T HE AFORESAID FINDINGS OF LEARNED CIT (A) IN ASSESSING THE INCOME UNDER THE H EAD BUSINESS WHILE THE ASSESSEE IN HIS CROSS OBJECTION DISPUTED THE CLAIM OF EXPENSES AGGREGATING TO RS.3,67,888/-. ON ACCOUNT OF RUNNING AND MAINTENAN CE OF CAR. THE LD. DR SUPPORTED THE FINDINGS OF THE AO WHILE THE LD. AR ON BEHALF OF THE ASSESSEE RELIED UPON THE FINDINGS OF THE LD. CIT (A) ,DIRECTING TO ASSESS RECEIPTS FROM PCPL AS PROFESSIONAL RECEIPTS AND ADDED THAT A REASONABLE D ISALLOWANCE OF EXPENSES ON ACCOUNT OF LAND CRUISER CAR MAY BE MADE. ITA NO.2010/DEL./2011 CO NO.194/DEL/2011 6 5. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE FACTS OF THE CASE. INDISPUTABLY AND AS THE LD. CIT(A) FOUND, THE ASSES SEE HAS BEEN ADVISING THE EMPLOYEES OF THE AFORESAID COMPANY, PCPL AS A GROUP EDITOR OF FOUR MAGAZINES, NAMELY, BUSINESS & ECONOMY, 4 PS BUSINESS & MARKETI NG, THE SUNDAY INDIANS AND THE INDIAN PC MAGAZINE. THE LD. CIT(A) WHILE R EFERRING TO THE COPY OF THE AGREEMENT DATED 02.04.2004 BETWEEN THE PCPL AND THE ASSESSEE OBSERVED THAT THE ASSESSEE WAS ENGAGED IN GIVING PROFESSIONAL CON SULTANCY TO THE PCPL AND THAT THERE IS NOTHING TO SUGGEST THAT THE AFORESAID COMPANY HAD EMPLOYED THE ASSESSEE AS THEIR EMPLOYEE. AS IS APPARENT FROM THE AFORESAID FACTS , THERE IS NOTHING TO SUGGEST THAT THE ASSESSEE WAS GIVEN ANY POST BY PCPL FOR ANY PARTICULAR SERVICE, BUT THE AMOUNT WAS PAID ONLY FO R THE SERVICES TO BE RENDERED AS A PROFESSIONAL EDITOR. THE ASSESSEE HAD NOT, AT ANY POINT OF HIS PROFESSIONAL CAREER IN THE YEAR UNDER CONSIDERATION, EXCHANGED HIS PROF ESSION FOR SERVICE AND HE CONTINUED TO BE A PROFESSIONAL PERSON. HE RECEIVED THE AMOUNT IN HIS CAPACITY AS A PROFESSIONAL EDITOR AND IT WAS PROPERLY ASSESSED BY THE LD. CIT(A) UNDER THE HEAD 'PROFESSION'. IT CANNOT BE ASSUMED AND IT IS UNTHIN KABLE THAT THE ASSESSEE HAD CHANGED HIS HAT OF A PROFESSIONAL EDITOR AND HAD TH E HAT OF A SALARIED EMPLOYEE WHEN HE RECEIVED THE AMOUNT DESCRIBED IN THE TDS C ERTIFICATES AS PROFESSIONAL INCOME AND NOT ON ACCOUNT OF INCOME UNDER THE HEAD SALARY. THE CONTROL AND SUPERVISION OF THE EMPLOYER IS A SINE QUA NON OF TH E RELATIONSHIP BETWEEN THE EMPLOYER AND THE EMPLOYEE. GENERALLY, IN AN EMPLOYE R-EMPLOYEE RELATIONSHIP, THE EMPLOYER CONTROLS, DIRECTLY OR INDIRECTLY, THE WAY THE WORK IS TO BE DONE AND THE WORK METHODS USED. THE EMPLOYER ASSIGNS SPECIFIC TA SKS THAT DEFINE THE REAL FRAMEWORK WITHIN WHICH THE WORK IS TO BE DONE. THE PAYER EXERCISES CONTROL IF HE/SHE HAS THE RIGHT TO HIRE OR FIRE, AND DECIDE WH ERE, WHEN AND HOW THE WORK WILL BE DONE. THERE IS NO SUCH MATERIAL BEFORE US IN THE INSTANT CASE. ON THE BASIS OF INDEPENDENT VERIFICATION MADE BY THE LEARNED CIT (A ), THE EXISTENCE OF OFFICE AT CHITRANJAN PARK WAS ALSO ESTABLISHED. IN THE LIGHT OF THE AFORESAID UNDISPUTED FINDINGS OF THE LD. CIT(A) ESPECIALLY WHEN THE LEA RNED DR DID NOT PLACE ANY MATERIAL BEFORE US SO AS TO ENABLE US TO TAKE A DIF FERENT VIEW IN THE MATTER, WE ARE NOT INCLINED NOT TO INTERFERE WITH THE FINDINGS OF THE LEARNED CIT (A) IN ASSESSING THE RECEIPTS FROM PCPL UNDER THE HEAD OF BUSINESS OR PR OFESSION. THEREFORE, GROUNDS NOS.1 & 2 IN THE APPEAL OF THE REVENUE ARE DISMISSE D. ITA NO.2010/DEL./2011 CO NO.194/DEL/2011 7 6. AS REGARDS SOLE GROUND RAISED IN THE CO, INDISPUTED LY CO IS DELAYED BY 21 DAYS AND THE ASSESSEE MENTIONED IN HIS APPLICATION FOR CONDONATION OF DELAY IN FILING CROSS OBJECTION THAT HE WAS NOT AWARE THAT H E COULD FILE CO AND ONLY AFTER HIS ADVOCATE ADVISED HIM, CO WAS FILED. SINCE PROCESS O F PREPARING CO TOOK TIME, THE ASSESSEE PLEADED THAT DELAY OF 21 DAYS IN FILING TH E CO MAY BE CONDONED. THE LD. DR DID NOT OPPOSE THE AVERMENTS MADE IN THE APPLIC ATION FOR CONDONATION OF DELAY IN FILING THE CO. THE ISSUE BEFORE US IS AS TO WHETHER OR NOT THERE WAS SUFFICIENT CAUSE FOR DELAY IN FILING THE CO. IN THE CASE OF STATE OF WEST BENGAL VS. ADMINISTRATOR, HOWRAH MUNICIPALITY AIR 1972 SC 749, THE HON'BLE SUPREME COURT WHILE CONSIDERING THE SCOPE OF EXPRESSION 'SUFFICIE NT CAUSE' FOR CONDONATION OF DELAY HAVE HELD THAT THE SAID EXPRESSION SHOULD REC EIVE A LIBERAL CONSTRUCTION SO AS TO ADVANCE THE SUBSTANTIAL JUSTICE WHEN NO NEGLI GENCE OR INACTION OR WANT OF BONA FIDE IS IMPUTABLE TO THE PARTY. IN THE CASE OF VEDABAI ALIAS VAIJAYANTABAI BABULAO PATIL VS. SHANTARAM BABURAO PATIL & ORS., I T WAS HELD BY THE HONBLE APEX COURT THAT WHILE EXERCISING DISCRETION UNDER S. 5 O F THE LIMITATION ACT, 1963, TO CONDONE DELAY FOR SUFFICIENT CAUSE IN NOT FILING TH E APPEAL WITHIN THE PERIOD PRESCRIBED, COURTS SHOULD ADOPT A PRAGMATIC APPROAC H. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE OPINION TH AT THE REASONS GIVEN IN THE REQUEST FOR CONDONATION OF DELAY REFLECT SUFFICIENT CAUSE FOR CONDONATION OF DELAY. THE LAW OF LIMITATION IS ENSHRINED IN THE MAXIM INT EREST REIPUBLICAE UT SIT FINIS LITIUM (IT IS FOR THE GENERAL WELFARE THAT A PERIOD BE PUT TO LITIGATION). RULES OF LIMITATION ARE NOT MEANT TO DESTROY THE RIGHTS OF THE PARTIES, RAT HER THE IDEA IS THAT EVERY LEGAL REMEDY MUST BE KEPT ALIVE FOR A LEGISLATIVELY FIXED PERIOD OF TIME. IN SHANKARRAO V. CHANDRASENKUNWAR REPORTED IN [1987] SUPP SCC 338 , THE HONBLE SUPREME COURT TOOK THE VIEW THAT THE COURT SHOULD NOT ADOPT AN INJUSTICE-ORIENTED APPROACH IN REJECTING THE APPLICATION FOR CONDONATION OF DEL AY. IN O.P. KATHPALIA V. LAKHMIR SINGH REPORTED IN AIR 1984 SC 1744, THE HON'BLE SU PREME COURT HELD THAT IF THE REFUSAL TO CONDONE THE DELAY RESULTS IN GRAVE MISCA RRIAGE OF JUSTICE, IT WOULD BE A GROUND TO CONDONE THE DELAY. 6.1. IN VIEW OF THE FOREGOING AND ESPECIALLY IN THE LIGHT OF OBSERVATIONS OF THE HONBLE APEX COURT IN O.P. KATHPALIA V. LAKHMIR SIN GH REPORTED IN AIR 1984 SC 1744, THAT IF THE REFUSAL TO CONDONE THE DELAY RES ULTS IN GRAVE MISCARRIAGE OF ITA NO.2010/DEL./2011 CO NO.194/DEL/2011 8 JUSTICE, IT WOULD BE A GROUND TO CONDONE THE DELAY, WE ARE OF THE OPINION THAT THE REASONS GIVEN BY THE ASSESSEE FOR THE DELAY IN FILI NG THE APPEAL, REFLECT SUFFICIENT CAUSE AND, ACCORDINGLY, THE DELAY OF 21 DAYS IN FI LING THE CO IS CONDONED. 7. AS REGARDS DISALLOWANCE OF EXPENSES TOWARDS R UNNING AND MAINTENANCE OF LAND CRUISER CAR, INDISPUTEDLY, THE EMPLOYEES DID N OT USE THE VEHICLE FOR THE PURPOSE OF PROFESSION OF THE ASSESSEE WHILE PERSON AL USE OF CAR BY THE ASSESSEE AND HIS FAMILY MEMBERS HAS NOT BEEN DEN IED NOR IT WAS CLAIMED THAT THE ASSESSEE OR HIS FAMILY HAD THEIR INDEPENDENT V EHICLES FOR THEIR PERSONAL USE. IN THESE CIRCUMSTANCES, IN OUR OPINION DISALLOWANC E OF 50% OF THE AFORESAID EXPENSES FOR RUNNING AND MAINTENANCE ON LAND CRUIS ER, INCLUDING DEPRECIATION THEREON IN THE LIGHT OF PROVISIONS OF SEC. 38(2) O F THE ACT, IS REASONABLE. ACCORDINGLY , GROUND NOS.1 AND 2 OF THE CO ARE PAR TLY ALLOWED. 8. GROUND NO.3 IN THE CO BEING GENERAL IN NATURE NOR ANY SUBMISSIONS HAVING BEEN MADE ON THIS GROUND ,DOES NOT REQUIRE ANY SEP ARATE ADJUDICATION WHILE NO ADDITIONAL GROUND HAVING BEEN RAISED BEFORE US IN T ERMS OF RESIDUARY GROUND IN THE APPEAL OF THE REVENUE, THEREFORE, THESE GROUNDS ARE DISMISSED. 9. NO OTHER PLEA OR ARGUMENT WAS MADE BEFORE US. 10. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISS ED WHILE CORRESPONDING CO IS PARTLY ALLOWED AS INDICATED ABOVE. ORDER PRONOUNCED IN OPEN COURT . SD/- SD/- (I.P. BANSAL) (A.N. PAHUJA) JUDICIAL MEMBER ACCOUNTANT MEMBER COPY FORWARDED TO: 1. SHRI A. SANDEEP,24 B, DDA (MIG) FLA TS,RAJOURI GARDEN, NEW DELHI 2. J.C.I.T.CIRCLE-26(1), ROOM NO. 206D,V IKAS BHAWAN, NEW DELHI 3.CIT CONCERNED 4.CIT (A)-XXIV, NEW DELHI.. 5. DR A BENCH,ITAT, NEW DELHI. ITA NO.2010/DEL./2011 CO NO.194/DEL/2011 9 6. GUARD FILE AR, ITAT NEW DELHI.