Narender Khurana, Delhi V. ACIT, New Delhi

ITA 2218/DEL/2013

• Counselvise Citation: 221820114 RSA 2013
• Duration Of Justice: 6 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-10-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Assessment Year: 2010-2011
• Appeal Filed On: 16-04-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MRS REN UKA JAIN GUPTA SENIOR
• Keywords: Business expenditure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH E: NEW DELHI) BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER AND SHRI B.C. MEENA, ACCOUNTANT MEMBER ITA NO.2218/DEL/ 2013 (ASSESSMENT YEAR: 2010-11) SHRI NARENDER KHURANA, VS. ACIT, CIRCLE 29 (1), 109 113, DILKHUSH BUILDING, NEW DELHI. CHOWK TILAK BAZAR, DELHI 110 006. (PAN : AADPK8736A) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI SURESH KUMAR GUPTA, CA RESPONDENT BY : MRS. REN UKA JAIN GUPTA, SENIOR DR O R D E R PER B.C. MEENA, ACCOUNTANT MEMBER : THIS APPEAL FILED BY THE ASSESSEE EMANATES FROM TH E ORDER OF THE CIT (APPEALS)-XXV, NEW DELHI DATED 25.02.2013. 2. THE ASSESSEE IS AN INDIVIDUAL ENGAGED IN THE BUS INESS OF RESALE OF CHEMICALS IN THE NAME OF SOLE PROPRIETOR OF M/S. J. D. SALES CORPORATION. THE ASSESSING OFFICER MADE AN AD HOC DISALLOWANCE O F 10% OF THE EXPENSES DEBITED IN THE BOOKS OF ACCOUNT UNDER THE HEADS - VEHICLE MAINTENANCE RS.8,04,569/-, CONVEYANCE RS.4,46,4 06/-, REPAIR & MAINTENANCE RS.2,33,886/-, TELEPHONE EXPENSES R S.1,75,907/- AND TRAVELING EXPENSES RS.84,376/-. THUS, OUT OF THES E TOTAL EXPENSES OF ITA NO.2217/DEL/2013 2 RS.25,05,424/-, THE DISALLOWANCE WAS MADE OF RS.2,5 0,542/- WHICH IS 10% OF THE EXPENSES AND THE REASON FOR DISALLOWANCE GIVEN BY THE ASSESSING OFFICER WAS THAT THERE IS POSSIBILITY OF PERSONAL EXPENSES INCLUDED IN THESE EXPENSES. THE CIT (A) HAS CONFIRM ED THE ADDITION BY HOLDING AS UNDER :- 4.3 I HAVE CONSIDERED THE ORDER OF THE A.O. AND T HE SUBMISSIONS OF THE ASSESSEE AND I DO NOT FIND ANY M ERIT IN THE SUBMISSIONS OF THE ASSESSEE THAT ALL THE EXPENS ES ARE FOR THE PURPOSES OF BUSINESS. AFTER CONSIDERING ALL THE FACTS AND CIRCUMSTANCES OF THE CASE, I AM OF THE VIEW THAT TH ERE IS NO MERIT IN THE SUBMISSIONS OF THE ASSESSEE AS THE PER SONAL USE OF THE VEHICLE, TELEPHONE AND TRAVELING ETC. CANNOT BE RULED OUT AND ACCORDINGLYLY, THE ADDITION/DISALLOWANCE MA DE BY THE A.O. IS CONFIRMED. 3. NOW, THE ASSESSEE IS IN APPEAL BEFORE US AGAINST THE AD HOC DISALLOWANCE ON THE BASIS OF VAGUE AND GENERAL GROU NDS OF EXPENSES AGGREGATING RS.2,50,542/-. 4. WE HAVE HEARD BOTH THE SIDES ON THE ISSUE. LD. AR RELIED ON THE ORDER OF THE CIT (A) IN ASSESSEES OWN CASE IN ASSE SSMENT YEAR 2009-10 WHEREIN SIMILAR AD HOC DISALLOWANCES WERE DELETED. HOWEVER, IT IS NOT CLEAR WHETHER THE ORDER OF THE CIT (A) WAS CONTESTE D BEFORE THE ITAT OR NOT BY THE REVENUE. THE ASSESSING OFFICER HAD MADE THE DISALLOWANCE AFTER EXAMINATION OF THE DETAILS WHEREIN SOME OF TH E EXPENSES INCURRED UNDER THESE HEADS WERE FOR PERSONAL USE OF THE ASSE SSEE. WE HAVE CONSIDERED THE PLEADINGS OF BOTH THE SIDES. WE HAVE ALSO CONSIDERED THE ORDERS OF THE AUTHORITIES BELOW. WE HAVE ALSO CONSI DERED THE NATURE OF THE ITA NO.2217/DEL/2013 3 EXPENSES DEBITED IN THE BOOKS OF ACCOUNT. WE HAVE A LSO CONSIDERED THE MODEL OF THE BUSINESS BEING RUN UNDER THE PROPRIETO RSHIP CONCERN PARTICULARLY WHERE THERE ARE SOME CHANCES THAT PERS ONAL EXPENSES CAN BE DEBITED AS BUSINESS EXPENDITURE IN THE PROPRIETORSH IP CONCERN PARTICULARLY WITH REGARD TO THE USE OF THE VEHICLES AND TELEPHON E EXPENSES. THEREFORE, WE SUSTAIN THE ORDER OF THE CIT (A) WITH REGARD TO THE VEHICLE MAINTENANCE AND TELEPHONE EXPENSES. HOWEVER, FOR TH E OTHER EXPENSES, LIKE CONVEYANCE, REPAIR & MAINTENANCE AND TRAVELING EXPENSES, WE DIRECT TO DELETE THE SAME. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THIS 18 TH DAY OF OCTOBER, 2013. SD/- SD/- (R.P. TOLANI) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED THE 18 TH DAY OF OCTOBER, 2013 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-XXV, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR/ITAT NEW DELHI