DR. PREM KRISHNA MAHESHWARI, MUMBAI V. ITO WD 11(3)(2), MUMBAI

ITA 2461/MUM/2013

• Counselvise Citation: 246119914 RSA 2013
• Duration Of Justice: 1 year(s) 10 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-02-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 17-12-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 01-04-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ASGHAR ZAIN V P
• Keywords: Depreciation

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL C , BENCH MUMBAI , BEFORE SHRI R.C.SHARMA , A M & SHRI SANJAY GARG , J M ITA NO. 2461 / MUM/20 1 3 ( ASSESSMENT YEAR : 2006 - 07 ) DR. PREM KRISHNA MAHESHWARI, C/O KARNAVAT &CO., 2A KITAB MAHAL, 1 ST FLOOR,192 DR.D.N.ROAD, MUMBAI - 400001 VS. THE ITO,WARD - 11(3)(2), MUMBAI PAN/GIR NO. : A FJPM 382 2 J ( APPELLANT ) .. ( RESPONDENT ) /ASSESSEE BY : SHRI SUNIL HIRAWAT /REVENUE BY : SHRI ASGHAR ZAIN VP DATE OF HEARING : 17 TH DECEMBER, 2014 DATE OF PR ONOUNCEMENT 11/02/2015 O R D E R PER R.C.SHARMA (A.M) : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A), DATED 5 - 11 - 2012 FOR THE ASSESSMENT YEAR 2006 - 07, IN THE MATTER OF ORDER PASSED U/S.143(3) OF THE ACT, WHEREIN FOLLOWING GROUN DS HAVE BEEN TAKEN : (A) ON FACTS AND IN LAW, THE LEARNED CIT(A) HAD ERRED IN CONFIRMING THE ADDITION OF RS.34.627/ - UNDER THE HEAD INCOME FROM HOUSE PROPERTY IN RESPECT OF 50% SHARES IN FLAT OF MANISH NAGAR USED AS NURSING HOME BY THE FIRM IN WHICH THE A PPELLANT IS A PARTNER. UNDER THE FACTS AND CIRCUMSTANCES OF THE MATTER, HE OUGHT NOT TO HAVE CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER. (B) ON FACTS AND IN LAW, THE LEARNED CIT(A) HAD ERRED IN CONFIRMING THE ADDITION OF RS.7,957/ - UNDER THE HEA D INCOME FROM HOUSE PROPERTY IN RESPECT OF 50% SHARES IN FLAT OF ITA NO. 2461 / 1 3 2 KENWOOD USED FOR THE SAFE KEEPING THE RECORDS OF THE APPELLANT. UNDER THE FACTS AND CIRCUMSTANCES OF THE MATTER, HE OUGHT NOT TO HAVE CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER. 2. ON FACTS AND IN LAW, THE LEARNED CIT(A) HAD ERRED IN HOLDING THE ADDITION OF RS.1,50,000/ - OUT OF VARIOUS EXPENSES ON ADHOC BASIS. UNDER THE FACTS AND CIRCUMSTANCES OF THE MATTER, HE OUGHT TO HAVE DIRECTED THE ASSESSING OFFICER TO DELETE THE ADDITION OF R S.1,50,000/ - . 2. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. FACTS IN BRIEF ARE THAT THE ASSESSEE IS A DOCTOR, PRACTICING AS CARDIOLOGIST. THE ASSESSEE FILED ITS RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION ON 31 - 10 - 2006 DECLARING TOTAL INC OME OF RS.7,40,097/ - . THE ASSESSEE IS ALSO PARTNER OF TWO FIRMS, NAMELY, M/S VITAL CARE CENTRE AND (2) M/S NEELAM ENTERPRISES. DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE SHOWN PROFESSIONAL RECEIPTS OF RS.4,58,636/ - , REMUNERATION, INTEREST ON CAPITAL AND SHARE OF PROFIT FROM BOTH THESE FIRMS. THE SHARE OF PROFIT FROM THESE FIRMS ARE CLAIMED AS EXEMPT. THE AO DID NOT CONVINCE WITH THE SUBMISSION OF THE ASSESSEE AND MADE VARIOUS ADDITIONS BY COMPUTING INCOME FROM HOUSE PROPERTY IN RESPECT OF FLAT SITUATE D AT MANISH NAGAR AND KENWOOD. A.O. ALSO MADE ADHOC DISALLOWANCE OF EXPENSES CLAIMED BY ASSESSEE AND DETERMINED THE ASSESSED INCOME AT RS.10,62,971/ - . 3. BY THE IMPUGNED ORDER, THE CIT(A) PARTLY CONFIRMED THE ACTION OF THE A.O. AGAINST WHICH THE ASSESSE E IS IN APPEAL BEFORE US. 4. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND FOUND THAT AN ADDITION OF RS. 36,627/ - WAS MADE BY A.O. IN RESPECT OF FLAT SITUATED AT ITA NO. 2461 / 1 3 3 MANISH NAGAR, WHILE COMPUTING ALV U/S 23(1) OF THE I.T. ACT. WE FOUND THAT AT MANISH NAGAR FLAT WAS USED BY THE ASSESSEE FOR THE PURPOSE OF HIS BUSINESS AND PROFESSION CARRIED ON BY HIM. T HE ANNUAL LETTING VALUE OF FLAT USED BY THE ASSESSEE FOR THE PURPOSE OF HIS BUSINESS AND PROFESSION IS OUTSIDE THE PURVIEW OF SECTION 22 OF THE ACT. ACCORDINGL Y, THE A.O. WAS NOT JUSTIFIED IN MAKING THE ADDITION OF RS. 34,627/ - UNDER THE HEAD INCOME FROM HOUSE PROPERTY U/S 23(1) OF THE ACT IN RESPECT OF 50% SHARES IN FLAT USED AS NURSING HOME BY THE FIRM IN WHICH THE ASSESSEE IS A PARTNER. 5. IN RESPECT OF F LAT AT KENWOOD, WE FOUND THAT THE ASSESSEE COULD NOT BROUGHT ON RECORD ANY MATERIAL TO SUBSTANTIATE THE USE OF PREMISES AS STOREROOM TO KEEP THE RECORDS OF NURSING HOME SITUATED AT DISTANT PLACE. ACCORDINGLY, THE LD. CIT(A) HAS CORRECTLY CONFIRMED THE AC TION OF THE A.O. FOR ADDITION OF RS. 7957/ - U/S 23(1) OF THE ACT. 6. THE LD. CIT(A) ALSO UPHELD THE ADHOC ADDITION OF RS. 1,50,000/ - OUT OF VARIOUS EXPENSES INCURRED BY ASSESASEE . WE FIND THAT THE ADHOC ADDITION WAS MADE OUT OF EXPENDITURE INCURRED ON TELEPHONE EXPENSES, ELECTRICITY CHARGES, REPAIRS AND MAINTENANCE ETC. THE ENTIRE SAID DISALLOWANCE HAD BEEN MADE BY THE A.O. ON ADHOC BASIS AND THE WELL SETTLED POSITION OF LAW IS THAT ANY DISALLOWANCE MADE PURELY ON ADHOC BASIS IS NOT SUSTAINABLE IN THE EYES OF LAW AS HELD IN THE FOLLOWING DECIDED CASES: - (I) COCO COLA INDIA LIMITED V. JCIT (2006) 102 ITD 134(PUNE) (II) HUGHES ESCORTS COMMUNICATIONS LTD. JCIT(2007) 106 TTJ 1065(DEL) (III) TRIMURTI SALT CO. V. ITO (1981) 12 TTJ 485(CAL) (IV) SIMBHAOLI SUGAR MILLS LTD. V. ACIT (2007) 17 SOT 90(DEL) (V) RAJ ENTERPRISS V. ITO (1995) 51 TTJ 408 (JP): AND (VI) CORE HEALTH CARE LTD. V. DCIT (2000) 78 ITD 1 (AHM)(TM) ITA NO. 2461 / 1 3 4 KEEPING IN VIEW THE PERSONAL USE OF TELEPHONE, MOTOR CAR ETC., WE DIRECT THE A.O. TO CONFIRM THE DISALLOWANCE OF RS. 6328/ - ON ACC OUNT OF TELEPHONE EXPENSES, RS. 2201/ - ON ACCOUNT OF MOTOR CAR EXPENSES AND RS. 5060/ - ON ACCOUNT OF DEPRECIATION ON MOTOR CAR WHICH IS EQUAL TO 10% OF THESE EXPENSES. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED IN PART. ORDER PRONOUNCED I N THE OPEN COURT ON THIS 11/02/ 201 5 . 11/02 / 201 5 SD/ - SD/ - ( ) ( SANJAY GARG ) ( ) ( R.C.SHARMA ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED 11/02 /201 5 /PKM , PS COPY OF THE ORDER FORWARDED TO : / BY ORDER, ( ASSTT. REGISTRAR) / ITAT, MUMBAI 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / THE CIT(A), MUMBAI. 4. / C IT 5. / DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//