ARYABHATTA, Berhampur V. ITO, Ward-1, Berhampur, Berhampur

ITA 260/CTK/2013

• Counselvise Citation: 26022114 RSA 2013
• Duration Of Justice: 1 year(s) 10 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-03-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 29-01-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 23-04-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ANIL SHARMA L D
• Keywords: Gift; Depreciation; Capital receipt
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH ES , CUTTACK BEFORE SHRI P.K. BANSAL, HONBLE ACCOUNTANT MEMBER AND SHRI D.T. GARASIA, HONBLE JUDICIAL MEMBER ITA NO. 2 6 0 / CTK /201 3 : (ASST. YEAR : 200 8 - 0 9 ) ARYABHATTA , COURTPETA SQUARE , B ERHAMPUR . PAN : A AAAA8063A . (APPELLANT) VS. INCOME TAX OFFICER , WARD - 1 , B ERHAMPUR . (RESPONDENT) A PPELLANT BY : NONE . RE SPONDENT BY : SHRI ANIL SHARMA , L D. D.R. DATE OF HEARING : 29 / 01 /201 5 DATE OF PRONOUNCEMENT : 04/03 /201 5 O R D E R PER P.K. BANSAL THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) , B ERHAMPUR, ODISHA DT D . 18 .0 1 .201 3 BY TAKING THE FOLLOWING EFFECTIVE GROUNDS OF APPEAL : - 1. THAT F OR THE FACTS OF THE CASE , THE APPEAL ORDER PRONOUNCED BY THE LEARNED CIT(APPEAL), BERHAMPUR, IS NOT PROPER AND CORRECT. THAT THE APPELLANT HAD ALWAYS RESPONDED TO THE DEPARTMENTAL NOTICES. UNDER THE CIRCUMSTANCES THE APPEAL ORDER PRONOUNCED BY THE LEARNED CIT(APPEAL) IS UNJUS TIFIED. 2. THAT FOR THE FACTS OF THE CASE, THE ASSESSEE HAS RECEIVED RS 352000/ - AS INSTITUTIONAL DEVELOPMENT FUND WHICH IS ACTUALLY A CAPITAL RECEIPTS AND FULLY DISCLOSED BY THE ASSESSEE. HOWEVER THE LEARNED CIT(APPEAL) TREATED THIS INSTITUTIONAL DEVEL OPMENT FUND RECEIPTS OF RS 352000/ - AS THE ASSESSES INCOME FROM UNDISCLOSED SOURCE AND ADDED TO THE TOTAL INCOME WHICH IS NOT CORRECT AND AGAINST THE FACTS OF THE CASE. HENCE THE ADDITIONS OF RS. 352000/ - IS LIABLE TO BE FULLY DELETED. 3. THAT FOR THE FACT S OF THE CASE THE ASSESSEE HAS SHOWN UNSECURED LOAN OF RS 33500/ - IN THE BALANCE SHEET WHICH IS BEARING OLD BALANCE CARRIED FORWARDED FROM PAST YEAR. FURTHER DURING THE SCRUTINY ASSESSMENT 2 ITA NO. 2 6 0 / CTK /201 3 (ASST. YEAR : 200 8 - 0 9 ) PROCEEDINGS THE ASSESSEE WAS NEVER ASKED REGARDING THE UNSECURED L OAN FOR WHICH REASONS THE DETAILS WERE NOT SUBMITTED BY THE ASSESSEE. IN VIEW OF THE ABOVE FACTS TREATMENT OF UNSECURED LOAN OF RS 30000 AS THE INCOME OF THE ASSESSEES AS UNEXPLAINED LOAN CREDIT U/S 68 OF THE IT ACT 1961, BY THE LEARNED CIT(APPEAL) IS UNJU STIFIED AND NOT CORRECT. HENCE THE ADDITIONS OF RS 30000/ - IS LIABLE TO BE FULLY DELETED. 4. FOR THAT ON THE FACTS OF THE CASE THE DISALLOWANCE OF RS 13305/ - ON ADHOC BASIS OUT OF TOTAL EXPENDITURE WITHOUT ANY POSITIVE FINDINGS THAT THE EXPENDITURES WAS NO T INCURRED FOR BUSINESS PURPOSE, BY THE LEARNED AO IS WITHOUT ANY BASIS WHICH IS UNJUSTIFIED AND NOT CORRECT, HENCE THE ADDITIONS OF RS 13305/ - IS LIABLE TO BE FULLY DELETED. 5. FOR THAT ON THE FACTS OF THE CASE THE ASSESSEE HAD CLAIMED RS 95263/ - AS DEPRE CIATION ON THE FIXED ASSETS. HOWEVER THE LEARNED CIT(APPEAL) ALLOWED DEPRECIATION OF RS 70758/ - ON THE BASIS OF THE VOUCHERS FOR THE PURCHASE OF FIXED ASSETS SEIZED BY THE IT DEPT. INFACT THE ASSESSEE HAS PURCHASED ALL THE FIXED ASSETS MENTIONED IN THE DE PRECIATION STATEMENT WHICH HAVE PHYSICALLY AVAILABLE DURING THE PREVIOUS YEAR. HENCE THE DISALLOWANCE OF DEPRECIATION OF RS 24505/ - BY THE LEARNED CIT(APPEAL) IS UNJUSTIFIED, NOT PROPER AND CORRECT. HENCE THE ADDITIONS OF RS 24505/ - IS LIABLE TO FULLY DELE TED. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE DERIVES INCOME FROM A COACHING CENTRE. THE ASSESSEE FILED R ETURN OF INCOME ON 24.09.2008 SHOWING TOTAL INCOME AT RS.1,08,100/ - . THE ASSESSMENT WAS COMPLETED ON AN INCOME OF RS.5,27,910/ - U/S 143(3). THE CIT(A) DISMISS THE APPEAL. 3. GROUND NO.1 AND 6 ARE GENERAL IN NATURE AND DOES NOT REQUIRE ANY ADJUDICATION. GROUND NO.2 RELATE S TO THE ADDITION OF RS.3,52,000/ - . THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS RUNNING A COACHING CENTRE. THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAS COLLECTED INSTITUTION DEVELOPMENT FUND AMOUNTING TO RS.3,52,000/ - FROM THE STUDENTS. THIS AMOUNT HAS BEEN DIRECTLY CREDITED TO THE CAPITAL AMOUNT OF THE ASSESSEE. THE ASSESSING OFFICER WAS OF THE VI EW THAT THIS IS A REVENUE RECEIPT AND ADDED THE SAME IN THE INCOME OF THE ASSESSEE. WHEN THE MATTER WENT BEFORE CIT(A), CIT(A) CONFIRMED THE ADDITION. 3 ITA NO. 2 6 0 / CTK /201 3 (ASST. YEAR : 200 8 - 0 9 ) 4. WE HEARD THE LD. D.R. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS MADE BY LD. D.R. AND HAVE GONE T HROUGH THE ORDERS OF THE AUTHORITIES BELOW. THIS IS AN UNDISPUTED FACT THAT THE SAID AMOUNT HAS BEEN RECEIVED BY THE ASSESSEE DURING THE COURSE OF CARRYING ON ITS BUSINESS FROM THE STUDENTS WHO ARE ITS CLIENTS. THE AMOUNT IS NON - REFUNDABLE. THE RECEIPTS A RE NEITHER THE VOLUNTARY CONTRIBUTION NOR ARE IN THE NATURE OF GIFTS. THESE RECEIPTS ARE INCIDENTAL TO THE PROFESSION OF THE ASSESSEE. WE THEREFORE, ARE OF THE VIEW THAT THE CIT(A) HAS CORRECTLY CONFIRMED THE ORDER OF THE ASSESSING OFFICER TREATING THESE RECEIPTS TO BE REVENUE RECEIPTS. THERE IS NO INFIRMITY OR ILLEGALITY IN THE ORDER OF THE CIT(A) WHICH WARRANT OUR INTERFERENCE. WE ACCORDINGLY, DISMISS THIS GROUND. 5. GROUND NO.3 RELATES TO THE ADDITION OF RS.30,000/ - AS AN EXPLAINED CREDIT. WE HEARD TH E LD. D.R AND CAREFULLY CONSIDERED THESE SUBMISSIONS. WE NOTED THAT THE ASSESSEE HAS SHOWN UNSECURED LOAN OF RS.33,500/ - BEING OLD BALANCES CARRIED FORWARD. THESE LOANS HAVE NOT BEEN RECEIVED OR CREDITED DURING THE IMPUGNED ASSESSMENT YEAR THEREFORE, NO AD DITION CAN BE MADE IN THE IMPUGNED ASSESSMENT YEAR. WE ACCORDINGLY ALLOW THIS GROUND AND DELETE THE ADDITION OF RS.30,000/ - . 6. GROUND NO.4 RELATES TO THE DISALLOWANCE OF RS.13305/ - . OUT OF THE EXPENSES CLAIMED BY THE ASSESSEE AMOUNTING TO RS.1,33,081/ - . THE ASSESSING OFFICER NOTED THAT THERE ARE ONLY FEW VOUCHERS FOR THE EXPENSES AND ALL THE EXPENSES ARE NOT FULLY VOUCHED . THEREFORE, HE DISALLOWED 10% OF THE EXPENDITURE AMOUNTING TO RS.13,308/ - . THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(A). THE CIT(A) CONFIRMED THE DISALLOWANCE. AFTER CAREFULLY CONSIDERING THE SUBMISSION OF THE LD. D.R AND GOING THROUGH THE ORDER OF THE TAX AUTHORITIES BELOW , WE NOTED THAT DURING THE COURSE OF TH E SURVEY BOOKS OF THE ASSESSEE ARE DULY IMPOUNDED. THE ASSESSING OFFICER VERIFIED THE BOOKS AND VOUCHERS 4 ITA NO. 2 6 0 / CTK /201 3 (ASST. YEAR : 200 8 - 0 9 ) IMPOUNDED BUT OBSERVED ONLY PART OF THE EXPENDITURE ARE VERIFIABLE BUT DID NOT POINT OUT WHICH OF THE EXPENDITURE INCURRED BY THE ASSESSEE UNDER THE SI X DIFFERENT HEADS ARE NOT FULLY VOUCHED. THE ASSESSING OFFICER DID NOT DENY THE DETAILS IN THE BOOKS. THE DISALLOWANCE WAS MADE ON ADHOC BASIS. I N OUR OPINION NO DISALLOWANCE CAN BE MADE ON ADHOC BASIS. WE ACCORDINGLY DELETE THE DISALLOWANCE. THUS THE GROU ND NO.4 STANDS ALLOWED. 7. GROUND NO.5 RELATES TO THE EXCESS CLAIM OF DEPRECIATION AMOUNTING TO RS.24,505/ - . THE ASSESSEE MADE THE ADDITIONS IN THE VARIOUS ASSETS DURING THE YEAR AND CLAIMED DEPRECIATION AMOUNTING TO RS.95,263/ - . THE ASSESSING OFFICER S UBMITTED ALL THE INVOICES FOR THE PURCHASE ARE TAGGED WITH IMPOUNDED LOOSE SHEETS. THE ASSESSING OFFICER NOTED THAT INVOICES IN RESPECT OF COMPUTER ACCESSORIES AND XEROX MACHINE WERE AVAILABLE BUT NOT IN RESPECT OF OTHER ASSETS. THE ASSESSING OFFICER ALLO WED DEPRECIATION IN RESPECT OF THE ASSETS FOR WHICH INVOICES WERE AVAILABLE AND COMPUTED IT AT RS.70,758/ - AS DETAILED IN PARA NO.5 OF THE ASSESSMENT ORDER AND DISALLOWED A SUM OF RS.24,505/ - . WHEN THE MATTER WENT BEFORE THE CIT(A), THE CIT(A) CONFIRMED THE ORDER OF THE ASSESSING OFFICER. 8. WE HEARD THE SUBMISSIONS MADE BY THE LD. D.R AND CAREFULLY CONSIDERED THE SAME ALONG WITH THE ORDER OF THE TAX AUTHORITIES BELOW. WE NOTED THAT THE CIT(A) HAS DISPOSED OF THE APPEAL EX - PARTE AFTER GIVING SIX OPPOR TUNITIES TO THE ASSESSEE. IN THE INTEREST OF JUSTICE AND FAIR PLAY WE SET ASIDE THE ORDER OF THE CIT(A) AND RESTORE THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER WITH THE DIRECTION THAT THE ASSESSING OFFICER SHALL RE - DECIDE THIS ISSUE AFTER GIVING PROP ER AND SUFFICIENT OPPORTUNITY TO THE ASSESSEE FOR PROVING THAT ALL THESE FIXED ASSETS WERE DULY PURCHASED BY THE ASSESSEE IN ACCORDANCE WITH LAW . THE ASSESSEE IS ALSO DIRECTED TO CO - OPERATE THE ASSESSING OFFICER. THUS THIS GROUND IS STATISTICALLY ALLOW ED. 5 ITA NO. 2 6 0 / CTK /201 3 (ASST. YEAR : 200 8 - 0 9 ) 9 . IN THE RESULT, APPEAL FILED BY THE ASSESSEE STANDS PARTLY ALLOWED FOR STATISTICAL PURPOSE. 10 . ORDER PRONOUNCED IN PURSUANCE OF RULE 34(4) OF ITAT RULES, 1963 BY PUTTING ON TH E NOTICE BOARD OF THE BENCH AT CUTTACK ON 04.03.2015. SD/ - (D.T.GARASIA) JUDICIAL MEMBER SD/ - (P.K. BANSAL) ACCOUNTANT MEMBER PLACE : PANAJI - GOA DATED : 04/03 /201 5 * A * COPY TO : (1) APPELLANT (2) RESPONDENT (3) CIT CONCERNED (4) CIT(A) CONCERNED (5) D.R (6) GUARD FILE TRUE COPY, BY ORDER ASSISTANT REGISTRAR ITAT, CUTTACK BENCH, CUTTACK