Dr Chandra Gupt Agrawal, Lucknow V. ACIT-VI, Lucknow

ITA 268/LKW/2011

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 6540 (ITAT-LUCKNOW)
• Duration Of Justice: 3 year(s) 1 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-06-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 23-05-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 10-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ALOK MITRA
• Assessee Lawyers: YOGESH AGARWAL
• Keywords: Depreciation
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B , LUCKNOW BEFORE SHRI S UNIL KUMAR YADAV , JUDICIAL MEMBER AND SHRI. A. K. GARODIA , ACCOUNTANT MEMBER ITA NO. 268/LKW/2011 ASSESSMENT YEAR: 2005 - 06 DR. CHANDRA GUPTA AGARWAL LUCKNOW V. ASSTT. CIT RAN G E VI LUCKNOW PAN: AEHPA1231N (APP ELL ANT) (RESPONDENT) APP ELL ANT BY: SHRI. YOGESH AGARWAL, ADVOCATE RESPONDENT BY: SHRI. ALOK MITRA, D.R. DATE OF HEARING: 23 0 5 2014 DATE OF PRONOUNCEMENT: 25 0 6 2014 O R D E R PER SUNIL KUMAR YADAV: THI S APPEAL IS PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A), INTER ALIA, ON THE FOLLOWING GROUNDS: - 1 . THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - II, LUCKNOW [HERE - IN - AFTER REFERRED TO AS THE LD. CIT (A)'S] ERRED ON FACTS AND IN LAW IN CO NFIRMING THE ADDITION OF RS. 1,80,407 / - BEING LOAN RECEIVED FROM SHRI. A.K. SHUKLA A RESIDENT OF CANADA AND IN NOT APPRECIATING THE SUBMISSIONS AND THE DOCUMENTS SUBMITTED BEFORE HIM AND THUS THE ADDITION BEING BASED ON NOTIONS, CONJECTURES AND SURMISES MA Y KINDLY BE ORDERED TO BE DELETED. 2 . THE LD. CIT (A)'S ERRED ON FACTS AND IN LAW IN PARTLY CONFORMING THE ADDITION OF RS.24,139/ - AND ONLY GIVING A RELIEF OF RS.3,106/ - UNDER THE HEAD TRAVELLING AND CONVEYANCE FOR ALLEGED NON PROFESSIONAL PURPOSES AND AS THE SAME IS NOT BASED ON ANY COGENT MATERIAL ON RECORD AND MADE ONLY ON WHIMS AND FANCIES THE SAME MAY KINDLY BE ORDERED TO BE DELETED. PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 2 - : 3 . THE LD. CIT (A)'S ERRED ON FACTS AND IN LAW IN PARTLY CONFORMING THE ADDITION OF RS.3,462 / - AND ONLY GIVING A RELIEF OF RS. 692 / - UNDER THE HEAD DEPRECIATION ON CAR FOR ALLEGED NON PROFESSIONAL PURPOSES AND AS THE SAME IS NOT BASED ON ANY COGENT MATERIAL ON RECORD AND MADE ONLY ON WHIMS AND FANCIES THE SAME MAY KINDLY BE ORDERED TO BE DELETED. 4 . THE LD CIT (A)'S ERRED ON FACTS AN D IN LAW IN CONFIRMING THE ADDITION OF RS.27,966 / - BEING 30% OF AGRICULTURAL INCOME DISCLOSED OF RS.93,220 / - AS AN INCOME FROM OTHER SOURCES WITHOUT BRINGING ANY MATERIAL ON RECORD ONLY ON WHIMS AND FANCIES AND THUS THE ADDITION MADE MAY KINDLY BE ORDERED TO BE DELETED. 2 . APROPOS GROUND NO.1, IT IS NOTICED THAT THE ASSESSEE HAS INTRODUCED A LOAN OF RS.1,80,407/ - RECEIVED FROM SHRI. A. K. SHUKLA RESIDENT OF CANADA. ON ACCOUNT OF NON - PRODUCTION OF THE CREDITOR, THE ASSESSING OFFICER HAS TREATED THE ENTIRE CRED IT AS UNEXPLAINED AND MADE ADDITION OF THE SAME UNDER SECTION 68 OF THE INCOME - TAX ACT, 1961 (HEREINAFTER CALLED IN SHORT THE ACT') . 3 . AN APPEAL WAS FILED BEFORE THE LD. CIT(A) WITH THE SUBMISSION THAT THE ASSESSEE HAS PLACED RELEVANT EVIDENCE I.E. CONFIRMA TION LETTERS AND BANK STATEMENTS IN ORDER TO PROVE THE GENUINENESS OF THE TRANSACTION, ETC., BUT THE SAME WAS NOT APPRECIATED BY THE ASSESSING OFFICER AND HE MADE THE ADDITION. THE LD. CIT(A), THOUGH RE - EXAMINED THE ISSUE IN THE LIGHT OF THE ARGUMENTS OF THE ASSESSEE, BUT WAS NOT CONVINCED WITH IT AND THE ADDITION WAS CONFIRMED. 4 . NOW THE ASSESSEE IS BEFORE US WITH THE SUBMISSION THAT THE LD. CIT(A) HAS GONE ON TECHNICAL POINT, LIKE NATURE OF DOLLARS WHETHER IT IS CANADA OR U.S AND THE NAME OF THE PERSONS AP PEARING IN THE BALANCE SHEET OF THE ASSESSEE. THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT IT HAS FILED THE BANK STATEMENT TO SHOW FROM WHERE THE MONEY IS TRANSFERRED AND THE ASSESSEE HAS RECEIVED THIS LOAN IN U.S. DOLLARS. COPY OF THE CONFIRMATIO N WAS ALSO FILED. IT WAS CONTENDED THAT SHRI. A. K. SHUKLA IS A RESIDENT OF CANADA, THEREFORE, IT HAS BECOME PRACTICALLY IMPOSSIBLE TO PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 3 - : PRODUCE HIM FOR CROSS - EXAMINATION. OTHERWISE , HE HAS ALL OTHER RELEVANT EVIDENCE TO PROVE THE GENUINENESS OF THE TRANSA CTION AND THE CREDITWORTHINESS OF THE CREDITOR, BUT THE REVENUE AUTHORITIES DID NOT APPRECIATE THE EVIDENCE FILED BY THE ASSESSEE. 5 . THE LD. D.R. HAS PLACED RELIANCE UPON THE ORDER OF THE LD. CIT(A). 6 . WE HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW A ND THE DOCUMENTS FILED BEFORE US ON BEHALF OF THE ASSESSEE IN THE LIGHT OF RIVAL SUBMISSIONS AND WE FIND THAT THE ASSESSEE HAS FILED CONFIRMATION LETTER OF SHRI. A. K. SHUKLA AND THE BANK STATEMENTS TO SHOW FROM WHERE THE MONEY WAS RECEIVED BY THE ASSESSEE . THE ENTIRE TRANSACTION WAS UNDERTAKEN THROUGH BANKING CHANNEL. THEREFORE, IT SHOULD NOT BE DOUBTED ON TECHNICAL GROUND THAT AT ONE POINT OF TIME THE ASSESSEE HA S STATED THAT HE RECEIVED CANADIAN DOLLARS , WHEREAS IN THE CONFIRMATION LETTER HE HAS STATED THAT HE HAS RECEIVED THE LOAN IN US DOLLARS. SINCE THE ASSESSEE HAS FILED ENORMOUS EVIDENCE TO ESTABLISH THE GENUINENESS OF THE TRANSACTION AND CREDITWORTHINESS OF THE CREDITOR, ADDITION IS NOT CALLED FOR UNLESS AND UNTIL IT IS PROVED OTHERWISE. ACCORDI NGLY, WE FIND NO MERIT IN THE ADDITION AND WE DELETE THE SAME AFTER SETTING ASIDE THE ORDER OF THE LD. CIT(A) ON THIS ISSUE. 7 . APROPOS GROUND NO.2, IT IS NOTICED THAT THE ASSESSING OFFICER HAS MADE DISALLOWANCE OF TRAVELLING AND CONVEYANCE CHARGES ON ACCOUNT OF NON - PROFESSIONAL USE. THE ASSESSING OFFICER HAS MADE DISALLOWANCE OF 25% OF THE TOTAL CLAIM RAISED BY THE ASSESSEE ON ACCOUNT OF PERSONAL USE OF THE VEHICLES, BUT IT WAS REDUCED BY THE LD. CIT(A) TO 20%. 8 . NOW THE ASSESSEE IS BEFORE US WITH THE SUBMISSI ON THAT VEHICLE WAS USED FOR THE P ROFESSION OF THE ASSESSEE. 9 . THE LD. D.R., ON THE OTHER HAND, HAS PLACED RELIANCE UPON THE ORDER OF THE LD. CIT(A). PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 4 - : 10 . HAVING CAREFULLY EXAMINED THE ISSUE IN DETAIL IN THE LIGHT OF THE RIVAL SUBMISSIONS, WE FIND THAT UNDISPUTED LY PERSONAL USE OF VEHICLES CANNOT BE RULED OUT. THEREFORE, CERTAIN DISALLOWANCE IS CALLED FOR. BUT THE DISALLOWANCE ESTIMATED BY THE LD. CIT(A) @ 20% IS ON HIGHER SIDE AND WE ACCORDINGLY REDUCE THE SAME TO 10% TO MEET THE ENDS OF JUSTICE. ACCORDINGLY, WE DIRECT THE ASSESSING OFFICER TO RE - COMPUTE THE DISALLOWANCE @ 10% OF THE TOTAL CLAIM ON ACCOUNT OF PERSONAL USE OF VEHICLE. 11 . APROPOS GROUND NO.3, IT IS NOTICED THAT THE ASSESSING OFFICER HAS DISALLOWED DEPRECIATION ON CAR AT 25% ON ACCOUNT OF PERSONAL US E, WHICH WAS RESULTED INTO DISALLOWANCE OF RS.3,462/ - AND THE SAME WAS REDUCED TO RS.2,770/ - BY THE LD. CIT(A). 12 . NOW THE ASSESSEE IS BEFORE US. 13 . KEEPING IN VIEW THE FINDINGS GIVEN IN THE FOREGOING PARA, WE REDUCE THE DISALLOWANCE ON ACCOUNT OF DEPRECIATION T O 10% ON ACCOUNT OF PERSONAL USE OF THE VEHICLE. ACCORDINGLY, THE ASSESSING OFFICER IS DIRECTED TO RE - COMPUTE THE DISALLOWANCE IN TERMS INDICATED ABOVE. 14 . APROPOS GROUND NO.4, IT IS NOTICED THAT THE ASSESSEE HAS DECLARED AGRICULTURAL INCOME AT RS.93,220/ - . BEING NOT CONVINCED WITH THE EXPLANATIONS OF THE ASSESSEE, THE ASSESSING OFFICER HAS ESTIMATED 30% OF THE ALLEGED AGRICULTURAL INCOME AS INCOME FROM OTHER SOURCES AND MADE THE ADDITION OF THE SAME. 15 . THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A), B UT DID NOT FIND FAVOUR WITH HIM. 16 . NOW THE ASSESSEE IS BEFORE US AND HAS PLACED HEAVY RELIANCE UPON THE COPIES OF THE REVENUE RECORD, WITH THE SUBMISSION THAT THE ASSESSEE OWNS SUBSTANTIAL AGRICULTURAL HOLDINGS WHICH WAS UNDER CULTIVATION. THEREFORE, AGRICU LTURAL INCOME DECLARED OUT OF IT SHOULD BE ACCEPTED. PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 5 - : 17 . THE LD. D.R., ON THE OTHER HAND, HAS PLACED RELIANCE UPON THE ORDER OF THE LD. CIT(A). 18 . HAVING GIVEN A THOUGHTFUL CONSIDERATION TO THE RIVAL SUBMISSIONS AND FROM A CAREFUL PERUSAL OF THE ORDERS OF THE A UTHORITIES BELOW, WE FIND THAT THE ASSESSEE HAS FILED COPIES OF REVENUE RECORD BEFORE THE LD. CIT(A) AND THE LD. CIT(A) HIMSELF HAS ACCEPTED THAT THE ASSESSEE OWNS AGRICULTURAL LAND, BUT HE HAS CONFIRMED THE DISALLOWANCE ON THE GROUND THAT NO EVIDENCE WAS FILED WITH REGARD TO SALE OF AGRICULTURAL PRODUCE AND THE EXPENSES INCURRED IN AGRICULTURAL OPERATION. IN THIS REGARD, WE WOULD LIKE TO MENTION HERE THAT IN A COUNTRY LIKE INDIA FARMERS ARE NOT THAT MUCH LITERATE AND THEY ARE NOT AWARE OF THE MAINTENANCE OF ACCOUNTS, ETC. AND NO FA R MER MAINTAINS ACCOUNTS FOR THE EXPENSES INCURRED IN AGRICULTURAL OPERATION AND AGRICULTURAL INCOME EARNED. THEREFORE, IT IS NOT PROPER TO SAY THAT IF THE ASSESSEE DOES NOT MAINTAIN ANY ACCOUNTS FOR AGRICULTURAL OPERATION, HE IS NOT ENTITLED FOR ANY AGRICULTURAL INCOME. WE ARE OF THE VIEW THAT IN SUCH TYPE OF THINGS, AGRICULTURAL INCOME IS TO BE ESTIMATED ON THE BASIS OF AGRICULTURAL HOLDINGS. IN THIS CASE, THE ASSESSEE HAS SUFFICIENT AGRICULTURAL HOLDINGS, THEREFORE, THE AGRIC ULTURAL INCOME DECLARED BY THE ASSESSEE SHOULD BE ACCEPTED. WE ACCORDINGLY SET ASIDE THE ORDER OF THE LD. CIT(A) ON THIS ISSUE AND DELETE THE ADDITION . T HE ASSESSING OFFICER IS ACCORDINGLY DIRECTED TO ACCEPT THE AGRICULTURAL INCOME DECLARED BY THE ASSESS EE. 19 . IN THE RESULT, APPEAL OF THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 25.6.2014. SD/ - SD/ - [ A. K. GARODIA ] [ S UNIL KUMAR Y ADAV ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 25 TH JUNE , 2014 JJ: 1906 PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 6 - : COPY FORWARDED TO: 1 . APPELL ANT 2 . RESPONDENT 3 . CIT(A) 4 . CIT 5 . DR ASSISTANT REGISTRAR PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ )