Bansal Timber Store, Kaithal V. JCIT, Kurukshetra

ITA 271/CHANDI/2011

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 5403 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-06-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 17-03-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: PERMIL GOEL
• Keywords: Depreciation

Judgement Text

BANSAL TIMBER STORE 271/CHANDI/2011 IN THE INCOME TAX APPELLATE TRIBUNAL: B BENCH: CH ANDIGARH BEFORE SHRI D K SRIVASTAVA, AM AND MS. SUSHMA CHOWL A, JM ITA NO. 271/CHANDI/2011 ASSESSMENT YEAR: 2007-08 BANSAL TIMBER STORE, KAITHAL V J.C.I.T. KURUKSH ETRA PAN: AAAFB 6519 R APPELLANT BY: SHRI PERMIL GOEL RESPONDENT BY: SMT. SARITA KUMARI ORDER D K SRIVASTAVA: THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE LD. CIT(A) ON 3.1.11, ON THE FOLLOWIN G GROUNDS: 1 THAT ITO/LD. CIT(A) ERRED IN LAW AND FACT IN MAK ING/CONFIRMING ADDITION OF RS. 50,000/- ON ACCOUNT OF INCREASE IN SALARY PA ID, AS COMPARED TO LAST YEAR, WITHOUT APPRECIATING FACTS, STATED IN REPLY FILED B Y ASSESSEE FIRM BEFORE AO/LD. CIT(A). 2 THAT AO (AS CONFIRMED IN APPEAL) ERRED IN LAW AN D FACT IN MAKING ADDITION OF RS. 21533/- BY DISALLOWING DEPRECIATION @ 1/8 OF 1,72,260/- PAPRTICULARLY WHEN LD. CIT(A) FAILED TO CONSIDER TH AT FBT WAS ALSO PAID ON DEPRECIATION AND MOREOVER DEPRECIATION IS A STATUTO RY ALLOWANCE AND CANNOT BE RESTRICTED ON THE BASIS OF PERSONAL USE. 2. WE HAVE HEARD BOTH THE PARTIES. 3. APROPOS DISALLOWANCE OF RS.50,000/- OUT OF SALAR Y, THE ASSESSING OFFICER FOUND THAT THERE WAS INCREASE IN PAYMENT OF SALARY FROM R S.8,68,100/- LAST YEAR TO RS. 12,53,800/- IN THE YEAR UNDER APPEAL. ON BEING CALL ED UPON TO EXPLAIN THE REASONS FOR INCREASE IN THE AMOUNT OF SALARY, THE ASSESSEE EXPL AINED THAT IT HAD PAID SAWING CHARGES AMOUNTING TO RS.18,24,564/- LAST YEAR WHICH WERE NOT PAID IN THE YEAR UNDER AS THE ASSESSEE HAD TAKEN A SAW MILL ON LEASE BY PA YING LEASE RENT OF RS.60,000/- AND ACCORDINGLY HAD TO ENGAGE ADDITIONAL STAFF AND LABO UR TO OPERATE THE SAW MILL. IT WAS CLAIMED BY THE ASSESSEE THAT IT COULD SAVE SUBSTANT IAL SAWING CHARGES BY ENGAGING ADDITIONAL LABOUR TO OPERATE THE SAW MILL WHICH LED TO INCREASE IN SALARY PAYMENTS IN THE YEAR UNDER APPEAL. THE CORRECTNESS OF THE EXPLA NATION GIVEN BY THE ASSESSEE HAS NOT BEEN DOUBTED EITHER BY THE ASSESSING OFFICER OR BY THE CIT(A). THE ASSESSEE HAS BANSAL TIMBER STORE 271/CHANDI/2011 THUS SATISFACTORILY EXPLAINED THE REASONS FOR INCRE ASE IN SALARY. NEITHER THE ASSESSING OFFICER NOR THE CIT(A) HAS GIVEN ANY SPECIFIC INSTA NCE TO ESTABLISH THAT THE SALARY PAYMENTS ARE NOT SUPPORTED BY VOUCHERS. IN THIS VIE W OF THE MATTER, THE IMPUGNED DISALLOWANCE MADE BY THE ASSESSING OFFICER AND CONF IRMED BY THE CIT(A) IS DELETED. GROUND NO. 1 IS ALLOWED. 4. APROPOS DISALLOWANCE OF DEPRECIATION ON CAR @ 1/ 8 OF RS. 1,72,260/-, THE ASSESSEE HAD FILED WRITTEN SUBMISSIONS BEFORE THE C IT(A) IN WHICH IT WAS CLAIMED THAT THE ASSESSEE HAD PAID FBT ON TELEPHONE/MOBILE AS AL SO ON RUNNING/MAINTENANCE OF CARS INCLUDING DEPRECATION THEREON AND THEREFORE SO UGHT DELETION OF THE IMPUGNED DISALLOWANCE OF DEPRECIATION ON CARS ON THAT BASIS. THERE IS NO DISCUSSION ABOUT THIS ASPECT OF THE MATTER IN THE ORDER OF THE CIT(A). HI S ORDER IS THEREFORE VACATED. THE ASSESSING OFFICER IS DIRECTED TO VERIFY THE CLAIM O F THE ASSESSEE AS REGARDS THE PAYMENT OF FBT ON DEPRECIATION OF CAR. IF THE ASSES SEE IS FOUND TO HAVE PAID FBT ON DEPRECIATION OF CAR, THE ASSESSING OFFICER, IN THAT CASE, WOULD NOT MAKE ANY DISALLOWANCE OTHERWISE THE DISALLOWANCE CONFIRMED B Y THE CIT(A) WILL STAND FOR THE REASONS GIVEN BY HIM. GROUND NO. 2 IS TREATED AS AL LOWED FOR STATISTICAL PURPOSES. 5. APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED ON 20 TH JUNE 2011 SD/- SD/- (SUSHMA CHOWLA) (D K SRIVASTAVA) JUDICIAL MEMBER ACCOUNTANT MEMBER CHANDIGARH: THE 20TH JUNE 2011 SURESH COPY TO: 1. THE APPELLANT, BANSAL TIMBER STORE, KAITHAL 2. THE RESPONDENT, J.C.I.T. KURUKSHETRA. 3. THE CIT(A), KARNAL 4. THE LD. CIT, KARNAL 5. THE D.R, INCOME-TAX DEPARTMENT, CHANDIGARH ASSISTANT REGISTRAR, ITAT, CHANDIGARH BANSAL TIMBER STORE 271/CHANDI/2011