M/s Sea Hawk Tour & Travels (Pvt.) Ltd., New Delhi V. Addl. CIT, New Delhi

ITA 2715/DEL/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 58795 (ITAT-DELHI)
• Duration Of Justice: 9 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-02-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: G
• Next Hearing Date: 23-02-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 26-05-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S MOHANTY
• Keywords: Depreciation; Additional evidence; Revenue expenditure; Capital expenditure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH G : NEW DELHI) SHRI I.P. BANSAL, JUDICIAL MEMBER AND BEFORE SHRI B.C. MEENA, ACCOUNTANT MEMBER ITA NO.2715/DEL./2011 (ASSESSMENT YEAR : 2007-08) M/S. SEA HAWK TOUR & TRAVELS PVT. LTD., VS. ADDL. C IT, RANGE 8, C 101/B, 1 ST FLOOR, LEFT SIDE, NEW DELHI. PANCHSHEEL VIHAR, KHIRKI EXTENSION, MALVIYA NAGAR, NEW DELHI 110 017. (PAN : AAFCS6921A) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI PRATAP GUPTA, CA REVENUE BY : SHRI S. MOHANTY, DR ORDER PER B.C. MEENA, ACCOUNTANT MEMBER : THIS APPEAL FILED BY THE ASSESSEE EMANATES FROM THE ORDER OF CIT (APPEALS)- XI, NEW DELHI DATED 28.03.2011 FOR THE ASSESSMENT Y EAR 2007-08. 2. DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE WAS ENGAGED IN THE BUSINESS OF PROVIDING THE CABS AND BUSES ON HIRE BA SIS TO THE PARTIES. 3. THE GROUNDS OF APPEAL READ AS UNDER :- 1. LD CIT(A) IS NOT JUSTIFIED IN LAW AND FACTS AND CIRCUMSTANCES OF THE CASE IN NOT ACCEPTING THE ADDITIONAL DOCUMEN TS FILED BEFORE HIM UNDER RULE 46A UNDER THE CIRCUMSTANCES WHEN ADDITIO N WAS MADE BY ASSESSING OFFICER WITHOUT RAISING ANY QUERY/SHOW CA USE FOR MAKING THE DISALLOWANCE. 2. LD CIT(A) IS NOT JUSTIFIED IN LAW AND FACTS AND CIRCUMSTANCES OF THE CASE AND IGNORING THE MATERIAL PLACED ON REC ORD, IN CONFIRMING ITA NO.2715/DEL./2011 2 THE ADDITION MADE BY ASSESSING OFFICER ON ACCOUNT O F COMMISSION PAID AMOUNTING TO RS. 3,45,501/- TO 4 PARTIES UNDER THE CIRCUMSTANCES WHEN NO SPECIFIC QUERY/ SHOW CAUSE IS RAISED/ISSUED AND SERVICES RENDERED BY THESE PARTIES WAS NOT DISPUTED BY ASSES SING OFFICER AND 2 PARTIES, EXAMINED BY ASSESSING OFFICER IN A.Y. 2008 -09, CONFIRMED SERVICES RENDERED BY THEM IN THE YEAR UNDER CONSIDE RATION IN THE STATEMENT RECORDED ON OATH AND COMMISSION RECEIVED. 3. LD CIT(A) IS NOT JUSTIFIED IN LAW AND FACTS AND CIRCUMSTANCES OF THE CASE AND IGNORING THE MATERIAL AND EVIDENCE PLACED ON RECORD, IN CONFIRMING THE DISALLOWANCE OF RS.1,00,000/-UNDE R THE HEAD REPAIR AND MAINTENANCE EXPENSES TREATING THE EXPENDITURE S O INCURRED AS CAPITAL EXPENDITURE AND ALLOWING THE DEPRECIATION O N THE SAME 4. ASSESSEE HAS EVERY RIGHT TO MAKE, ADD, DELETE, M ODIFY OR ALTER ANY GROUNDS OF APPEAL AT THE TIME OF HEARING. 4. WHILE PLEADING ON BEHALF OF THE ASSESSEE ON GROU ND NOS.1 & 2, THE LEARNED AR SUBMITTED THAT THE CIT (A) IS NOT JUSTIFIED IN N OT ACCEPTING THE ADDITIONAL DOCUMENTS FILED BEFORE HIM UNDER RULE 46A OF THE IN COME-TAX RULES, 1962. THE ASSESSING OFFICER MADE THE ADDITION WITHOUT RAISING ANY QUERY OR SHOW CAUSE TO THE ASSESSEE. THE CONFIRMATIONS WERE FILED BEFORE THE CIT (A) IN RESPECT OF THE COMMISSION PAID OF RS.3,45,501/- TO THE FOUR PARTIE S. THE ASSESSING OFFICER DID NOT MAKE ANY QUERY OR SHOW-CAUSE THE ASSESSEE ON THE IS SUE. THE ASSESSING OFFICER HAS EXAMINED THESE PERSONS IN THE ASSESSMENT PROCEEDING S FOR THE YEAR 2008-09. THESE PERSONS HAVE CONFIRMED THE SERVICES PROVIDED. THE STATEMENT OF OATH WAS ALSO RECORDED OF THESE PERSONS. LD. AR PLEADED THAT ISS UE MAY BE RESTORED TO THE FILE OF ASSESSING OFFICER TO DECIDE AFRESH. 5. ON THE OTHER HAND, THE LEARNED DR RELIED ON THE ORDERS OF THE AUTHORITIES BELOW. ITA NO.2715/DEL./2011 3 6. WE HAVE HEARD BOTH THE SIDES. THE CIT (A) HAS D EALT THE ISSUE IN PARA 4.2 OF HIS ORDER. FROM THE ORDER OF THE CIT (A), WE FIND THAT HE HAS NOT ADMITTED THE ADDITIONAL EVIDENCES FIELD BY THE ASSESSEE UNDER RU LE 46A BY HOLDING THAT THE CONDITIONS ARE NOT SATISFIED. AFTER HEARING BOTH S IDES, WE FIND THAT THERE WERE SUFFICIENT CONDITIONS UNDER WHICH THE ASSESSEE COUL D NOT FURNISH THESE DETAILS BEFORE THE ASSESSING OFFICER. KEEPING THESE FACTS IN VIEW AND IN THE INTEREST OF JUSTICE AND EQUITY, WE FIND IT PROPER TO SET ASIDE THE ORDER OF THE AUTHORITIES BELOW AND RESTORE THE ISSUE TO THE FILE OF THE ASSESSING OFFICER. TH E ASSESSEE IS DIRECTED TO SUBMIT ALL THE RELEVANT EVIDENCES ON WHICH THE RELIANCE IS PLA CED. THE ASSESSING OFFICER WILL DECIDE THE ISSUE AFRESH AS PER LAW. 7. IN THE GROUND NO.3, THE ISSUE INVOLVED IS SUSTAI NING THE ADDITION OF RS. 1 LAC UNDER THE HEAD REPAIR AND MAINTENANCE TREATING TH E SAME AS CAPITAL EXPENDITURE. 8. THE LEARNED AR SUBMITTED THAT THE DETAILS WERE S UBMITTED AND THIS WAS AN EXPENSES INCURRED ON REPAIRING OF A CAR NO.HR-55A-T 5860 WHICH IS EVIDENT FROM THE INVOICE OF MGF TOYOTA DATED 19.03.2007. THE TO TAL EXPENDITURE AS REPAIRS WAS OF RS.2,07,591/- AND OUT OF WHICH, THE INSURANCE CL AIM WAS RECEIVED OF RS.1,03,500/-. THE ASSESSEE GOT DISCOUNT OF RS.4,0 91/- AND THE BALANCE AMOUNT WAS PAID BY THE ASSESSEE AND DEBITED TO THE ACCOUNT OF REPAIRS AND MAINTENANCE EXPENSES. THE RELEVANT DOCUMENTS WERE ALSO SUBMITT ED BEFORE AUTHORITIES BELOW, HOWEVER, THE ADDITION WAS SUSTAINED. LD. AR PLEADE D TO DELETE THE SAME. 9. ON THE OTHER HAND, THE LEARNED DR RELIED ON THE ORDERS OF THE AUTHORITIES BELOW. ITA NO.2715/DEL./2011 4 10. WE HAVE HEARD BOTH THE SIDES. WE FIND THAT THI S EXPENDITURE WAS INCURRED ON THE REPAIR OF THE ACCIDENTED CAR OWNED BY THE ASSES SEE. THE CAR WAS USED IN THE BUSINESS OF THE ASSESSEE. THE PART OF THE EXPENSES WAS REIMBURSED BY THE INSURANCE COMPANY. THE BALANCE AMOUNT WAS PAID BY THE ASSESS EE TOWARDS THE REPAIRS AND MAINTENANCE. IN OUR CONSIDERED VIEW, THIS EXPENDIT URE WAS INCURRED BY THE ASSESSEE FOR THE BUSINESS PURPOSES UNDER THE HEAD REPAIR AN D MAINTENANCE EXPENSES WHICH IS ALLOWABLE AS A REVENUE EXPENDITURE. IN VIEW OF THESE FACTS, WE ALLOW THIS GROUND OF THE ASSESSEE. 11. GROUND NO.4 IS GENERAL IN NATURE AND DOES NOT R EQUIRE ANY ADJUDICATION. 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON THIS 29 TH DAY OF FEBRUARY, 2012. SD/- SD/- (I.P. BANSAL) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED THE 29 TH DAY OF FEBRUARY, 2012 /TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-XI, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.