ITO, DUNGARPUR V. Shri Mahendra Pal Singh, DUNGARPUR

ITA 278/JODH/2013

• Counselvise Citation: 27823314 RSA 2013
• Duration Of Justice: 1 year(s) 2 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-08-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 17-07-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 06-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N A JOSHI
• Keywords: Depreciation

Judgement Text

IN THE INCOME TAX APPELALTE TRIBUNAL : JODHPUR BENCH : JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER. ITA NO. 278 /JODH/2013 (A.Y. 200 9 - 10 ) ITO , WARD - DUNGARPUR , VS. SHRI MAHENDRA PAL SINGH, HEAD QRTS - UDAIPUR. PROP. POOJA TRANSPORT & CONSTRUCTION , VP O . NOLYAWARA, DISTRICT DUNGARPUR . PAN NO. AHOPC 5057 C (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI SHRAWAN KUMAR GUPTA. DEPARTMENT BY : SHRI N.A. JOSHI - D.R. DATE OF HEARING : 17 / 0 7 /201 4 . DATE OF PRONOUNCEMENT : 05 /0 8 /201 4 . O R D E R PER N.K. SAINI, A.M TH IS IS AN APPEAL BY THE DEPARTMENT AGAINST THE ORDER DATED 2 6 /0 2 /2013 OF L D . CIT(A), UDAIPUR . THE FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPEAL: ON THE FACTS AND IN THE PRESENT CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN: - 2 1. ALLOWING THE DEPRECIATION AT HIGHER RATE OF 30% ON HYDRAULIC EXCAVATOR AND DUMPERS, ROAD ROLLER FOR RS. 20,66,272/ - DISALLOWED BY THE AO DESPITE THE FACT THAT NORMAL RATE OF DEPRECIATION @ 15% IS ALLOWABLE BEING USED BY THE ASSESSEE AS NORMAL PLANT AND MACHINERY. 2. REDUCING THE DISALLOWANCE FROM RS. 5 LACS TO RS. 1.5 LACS MADE OUT OF EXPENDITURE INCURRED IN CASH , B E I NG UNSUPPORTED BY PROPER BILLS/VOUCHERS, DESPITE THE FACTS THAT THE DISALLOWANCE IS JUST 3% OF TOTAL CASH PAYMENT. THAT THE APPELLANT CRAVES TO ADD, AMEND, ALTER, DELETED OR MODIFY ANY OR ALL THE ABOVE GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING. 2 FIRST ISSUE VIDE GROUND NO. 1 REL A TES TO THE DELETION OF DISALLOWANCE MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DEPRECIATION ON HYDRAULIC EXCAVATOR, DUMPER AND ROAD ROLLER. 3. FACTS RELATING TO THIS ISSUE, IN BRIEF, ARE THAT THE ASSESSEE CLAIMED DEPRECIATION @ 30% ON HYDRAULIC EXCAVATOR, DUMPERS AND ROAD ROLLER ON ACCOUNT OF RUNNING THE VEHICLES ON HIRE . THE ASSESSING OFFICER , HOWEVER, ALLOWED THE DEPRECIATION @ 15% AND MADE DISALLOWANCE OF RS. 2 2 ,66,273/ - . 4. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) , WHO ALLOWED THE CLAIM OF THE ASSESSEE BY FOLLOWING THE DECISION DATED 28/07/2011 OF THIS BENCH OF THE TRIBUNAL IN THE CASE OF CIT VS. M/S. SAYIEED IQUBAL IN I.T.A.NO. 39/JU/2009 WHEREIN THE JUDGMENT OF THE HON'BLE ANDHRA PRADESH HIGH COURT IN THE CASE OF CIT VS. A.M. 3 CONSTRUCTION REPORTED AT 238 ITR 775 AND THE JUDGMENT OF THE HON'BLE GUJRAT HIGH COURT IN THE CASE OF CIT VS. SHIV CONSTRUCTION REPORTED AT 165 ITR 159 WERE FOLLOWED. BEING AGGRIEVED, THE DEPARTMENT IS IN APPEAL. 5. LEARNED D.R. ALTHOUGH SUPPORTED THE ORDER OF THE ASSESSING OFFICER, BUT COULD NOT CONTROVERT THE FINDINGS GIVEN BY THE LD. CIT(A). 6 . IN HIS RIVAL SUBMISSIONS, LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND STRONGLY SUPPORTED THE IMPUGNED ORDER PASSED BY THE LD. CIT(A) . 7 . AFTER CONSIDERING THE SUBMISSIONS OF BOTH THE PARTIES AND THE MATERIAL ON RECORD, IT IS NOTICED THAT THE ISSUE UNDER CONSIDERATION IS SQUARELY COVERED BY THE DECISION OF THE ITAT DATED 28/07/2011 IN I.T.A.NO. 39/JU/2009 IN THE CASE OF ACIT, CIRCLE - 2, UDAIP UR VS. M/S. SAYEED IQUBAL , UDAIPUR FOR THE A.Y. 2005 - 06 WHEREIN THE ORDER OF THE LD. CIT(A) ALLOWING THE HIGHER RATE OF DEPRECIATION IN RESPECT OF TIPPERS, DUMPERS , ROAD ROLLERS , JC B AND EXCAVATORS ETC. IS ALLOWED BY FOLLOWING THE JUDGMENT OF THE HON'BLE ANDHRA PRADESH HIGH COURT AND THE HON'BLE GUJRAT HIGH COURT IN THE AFORESAID REFERRED TO CASES OF M/S. CIT VS. A.M. 4 CONSTRUCTION AND CIT VS. SHIV CONSTRUCTION RESPECTIVELY. WE THEREFORE, DO NOT SEE ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) ON THIS ISSU E. 8 . NEXT ISSUE VIDE GROUND NO. 2 RELATES TO THE REDUCTION IN THE DISALLOWANCE MADE BY THE ASSESSING OFFICER OUT OF THE EXPENDITURE INCURRED IN CASH BEING UNSUPPORTED BY PROPER BILLS/VOUCHERS. 9 . FACTS RELATING TO THIS ISSUE, IN BRIEF, ARE THAT THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS , NOTICED THAT THE ASSESSEE HAD DEBITED HEAVY EXPENSES UNDER THE HEAD TRAVELLING, PETROL, REPAIRS & MAINTENANCE, MATERIAL, SALARY AND DIESEL. HE FURTHER OBSERVED THAT SOME OF THE CASH VOUCHERS WERE SELF MADE AND IN OTHER VOUCHERS, COMPLETE DETAILS W ERE NOT AVAILABLE. THE ASSESSING OFFICER DISALLOWED A LUMP SUM AMOUNT OF RS. 5 LAC. 10 . BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) AND SUBMITTED THAT ALL THE EXPENSES WERE RELATED TO THE BUSINESS AND ADHOC DISALLOWANCE COULD NOT BE MADE FOR LEVY OF TAXES AS PER LAW WITHOUT RECORDING ANY ADVERSE FI ND ING ON ACCOUNT OF NON - AVAILABILITY OF COMPLETE DETAILS RELATED TO CLAIM OF SUCH EXPENSES OR RECORDING OF UNVERIFIABLE NATURE AND ELEMENT OF NON - BUSINESS PURPOSE OF THE EXPENSES INCURRED . 5 11 . L EARNED CIT(A), AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, OBSERVED THAT ADDITION MADE BY THE ASSESSING OFFICER WAS ON ADHOC AND LUMP SUM BASIS BY CONSIDERING THE NATURE OF VOUCHE RS WHICH WERE NOT COMPLETE AND VERIFIABLE . HE FURTHER OBSERVED THAT I N SOME CASES, PROPER VOUCHERS WERE NOT AVAILABLE AND THAT PERSONAL EXPENDITURE DEBITED TO ACCOUNTS OF BUSINESS COULD NOT BE RULED OUT . H OWEVER, BY CONSIDERING THIS FACT THAT THE ASSESSEE DECLARED NET INCOME OF RS. 5,97,314/ - AS AGAINST NET INCOME OF RS. 1,94,443/ - IN THE IMMEDIATELY PRECEDING YEAR FROM THE SAME BUSINESS , L D. CIT(A) WAS OF THE VIEW THAT IT WOULD BE FAIR AND REASONABLE IF THE DISALLOWANCE WAS RESTRICTED AT RS. 1,50, 000/ - TO COVER THE POSSIBILITIES AND PROBABILITIES OF PERSONAL NATURE OF EXPENDITURE. NOW THE DEPARTMENT IS IN APPEAL. 12. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. IN THE PRESENT CASE , IT IS NOTICED THAT THE ASSESSING OFFICER MADE THE ADHOC DIS ALLOWANCE OUT OF THE EXPENSES, BUT HE HAS NOT POINTED OUT ANY SPECIFIC INSTANCE WHERE THE EXPENSES WERE NOT INCURRED FOR THE PURPOSE OF BUSINESS . A T THE SAME TIME, IN SUC H TYPE OF CA SES WHERE PROPER VOUCHERS ARE NOT MAINTAINED, PERSONAL ELEMENT INVOLVED IN THE EXPENSES CANNOT BE RULED OUT , HOWEVER, ADHOC DISALLOWANCE MADE BY THE ASSESSING OFFICER FOR A 6 SUM OF RS. 5 LAC APPEARS TO BE ON HIGHER SIDE. IN OUR OPINION, LD. CIT(A) WAS JUSTIFIED IN RESTRICTING THE DISALLOWANCE TO RS. 1.50 LAC . WE DO NOT SEE ANY MERIT IN THIS APPEAL OF THE DEPARTMENT ON THIS ISSUE. 13 IN THE RESULT, APPEAL OF THE DEPARTMENT IS DISMISSED . ( ORDER PRONOUNCED IN THE COURT ON 05 TH AUGUST , 201 4) . SD/ - SD/ - ( HARI OM MARATHA ) (N.K.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 05 TH AUGUST , 201 4 . VR/ - COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE LD. CIT 4. THE CIT(A) 5. THE D.R SR. PRIVATE SECRETARY , ITAT, JODHPUR .