Bharatsons HUF, New Delhi V. JCIT, New Delhi

ITA 2826/DEL/2012

• Counselvise Citation: 282620114 RSA 2012
• Duration Of Justice: 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-08-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 15-05-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 08-06-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI A BENC H BEFORE SHRI R.K. GUPTA , JM & SHRI A.N. PAHUJA, A M ITA NO.2826/DEL/2012 ASSESSMENT YEAR:2009-10 M/S BHARAT SONS, HUF, 15, ABUL FAZAL ROAD, BENGALI MARKET, NEW DELHI V/S . JCIT,RANGE-28, ROOM NO.212,DRUM SHAPE BUILDING, I.P. ESTATE, NEW DELHI [PAN : AACHB 5699 E] (APPELLANT) (RESPONDENT) ASSESSEE BY NONE REVENUE BY SHRI NEERAJ KUMAR, DR DATE OF HEARING 08-08-2012 DATE OF PRONOUNCEMENT 09-08-2012 O R D E R A.N.PAHUJA:- THIS APPEAL FILED ON 08 TH JUNE, 2012 BY THE ASSESSEE AGAINST AN ORDER DATED 08 TH MAY, 2012 OF THE LD. CIT(A)-XXV, NEW DELHI, RAISES THE FOLLOWING GROUNDS:- 1 THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE ORDER OF THE CIT(A)-XV IS ARBITRARY, CONTRARY TO LA W AND AGAINST THE FACTS AND CIRCUMSTANCES OF THE APPELLAN TS CASE. 2 THAT THE LEARNED CIT(A) HAS ERRED IN LAW AS WELL AS FACTS OF THE CASE WHILE (A) UPHOLDING THE ADDITION OF @10% (OUT OF THE ADDITION OF 20% MADE BY THE LEARNED ASSESSING OFFICER RANGE-28) OF THE VEHICLE RUNNING EXPENSES OF ` ` 29,12,980/- AND DEPRECIATION ON CARS AMOUNTING TO ` `5,31,106/- ON ACCOUNT OF PERSONAL USE BY THE PROPRIETOR OF THE BUSINESS. ITA N O.2826 /DEL./2012 2 (B) UPHOLDING THE ADDITION OF 10% (OUT OF THE ADDITION OF 20% MADE BY THE LEARNED ASSESSING OFFICER RANGE-28, NEW DELHI) OF THE TOTAL TELEPHONE EXPENSES AMOUNTING TO ` `7,41,643/- WHEREAS A SEPARATE DETAIL OF TELEPHONE BILL OF THE PROPRIETOR WAS PROVIDED AT THE TIME OF ASSESSMENT AS WELL AS APPEAL. 3 THAT THE ASSESSEE CRAVES LEAVE, RIGHT TO ADD TO O R AMEND OR TO DELETE ANY GROUND OF APPEAL BEFORE THE DISPOSAL OF THE APPEAL. 4 THAT THE ASSESSEE, THEREFORE, PRAYS A) THAT THE ILLEGAL IMPUGNED ORDER DATED 8.5.2012 BE QUASHED AND SET ASIDE AND B) THIS HONBLE COURT MAY PASS SUCH FURTHER ORDER AND OTHER RELIEF AS NATURE AND CIRCUMSTANCES OF THE CASE MAY REQUIRE. 2. AT THE OUTSET, NONE APPEARED ON BEHALF OF THE ASSESSEE NOR SUBMITTED ANY REQUEST FOR ADJOURNMENT. CONSIDERING THE NATURE OF ISSUE & FINDINGS OF THE LD. CIT(A), THE BENCH PROCEEDED TO DISPOSE OF THE APPEAL AFTER HEARING THE LD. DR. 3. ADVERTING TO MAIN GROUND NOS.2(A) & (B) IN THE APPEAL, FACTS IN BRIEF, AS PER RELEVANT ORDERS ARE THAT THE RETURN DECLARING INCOM E OF ` ` 52,60,240/- FILED ON 25.09.2009 BY THE ASSESSEE, WAS SELECTED FOR SCRUTI NY WITH THE SERVICE OF A NOTICE U/S 143(2) OF THE INCOME-TAX ACT, 1961 (HERE INAFTER REFERRED TO AS THE ACT) ON 21.8.2010,. DURING THE COURSE OF ASSESSM ENT PROCEEDINGS, THE ASSESSING OFFICER (A.O. IN SHORT) NOTICED THAT THE ASSESSEE DEBITED EXPENDITURE OF ` ` 29,12,980 ON VEHICLE RUNNING AND MAINTENANCE; ` ` 5,31,106/- ON ACCOUNT OF DEPRECIATION ON CAR AND TELEPHONE EXPENSES AMOUNTIN G TO ` `7,41,643/-. SINCE THE ASSESSEE DID NOT MAINTAIN ANY LOG BOOK, THE AO WAS OF THE OPINION THAT ITA N O.2826 /DEL./2012 3 PERSONAL EXPENSES UNDER THESE HEADS WERE NOT RULED OUT. ACCORDINGLY, THE AO DISALLOWED 20% OF THE TOTAL EXPENDITURE , RESULTING IN DISALLOWANCE OF ` `8,37,145/- . 4. ON APPEAL, THE LD. CIT(A) REDUCED THE DISALLOWA NCE TO 10% HOLDING AS UNDER:- 3.3 I HAVE CONSIDERED THE ORDER OF THE AO AND THE SUBMISSIONS OF THE ASSESSEE THAT THE AO IS NOT JUSTIFIED TO MAK E THE DISALLOWANCE AT THE HIGHER RATE OF 20% CONSIDERING THE BUSINESS NEEDS O F THE ASSESSEE. HOWEVER, IT CANNOT BE DENIED THAT THERE IS SOME ELE MENT OF PERSONAL USE OF THE VEHICLE AND TELEPHONE ETC AND AT THE SAME TI ME THERE MAY BE LACK OF VOUCHERS FOR ALL THE EXPENSES CLAIMED BY THE ASS ESSEE. AFTER CONSIDERING ALL THE FACTS AND CIRCUMSTANCES OF THE CASE, I AM OF THE VIEW THAT THE ENDS OF JUSTICE WILL BE MET IF THE DISALLO WANCE IS RESTRICTED @10% AND ACCORDINGLY, THE DISALLOWANCE @10% OF ` ` 4,18,573/- IS CONFIRMED AND THE BALANCE ADDITION OF ` ` 4,18,572/- IS DELETED. 5. THE ASSESSEE IS NOW IN APPEAL BEFORE US AGAINST THE AFORESAID FINDINGS OF THE LD. CIT (A).THE LD. DR MERELY SUPP ORTED THE ORDER OF THE LD.CIT(A). 6. WE HAVE HEARD THE LD. DR AND GONE THROUGH THE F ACTS OF THE CASE. THE ASSESSEE IS CARRYING ON THE BUSINESS IN DELHI AND HAS TWO UNITS AT PAONTA SAHIB IN HIMACHAL. SINCE PERSONAL USE OF CARS AND T ELEPHONES BY THE KARTA OF THE ASSESSEE AND HIS FAMILY MEMBERS OR STAFF HAS NO T BEEN DENIED NOR IT WAS CLAIMED THAT THE KARTA OR HIS FAMILY MEMBERS HAD ANY INDEPENDENT VEHICLES OR TELEPHONES FOR PERSONAL USE, IN OUR OPINION DISALL OWANCE OF 1/10 TH OF THE EXPENSES ON RUNNING AND MAINTENANCE OF VEHICLES INC LUDING DEPRECIATION THEREON AS ALSO EXPENSES ON TELEPHONES/MOBILES , IN THE LI GHT OF PROVISIONS OF SEC. 38(2) OF THE ACT, IS REASONABLE . THEREFORE, GROUND NOS.2 (A) & (B) IN THE APPEAL ARE REJECTED. 7. GROUND NOS.1 AND 4 IN THE APPEAL BEING GENERAL IN NATURE DO NOT REQUIRE ANY SEPARATE ADJUDICATION WHILE NO ADDITION AL GROUND HAVING BEEN RAISED ITA N O.2826 /DEL./2012 4 BEFORE US IN TERM OF RESIDUARY GROUND NO.3 IN THE A PPEAL, ACCORDINGLY, ALL THESE GROUNDS ARE DISMISSED. 8. NO OTHER PLEA OR ARGUMENT WAS MADE BEFORE US. 9. IN THE RESULT, APPEAL IS DISMISSED. SD/- SD/- (R.K. GUPTA) (A.N. PAHUJA) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) NS COPY OF THE ORDER FORWARDED TO :- 1. ASSESSEE 2. JCIT,RANGE-28, ROOM NO.212,DRUM SHAPE BUILDI NG, I.P. ESTATE, NEW DELHI 3. CIT CONCERNED. 4. CIT(A)-XXV, NEW DELHI 5. DR, ITAT,A BENCH, NEW DELHI 6. GUARD FILE. BY ORDER, DEPUTY / ASSTT.REGISTRAR ITAT, DELHI ORDER PRONOUNCED IN OPEN COURT