Shri Vaibhav Babulal Patel, Ahmedabad V. The Dy.CIT, Circle-6, Ahmedabad

ITA 2930/AHD/2015

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 8391 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 5 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-04-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 20-10-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: S N DIVETIA
• Keywords: Depreciation; Business expenditure; Principle of natural justice
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH BEFORE: SHR I S. S. GODARA , JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER VAIBHAV BABULAL PATEL, 4, MAHAVIR KRUPA SOCIETY, BHUYANGDEV CHAR RASTA, AHMEDABAD - 380061 PAN: AFDPP8672F (APPELLANT) VS THE DCIT, CIRCLE - 6, AHMEDABAD (RESPONDENT) REVENUE BY : S H RI PRASOON KABRA , S R. D . R. ASSESSEE BY: S H RI S.N. DIVETIA , A.R. DATE OF HEARING : 28 - 03 - 2 018 DATE OF PRONOUNCEMENT : 17 - 04 - 2 018 / ORDER P ER : AMARJIT SINGH, ACCOUNTANT MEM BER : - THIS ASSESSEE S APPEAL FOR A.Y. 2011 - 12 , ARIS ES FROM ORDER OF THE CIT(A) - 4 , AHM EDABAD DATED 03 RD AUGUST, 2015 , IN PROCEEDINGS UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF AP PEAL: - 1 . 1 THE ORDER PASSED U/S.250 ON 3 - 8 - 2015 FOR A.Y.2011 - 12 BY CIT(A) - 4 ABAD UPHOLDING THE ADDITIONS/DISALLOWANCES MADE BY AO IS WHOLLY ILLEGAL, UNLAWFUL AND AGAINST THE PRINCIPLES OF NATURAL JUSTICE. 1.2 THE LD. CIT(A) HAS GRIEVOUSLY ERRED IN LAW AND/OR ON FACTS IN NOT CONSIDERING FULLY AND PROPERLY THE SUBMISSIONS MADE AND EVIDENCE PRODUCED BY THE APPELLANT WITH REGARD TO THE IMPUGNED ADDITIONS. I T A NO . 2930 / A HD/20 15 A SSESSMENT YEAR 2011 - 12 I.T.A NO. 2930 /AHD/20 15 A.Y. 2011 - 12 PAGE NO VAIBHAV BABULAL PATEL VS. DCIT 2 2.1 THE LD. CIT(A) HAS GRIEVOUSLY ERRED IN LAW AND ON FACTS IN CONFIRMING THAT CONSIDERIN G THE SIZE OF THE FAMILY & POSH LOCALITY THE WITHDRAWALS FOR HOUSEHOLD EXPENSES WERE INADEQUATE AND THEREBY AO WAS JUSTIFIED IN MAKING ADDITION OF RS.2 LACS. 2.6 THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW, THE LD. CIT(A) OUGHT NOT TO HAVE UPHELD THE ADDITION OF RS. 2 LACS TOWARDS HH EXPENSES. THE LD CIT(A) COMPLETELY IGNORED THE WITHDRAWALS BY CHEUES OF RS.8,80,431/ - TOWARDS ELECTRICITY, TELEPHONES ETC. THOUGH THE SAME WAS BROUGHT TO HIS NOTICE. 3.1 THE LD. CIT(A) HAS ERRE D IN UPHOLDING THAT THE UPHOLDING DISALLOWANCE OUT OF INTEREST EXP. @ 1 /6 TH OUT OF VEHICLE LOANS AS PERSONAL EXPENSES. 4.1 THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW, THE LD. CIT(A) OUGHT NOT TO HAVE REJECTED THE ADDITIONAL GR OUND OF APPEAL RELATING TO THE DISALLOWANCE OF DEPRECI ATION ALLOWANCE OF RS. 1,93,409/ - IN RESPECT OF OLD MOTOR CAR. THE LD . CIT(A) HAS FAILED TO APPRECIATE THAT THE SAID MOTOR CAR BEING PART OF THE OLD BLOCK OF ASSETS, THE ALLOWANCE, OF DEPRECIATION WAS A PPARENT & OBVIOUS WHICH EVEN THE AO WAS SUPPOSED TO ALLOW IT. 3. RETURN OF INCOME DECLARING INCOME OF RS. 63 , 85 , 880/ - WAS FILED ON 1 ST OCTOBER, 2011. ON SCRUTINY, DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER HAS ASKED THE ASSESS EE TO FURNISH DETAIL OF FAMILY MEMBER AND HOUSEHOLD EXPENSES. THE ASSESSEE EXPLAINED THAT THAT THE TOTAL HOUSEHOLD EXPENDITURE DURING THE FINANCIAL YEAR 2010 - 11 WAS RS. 5.99 LACS AND ASSESSEE HAS 14 MEMBERS IN HIS FAMILY. THE ASSESSING OFFICER WAS NOT CO NVINCED WITH THE EXPLANATION OF THE ASSESSEE, TH EREFORE, LOOKING TO THE SIZE OF FAMILY, THE ASSESSING OFFICER HAS ESTIMATED THE HOUSEHOLD EXPENSES OF THE ASSESSEE AT RS. 65,000/ - PER MONTH. ACCORDINGLY, HE HAS MADE ADDITION OF RS. 2 LACS TO THE TOTAL INCO ME OF THE ASSESSEE. THE ASSESSING OFFICER HAS ALSO NOTICED THAT ASSESSEE HAS CLAIMED VEHICLE LOAN EXPENSES OF RS. 1 , 82 , 715/ - . THE ASSESSING OFFICER OBSERVED THAT PERSONAL ELEMENT OF USE OF CAR CANNOT BE RULED OUT, THEREFORE HE HAS DISALLOWED 1/6 TH DEPRECI ATION ON CAR TO THE AMOUNT OF RS. 30,450/ - . 4. AGGRIEVED ASSESSEE FILED APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) HAS DISMISSED THE APPEAL OF THE ASSESSEE ON BOTH THE ISSUES BY STATING THAT ASSESSEE HAS SHOWN LOW HOUSEHOLD EXPENDITURE LOOKING TO THE SIZE OF THE FAMILY MEMBERS AND PERSONAL USE OF CAR CANNOT BE DENIED. I.T.A NO. 2930 /AHD/20 15 A.Y. 2011 - 12 PAGE NO VAIBHAV BABULAL PATEL VS. DCIT 3 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD CAREFULLY. WE OBSERVE THAT ASSESSEE HAS SHOWN HOUSEHOLD EXPENSES OF RS. 5.99 LACS FOR A FAMILY OF 14 MEMBERS A ND ASSESSEE COULD NOT SUBSTANTIATE THE REASON FOR LOW HOUSEHOLD EXPENDITURE IN SP I TE OF THE FACT THAT HE WAS LIVING IN A POSH LOCALITY , THEREFORE, WE DO NOT FIND ANY REASON TO INTERFERE IN THE DECISION OF LD. CIT(A) . REGARDING DISALLOWANCE OF 1/6 TH VEHICL E EXPENSES BY THE ASSESSING OFFICER ON ACCOUNT OF PERSONAL USE OF VEHICLE, WE OBSERVED THAT DISALLOWANCE TO THE EXTENT OF 1/10 ON VEHICLE EXPENSES IS REASONABLE AF T ER TAKING INTO CONSIDERATION THE CLAIM OF THE ASSESSEE T HAT IN THE PRECEDING YEAR SUCH EXPEN SES WAS ALLOWED AS BUSINESS EXPENDITURE. 6. IN THE RESULT , THE APPEAL OF THE ASSES SEE IS PARTLY ALLOWED. ORDER PR ONOUNCED IN THE OPEN C OURT ON 1 7 - 04 - 201 8 SD/ - SD/ - ( S.S. GODARA ) ( AMARJIT SINGH ) JUDICIAL MEMBE R ACCOUNTANT MEMBER AHMEDABAD : DATED 1 7 /04 /2018 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,