Abhay Mahadeo Nalawade, Pune V. Joint Commissioner of Income tax, Pune

ITA 312/PUN/2017

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 6807 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 10 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-12-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 07-02-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: IS ARISING OUT OF PASSED
• Keywords: Depreciation; Salary income

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI R.S. SYAL, VICE PRESIDENT AND SHRI PARTHA SARATHI CHADHURY, JUDICIAL MEMBER . / ITA NO.312/PUN/17 / ASSESSMENT YEAR : 2011-12 ABHAY MAHADEO NALAWADE, AMAN 53, NATIONAL CO-OP. HOUSING SOCIETY, AUNDH, PUNE 411 007 PAN : AAYPN0205C VS. JCIT, RANGE-7, PUNE (APPELLANT) (RESPONDENT) / ORDER PER R.S.SYAL, VP : THIS APPEAL BY THE ASSESSEE IS ARISING OUT OF THE ORDER PAS SED BY THE CIT(A) ON 28-09-2016 IN RELATION TO THE ASSESSMENT Y EAR 2011-12. 2. THE ONLY ISSUE RAISED IN THIS APPEAL IS AGAINST THE CONFIRMATION OF DISALLOWANCE OF CERTAIN EXPENSES. 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSE E DECLARED INCOME FROM SALARY, HOUSE PROPERTY, PROFESSION, CAPITAL APPELLANT BY SHRI C.H. NANIWADEKAR RESPONDENT BY SHRI SUDHENDU DAS DATE OF HEARING 20-12-2018 DATE OF PRONOUNCEMENT 20-12-2018 ITA NO.312/PUN/2017 ABHAY MAHADEO NALAWADE 2 GAINS AND OTHER SOURCES TO THE TUNE OF RS.94,30,324/-. INCOME FROM PROFESSION OF MANAGEMENT CONSULTANCY, WITH GROSS REC EIPTS OF RS.18,77,866/-, WAS SHOWN AT RS.2,82,918/-, THEREBY CLAIMING EXPENSES OF RS.15,94,948/-. THE AO OBSERVED THAT THE EXPENSES WERE HIGHLY EXCESSIVE AND NOT FULLY SUPPORTED BY BILLS OR VOU CHERS. HE DREW A CHART OF CERTAIN EXPENSES TOTALLING RS.14,37,372 /-. 75% OF SUCH EXPENSES WAS DISALLOWED, WHICH RESULTED INTO AN ADD ITION OF RS.10,78,029/-. THE LD. CIT(A) REDUCED THE DISALLOWA NCE TO 70%, THEREBY ALLOWING DEDUCTION @ 30% OF SUCH EXPENSES. THE ASSESSEE IS AGGRIEVED BY SUCH CONFIRMATION OF ADDITION. 4. HAVING HEARD BOTH THE SIDES AND GONE THROUGH THE RELEVA NT MATERIAL ON RECORD, IT IS OBSERVED THAT THE ASSESSEE SUO MOTU OFFERED DISALLOWANCE OF RS.2,87,917/- IN HIS RETURN OF INCOME, AS IS EVIDENT FROM PAGES 4 AND 5 OF THE IMPUGNED ORDER. THE ITEMS D ISALLOWED VOLUNTARILY BY THE ASSESSEE ARE CERTAIN PERCENTAGES OF CLIENT LICENSING EXPENSES, ELECTRICITY EXPENSES, REPAIRS AND MAINTE NANCE AND DEPRECIATION. ALL THESE FOUR ITEMS ARE INCLUDED IN THE LIST OF EXPENSES TOTALLING TO RS.14.37 LAKHS, WHICH WERE SUBJECTED TO DISALLOWANCE BY THE AO AT THE RATE OF 75%. ONCE THE ASSESS EE HAS ITSELF DISALLOWED EXPENSES TO THE TUNE OF RS.2,87,917/-, IN O UR CONSIDERED OPINION, THIS AMOUNT OUGHT TO HAVE BEEN EXCLUDE D BY ITA NO.312/PUN/2017 ABHAY MAHADEO NALAWADE 3 THE AO FOR COMPUTATION OF THE DISALLOWANCE. WE, THEREFORE, ORDER THAT THE AMOUNT OF RS.2,87,917/- BE EXCLUDED FROM THE AM OUNT DISALLOWABLE OUT OF THE EXPENSES OF RS.14,37,372/-, TAKEN NOTE OF BY THE AO. 5. COMING TO THE AMOUNT DISALLOWABLE, IT IS SEEN THAT THE AO DISALLOWED 75% ON AD HOC BASIS, WHICH DISALLOWANCE STOOD REDUCED TO 70%. CONSIDERING THE PECULIAR FACTS OF THE INSTA NT CASE, WE ARE SATISFIED THAT THE ENDS OF JUSTICE WOULD MEET ADEQUATE LY IF THE DISALLOWANCE FOR WANT OF EVIDENCE ETC. IS REDUCED TO 50 %. THIS WOULD LEAD TO CONFIRMATION OF DISALLOWANCE TO THE TUNE OF RS.4,30,770/- (50% OF RS.14,37,372 MINUS RS.2,87,917) . WE, THEREFORE, RESTRICT THE DISALLOWANCE TO THIS LEVEL. 6. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH DECEMBER, 2018. SD/- SD/- (PARTHA SARATHI CHAUDHURY) (R.S.SYAL) JUDICIAL MEMBER VI CE PRESIDENT PUNE; DATED : 20 TH DECEMBER, 2018 ITA NO.312/PUN/2017 ABHAY MAHADEO NALAWADE 4 / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT; 2. / THE RESPONDENT; 3. ( ) / THE CIT (APPEALS)-3,PUNE 4. 5. THE PR.CIT -4, PUNE , , / DR B, ITAT, PUNE; 6. / GUARD FILE. // TRUE COPY // / BY ORDER, // TRUE COPY // SENIOR PRIVATE SECRETARY , / ITAT, PUNE ITA NO.312/PUN/2017 ABHAY MAHADEO NALAWADE 5 DATE 1. DRAFT DICTATED ON 20-12-18 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 20-12-18 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS 6. KEPT FOR PRONOUNCEMENT ON SR.PS 7. DATE OF UPLOADING ORDER SR.PS 8. FILE SENT TO THE BENCH CLERK SR.PS 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK 10. DATE ON WHICH FILE GOES TO THE A.R. 11. DATE OF DISPATCH OF ORDER. *