Manikanta Concerns, Warangal, Hyderabad V. ACIT, Cirlce-1, Warangal, Warangal

ITA 313/HYD/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 5916 (ITAT-HYDERABAD)
• Duration Of Justice: 9 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-12-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 16-03-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: K J RAO
• Assessee Lawyers: D SATYANARAYANA
• Keywords: Depreciation
• Section: 143(3)

Judgement Text

ITA NO 313 OF 2016 MANIKANTA CONCERNS WARANGAL PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD B BENCH, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER ITA NO.313/HYD/2016 (ASSESSMENT YEAR: 2009-10) M/S MANIKANTA CONCERNS WARANGAL PAN: AAFCM 8523 C VS ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE-1 WARANGAL FOR ASSESSEE : SHRI D. SATYANARAYANA FOR REVENUE : SHRI K.J. RAO, DR O R D E R PER SMT. P. MADHAVI DEVI, J.M. THIS IS ASSESSEES APPEAL FOR THE A.Y 2009-10. IN TH IS APPEAL, THE ASSESSEE HAS RAISED THE FOLLOWING GROUN DS OF APPEAL: 1. THE ORDER OF THE LEARNED CIT (A) IS ERRONEOUS TO THE EXTENT IT IS PREJUDICIAL TO THE APPELLANT. 2. THE LEARNED CIT (A) ERRED IN CONFIRMING THE DISALLOWANCE OF EXPENDITURE OF RS.6,04,459 WITHOUT PROPERLY CONSIDERING THE EXPLANATION SUBMITTED. 3. THE LEARNED CIT (A) ERRED IN CONFIRMING THE DISALLOWANCE OF DEPRECIATION OF RS.4,97,504 MADE BY THE AO. THE LEARNED CIT (A) CONSIDERED THE EXPLANATION IN FAVOUR OF THE APPELLANT, BUT HELD THA T THE ADDITION IS CONFIRMED. DATE OF HEARING : 06.12.2016 DATE OF PRONOUNCEMENT : 16.12.2016 ITA NO 313 OF 2016 MANIKANTA CONCERNS WARANGAL PAGE 2 OF 4 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE, A PARTNERSHIP FIRM TRADING IN MAIZE AND ALSO DERIVING INCOME FROM BROKERAGE, FILED ITS RETURN OF INCOME ON 30.09.2009 ADMITTING INCOME OF RS.39,62,010. DURING THE ASSESSMENT PROCE EDINGS U/S 143(3) OF THE ACT, THE ASSESSEE FURNISHED THE DETAI LS CALLED FOR BY THE AO. THE AO OBSERVED THAT MOST OF THE EXPENSES D EBITED TO THE P&L A/C ARE SUPPORTED BY BILLS AND VOUCHERS BUT SO ME OF THEM ARE SELF MADE AND DID NOT CONTAIN THE DETAILS OF TH E RECEIVERS. WHEN THE DISCREPANCIES WERE BROUGHT TO THE NOTICE O F THE ASSESSEE, THE A.R. OF THE ASSESSEE ACCEPTED FOR THE DISALLOWANCE THE EXPENDITURE ON KANTA COOLI AND LORRY FREIGHT CHA RGES DEBITED TO THE P&L A/C AMOUNTING TO RS.6,04,459. 3. FURTHER, THE AO ALSO OBSERVED THAT THE ASSESSEE H AS CLAIMED DEPRECIATION ON A FLAT AT KAKINADA, THOUGH THE ASSESSEE WAS CARRYING ON BUSINESS AT WARANGAL. FURTHER, THE A O DISALLOWED THE CLAIM OF DEPRECIATION ON VEHICLES AND THE TOTAL OF THE DISALLOWANCE OF DEPRECIATION WAS RS.5,78,940. HE AC CORDINGLY, MADE THE CONSEQUENTIAL ADDITIONS TO THE RETURNED IN COME OF THE ASSESSEE AND BROUGHT IT TO TAX. 4. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFO RE THE CIT (A), WHO CONFIRMED THE DISALLOWANCE OF THE EXPE NDITURE, BUT WAS GRANTED PARTIAL RELIEF BY DELETING THE DISALLOW ANCE OF DEPRECIATION ON VEHICLES. HE CONFIRMED THE DISALLOW ANCE ON DEPRECIATION ON THE FLAT AT KAKINADA. AGAINST THE O RDER OF THE CIT (A), THE ASSESSEE IS IN APPEAL BEFORE US. ITA NO 313 OF 2016 MANIKANTA CONCERNS WARANGAL PAGE 3 OF 4 5. AT THE TIME OF HEARING, THE LEARNED COUNSEL FOR THE ASSESSEE, SHRI D. SATYANARAYANA, SUBMITTED THAT THE ASSESSEE IS INTO THE BUSINESS OF TRADING IN MAIZE AND THEREFORE , HAD TO HIRE VEHICLES FOR TRANSPORTATION OF MATERIAL AND HAS ACC ORDINGLY MAINTAINED PROPER VOUCHERS FOR ALL THE PAYMENTS. TH EREFORE, ACCORDING TO HIM, THE DISALLOWANCE IS NOT CALLED FO R. AS REGARDS THE DEPRECIATION ON FLAT AT KAKINADA IS CONCERNED, HE S UBMITTED THAT THE SAID FLAT IS ALSO USED FOR THE BUSINESS PURPOSE S OF THE ASSESSEE AND DEPRECIATION WAS ALLOWED IN THE EARLIER A.YS AND HENCE DEPRECIATION IS TO BE ALLOWED FOR THIS A.Y ALSO. 6. THE LEARNED DR, HOWEVER, SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 7. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE M ATERIAL ON RECORD, WE FIND THAT THE ASSESSEE HAS NO DOUBT M AINTAINED VOUCHERS FOR ALL THE EXPENDITURE, BUT SOME OF THE V OUCHERS HAVE NOT BEEN FOUND TO BE ACCEPTABLE AS THEY WERE SELF-M ADE AND ALSO DID NOT CONTAIN THE DETAILS OF THE RECEIVERS. IN FA CT, THE ASSESSEE ITSELF HAS ACCEPTED FOR THE DISALLOWANCE AT 10/% OF THE EXPENDITURE ON KANTA COOLI AND LORRY FREIGHT. THE AS SESSEE HAD NOT GIVEN ANY PROPER EXPLANATION EITHER BEFORE THE CIT (A) OR BEFORE US TO TAKE ANY OTHER VIEW. IN VIEW OF THE SA ME, WE CONFIRM THE DISALLOWANCE OF THE EXPENDITURE. ITA NO 313 OF 2016 MANIKANTA CONCERNS WARANGAL PAGE 4 OF 4 8. AS REGARDS THE DEPRECIATION ON FLAT AT KAKINADA, THE ASSESSEE HAS NOT PRODUCED ANY EVIDENCE IN SUPPORT O F HIS CLAIM THAT THE FLAT IS USED FOR THE ASSESSEES BUSINESS A ND THAT THE DEPRECIATION WAS ALLOWED IN THE EARLIER A.YS. THEREF ORE, WE DEEM IT FIT AND PROPER TO REMIT THIS ISSUE TO THE FILE OF T HE AO TO VERIFY THE CLAIM OF THE ASSESSEE THAT DEPRECIATION WAS ALLOWED ON THIS ASSET IN THE EARLIER A.YS AND IF IT IS FOUND TO BE TRUE, T HEN WE DIRECT THE AO TO ALLOW DEPRECIATION FOR THIS YEAR ALSO. THIS G ROUND IS ACCORDINGLY ALLOWED FOR STATISTICAL PURPOSES. 9. IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALLOW ED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 16 TH DECEMBER, 2016. SD/- SD/- (B. RAMAKOTAIAH) ACCOUNTANT MEMBER (P. MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD, DATED 16 TH DECEMBER, 2016. VINODAN/SPS COPY TO: 1 SHRI S.RAMA RAO, ADVOCATE, FLAT NO.102, SHRIYA'S E LEGANCE, 3-6- 643, STREET NO.9, HIMAYATNAGAR, HYDERABAD 500029 2 ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE-1 WARAN GAL 3 CIT (A)-3 HYDERABAD 4 PR.CIT 3 HYDERABAD 5 THE DR, ITAT HYDERABAD 6 GUARD FILE BY ORDER