Shree Hardoi Baba Roller Flour Mills (P) Ltd., Hardoi V. Jt. Commissioner of Income Tax, Sitapur

ITA 350/LKW/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 4363 (ITAT-LUCKNOW)
• Duration Of Justice: 1 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-07-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 18-07-2016
• Assessment Year: 2012-2013
• Appeal Filed On: 07-06-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Business income; Depreciation; Opportunity of being heard

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH SMC, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER ITA NO.350/LKW/2016 ASSESSMENT YEAR 2012-13 JOINT COMMISSIONER OF INCOME TAX RANGE-SITAPUR VS SHREE HARDOI BABA ROLLER FLOUR MILLS PVT. LTD. BILGRAM ROAD, HARDOI PAN AADCS 4662G (RESPONDENT) (APPELLANT) SHRI SANJAY SAXENA, CA APPELLANT BY SHRI AMIT NIGAM, DR RESPONDENT BY 15 /07/2016 DATE OF HEARING 20 /07/2016 DATE OF PRONOUNCEMENT O R D E R THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST TH E ORDER OF THE LD. CIT(A), INTER ALIA ON FOLLOWING GROUNDS: 1) THAT THE ID. CIT(A), BAREILLY ERRED ON FACTS AND IN LAW IS PASSING EX-PARTE ORDER IGNORING THE ADJOURNMENT APP LICATION SENT VERY BEFORE THE DATE OF HEARING AS THE A.R WAS TO APPEAR BEFORE THE INCOME TAX APPELLATE TRIBUNAL, LU CKNOW IN CONNECTION WITH OTHER APPEAL. 2) THAT THE ID. CIT(A), BAREILLY ERRED ON FACTS A ND LAW IS CONFIRMING THE ACTION OF THE A.O. WHERE THE DEDUCTI ON OF RS.3,75,000/- U/S 24 OF THE I.T ACT, 1961 WAS DENIE D WHICH IS CONTRARY TO THE HON'BLE SUPREME COURT DECISION I N THE ITA NO. 350 / LKW /201 6 2 CASE OF CHENNAI PROPERTIES & INVESTMENTS LTD. (2015 ) 231 TAXMAN 336(SC). 3) THAT THE ID. CIT(A), BAREILLY ERRED ON FACTS A ND LAW IS CONFIRMING THE DISALLOWANCE OF RS. 20,736/- OUT OF TRAVELLING & CONVEYANCE EXPENSES. 4) THAT THE ID. CIT(A), BAREILLY ERRED ON FACTS A ND LAW IS CONFIRMING THE DISALLOWANCE OF RS. 50,000/- OUT OF FREIGHT EXPENSES. 5) THE APPELLANT COMPANY RESERVES A RIGHT TO ADD/ ALTER/AMEND ANY GROUND AT THE TIME OF ITS HEARING. 2. APROPOS GROUND NO.1, LD. COUNSEL FOR THE ASSESSE E HAS CONTENDED THAT THE CIT(A) HAS DECIDED THE APPEAL EX-PARTE WIT HOUT AFFORDING PROPER OPPORTUNITY OF BEING HEARD TO THE ASSESSEE W HEREAS FROM RECORD IT IS EVIDENT THAT THE CIT(A) HAS ISSUED VARIOUS NO TICES AND THE ASSESSEE SOUGHT ADJOURNMENT FOR ONE REASON OR THE OTHER AND FINALLY LD. CIT(A) HAS DISPOSED OF THE APPEAL ON MERIT IN THE ABSENCE OF THE ASSESSEE. I, THEREFORE, FIND NO INFIRMITY IN THE ORDER OF THE CI T(A) IN THIS REGARD AND I CONFIRM THE ORDER OF THE CIT(A). ACCORDINGLY, GROUN D NO.1 IS REJECTED. 3. APROPOS GROUND NO.2, I FIND THAT THE ASSESSEE HA S SHOWN THE PROPERTY AS BUSINESS ASSETS AND CLAIMED DEPRECIATIO N THEREON. ASSESSING OFFICER HAS DISALLOWED THE DEDUCTION U/S 24 OF THE ACT ON THE GROUND THAT THIS PROPERTY IS BUSINESS ASSET AND THE ASSESS EE HAS CLAIMED DEPRECIATION THEREON. THOUGH THE ASSESSEE HAS CLAIMED THAT DEDUCTION U/S 24 OF THE ACT SHOULD BE ALLOWED AS HE HAS CLAIM ED INCOME FROM HOUSE PROPERTY, BUT IN THE LIGHT OF THE FACT THAT W HEN THE ASSESSEE HAS CLAIMED DEPRECIATION ON THIS BUSINESS ASSET, I AM O F THE VIEW THAT THE ASSESSEE CANNOT CLAIM THE PROPERTY TO HOUSE PROPERT Y AS WELL AS THE BUSINESS ASSETS. ONCE IT IS AN HOUSE PROPERTY, THE DEPRECIATION CANNOT ITA NO. 350 / LKW /201 6 3 BE ALLOWED BUT THE ASSESSEE CLAIMED DEPRECIATION ON THIS PROPERTY. THEREFORE, THE DEDUCTION U/S 24 OF THE ACT CANNOT B E ALLOWED AS IT CAN ONLY ALLOWED AGAINST THE INCOME FROM HOUSE PROPERTY AND NOT AGAINST THE BUSINESS INCOME OF THE ASSESSEE. AGAINST THE BU SINESS ASSETS ONLY DEPRECIATION CAN BE ALLOWED AND NOT THE DEDUCTION U /S 24 OF THE ACT. THEREFORE, I FIND NO MERIT ON THIS GROUND OF THE AS SESSEE. ACCORDINGLY, I DISMISS THE SAME AND CONFIRM THE ORDER OF CIT(A) IN THIS REGARD. 4. APROPOS GROUND NOS. 3 AND 4 ARE CONCERNED, I FIN D THAT ADHOC ADDITIONS WERE MADE BY THE ASSESSING OFFICER WITHOU T POINTING OUT ANY SPECIFIC DEFECT IN THE MAINTENANCE OF ACCOUNT. SINC E THE ADDITION ON ACCOUNT OF ADHOC DISALLOWANCES ARE NOT SUSTAINABLE IN THE EYES OF LAW, I DELETE THE SAME AFTER SETTING ASIDE THE ORDER OF TH E CIT(A). 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DAT E MENTIONED ON THE CAPTION PAGE) SD/- (S.K. YAD AV ) JUDICIAL MEMBER DATED: 20/07/2016 AKS COPY OF THE ORDER FORWARDED TO : 1.THE APPELLANT 2.THE RESPONDENT. 3.CONCERNED CIT 4.THE CIT(A) 5.D.R., I.T.A.T., LUCKNOW ASSTT. REG ISTRAR