Balwant Singh Sandhu, V. ACIT, Circle-27(1),

ITA 3610/DEL/2004

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 0411 (ITAT-DELHI)
• Duration Of Justice: 6 year(s) 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-02-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Next Hearing Date: 28-01-2011
• Assessment Year: 2001-2002
• Appeal Filed On: 17-08-2004
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PEEYUSH SONKAR
• Assessee Lawyers: S K KAPOOR
• Keywords: Depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, IN THE INCOME TAX APPELLATE TRIBUNAL, IN THE INCOME TAX APPELLATE TRIBUNAL, IN THE INCOME TAX APPELLATE TRIBUNAL, NEW DELHI, BENCH E NEW DELHI, BENCH E NEW DELHI, BENCH E NEW DELHI, BENCH E BEFORE SHRI C.L. SETHI, JUDICIAL MEMBER AND SHRI K. D. RANJAN, ACCOUTANT MEMBER ITA NO. 3610 /DEL/2004 (ASSESSMENT YEAR 2001-02) SHRI BALWANT SINGH SANDHU, VS. ACIT, CIRCLE 27(1) , B-88/5, MAYAPURI, PHASE I, NEW DELHI NEW DELHI. (APPELLANTS) (RESPONDENTS) PAN / GIR NO. AAHPS8719F APPELLANT BY: SHRI S. K. KAPOOR, ADV. RESPONDENT BY: SHRI PEEYUSH SONKAR, SR. DR ORDER ORDER ORDER ORDER PER K. D. RANJAN, AM: PER K. D. RANJAN, AM: PER K. D. RANJAN, AM: PER K. D. RANJAN, AM: 1. THIS APPEAL BY THE ASSESSEE FOR THE ASSESSMENT Y EAR 2001-02 ARISES OUT OF THE ORDER OF LD. CIT(A) XXIV, NEW DEL HI. THE RELEVANT GROUNDS OF APPEAL ARE REPRODUCED AS UNDER: 1) THAT THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE FOLLOWING ACTIONS OF A.O. AND UNHELD BY CIT(A) ARE MOST ARBITRARY, UNLAWFUL AND UNJUST. 2) THE CIT(A) HAS WRONGLY AND WITHOUT GOING INTO TH E WRITTEN EXPLANATION ALONG WITH RELEVANT DOCUMENTS F ILED DURING APPEAL PROCEEDING UPHELD THE TELEPHONE EXPEN SES AMOUNTING TO ` 55,942/- INCURRED ON TWO MOBILE PHON ES IS NOT FOR BUSINESS PURPOSES AND DO NOT BELONG TO ASSESSEE . 3) THE A.O. HAS WRONGLY DISALLOWED ` 1 13,490/- OUT OF VEHICLE MAINTENANCE EXPENSES ON PRESUMPTION THE SAM E HAS BEEN USED FOR PERSONAL PURPOSE, WHICH IS UNREASONAB LE. 4) THE A.O. WRONGLY DISALLOWED ` 31,609/- OUT OF TE LEPHONE EXPENSES (` 2,45,596/-) ON PRESUMPTION THE SAME HAS BEEN USED FOR PERSONAL PURPOSES WHICH IS UNREASONABLE. 2. THE ONLY ISSUE FOR CONSIDERATION RELATES TO DISA LLOWANCE OF TELEPHONE EXPENSES OF ` 55,942/- AND VEHICLE MAINTE NANCE EXPENSES OF ` 13,490/-. THE A.O. WHILE COMPLETING THE ASSESSMENT, DISALLOWED TELEPHONE EXPENSES DISALLOWING ` 55,942/ - OUT OF TOTAL 2 EXPENDITURE OF ` 2,45,596/- ON THE GROUND THAT MOBI LE NUMBER 9811229192 IN THE NAME OF SHRI B S SANDHU AND MOBIL E NUMBER 9811063825 IN THE NAME OF J S SANDHU WERE USED BY T HESE PERSONS FOR CARRYING OUT INDEPENDENT BUSINESS. THE A.O. AL SO DISALLOWED 1/6 TH OF THE REMAINING AMOUNT FOR THE PERSONAL USE BY TH E PARTNERS. SIMILARLY A.O. ALSO DISALLOWED 1/6 TH OUT OF VEHICLE MAINTENANCE AT ` 13,490/- AND DEPRECIATION OF ` 32,875/-. 3. ON APPEAL, LD. CIT(A) SUSTAINED THE ADDITION OF ` 55,942/- INCURRED ON MOBILE PHONE NO.9811229192 AND 98110638 25 AS THE SAME DID NOT BELONG TO THE ASSESSEE. AS REGARDS TH E VEHICLE MAINTENANCE EXPENSES, LD. CIT(A) UPHELD THE ADDITIO N ON THE GROUND THAT PERSONAL USE OF VEHICLE COULD NOT BE RU LED OUT. THEREFORE, HE HELD THAT A.O. WAS JUSTIFIED IN DISAL LOWING ` 13,490/- ON ACCOUNT OF VEHICLE MAINTENANCE EXPENSES. 4. BEFORE US, LD. A.R. SUBMITTED THAT THE TELEPHONE S THOUGH WERE IN THE NAME OF TWO DIFFERENT PERSONS BUT WERE BEING USED FOR THE PURPOSE OF BUSINESS. THEREFORE, NO DISALLOWANCE CO ULD BE MADE. AS REGARDS THE DISALLOWANCE ON VEHICLE MAINTENANCE EXP ENSES, IT WAS SUBMITTED THAT DISALLOWANCE MADE WAS EXCESSIVE. ON THE OTHER HAND, LD. SR. DR SUPPORTED THE ORDER OF LD. CIT(A). 5. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. FROM THE BILLS FILED BY THE ASSESSEE IN RESPECT OF MOBILE NO. 9811229192, IT IS SEEN THAT I T IS IN THE NAME OF SHRI BALWANT SINGH SANDHU, THE ASSESSEE WHEREAS MOB ILE NO. 9811063825 IS IN THE NAME OF PARAMJEET SANDHU ENGIN EERING WORKS OF WHICH THE ASSESSEE IS THE PROPRIETOR. THEREFORE , BOTH THE MOBILE PHONES BELONG TO THE ASSESSEE. SINCE LD. CIT(A) HA S CONFIRMED THE DISALLOWANCE OF 100% IN RESPECT OF THESE CELL PHONE S, WE ARE OF THE VIEW THAT IT WILL BE FAIR TO RESTRICT THIS DISALLOW ANCE TO THE EXTENT OF 50% ON MOBILE PHONE EXPENSES. SIMILARLY, IN RESPEC T OF VEHICLE 3 MAINTENANCE EXPENSES, THE A.O. HAD DISALLOWED 1/6 TH OF THE EXPENDITURE CLAIMED ON VEHICLE MAINTENANCE. DURING THE COURSE OF HEARING LD. COUNSEL FOR THE ASSESSEE REQUESTED TO D ISALLOW 50% OF `13,490/-. IN VIEW OF THESE FACTS, WE RESTRICT THE DISALLOWANCE IN RESPECT OF TELEPHONE EXPENSES TO THE EXTENT OF 50% OF ` 55,942/- AND ` 6,745/- OUT OF ` 13,490/- CONFIRMED BY THE LD . CIT(A). WE WOULD ALSO LIKE TO MAKE IT CLEAR THAT THIS DECISION HAS BEEN RENDERED ON THE PECULIAR FACTS OF THE CASE AND WOULD NOT CON STITUTE A PRECEDENT TO BE CITED BY THE ASSESSEES IN ANY OF TH E CASE. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS PARTLY ALLOWED. 7. PRONOUNCED IN THE OPEN COURT ON 18 TH FEB., 2011. SD./- SD./- (C. L. SETHI) (K. D. RANJAN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED:18 TH FEB., 2011 SP. COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT TRUE COPY: BY ORDER 4. CIT(A) 5. DR DY. REGISTRAR, ITAT, NEW DELHI