RAJESH DIGAMBAR AGASHE, MUMBAI V. ITO 17(2)(3), MUMBAI

ITA 3719/MUM/2014

• Counselvise Citation: 371919914 RSA 2014
• Duration Of Justice: 1 year(s) 2 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-08-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 23-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation
• Section: 133A

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE S/SHRI B.R.BASKARAN (ACCOUNTANT MEMBER ) . . , ./ I.T.A. NO . 3719 / MUM/20 14 ( / ASSESSMENT YEAR : 20 09 - 10 ) RAJESH DIGAMBAR AGASHE, 15,JENABAI BUILDING, D S PHALKE R OAD, DADAR, MUMBAI - 400014 / VS. INCOME TAX OFFICER, 17 ( 2 )( 3 ), MUMBAI . ( / APPELLANT ) .. ( / RESPONDENT ) ./ . /PAN/GIR NO. : AAYPA7677H / APPELLANT BY SHRI SACHIN MAHESHWARI / RSPONDENT BY SHRI K P R R MURTY / DATE OF HEARING : 6 .8 . 201 5 / DATE OF PRONOUNCEMENT : 6 . 8. 201 5 / O R D E R PER B ENCH: THE ASSESSEE HAS FILED THIS APPEAL CHALLENGING THE ORDER DATED 13.3.2014 PASSED BY THE LD. CIT(A) - 19 , MUMBAI AND IT RELATES TO THE ASSESSMENT YEAR 2009 - 10. 2. ASSESSEE IS AGGRIEVED BY THE DECISION OF T HE LD. CIT(A) IN CONFIRMING FOLLOWING ADDITIONS MADE BY THE AO: A) DIFFERENCE IN TUITION FEES OF RS.1,18,500/ - ; B) DISALLOWANCE OF 40% VEHICLE EXPENSES AND DEPRECIATION CLAIMED THEREON - RS.49,902/ - ; ITA NO. 3719 / MUM/20 14 2 3. I HEARD THE PARTIES AND PERUSED THE RECORD. THE A SSESSEE IS RUNNING TWO BUSINESS CONCERN S . ONE CONCERN IS ENGAGED IN DOING DATA ENTRY AND OTHER COMPUTER RELATED WORK AND OTHER CONCERN NAMED AS M/S R D DNYANREKHA TU TORIALS IS CONDUCTING COACHING CLASSES TO SCHOOL STUDENTS. THE ASSESSEE WAS SUBJECT ED TO SURVEY ACTION UNDER SECTION 133A OF THE INCOME TAX ACT, 1961 O N 27.9.2011 . D URING THE COURSE OF SURVEY, THE ASSESSEE SUBMITTED THE DETAILS OF NUMBER OF STUDENTS , CLASS WISE AND ALSO THE DETAILS RELATING TO FEE CHARGED FROM THEM. ACCORDINGLY , THE TOTAL FEE S RECEIVABLE BY THE ASSESSEE FO R THE YEAR UNDER CONSIDERATION WAS WORKED OUT TO RS.26,23,500/ - . HOWEVER, IN THE RETURN OF INCOME, THE ASSESSEE HAD DISCLOSED FEE RECEIPTS AT RS.25,05,000/ - ONLY . WHEN QUESTIONED, THE ASSESSEE SUBMITTED THAT THERE IS SLIGHT CHANGE IN NUMBER OF STUDENTS AND ALSO THERE IS REDUCTION IN THE FEES RECEIVED FROM SOME OF THE STUDENTS. THE AO DID NOT ACCEPT THE EXPLANATION S FURNISHED BY THE ASSESSEE AND ACCORDINGLY ASSESSED THE DIFFERENCE OF AMOUNT OF RS.1,18,500 / - (RS.26,23,500/ - ( - ) RS.25,05,000/ - ). THE AO ALSO DISALLOWED 40% OF THE VEHICLE EXPENSES AND DEPRECIATION CLAIMED ON V EHICLE TOWARDS PERSONAL ELEMENT EMBEDDED THEREIN. THE LD. CIT(A) CONFIRMED BOTH THE ADDITIONS AND HENCE THE ASSESSEE HAS FILED THIS APPEAL BEFORE THE TRIBUN AL. 4 . WITH REGARD TO THE DIFFERENCE IN THE QUANTUM OF FEES RECEIVED, THE LD. AR OF THE ASSESSEE SUBMITTED THA T THE ASSESSEE HAD GIVEN PROPER EXPLANATION BEFORE THE AO I.E. THERE WAS DIFFERENCE IN THE NUMBER OF STUDENTS , I.E., HIGHER NUMBER WAS ERRONEOUSL Y MENTIONED AT THE TIME OF SURVEY THAN THE ACTUAL AND IN SOME CASE S , THE ASSESSEE HAS RECEIVED LESSER FEES THAN THAT PRESCRIBED. THE LD. AR SUBMITTED THAT THE ASSESSEE FURNISHED ALL THE RELEVANT DETAILS BEFORE THE TAX AUTHORITIES . HE SUBMITTED THAT THE A SSESSEE HAS COLLATED THOSE DETAILS AND THE SHORT FALL IN FEES RECEI PTS DUE TO THE DIFFERENCE IN NUMBER OF STUDENTS WORKED OUT TO ITA NO. 3719 / MUM/20 14 3 RS.86,000/ - AND SHORT FALL IN FEE RECEIPTS DUE TO RECEIPT OF LESSER FEES WORKED OUT TO RS.41,500/ - . ACCORDINGLY, HE SUBMITTED THAT THE ASSESSEE HAS DULY RECONCIL ED THE DIFFERENCE AND ACCORDINGLY PRAYED FOR DELETION OF THIS ADDITION. 5 . ON THE CONTRARY, THE LD. DR SUBMITTED THAT THE ASSESSEE HAS NO T FIL E D ANY RECONCILIATION STATEMENT BEFORE THE TAX AUTHORITIES AND CO LLA ATED FIGU RES ARE GIVEN FOR THE FIRST TIME BEFORE THE TRIBUNAL. 6. IN THE REJOINDER, THE LD. AR SUBMITTED THAT THE DETAILS OF FEE RECEIPT S HAVE ALREADY BEEN PLACED BEFORE THE TAX AUTHORITIES AND THEY HAVE BEEN COLLATED NOW IN ORDER TO QUANTIFY THE DIFFERENCE AS P ER THE EXPLANATION GIVEN BY THE ASSESSEE. 7. I HAVE HEA R D THE PARTIES ON THIS ISSUE. I NOTICE THAT THE AO HAS MADE ADDITION OF RS.1,18,500/ - ON THE BASIS OF DETAILS FURNISHED DURING T HE COURSE OF SURVEY OPERATION. ACCORDING TO THE ASSESSEE , THERE WAS MISTAKE IN FURNISHING THE DETAILS OF NUMBER OF STUDENTS AT THE TIME OF SURVEY OPERATION AND HENCE, THE SAME HAS RESULTED IN A DIFFERENCE OF RS.86,000/ - IN THE FEE RECEIPTS. ACCORDING TO THE LD.AR, THE DETAILS RELATING TO THE DIFFERENCE IN NUMBER OF STUD ENTS HAVE ALREADY BEEN FURNISHED BEFORE THE TAX AUTHORITIES AND HE HAS QUANTIFIED THE DIFFERENCE IN FEE RECEIPTS BY COLLATING THE RELEVANT DETAILS. IT IS NOT THE CASE OF THE AO THA T THE NUMBER OF STUDENTS FURNISHED AT THE TIME OF SURVEY OPERATION WAS CROS S - CHECKED BY MAKING PHYSICAL COUNT OF THE STUDENTS . FURTHER, T HE SURVEY HAS ALSO TAKEN PLACE IN THE MID DLE OF THE ACCOUNTING PERIOD, HENCE, THE POSSIBILITY OF DIFFERENCE IN THE NUMBER OF STUDENTS CANNOT ALSO BE RULED OUT. ACCORDINGLY, I AM OF THE VIEW TH AT THE ADDITION TO THE EXTENT OF RS.86,000/ - DUE TO DIFFERENCE IN THE NUMBER OF STUDENTS DESERVES TO BE ITA NO. 3719 / MUM/20 14 4 DELETED. HOWEVER, WITH REGARD TO THE CLAIM OF LESSER FEES RECEIVED BY THE ASSESSEE, NO MATERIAL WAS PRODUCED BEFORE THE TAX AUTHORITIES OR BEFORE US TO SUPPORT THE SAID CLAIM . THE ASSESSEE HAS ALSO NOT FURNISHED ANY EXPLANATION FOR LESSER COLLECTION FROM SOME OF THE STUDENTS. IN MY VIEW, THE STATEMENT PREPARED BY THE ASSESSEE TO SUPPORT THE CLAIM OF LESSER COLLECTION MAY NOT COME TO HIS RESCUE, IN THE ABSENCE OF ANY CORROBORATIVE EVIDENCE. HENCE, I AM NOT INCLINED TO ACCEPT THE SAID EXPLANATION. ACCORDINGLY , I MODIFY THE ORDER OF LD.CIT(A) AN D DIRECT THE AO TO REDUCE THE DISALLOWANCE BY RS.86,000/ - . ACCORDINGLY, THE B ALANCE AMOUNT OF DISALLOWANCE STAN DS CONFIRMED. 8 . THE NEXT ISSUE RELATES TO THE DISALLOWANCE OF VEHICLE EXPEN SES AND DEPRECIATION THEREON TO THE EXTENT OF 40%. THE LD. AR SUBMITTED THAT THE ASSESSEE IS USING THE VEHICLE FOR OFFICIAL PURPOSE ONLY AND HENCE THE SAID DISALLOWANCE IS NOT C ALLED FOR. 9 . ON THE CONTRARY, THE LD. DR SUBMITTED THAT THE USE OF VEHICLE FOR PERSONAL PURPOSE CANNOT BE RULED OUT AND HENCE DISALLOWANCE ON ACCOUNT OF PERSONAL ELEMENT @ 40% IS JUSTIFIED. 10 . HAVING HEARD THE RIVAL CONTENTIONS ON THIS ISSUE I AM O F THE VIEW THAT THE USE OF VEHICLE FOR PERSONAL PURPOSE CANNOT BE ALTOGETHER RULED OUT. HOWEVER, I FIND THAT THE DISALLOWANCE MADE AT THE RATE OF 40% IS ON HIGHER SIDE. ACCORDINGLY , I MODIFY THE ORDER OF LD. CIT(A) ON THIS ISSUE AND DIRECT THE AO TO SUS TAIN THE DIS ALLOWANCE AT 20% OF THE EXPENSES AND DEPRECIATION CLAIMED THEREON. ITA NO. 3719 / MUM/20 14 5 11 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. PRONOUNCED ACCORDINGLY ON 6 TH AUGUST 2015. 6 TH AUGUST, 2015 SD ( . . / B.R. BASKARAN) / ACCOUNTANT MEMBER MUMBAI: 6 TH AUG , 2015 . . . ./ SRL , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - CONCERNED 4. / CIT CONCERNED 5. , , / DR, ITAT, MUMBAI CONCERNED 6. / GUARD FILE. / BY ORDER, TRUE COPY (ASSTT. REGISTRAR) , /ITAT, MUMBAI