ITO Ward 1(2), Gwalior V. Shri Palvinder singh Sandhu, Gwalior

ITA 372/AGR/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 6970 (ITAT-AGRA)
• Duration Of Justice: 1 year(s) 9 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2011
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 21-06-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 09-09-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: ASHOK VIJAYWARGIYA
• Keywords: Depreciation
• Section: 37

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH, AGRA BEFORE SHRI P.K. BANSAL, ACCOUNTANT MEMBER AND SHRI H.S. SIDHU, JUDICIAL MEMBER ITA NO.372/AGR/2009 ASST. YEAR: 2006-07 INCOME TAX OFFICER, VS. SHRI PALVINDER SINGH SAND HU, WARD-1(2), GALIOR. PROP. M/S. SANDHU FRIGHT CAR RIERS, DREAM COMPLEX, TRANSPORT NAGAR, GWALIOR. (PAN : ARMPS 7589 R) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI VINOD KUMAR, JR. D.R. RESPONDENT BY : SHRI ASHOK VIJAYWARGIYA, CA ORDER PER H.S. SIDHU, J.M. : THE REVENUE HAS FILED THE PRESENT APPEAL AGAINST TH E IMPUGNED ORDER DATED 06.05.2009 PASSED BY THE LD. CIT(A), GWALIOR ON THE FOLLOWING GROUNDS OF APPEAL :- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION ON ACCOUN T OF TRUCK HIRE CHARGES AMOUNTING TO RS.4,54,322/- 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION ON ACCOUN T OF TRUCK HIRE CHARGES PAID TO SHRI H.S. SANDHU AND THE SAME IS DI SALLOWED BY THE ASSESSING OFFICER U/S 37 AMOUNTING TO RS.7,81,672/- . 2 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION ON ACCOUN T OF REPAIRS AND MAINTENANCE (TYRE TUBES) AMOUNTING TO RS.2,11,800/- . 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION ON ACCOUN T OF SHOP RENT AMOUNTING TO RS.24,000/-. 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION ON ACCOUN T OF LIGHT EXPENSES AMOUNTING TO RS.12,750/-. 6. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION ON ACCOUN T OF SALARY EXPENSES AMOUNTING TO RS.1,23,000/-. 7. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION ON ACCOUN T OF REPAIRS AND MAINTENANCE (VEHICLE REPAIRING) AMOUNTING TO RS.20, 000/-. 8. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION ON ACCOUN T OF DEPRECIATION AMOUNTING TO RS.99,250/-. 9. THE APPELLANT CRAVES LEAVE TO ADDITION/ALTER TH E GROUNDS OF APPEALS. 2. THE BRIEF FACTS NARRATED BY THE REVENUE AUTHORIT IES ARE NOT DISPUTED BY BOTH THE PARTIES AND, THEREFORE, NO NEED TO REPEAT THE S AME FOR THE SAKE OF CONVENIENCE. 3. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ELEVANT RECORDS AVAILABLE WITH US, ESPECIALLY THE IMPUGNED ORDER PASSED BY TH E LD. FIRST APPELLATE AUTHORITY ALONG WITH SMALL PAPER BOOK FILED BY THE LD. COUNSE L FOR THE ASSESSEE. 3 4. AS REGARDS TO THE ISSUE INVOLVED IN GROUND NO.1 REGARDING DELETION OF ADDITION OF RS.4,54,322/- ON ACCOUNT OF TRUCK HIRE CHARGES, THE ASSESSING OFFICER HAS MADE THE ADDITION IN DISPUTE ON THE BASIS OF NO N-FURNISHING OF THE EVIDENCE BY THE ASSESSEE TO SUPPORT THE CLAIM IN DISPUTE. THE ASSESSING OFFICER ASKED THE ASSESSEE TO FURNISH THE DETAILS OF RS.4,54,322/- GI VING THE NAME OF CREDITOR, ADDRESS, TELEPHONE NUMBER AND PARTICULARS OF THE TRANSACTION BUT THE ASSESSEE HAS SUBMITTED ONLY THE LIST OF TRUCK NUMBERS AGAINST WHOM THE LIA BILITY WAS EXISTING. EVEN BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE HAS NOT PRODUC ED ANY EVIDENCE AS REQUIRED BY THE ASSESSING OFFICER. HE HAS SHOWN HIS INABILITY TO PRODUCE THE DETAILS OF RS.4,54,322/- AND GIVING THE NAME OF CREDITOR, ADDR ESS, TELEPHONE NUMBERS AND PARTICULARS OF TRANSACTIONS IN DISPUTE. IN ABSENCE OF THE SAME, WE ARE UNABLE TO UPHOLD THE IMPUGNED ORDER IN WHICH THE LD. FIRST AP PELLATE AUTHORITY HAS DELETED THE ADDITION IN DISPUTE BY PASSING THE IMPUGNED ORD ER. THE LD. FIRST APPELLATE AUTHORITY HAS HELD THAT WHEN THE ASSESSING OFFICER HAS ACCEPTED THE OTHER EXPENDITURE/TRANSACTIONS, WHICH THE ASSESSEE HAS SH OWN IN THE BALANCE SHEET AGAINST THE TRADING TRANSACTIONS, THEN THE LIABILIT Y OF THE AMOUNT IN DISPUTE STOOD ESTABLISHED. BUT WE DO NOT AGREE WITH THE FINDING OF THE LD. FIRST APPELLATE AUTHORITY BECAUSE THE ASSESSEE HAS NOT SATISFIED TH E QUERY RAISED BY THE ASSESSING OFFICER FOR SUBSTANTIATING THE CLAIM IN DEPUTE. TH EREFORE, WE UPHOLD THE ORDER OF THE ASSESSING OFFICER ON THE ADDITION OF RS.4,54,32 2/- ON ACCOUNT OF TRUCK HIRE CHARGES BY CANCELING THE IMPUGNED ORDER ON THE ISSU E IN DISPUTE. THUS, THE ISSUE 4 INVOLVED IN GROUND NO.1 IS DECIDED AGAINST THE ASSE SSEE AND IN FAVOUR OF THE REVENUE. 5. AS REGARDS TO THE ISSUE INVOLVED IN GROUND NO.2 REGARDING DELETION OF ADDITION OF RS.7,81,672/- MADE BY THE ASSESSING OFF ICER ON ACCOUNT OF TRUCK HIRE CHARGES PAID TO SHRI H.S. SANDHU, AFTER HEARING BOT H THE PARTIES ON THE ISSUE IN DISPUTE AND PERUSING THE RELEVANT RECORDS AVAILABLE WITH US, WE ARE OF THE CONSIDERED OPINION THAT THE ASSESSEE HAS SUBMITTED THE REQUIRED DETAILS FOR SUBSTANTIATING THE CLAIM IN DISPUTE IN THE SHAPE OF DOCUMENTARY EVIDENCES. THE AMOUNT IN DISPUTE HAS BEEN PAID BY THE ASSESSEE AS HIRE CHARGES TO SHRI H.S. SANDHU, FATHER OF THE ASSESSEE. THE ASSESSEE HAS ALSO TRANSFERRED THESE PAYMENTS TO HIRE CHARGES BY WAY OF JOURNAL ENTRY, BUT THE AS SESSING OFFICER HAS DISALLOWED THESE EXPENSES MENTIONING THAT THE ASSESSEE HAS DIV ERTED THE INCOME OF TRUCK NO.MP07 G 4913, OWNED BY HIM, IN THE NAME OF HIS FA THER SHRI H.S. SANDHU. AFTER GOING THROUGH THE ORDERS PASSED BY THE REVENU E AUTHORITIES, WE ARE OF THE CONSIDERED OPINION THAT THE ASSESSEE WAS HAVING TRU CK NUMBER MP07 G 6850 AND HE MADE PAYMENT IN DISPUTE THROUGH ACCOUNT PAYEE CH EQUE TO SHRI H.S. SANDHU AND TRANSFERRED THESE PAYMENTS TO HIRE CHARGES ACCO UNT FROM TIME TO TIME AS PER EARLIER PRACTICE. KEEPING IN VIEW OF THE FINDING G IVEN BY THE LD. FIRST APPELLATE AUTHORITY, WE AGREE WITH THE SAME BY UPHOLDING THE FINDING GIVEN IN THE IMPUGNED ORDER ON THE ISSUE IN DISPUTE. 5 6. AS REGARDS TO THE ISSUE INVOLVED IN GROUND NO.3 REGARDING DELETION OF ADDITION OF RS.2,11,800/- MADE BY THE ASSESSING OFF ICER ON ACCOUNT OF REPAIRS AND MAINTENANCE (TYRE TUBES), THE ASSESSING OFFICER HAS DISALLOWED THE SAME BY HOLDING THAT THE ASSESSEE HAS PURCHASED THE TYRE TU BES FOR THE TRUCK, WHICH WERE EITHER NOT BROUGHT IN OPERATION OR PURCHASED DURING VERY SHORT SPAN OF TIME OF 4 TO 6 MONTHS AND THE ASSESSEE HAS NOT GIVEN ANY SATISFA CTORY REPLY ON THE ISSUE IN DISPUTE. BUT THE LD. FIRST APPELLATE AUTHORITY HAD DELETED THE ADDITION IN DISPUTE BY HOLDING THAT WHEN THE ASSESSING OFFICER HAS NOT DOUBTED THE GENUINENESS OF PURCHASE FROM THE SUPPLIER OF TYRE TUBES ON THE BAS IS OF THE PURCHASE BILL AND THESE TYRE TUBES CAN BE USED FOR ANY OTHER TRUCK BECAUSE THE ASSESSEE HAVING 8 NUMBERS OF TRUCK DURING THE YEAR UNDER CONSIDERATION. WE H AVE GONE THROUGH THE FINDING GIVEN BY THE LD. FIRST APPELLATE AUTHORITY ON THE I SSUE IN DISPUTE AND WE AGREE WITH THE SAME AND UPHOLD THE IMPUGNED ORDER ON THE ISSUE IN DISPUTE. 7. AS REGARDS TO THE ISSUE INVOLVED IN GROUND NO.4 REGARDING DELETION OF ADDITION OF RS.24,000/- MADE BY THE ASSESSING OFFIC ER ON ACCOUNT OF SHOP RENT, THE ASSESSING OFFICER DISALLOWED THE AMOUNT IN DISPUTE STATING THAT THE SHOP RENT FOR THE PREVIOUS YEAR WAS RS.18,000/- AND THE ASSESSEE HAS NOT GIVEN ANY COPY OF AGREEMENT FOR INCREASE IN THE SHOP RENT. BUT THE L D. FIRST APPELLATE AUTHORITY DELETED THE ADDITION IN DISPUTE BY STATING THAT THE ASSESSEE HAD TAKEN ONE SHOP ON LEASE HAVING AREA OF APPROXIMATELY 100 SQ. FT WITHO UT PARKING FACILITY FROM HIS 6 FATHER SHRI H.S. SANDHU AND SUBSEQUENTLY HE HAS TAK EN TWO SHOPS HAVING AREA OF APPROXIMATELY 250 SQ. FT. WITH PARKING FACILITY. T HE RENT WAS ALSO INCREASED BECAUSE OF INCREASE IN AREA WITH PARKING FACILITY. SO FAR THE RENT AGREEMENT IS CONCERNED, IT IS PREVAILING PRACTICE OF NOT EXECUTI NG THE RENT AGREEMENT WHENEVER LANDLORD AND TENANT HAVING GOOD RELATION AND KNOWN TO EACH OTHER. AFTER GOING THROUGH THE FINDING GIVEN BY THE LD. FIRST APPELLAT E AUTHORITY ON THE ISSUE IN DISPUTE AND DELETING THE ADDITION INVOLVED IN GROUN DNO.4, WE AGREE WITH THE FINDING GIVEN BY THE LD. FIRST APPELLATE AUTHORITY AND UPHO LD THE SAME. 8. AS REGARDS TO THE ISSUE INVOLVED IN GROUND NO.5 REGARDING DELETION OF ADDITION OF RS.12,750/- MADE BY THE ASSESSING OFFIC ER ON ACCOUNT OF LIGHT EXPENSES, THE ASSESSING OFFICER HAS DISALLOWED THE AMOUNT IN DISPUTE FOR WANT OF SUBMITTING THE RECEIPTS FOR RENT AND ELECTRICITY CH ARGES PAID TO THE LANDLORD, BUT THE LD. FIRST APPELLATE AUTHORITY DELETED THE SAME BY HOLDING THAT THE CONSUMPTION OF ELECTRICITY IS BUSINESS EXIGENCY AND NECESSITY AND THE SAME HAS NOT BEEN DISPUTED BY THE ASSESSING OFFICER. THEREFORE, THE LD. FIRST APPELLATE AUTHORITY HAS DELETED THE SAME. WE AGREE WITH THE REASONING MENTIONED BY THE LD. FIRST APPELLATE AUTHORITY AND UPHOLD THE FINDING GIVEN IN THE IMPUG NED ORDER ON THE ISSUE IN DISPUTE. 7 9. AS REGARDS TO THE ISSUE INVOLVED IN GROUND NO.6 REGARDING DELETION OF ADDITION OF RS.1,23,000/- MADE BY THE ASSESSING OFF ICER ON ACCOUNT OF SALARY EXPENSES, THE ASSESSING OFFICER HAS DISALLOWED THE SAME BY DOUBTING THE INCREASE IN THE SALARY OF ADDITIONAL STAFF APPOINTED DURING THE YEAR UNDER CONSIDERATION, BUT THE LD. FIRST APPELLATE AUTHORITY HAS MENTIONED VER Y RELEVANT REASON OF EXCESSIVE EMPLOYMENT, MEANING THEREBY, THE ASSESSEE HAS INCRE ASED HIS BUSINESS APPROXIMATELY 7 TIMES OVER PRECEDING YEAR AS PER CH ART GIVEN IN THE IMPUGNED ORDER FOR THE PREVIOUS YEARS. THE ASSESSEE WAS HAV ING 5 TRUCKS AND HE HAD PURCHASED 3 NEW TRUCKS DURING THE YEAR UNDER CONSID ERATION. TO PLY THE TRUCK, THE TRANSPORTER IS REQUIRED TO APPOINT 2 DRIVERS AND 2 CLEANERS FOR EACH TRUCK, WHEREAS, THE ASSESSEE HAS APPOINTED THE DRIVERS LESS THAN TH E NUMBER OF DRIVERS REQUIRED AND HE HAS ALSO APPOINTED MANY OTHER PERSONS TO RUN HIS BUSINESS KEEPING IN VIEW OF THE BUSINESS EXPEDIENCY, EXIGENCY AND NECESSITY. A LL THESE HAVE TO BE JUDGED IN VIEW OF THE BUSINESSMAN AND NOT OF THE DEPARTMENT. THE ASSESSEE HAS FILED ALL THE DETAILS OF SALARY ALONG WITH ORIGINAL SALARY REGIST ER BEFORE THE REVENUE AUTHORITIES. KEEPING IN VIEW THE EVIDENCE AS APPRECIATED BY THE LD. FIRST APPELLATE AUTHORITY IN THE IMPUGNED ORDER, WE ARE OF THE VIEW THAT THE DISALLOWANCE OF RS.1,23,000/- FOR INCREASE IN THE SALARY EXPENDITURE WITHOUT CONS IDERING THE VOLUME OF WORK IS NOT SUSTAINABLE AND HAS RIGHTLY BEEN DELETED BY THE LD. FIRST APPELLATE AUTHORITY. WE UPHOLD THE FINDING GIVEN BY THE LD. FIRST APPELL ATE AUTHORITY ON THE ISSUE IN DISPUTE. 8 10. AS REGARDS TO THE ISSUE INVOLVED IN GROUND NO.7 REGARDING DELETION OF ADDITION OF RS.20,000/- MADE BY THE ASSESSING OFFIC ER ON ACCOUNT OF REPAIRS AND MAINTENANCE (VEHICLE REPAIR), AFTER GOING THROUGH T HE FINDING GIVEN BY THE LD. FIRST APPELLATE AUTHORITY IN WHICH DISALLOWANCE OF RS.30, 000/ IS RESTRICTED TO RS.10,000/- AND RELIEF OF RS.20,000/- HAS BEEN GIVE N TO THE ASSESSEE. NO INTERFERENCE IS CALLED FOR IN THE WELL REASONED ORD ER PASSED BY THE LD. FIRST APPELLATE AUTHORITY ON THE ISSUE IN DISPUTE. WE UP HOLD THE IMPUGNED ORDER ON THE ISSUE IN DISPUTE. 11. AS REGARDS TO THE ISSUE INVOLVED IN GROUND NO.8 REGARDING DELETION OF ADDITION OF RS.99,250/- MADE BY THE ASSESSING OFFIC ER ON ACCOUNT OF DEPRECIATION, THE LD. FIRST APPELLATE AUTHORITY HAS REPRODUCED TH E DEPRECIATION CHART AT PAGE NO.11. WE HAVE PERUSED THE SAME AND WE ARE OF THE CONSIDERED OPINION THAT KEEPING IN VIEW THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE, THE LD. FIRST APPELLATE AUTHORITY HAS RIGHTLY RESTRICTED THE DISA LLOWANCE FROM RS.2,04,127/- TO RS.1,04,877/- AND HAS GIVEN THE RELIEF OF RS.99,250 /- TO THE ASSESSEE. WE AGREE WITH THE SAME BY UPHOLDING THE IMPUGNED ORDER ON TH E ISSUE IN DISPUTE. 12. KEEPING IN VIEW OF THE FACTS AND CIRCUMSTANCES AND THE DISCUSSIONS ABOVE, WE ARE OF THE CONSIDERED OPINION THAT THE LD. FIRST APPELLATE AUTHORITY HAS PASSED A WELL REASONED ORDER ON THE ISSUES INVOLVED IN GRO UND NOS.2 TO 8 AND WE UPHOLD 9 THE SAME. BUT, AS REGARDS TO THE ISSUE INVOLVED IN GROUND NO.1, WE HAVE CANCELLED THE IMPUGNED ORDER BY UPHOLDING THE ORDER PASSED BY THE ASSESSING OFFICER. 13. IN THE RESULT, APPEAL FILED BY THE REVENUE IS P ARTLY ALLOWED. (ORDER PRONOUNCED IN THE OPEN COURT ON 30.06.20 11). SD/- SD/- (P.K. BANSAL) (H.S. SIDHU) ACCOUNTANT MEMBER JUDICIAL MEMBER PLACE: AGRA DATE: 30 TH JUNE, 2011 PBN/* COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT BY ORDER 3. CIT CONCERNED 4. CIT (APPEALS) CONCERNED 5. DR, ITAT, AGRA BENCH, AGRA 6. GUARD FILE ASSISTANT REGISTRAR INCOME-TAX APPELLATE TRIBUNAL, AGRA TRUE COPY