DCIT, New Delhi V. Sh. Gautam R Chadha, New Delhi

ITA 3764/DEL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 90909 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 10 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-04-2015
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 28-04-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 12-06-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SHR T VASANTHAN
• Keywords: Depreciation; Opportunity of being heard; Earning of tax free income
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : C : NEW DELHI BEFORE SHRI R.S. SYAL, AM AND SHRI C.M. GARG, JM ITA NO.3764/DEL/2013 ASSESSMENT YEAR : 2008-09 DCIT, CIRCLE-32(1), NEW DELHI. VS. GAUTAM R CHADHA, THROUGH L/H SMT. RATNA CHADHA, D-284, 1 ST FLOOR, DEFENCE COLONY, NEW DELHI. PAN: AADPC5798A (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI ASHOK SIKKA, ADVOCATE DEPARTMENT BY : SHR T. VASANTHAN, SR. DR DATE OF HEARING : 28.04.2015 DATE OF PRONOUNCEMENT : 29.04.2015 ORDER PER R.S. SYAL, AM: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A) ON 28.3.2013 IN RELATION TO THE ASSESSME NT YEAR 2008-09. 2. THE FIRST GROUND IS AGAINST THE DELETION OF ADDI TION OF RS.9,50,500/- MADE U/S 14A OF THE ACT. ITA NO.3764/DEL/2013 2 3. BRIEFLY STATED, THE FACTS OF THE CASE AS GIVEN I N THE ASSESSMENT ORDER ARE THAT ASSESSEE EARNED TOTAL EXEMPT INCOME OF RS. 1,18,62,394/-. INVOKING THE PROVISIONS OF SECTION 14A READ WITH RU LE 8D, THE AO COMPUTED DISALLOWANCE U/S 14A AT RS.9,50,500/-. TH E LD. CIT(A) ORDERED FOR THE DELETION OF ADDITION. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. IT IS OBSERVED THAT THE LD. CI T(A) HAS MENTIONED IN THE IMPUGNED ORDER THAT THE AO HAS WRONGLY COMPUTED THE DISALLOWANCE BY CONSIDERING THE ACCOUNTS OF PROPRIETORSHIP CONCE RN OF THE ASSESSEE, NAMELY, M/S TIRUN TRAVEL MARKETING AND THE SEPARATE ACCOUNTS MAINTAINED BY THE ASSESSEE. THERE IS APPARENT CONF LICT IN THE FACTUAL POSITION RECORDED BY THE AO AS WELL AS THE LD. CIT( A). THE LD. FIRST APPELLATE AUTHORITY DELETED THE ADDITION BY RELYING ON THE FACTUAL POSITION WHICH IS NOT BORNE OUT FROM THE ASSESSMENT ORDER. IN OUR CONSIDERED OPINION, THE ENDS OF JUSTICE WOULD MEET ADEQUATELY IF THE IMPUGNED ORDER ON THIS ISSUE IS SET ASIDE AND THE MATTER IS RESTORED TO THE FILE OF AO. WE ORDER ACCORDINGLY AND DIRECT THE AO TO DECI DE THIS ISSUE AFRESH ITA NO.3764/DEL/2013 3 AS PER LAW, AFTER ALLOWING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 5. THE ONLY OTHER GROUND IS AGAINST RESTRICTING THE DISALLOWANCE OF PERSONAL EXPENSES TO 1/10 TH INSTEAD OF 1/6 TH MADE BY THE AO. THE AO DISALLOWED 1/6 TH OF TELEPHONE EXPENSES, VEHICLE EXPENSES, DIWALI EXPENSES, TRAVELLING, DEPRECIATION AND ELECTRICITY EXPENSES BY TREATING THEM FOR PERSONAL USE. THE LD. CIT(A) REDUCED THE DISALLOWANCE TO 1/10 TH . IN OUR CONSIDERED OPINION AND VIEWING THE TOTALI TY OF THE PECULIAR FACTS AND CIRCUMSTANCES OF THE INSTANT CASE, THE L D.CIT(A) WAS JUSTIFIED IN REDUCING THE DISALLOWANCE TO 1/10 TH . THIS GROUND IS NOT ALLOWED. 6. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. THE ORDER PRONOUNCED IN THE OPEN COURT ON 29.04.201 5. SD/- SD/- [C.M. GARG] [R.S. SYAL] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED, 29 TH APRIL, 2015. DK ITA NO.3764/DEL/2013 4 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT AR, ITAT, NEW DELHI.