Thomas Philip, Trivandrum V. ITO, Thiruvalla

ITA 420/COCH/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 65008 (ITAT-COCHIN)
• Duration Of Justice: 1 year(s) 6 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-12-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 05-12-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 26-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUSAN GEORGE VARGHESE
• Assessee Lawyers: TONY C KALLUKALAM
• Keywords: Depreciation; Principle of natural justice

Judgement Text

1 ITA NO. 420/COCH/2011 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI N.R.S. GANESAN (JM) AND SHRI B.R. BASKA RAN(AM) I.T.A NO. 420/COCH/2011 (ASSESSMENT YEAR 2007-08) THOMAS PHILIP VS ITO, WD.4 C-14, JAWAHAR NAGAR THIRUVALLA KOWDIAR, TRIVANDRUM-695 003 PAN : AITPP6571C (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI TONY C KALLUKALAM RESPONDENT BY : SMT. SUSAN GEORGE VARGHESE DATE OF HEARING : 05-12-2012 DATE OF PRONOUNCEMENT : 07-12-2012 O R D E R PER N.R.S. GANESAN (JM) THIS APPEAL OF THE TAXPAYER IS DIRECTED AGAINST TH E ORDER OF COMMISSIONER OF INCOME-TAX(A)-I, TRIVANDRUM DATED 2 5-03-2011 AND PERTAINS TO ASSESSMENT YEAR 2007-08. 2. THE FIRST ISSUE IS WITH REGARD TO CLAIM OF DEPRE CIATION. SHRI TONY C KALLUKALAN, THE LD.REPRESENTATIVE FOR THE TAXPAYER SUBMITTED THAT THE 2 ITA NO. 420/COCH/2011 TAXPAYER CLAIMED DEPRECIATION ON TIPPERS AND TAURUS . HOWEVER, THE ASSESSING OFFICER DISALLOWED THE CLAIM OF THE TAXPA YER ON THE GROUND THAT THE TIPPERS AND TAURUS WERE NOT REGISTERED. THE LD .REPRESENTATIVE SUBMITTED THAT THE REGISTRATION OF THE TIPPERS AND TAURUS IS NOT MANDATORY REQUIREMENT FOR ALLOWING DEPRECIATION. WHAT IS TO BE SEEN IS WHETHER THE TIPPERS AND TAURUS ARE USED FOR THE BUSINESS OF THE TAXPAYER. ACCORDING TO THE LD.REPRESENTATIVE, THE TAXPAYER HAS FILED TRIP SHEETS TO SHOW THAT THE TIPPERS AND TAURUS WERE ACTUALLY USED FOR THE BUSIN ESS IN THE ASSESSMENT YEAR UNDER CONSIDERATION. 3. ON THE CONTRARY, SMT. SUSAN GEORGE VERGHESE, THE LD.DR SUBMITTED THAT THE KERALA HIGH COURT IN THE CASE OF COMMISSIO NER OF INCOME-TAX VS AIR TRAVEL ENTERPRISES INDIA LTD (2004) 225 ITR 527 (KE R) HELD THAT WHEN THERE WAS NO PERMIT THE DEPRECIATION CANNOT BE ALLOWED ON THE VEHICLE. HERE ALSO IT IS NOT KNOWN WHETHER THE TAXPAYER HAS OBTAI NED ANY PERMIT OR NOT. SINCE THE TRIP SHEETS AND OTHER MATERIALS WERE NOT FILED BEFORE THE LOWER AUTHORITIES, THE LD.DR SUBMITTED THAT THE MATTER NE EDS TO BE RE-EXAMINED BY THE ASSESSING AUTHORITY. 3 ITA NO. 420/COCH/2011 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. ADMITTED LY, THE ASSESSING OFFICER REJECTED THE CLAIM OF THE TAXPAYER ON THE GROUND THA T THE TIPPERS AND TAURUS ARE NOT REGISTERED UNDER THE MOTOR VEHICLES ACT. REGISTRATION UNDER THE MOTOR VEHICLES ACT MAY NOT BE A NECESSARY PRE- CONDITION FOR GRANT OF DEPRECIATION. WHAT IS REQUIRED IS WHETHER THE TIPP ERS / TAURUS ARE IN FACT USED FOR THE BUSINESS OF THE TAXPAYER. THE TAXPAYE R HAS NOW FILED THE COPIES OF THE TRIP SHEETS TO SHOW THAT THE TIPPERS AND TAURUS WERE USED FOR THE PURPOSE OF BUSINESS. THE DEPARTMENTAL REPRESEN TATIVE NOW CONTENDS THAT PERMIT IS REQUIRED FOR USING THE TIPPERS AND T AURUS IN THE BUSINESS, THEREFORE, UNLESS AND UNTIL PERMIT WAS OBTAINED, TH E TAXPAYER WILL NOT BE ENTITLED FOR DEPRECIATION. IN VIEW OF THE ABOVE, T HE MATTER NEEDS TO BE RE- EXAMINED IN THE LIGHT OF THE MATERIAL NOW FILED BY THE TAXPAYER BEFORE THIS TRIBUNAL. ACCORDINGLY, THE ORDERS OF LOWER AUTHORI TIES ARE SET ASIDE AND THE ISSUE IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER SHALL RE-EXAMINE THE ISSUE AFRESH IN THE LI GHT OF THE COPIES OF THE TRIP SHEETS FILED BY THE TAXPAYER AND THE JUDGMENT OF THE KERALA HIGH COURT IN THE CASE OF AIR TRAVEL ENTERPRISES INDIA LTD (SUPRA ) AND THEREAFTER DECIDE THE 4 ITA NO. 420/COCH/2011 SAME IN ACCORDANCE WITH LAW AFTER GIVING REASONABLE OPPORTUNITY OF HEARING TO THE TAXPAYER. 5. THE NEXT GROUND OF APPEAL IS WITH REGARD TO ESTI MATION OF AGRICULTURAL INCOME. THE LD.REPRESENTATIVE FOR THE TAXPAYER SUB MITTED THAT THE TAXPAYER HAS SHOWN AGRICULTURAL INCOME OF RS.30 LAKHS FROM T HE RUBBER PLANTATION. THE ASSESSING OFFICER REJECTED THE CLAIM OF THE TAXP AYER ON THE GROUND THAT THE COPIES OF THE AGRICULTURAL INCOME-TAX RETURN WA S NOT FURNISHED. THE LD.REPERESENTATIVE SUBMITTED THAT HE HAS FILED ALL THE DOCUMENTS / INVOICES TO SHOW THAT THE RUBBER WAS SOLD AND THE INCOME WAS ESTIMATED ON THE BASIS OF THE STATISTICS OF THE RUBBER BOARD. HOWEV ER, THE ASSESSING OFFICER DISALLOWED THE CLAIM OF THE TAXPAYER ON THE BASIS O F THE ENQUIRY SAID TO BE CONDUCTED BEHIND THE BACK OF THE TAXPAYER. 6. ON THE CONTRARY, SMT. SUSAN GEORGE VERGHESE, THE LD.DR SUBMITTED THAT THE INVOICES AND OTHER MATERIALS FOR SALE OF R UBBER WERE NOT AVAILABLE BEFORE THE ASSESSING OFFICER. THE ASSESSING OFFICE R HAS TO RE-EXAMINE THE MATTER. 5 ITA NO. 420/COCH/2011 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. THE TAXP AYER HAS FILED THE COPIES OF THE INVOICES AND OTHER MATERIALS TO SHOW THE SAL E OF RUBBER. THE ASSESSING OFFICER HAS SIMPLY REJECTED THE CLAIM OF T HE TAXPAYER ON THE GROUND THAT THE COPY OF THE AGRICULTURAL INCOME-TAX RETURN WAS NOT FURNISHED. WHEN THE TAXPAYER CLAIMS THAT HE IS CUL TIVATING CERTAIN AREA OF LAND, THE ASSESSING AUTHORITY HAS TO FIND OUT WHETH ER THAT AREA WAS CULTIVATED OR NOT. IF THE TAXPAYER HAS MAINTAINED BOOKS OF ACCOUNT AND OTHER DETAILS THE INCOME HAS TO BE COMPUTED ON THE BASIS OF THAT BOOKS MAINTAINED BY THE TAXPAYER. IF THE ASSESSING OFFIC ER FINDS THAT THE BOOKS OF ACCOUNT AND OTHER DETAILS MAINTAINED BY THE TAXPAYE R ARE NOT GENUINE THEN THE INCOME HAS TO BE ESTIMATED ON THE BASIS OF THE OTHER MATERIALS THAT MAY BE AVAILABLE ON RECORD. IN THIS CASE, THE TAXP AYER THOUGH CLAIMS THAT THE DETAILS OF SALE OF RUBBER WERE AVAILABLE, IT AP PEARS; THE INCOME WAS ESTIMATED ON THE BASIS OF THE STATISTICAL REPORT OF THE RUBBER BOARD. STATISTICAL REPORT FROM THE RUBBER BOARD IS ALSO ON E OF THE FACTORS THAT COULD BE CONSIDERED APART FROM LOCAL ENQUIRIES. HO WEVER, WHEN THE ASSESSING OFFICER CONDUCTS LOCAL ENQUIRY TO FIND OU T THAT AGRICULTURAL INCOME, THE COPY OF THAT LOCAL ENQUIRY REPORT SHALL BE FURN ISHED TO THE TAXPAYER 6 ITA NO. 420/COCH/2011 BEFORE PLACING RELIANCE ON THAT. IN THIS CASE, THE LOCAL ENQUIRY SAID TO BE CONDUCTED BY THE ASSESSING OFFICER THROUGH THE INSP ECTOR WAS NOT FURNISHED / SERVED ON THE TAXPAYER. THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THERE WAS VIOLATION OF NATURAL JUSTICE. ACCORDINGLY, THE ORDER OF THE LOWER AUTHORITY IS SET ASIDE AND THE ISSUE I S REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER IS DIRECTED TO FURNISH THE COPY OF REPORT OF THE ENQUIRIES SAID TO BE MADE THROUGH THE LOCAL INSPECTOR TO THE TAXPAYER AND RECONSIDER THE ISSUE ON THE BASIS OF THE REPLY THAT MAY BE FILED BY THE TAXPAYER AND THEN DECIDE THE ISSUE ON THE BASIS OF MATERIAL AVAILABLE ON RECORD AND IN ACCORDANCE WITH LAW AFTE R PROVIDING REASONABLE OPPORTUNITY TO THE TAXPAYER. 8. IN THE RESULT, THE APPEAL OF THE TAXPAYER IS ALL OWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 07 TH DECEMBER, 2012. SD/- SD/- (B.R. BASKARAN) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN, DT : 07 TH DECEMBER, 2012 PK/- 7 ITA NO. 420/COCH/2011 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE COMMISSIONER OF INCOME-TAX 4. THE COMMISSIONER OF INCOME-TAX(A) 5. THE DR (TRUE COPY) BY ORDER ASSTT. REGISTRAR, INCOME-TAX APPELLATE TRIBUNAL, COCHIN BENCH