Suresh Kumar Kabra, JODHPUR V. ITO, JODHPUR

ITA 421/JODH/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3028 (ITAT-JODHPUR)
• Duration Of Justice: 5 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-04-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 27-11-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: G R KOKANI
• Assessee Lawyers: T P GAGGAR
• Keywords: Depreciation; Opportunity of being heard; Additional evidence; Corroborative evidences; Valuation report
• Section: 54

Judgement Text

IN THE INCOME TAX APPELALTE TRIBUNAL : JODHPUR BENC H : JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER. ITA NO. 421/JODH/2012 (A.Y. 2009-10) SURESH KUMAR KABRA VS. ITO, WARD-3(2), C/O. BHANSALI GAGGAR & MEHTA, CAS, JODHPUR. C-10, SHASTRI NAGAR, JODHPUR. PAN NO.ACAPK9657P ASSESSEE BY : SHRI T.P. GAGGAR. DEPARTMENT BY : SHRI G.R. KOKANI (DR) DATE OF HEARING : 06/03/2013. DATE OF PRONOUNCEMENT : 30/04/2013. PER HARI OM MARATHA, J.M.: THIS APPEAL OF THE ASSESSEE FOR A.Y. 2009-10 IS DI RECTED AGAINST THE ORDER OF LD. CIT(A), JODHPUR, DATED 31/10/2012. 2. BRIEFLY STATED, THE FATS OF THE CASE ARE THAT TH E ASSESSEE, DURING THE RELEVANT YEAR DEALT IN SHARES AND COMMODITY. HE DERIVED HIS INCOME FROM THE ABOVE BUSINESS APART FROM DERIVING INCOME FROM INTEREST AND CAPITAL GAINS. 3. IN THIS APPEAL FOLLOWING GROUND SHAVE BEEN RAISE D :- 1. THAT ON THE FACTS, IN THE CIRCUMSTANCES OF THE CASE AND IN VIEW OF EVIDENCE ON RECORD THE LD. C1T (APPEAL) HAS WRON GLY AND ERRONEOUSLY CONFIRMED THE ADDITION OF RS.142012/- T HE 50% OF FOLLOWING EXPENSES CLAIMED:- TELEPHONE EXPENSES : RS. 76571/- ENTERTAINMENT EXPENSES : RS. 50,000/- REPAIR AND MAINTENANCE EXPENSES : RS. 5486/- OFFICE EXPENSES : RS. 15467/- DEPRECIATION EXPENSES : RS. 136500/- WHEREAS ASSESSEE HAS MAINTAINED PROPER BOOKS OF RE CORDS AND SUPPORTING EVIDENCES IN RESPECT OF VARIOUS EXPENSES CLAIMED. 2. THAT ON THE FACTS, IN THE CIRCUMSTANCES OF THE C ASE AND IN VIEW OF EVIDENCE ON RECORD THE LD. C1T (APPEAL) HAS WRON GLY AND ERRONEOUSLY CONFIRMED THE DISALLOWANCE OF THE EXEMP TION U/S 54 RS.6912188/- WHEREAS ASSESSEE HAS INVESTED RS.69506 00/- IN NEW HOUSE PROPERTY AND ELIGIBLE FOR EXEMPTION U/S 54. 3. THAT ON FACTS, IN THE CIRCUMSTANCE OF THE CASE A ND IN VIEW OF EVIDENCE ON RECORD THE LD. CIT (APPEAL) HAS WRONGLY & ERRONEOUSLY CONFIRMED THE DISALLOWANCE OF THE BENEFIT OF BROUGH T FORWARD BUSINESS LOSS SET-OFF RS.51069/- WHERE AS ENTIRE FA CTS ARE SUPPORTED WITH PROOF OF BUSINESS LOSS. 4. THAT ON FACTS, THE LD. A.O. HAS WRONGLY AND ERRO NEOUSLY INITIATED THE PENALTY PROCEEDINGS U/S 271(L)(C) OF THE IT ACT 1961. 4. AT THE TIME OF HEARING LD. A.R. SHRI T.P. GAGGAR DID NOT PRESS GROUND NOS. 3 AND 4 AND HENCE, THESE GROUNDS STAND DISMISSED. GROUND NO. (5) IS FORMAL. 5. THE FACTS APROPOS GROUND NO. (1) OF THIS APPEAL ARE THAT THE ASSESSEE HAS CLAIMED FOLLOWING EXPENSES DURING THIS YEAR :- TELEPHONE EXP. : RS. 76571/- ENTERTAINMENT EXPENSES : RS. 50,000/- REPAIR & MAINTENANCE : RS. 5486/- OFFICE EXPENSES : RS. 15467/- DEPRECIATION ON CAR : RS. 136500/- TOTAL : RS. 284024/- THE AO HAS DISALLOWED 50% OF THE ABOVE EXPENSES BEI NG RS. 1,42,012/-. THE ASSESSEE IS AGGRIEVED AND HAS RAISED THIS GROU ND. 6. WE HAVE HEARD RIVAL SUBMISSIONS. IT WAS ARGUED B Y LD. AR THAT THE ASSESSEE WAS A MEMBER OF NCDEX MUMBAI AND WAS ENGAG ED IN BROKERAGE BUSINESS FOR DERIVATIVE COMMODITY TRADING . HE DISCONTINUED THIS BUSINESS DUE TO HEAVY LOSSES AND ALSO SURRENDE RED HIS MEMBERSHIP VIDE LETTER DATED 19/03/2010 (ENCLOSED AT PAGE 12 T O THE PAPER BOOK). HE STATED DUE TO CLOSURE OF BUSINESS THERE WERE NO EMPLOYEES AND EVEN THE ACCOUNTANT ALSO LEFT RELEVANT DETAILS AND PAPERS COULD NOT BE PRODUCED. ON THE OTHER HAND LD. DR HAS SUPPORTED TH E ORDERS OF THE AUTHORITIES BELOW. 7 WE HAVE FOUND THAT THE ASSESSEE DID MAINTAIN PROP ER BOOKS OF ACCOUNTS INCLUDING SUPPORTING EVIDENCE AND THE ACCO UNTS ARE AUDITED BY THE C.A. (COPY ENCLOSED AT PAGE 15 TO 31 OF PB). THE ASSESSEE HAS CLAIMED EXPENSES AND THE A.O. HAS ACCEPTED THEM IN PRINCIPLE. DUE TO NON-PRODUCTION OF VOUCHERS, HE HAS DISALLOWED 50% O F THESE EXPENSES. THE ASSESSEE HAS BEEN CLAIMING SIMILAR EXPENSES IN THE EARLIER YEARS. AT PAGE 30 OF PB AS PER SCHEDULE 9, SIMILAR EXPENSE S WERE CLAIMED BY THE ASSESSEE AND THEY WERE ALLOWED. IN OUR CONSIDER ED OPINION THIS DISALLOWANCE IS SIMPLY ADHOC AND BASED ON NO LOGICA L BASIS. SUCH A DISALLOWANCE CANNOT BE UPHELD IN THE EYES OF LAW. A CCORDINGLY, WE ORDER TO DELETE THE ENTIRE DISALLOWANCE AND ALLOW G ROUND NO. (1) OF THIS APPEAL. 8. THE FACTS APROPOS GROUND NO. (2) AND THAT THE AS SESSEE HAS CLAIMED A DEDUCTION U/S 54 OF THE ACT. THE AO HAS D ISALLOWED THIS CLAIM WHICH HAS BEEN APPROVED BY LD. CIT(A), AS WEL L. 9. BEFORE, US IT WAS ARGUED THAT THE ASSESSEE HAS I NVESTED THE SALE CONSIDERATION AS PER THE PROVISIONS OF SECTION 54 O F THE ACT. THE ASSESSEE HAS FILED A COPY OF THE VALUATION REPORT W HICH IS AVAILABLE ON PAGES 1 TO 10 OF PB. IT IS STATED THAT THIS REPORT COULD NOT BE FILED BECAUSE THE BUSINESS OF THE ASSESSEE WAS CLOSED AND ACCOUNTANT HAD LEFT THE SERVICES. THE ASSESSEE FILED APPLICATION U /R 46A FOR ENTERTAINMENT OF THIS ADDITIONAL EVIDENCE BEFORE LD . CIT(A). COPY OF THIS APPLICATION IS ENCLOSED AT PB 11. THE LD. CIT( A) CALLED FOR R.R. ON THIS APPLICATION FROM THE AO. THEREFORE, THIS EVIDE NCE WAS NOT ADMITTED. AFTER HEARING BOTH SIDES AND IN THE GIVEN FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN THE INTEREST OF JU STICE WE RESTORE GROUND NO. (2) TOT EH FILE OF THE AO AFTER SETTING ASIDE THE FINDING ON THIS ISSUE. THE A.O. SHALL DECIDE THIS ISSUE AFRESH AFTER GIVING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. HE SHAL L ALSO ALLOW THE ASSESSEE TO PRODUCING ANY EVIDENCE TO PROVE HIS CAS E. THEREFORE, THIS GROUND IS ALLOWED FOR STATISTICAL PURPOSES. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED AND PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH APRIL, 2013 SD/- SD/- [N.K. SAINI] [HARI OM MARATHA] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 30 TH APRIL 2013. VL COPY TO ALL CONCERNED.