SMT. SUNITA SAINI, Indore V. THE ITO WARD 1(3), Indore

ITA 430/IND/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 99184 (ITAT-INDORE)
• Duration Of Justice: 6 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-12-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2005-2006
• Appeal Filed On: 08-06-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Assessee Lawyers: S S DESHPANDE
• Keywords: Depreciation; Business expenditure
• Section: 37(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE (SINGLE MEMBER CASE) BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER I.T.A.NO. 430/IND/2015 A.Y. : 2005-06 SMT. SUNITA SAINI, ITO, INDORE. VS. 1(3), INDORE. APPELLANT RESPONDENT PAN NO. AUBOS4974M A PPELLANT S BY : SHRI S.S. DESHPANDE, C. A. RESPONDENT BY : SHRI R.A.VERMA, DR O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF CIT(A)-I, INDORE, DATED 20.11.2014 FOR THE ASSES SMENT YEAR 2004-05. 2. FOLLOWING GROUNDS HAVE BEEN TAKEN BY THE ASSESSEE : - DATE OF HEARING : 29 .12.2015 DATE OF PRONOUNCEMENT : 29 .12.2015 SMT. SUNITA SAINI, INDORE VS. ITO, WARD 1(3), INDOR E. I.T.A.NO. 430/IND/2015 A.Y. 2005-06 2 2 1. THAT IN THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A)-I, INDORE, ERRED IN CONFIRMING DISALLOWANCE OF RS. 2,29,131/- AND RS. 23,100/- ON ACCOUNT OF EXPENSES RELATED TO VEHICLE AND SALARY RESPECTIVELY. 2. THAT IN THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A)-I, INDORE, ERRED IN CONFIRMING DISALLOWANCE OF RS. 54,559/- ON ACCOUNT OF INTEREST EXPENSES. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE H AS FILED THE RETURN OF INCOME ON 30.12.2005. THE ASSES SEE IS PROPRIETOR OF M/S. NAKUL FINANCE CORPORATION AND EN GAGED IN THE BUSINESS OF ARRANGING THE FINANCE FROM OUTSIDE PARTIES AND CHARGING THE BROKERAGE. THE ASSESSEE HAS RECEIVED R S. 4,56,585/- AS BROKERAGE DURING THE YEAR AND APART F ROM THIS, THE ASSESSEE EARNED INCOME FROM HOUSE PROPERTY. THE ASSESSEE HAS SHOWN THE HIRE RECEIPT FROM CAR AMOUNTING TO RS . 40,428/-, WHEREAS THE ASSESSEE HAS CLAIMED EXPENSES OF RS. 2,29,131/- AGAINST THE INCOME. THE ASSESSEE HAS CLA IMED INSURANCE EXPENSES OF RS. 30,257/-, VEHICLE EXPENSE S AT RS. SMT. SUNITA SAINI, INDORE VS. ITO, WARD 1(3), INDOR E. I.T.A.NO. 430/IND/2015 A.Y. 2005-06 3 3 42,550/-, DEPRECIATION AT RS. 1,04,266/-, BANK HIRE CHARGES AT RS. 10,058/- AND DRIVER SALARY AT RS. 42,000/-. THE AO HAS GIVEN SHOW CAUSE NOTICE AND THE ASSESSEE SUBMITTED THAT THIS VEHICLE IS USED FOR PLYING HIRE AS WELL AS BUSINESS . THE ASSESSEE DOES NOT MAINTAIN LOG BOOK. THEREFORE, THE AO DID NOT ALLOW THE VEHICLE EXPENSES. 4. THE MATTER CARRIED TO THE LD. CIT(A) AND THE LD. C IT(A) HAS DISMISSED THE APPEAL. 5. THE LD. AUTHORIZED REPRESENTATIVE SUBMITTED BEFORE ME THAT THE ASSESSEE HAS BROKERAGE INCOME. THEREFORE, WHEN THE ASSESSEE HAS CAR FOR HIS BUSINESS, VEHICLE EXPENSES SHOULD BE ALLOWED. THE LD. AUTHORIZED REPRESENTATIVE ALSO SUB MITTED THAT THE DEPRECIATION, BANK HIRE CHARGES AND DRIVER SALA RY MUST BE ALLOWED. 6. HAVING HEARD BOTH THE PARTIES AND LOOKING TO THE FA CTS AND CIRCUMSTANCES OF THE CASE, I FIND THAT THE ASSE SSEE HAD ONLY BROKERAGE INCOME AND ASSESSEE WAS CLAIMING THA T HE IS USING QUALIS AS TAXI AND HE IS EARNING THE RENTAL I NCOME. THEREFORE, WHEN RENTAL INCOME IS OFFERED TO TAX, HE MUST BE ALLOWED THE VEHICLE EXPENSES, DEPRECIATION AND DRIV ER SALARY SMT. SUNITA SAINI, INDORE VS. ITO, WARD 1(3), INDOR E. I.T.A.NO. 430/IND/2015 A.Y. 2005-06 4 4 AND INSURANCE EXPENSES. I FIND THAT AS PER SECTION 37(1) ANY BUSINESS EXPENDITURE MUST BE ALLOWED, WHICH IS INCU RRED FOR BUSINESS PURPOSES. I FIND THAT THE ASSESSEE HAD TWO VEHICLES AND SHE CLAIMS TO HAVE HIRE RECEIPTS FROM QUALIS, W HICH IS NOT REGISTERED WITH RTO AS TAXI. THEREFORE, IT CANNOT B E GIVEN FOR HIRE CHARGES AND MEAGRE HIRE AND HUGE EXPENSES RELA TED TO QUALIS. THE ASSESSEES CLAIM CANNOT BE ALLOWED. THE ASSESSEE IS IN FINANCE BUSINESS AND THE ASSESSEE HAS NOT GIV EN ANY USE OF QUALIS IN FINANCE BUSINESS. THE ASSESSEE FAILED TO GIVE THE NATURE OF ANY FINANCE BUSINESS, WHERE THE VEHICLE I S USED FOR DOING FINANCE PROJECT AND BANK LOAN FINANCE FOR THE PURPOSE OF BUSINESS. THEREFORE, THE ASSESSEE DID NOT PROVE TH AT QUALIS WAS USED FOR HIS BUSINESS PURPOSES. THEREFORE, THE QUALIS WAS USED FOR PERSONAL PURPOSES. THE ENTIRE CLAIM OF QUA LIS EXPENSES OF RS. 2,29,131/- IS TO BE DISALLOWED. THE REFORE, I DISALLOW THE SAME. 7. GROUND NO.2 WAS NOT ARGUED, HENCE THE SAME IS DISMISSED. SMT. SUNITA SAINI, INDORE VS. ITO, WARD 1(3), INDOR E. I.T.A.NO. 430/IND/2015 A.Y. 2005-06 5 5 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMIS SED. THIS ORDER HAS BEEN PRONOUNCED IN T HE OPEN COURT ON 29 TH DECEMBER, 2015. SD/- ( D.T.GARASIA) JUDICIAL MEMBER DATED : 29 TH DECEMBER, 2015. CPU*