Shri Vijay Kumar Sharma, Amritsar. V. The Income-tax Officer, Amritsar.

ITA 439/ASR/2012

• Counselvise Citation: 43920914 RSA 2012
• Duration Of Justice: 2 year(s) 1 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-12-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 29-12-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 30-11-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: P N ARORA
• Keywords: Depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. A.D. JAIN, JUDICIAL MEMBER AND SH. B.P. JAIN, ACCOUNTANT MEMBER I.T.A. NO. 439(ASR)/2012 ASSESSMENT YEAR: 2006-07 PAN: ADDPS2145Q SHRI VIJAY KUMAR SHARMA, VS. THE INCOME TAX OFFIC ER, PROP. M/S. NATIONAL MOTORS, WARD 4(1), AMRITSAR 10-11, COURT ROAD, AMRITSAR (APPELLANT) (RESPONDENT) APPELLANT BY: SH. P.N. ARORA, ADV. RESPONDENT BY: SH. TARSEM LAL, DR DATE OF HEARING: 29.12.2014 DATE OF PRONOUNCEMENT: 30.12.2014 ORDER PER B.P. JAIN, A.M. 1. THIS APPEAL OF THE ASSESSEE ARISES FROM THE ORDER OF LEARNED CIT(A), AMRITSAR, DATED 01.11.2012 FOR THE ASSESSME NT YEAR 2006-07. 2. THE APPEAL IN THE PRESENT CASE WAS DECIDED BY TH IS BENCH VIDE ORDER DATED 24.02.2014 WHERE THE ASSESSEE HAD RAISE D AS MANY AS EIGHT GROUNDS OF APPEAL. THE ASSESSEE FILED A MISCELLANEO US APPLICATION SUBMITTING THAT IN OUR ORDER DATED 24.02.2014, GROU ND NOS. 6 & 7 RAISED THEREIN HAVE NOT BEEN DECIDED. ON HEARING THE MISCE LLANEOUS APPLICATION, WE FOUND THE MISTAKE APPARENT FROM RECORD THAT GROU ND NOS. 6 & 7 IN FACT WERE NOT DECIDED BY US IN THE ORDER DATED 24.02.201 4 AND ACCORDINGLY 2 I.T.A. NO. 439(ASR)/2012 ASSESSMENT YEAR: 2006-07 MISCELLANEOUS APPLICATION OF THE ASSESSEE WAS ALLOW ED TO DECIDED GROUND NOS. 6 & 7 VIDE ORDER DATED 05.09.2014. HENCE, THIS APPEAL OF THE ASSESSEE TO DECIDE GROUND NOS. 6 & 7 IS BEFORE US. THE SAID GROUND NOS. 6 & 7 ARE REPRODUCED HEREIN BELOW: 6. AGAIN, THE ASSESSING OFFICE HAS GROSSLY ERRED I N MAKING AN ADDITION OF RS. 1,06,000/- ON ACCOUNT OF SO-CALLED UNDER VALUATION OF MATERIAL CONSUMED. THE LD. CIT(APPEALS ) HAS GROSSLY ERRED IN CONFIRMING THE SAME WITHOUT APPREC IATING THE FACTS AS THIS ADDITION HAS BEEN MADE WITHOUT ANY RH YME & REASON. AS SUCH, THE ADDITION OF RS. 1,06,000/- MAD E BY THE A.O. AND CONFIRMED BY THE LEARNED CIT(APPEALS), MAY BE DELETED. 7. AGAIN, THE LEARNED CIT(APPEALS) HAS GROSSLY ERR ED IN CONFIRMING THE DISALLOWANCE OF RS. 69,310/- ON ACCO UNT OF CAR DEPRECIATION. THE CAR WAS USED FOR BUSINESS PURPOSE S AND AS SUCH THE DEPRECIATION AS CLAIMED SHOULD HAVE BEEN A LLOWED IN TOTO. ALTERNATIVE, THE DISALLOWANCE OF CAR DEPRECIA TION IS VERY HIGH & EXCESSIVE. 3. AS REGARDS GROUND NO. 6, THE BRIEF FACTS OF THE CASE ARE THAT M/S. SHREE VEE JAY BUILDERS IN THE TRADING ACCOUNT, THE ASSESSEE HAD SHOWN THE OPENING STOCK AT RS. 11,91,000/- AND MATERIAL C ONSUMED HAD BEEN DECLARED AT RS. 13,94,000/- WHICH RESULTED INTO GRO SS PROFIT OF RS. 2,03,000/-. THE ASSESSEE DID NOT FURNISH ANY DETAIL AND HE SUBMITTED THE FOLLOWING REPLY: THAT ASSESSEE HAS ALSO BEEN CARRYING BUSINESS OF C ONSTRUCTING BUILDING/SHOPS UNDER THE NAME M/S. SHREE VEE JAY BU ILDERS AND DEVELOPERS. DURING THE RELEVANT YEAR NO CONSTRUCTIO N WAS CARRIED DUE TO INTERVENTION OF MCA AND STATE GOVT. AND THE ASSE SSEE DECIDED TO DISPOSE OFF STOCK OF BUILDING MATERIAL, THE COMPLET E COPY OF ACCOUNT OF MATERIAL CONSUMED IS ENCLOSED HEREWITH. 3 I.T.A. NO. 439(ASR)/2012 ASSESSMENT YEAR: 2006-07 4. THE AO AFTER CONSIDERING THE REPLY OF THE ASSESS EE OBSERVED THAT THE SAID REPLY IS DEVOID OF ANY DOCUMENTARY EV IDENCE AND IN THE ABSENCE OF THE SAME VALUE OF MATERIAL CONSUMED WAS TAKEN AT RS. 15,00,000/- WHICH RESULTED INTO ADDITION OF RS. 1,0 6,000/-. 5. LEARNED CIT(A) CONFIRMED THE ACTION OF THE A.O. 6. THE LEARNED COUNSEL FOR THE ASSESSEE MR. P.N. AR ORA, ADV., INVITED OUT ATTENTION AT PAPER BOOK, PAGE NOS. 30 & 31 WHERE THE ASSESSEE HAD SUBMITTED COPY OF THE SALE OF THE MATERIAL ACCO UNT IN WHICH NO DEFECT HAS BEEN POINTED OUT BY THE AO AND THE LEARNED CIT (A). BOOKS OF ACCOUNT HAVE NOT BEEN REJECTED AND PROVISIONS OF SE CTION 145(3) OF THE INCOME-TAX ACT, 1961 (FOR SHORT THE ACT) HAVE NOT BEEN INVOKED. NO DEFECT IN THE PROFIT AND LOSS ACCOUNT HAS BEEN POIN TED OUT. THEREFORE, THE AO WAS NOT JUSTIFIED IN ESTIMATING THE SALE OF THE MATERIAL AT RS. 15,00,000/- ON CONJECTURES AND SURMISES AND WITHOU T BRINGING ANY MATERIAL ON RECORD. ACCORDINGLY, THE ORDER OF THE L EARNED CIT(A) BE REVERSED. 7. LEARNED DR, ON THE OTHER HAND, ARGUED THAT THE A SSESSEE HAS NOT SUBMITTED ANY DOCUMENTARY EVIDENCE TO PROVE THE SAL E OF THE MATERIAL AND ACCORDINGLY THE A.O. HAD MADE A REASONABLE ESTIMATI ON. 4 I.T.A. NO. 439(ASR)/2012 ASSESSMENT YEAR: 2006-07 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. THERE IS NO DISPUTE TO THE FACT THAT THE ASSE SSEE HAD SUBMITTED THE BOOKS OF ACCOUNT AND TRADING AND PROFIT & LOSS ACCO UNT IN WHICH NO DEFECT HAS BEEN POINTED OUT AND THE A.O. AS WELL AS THE LEARNED CIT(A) HAD NOT INVOKED THE PROVISIONS OF SECTION 145(3) OF THE ACT. IN THE ABSENCE OF THE SAME, NONE OF THE AUTHORITIES BELOW WAS JUSTIFIED IN SIMPLY ESTIMATING THE SALES AT RS. 15,00,000/- AND THAT TO O WITHOUT BRINGING ANY MATERIAL ON RECORD FOR SUCH ESTIMATION AND WITHOUT POINTING ANY DEFECT IN THE SALES DECLARED BY THE ASSESSEE AT RS. 13,94,000 /-. 9. THEREFORE, THE A.O. CANNOT TAKE A PLEA OF THE AS SESSEE NOT PRODUCING ANY DOCUMENTARY EVIDENCE. NO INQUIRY HAS BEEN MADE BY THE A.O. OR THE LEARNED CIT(A) WITH REGARD TO THE SALES OF MATERIAL AT RS.13,94,000/- AND IN THE ABSENCE OF ANY DEFECT IN THE SALES AT RS. 13,94,000/- AND IN THE ABSENCE OF REJECTION OF BOOK S OF ACCOUNTS, THE A.O. IS NOT JUSTIFIED IN ESTIMATING THE SALES ON CONJECT URES AND SURMISES AND ACCORDINGLY THE ORDER OF THE LEARNED CIT(A) IS REVE RSED AND GROUND NO. 6 OF THE ASSESSEE IS ALLOWED. 10. AS REGARDS GROUND NO. 7, THE BRIEF FACTS OF THE C ASE ARE THAT THE A.O. MADE A DISALLOWANCE OF DEPRECIATION ON ACCOUNT OF PERSONAL ELEMENT AT 1/6 TH WHICH HAS RESULTED INTO ADDITION OF RS. 69,301/- W HICH ACTION OF THE A.O. WAS CONFIRMED BY THE LEARNED CIT(A). 5 I.T.A. NO. 439(ASR)/2012 ASSESSMENT YEAR: 2006-07 11. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED T HE FACTS OF THE CASE. 12. IN OUR ORDER DATED 24.02.2014 IN GROUND NO. 5, WE HAVE DECIDED THE DISALLOWANCE OF CAR EXPENSES AT 1/6 TH OF THE CLAIM MADE BY THE ASSESSEE AND ACCORDINGLY THE CAR DEPRECATION HAS AL SO TO BE RESTRICTED AT 1/6 TH OF THE CLAIM MADE BY THE ASSESSEE. THEREFORE, WE F IND NO INFIRMITY IN THE ORDER OF LEARNED CIT(A) IN RESTRICTING THE D ISALLOWANCE ON ACCOUNT OF DEPRECIATION AT 1/6 TH OF THE CLAIM MADE BY THE ASSESSEE. ACCORDINGLY, GROUND NO. 7 OF THE ASSESSEE IS DISMISSED. 13. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PART LY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH DECEMBER, 2014 SD/- SD/- (A.D. JAIN) (B.P. JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 30 TH DECEMBER, 2014 /RK/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE: SH. VIJAY KUMAR SHARMA, PROP. M/S N ATIONAL MOTORS, 10-11, COURT ROAD, AMRITSAR 2. ITO, WARD 4(1), AMRITSAR 3. THE CIT(A), 4. THE CIT, 5. THE SR DR, I.T.A.T., TRUE COPY BY ORDER 6 I.T.A. NO. 439(ASR)/2012 ASSESSMENT YEAR: 2006-07 (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.