Rajesh Gupta HUF, Ambala Cantt. V. DCIT, Ambala

ITA 455/CHANDI/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 64075 (ITAT-CHANDIGARH)
• Duration Of Justice: 7 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-12-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 13-12-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 24-04-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Depreciation; Agreed addition

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A, CHANDIGARH BEFORE SHRI T.R. SOOD, A.M AND MS. SUSHMA CHOWLA, J M ITA NO. 455/CHD/2012 ASSESSMENT YEAR : 2008-09 RAJESH GUPTA, HUF V D.C.I.T. PROP. M/S PANNA LAL & CO AMBALA 70-A, THE MALL AMBALA CANTT AAIHR 2395 R (APPELLANT) (RESPONDENT) APPELLANT BY SHRI TEJ MOHAN SINGH RESPONDENT BY: SHRI AKHILESH GUPTA DATE OF HEARING 13.12.2012 DATE OF PRONOUNCEMENT 18.12.2012 O R D E R PER T.R.SOOD, A.M THIS APPEAL IS DIRECTED AGAINST THE ORDER PASSED BY THE LD. CIT(A), PANCHKULA DATED 21.2.2012. 2. IN THIS APPEAL THE ASSESSEE HAS RAISED THE FOLLO WING GROUNDS: 1 THE LD. CIT(A) PANCHKULA WAS NOT JUSTIFIED IN UPHOLDING THE DISALLOWANCE OF RS. 200,000/- OUT OF SALARY EXPENSES AND FURTHER UPHOLDING THE FOLLOWING DISALLOWANCES: - RS. 3177/- OUT OF STAFF WELFARE EXPENSES - RS. 4148/- OUT OF ENTERTAINMENT EXPENSES - RS. 8461/- OUT OF TRAVELING EXPENSES - RS. 4707/- OUT OF OFFICE EXPENSES - RS. 18695/- OUT OF PETROL AND LOCAL CONVEYANCE AN D INTEREST ON CAR LOAN - RS. 18545/- OUT OF CAR DEPRECIATION. 2. THE LD. CIT(A) WAS ALSO NOT JUSTIFIED IN NOT ALL OWING THE TELESCOPIC ADJUSTMENT OF THE DISALLOWANCE OF RS . 257733/- OUT OF AGREED ADDITION OF RS. 260500/- MAD E UNDER THE HEAD SUSPENSE VIJAYA BANK A/C. 2 3 GROUND NO. 2 WAS NOT PRESSED BEFORE US, THEREFORE, THE SAME IS DISMISSED AS NOT PRESSED. 4 GROUND NO. 1 AFTER CONSIDERING THE RIVAL SUBMISSIONS WE FIND THAT DURING THE ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER NOTICED THAT PROPER VOUCHERS WERE NOT AVAIL ABLE FOR SALARY, STAFF WELFARE EXPENSES, ENTERTAINMENT EXPEN SES, TRAVELING EXPENSES, OFFICE EXPENSES, PETROL AND LOC AL CONVEYANCE AND INTEREST ON CAR LOAN. ACCORDINGLY H E DISALLOWED A SUM OF RS. 2 LAKHS OUT OF SALARY. FURT HER THE EXPENSES FROM VARIOUS HEADS @ 1/6 TH WERE DISALLOWED. ON APPEAL THE ACTION OF THE ASSESSING OFFICER WAS CONF IRMED BY THE LD. CIT(A). 5 BEFORE US, THE LD. COUNSEL OF THE ASSESSEE SUBMIT TED THAT THE DISALLOWANCES HAVE BEEN MADE MERELY ON ADHOC BA SIS WITHOUT PIN POINTING ANY PARTICULAR DEFECT. HE AL SO POINTED OUT THAT %AGE OF SALARY HAS GONE DOWN IN THIS YEAR AND IN THIS REGARD HE REFERRED TO THE FOLLOWING CHART FURNISHED BEFORE THE LD. CIT(A): A.Y COMMISSION EARNED SALARY CLAIMED %SALARY EXPENDITURE. DISALLOWANCE 2008-09 45,67,907/- 15,70,469/- 34.38 2 LAKH 2007-08 37,581,423/- 12,62,298/- 33.64 NIL 2006-07 33,85,116/- 14,43,656/- 42.64 12,000 HE POINTED OUT THAT MERELY A DISALLOWANCE OF RS. 12 ,000/- WAS MADE DURING ASSESSMENT YEAR 2006-07 AND THEREFORE, DISALLOWANCE IS ON A VERY HIGH SIDE WHICH IS NOT MA INTAINABLE. 6 ON THE OTHER HAND, THE LD. DR FOR THE REVENUE SU PPORTED THE ORDER OF LD. CIT(A). 3 7 AFTER CONSIDERING THE RIVAL SUBMISSIONS WE FIND THAT ALL THESE DISALLOWANCE HAVE BEEN MADE ON ADHOC BASIS WI THOUT PIN POINTING ANY PARTICULAR DEFECT. HOWEVER, AT THE SA ME TIME IT IS NOT DISPUTED THAT PROPER VOUCHERS WERE NOT AVAILABL E. THEREFORE, AS FAR AS SALARY IS CONCERNED, WE ARE O F THE VIEW THAT IF DISALLOWANCE OF RS. 50,000 IS MADE, SAME WO ULD MEET THE ENDS OF JUSTICE. 8. IN RESPECT OF EXPENSES OF STAFF WELFARE, ENTERTA INMENT EXPENSES, TRAVELING EXPENSES, OFFICE EXPENSES LUMP SUM ADDITION OF RS. 2,000 WOULD BE JUSTIFIED. 9 AS FAR AS PETROL AND CAR DEPRECIATION IS CONCERNE D, IT HAS NOT BEEN DENIED THAT THERE WAS NO PERSONAL USAGE OF THE SAME, THEREFORE, IN OUR VIEW DISALLOWANCE TO THE EXTENT OF 1/10 TH OF THE EXPENSES ON ACCOUNT OF PETROL ETC. AS WELL CAR EXPENSES AND DEPRECIATION IS JUSTIFIED. THE LD. COUNSEL OF THE ASSESSEE HAD ACCEPTED THIS PROPOSAL AND ACCORDINGLY WE SET ASIDE THE ORDER OF THE LD. CIT(A) AND DIRECT THE ASSESSING OF FICER TO MAKE DISALLOWANCES AS INDICATED BY US. 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED ON 18.12.2012. SD/- (SUSHMA CHOWLA) (T.R. SOOD) JUDICIAL MEMBER ACCOUNTANT MEM BER DATED : 18 .12. 2012 SURESH COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT/THE C IT(A)/THE DR 4