Dr. Avdesh Bansal, New Delhi V. ITO, New Delhi

ITA 4560/DEL/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1225 (ITAT-DELHI)
• Duration Of Justice: 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 26-02-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 27-08-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: Y KAKKAR
• Assessee Lawyers: P K RASTOGI
• Keywords: Depreciation
• Section: 143(3); 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH A AA A : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI G. BEFORE SHRI G. BEFORE SHRI G. BEFORE SHRI G.D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, VICE PRESIDENT AND VICE PRESIDENT AND VICE PRESIDENT AND VICE PRESIDENT AND SHRI SHRI SHRI SHRI A.D.JAIN A.D.JAIN A.D.JAIN A.D.JAIN, JUDICIAL MEMBER , JUDICIAL MEMBER , JUDICIAL MEMBER , JUDICIAL MEMBER ITA NO. ITA NO. ITA NO. ITA NO.4560/DEL/2012 4560/DEL/2012 4560/DEL/2012 4560/DEL/2012 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR : : : : 2006 2006 2006 2006- -- -07 0707 07 DR. AVDHESH BANSAL, DR. AVDHESH BANSAL, DR. AVDHESH BANSAL, DR. AVDHESH BANSAL, 124, SIDHARTHA ENCLAVE, 124, SIDHARTHA ENCLAVE, 124, SIDHARTHA ENCLAVE, 124, SIDHARTHA ENCLAVE, NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. PAN : A PAN : A PAN : A PAN : AAEPB0536E. AEPB0536E. AEPB0536E. AEPB0536E. VS. VS. VS. VS. INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, WARD WARD WARD WARD- -- -37(2), 37(2), 37(2), 37(2), NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI P.K.RASTOGI, CA. RESPONDENT BY : MS. Y.KAKKAR, SR.DR. ORDER ORDER ORDER ORDER PER G. PER G. PER G. PER G.D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, VP VPVP VP : : : : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF LEARNED CIT(A)-XXVIII, NEW DELHI DATED 25 TH JULY, 2012 FOR THE AY 2006- 07. 2. THE ONLY GROUND RAISED BY THE ASSESSEE IS AGAINS T THE ADDITION OF ` 2 LAKHS MADE BY THE ASSESSING OFFICER ON ACCOUNT OF SALE OF CAR BY INVOKING HIS POWERS UNDER SECTION 154. 3. AT THE TIME OF HEARING BEFORE US, IT IS STATED B Y THE LEARNED COUNSEL FOR THE ASSESSEE THAT THE ASSESSEE IS A PRA CTICING DOCTOR. FOR THE YEAR UNDER CONSIDERATION, ASSESSMENT WAS COMPLE TED UNDER SECTION 143(3) AT AN INCOME OF ` 9,83,190/-. THEREAFTER, THE ASSESSING OFFICER PASSED THE ORDER UNDER SECTION 154 ON THE G ROUND THAT FROM THE SCRUTINY OF 3CD REPORT, IT WAS FOUND THAT DURIN G THE YEAR UNDER CONSIDERATION, ASSESSEE HAS SOLD A CAR FOR A SUM OF ` 2 LAKHS WHICH WAS NOT ADDED IN THE INCOME OF THE ASSESSEE. HE, THERE FORE, MADE THE ADDITION OF ` 2 LAKHS BEING THE RECEIPT ON SALE OF CAR. IT IS SU BMITTED BY ITA-4560/DEL/2012 2 THE LEARNED COUNSEL THAT AFTER THE CONCEPT OF BLOCK OF ASSET, THE SALE PROCEED OF A DEPRECIABLE ASSET IS TO BE REDUCED FRO M A BLOCK OF ASSET. THAT THE ASSESSEE HAS REDUCED THE SALE PROCEED OF C AR OF ` 2 LAKHS FROM THE WDV OF THE CAR. HE REFERRED TO THE DEPRECIATIO N CHART FILED ALONGWITH THE RETURN OF INCOME AND POINTED OUT THAT THE OPENING WDV WAS ` 6,55,660/- AND ADDITION/DELETION THEREOF WAS ` 4,73,108/-. HE EXPLAINED THAT DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAS PURCHASED ONE MORE CAR AND THE SUM OF ` 4,73,108/- WAS WORKED OUT BY REDUCING THE SALE PROCEED OF ` 2 LAKHS FROM THE COST OF THE CAR PURCHASED DURING THE YEAR UNDER CONSIDERATION. HE, THEREFORE, SUBMITTED THAT THE ASSESSING OFFICER WAS NOT JUSTIF IED IN MAKING THE ADDITION OF ` 2 LAKHS BEING THE SALE PROCEED OF CAR TO THE INCOME OF THE ASSESSEE BY PASSING THE ORDER UNDER SECTION 154. 4. LEARNED DR, ON THE OTHER HAND, RELIED UPON THE O RDERS OF AUTHORITIES BELOW AND SHE STATED THAT IN RESPONSE T O NOTICE UNDER SECTION 154, THE ASSESSEE, VIDE REPLY DATED 15.06.2 011, STATED THAT THE CAR USED BY THE ASSESSEE WAS THE PERSONAL CAR O F THE ASSESSEE AND THE ASSESSEE HAS NOT CLAIMED ANY DEPRECIATION THERE ON. HOWEVER, THE CONTENTION OF THE LEARNED COUNSEL BEFORE THE ITAT I S CONTRADICTORY TO WHAT WAS STATED BEFORE THE ASSESSING OFFICER. SHE, THEREFORE, STATED THAT THE ORDER OF THE ASSESSING OFFICER SHOULD BE S USTAINED OR, IN THE ALTERNATIVE, MATTER SHOULD BE SET ASIDE TO THE FILE OF THE ASSESSING OFFICER FOR PROPER EXAMINATION OF ENTIRE FACTS. 5. IN THE REJOINDER, IT IS STATED BY THE LEARNED CO UNSEL THAT THE REPLY DATED 15.06.2011 WAS FURNISHED BY THE ASSESSEES CO UNSEL WITHOUT ASCERTAINING THE CORRECT FACTS FROM THE ASSESSEE. HOWEVER, AFTER ASCERTAINING THE CORRECT FACTS, ANOTHER REPLY WAS F URNISHED ON 18.07.2011 IN WHICH IT WAS CLARIFIED THAT THE CAR W AS PURCHASED IN THE YEAR 2000-01 FOR ` 6,04,219/- AND ON WHICH DEPRECIATION WAS CLAIMED FROM AY 2000-01 AND WAS ALLOWED IN ALL THE PRECEDIN G YEARS. THE ITA-4560/DEL/2012 3 DETAILED CHART OF DEPRECIATION ALLOWED IN EACH YEAR WAS GIVEN IN THE REPLY DATED 18.07.2011. HE FURTHER STATED THAT IT IS ALSO A MATTER OF RECORD WITH THE REVENUE THAT THE DEPRECIATION ON CA R WAS CLAIMED AND ALLOWED IN THE EARLIER YEARS. HE FURTHER SUBMITTED THAT EVEN OTHERWISE, IF THE REVENUE INSISTS UPON THE ASSESSEES REPLY DA TED 15.06.2011, THEN ALSO THE CAR IS A PERSONAL ASSET AND FROM THE SALE OF PERSONAL ASSET, THE SALE PROCEED CANNOT BE ADDED TO THE INCO ME OF THE ASSESSEE. IN FACT, IF FROM SALE OF PERSONAL ASSET ANY CAPITAL GAIN ARISES, EVEN THAT IS NOT CHARGEABLE TO TAX. BUT, BY NO STR ETCH OF IMAGINATION, THE ENTIRE SALE PROCEED OF PERSONAL ASSET CAN BE TR EATED AS INCOME OF THE ASSESSEE. 6. WE HAVE CAREFULLY CONSIDERED THE ARGUMENTS OF BO TH THE SIDES AND PERUSED THE MATERIAL PLACED BEFORE US. AFTER C ONSIDERING THE FACTS OF THE CASE AND PERUSING THE MATERIAL PLACED BEFORE US, WE ARE SATISFIED THAT THE CAR WAS A DEPRECIABLE ASSET ON W HICH DEPRECIATION WAS CLAIMED AND ALLOWED IN THE EARLIER YEARS. MERE LY BECAUSE A WRONG EXPLANATION WAS FURNISHED BY THE ASSESSEES COUNSEL WHICH WAS RECTIFIED BEFORE THE ASSESSING OFFICER HIMSELF, IT CANNOT BE HELD THAT THE CAR WAS A PERSONAL ASSET. IN THE CASE OF A DEPRECI ABLE ASSET, THE SALE PROCEED OF THE DEPRECIABLE ASSET IS TO BE REDUCED F ROM THE WDV AND IF THE SALE PROCEED FALLS SHORT OF THE WDV, THEN THE S AME IS ALLOWED AS A DEDUCTION UNDER SECTION 32(III) OF THE INCOME-TAX A CT, 1961. BUT, IF THE SALE PROCEED EXCEEDS THE AGGREGATE VALUE OF THE WDV , THEN THE SAME IS CHARGEABLE TO TAX AS A SHORT TERM CAPITAL GAIN U NDER SECTION 50 OF THE INCOME-TAX ACT. HOWEVER, IN NO CIRCUMSTANCE, T HE SALE PROCEED OF A DEPRECIABLE ASSET CAN BE TREATED AS INCOME OF THE ASSESSEE. THEREFORE, THE ORDER OF THE ASSESSING OFFICER PASSE D UNDER SECTION 154 TAXING THE ENTIRE RECEIPT FROM SALE OF CAR AS INCOM E OF THE ASSESSEE CANNOT BE SUSTAINED. ITA-4560/DEL/2012 4 7. THE LEARNED DR HAS ALSO REQUESTED FOR SETTING AS IDE THE MATTER TO THE FILE OF THE ASSESSING OFFICER. HOWEVER, WE DO NOT FIND IT A FIT CASE FOR SETTING ASIDE ALSO BECAUSE THE ASSESSEE HA S CLEARLY SHOWN THAT THE WDV OF BLOCK OF ASSET OF CAR WAS MUCH MORE THAN ` 2 LAKHS AND, THEREFORE, NO USEFUL PURPOSE WOULD BE SERVED B Y SETTING ASIDE THE MATTER TO THE FILE OF THE ASSESSING OFFICER. THE A SSESSEE HAS ALSO SHOWN THAT IT HAS REDUCED THE SALE PROCEEDS OF THE CAR FROM THE WDV. IN VIEW OF THE ABOVE, WE QUASH THE ORDER OF THE ASS ESSING OFFICER PASSED UNDER SECTION 154 AND ALLOW THE APPEAL OF TH E ASSESSEE. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. DECISION PRONOUNCED IN THE OPEN COURT ON 28 TH FEBRUARY, 2013. SD/- SD/- ( (( (A.D.JAIN A.D.JAIN A.D.JAIN A.D.JAIN) )) ) (G.D.AGRAWAL) (G.D.AGRAWAL) (G.D.AGRAWAL) (G.D.AGRAWAL) JUDICIAL JUDICIAL JUDICIAL JUDICIAL MEMBER MEMBER MEMBER MEMBER VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT DATED : 28.02.2013 VK. COPY FORWARDED TO: - 1. APPELLANT : DR. AVDHESH BANSAL, DR. AVDHESH BANSAL, DR. AVDHESH BANSAL, DR. AVDHESH BANSAL, 124, SIDHARTHA ENCLAVE, NEW DELHI. 124, SIDHARTHA ENCLAVE, NEW DELHI. 124, SIDHARTHA ENCLAVE, NEW DELHI. 124, SIDHARTHA ENCLAVE, NEW DELHI. 2. RESPONDENT : INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, WARD WARD WARD WARD- -- -37(2), NEW DELHI. 37(2), NEW DELHI. 37(2), NEW DELHI. 37(2), NEW DELHI. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR