David Jeyaskaran Davidar, V. ACIT Circle 24 (1),

ITA 4660/DEL/2007

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 9637 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 9 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-09-2009
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 14-09-2009
• Assessment Year: 2004-2005
• Appeal Filed On: 30-11-2007
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MANISH GUPTA
• Assessee Lawyers: S K SARKAR
• Keywords: Depreciation
• Section: 143(2); 32

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B : NEW DELHI BEFORE SHRI I.P.BANSAL, JM AND SHRI R.C.SHARMA, AM ITA NO.4660/DEL/2007 ASSESSMENT YEAR : 2003-04 SHRI DAVID JEYASKARAN DAVIDAR, C/O PENGUIN BOOKS INDIA LIMITED, 11, COMMUNITY CENTER, PANCHSHEEL PARK, NEW DELHI 110 017. PAN NO.AFAPD5475P. VS. ASSTT.COMMISSIONER OF INCOME TAX, CIRCLE-24(1), NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S.K.SARKAR, CA. RESPONDENT BY : SHRI MANISH GUPTA, DR. ORDER PER R.C.SHARMA, AM : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF CIT(A) DATED 2.9.2007 FOR THE AY 2003-04 WHEREIN FOLLOWING GROUN DS HAVE BEEN TAKEN BY THE ASSESSEE :- 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS )-XXIII & THE LEARNED ASSISTANT COMMISSIONER OF INCOME-TAX HAVE ERRED IN NOT SERVING THE NOTICE UNDER SECTION 143(2) OF THE INCOME-TAX ACT, 1961 WITHIN THE STIPULATED PERIOD. 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) -XXIII & THE LEARNED ASSISTANT COMMISSIONER OF INCOME-TAX HAVE ERRED IN DISALLOWING DEPRECIATION ON BOOKS. 3. THE ASSESSEE MAY KINDLY BE PERMITTED TO MAKE FUR THER ADDITIONS TO THE ABOVE GROUNDS AT THE TIME OF HEARI NG OF THE APPEAL. 2. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PER USED. AT THE OUTSET, LEARNED AR ALLEGED SERVICE OF NOTICE U/S 143(2) AND CONTENDED THAT NOTICE COULD NOT BE SERVED ON THE ASSESSEE ON 23.11.2004 OR BEFO RE IT, ON THE PLEA THAT ASSESSEE ITA-4660/D/2007 2 WAS NOT IN INDIA ON THIS DATE. BY STRESSING UPON T HE PROVISIONS OF SECTION 143(2) AND 281, LEARNED AR CONTENDED THAT NOTICE U/S 143(2 ) WAS NOT SERVED UPON THE ASSESSEE IN ACCORDANCE WITH THE STATUTORY PROVISION S OF LAW AND FOR THIS PURPOSE, RELIANCE WAS PLACED ON THE DECISION OF DELHI HIGH C OURT IN THE CASE OF LUNAR DIAMONDS LTD. AND CONTENDED THAT BURDEN WAS ON THE DEPARTMENT TO SHOW THAT NOTICE WAS SERVED UPON THE ASSESSEE WITHIN THE PRES CRIBED TIME. HE ALSO ALLEGED THAT MERE AFFIXTURE OF NOTICE IS ALSO NOT SUFFICIEN T, INSOFAR AS THERE IS SOME PROCEDURE TO BE FOLLOWED AT THE TIME OF AFFIXTURE. 3. ON THE OTHER HAND, LEARNED DR CONTENDED THAT SER VICE OF NOTICE BY THE ASSESSING OFFICER U/S 143(2) CANNOT BE HELD TO BE I NVALID IN VIEW OF THE DECISION OF HON'BLE DELHI HIGH COURT IN THE CASE REPORTED AT 300 ITR 243 AND 301 ITR 69 WHEREIN PRESUMPTION IS DRAWN WITH REGARD TO SERVICE OF NOTICE. 4. WE HAVE CONSIDERED THE RIVAL CONTENTIONS, CAREFU LLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. AS PER FINDING RECORDED B Y AO, THE NOTICE U/S 143(2) WAS ISSUED ON 23.11.2004 AND WAS DULY SERVED ON THE ASS ESSEE. IT WAS CONTENDED THAT NOTICE WAS NOT SERVED ON THE ASSESSEE. IN THE INST ANT CASE, IT IS UNDISPUTED FACT THAT MOST OF THE TIME DURING THE YEAR 2004, THE ASSESSEE WAS AWAY FROM THE COUNTRY. HE WAS IN INDIA ONLY FOR 18 DAYS IN TWO SPELLS OF S EVEN DAYS IN MAY 2004 AND ELEVEN DAYS IN DECEMBER 2004 RESPECTIVELY. EVEN TH E ASSESSEE DID NOT BOTHER TO INTIMATE THE DEPARTMENT REGARDING HIS ABNORMAL LONG ABSENCE NOR AO WAS INTIMATED WHO WOULD BE RESPONSIBLE TO RECEIVE THE N OTICE ON HIS BEHALF OR DEAL WITH HIS CASE FURTHER. UNDER THESE FACTS AND CIRCU MSTANCES, THE AO COULD NOT BE EXPECTED TO SERVE UPON THE ASSESSEE THE NOTICE U/S 143(2) IN PERSON. AS PER THE FINDING RECORD BY BOTH THE LOWER AUTHORITIES EVIDEN CE WAS AVAILABLE WITH THE DEPARTMENT THAT NOTICE WAS DISPATCHED BY POST WELL WITHIN THE PRESCRIBED TIME LIMIT AND HAD THE ASSESSEE BEEN PRESENT AT HIS GIVE N ADDRESS IT COULD HAVE BEEN PROPERLY SERVED ON HIM. AS THE NOTICE SO ISSUED WA S NOT RETURNED UNSERVED IN VIEW OF THE DECISION OF DELHI HIGH COURT AS CITED BY THE LEARNED DR, A PRESUMPTION CAN ITA-4660/D/2007 3 BE DRAWN THAT THE SAME WAS RECEIVED BY SOME REPRESE NTATIVE OF THE ASSESSEE WHO WAS AVAILABLE AT THE GIVEN ADDRESS AT THAT GIVEN PO INT OF TIME AND IT WAS COMMUNICATED TO THE ASSESSEE. ACCORDINGLY, THE GRO UND TAKEN BY THE ASSESSEE WITH REGARD TO NON-SERVICE OF NOTICE U/S 143(2) IS DISMISSED. 5. ON MERITS, THE ASSESSEE HAS ALLEGED DISALLOWANCE OF CLAIM OF DEPRECIATION ON BOOKS. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND FOUND FROM THE RECORD THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, T HE ASSESSEE WAS ASKED TO FURNISH DEPRECIATION CHART AS PER INCOME TAX RULES ALONGWITH COPIES OF INVOICES PERTAINING TO ADDITIONS MADE TO THE FIXED ASSETS. THE ASSESSEE RELIED UPON THE DEPRECIATION CHART FURNISHED ALONGWITH THE RETURN O F INCOME BUT FAILED TO PROVIDE THE COPIES OF THE BILLS OF THE ADDITIONS MADE TO TH E SCHEDULE OF FIXED ASSETS. THE AO OBSERVED THAT THE ASSESSEE HAD CLAIMED ADDITION TO BOOKS AMOUNTING TO RS.2,55,722/-, AS PER SCHEDULE OF FIXED ASSETS ON W HICH DEPRECIATION OF RS.1,34,573/- WAS CLAIMED. HOWEVER, SUCH DEPRECIAT ION WAS NOT ALLOWED BY THE AO IN WANT OF BILLS/VOUCHERS. BY THE IMPUGNED ORDE R, CIT(A) CONFIRMED THE ACTION OF THE AO. 6. IT WAS CONTENDED BY THE LEARNED AR THAT THE TAX AUDIT REPORT ALONGWITH THE BANK STATEMENT EVIDENCING THAT MONEY IS BEING SPENT ON THE BOOKS WAS FURNISHED BEFORE THE AO. LEARNED AR SUBMITTED THAT ASSESSEE IS AN AUTHOR AND HIS MAJOR INVESTMENTS ARE LIKELY IN THE BOOKS. 7. ON THE OTHER HAND, IT WAS CONTENDED BY THE LEARN ED DR THAT NO EVIDENCE OF ANY BOOKS HAVING BEEN PURCHASED BY THE ASSESSEE WER E FURNISHED EITHER BEFORE THE AO OR BEFORE THE CIT(A), THEREFORE CLAIM OF DEPRECI ATION U/S 32 CANNOT BE ACCEPTED AND ALLOWED. 8. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND FOU ND FROM THE RECORD THAT EVIDENCE FOR PURCHASE OF BOOKS ON WHICH DEPRECIATIO N WAS CLAIMED WAS NOT ITA-4660/D/2007 4 PRODUCED BY THE ASSESSEE BEFORE ANY OF THE LOWER AU THORITIES, EVEN BEFORE US LEARNED AR WAS ASKED TO FURNISH ADDRESS OF THE PART Y FROM WHOM THE BOOKS WERE PURCHASED SO THAT MATTER CAN BE RESTORED TO THE AO FOR MAKING ENQUIRY AND TO FIND OUT THE TRUTH OF MAKING PURCHASES. HOWEVER, LEARNE D AR FAILED TO GIVE ANY SUCH ADDRESS. THE BASIC REQUIREMENT OF LAW FOR ALLOWING DEPRECIATION CLAIM IS THAT AN ASSET HAVING BEEN A PARTICULAR COST SHOULD BEEN OWN ED/PURCHASED DURING THE YEAR AND USED FOR THE PURPOSE OF BUSINESS OR PROFESSION. IN ORDER TO VERIFY THE COST OF ASSET THE BASIC DOCUMENTARY EVIDENCE I.E. BILLS/VOU CHERS IS NECESSARY AND SIMULTANEOUSLY IT IS ALSO REQUIRED ON THE PART OF T HE ASSESSEE TO SHOW THAT ASSET SO PURCHASED WAS USED FOR THE PURPOSE OF BUSINESS DURI NG THE YEAR. IN THE INSTANT CASE, THERE ARE NO BILLS/VOUCHERS TO ESTABLISH THAT THE EXPENDITURE WAS ACTUALLY INCURRED FOR THE PURCHASE OF BOOKS AND IN FACT BOOK S WERE PURCHASED DURING THE YEAR TO THE EXTENT OF RS.2,55,722/- AND THE SAME WE RE UTILIZED BY THE ASSESSEE FOR THE PURPOSE OF HIS PROFESSION OF AUTHOR. WE ALSO F OUND THAT EVEN THE BANK STATEMENT SUBMITTED BY THE ASSESSEE DO NOT REFLECT AS TO WHOM PAYMENT OF RS.2,33,000/- WAS MADE. 9. IN VIEW OF THE ABOVE, WE ARE INCLINED TO AGREE W ITH THE LEARNED DR SHRI MANISH GUPTA THAT MERELY BECAUSE ASSESSEE WAS AN AU THOR, DOES NOT MEAN THAT INVESTMENT WAS MADE BY HIM AUTOMATICALLY STAND PROV ED TO HAVE BEEN MADE TOWARDS THE BOOKS AND THAT ALL THE BOOKS WERE UTILI ZED BY HIM DURING THE YEAR ITSELF FOR THE PURPOSE OF HIS PROFESSION. ACCORDINGLY, TH E ASSESSEES CLAIM WAS NOT TENABLE BOTH ON FACTS AND LAW. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DI SMISSED. DECISION PRONOUNCED IN THE OPEN COURT ON 25 TH SEPTEMBER, 2009. SD/- SD/- (I.P.BANSAL) (R.C.SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 25.09.2009. VK. ITA-4660/D/2007 5 COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT DEPUTY REGISTRAR