SHRI TIKAM KHANDELWAL, Jaipur V. ACIT, Jaipur

ITA 471/JPR/2011

• Counselvise Citation: 47123114 RSA 2011
• Duration Of Justice: 3 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-08-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 18-05-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: K L MOOLCHANDAN I; R K KHUNTETA
• Keywords: Depreciation; Block assessment
• Section: 80C; 153A

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH A JAIPUR (BEFORE SHRI R.K.GUPTA AND SHRI N.L.KALRA) ITA NO.471/ JP/2011 ASSESSMENT YEAR 2006-07 PAN: AKGPK 7401 H SHRI TIKAM KHANDELWAL VS. THE ACIT A-2, RANA PRATAP NAGAR CENTRAL CIRCLE- 1 JHOTWARA, JAIPUR JAIPUR (APPELLANT ) (RESPONDENT) ITA NO.583/ JP/2011 ASSESSMENT YEAR 2006-07 PAN: AKGPK 7401 H THE ACIT VS. SHRI TIKAM KHANDELWAL CENTRAL CIRCLE- 1 A-2, RANA PRATAP NAGAR JAIPUR JHOTWARA, JAIPUR (APPELLANT ) (RESPONDENT) ASSESSEE BY : SHRI K.L. MOOLCHANDANI & SHRI R .K. KHUNTETA DEPARTMENT BY : SHRI SUNIL MATHUR DATE OF HEARING: 02-08-2011 DATE OF PRONOUNCEMENT:19-08-2011 ORDER PER N.L. KALRA, AM:- THE ASSESSEE AS WELL AS REVENUE HAVE FILED APPEAL S AGAINST THE ORDER OF THE LD. CIT(A), CENTRAL JAIPUR DATED 18-03-2011 FOR THE ASSESSMENT YEAR 2006-07. 2 2.1 THE FIRST GROUND OF APPEAL OF THE ASSESSEE IS T HAT THE LD. CIT(A) HAS ERRED IN RESTRICTING THE DISALLOWANCE TO THE EXTENT OF 20% OF TAXI EXPENSES AS AGAINST 33.3% MADE BY THE AO. 2.2 THE SECOND GROUND OF APPEAL OF THE ASSESSEE IS THAT THE LD. CIT(A) HAS ERRED IN RESTRICTING THE CLAIM OF DEPRECIATION TO T HE EXTENT OF RS. 2,96.550/- OUT OF DISALLOWANCE OF RS. 5,26,267/- MADE BY THE A O. 2.3 THE FIRST GROUND OF APPEAL OF THE REVENUE IS T HAT THE LD. CIT(A) HAS ERRED IN RESTRICTING THE CLAIM DISALLOWANCE MADE OU T OF TAXI HIRING EXPENSES TO RS. 1,52,484/- AND THEREBY GRANTING RELIEF OF RS . 1,01,656/-. 2.4 THE REVENUE IN GROUND NO. 1 IS ALSO AGGRIEVED THAT THE LD. CIT(A) HAS ERRED IN NOT ALLOWING DEPRECIATION TO THE EXTEN T OF RS. 2,96,550/- AND HAS NOT ACCEPTED THE ALTERNATE PLEA THAT INCOME IS TO B E ASSESSED AS PER SECTION 44AE. 2.5 WE HAVE HEARD BOTH THE PARTIES. DURING THE YEAR , THE ASSESSEE WAS HAVING TWO TAXIES FOR ENTIRE YEAR AND ONE TAXI FOR PART OF THE YEAR. THE PRESENT ASSESSMENT HAS BEEN MADE U/S 153A OF THE AC T. THE ASSESSMENT U/S 153A IS DIFFERENT FROM THE BLOCK ASSESSMENT U/S 158 BC OF THE ACT. THE BLOCK ASSESSMENT WAS BEING MADE FOR MAKING THE ASSE SSMENT OF UNDISCLOSED INCOME AS PER THE MATERIAL FOUND DURING THE COURSE OF SEARCH OR ANY MATERIAL WHICH IS CONNECTED WITH THE MATERIAL FOUND DURING T HE COURSE OF SEARCH AND 3 NOTICED AFTER THE SEARCH. THE BLOCK ASSESSMENT WAS SEPARATE AND DISTINCT FROM THE REGULAR ASSESSMENT. HOWEVER, THE ASSESSMEN T U/S 153A IS TO BE MADE AND THE REGULAR ASSESSMENT IF ANY PENDING STAN DS ABATED. HENCE, WHEN THE INCOME IS BEING ASSESSED IN A REGULAR WAY THEN THE ASSESSEE IS ENTITLED FOR DEPRECIATION. HENCE, THE DECISION OF JODHPUR TRIBUN AL IN THE CASE OF SUNCITY ALLOYS (P) LTD. VS. ACIT, CENTRAL CIRCLE- 1 IN ITA NOS.586 TO 588/JU/2008 ON WHICH AO HAS PLACED RELIANCE IS NOT APPLICABLE I N THE INSTANT CASE. LOOKING TO THE NUMBER OF TAXIES AVAILABLE, WE FEEL THAT IT WILL BE FAIR AND REASONABLE TO ESTIMATE THE INCOME FROM TAXIES AT RS . 30,000/- AFTER ALLOWING DEPRECIATION. HENCE, THE GROUND NO. 1 AND 2 OF THE ASSESSEE AND GROUND NO. 1 OF THE REVENUE ARE ALLOWED AS INDICATE ABOVE. 3.1 THE THIRD GROUND OF APPEAL OF THE ASSESSEE IS T HAT THE LD. CIT(A) HAS ERRED IN RESTRICTING THE DISALLOWANCE OUT OF CONSTR UCTION EXPENSES AND WIP EXPENSES OF RS. 75,294/- AS AGAINST RS. 1,88,236/- MADE BY THE AO. 3.2 THE REVENUE IN GROUND NO. 2 IS AGGRIEVED THAT T HE LD. CIT(A) HAS ALLOWED RELIEF BY REDUCING THE DISALLOWANCE TO 20% AS AGAINST 50% MADE BY THE AO. 3.3 WE HAVE HEARD BOTH THE PARTIES. DURING THE YEAR , THE ASSESSEE HAS SOLD ONE PROPERTY ON WHICH THE ASSESSEE HAS CONSTRUCTED 1,000 SQ.FT AREA @ RS. 376/- PER SQ.FT. THE NET PROFIT RATE HAS BEEN SHOWN AT 12.13%. 4 3.4 WE HAVE HEARD BOTH THE PARTIES. LOOKING TO THE COST OF CONSTRUCTION AND THE NET PROFIT RATE SHOWN BY THE ASSESSEE, WE F EEL THAT THERE IS NO CASE OF MAKING ANY DISALLOWANCE. THUS GROUND NO. 3 OF THE A SSESSEE IS ALLOWED AND THE GROUND NO. 2 OF THE REVENUE IS DISMISSED. 4.1 THE 4 TH GROUND OF APPEAL OF THE ASSESSEE IS THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF THE EXPENSE S OF M/S. S.R. AGENCIES TO THE EXTENT OF RS. 1,57,165 I.E. 20% OF THE EXPE NSES OUT OF THE TOTAL DISALLOWANCE OF RS. 2,61,941/- AS MADE BY THE AO 4.2 IN GROUND NO. 3, THE REVENUE IS AGGRIEVED THAT THE LD. CIT(A) HAS ERRED IN DISALLOWING THE EXPENSES TO THE EXTENT OF 20% AS AGAINST 33.33% CLAIMED IN THE PROPRIETARY CONCERN M/S. S.R. AGENCI ES. 4.3 WE HAVE HEARD BOTH THE PARTIES. THE ASSESSEE HA S CLAIMED THE EXPENSE UNDER DIFFERENT HEADS LIKE SHOP EXPENSES, SALARY, P ETROL, TELEPHONE EXPENSES, BANK INTEREST AND DEPRECIATION. THERE MAY BE FEW EX PENSES IN WHICH DISALLOWANCE CAN BE MADE. LOOKING TO THE QUANTUM OF TELEPHONE EXPENSE, PETROL EXPENSES AND CONSIDERING THAT THE VOUCHERS A RE NOT AVAILABLE, WE FEEL THAT IT WILL BE FAIR AND REASONABLE TO RESTRICT THE DISALLOWANCE TO RS. 15,000/-. THUS GROUND NO. 2 OF THE ASSESSEE IS PARTLY ALLOWED AND GROUND NO. 3 OF THE REVENUE IS DISMISSED. 5 5.1 THE 4TH GROUND OF APPEAL OF THE REVENUE IS THA T THE LD. CIT(A) HAS ERRED IN ALLOWING DEDUCTION U/S 80C OF RS. 57,951/- AS AGAINST RS. 48,000/- ALLOWED BY THE AO. 5.2 WE HAVE HEARD BOTH THE PARTIES. IN THE ORIGINAL RETURN, THE ASSESSEE CLAIMED DEDUCTION U/S 80C TO THE EXTENT OF RS. 57, 951/- BUT THE DEDUCTION WAS ALLOWED UPTO THE TOTAL INCOME OF RS. 48,000/-. SINCE THE TOTAL INCOME IS MORE THAN RS. 57,951/- , THEREFORE, THE LD. CIT(A) HAS DIRECTED TO ALLOW THE CLAIM OF RS. 57,951/-. WE THEREFORE, FEEL THAT THE LD. CIT(A) WAS JUSTIFIED IN DIRECTING THE AO TO ALLOW THE CLAIM OF RS. 57,951/- U/S 80C OF THE ACT. THUS GROUND NO. 4 OF THE REVENUE IS DISMISSED. 6. IN THE RESULT, THE APPEALS OF THE ASSESSEE AS WE LL AS OF THE REVENUE ARE PARTLY ALLOWED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 19-0 8-2011. SD/- SD/- (R.K. GUPTA) (N.L. KALRA) JUDICIAL MEMBER ACCOUNTANT MEMBER JAIPUR DATED; 19/08/2011 *MISHRA COPY FORWARDED TO :- 1. SHRI TIKAM KHANDELWAL, JAIPUR 2. THE ACIT, CENTRAL CIRCLE- 1, JAIPUR 3. THE LD. CIT BY ORDER 4. THE LD. CIT(A) 5. THE LD.DR 6. THE GUARD FILE (ITA NO.471/JP /11) A.R. , ITAT , JAIPUR 6 7 8