Smt. Jaswant Kaur, Agra V. I.T.O., Agra

ITA 478/AGR/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 0243 (ITAT-AGRA)
• Duration Of Justice: 1 year(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-01-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 07-01-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 28-12-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: KK MISHRA
• Keywords: Unexplained cash credit; Depreciation
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA BEFORE : SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI A.L. GEHLOT, ACCOUNTANT MEMBER ITA NO. 478/AGRA/2011 ASSTT. YEAR : 2008-09 SMT. JASWANT KAUR, VS. INCOME-TAX OFFICER, PROP. M/S. SALUJA SANITARY STORE, 1(2), AGRA. RAJARAM KI BAGIA, RAJPUR, SHAMSHABAD ROAD, AGRA. (PAN : AGOPK 1000 C) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAJENDRA SHARMA, ADVOCATE RESPONDENT BY : SHRI K.K. MISHRA, JR. D.R. DATE OF HEARING : 07.01.2013 DATE OF PRONOUNCEMENT OF ORDER : 18.01.2013 ORDER PER BHAVNESH SAINI, J.M.: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF LD. CIT(A)-I, AGRA DATED 30.05.2011 FOR THE ASSESSMENT YEAR 2008- 09. 2. ON GROUND NO. 1 & 2, THE ASSESSEE CHALLENGED THE ADDITION OF RS.1,05,086/- ON ACCOUNT OF INTEREST PAYMENT PAID AGAINST LOAN TA KEN FOR PURCHASE OF CAR. ON GROUND NO. 3, THE ASSESSEE CHALLENGED THE ORDERS OF THE AUTHORITIES BELOW IN NOT ALLOWING DEPRECIATION CLAIM ON THE COST OF CAR OF R S.1,39,034/-. IN THE REVISED GROUNDS, THE ASSESSEE RAISED GROUND NO. 6 & 7, CHAL LENGING THE ORDER OF THE LD. ITA NO. 478/AGRA/2011 2 CIT(A) IN SUSTAINING THE ADDITION OF RS.7,50,000/- U/S. 68 OF THE IT ACT. WITH REGARD TO GROUND NO. 6 & 7 ABOVE, RAISED IN REVISED GROUNDS OF APPEAL, THE ASSESSEE MADE A REQUEST FOR ADMISSION OF ADDITIONAL GROUND N O. 6 & 7 AND IT WAS SUBMITTED THAT THERE WAS A TYPING MISTAKE AND ON ACCOUNT OF I NADVERTENT MISTAKE, THESE GROUNDS COULD NOT BE TAKEN UP IN THE ORIGINAL GROUN DS OF APPEAL, WHICH IS ARISING OUT OF THE IMPUGNED ORDER. IT IS, THEREFORE, REQUES TED THAT THE GROUND NO. 6 & 7 MAY BE ADMITTED FOR THE PURPOSE OF DISPOSAL OF APPE AL. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT ADDITION OF RS.7,50,000/- I S ON ACCOUNT OF CASH DEPOSITED IN THE CASH BOOK UPON WHICH GROUND NO. 1 TO 3 WOULD BE DEPENDENT AND INADVERTENTLY THIS GROUND COULD NOT BE RAISED WHICH IS ARISING OU T OF THE IMPUGNED ORDER. THERE IS NO SERIOUS CHALLENGE TO THE ADMISSION OF THE ADDITI ONAL GROUND, WHICH IS ARISING OUT OF THE ORDER OF THE LD. CIT(A) AND ON ADJUDICATION OF THESE GROUND NO. 6 & 7, THE GROUND NO. 1 TO 3 WOULD BE DEPENDENT. CONSIDERING T HE ABOVE FACTS AND THAT ADDITIONAL GROUNDS ARE ARISING OUT OF THE ORDER OF LD. CIT(A) AND ARE RELEVANT FOR DISPOSAL OF OTHER GROUNDS, THE REQUEST OF THE ASSES SEE FOR ADMISSION OF ADDITIONAL GROUND NO. 6 & 7 ARE ACCEPTED, WHICH ARE RAISED IN THE REVISED GROUNDS OF APPEAL. 3. IT MAY BE STATED HERE THAT GROUND NO. 1 TO 3 AND 6 & 7 ABOVE ARE INTERLINKED. THEREFORE, SAME ARE TAKEN UP TOGETHER FOR THE PURPO SE OF DISPOSAL. THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS PROPRIETOR OF M/S. SA LUJA SANITARY STORE. THE ASSESSEE ITA NO. 478/AGRA/2011 3 PRODUCED ICICI BANK CAR LOAN ACCOUNT FROM WHICH THE AO FOUND THAT SAID LOAN IS TAKEN BY SHRI GURJEET SINGH. THEREFORE, THE LOAN AM OUNT OF RS.8,00,000/- WAS DISALLOWED AND ADDED TO THE INCOME OF THE ASSESSEE. IT WAS FURTHER FOUND THAT DURING THE YEAR THE ASSESSEE HAS NOT CLAIMED ANY EX PENSES ON THE CAR, THEREFORE, IT WAS FOUND THAT THE CAR WAS NOT USED FOR THE PURPOSE OF BUSINESS. THEREFORE, DEPRECIATION IN A SUM OF RS.1,39,034/- AND INTEREST ON SAID LOAN OF RS.1,05,086/- (TOTALING TO RS.2,44,120/-) WERE DISALLOWED. WITH R EGARD TO THE ADDITION OF RS.8,00,000/-, IT WAS SUBMITTED BY THE LD. COUNSEL FOR THE ASSESSEE BEFORE THE LD. CIT(A) THAT THE ASSESSEE PURCHASED A MAHINDRA SCORP IO CAR FROM M/S ATMA RAM AUTO ENTERPRISE AGRA. HE HAS FURTHER STATED THAT TH E SAID CAR LOAN WAS TAKEN FROM ICICI BANK LTD., AGRA. WITH REGARD TO THIS CAR LOAN , THE AO WAS DIRECTED TO MAKE NECESSARY VERIFICATION FROM ICICI BANK. ON CIT(A) D IRECTION, IN THE REMAND REPORT SUBMITTED ON 12.05.2011, THE AO STATED THAT AS PER THE INFORMATION GIVEN BY THE BANK A LOAN OF RS. 8,00,000/- WAS GIVEN BY THE BANK ON SECURITY OF A PROPERTY AS BUSINESS LOAN IN WHICH THE MAIN APPLICANT WAS SHRI GURJEET SINGH AND APPELLANT WAS CO-APPLICANT. THE BANK ISSUED CHEQUE OF RS. 8,0 0,000/- IN THE NAME OF SHRI GURJEET SINGH AND THIS AMOUNT WAS DEPOSITED IN HIS BANK ACCOUNT. IN RESPECT OF THIS LOAN GIVEN TO SHRI GURJEET SINGH, IT WAS EXPLAINED BY THE LD. AR THAT ACCOUNT OF SHRI GURJEET SINGH (SON OF THE ASSESSEE) IS KEPT WI TH THE FIRM AND ENTRIES RELATING TO THIS ACCOUNT IS MAINTAINED IN THE CASH BOOK AND LED GER ACCOUNT OF THE ASSESSEE. ON ITA NO. 478/AGRA/2011 4 FURTHER VERIFICATION OF THE FACT RELATING TO THIS A MOUNT OF RS. 8,00,000/-, IT HAS BEEN FOUND THAT FIRST THE AMOUNT OF RS. 8,00,000/- WAS G IVEN AS BUSINESS LOAN BY ICICI BANK TO SHRI GURJEET SINGH WHICH WAS DEPOSITED IN H IS BANK ACCOUNT NO. 628701512658 AT ICICI BANK ON 04.04.07 AND THEN RS. 7,50,000/- WAS WITHDRAWN BY HIM IN CASH ON 09.04.2007. ON THE SAME DAY I.E. 09.04.2007, AN AMOUNT OF RS. 7,50,000/- IN CASH WAS DEPOSITED IN THE CASH BOOK O F THE ASSESSEE. THE LD. AR EXPLAINED THAT RS. 7,50,000/- SHOWN IN THE CASH BOO K OF THE ASSESSEE ON 09.04.2007 IS THE SAME AMOUNT WHICH WAS WITHDRAWN FROM THE BAN K ACCOUNT OF SHRI GURJEET SINGH ON 09.04.2007, OUT OF WHICH RS. 6,00,000/- WA S DEPOSITED IN CASH IN THE BANK ACCOUNT OF THE ASSESSEE ON 09.05.2007. THE ENT RY OF DEPOSIT OF RS. 6,00,000/- IN THE BANK ACCOUNT OF THE ASSESSEE IS MADE IN THE CASH BOOK. FURTHER A CHEQUE OF RS. 2,00,000/- WAS DEPOSITED IN THE BANK ACCOUNT OF THE ASSESSEE AFTER RECEIVING THIS AMOUNT THROUGH CHEQUE FROM M/S SINGH BROTHERS, PROPRIETARY CONCERN OF SHRI GURJEET SINGH. AFTER DEPOSITING OF THESE TWO AMOUNT S I.E. RS. 6,00,000/- IN CASH AND RS. 2,00,000/- BY CHEQUE, TOTAL AMOUNT OF RS. 8 ,00,000/- WAS WITHDRAWN FOR THE PURPOSE OF MAKING PAYMENT FOR PURCHASE OF A SCO RPIO CAR, FOR WHICH THE PAYMENT RECEIPT AND REGISTRATION DOCUMENT HAS BEEN FURNISHED. IN THIS WAY, THE LD. COUNSEL FOR THE ASSESSEE TRIED TO EXPLAIN THE SOURC E OF RS. 8,00,000/- USED FOR PURCHASE OF CAR. ITA NO. 478/AGRA/2011 5 3.1 THE LD. CIT(A) ON FURTHER EXAMINATION OF CASH B OOK ALSO FOUND THAT THE AMOUNT OF RS.7,50,000/- SHOWN TO HAVE BEEN RECEIVED IN CASH CLAIMING THAT IT WAS RECEIVED AFTER WITHDRAWAL OF THE SAME AMOUNT FROM T HE BANK ACCOUNT OF SHRI GURJEET SINGH. ITS REPAYMENT WAS ALSO MADE IN CASH. THE LD. CIT(A), CONSIDERING THE EXPLANATION OF THE ASSESSEE CONFIRMED THE ADDIT ION OF RS.7,50,000/- SHOWN AS A CASH DEPOSIT IN CASH BOOK REMAINED UNEXPLAINED U/S. 68 OF THE IT ACT. THE FINDINGS OF THE LD. CIT(A) IN PARA 8.3 OF APPELLATE ORDER AR E REPRODUCED AS UNDER : 8.3 IN VIEW OF THE ABOVE FINDINGS RELATING TO THE AMOUNT OF RS. 8,00,000/- UTILIZED FOR PURCHASE OF A CAR, IT H AS BEEN FOUND THAT FOR PURCHASE OF THIS CAR, AN AMOUNT OF RS. 7,50,000/- W AS TAKEN IN CASH, WHICH WAS CLAIMED TO HAVE BEEN TAKEN FROM SHRI GURJ EET SINGH AND THE SAME WAS REPAID IN CASH TO SHRI GURJEET SINGH. THEREFORE, A LOAN OF RS. 7,50,000/- WAS TAKEN FROM SHRI GURJET SINGH IN CASH AND ITS REPAYMENT TO SHRI GURJEET SINGH WAS ALSO MADE IN CA SH, WHICH IS DONE IN CLEAR VIOLATION OF PROVISIONS SECTION 269SS & 26 9T. THEREFORE, LD. AR WAS ASKED TO EXPLAIN AS TO WHEN SHRI GURJEET SIN GH AS WELL AS THE APPELLANT WAS MAINTAINING BANK ACCOUNT, WHY LOAN WA S GIVEN BY SHRI GURJEET SINGH IN CASH AND ALSO THE REPAYMENT WAS MA DE TO HIM IN CASH INSTEAD OF MAKING THIS TRANSACTION THROUGH CHE QUE TO AVOID THE VIOLATION OF THE PROVISION OF SECTION 269SS & 269T. FOR THIS VIOLATION, NO CLEAR EXPLANATION COULD BE FURNISHED BY THE LD. AR AND HE SIMPLY EXPLAINED THAT THE ACCOUNT OF SHRI GURJEET SIGH IS BEING MAINTAINED ON BEHALF OF HER MOTHER AND ALL THE TRANSACTIONS IN TH IS ACCOUNT ARE RELATED TO THE TRANSACTIONS DONE FOR PURPOSE OF THE BUSINESS OF HIS MOTHER. HOWEVER, I FIND THAT THIS EXPLANATION OF LD . AR IS NOT JUSTIFIED BECAUSE THE ACCOUNT BEING MAINTAINED IN THE NAME OF SHRI GURJEET SINGH IS IN HIS INDIVIDUAL NAME AND NOT IN THE NAME OF THE APPELLANT WITH SHRI GURJEET SINGH AS AUTHORIZED SIGNATORY. IF THE FACT HAD BEEN THAT THIS ACCOUNT WAS MAINTAINED FOR THE PURPOSE OF BUSINESS OF HIS MOTHER, THIS ACCOUNT SHOULD HAVE BEEN MAINTAINED IN THE NAME OF THE APPELLANT AND SHRI GURJEET SINGH SHOULD HAVE BEEN M ADE AUTHORIZED ITA NO. 478/AGRA/2011 6 SIGNATORY. SINCE SHRI GURJEET SINGH IS MAINTAINING HIS SEPARATE ACCOUNT AND ALSO USING THIS ACCOUNT FOR HIS OWN TRA NSACTION IN WHICH HE HAS RECEIVED A LOAN OF RS. 8,00,000/- FROM ICICI BANK BEING THE MAIN APPLICANT FOR THE PURPOSE OF HIS BUSINESS OUT OF WHICH HE HAS MADE A WITHDRAWAL OF RS. 7,50,000/- IN CASH, IT CAN NOT BE SAID THAT THE SAME AMOUNT WAS GIVEWN BY HIM TO HIS MOTHER IN CASH . BECAUSE, IF HE GENUINELY WANTED TO GIVE RS. 7,50,000/- AS LOAN TO HIS MOTHER, HE COULD HAVE VERY WELL ISSUED A CHEQUE OF RS. 7,50,00 0/- TO HIS MOTHER AS SHE WAS ALSO MAINTAINING BANK ACCOUNT. IN FACT, SINCE THERE WAS A CASH DEPOSIT OF RS. 6,00,000/- MADE IN THE ACCOUNT OF APPELLANT ON SUBSEQUENT DATE OF 09.05.2007 BEFORE MAKING PAYMENT OF RS. 8,00,000/- TO THE CAR DEALER, THE APPELLANT TRIED T O EXPLAIN THIS CASH DEPOSIT WITH THESE CIRCUITOUS ENTRIES OF WITHDRAWAL OF CASH FROM THE ACCOUNT OF HER SON SHRI GURJEET SINGH ON A PREVIOUS DATE OF 09.04.2007, THEN SHOWING DEPOSIT OF SIMILAR AMOUNT OF CASH IN HER CASH BOOK AND THEREAFTER EXPLAINING THE DEPOSIT OF CASH IN HER BANK ACCOUNT BEFORE MAKING PAYMENT TO CAR DEALER. HOWEVE R, I HAVE ALREADY DISCUSSED ON THE BASIS OF THE INFORMATION C OLLECTED FROM THE ICICI BANK THAT SHRI GURJEET SINGH TOOK A LOAN OF R S. 8,00,000/- FOR BUSINESS PURPOSE OUT OF WHICH HE MADE WITHDRAWAL OF RS. 7,50,000/- AND HENCE THE EXPLANATIONS OF THE APPELLANT CANNOT BE ACCEPTED THAT THE SAME AMOUNT OF RS. 7,50,000/- WAS DEPOSITED IN THE CASH BOOK OF APPELLANT, WHICH IS IN CLEAR VIOLATION OF SECTION 2 69SS & 269T AND THEREFORE, IN MY CONSIDERED VIEW THE SOURCE OF CASH DEPOSIT OF RS. 7,50,000/- IN THE CASH BOOK OF THE APPELLANT REMAIN ED UNEXPLAINED AND HENCE OUT OF RS. 8,00,000/- ADDED BY THE AO AS UNEXPLAINED CAR LOAN, I FIND THAT RS. 7,50,000/- SHOWN AS A CASH DE POSIT IN CASH BOOK REMAINED UNEXPLAINED AND THE SAME IS CONFIRMED TO B E ADDED IN THE INCOME OF THE APPELLANT U/S 68 AS UNEXPLAINED CASH CREDITS. IF THE APPELLANT MAINTAINS THE CLAIM THAT SHE HAS RECEIVED LOAN FROM GURJEET SINGH AND ALSO REPAID HIM, BOTH TRANSACTIONS BEING IN CASH, THE AO MAY ALSO EXAMINE AND TAKE NECESSARY ACTION AGAINST THE APPELLANT FOR VIOLATION OF SECTION 269SS & 269T FOR RECEIVING A C ASH LOAN AND ALSO ITS REPAYMENT IN CASH. IN THE RESULT GROUND NO.4 IS PARTLY ALLOWED. ITA NO. 478/AGRA/2011 7 3.2 AS AGAINST THE ADDITION OF RS.2,44,120/- ON ACC OUNT OF DISALLOWANCE OF DEPRECIATION ON CAR AND INTEREST ON LOAN, THE LD. C OUNSEL FOR THE ASSESSEE EXPLAINED BEFORE THE LD. CIT(A) THAT THE ADDITION ON ACCOUNT OF DEPRECIATION OF RS. 1,39,034/- AND INTEREST OF RS. 1,05,086/- WAS MADE WITHOUT ANY BASIS. IT HAS BEEN FURTHER EXPLAINED THAT WHILE THE ASSESSEE PURCHASED THE CAR IN HER NAME AND ALSO TAKEN LOAN FROM ICICI BANK AND THE SAME WAS USED BY HER TO PUR CHASE A CAR AND ALL THE TRANSACTIONS ARE MADE BY THE ASSESSEE TO MAKE THE P AYMENT TO THE ICICI BANK WITH THE FIRM ACCOUNT M/S SALUJA SANITARY STORE, INTERES T AND DEPRECIATION ON THE CAR SHOULD BE ALLOWED. 3.3. THE LD. CIT(A), HOWEVER, CONSIDERING THE FINDI NGS OF THE AO AND GIVING FINDING THAT NO LOAN HAS BEEN TAKEN BY THE ASSESSEE FROM BANK , CONFIRMED BOTH THE ADDITIONS. THE FINDINGS OF THE LD. CIT(A) IN PARAS 9.3 AND 9.4 OF THE APPELLATE ORDER, ARE REPRODUCED AS UNDER : 9.3 I HAVE CONSIDERED THE ABOVE SUBMISSION OF THE LD. AR. WITH REGARD TO THE AMOUNT OF RS. 8,00,000/- UTILIZE D FOR PURCHASE OF CAR AND THE SAME BEING CLAIMED BY THE APPELLANT AS A LOAN TAKEN FROM ICICI BANK, I HAVE ALREADY DISCUSSED THE PECULIAR N ATURE OF VARIOUS ENTRIES MADE IN THE CASH BOOK OF THE APPELLANT AND LINKING THESE ENTRIES WITH THE BANK ACCOUNT OF HER SON SRI GURJEE T SINGH WHO ACTUALLY RECEIVED LOANS FROM ICICI BANK AND DEPOSIT ED THE LAON IN HIS BANK ACCOUNT. IT HAS BEEN ALREADY SHOWN IN THE PREV IOUS DISCUSSION THAT THE AMOUNT OF RS. 8,00,000/- AS LOAN FROM ICIC I BANK WAS TAKEN BY HIS SON SHRI GURJEET SINGH AND THE SAME WAS DEPO SITED IN HIS BANK ACCOUNT. THE ICICI BANK HAS ALSO CONFIRMED THAT REP AYMENT OF THIS LOAN WAS DONE BY SHRI GURJEET SINGH FROM HIS ACCOUN T NO. ITA NO. 478/AGRA/2011 8 628701512658 AND PART PAYMENT OF RS. 6,70,000/- FRO M HIS CANARA BANK ACCOUNT IN APRIL 09. AS PER THE STATEMENT OF A CCOUNT OF SHRI GURJEET SINGH, ENCLOSED BY THE ICICI BANK VIDE ITS LETTER DATED 12.05.11 OBTAINED BY THE AO DURING THE REMAND STAGE , IT HAS BEEN FOUND THAT THE LOAN OF RS. 8,00,000/- WAS TAKEN BY SHRI GURJEET SINGH AND ALSO REPAID BY HIM. THERERFORE, THE CONTENTION OF THE APPELLANT THAT SHE HAS TAKEN LOAN OF RS. 8,00,000/- FROM ICIC I BANK FOR PURCHASE OF CAR WAS FOUND TOTALLY WRONG. I HAVE ALR EADY DISCUSSED IN THE PREVIOUS PARAS THAT THE APPELLANT HAS TRIED TO EXPLAIN THE SOURCE OF RS. 6,00,000/- DEPOSITED IN CASH IN HER BANK ACCOUN T BEFORE MAKING PAYMENT TO THE CAR DEALER SHOWING A WITHDRAWAL OF R S. 7,50,000/- MADE IN CASH FROM THE BANK ACCOUNT OF HIS SON SHRI GURJEET SINGH BY CLAIMING THAT THIS AMOUNT WAS DEPOSITED IN HER CASH BOOK KNOWING VERY WELL THAT IF ANY SUCH LOAN IS TAKEN IN CASH, I T WOULD BE IN CLEAR VIOLATION OF SECTION 269SS & 269T. THEREFORE, THIS EXPLANATION OF THE APPELLANT WAS NOT ACCEPTED I HAVE ALREADY HELD THAT THE CASH DEPOSIT OF RS. 7,50,000/- SHOWN IN THE CASH BOOK OF THE APP ELLANT IS AN UNEXPLAINED CASH CREDIT ENTRY AND THE SAME WAS CONF IRMED TO BE ADDED AS UNEXPLAINED CASH CREDIT U/S 68 OUT OF RS. 8,00,000/- ADDED BY THE AO OUT OF THE CAR LOAN CLAIMED BY THE APPELL ANT. SINCE, NO LOAN WAS FOUND TO HAVE BEEN TAKEN BY THE APPELLANT FROM ICICI BANK FOR PURCHASE OF CAR, HER CLAIM OF PAYMENT OF INTEREST O N SUCH CAR LOAN IS NOT FOUND TO BE CORRECT. THEREFORE, I FIND THAT THE AO IS JUSTIFIED IN DISALLOWING THE INTEREST OF RS. 1,05,086/- AND HENC E THE ADDITION OF RS. 1,05,086/- IS CONFIRMED. 9.4. WITH REGARD TO ALLOWING DEPRECIATION ON CAR, T HOUGH THE VEHICLE HAS BEEN FOUND TO BE REGISTERED IN THE NAME OF THE ASSESSEE, THE OWNER SHIP OF THE VEHICLE IS CERTAINLY WITH THE ASSESSEE. HOWEVER, I FIND THAT THE AO IS CORRECT IN STATING THAT NO EXPE NSES ON ACCOUNT OF RUNNING OF VEHICLE HAS BEEN DEBITED IN P & L A/C. T HEREFORE, FINDINGS OF THE AO IS CORRECT THAT VEHICLE HAS NOT BEEN USED FOR THE PURPOSE OF THE BUSINESS OF THE ASSESSEE. THEREFORE, SINCE THIS VEHICLE HAS NOT BEEN USED FOR THE PURPOSE OF BUSINESS OF THE ASSESSEE, D ESPITE THE FACT THAT THE VEHICLE IS OWNED BY THE ASSESSEE DUE TO REGISTR ATION OF THIS VEHICLE IN THE NAME OF THE ASSESSEE, IN MY CONSIDERED OPINI ON, THE AO IS JUSTIFIED IN DISALLOWING THE DEPRECIATION ON THE VE HICLE. THEREFORE, ADDITION MADE BY THE AO ON ACCOUNT OF DISALLOWANCE OF DEPRECIATION ITA NO. 478/AGRA/2011 9 ON THE MOTOR CAR OF RS.1,39,034/- IS CONFIRMED AND THEREFORE, GROUND NO. 5 IS DISMISSED. 4. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW. HE HAS REFERRED TO PB-17, WHICH IS REGISTRATION CERTIFICATE OF CAR IN QUESTION IN THE NAME OF THE ASSESSEE. PB-18 & 19 ARE THE RECEIPTS OF THE CAR DEALER TO WHOM THE PAYMENTS HAVE BEEN MADE OF RS.8, 00,000/- THROUGH CHEQUES NO. 4,89,499/- FOR THE PURCHASE OF CAR AND RS.81,00 0/- IN CASH. PB-3 IS BALANCE SHEET OF THE ASSESSEE IN WHICH CAR LOAN IS REFLECTE D OF ICICI BANK. PB-5 IS THE DETAILS OF FIXED ASSETS IN WHICH CAR WAS TAKEN INTO THE BLOCK OF ASSETS AS PER SCHEDULE-F IN A SUM OF RS.8,81,000/-. PB-10 IS THE LOAN SANCTIONED BY THE BANK IN THE NAME OF GURJEET SINGH, GURMEET SINGH, DILIP SIN GH AND SMT. JASWANT KAUR (ASSESSEE). PB-11 IS THE LETTER TO THE BANK. PB-8 & 9 IS THE BANK LOAN TAKEN IN THE BOOKS OF ACCOUNT OF THE ASSESSEE. PB-12 IS THE COPY OF ICICI BANK ACCOUNT SHOWING DEPOSIT OF RS.8,00,000/- AS LOAN FROM WHERE RS.7,50,000/- WAS WITHDRAWN ON 9 TH APRIL AND SAME WAS DEPOSITED IN CASH BOOK OF THE A SSESSEE (PB-14). PB-15 IS THE COPY OF CASH BOOK OF ASSESSEE FROM WHERE RS.6,0 0,000/- WAS WITHDRAWN AND DEPOSITED WITH INDIAN OVERSEAS BANK BY CASH (PB-16) ON THE SAME DAY, I.E., 09.05.2007. ON 9 TH MAY, CHEQUES NO. 489499 OF INDIAN OVERSEAS BANK WA S GIVEN TO THE CAR DEALER, M/S. ATMA RAM AUTO ENTERPRISES W HICH WAS CLEARED FROM THE INDIAN OVERSEAS BANK ON 11.05.2007 AND ACCORDINGLY, CAR WAS PURCHASED IN THE ITA NO. 478/AGRA/2011 10 NAME OF THE ASSESSEE. THE LD. COUNSEL FOR THE ASSES SEE BY REFERRING TO ALL THESE DOCUMENTS SUBMITTED THAT CAR LOAN WAS TAKEN FOR THE ASSESSEE, BUT IT WAS GRANTED IN JOINT NAME AS IT WAS GRANTED ON SECURITY OF PROPERT Y AND AFTER PURCHASE OF CAR IT WAS TAKEN INTO BLOCK OF ASSETS. THEREFORE, NEITHER RS.7,50,000/- SHOWN IN THE CASH BOOK OF THE ASSESSEE REMAINED UNEXPLAINED NOR THE I NTEREST AND DEPRECIATION COULD BE DISALLOWED AS THE ASSESSEE HAS PURCHASED THE CAR IN QUESTION IN HER NAME AND TAKEN TO THE BLOCK OF ASSET FOR THE PURPOSE OF DEPR ECIATION AND LIABILITY TO PAY THE BANK LOAN WAS TAKEN IN THE BALANCE SHEET OF THE ASS ESSEE. ON THE OTHER HAND, THE LD. DR RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND THE MATERIAL ON RECORD & WE HAVE PERUSED THE DOCUMENTS FILED IN THE PAPER BOOK. ICICI BANK SANCTIONED THE LOAN OF RS.8,00,000/- IN THE JOINT NAMES OF GURJEET SINGH, GURMEET SINGH, DALIP SINGH AND THE ASSESSEE SMT. JASWANT KAUR (PB-10). T HE CHEQUE OF RS.8,00,000/- WAS DEPOSITED IN S/B ACCOUNT IN THE NAME OF GURJEET SINGH SALUJA (PB-12) ON 4 TH APRIL, 2007. ON 9 TH APRIL, 2007, CASH OF RS.7,50,000/- WAS WITHDRAWN F ROM THE BANK ACCOUNT OF SHRI GURJEET SINGH (PB-12) AND ON T HE SAME DAY CASH OF RS.7,50,000/- WAS TAKEN AND DEPOSITED IN CASH BOOK OF THE ASSESSEE ON THE SAME DAY (PB-14). RS.6,00,000/- WAS WITHDRAWN FROM THE C ASH BOOK OF THE ASSESSEE AND DEPOSITED WITH THE INDIAN OVERSEAS BANK ACCOUNT OF THE ASSESSEE ON 9 TH MAY 2007 ITA NO. 478/AGRA/2011 11 (PB-15 & 16). ON 11 TH MAY, 2007, THE CHEQUES OF RS.8,00,000/- IS CLEAR F ROM THE BANK ACCOUNT OF THE ASSESSEE VIDE CHEQUES NO.489499 DATED 09.05.2007 (PB-16 & 18) AND ACCORDINGLY, THE CAR DEALER SOLD THE CAR IN FAVOUR OF THE ASSESSEE, WHICH IS REGISTERED IN THE NAME OF THE ASSESSEE AS PER REGIS TRATION CERTIFICATE (PB-17). THE ABOVE DOCUMENTS ON RECORD CLEARLY SUPPORT THE EXPLA NATION OF THE ASSESSEE. THE LOAN WAS TAKEN FROM ICICI BANK LTD. JOINTLY BY THE ASSESSEE WITH OTHERS. MAY BE INITIALLY THE LOAN AMOUNT WAS TAKEN IN THE NAME OF SHRI GURJEET SINGH WOULD NOT DISALLOW THE CLAIM OF ASSESSEE BECAUSE ULTIMATELY, THE LOAN AMOUNT WAS WITHDRAWN IN A SUM OF RS.7,50,000/- FROM HIS BANK ACCOUNT AND WAS TRANSFERRED TO THE CASH BOOK OF THE ASSESSEE ON THE SAME DAY ON 09.04.2007. IT IS, THEREFORE, CLEAR THAT THE LOAN AMOUNT JOINTLY SANCTIONED BY ICICI BANK ULTIMA TELY REACHED IN THE HANDS OF THE ASSESSEE. MAY BE, THE AMOUNT WAS GIVEN TO THE A SSESSEE IN CASH FROM THE ACCOUNT OF SHRI GURJEET SINGH WOULD NOT PROVE THAT THE CASH DEPOSIT IN THE CASH BOOK OF ASSESSEE REMAINED UNEXPLAINED OR UNVERIFIAB LE. FURTHER, THE ASSESSEE HAS TAKEN THE LOAN AMOUNT IN HER BALANCE SHEET AND THE CAR IS ALSO TAKEN TO BLOCK OF ASSETS IN A SUM OF RS.8,81,000/-. THUS, THE ASSESSE E IS ABLE TO PROVE THAT THE AMOUNT OF RS.7,50,000/- WAS WITHDRAWN FROM THE LOAN ACCOUN T JOINTLY GIVEN IN THE NAME OF THE ASSESSEE AND OTHERS AND RS.7,50,000/- WAS TAKEN TO THE BOOKS OF ACCOUNT OF THE ASSESSEE FOR THE PURCHASE OF CAR IN QUESTION. THERE FORE, THERE IS NO JUSTIFICATION TO MAKE ADDITION OF RS.7,50,000/- IN THE CASE OF THE A SSESSEE BEING CASH DEPOSIT IN THE ITA NO. 478/AGRA/2011 12 CASH BOOK. THE EXPLANATION OF THE ASSESSEE IS CLEAR LY SUPPORTED BY THE DOCUMENTS ON RECORD. THEREFORE, IN OUR VIEW, THE ADDITION OF RS.7,50,000/- IS WHOLLY UNJUSTIFIED IN THE CASE OF ASSESSEE. WE ACCORDINGLY SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND DELETE THE ADDITION OF RS.7,5 0,000/-. GROUND NO. 6 & 7 OF THE ADDITIONAL GROUNDS OF APPEAL ARE ACCORDINGLY ALLOWE D. 5.1 AS REGARDS ADDITION OF RS.2,44,120/- ON ACCOUNT OF DEPRECIATION OF CAR AND PAYMENT OF INTEREST, THE LD. CIT(A) DID NOT ALLOW T HE DEDUCTION OF INTEREST BECAUSE CAR LOAN WAS NOT FOUND TO BE TAKEN BY THE ASSESSEE FROM THE BANK. SINCE THE ISSUE OF CAR LOAN IS DECIDED IN FAVOUR OF THE ASSESSEE AB OVE, THEREFORE, INTEREST PAID ON TAKING CAR LOAN FOR THE PURPOSE OF BUSINESS IS ALLO WABLE DEDUCTION AND ACCORDINGLY, THE ORDERS OF THE AUTHORITIES BELOW ON THIS ISSUE A RE SET ASIDE AND THE ADDITION ON ACCOUNT OF INTEREST OF RS.1,05,086/- PAID AGAINST L OAN TAKEN FOR THE PURCHASE OF CAR IS ALLOWED AS DEDUCTION. GROUND NOS. 1 & 2 OF APPEA L OF THE ASSESSEE ARE ALLOWED. 5.2 AS FAR AS DEPRECIATION IS CONCERNED, THE AUTHOR ITIES BELOW THOUGH HAVE FOUND THAT CAR HAS BEEN REGISTERED IN THE NAME OF THE ASS ESSEE. THEREFORE, THE OWNERSHIP IS WITH THE ASSESSEE BUT DURING THE YEAR IN QUESTIO N, NO EXPENSES ON ACCOUNT OF RUNNING OF THIS VEHICLE HAVE BEEN DEBITED TO THE PR OFIT AND LOSS ACCOUNT. THEREFORE, IT WAS FOUND THAT THE VEHICLE IN QUESTION HAS NOT B EEN USED FOR THE PURPOSE OF ITA NO. 478/AGRA/2011 13 BUSINESS OF THE ASSESSEE. THEREFORE, DEPRECIATION W AS ALSO NOT ALLOWED ON THIS GROUND ALSO. DURING THE COURSE OF ARGUMENTS, THE LD . COUNSEL FOR THE ASSESSEE DID NOT DEMONSTRATE BEFORE US THAT THE ASSESSEE EXPANDE D OR LAID ANY EXPENSES FOR USE OF CAR FOR THE PURPOSE OF BUSINESS. IN THE PROFIT A ND LOSS ACCOUNT ALSO (PB-2), THE ASSESSEE HAS NOT CLAIMED ANY EXPENSES FOR USE OF TH E CAR IN QUESTION. THEREFORE, IT IS CLEAR THAT THE CAR WAS NOT USED FOR THE PURPOSE OF BUSINESS OF THE ASSESSEE. ACCORDING TO SECTION 32(1) OF THE IT ACT, THE DEPRE CIATION COULD BE ALLOWED IN RESPECT OF PROPERTY IN QUESTION OWNED WHOLLY OR PAR TLY BY THE ASSESSEE AND USED FOR THE PURPOSE OF BUSINESS. SINCE, IN THIS CASE THE AS SESSEE HAS NOT BEEN ABLE TO PROVE THAT THE CAR IN QUESTION WAS USED FOR THE PURPOSE O F BUSINESS, THEREFORE, DEPRECIATION HAS BEEN RIGHTLY DISALLOWED IN THE CAS E OF THE ASSESSEE. THE ORDERS OF THE AUTHORITIES BELOW TO THAT EXTENT ARE CONFIRMED AND ADDITION OF RS.1,39,034/- ON ACCOUNT OF DEPRECIATION IS CONFIRMED AND GROUND NO. 3 OF APPEAL OF THE ASSESSEE IS DISMISSED. 6. ON GROUND NO.4, THE ASSESSEE CHALLENGED THE ADDI TION OF RS.50,000/- ON ACCOUNT OF DISALLOWANCE OF EXPENSES. THE LD. CIT(A) NOTED THAT AS PER HIS DIRECTIONS, NECESSARY VERIFICATION WAS MADE BY THE AO AND HE HAS REPORTED THAT THE ASSESSEE HAS NOT MAINTAINED COMPLETE VOUCHERS/BILLS WITH REGARD TO SHOW EXPENSES, TRAVELING EXPENSES AND PRINTING AND STATIONERY EXPE NSES. ON ACCOUNT OF THIS REASON, ITA NO. 478/AGRA/2011 14 THE DISALLOWANCE OF EXPENSES OF RS.50,000/- WAS CON FIRMED AND THIS GROUND WAS DISMISSED. IN THE PAPER BOOK, THE ASSESSEE HAS FILE D LIST OF CONVEYANCE EXPENSES ON WHICH CASH WAS PAID FOR PETROL. NO DETAILED VOUCHER S / BILLS HAVE BEEN PRODUCED, THEREFORE, IN ABSENCE OF ANY SUCH DETAILS, WE DO NO T FIND ANY REASON TO INTERFERE WITH THE ORDERS OF THE AUTHORITIES BELOW. THE ADDIT ION OF RS.50,000/- IS CONFIRMED AND GROUND NO. 4 OF APPEAL OF THE ASSESSEE IS DISMI SSED. NO OTHER POINT IS ARGUED OR PRESSED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED, AS INDICATED ABOVE. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (A.L. GEHLOT) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER *AKS/- COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A), CONCERNED BY ORDER 4. CIT, CONCERNED 5. DR, ITAT, AGRA 6. GUARD FILE SR. PRIVATE SECRETARY TRUE COPY