Laxmi Narayan Yadava, New Delhi V. ITO, New Delhi

ITA 4973/DEL/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 6490 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-12-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 1
• Next Hearing Date: 15-12-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 19-09-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K JAIN
• Assessee Lawyers: SATISH KUMAR DHINGRA
• Keywords: Depreciation; Revised return
• Section: 43B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : SMC-1 : NEW DELHI BEFORE SHRI R.S. SYAL, ACCOUNTANT MEMBER ITA NOS.4973 & 4974/DEL/2016 ASSESSMENT YEARS : 2011-12 & 2012-13 LAXMI NARAYAN YADAVA, C-1/41, SAFDARJUNG DEVELOPMENT AREA, NEW DELHI 110 016. PAN : AAMPY1057H VS. ITO, WARD-32(4), NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SATISH KUMAR DHINGRA, CA RESPONDENT BY: SHRI S.K. JAIN, DR DATE OF HEARING : 15.12.2016 DATE OF PRONOUNCEMENT : 16.12.2016 ORDER PER R.S. SYAL, AM: THESE TWO APPEALS BY THE ASSESSEE RELATE TO ASSESSM ENT YEARS 2011- 12 AND 2012-13. SINCE SOME COMMON ISSUES ARE RAISE D IN THESE APPEALS, I AM, THEREFORE, PROCEEDING TO DISPOSE THEM OFF BY TH IS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. ITA NOS.4973&4974/DEL/2006 2 ASSESSMENT YEAR 2011-12 2. THE FIRST GROUND IS GENERAL WHICH DOES NOT REQUI RE ANY SEPARATE ADJUDICATION. 3. THE GROUND NO.2 IS AGAINST THE SUSTENANCE OF DIS ALLOWANCE OF RS.2,01,121/- OUT OF VEHICLE RUNNING AND MAINTENANC E, DEPRECIATION ON CAR AND TELEPHONE EXPENSES ON ACCOUNT OF PERSONAL USE. 4. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE IS AN INDIVIDUAL WHO FILED RETURN DECLARING INCOME OF RS. 13,49,900/- FROM HIS PROPRIETORSHIP CONCERN IN THE NAME AND STYLE OF M/S ESS BEE INTERNATIONAL ENGAGED IN THE BUSINESS OF MANUFACTURE AND EXPORT O F READYMADE GARMENTS. THE AO OBSERVED THAT A TOTAL OF RS.20,11,209/- WAS DEBITED TO THE PROFIT & LOSS ACCOUNT ON ACCOUNT OF VEHICLE RUNNING AND MAIN TENANCE, DEPRECIATION ON CAR AND TELEPHONE EXPENSES. CONSIDE RING 1/10 TH TOWARDS PERSONAL USE, THE AO MADE DISALLOWANCE FOR A SUM OF RS.2,01,121/-, WHICH WAS SUSTAINED IN THE FIRST APPEAL. 5. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED T HE RELEVANT MATERIAL ON RECORD. IT IS NOTICED THAT THE ASSESSEE IS AN I NDIVIDUAL. THERE IS NO LOG BOOK MAINTAINED BY THE ASSESSEE TO SHOW THAT VEHICL E WAS RUN AND TELEPHONE WAS USED ONLY FOR BUSINESS PURPOSES. IN THESE CIRCUMSTANCES, ITA NOS.4973&4974/DEL/2006 3 ELEMENT OF PERSONAL USER FROM THESE EXPENSES CANNOT BE RULED OUT. CONSIDERING THE TOTALITY OF FACTS AND CIRCUMSTANCES OF THE INSTANT CASE, I AM OF THE CONSIDERED OPINION THAT SUSTENANCE OF DISALL OWANCE AT 10% OF THESE EXPENSES IS REASONABLE, WHICH DOES NOT REQUIRE ANY INTERFERENCE. THIS GROUND IS NOT ALLOWED. 6. THE NEXT GROUND IS AGAINST SUSTENANCE OF THE REM AINING ADDITION AT RS.54,483/- ON ACCOUNT OF LOW DRAWINGS. THE ASSESS EE HAD SHOWN HOUSEHOLD WITHDRAWALS OF RS.2,55,572/-. THE ASSESS EE WAS ASKED TO JUSTIFY THE HOUSEHOLD EXPENSES WITH REFERENCE TO THE SIZE A ND STATUS OF THE FAMILY. NO REPLY WAS FILED TO JUSTIFY SUCH HOUSEHOLD WITHDR AWALS. ESTIMATING THE HOUSEHOLD EXPENSE AT RS.30,000/- PER MONTH, THE AO MADE AN ADDITION OF RS.1,04,428/- (RS.3,60,000/- MINUS RS.2,55,572/-). THE LD. CIT(A) REDUCED THIS ADDITION TO RS.54,483/- BY OBSERVING T HAT THE FIGURE OF HOUSEHOLD WITHDRAWALS WAS NOT PROPERLY COMPUTED BY THE AO WHICH AMOUNT WAS, IN FACT, RS.3,05,517/-. THE ASSESSEE I S AGGRIEVED AGAINST THE SUSTENANCE OF THE REMAINING ADDITION. 7. HAVING HEARD THE RIVAL SUBMISSIONS AND PERUSED T HE RELEVANT MATERIAL ON RECORD, I FIND THAT THE ASSESSEE DID NOT FURNISH ANY JUSTIFICATION FOR THE HOUSEHOLD WITHDRAWALS BEFORE THE AO. CONSIDERING T HE TOTALITY OF FACTS AND ITA NOS.4973&4974/DEL/2006 4 CIRCUMSTANCES PREVAILING IN THIS CASE, I AM OF THE CONSIDERED OPINION THAT THE SUSTENANCE OF ADDITION AT THIS LEVEL DOES NOT R EQUIRE ANY INTERFERENCE. THIS GROUND IS NOT ALLOWED. 8. THE LAST GROUND IS AGAINST NOT ALLOWING FRESH DE DUCTION OF RS.8,01,463/- WHICH WAS NOT CLAIMED IN THE RETURN, BUT, TAKEN UP BEFORE THE AO. THE ASSESSEE VOLUNTARILY DISALLOWED A SUM OF R S.8,01,463/- IN HIS RETURN OF INCOME ON ACCOUNT OF LATE DEPOSIT OF ESI AND PF, ETC. U/S 36(1)(VA) OF THE ACT. UPON THE ADVENT OF THE JUDGMENT BY THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. AIMIL LTD. (2010) 321 ITR 508 (DEL), THE ASSESSEE CLAIMED BEFORE THE AO THAT SINCE THE AMOUN T OF ESI AND EPF ETC., WAS DEPOSITED BEFORE THE DUE DATE U/S 139(1) OF THE ACT AND, HENCE, THE SAME SHOULD BE ALLOWED AS DEDUCTION. THE AO DENIED THIS CLAIM BY OBSERVING THAT SUCH A CLAIM WAS NOT ENTERTAINABLE O THERWISE THAN THROUGH A REVISED RETURN. FOR THIS PROPOSITION, HE RELIED ON THE JUDGEMENT OF THE HONBLE SUPREME COURT IN THE CASE OF GOETZE INDIA PVT. LTD. VS. CIT (2006) 284 ITR 323 (SC) . THE LD. CIT(A) UPHELD THE VIEW POINT OF THE AO. 9. HAVING HEARD THE RIVAL SUBMISSIONS AND PERUSED T HE RELEVANT MATERIAL ON RECORD, IT IS FOUND AS AN ADMITTED POSITION THAT THE ASSESSEE PAID EPF AND ESI ETC. BEFORE THE DUE DATE OF FILING THE RETURN U /S 139(1) OF THE ACT. ITA NOS.4973&4974/DEL/2006 5 10. AS REGARDS THE AOS POINT OF VIEW ABOUT NOT ALL OWING DEDUCTION DUE TO ABSENCE OF SUCH A CLAIM IN THE RETURN OF INCOME, I FIND THAT THE HONBLE SUPREME COURT IN GOETZE (INDIA) LTD. VS. CIT (2006) 284 ITR 323 (SC ) HAS HELD THAT THOUGH THE AO HAS NO POWER TO ENTERTAIN C LAIM MADE OTHERWISE THAN BY WAY OF REVISED RETURN, BUT, THE POWERS OF T HE APPELLATE AUTHORITIES ARE NOT AFFECTED BY IT. IN VIEW OF THIS JUDGMENT O F THE HONBLE SUPREME COURT, IT IS CLEAR THAT THE TRIBUNAL HAS POWER TO C ONSIDER THE CLAIM MADE BEFORE THE AO OTHERWISE THAN THROUGH THE RETURN OF INCOME . 11. ON MERITS, I FIND THAT THE QUESTION OF DELETIO N OF DISALLOWANCE UNDER SUCH CIRCUMSTANCES AS ARE INSTANTLY PREVAILING IS N O MORE RES INTEGRA. THE HONBLE SUPREME COURT IN THE CASE OF CIT V. ALOM EXTRUSIONS LIMITED [(2009) 319 ITR 306 (SC)] HAS HELD THAT THE AMENDMENT TO FIRST PROVISO AND OMISSION OF THE SECOND PROVISO TO SECTION 43B BY TH E FINANCE ACT, 2003 IS RETROSPECTIVE. THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT V. AIMIL LIMITED [(2010) 321 ITR 508 (DELHI)] HAS ALLOWED DEDUCTION IN RESPECT OF EMPLOYEES SHARE WHEN THE AMOUNT WAS PAID BEFORE TH E DUE DATE. WHEN I CONSIDER THESE TWO JUDGMENTS, IT BECOMES PATENT TH AT BOTH THE EMPLOYERS AND EMPLOYEES CONTRIBUTION ARE ALLOWABLE AS DEDUCT ION IF THE AMOUNT OF PROVIDENT FUND ETC., THOUGH BELATEDLY, BUT IS PAID BEFORE THE DUE DATE OF ITA NOS.4973&4974/DEL/2006 6 FILING OF RETURN U/S 139(1) OF THE ACT. ADVERTING TO THE FACTS OF THE INSTANT CASE, IT IS SEEN AS AN ADMITTED POSITION THAT THE A SSESSEE DEPOSITED ITS AND EMPLOYEES SHARE IN EPF ETC. BEFORE THE DUE DATE U/ S 139(1) OF THE ACT. RESPECTFULLY FOLLOWING THE AFORENOTED PRECEDENTS, I ORDER FOR THE DELETION OF THE ADDITION. THIS GROUND IS, THEREFORE, ALLOWED. ASSESSMENT YEAR 2012-12 12. THE FIRST ISSUE IS AGAINST THE SUSTENANCE OF DI SALLOWANCE OF RS.50,000/- OUT OF VEHICLE RUNNING AND MAINTENANCE AND TELEPHONE EXPENSES. THE ASSESSEE CLAIMED DEDUCTION FOR A SUM OF RS.14,45,318/- UNDER THE HEAD VEHICLE RUNNING AND MAINTENANCE. C ONSIDERING THE PERSONAL USER BY THE ASSESSEE, THE AO MADE AN ADDIT ION OF RS.50,000/-, WHICH GOT SUSTAINED IN THE FIRST APPEAL. 13. HAVING HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD, IT IS SEEN THAT THE ASSESSEE IS AN INDIV IDUAL AND HAS NOT MAINTAINED ANY LOG BOOK IN RESPECT OF VEHICLE ETC. IN SUCH CIRCUMSTANCES, THE ELEMENT OF PERSONAL USE CANNOT BE IGNORED. ON A HOLISTIC BASIS, I CONSIDER THE SUSTENANCE OF DISALLOWANCE AS REASONAB LE. THIS GROUND IS NOT ALLOWED. ITA NOS.4973&4974/DEL/2006 7 14. THE ONLY OTHER GROUND IS AGAINST NOT ALLOWING F RESH DEDUCTION OF RS.1,09,763/- TOWARDS LATE PAYMENT OF EPF ETC., WHI CH WAS NOT CLAIMED IN THE RETURN, BUT, MADE BEFORE THE AO. THE CLAIM WAS REFUSED NOT ONLY BY THE AO BUT ALSO THE LD. FIRST APPELLATE AUTHORITY. 15. AFTER CONSIDERING THE RIVAL SUBMISSIONS, I FI ND THAT THIS ISSUE IS SIMILAR TO GROUND NO.4 RAISED BY THE ASSESSEE IN HIS APPEAL FOR AY 2011-12, WHICH HAS BEEN ALLOWED HEREINABOVE. FOLLOWING THE SAME, I REVERSE THE VIEW OF THE LD. CIT(A) AND ORDER FOR GRANTING DEDUCTION OF RS.1,09,763/-. THIS GROUND IS ALLOWED. 16. IN THE RESULT, BOTH THE APPEALS FILED BY THE AS SESSEE ARE PARTLY ALLOWED. THE DECISION WAS PRONOUNCED IN THE OPEN COURT ON 1 6 TH DECEMBER, 2016. SD/- (R.S. SYAL) ACCOUNTANT ME MBER DATED: 16 TH DECEMBER, 2016. DK ITA NOS.4973&4974/DEL/2006 8 COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR DY. REGISTRAR, ITAT, NEW DELHI