Mohd. Zafar, Ferozspur V. ITO, Ward 2(5), Gurgaon

ITA 5091/DEL/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 5028 (ITAT-DELHI)
• Duration Of Justice: 6 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-02-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 24-07-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S L ANURAGI
• Assessee Lawyers: SHRI CHAND
• Keywords: Depreciation
• Section: 44AD

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC , NEW DELHI BEFORE SH. N. S . SAINI, ACCOUNTANT MEMBER ITA NO. 5091 /DEL/2018 : ASSTT. YEAR : 2010 - 1 1 MOHD. ZAFAR, S/O SOKAT ALI, VILLAGE - BUKHRAK A, POST - NAGINA, TEHSIL - FEROZPUR JHIRKA, DISTT. - NUH, HARYANA - 122108 AND C/O L M S C & CO., CHARTERED ACCOUNTANTS, UNIT NO. 317A, VARDHMAN STAR MAL L , SECTOR - 19, FARIDABAD, HARYANA - 121002 VS INCOME TAX OFFICER, WARD - 2(5), GURGAON, HARYANA - 1220 16 (APPELLANT) (RESPONDENT) PAN NO. A A LPZ1637M ASSESSEE BY : SH. SHRI CHAND , CA REVENUE BY : SH. S. L. ANURAGI , SR. DR DATE OF HEAR ING: 0 4 . 02 .201 9 DATE OF PRONOUNCEMENT: 05 .02 .201 9 ORDER THI S IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) - 1 , GURGAON DATED 28.05 .2018. 2. THE SOL E ISSUE INVOLVED IN THIS APPEAL IS THAT THE CIT(A) ERRED IN COMPUTING THE INCOME OF THE ASSESSEE APPLYING RATE OF 8% TO THE GROSS RECEIPTS AS PER PROVI SIONS OF SECTION 44AD OF THE ACT ON THE TOTAL DEPOSIT IN THE BANK ACCOUNT OF THE ASSESSEE OF RS.11,88,450/ - 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAD MADE CASH DEPOSIT OF RS.11,88,450/ - IN HIS BANK ACCOUNT. T HE ASSESSING OFFICER ALLOWED SUFFICIENT OPPORTUNITY TO THE ASSESSEE BUT NO RETURN OF ITA NO . 5091 /DEL /201 8 MOHD. ZAFAR 2 INCOME WAS FILED BY THE ASSESSEE AND NO REPLY WAS ALSO FILED BY THE ASSESSEE TO THE SHOW - CAUSE NOTICE ISSUED BY THE AO. HE, THEREFORE, MADE ADDITION OF RS.11,88,450/ - TO T HE INCOME OF THE ASSESSEE. 4. ON APPEAL, THE CIT(A) CONFIRMED THE ACTION OF THE AO OBSERVING THAT SUFFICIENT OPPORTUNITY WAS GRANTED TO THE ASSESSEE BY THE AO BUT THE ASSESSEE DID NOT AVAI L OF THEM AND ALSO BEFORE HIM FURTHER OPPORTUNITY WAS GRANTED BUT NO EVIDENCES WERE FILED BEFORE HIM. 5. BEFORE ME, THE AR OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAD PURCHASED TWO JCB IN EARLIER YEA RS AND WAS GIVING THEM ON HIRE . THE AMOUNT DEPOSITED IN THE BANK PERTAINED TO HIRE CHARGES OF JCB. HE SUBMITTED THAT FROM THE DEPOS IT IN THE BANK ACCOUNT OF HIRE CHARGES OF RS.11,88,450/ - , THE ASSESSEE WAS ENTITLED TO DEDUCTION OF INTEREST EXPENSES OF RS.2,37,924/ - WHICH IS ALSO REFLECTED IN THE BANK ACCOUNT OF THE ASSESSEE AS THE ASSESSEE HAD TAKEN LOAN FROM THE BANK FO R PURCHASE OF JCB. 6. HE FURTHER SUBMITTED THAT THE ASSESSEE WAS ENTITLED TO DEPRECIATION @ 15% ON THE COST OF JCB WHICH WORKS OUT TO RS.4,75,269/ - ON THE WRITTEN DOWN VALUE AS ON FIRST DAY OF THE FINANCIAL YEAR UNDER APPEAL. FURTHER, THE ASSESSEE HAD INC URRED INSURANCE EXPENDITURE OF RS.94,482/ - ON JCB WHICH IS ALSO REFLECTED IN THE BANK STATEMENT OF THE ASSESSEE WHICH IS ALSO ALLOWABLE DEDUCTION TO THE ASSESSEE. HE FURTHER SUBMITTED THAT THE ASSE SSEE HAD INCURRED EXPENDITURE ON SALARY OF DRIVER OF THE JC B OF RS.56,000/ - DURING THE YEAR AND DEDUCTION FOR THE SAME SHOULD BE ALLOWED TO THE ASSESSEE. IN THIS WAY, IT WAS HIS SUBMISSION THAT THE INCOME OF THE ASSESSEE WILL WORK OUT OF RS.3,52,775/ - WHICH SHOULD BE SUBJECTED TO TAX DURING THE YEAR UNDER APPEAL. ITA NO . 5091 /DEL /201 8 MOHD. ZAFAR 3 7. THE LD. DR RELIED ON THE ORDERS OF THE LOWER AUTHORITIES AND SUBMITTED THAT SUFFICIENT OPPORTUNITIES WERE ALLOWED TO THE ASSESSEE BOTH BY THE AO AS WELL AS THE CIT(A) AND THE ASSESSEE DID NOT AVAIL OF THEM AND FILE NECESSARY EVIDENCES FOR THE EXPENDITU RE INCURRED. HENCE, THE ORDER OF THE CIT(A) SHOULD BE CONFIRMED. 8. IN THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE, I AM OF THE CONSIDERED OPINION THAT IN THE INTEREST OF RENDERING SUBSTANTIAL JUSTICE TO THE ASSESSEE ONE MORE OPPORTUNITY SHOULD BE GRANT ED TO THE ASSESSEE TO PRESENT ITS CASE BEFORE THE ASSESSING OFFICER WITH THE NECESSARY DOCUMENTS FOR EXPENDITURE CLAIMED TO HAVE BEEN INCURRED BY THE ASSESSEE AND THE AS SESSING OFFICER SHALL RE - COMPUTE THE INCOME OF THE ASSESSEE AFTER VERIFYING THE CLAIM O F THE ASSESSEE FOR EXPENDITURE INCURRED BY IT FO R EARNING THE INCOME FROM HIRE OF JCB. I, THEREFORE, SET ASIDE THE ORDERS OF THE LOWER AUTHORITIES AND REMAND THE MATTER BACK TO THE FILE OF THE AO TO RE - ADJUDICATE THE ISSUES AFRESH AFTER ALLOWING REASONABLE AND PROPER OPPORTUNITY OF HEARING TO THE ASSESSEE IN LIGHT OF THE DISCUSSION MADE HEREINABOVE. THE ASSESSEE IS DIRECTED TO FILE ALL EVIDENCES IN SUPPORT OF THE EXPENDITURE CLAIMED TO HAVE BEEN INCURRED BY IT FO R EARNING THE INCOME FROM HIRE OF JCB AS AND WHEN CALLED UPON TO DO SO BY THE AO . W ITH THESE DIRECTIONS, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 9 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES . (ORDER PRO N OUNCED IN THE OPEN COURT ON 05 /0 2 / 2019). SD/ - (N. S . SAINI) ACCOUNTANT MEMBER DATED: 05 /02/2019 *SUBODH*