Amit Singal, New Delhi V. ITO, New Delhi

ITA 5192/DEL/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 65202 (ITAT-DELHI)
• Duration Of Justice: 8 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-08-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 02-08-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 22-11-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR B R R KUMAR
• Assessee Lawyers: S K SINGAL
• Keywords: Depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: SMC NEW DELHI BEFORE SHRI SHAMIM YAHYA ACCOUNTANT MEMBER I.T.A .NO. 5192/DEL/2011 ASSESSMENT YEAR: 2007-08 AMIT SINGAL ITO, 20 (4), A-108, GUJRANWALA TOWN ROOM NO. F-303, VIKAS DELHI-110009. VS. BHAVAN, NEW DELHI 2 PAN: AAJPS3839G (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI S.K.SINGAL, AR RESPONDENT BY: DR. B.R.R.K UMAR, SR.DR ORDER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (A) DATED 22.9.2011 PER TAINS TO ASSESSMENT YEAR 2007-08. THE GROUNDS RAISED IN THE APPEAL REA D AS UNDER:- 1. WHETHER THE LEARNED CIT(A) WAS JUSTIFIED IN CON FIRMING DISALLOWANCES ON ACCOUNT OF TELEPHONE AND CAR MAINT ENANCE INCLUDING DEPRECIATION RESTRICTING TO RS.10,000/- E ACH, EVEN AFTER AGREEING WITH THE APPELLANT TO THE EXTENT THAT THE LEARNED ASSESSING OFFICER HAD NOT POINTED OUT ANY SPECIFIC INSTANCES OF TELEPHONE AND CAR FACILITIES, BEING USED FOR PERSON AL PURPOSES OF THE MICRO (INDUSTRIAL) ENTERPRISE-APPELLANT ? 2. WHETHER THE CIT(A) WAS JUSTIFIED IN SUPPORTING IMAG INARY PERSONAL ELEMENT, AS COULD NOT BE RULED OUT BY LD. AO., EVEN AFTER OBSERVING FAILURE ON THE PART OF THE LD. AO. TO POI NT OUT SPECIFIC INSTANCES OF PERSONAL USER? 3. WHETHER THE AUDIT REPORT IN FORM 3CB U/S 44AB DATED 01/09/2007 AND STATEMENT OF PARTICULARS IN FORM 3CD , PARTICULARLY AT CLAUSE 14 AND 17(B) COULD BE IGNORED, WITHOUT AN Y FINDING AGAINST IT, WHATSOEVER? I.T.A .NO. 5192/DEL/2011 2 2. IN THIS CASE ASSESSING OFFICER NOTED THAT ASSESSEE HAS DEBITED A SUM OF RS. 1,29,739/- UNDER THE TELEPHONE EXPENSES. A O FURTHER OBSERVED THAT NO DETAILS HAS BEEN MAINTAINED BY THE ASSESSEE IN RESPECT OF CALLS THAT WERE MADE FROM THE TELEPHONE. THEREFORE, ASSESSING OFFIC ER WAS OF THE OPINION THAT PERSONAL ELEMENT CANNOT BE RULED OUT HENCE, AO DISALLOWED APPROXIMATELY 1/6 TH AMOUNTING TO RS.21,500/- FOR PERSONAL USE OF THE TELEPHONE. 3. THE ASSESSING OFFICER FURTHER NOTED THAT ASSESSEE HAS DEBITED A SUM OF RS.65,994/- AS CAR REPAIR AND MAINTENANCE EXPEN SES AND RS.19,273/- UNDER THE CAR INSURANCE. ASSESSING OFFICER FURTHE R NOTED THAT ASSESSEE HAS CLAIMED CAR DEPRECIATION OF RS.1,38,345/- . ASSES SING OFFICER HELD THAT PERSONAL ELEMENT FOR THESE EXPENSES CANNOT BE RULED OUT HENCE, ASSESSING OFFICER DISALLOWED A SUM OF RS.37,300/- BEING APPR OXIMATELY 1/6 TH FOR PERSONAL USE. 4. UPON ASSESSEES APPEAL, LD. COMMISSIONER OF INCOME TAX (A) HAS NOTED THAT HE AGREED WITH THE ASSESSEE THAT ASSESSI NG OFFICER HAS NOT POINTED OUT SPECIFIC INSTANCES OF TELEPHONE AND CAR FACILITIES BEING USED FOR PERSONAL PURPOSES. BUT , LD. COMMISSIONER OF INCO ME TAX (A) NOTED THAT FAILURE ON THE PART OF THE ASSESSING OFFICER TO P OINT OUT SPECIFIC INSTANCES OF PERSONAL USER OF THE AFORESAID FACILITIES BY ITSELF WOULD NOT ENTITLE THE ASSESSEE TO CLAIM THAT ENTIRE EXPENSES ON ACCOUNT O F TELEPHONE AND CAR WERE INCURRED WHOLLY AND EXCLUSIVELY FOR BUSINESS PURPOS E. LD. COMMISSIONER OF INCOME TAX (A) HELD THAT HE WAS OF THE OPINION THAT THERE SHOULD BE DISALLOWANCE OF RS.10,000/- EACH FROM TELEPHONE AND CAR EXPENSES INCLUDING THE DEPRECIATION. 5. AGAINST ABOVE ORDER ASSESSEE IS IN APPEAL BEFORE ME . I.T.A .NO. 5192/DEL/2011 3 6. I HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECOR DS, I FIND THAT ASSESSING OFFICER HAS NOT POINTED OUT ANY DEFECT I N THE BOOKS OF ACCOUNT OR INSTANCE OF PERSONAL USE OF TELEPHONE AND CAR EXPEN SES. DESPITE NOTING THE ABOVE FACTS LD. COMMISSIONER OF INCOME TAX (A) HAS PARTLY CONFIRMED DISALLOWANCE. IN MY CONSIDERED OPINION, THERE IS NO BASIS FOR THE DISALLOWANCE SUSTAINED BY THE LD. COMMISSIONER OF I NCOME TAX (A) IN THIS CASE AND ACCORDINGLY, I SET ASIDE THE ORDERS OF LO WER AUTHORITIES AND DELETE THE ADDITION MADE IN THIS REGARD. 7. IN THE RESULT, THIS APPEAL FILED BY THE ASSESSEE S TANDS ALLOWED. 8. ORDER PRONOUNCED IN THE OPEN COURT ON 07/08/201 2. SD/- (SHAMIM YAHAYA) ACCOUNTANT MEMBER DATED: 07/08/2012 *AK VERMA* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR