Anil Kumar Tiwari, Kanpur V. Astt. Commissioner of Income Tax-II, Kanpur

ITA 527/LKW/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 0180 (ITAT-LUCKNOW)
• Duration Of Justice: 1 year(s) 10 month(s) 10 day(s)
• Appeal Type: Income Tax (Transfer Pricing) Appeal
• Pronouncement Date: 27-06-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 17-08-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAJESH TIWARI
• Keywords: Principle of natural justice; Set aside

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH SMC , LUCKNOW BEFORE SHRI. T.S. KAPOOR, ACCOUNTANT MEMBER AND SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER ITA NO. 527/LKW/2017 ASSESSMENT YEAR: 2013 - 14 ANIL KUMAR TIWARI E - 185, ADARSH NAGAR BARRA - 1, KANPUR V. ACIT - II KANPUR T AN /PAN : ACCPT8165F (APP ELL ANT) (RESPONDENT) APPELLANT BY: SHRI RAKESH GARG, ADVOCATE RESPONDENT BY: SHRI RAJESH TIWARI, D.R. DATE OF HEARING: 21 0 5 201 8 DATE OF PRONOUNCEMENT: 22 0 5 201 8 O R D E R PER P ARTHA SARATH I CHAUDHURY, J.M : THIS APPEAL PREFERRED BY THE ASSESSEE EMANATES FROM THE ORDER OF THE LD. CIT(A) - I, KANPUR DATED 5/6/2017. 2 . THE MAIN GRIEVANCE OF THE ASSESSEE ARE TWOFOLD I.E. (1) DISALLOWANCE OF RS.1,11,360/ - OUT OF SALARY EXPENSES AND (2) DISALLOWANCE O F RS.23,364/ - OUT OF VEHICLE RUNNING EXPENSES. 3 . THE MAIN ARGUMENT OF THE ASSESSEE IS THAT BOTH THE ADDITIONS WERE SUSTAINED BY THE LD. CIT(A) WHICH WERE DONE ON AD - HOC BASIS AND THEREFORE NOT LEGALLY TENABLE AND SHOULD BE DELETED. 4 . WITH REGARD TO THE FIRST G ROUND OF DISALLOWANCE OF SALARY EXPENSES, THE ASSESSING OFFICER IN HIS ORDER HAS DEALT WITH THIS ISSUE IN PARA 5 OF THE ASSESSMENT ORDER. ACCORDING TO THE ASSESSING OFFICER, ITA NO.527/LKW/2017 PAGE 2 OF 4 SALARY REGISTER WAS NOT SIGNED BY THE EMPLOYEES AND IN ORDER TO AVOID POSSIBLE LE AKAGE 10% OF THE SAME WAS DISALLOWED. 5 . BEFORE THE LD. CIT(A), THE LD. A.R. OF THE ASSESSEE WAS ASKED TO PRODUCE THE BOOKS OF ACCOUNT AND VOUCHERS FOR VERIFICATION. THIS WAS NOT DONE BY THE LD. A.R. OF THE ASSESSEE AND THEREFORE THE LD. CIT(A) IN THE ABSENC E OF THESE VOUCHERS AND BOOKS OF ACCOUNT , WHICH WAS NOT PRODUCED FOR VERIFICATION , UPHELD THE ADDITION MADE BY THE ASSESSING OFFICER. 6 . AT THE TIME OF HEARING BEFORE US, THE LD. A.R. OF THE ASSESSEE VEHEMENTLY ARGUED THAT THIS ADDITION WAS DONE ON AD - HOC BAS IS AND WITHOUT ANY SPECIFIC REASON. 7 . THE LD. D.R., ON THE OTHER HAND, SUBMITTED THAT THE REASON FOR DISALLOWANCE WAS VERY MUCH THERE IN THE ORDERS OF THE ASSESSING OFFICER AS WELL AS THE LD. CIT(A) AND THAT THE ASSESSEE WAS UNABLE TO PRODUCE THE BOOKS OF AC COUNT AND VOUCHERS FOR VERIFICATION AND THEREFORE THESE WERE NOT AD - HOC DISALLOWANCES. 8 . WE HAVE PERUSED THE CASE RECORDS AND HEARD THE RIVAL CONTENTIONS AND WE FIND THAT THE DISALLOWANCE WAS MADE SINCE ASSESSEE WAS NOT ABLE TO PRODUCE THE BOOKS OF ACCOUNT A ND VOUCHERS BEFORE THE LD. CIT(A) AND IN THE INTEREST OF JUSTICE, WE SET ASIDE THE ORDER OF THE LD. CIT(A) AND RESTORE THE MATTER BACK TO HIS FILE TO ADJUDICATE THE ISSUE AFRESH AND WE ALSO DIRECT THE ASSESSEE TO PRODUCE THE BOOKS OF ACCOUNT AND RELEVANT V OUCHERS BEFORE THE LD. CIT(A) TO DECIDE THE MATTER AFRESH. NEEDLESS TO SAY THAT THE MATTER TO BE ADJUDICATED KEEPING IN MIND THE PRINCIPLES OF NATURAL JUSTICE. ACCORDINGLY THIS ISSUE IS ALLOWED FOR STATISTICAL PURPOSES. ITA NO.527/LKW/2017 PAGE 3 OF 4 9 . WITH REGARD TO THE NEXT GROUND I.E . DISALLOWANCE OF RS.23,364/ - OUT OF VEHICLE RUNNING AND MAINTENANCE EXPENSES, THE ASSESSING OFFICER HAS AGGREGATED THE SAID AMOUNT AND HAS DISALLOWED 10% OF THE SAME. IT IS OBSERVED BY THE LD. CIT(A) THAT ASSESSEE DOES NOT HAVE A PERSONAL C A R AND IN FAC T IT HAS NOT BEEN ESTABLISHED HOW HIS SPOUSE, CHILDREN AND PARENTS TRAVELLED WITHOUT VEHICLE. AS REGARDS THE MATTER, ASSESSEE OR WIFE OR CHILDREN DO NOT HAVE ANY OTHER CONVEYANCE FOR PERSONAL TRANSPORTATION. THEY ARE OBVIOUSLY USING THESE VEHICLES FOR PER SONAL USE ALSO, THEREFORE, ELEMENT OF PERSONAL USE IS EVIDENT AND THERE IS WRONG BOOKING OF EXPENSES TO THE BUSINESS ACCOUNT. THE LD. CIT(A) HAS SUSTAINED 10% OF THE DISALLOWANCE FOR PERSONAL USE. 10 . WE HAVE PERUSED THE CASE RECORDS AND WE FIND THAT IT IS A FACT ON RECORD THAT ASSESSEE DOES NOT HAVE ANY PERSONAL C AR AND HOW HE AND HIS FAMILY MEMBERS TRAVELLED WITHOUT VEHICLE. IT HAS NOT BEEN ESTABLISHED AND THERE IS NO CONVEYANCE FOR PERSONAL TRANSPORTATION WHICH IS ABSOLUTELY CLEAR FROM RECORD. THEREFORE, THE ELEMENT OF PERSONAL USE IS DEFINITELY THERE AND THE OBSERVATION OF THE DEPARTMENT ON THIS ASPECT IS ABSOLUTELY CORRECT AND THEREFORE WE UPHOLD THIS DISALLOWANCE CONFIRMED BY THE LD. CIT(A). ACCORDINGLY THIS GROUND IS DISMISSED. 11 . IN THE RESULT, APPEAL O F THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 22 / 0 5 / 201 8 . SD/ - SD/ - [ T.S. KAPOOR ] [PARTHA SARATHI CHAUDHURY ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 22 ND MAY , 201 8 JJ: 2105 ITA NO.527/LKW/2017 PAGE 4 OF 4 COPY FORWARDED TO: 1 . AP PELLANT 2 . RESPONDENT 3 . CIT(A) 4 . CIT 5 . DR