M/s. Gujral Hotel Pvt. Ltd., Jabalpur V. ITO, Jabalpur

ITA 53/JAB/2012

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 1031 (ITAT-JABALPUR)
• Duration Of Justice: 6 year(s) 10 month(s) 4 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 28-05-2019
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Assessment Year: 2004-2005
• Appeal Filed On: 24-07-2012
• Court: TRIBUNAL
• Department Lawyers: ABHISHEK SHUKLA
• Assessee Lawyers: A P SHRIVASTAVA
• Keywords: Depreciation

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, JABALPUR BENCH, JABALPUR BEFORE SHRI JOGINDER SINGH, J.M. AND SHRI R.C.SHARM A, A.M. PAN NO. : AAACG8410B I.T.A.NO. 53/JAB/2012 A.Y. : 2004-05 M/S. GUJRAL HOTEL PVT.LTD., JABALPUR. VS. ITO, WARD 2(2), JABALPUR APPELLANT RESPONDENT APPELLANT BY : SHRI A.P. SHRIVASTAVA, ADV. RESPONDENT BY : SHRI ABHISHEK SHUKLA, SR. DR DATE OF HEARING : 18 .0 9 .2013 DATE OF PRONOUNCEMENT : 22 . 10 .2013 O R D E R PER R. C. SHARMA, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER PASSED BY THE CIT(A), DATED 12.12.2011 FOR THE ASSE SSMENT YEAR 2004-05. 2. THE RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORDS PERUSED. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE COMPANY DERIVES INCOME FROM THE BUSINESS OF RUNNING HOTEL, AND RESTAURANT. THE COMPANY FILED ITS RETURN ON 01.11.2 004 2 DECLARING TOTAL INCOME OF RS. 11,36,378/- ALONGWITH AUDITED ACCOUNTS. THE CASE WAS SELECTED FOR SCRUTINY AND AS SESSMENT WAS COMPLETED AFTER MAKING DISALLOWANCE OF VARIOUS EXPE NSES. THE ASSESSING OFFICER DISALLOWED LARGE NUMBER OF EXPENS ES FOR THE REASON THAT PROPER BILLS/VOUCHER WERE NOT PRODUCED AND THE REASONABLENESS OF THE EXPENDITURE COULD NOT BE EXPL AINED. 3. BY THE IMPUGNED ORDER, THE LD. CIT(A) CONFIRMED THE DISALLOWANCE, AGAINST WHICH THE ASSESSEE IS IN FURT HER APPEAL BEFORE US. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND FOUND FROM RECORD THAT DISALLOWANCE HAS BEEN MADE BY THE ASSESSING OFFICER BY REJECTING BOOKS OF ACCOUNT. DURING THE Y EAR, THE ASSESSEE HAD SHOWN PROFIT AT 5.04 % AS AGAINST LAST YEAR PROFIT OF 1.04 %. FROM THE RECORD, WE FOUND THAT VARIOUS GENU INE EXPENDITURE HAVING BEEN INCURRED FOR THE PURPOSE OF BUSINESS WAS DISALLOWED BY THE ASSESSING OFFICER ON THE PLEA THAT THE ASSESSEE HAS FILED SELF MADE VOUCHERS OR THAT EXPEN DITURE WERE NOT INCURRED FULLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS. ACCORDINGLY, EXPENDITURE UNDER THE HEAD PRINTING, STATIONERY, CONVEYANCES, TRAVELLING, FUEL & GAS, GENERATOR EXP ENSES, COMPUTER EXPENSES, FREIGHT AND CARTAGE, CROCKERY AN D CUTLERY 3 HOUSE KEEPING KITCHEN MATERIAL EXPENSES, HARDWARE M ATERIAL EXPENSES, WERE PARTLY DISALLOWED. KEEPING IN VIEW THE NATURE OF ASSESSEES BUSINESS VIZ. HOTEL & RESTAURANT VIS--V IS THE NATURE OF EXPENDITURE INCURRED VIS--VIS PROFITS SHOWN BY THE ASSESSEE DURING THE YEAR, WHICH WAS MORE THAN FOUR TIMES COM PARED TO THE PROFIT OF LAST YEAR, WE DIRECT THE ASSESSING OFFICE R TO CONFINE THE DISALLOWANCE OF EXPENDITURE INCURRED UNDER THE HEAD OF TELEPHONE EXPENSES AND TRAVELLING EXPENSES. KEEPING IN VIEW Q UANTUM OF BUSINESS AND NET PROFIT SHOWN BY ASSESSEE DURING TH E YEAR AS COMPARED TO PRECEDING YEAR NO OTHER DISALLOWANCE IS WARRANTED. WE DIRECT ACCORDINGLY. 5. SO FAR AS DISALLOWANCE OF CLAIM OF DEPRECIATION IS CONCERNED, WE DIRECT THE ASSESSING OFFICER TO VERIF Y THE RATE OF ADMISSIBLE DEPRECIATION ON HOTEL BUILDING AND AFTER APPLYING THE CORRECT RATE OF DEPRECIATION, DISALLOWANCE IS TO BE MADE. THE ASSESSING OFFICER IS FURTHER DIRECTED TO ALLOW ASSE SSEE TO CARRY FORWARD WDV IN THE NEXT YEAR AS PER THE CORRECT RAT E OF DEPRECIATION, MEANING THEREBY AFTER REDUCING THE CO RRECT AMOUNT OF DEPRECIATION DURING THE YEAR UNDER CONSIDERATION , THE ASSESSEES WDV SHOULD BE MODIFIED SO THAT ASSESSEE CAN CLAIM DEPRECIATION ON REVISED WDV IN NEXT YEAR. WE DIRECT ACCORDINGLY. 4 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D IN PART. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 22 ND OCTOBER, 2013. SD/- SD/- (JOGINDER SINGH) (R. C. SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 22 ND OCTOBER, 2013. CPU* 141518