Sri Praduman Kumar Bhasin, Kanpur V. Income Tax Officer- 3(3), Kanpur

ITA 533/LKW/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 4706 (ITAT-LUCKNOW)
• Duration Of Justice: 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-02-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 20-01-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 24-07-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ARE AS UNDER BECAUSE ON FACTS
• Assessee Lawyers: ASHISH JAISWAL SHRI AMIT NI

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.533/LKW/2015 ASSESSMENT YEAR:2006-07 SHRI PRADUMAN KUMAR BHASIN, 128/40, H-2, KIDWAI NAGAR, KANPUR. PAN:ACQPM8634F VS. INCOME TAX OFFICER - 3(3), KANPUR. (APPELLANT) (RESPONDENT) O R D E R PER A. K. GARODIA, A.M. THIS IS ASSESSEES APPEAL DIRECTED AGAINST THE ORDE R PASSED BY LEARNED CIT(A)-I, KANPUR DATED 30/04/2015 FOR THE ASSESSMEN T YEAR 2006-07. 2. GROUND NO. 1 & 2 ARE AS UNDER: 1. BECAUSE ON FACTS AND IN CIRCUMSTANCES OF THE CA SE, LD. CIT(APPEALS) HAS ERRED IN DISALLOWING CAR EXPENSES AMOUNTING TO RS.96,904.00 BEING 10% OF THE EXPENSES . 2. BECAUSE ON FACTS AND IN CIRCUMSTANCES OF THE CAS E, LD. CIT(APPEALS) HAS ERRED IN DISALLOWING TELEPHONE EXP ENSES AMOUNTING TO RS.1,050.00 BEING 10% OF THE EXPENSES. APPELLANT BY SHRI ASHISH JAISWAL, ADVOCATE RESPONDENT BY SHRI AMIT NIGAM, D. R. DATE OF HEARING 20/01/2016 DATE OF PRONOUNCEMENT 24/02/2016 2 3. LEARNED A. R. OF THE ASSESSEE REITERATED THE SAM E ARGUMENTS WHICH WERE RAISED BEFORE CIT(A) WHEREAS LEARNED D. R. OF THE REVENUE SUPPORTED THE ORDER OF LEARNED CIT(A). 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FI ND THAT 20% DISALLOWANCE WAS MADE BY THE ASSESSING OFFICER OUT OF CAR EXPENSES AND TELEPHONE EXPENSES ON THIS BASIS THAT PERSONAL USE OF CAR AND TELEPHONE CANNOT BE RULED OUT. BOTH THESE DISALLOWANCES WERE REDUCED BY CIT(A) TO 10% AS AGAINST 20% DISALLOWANCE MADE BY THE ASSESSI NG OFFICER. NEITHER BEFORE THE AUTHORITIES BELOW NOR BEFORE US, THE ASS ESSEE COULD SHOW THAT THE ASSESSEE WAS HAVING PERSONAL CAR OR PERSONAL TELEPH ONE FOR WHICH EXPENSES WERE NOT CLAIMED AS DEDUCTION. WHEN A PERSON IS NO T HAVING HIS PERSONAL CAR AND PERSONAL TELEPHONE, SOME PERSONAL USE OF CAR AN D TELEPHONE CANNOT BE RULED OUT. UNDER THESE FACTS, WE FIND NO REASON TO INTERFERE IN THE ORDER OF CIT(A) ON BOTH THESE ISSUES BECAUSE 10% DISALLOWANC E IS NEITHER EXCESSIVE NOR UNREASONABLE. ACCORDINGLY, WE REJECT GROUND NO . 1 & 2 OF THE ASSESSEE. 5. GROUND NO. 3 IS AS UNDER: 3. BECAUSE ON FACTS AND IN CIRCUMSTANCES OF THE CA SE, LD. CIT (APPEALS) HAS ERRED IN CONFIRMING ADDITION ON ACCOU NT OF DIFFERENCE IN ACCOUNT OF SUNDRY CREDITORS BY AN AMO UNT OF RS.1,13,570.00. 6. IT WAS SUBMITTED BY LEARNED A. R. OF THE ASSESSE E THAT THE COPY OF ACCOUNT OF THE CONCERNED PARTY M/S SHAH KHODIDAS PR EMCHAND & CO. FOR THE NEXT YEAR IS AVAILABLE ON PAGE NO. 3 OF THE PAPER B OOK AND AS PER THE SAME, OPENING BALANCE OF RS.1,13,570/- IN THAT YEAR HAS B EEN PAID OUT BY WAY OF TWO DRAFTS OF RS.80,000/- AND RS.26,000/- DATED 05/ 10/2006 AND 20/01/2007 RESPECTIVELY AND THE REMAINING BALANCE AMOUNT OF RS .7,570/- WAS PAID OUT IN CASH ON 26/03/2007. HE SUBMITTED THAT AS PER THESE FACTS, IT CAN BE SEEN THAT THE AMOUNT IN DISPUTE HAS BEEN PAID OUT IN NEX T YEAR AND THEREFORE, IT 3 CANNOT BE SAID THAT THERE WAS NO OUTSTANDING LIABIL ITY AT THE END OF THE PRESENT YEAR. 7. LEARNED D. R. OF THE REVENUE SUPPORTED THE ORDER S OF THE AUTHORITIES BELOW. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FI ND THAT IT IS NOTED BY LEARNED CIT(A) IN PARA 3.3 OF HIS ORDER THAT THE ID ENTITY OF THE CREDITOR AND PURCHASES FROM HIM HAVE NOT BEEN DISPUTED AND HIS O NLY OBJECTION IS THAT THE LIABILITY HAS CEASED TO EXIST AT THE END OF THE PRE SENT YEAR. HE HAS FURTHER OBSERVED THAT THE ARGUMENTS OF THE ASSESSEE THAT TH E LIABILITY WAS SETTLED IN NEXT FINANCIAL YEAR IS NOT SUPPORTED BY ANY COGENT EVIDENCE. NOW WE FIND THAT IN THE PAPER BOOK, THE ASSESSEE HAS FURNISHED A COPY OF ACCOUNT OF THAT CREDITOR IN NEXT YEAR AS PER WHICH THE AMOUNT OF RS .80,000/- WAS PAID OUT ON 05/10/2006 AND THIS PAYMENT IS BY WAY OF DRAFT PURC HASED BY DEBIT TO THE BANK ACCOUNT OF THE ASSESSEE AS PER THE BANK STATEM ENT AVAILABLE ON PAGE NO. 6 OF THE PAPER BOOK AND THIS DRAFT WAS PURCHASE D FROM BANK ON 05/10/2006. SIMILARLY, THE NEXT PAYMENT OF RS.26,0 00/- HAS BEEN MADE BY WAY OF DRAFT DATED 20/01/2007 AND THIS DRAFT IS ALS O PURCHASED BY DEBIT IN THE BANK ACCOUNT OF THE ASSESSEE AS PER BANK STATEMENT AVAILABLE ON PAGE NO. 7 OF THE PAPER BOOK. IN THE LIGHT OF THESE FACTS AND EVIDENCE AVAILABLE ON RECORD, IT IS SEEN THAT THE ASSESSEE HAS ESTABLISHE D THAT THE LIABILITY IN QUESTION WAS IN EXISTENCE AT THE END OF THE PRESENT YEAR AND THE SAME WAS CLEARED IN THE NEXT YEAR BY WAY OF PAYMENT BY DEMAN D DRAFTS WHICH WERE PURCHASED FROM THE BANK ACCOUNT OF THE ASSESSEE. C ONSIDERING THESE FACTS, IN OUR CONSIDERED OPINION, SECTION 41(1) IS NOT APPLIC ABLE AND THEREFORE, THE ADDITION MADE BY THE ASSESSING OFFICER AND SUSTAINE D BY CIT(A) IS NOT PROPER AND JUSTIFIED. WE, THEREFORE, DELETE THE SAME. AC CORDINGLY, GROUND NO. 3 IS ALLOWED. 9. GROUND NO. 4 IS AS UNDER: 4 4. BECAUSE ON FACTS AND IN CIRCUMSTANCES OF THE CA SE, LD. CIT (APPEALS) HAS ERRED IN CONFIRMING ADDITION ON ACCOU NT OF DIFFERENCE IN ACCOUNT OF SUNDRY DEBTORS BY AN AMOUN T OF RS.18,250.00. 10. THIS GROUND WAS NOT PRESSED BY LEARNED A. R. OF THE ASSESSEE THEREFORE, THIS GROUND IS REJECTED AS NOT PRESSED. 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE STAND S PARTLY ALLOWED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMB ER DATED:24/02/2016 *SINGH COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. D.R., I.T.A.T., LUCKNOW ASSTT . REGISTRAR