SMT. GUMAN KHANDELWAL, Jaipur V. ACIT, Jaipur

ITA 578/JPR/2011

• Counselvise Citation: 57823114 RSA 2011
• Duration Of Justice: 2 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2003-2004
• Appeal Filed On: 10-06-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: K L MOOLCHANDAN I; R K KHUNTETA
• Keywords: Depreciation

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH A JAIPUR (BEFORE SHRI R.K.GUPTA AND SHRI N.L.KALRA) ITA NO.578/ JP/2011 ASSESSMENT YEAR 2003-04 PAN: ADRPK 6455 F SMT. GUMAN KHANDELWAL VS. THE ACIT A-2, RANA PRATAP NAGAR CENTRAL CIRCLE- 1 JHOTWARA, JAIPUR JAIPUR (APPELLANT ) (RESPONDENT) ASSESSEE BY : SHRI K.L. MOOLCHANDANI & SHRI R .K. KHUNTETA DEPARTMENT BY: SHRI SUNIL MATHUR DATE OF HEARING: 02-08-2011 DATE OF PRONOUNCEMENT: 26-08-2011 ORDER PER N.L. KALRA, AM:- THE ASSESSEE HAS FILED AN APPEAL AGAINST THE ORDER OF THE LD. CIT(A), CENTRAL JAIPUR DATED 15-04-2011 FOR THE ASSESSMENT YEAR 2003-04. 2.1 THE FIRST AND SECOND GROUNDS RAISED BY THE ASSE SSEE ARE IN RESPECT OF DISALLOWANCE PARTLY CONFIRMED BY THE LD. CIT(A) FOR TAXING RUNNING EXPENSES AND NOT ALLOWING DEPRECIATION IN EXCESS OF NET INCO ME BEFORE ALLOWING DEPRECIATION. 2.2 WE HAVE HEARD BOTH THE PARTIES. DURING THE YEAR , THE ASSESSEE WAS HAVING TWO TAXIES FOR ENTIRE YEAR WHILE ONE TAXI WA S FOR SIX DAYS. THE TAXIES DURING THE YEAR WERE INDICA. IN THE SUBSEQUENT ASSE SSMENT YEAR, THE TAXIES 2 OWNED BY THE ASSESSEE WERE QUALIS, TAVERA AND INNOV A. LOOKING TO THE RATE WHICH WERE PREVALENT DURING THE PREVIOUS YEAR, WE F EEL THAT IT WILL BE FAIR AND REASONABLE TO ESTIMATE THE TAXI HIRING EXPENSE S AT RS. 12,000/- AFTER ALLOWING DEPRECIATION AS AGAINST RETURNED LOSS OF R S. 1,69,015/- AFTER ALLOWING DEPRECIATION.. 3.1 THE THIRD GROUND OF THE ASSESSEE IS THAT THE LD . CIT(A) HAS ERRED IN CONFIRMING THE ADDITION AT 20% AS AGAINST 33.33% OF TOTAL EXPENSES MADE BY THE AO OUT OF THE EXPENSES CLAIMED IN THE CONCERN O F M/S. SUNIL FURNITURE. 3.2 WE HAVE HEARD BOTH THE PARTIES. THE AO HAS MADE DISALLOWANCE OF RS. 54,940/- WHILE THE LD. CIT(A) HAS ESTIMATED THE DIS ALLOWANCE AT RS. 32,963/-. WE HAD ALREADY HELD THAT WHILE DECIDING THE APPEAL FOR THE SUBSEQUENT YEAR THAT DISALLOWANCE CONFIRMED BY THE LD. CIT(A) IS EX CESSIVE. WE THEREFORE, FEEL THAT IT WILL BE FAIR AND REASONABLE TO RESTRIC T THE DISALLOWANCE TO RS. 5,000/- ONLY. 4.1 THE FOURTH GROUND OF THE ASSESSEE IS THAT THE L D. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION AT 20% FROM CONSTRUCTION EX PENSES AT RS. 1,54,177/- AS AGAINST RS. 2,56,960/- MADE BY THE AO. 4.2 WE HAVE HEARD BOTH THE PARTIES. DURING THE YEAR UNDER REFERENCE, THE ASSESSEE HAS SOLD TWO PROPERTIES NAMELY 33 KRISHNA NAGAR AND 8 KALYANPURI AFTER INCLUDING THE COST OF CONSTRUCTION AND INTERE ST EXPENSES. THE ASSESSEE HAS SHOWN N.P. RATES AT 33.8% ON SALE OF 33 KRISHNA NAGAR PROPERTY AND AT 3 58.9% ON KALYANPURI PROPERTY. IN RESPECT OF THESE T WO PROPERTIES, THE CONSTRUCTION COST HAS BEEN DEBITED IN THE FINANCIAL YEAR 2001-02 AND 2002- 03. THUS THE N.P. RATE SHOWN BY THE ASSESSEE IS REA SONABLE. IT IS TRUE THAT THE EXPENSES CLAIMED ARE NOT FULLY VERIFIABLE. HENCE, T HE EXPENDITURE INCURRED DURING THE YEAR IN RESPECT OF CONSTRUCTION EXPENSES ARE FOR PROPERTIES WHICH HAVE NOT BEEN SOLD DURING THE YEAR AND THEREFORE, T HERE IS NO CLAIM OF EXPENDITURE. ONCE, THERE IS NO CLAIM OF EXPENDITURE THEN THERE IS NO CASE OF ANY DISALLOWANCE. WE REFER TO OUR FINDINGS IN THE C ASE OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2008-09. HENCE, THE DISALLOWANCE CO NFIRMED BY THE LD. CIT(A) TO THE EXTENT OF RS. 1,54,177/- IS DELETED. THUS GROUND NO. 4 OF THE ASSESSEE IS ALLOWED. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 26-08 -2011. SD/- SD/- (R.K. GUPTA) (N.L. KALRA) JUDICIAL MEMBER ACCOUNTANT MEMBER JAIPUR DATED; 26/08/2011 *MISHRA COPY FORWARDED TO :- 1. SMT. GUMAN KHANDELWAL, JAIPUR 2. THE ACIT, CENTRAL CIRCLE- 1, JAIPUR 3. THE LD. CIT BY ORDER 4. THE LD. CIT(A) 5. THE LD.DR 6. THE GUARD FILE (ITA NO.578/JP /11) A.R. ITAT, JAIPUR 4 5 6