Shri Anil Kumar Goel, New Delhi V. ITO, New Delhi

ITA 5849/DEL/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 65259 (ITAT-DELHI)
• Duration Of Justice: 7 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-08-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 30-07-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 29-12-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DR B R R KUMAR
• Assessee Lawyers: KUNAL PRASHANT
• Keywords: Depreciation
• Section: 32

Judgement Text

I.T.A. NO. 5849/DEL/2011 1 IN THE INCOME TAX APPELATE TRIBUNAL DELHI BENCH SMC: NEW DELHI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER ITA NO. 5849/DEL/2011 A.Y. : 2008-09 SH. ANIL KUMAR GOEL, VS. ITO, WARD-37(1), 108, NEELKANTH CHAMBERS-II, NEW DELHI LSC, SAINI ENCLAVE, VIKAS MARG, NEW DELHI 110 092 (PAN : AAGHG3919P)) (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. KUNAL PRASHANT, ADV. DEPARTMENT BY : DR. B.R.R. KUMAR, SR. D.R. O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-XXVIII, NEW DELHI DATED 19.10.2011 PERTAINING TO ASSESSMENT YEAR 2008-09. 2. THE GROUNDS OF APPEAL READ AS UNDER:- I) THE LD. COMMISSIONER OF INCOME TAX (A) HAS ERRED IN LAW AND IN FACTS AND CIRCUMSTANCES OF THE CASE IN FAILING TO APPRECIATE THE FACTS OF THE CASE AND TH E APPLICABILITY OF SECTION 199 OF THE INCOME TAX ACT, 1961 IN THE PRESENT CASE AND UPHOLDING THE ASSESSMENT ORDER AND DISALLOWING CREDIT OF TDS AMOUNTING TO ` 38,270/-. THE SCHEME OF SECTIONS 19 8 AND 199 OF THE I.T. ACT, 1961 CLEARLY SHOWS THAT A NY SUM DEDUCTED IN ACCORDANCE WITH THE PROVISIONS OF I.T.A. NO. 5849/DEL/2011 2 CHAPTER XVIIB OF THE I.T. ACT, 1961, WILL BE THE IN COME OF THE ASSESSEE AND SIMILARLY THE SUM SO DEDUCTED, I F PAID TO THE CENTRAL GOVERNMENT WILL BE TREATED AS TH E PAYMENT ON BEHALF OF ASSESSEE. THEREFORE, RULE 37BA(3) MADE UNDER SECTION 199(3) IS NOT APPLICABLE TO ENTITIES FOLLOWING CASH SYSTEM OF ACCOUNTING. II) FURTHER, ASSUMING THOUGH NOT ADMITTING, THAT EVEN IF RULE 37BA(3) IS APPLICABLE TO ENTITIES FOLLOWING CA SH SYSTEM OF ACCOUNTING, THE SAID RULE IS IN CONFLICT W ITH THE SCHEME OF THE ACT AND THE LEGISLATIVE INTENT OF THE LAW AND AS SUCH IS NOT BINDING. III) LD. COMMISSIONER OF INCOME TAX (A) HAS ERRED IN LAW AND IN FACTS AND CIRCUMSTANCES OF THE CASE BY NOT ALLOWING THE DEPRECIATION @15% ON THE MOBILE PHONE AMOUNTING TO ` 2,525/-. THIS FINDING IS IN EXPRESS VIOLATION OF THE SCHEME SET BY SECTION 32(1)(II) OF INCOME TAX ACT, 1961 AND ALSO IN CONTRAVENTION WITH THE CBDT CIRCULAR NO. 469 DATED 23.9.1986 AND THE DECISION OF THE DELHI HIGH COURT IN C.I.T. VS. OSWA L AGRO MILLS LTD. [I.T.A. NO. 161 OF 2006]. IV) THE APPELLANT CRAVES LEAVE TO BE ALLOWED TO AMEN D, DELETE OR ADD ANY OTHER GROUNDS OF APPEAL DURING TH E COURSE OF HEARING OF THIS APPEAL. 3. APROPOS DISALLOWANCE CREDIT OF TDS AMOUNTING TO ` 38270/- THE ASSESSEE IS A CHARTERED ACCOUNTANT. DURING T HE COURSE OF ASSESSMENT ASSESSING OFFICER NOTED THAT ASSESSEE IS FOLLOWING CASH I.T.A. NO. 5849/DEL/2011 3 SYSTEM OF ACCOUNTING. ASSESSING OFFICER OBSERVE D THAT DURING THE ASSESSMENT PROCEEDINGS, ASSESSEE WAS REQUIRED TO EX PLAIN WHETHER HE HAS CLAIMED TDS AS PER SECTION 199. ASSESSING OFFIC ER NOTED THAT ASSESSEE HAS CLAIMED THAT TDS AMOUNTING TO ` 42670/- WAS CLAIMED BUT CORRESPONDING RECEIPTS OTHER THAN THE TDS ITSELF WAS NOT RECEIVED DURING THE YEAR. HENCE, ASSESSING OFFICER OPI NED THAT THE CREDIT FOR TDS SHOULD BE ALLOWED PROPORTIONATELY I.E. ON THE INCOME ASSESSABLE DURING THE YEAR. HENCE, ON THE TOTAL FEES OF ` 414270/-, THE ASSESSEE DECLARED ` 42670/-. HENCE, ASSESSING OFFICER HE LD THAT PROPORTIONATE COMES TO 4395/-. THEREFORE, HE HELD THAT CREDIT F OR BALANCE TDS OF ` 38275/- IS NOT ALLOWED DURING THE AS PER THE PROVIS IONS OF SECTION 199. 4. UPON ASSESSEES APPEAL LD. COMMISSIONER OF INCOME TAX (A) CONFIRMED THE ASSESSING OFFICERS ACTION. 5. AGAINST THE ABOVE ORDER THE ASSESSEE IS IN APPEA L BEFORE ME. 6. I HAVE HEARD THE RIVAL CONTENTIONS IN LIGHT OF T HE MATERIAL PRODUCED. 6.1 IN THIS REGARD I CAN GAINFULLY REFER TO THE PRO VISION OF SECTION 199(1) AS UNDER:- ANY DEDUCTION MADE IN ACCORDANCE WITH THE FOREGOING PROVISIONS OF THIS CHAPTER AND PAID TO THE CENTRAL GOVERNMENT SHALL BE TREATED AS A PAYMENT OF TAX ON BEHALF OF THE PERSON FROM WHOSE INCOME THE DEDUCTION WAS MAD E, OR OF THE OWNER OF THE SECURITY, OR OF THE DEPOSITO R OR OF THE OWNER OF THE PROPERTY OR OF THE UNIT-HOLDER, OR OF THE SHAREHOLDER, AS THE CASE MAY BE. I.T.A. NO. 5849/DEL/2011 4 6.2 A READING OF THE ABOVE MAKE IT CLEAR THAT ANY DEDUCTION MADE AND PAID TO THE CENTRAL GOVERNMENT SHALL BE TREATED AS PAYMENT OF TAX ON BEHALF OF THE ASSESSEE FROM WHOSE INCOME THE DED UCTION WAS MADE. 6.3 IN THIS CASE AS THE FEE OF ` 414270/- WAS NOT RECEIVED IN THE PERIOD UNDER APPEAL, HENCE THE ASSESSEE DID NOT AC COUNT FOR THE SAME AS IT FOLLOWED CASH SYSTEM OF ACCOUNTING. HOWEVER TO THE EXTENT TDS WAS DEDUCTED AND PAID TO THE CENTRAL GOVERNMENT ON BEHALF OF THE ASSESSEE THE SAME WAS ACCOUNTED FOR AS INCOME AND B ENEFIT OF TDS INVOLVED WAS CLAIMED BY THE ASSESSEE. 6.4 IN MY CONSIDERED OPINION, ASSESSEES ACTION IS I N ACCORDANCE WITH PROVISIONS OF SECTION 199 AND THE ASSESSEE IS ELIG IBLE FOR SEEKING CREDIT OF THE TDS AMOUNT. HENCE, I SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND DECIDE THE ISSUE IN FAVOUR OF THE ASSESS EE. 7. APROPOS DEPRECIATION ON MOBILE PHONE ON THIS ACCOUNT ASSESSING OFFICER NOTED THAT ASSE SSEE HAS CLAIMED A DEPRECIATION OF MOBILE PHONE AMOUNTING TO ` 2525/-, BUT ASSESSING OFFICER ALSO NOTED THE SAME MOBILE PHONE W AS LOST. HENCE THE SAME SET WAS NOT USED BY THE ASSESSEE. THEREFOR E, DEPRECIATION CANNOT BE ALLOWED. 8. UPON ASSESSEES APPEAL LD. COMMISSIONER OF INCOME TAX (A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER. 9. I HAVE HEARD THE RIVAL CONTENTIONS IN LIGHT OF T HE MATERIAL PRODUCED. I FIND THAT DEPRECIATION ON MOBILE HAS N OT BEEN ALLOWED DURING THE YEAR ON THE GROUND THAT THE SAME WAS LOS T DURING THE YEAR. IN SUCH A SITUATION, THE ENTIRE COST OF THE MOBILE H AS TO BE TAKEN OUT I.T.A. NO. 5849/DEL/2011 5 FROM THE BLOCK. ACCORDINGLY, I REMIT THIS ISSUE TO T HE FILE OF THE ASSESSING OFFICER TO CONSIDER THE ISSUE AFRESH, IN LIGHT OF MY OBSERVATION AS ABOVE AND BY REFERENCE TO SECTION 32 (1)(III) OF THE I.T. ACT. 10. IN THE RESULT, THE APPEAL FILED BY THE ASSESSE E STANDS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 08/8/2012. SD/- [SHAMIM YAHYA] ACCOUNTANT MEMBER DATE: 08/8/2012 SRBHATNAGAR COPY FORWARDED TO: - 1. SH. ANIL KUMAR GOEL, 108, NEELKANTH CHAMBERS-II, LS C, SAINI ENCLAVE, VIKAS MARG, NEW DELHI 110 092. AND ATHENA LAW ASSOCIATE S, 808, L&T APARTMENTS, SECTION 18B, DWARKA, DELHI. 2. THE INCOME TAX OFFICER, WARD 37(1), NEW DELHI 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES