LOKESH KHANDWLWAL, Kota V. ADDL. CIT, Kota

ITA 6/JPR/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 99359 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 9 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-10-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 02-01-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAJ MEHRA
• Assessee Lawyers: B B MAHESHWARI
• Keywords: Depreciation

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; ,OA JH FOE FLAG ;KN O] YS[KK LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JM & SHRI VIKRAM SINGH YA DAV, AM VK;DJ VIHY LA- @ ITA NO. 06/JP/2014 FU/KZKJ.K O'K Z @ ASSESSMENT YEARS : 2006-07 LOKESH KHANDELWAL, 769, SHASTRI NAGAR, DADABARI, KOTA. CUKE VS. ADDL.CIT, RANGE-1, KOTA. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AHYPK 7242 F VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI B.B.MAHESHWARI (CA) JKTLO DH VKSJ LS @ REVENUE BY : SHRI RAJ MEHRA (JCIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 14/10/2015 MN?KKS'K .KK DH RKJH[ K@ DATE OF PRONOUNCEMENT : 21/10/2015 VKNS'K@ ORDER PER VIKRAM SINGH YADAV, A.M.: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 21/10/2013 PASSED BY THE LD CIT(A), KOTA FOR A.Y. 20 06-07. THE RESPECTIVE GROUNDS OF APPEAL ARE REPRODUCED AS UNDE R:- 1. THAT THE LD. A.O. GROSSLY ERRED IN DISALLOWANCE O F DONATION OF RS. 3,000/- AND THE LD CIT(A) ERRED IN SUSTAINING THE SAME. ITA 06/JP/2014_ LOKESH KHANDELWAL VS. ADDL.CIT 2 2. THAT THE LD A.O. GROSSLY ERRED IN DISALLOWANCE OUT OF THE ENTERTAINMENT EXPENSES AND THE LD CIT(A) ALLOWED PART RELIEF AND ERRED IN SUSTAINING RS. 10444/-. 3. THAT THE LD. A.O. GROSSLY ERRED IN DISALLOWANCE OF RS. 74,163/- OUT OF VEHICLE, TRAVELLING AND INSURANCE EX PENSES AND THE LD CIT(A) ALSO ERRED IN SUSTAINING THE SAME. 4. THAT THE LD A.O. GROSSLY ERRED IN DISALLOWANCE OF RS. 26,056/- OUT OF THE ELECTRICITY AND WATER EXPENSES AND THE LD CIT(A) ALSO ERRED IN SUSTAINING THE SAME. 5. THAT THE LD A.O. GROSSLY ERRED IN DISALLOWANCE OF RS. 13,154/- OUT OF THE OFFICE EXPENSES AND THE LD CIT(A ) ALSO ERRED IN SUSTAINING THE SAME. 6. THAT THE LD A.O. GROSSLY ERRED IN DISALLOWANCE OF RS. 15,484/- OUT OF THE REPAIR & MAINTENANCE EXPENSES A ND THE LD CIT(A) ALSO ERRED IN SUSTAINING THE SAME. 7. THAT THE LD A.O. GROSSLY ERRED IN DISALLOWANCE OF RS. 30,000/- OUT OF THE SALARY AND BONUS EXPENSES AND T HE LD CIT(A) ALSO ERRED IN SUSTAINING THE SAME. 8. THAT THE LD A.O. GROSSLY ERRED IN DISALLOWANCE OF RS. 6,496/- OUT OF THE AGAINST TELEPHONE AND MOBILE EXPENSES AN D THE LD CIT(A) ALSO ERRED IN SUSTAINING THE SAME. 9. THAT THE LD A.O. GROSSLY ERRED IN DISALLOWANCE OF RS. 1,50,000/- OUT OF TEACHING AND CONSULTANCY EXPENSES AND THE LD CIT(A) ALSO ERRED IN SUSTAINING THE SAME. 10. THAT THE LD A.O. GROSSLY ERRED IN DISALLOWANCE OF RS. 16,615/- OUT OF THE DEPRECIATION ON COMPUTERS AND A IR CONDITIONERS AND THE LD CIT(A) ALSO ERRED IN SUSTAIN ING THE SAME. ITA 06/JP/2014_ LOKESH KHANDELWAL VS. ADDL.CIT 3 2. IN RESPECT OF GROUNDS OF 1 TO 8 AND GROUND NO. 1 0 OF THE APPEAL AS RAISED BY THE APPELLANT, IT IS NOTED THAT THE LD ASSESSING OFFICER HAS DISALLOWED 20%-50% OF THESE EXPENSES BY HOLDING THAT THESE EXPENSES HAVE NOT BEEN INCURRED FOR BUSINESS PURPOSES BUT AT TRIBUTABLE TO PERSONAL USE AND HENCE IN NATURE OF PERSONAL EXPENS ES. 2.1 THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD CIT(A), WHO WHILE CONFIRMING THE DISALLOWANCES HAS REDUCED THE QUANTUM OF DISALLOWANCE TO A REASONABLE PERCENTAGE OF 20%-30% A S AGAINST 20%- 50% DONE BY A.O. 2.2 DURING THE COURSE OF HEARING, THE ASSESSEE SUB MITTED THAT AN ELEMENT OF PERSONAL NATURE IS NOT RULED OUT, AT THE SAME TIME, THE ADDITIONS CONFIRMED BY THE LD CIT(A) ARE ON THE HIGH ER SIDE. 2.3 WE HAVE PERUSED THE ORDER OF THE ASSESSING OFFI CER AS WELL AS THE LD CIT(A) AND WE FIND NO INFIRMITY IN THE ORDER OF TH E LD CIT(A). IN THE LIGHT OF ABOVE, THE GROUNDS NO. 1 TO 8 AND 10 OF TH E ASSESSEES APPEAL ARE DISMISSED. 3. IN GROUND NO. 9 OF THE ASSESSEES APPEAL, HE CHA LLENGED THE DISALLOWANCE OF RS. 1.50 LACS TOWARDS TEACHING AND CO NSULTANCY ITA 06/JP/2014_ LOKESH KHANDELWAL VS. ADDL.CIT 4 EXPENSES AS CONFIRMED BY THE LD CIT(A). FROM PERUSAL OF THE ASSESSMENT ORDER, IT IS NOTED THAT THE ASSESSEE HAD PAID RS. 3 LACS TO SHRI SANJAY KHANDELWAL, WHO IS A QUALIFIED C.A. AND THE SAID AMOU NT WAS PAID IN RELATION TO VARIOUS ACCOUNTING AND OTHER SERVICES P ROVIDED BY HIM. FURTHER THE PAYMENT WAS MADE BY CHEQUE AFTER DEDUCT ING TDS. THE ASSESSING OFFICER DISALLOWED THE EXPENSES U/S 40A(2) (B) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) HOLDING THAT THE SA ME IS EXCESSIVE IN NATURE AND DISALLOWED 50% OF THE TOTAL PAYMENT. 4. WE HAVE PERUSED THE ORDER OF THE LD A.O., LD CIT( A) AND HEARD THE LD AR. IT IS NOTED THAT FIRSTLY IT IS NOT PROVED HO W THE SAID TRANSACTION IS COVERED U/S 40A(2)(B) OF THE ACT AND SECONDLY THERE IS NO FINDING THAT ON WHAT BASIS THE AMOUNT WAS HELD TO BE EXCESSIVE. ME RELY BECAUSE THE ASSESSEE HAS PAID RS. 3 LACS TO HIS WIFE AND RS. 15, 000/- TO MR. ANIS, THE SAME CANNOT BE THE SOLE BASIS FOR DISALLOWANCE OF TH IS SUBJECT PAYMENT MADE TO SHRI SANJAY KHANDELWAL. IT IS SETTLED PRINCI PLE THAT IT IS A BUSINESS MAN OR THE PROFESSIONAL, WHO IS A BEST JUDG E TO DETERMINE WHAT EXPENDITURE TO INCUR AND HOW MUCH OF THAT EXPENDITUR E IS COMMENSURATE WITH THE SERVICES BEING AVAILED BY HIM. IN THE LIGHT OF ABOVE WE DELETE ITA 06/JP/2014_ LOKESH KHANDELWAL VS. ADDL.CIT 5 THE ADDITION OF RS. 1.50 LACS AS DONE BY THE ASSESS ING OFFICER AND CONFIRMED BY THE CIT(A). THIS GROUND OF APPEAL IS AL LOWED. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 21/10/2015. SD/- SD/- VKJ-IH-RKSYKUH FOE FLAG ;KNO (R.P.TOLANI) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 21 ST OCTOBER, 2015 * RANJAN VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI LOKESH KHANDELWAL, KOTA. 2. IZR;FKHZ@ THE RESPONDENT- THE ADDL.CIT, RANGE-1, KOTA 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 06/JP/2014) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR