Trans Air, New Delhi V. DCIT, New Delhi

ITA 646/DEL/2013

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 69636 (ITAT-DELHI)
• Duration Of Justice: 10 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-12-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 11-12-2013
• Assessment Year: 2003-2004
• Appeal Filed On: 01-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAMEER SHARMA SENIOR
• Keywords: Depreciation; Opportunity of being heard; Principle of natural justice
• Section: 142(1); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH H : NEW DELHI) SHRI U.B.S. BEDI, JUDICIAL MEMBER AND BEFORE SHRI B.C. MEENA, ACCOUNTANT MEMBER ITA NO.646/DEL./2013 (ASSESSMENT YEAR : 2003-04) M/S. TRANS AIR, VS. DCIT, CENTRAL CIRCLE 12, 118, ANSAL BHAWAN, NEW DELHI. KASTURBA GANDHI MAR, NEW DELHI 110 001. (PAN : AAAFT2744C) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI ASHWANI KUMAR, CA REVENUE BY : SHRI SAMEER SHARMA, SENIOR DR ORDER PER B.C. MEENA, ACCOUNTANT MEMBER : THIS APPEAL FILED BY THE ASSESSEE EMANATES FROM THE ORDER OF CIT (APPEALS)-XXXI, NEW DELHI DATED 31.12.2012. 2. IN THIS CASE, A NOTICE U/S 148 OF THE INCOME-TAX ACT, 1961 WAS ISSUED ON 31.03.2010 AFTER RECORDING THE SATISFACTION AS PER THE REQUIRE MENT OF LAW. THE INFORMATION RECEIVED FROM ENFORCEMENT DIRECTORATE THAT A MERCEDES BENZ C AR BEARING REGISTRATION NO.DL-3CQ 1010 WAS PURCHASED BY M/S. TRANS AIR. THE INVESTIGA TION CONDUCTED BY THE ENFORCEMENT DIRECTORATE REVEALED THAT THE CAR WAS ACTUALLY USED BY SHRI JAGAT SINGH, SON OF SHRI NATWAR SINGH AND IT WAS UNDER HIS ABSOLUTE CONTROL AND DOM INION. AS PER THE STATEMENT REPRODUCED IN THE REASONS RECORDED, WE FIND THAT SH RI CHETAN GUPTA HAD STATED ON ITA NO.646/DEL./2013 2 05.05.2006 THAT THE CAR WAS PURCHASED IN APRIL/MAY 2002 AND IT WAS USED FOR A SHORT WHILE AND AFTER WHICH SHRI JAGAT SINGH, S/O SHRI NATWAR S INGH, 19, TEEN MURTI LANE, NEW DELHI BORROWED IT FROM HIM AND THEN HE HAS BEEN USING THI S CAR UP TO SEPTEMBER / OCTOBER, 2005. THE ASSESSING OFFICER DISALLOWED THE DEPRECIATION A ND PETROL EXPENSES ON THE CAR AS THE SAME WAS NOT BEING USED FOR BUSINESS PURPOSES OF TH E ASSESSEE AND AN ADDITION OF RS.7,30,294/- WAS MADE. THE CIT (A) HAS CONFIRMED THIS ADDITION BY HOLDING AS UNDER :- 3.1.6 I HAVE CONSIDERED THE SUBMISSIONS OF THE AR AND FACTS OF THE CASE. IT IS NOT CORRECT TO SAY THAT DEPRECIATION IS ALLOWABLE MERELY ON THE GROUND OF OWNERSHIP OF THE ASSET. THE CAR MUST BE U SED FOR THE PURPOSE OF ASSESSEE'S BUSINESS. THE ASSET IN QUESTION MAY BE I N THE NAME OF THE ASSESSEE FIRM. HOWEVER, IT HAS BEEN PROVED SUFFICIE NTLY BEYOND DOUBT THAT THE SAID MERCEDES BENZ CAR WAS ONLY IN POSSESSION A ND USE OF SHRI JAGAT SINGH WHO IS NOT CONNECTED TO THE ASSESSEE FIRM. I FIND THAT THERE IS NO MERIT IN THE AR'S ARGUMENT THAT HE WAS NOT CONFRONTED WIT H THE FINDINGS OF THE ED. THE FACTS WERE MADE KNOWN TO THE ASSESSEE VERY MUCH IN THE BEGINNING OF THE ASSESSMENT PROCEEDINGS. THE ASSESS EE HAD REQUESTED FOR AND COLLECTED THE REASONS RECORDED WHILE ISSUING NO TICE U/S 148. IN THESE REASONING, THE FACTS HAVE ALL BEEN MADE VERY CLEAR. FURTHER WHEN NOTICE UNDER 143(2) AND 142(1) WERE ISSUED CALLING FOR THE FIRM'S REPLY, AS TO WHY DEPRECIATION SHOULD NOT BE DISALLOWED FOR THE SAID REASONS, THE FIRM HAS CHOSEN TO REMAIN SILENT. THEREFORE, THIS IS NOT A CASE OF NOT PROVIDING OPPORTUNITY OR NOT ALLOWING CROSS EXAMINATION BY TH E A.O. THE ASSESSEE NEVER DEMANDED IT NOR GAVE ANY EXPLANATION DURING T HE ASSESSMENT PROCEEDINGS. IN FACT, IN THE REGULAR ASSESSMENT FOR THE YEAR, ASSESSEE HAS CLAIMED THAT ALL BOOKS HAVE BEEN BURNT IN FIRE. HEN CE THE ALLEGATION OF VIOLATION OF THE PRINCIPLE OF NATURAL JUSTICE IS NO T FOUND ACCEPTABLE. SUFFICIENT OPPORTUNITY HAS BEEN GIVEN TO THE APPELL ANT TO PUT ACROSS HIS VIEWS OR LEAD EVIDENCES IN SUPPORT OF ITS CLAIM DUR ING THE ASSESSMENT STAGE. THE FIRM NEVER ASKED FOR CROSS-EXAMINATION OF SHRI JAGAT SINGH DURING THE ASSESSMENT PROCEEDINGS. HENCE, MAKING IT ONE OF THE ISSUE BEFORE APPELLATE AUTHORITY IS NOT ON PERMISSIBLE. 3.2 CONSIDERING ALL THE FACTS, I DO NOT FIND ANY M ERIT IN THE APPEAL. THE GROUND RAISED IS REJECTED. 3. NOW, THE ASSESSEE IS IN APPEAL BEFORE US BY TAKI NG THE FOLLOWING GROUND:- THAT THE ORDER DATED 31-12-2012 PASSED U/S 250 OF THE INCOME-TAX ACT, 1961 BY THE LEARNED COMMISSIONER OF INCOME-TAX (APP EALS) XXXI, NEW DELHI IS AGAINST LAW AND FACTS ON THE FILE IN AS MU CH AS HE WAS NOT JUSTIFIED IN UPHOLDING THE ACTION OF THE LEARNED ASSESSING OF FICER IN DISALLOWING CAR DEPRECIATION OF RS.4,74,542/- AND CAR EXPENSES OF R S.2,55,752/- (TOTALING ITA NO.646/DEL./2013 3 RS.7,30,294/-) ON THE GROUND THAT THE CAR WAS NOT U SED BY THE APPELLANT FIRM FOR BUSINESS PURPOSE WHICH IS ARBITRARY, UNJUS TIFIED AND AGAINST THE FACTS AND PROVISIONS OF LAW. 4. WE HAVE HEARD BOTH THE SIDES ON THE ISSUE AND AL SO PERUSED THE RECORD AVAILABLE. WE FIND THAT THE STATEMENT OF SHRI CHETAN GUPTA REC ORDED BY THE ENFORCEMENT DIRECTORATE AND THE OTHER EVIDENCES COLLECTED BY THE ENFORCEMEN T DIRECTORATE HAVE NOT BEEN CONFRONTED WITH THE ASSESSEE WITH REGARD TO THE USE OF THE CAR . WE DO NOT AGREE WITH THE VIEW OF CIT (A) THAT ASSESSEE HAD NEVER ASKED FOR CROSS EXAMINA TION OF SHRI JAGAT SINGH. EVEN WHEN ASSESSEE DOES NOT ASK FOR THEN ALSO ALL EVIDENCE US ED AGAINST ASSESSEE MUST HAVE BEEN CONFRONTED. THEREFORE, IN THE INTEREST OF JUSTICE AND EQUITY, WE FIND IT APPROPRIATE TO RESTORE THE ISSUE TO THE FILE OF THE ASSESSING OFFICER SO T HAT ASSESSEE CAN BE PROVIDED WITH THE COPY OF STATEMENT RECORDED BY THE ENFORCEMENT DIRECTORAT E AS WELL AS WITH OTHER MATERIAL WHICH WAS USED WHILE MAKING SUCH ADDITION. THEREFORE, WE SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND RESTORE THE ISSUE TO THE FILE OF THE ASSE SSING OFFICER TO DECIDE THE ISSUE DE NOVO AFTER PROVIDING AN OPPORTUNITY OF BEING HEARD TO TH E ASSESSEE. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON THIS 11 TH DAY OF DECEMBER, 2013. SD/- SD/- (U.B.S. BEDI) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED THE 11 TH DAY OF DECEMBER, 2013/TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-XXI, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.