Shri Dhanpat Singh, Lucknow V. Asstt. Commissioner of Income Tax-III, Lucknow

ITA 675/LKW/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 4595 (ITAT-LUCKNOW)
• Duration Of Justice: 2 year(s) 6 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-03-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 09-02-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 12-09-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Depreciation

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.675/LKW/2013 ASSESSMENT YEAR:2008-09 A.C.I.T., RANGE-III, LUCKNOW. VS SHRI DHANPAT SINGH, A-57, KAMLA NEHRU NAGAR, LUCKNOW. PAN:AQQPS6378B (RESPONDENT) (APPELLANT) SHRI SHALABH SINGH, ADVOCATE APPELLANT BY SHRI AMIT NIGAM, D. R. RESPONDENT BY 09/02/2016 DATE OF HEARING 15/03/2016 DATE OF PRONOUNCEMENT O R D E R PER A. K. GARODIA, A.M. THIS IS ASSESSEES APPEAL DIRECTED AGAINST THE OR DER PASSED BY LEARNED CIT(A)-I, LUCKNOW DATED 05/06/2013 FOR THE ASSESSMENT YEAR 2008-09. 2. IN THIS APPEAL, THE ASSESSEE HAS RAISED AS MANY AS 8 GROUNDS BUT THE MAIN GRIEVANCE OF THE ASSESSEE ARE TWO ONLY I.E . AD HOC DISALLOWANCE @50% OF THE REVENUE EXPENSES TO THE EXTENT OF RS.3, 15,507/- AND ADDITION OF RS.31,000/- ON THE BASIS OF ALLEGED UNE XPLAINED CASH DEPOSIT 3. BOTH THE SIDES WERE HEARD. WE FIND THAT IT IS N OTED BY THE ASSESSING OFFICER IN PARA 3.2 THAT THE ASSESSEE HAS SHOWN INC OME FROM BUSINESS AND PROFESSION TO THE TUNE OF RS.3,84,532/-. THE ASSES SING OFFICER HAS ALSO NOTED THAT THE ASSESSEE HAS FILED AUDIT REPORT WHIC H CONSISTS OF INCOME 2 AND EXPENDITURE STATEMENT IN WHICH GROSS RECEIPTS H AS BEEN SHOWN AT RS.10,15,545/-. THEREAFTER, THE ASSESSING OFFICER WORKED OUT THAT THE ASSESSEE HAS CLAIMED THE EXPENSES OF RS.6,31,013/- INCLUDING DEPRECIATION. THEREAFTER THE ASSESSING OFFICER SAY S THAT IT CANNOT BE RULED OUT THAT THERE MAY BE EXCESS CLAIM OF EXPENSES AND AFTER SAYING SO, HE HAS DISALLOWED 50% OF THE EXPENSES CLAIMED BY THE A SSESSEE I.E. RS.3,15,507/-. THE COPY OF INCOME & EXPENDITURE AC COUNT IS AVAILABLE ON PAGE NO. 11 OF THE PAPER BOOK. THE EXPENSES CLAIME D BY THE ASSESSEE INCLUDES DEPRECIATION OF RS.37,703/-. IN OUR CONSI DERED OPINION, NO DISALLOWANCE IS CALLED FOR OUT OF DEPRECIATION BECA USE THE SAME IS IN RESPECT OF COMPUTER, FURNITURE & FIXTURE AND EQUIPM ENTS AND THE SAME IS AS PER LAW. OUT OF REMAINING EXPENSES, THE EXPENSE S CLAIMED ARE SALARY & WAGES, STAFF WELFARE, PROFESSIONAL CHARGES PAID, CO NVEYANCE, TELEPHONE EXPENSES, ELECTRICITY EXPENSES MISC. EXPENSES ETC. IN OUR CONSIDERED OPINION, MAKING DISALLOWANCE OF 50% OUT OF TOTAL EX PENSES IS EXCESSIVE AND UNREASONABLE FOR THIS REASON ALONE THAT THE ASS ESSEE COULD NOT PRODUCE SUPPORTING BILLS AND VOUCHERS. IN OUR CONS IDERED OPINION, IN SUCH SITUATION, SOME DISALLOWANCE IS JUSTIFIED BUT THAT SHOULD BE REASONABLE. UNDER THE FACTS OF THE PRESENT CASE, WE HOLD THAT 2 5% DISALLOWANCE OUT OF ALL THE EXPENSES EXCLUDING DEPRECIATION IS REASONAB LE. WE HOLD ACCORDINGLY. THE ASSESSING OFFICER IS DIRECTED TO RECOMPUTE THE INCOME IN THE LIGHT OF ABOVE DIRECTIONS. 4. REGARDING THE SECOND ADDITION OF RS.31,000/-, WE FIND THAT IT IS NOTED BY THE ASSESSING OFFICER IN PARA 3.4 OF HIS O RDER THAT OUT OF TOTAL CASH DEPOSIT IN BANK OF RS.81,000/-, THE ASSESSEE C OULD NOT EXPLAIN THE SOURCE OF CASH DEPOSIT AMOUNTING TO RS.31,000/-. I N OUR CONSIDERED OPINION, WHEN WE ARE CONFIRMING PART ADDITION BY WA Y OF MAKING DISALLOWANCE OF EXPENSES WHICH WILL BE MORE THAN TH E AMOUNT OF RS.31,000/-, THE ASSESSEE DESERVES TO GET THE BENEF IT OF TELESCOPING AND 3 THEREFORE, NO SEPARATE ADDITION IN RESPECT OF CASH DEPOSIT IN BANK IS JUSTIFIED. WE, THEREFORE, DELETE THE SAME. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS PARTLY ALLOWED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GAROD IA ) JUDICIAL MEMBER ACCOUNTANT MEMB ER DATED:15/03/2016 *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. REGI STRAR