Debasis Samal, Cuttack V. ITO, Ward-2, Paradeep

ITA 75/CTK/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 7162 (ITAT-CUTTACK)
• Duration Of Justice: 1 year(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-03-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 21-03-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 04-03-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: D K PRADHAN
• Assessee Lawyers: P VYAS
• Keywords: Unexplained investment; Depreciation; Unabsorbed depreciation
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK SMC BENCH, CUTTACK BEFORE SHRI N.S SAINI, ACCOUNTANT MEMBER ITA NO.75 /CTK/2016 ASSESSMENT YEAR : 2010 - 2011 DEBASIS SAMAL, C/O. P.VYAS, ADVOCATE, KAZI BAZAR, CUTTACK - 01. VS. ITO, PARADEEP. PAN/GIR NO. APKPS 3108 L (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI P.VYAS, AR REVENUE BY : SHRI D.K.PRADHAN , DR DATE OF HEARING : 21 /03 / 2017 DATE OF PRONOUNCEMENT : 21 /03 / 2017 O R D E R THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT( A) - CUTTACK, DATED 23.12.2015 , FOR THE ASSESSMENT YEAR 2010 - 2011 . 2. THE ASSESSEE HAS TAKEN FOLLOWING GROUNDS OF APPEAL: 1. THAT THE ENTIRE ASSESSMENT ORDER PASSED BY THE ITO U/S.144 IS VITIATED IN LAW AS WELL AS IN FACTS, THEREFORE, NO TENABLE. 2. THAT THERE WAS NO SCOPE FOR PASSING THE ASSESSMENT ORDER U/S.144 OF I.T.ACT WHEN TIME TO TIME COMPLIANCE TO NOTICES HAS BEEN ADMITTED IN ASSESSMENT ORDER. 3. SINCE THE BOOKS OF ACCOUNT LIKE LEDGER A/C, PURCHASE & SALE REGISTERS, WITH SUPPORTING VOUCHERS WERE MAINTAINED IN REGULAR COURSE OF BUSINESS AND WERE DULY AUDITED AS REFLECTED IN AUDIT 2 ITA NO.75/CTK/2016 ASSESSMENT YEAR :2010 - 2011 REPORT U/S.44AB OF I.T.ACT, 1961, THERE WAS NO SCOPE FOR ESTIMATION OF INCOME FROM WORKS CONTRACT @ 8% IN ABSENCE OF ANY DISCREPANCY IN THE ACCOUNTS. 4. THAT THE ADD ITION OF RS.5,91,800/ - BEING THE INVESTMENT IN PURCHASE OF BOLORO VEHICLE AS UNEXPLAINED INVESTMENT U/S.69 OF I.T.ACT BEING CONTRARY TO THE FACTS & ACCOUNTS IS LIABLE TO BE DELETED. 5. THAT THE CLAIM OF DEPRECIATION OF RS.9,94,050/ - IN P&L ACCOUNT ON ACCOU NT OF LOADER USED FOR HIRING ON RENT HAS NOT BEEN CONSIDERED AND ALLOWED WHILE COMPUTING THE TOTAL INCOME WITHOUT ASSESSING ANY REASONS, MAY BE DUE TO MISTAKE HENCE SHOULD BE ALLOWED. 6. THAT A PART OF TDS CLAM HAS NOT BEEN ALLOWED BY THE ASSESSING OFFICER , WHILE COMPUTING TAX PAYMENT UNDER S/L 44 OF COMPUTATION SHEET. 7. THAT, THE CIT(A) HAS NOT CONSIDERED THE WRITTEN SUBMISSIONS FILED BEFORE NOR WITH SUPPORTING DOCUMENTS ON 19.5.2015 AND ON 22.12.2015 ON THE FINDING OF REMAND REPORT AND HAS UNDULY UPHELD THE ESTIMATION OF INCOME ON WORKS CONTRACT @ 8%. ADDITION ON INVESTMENT ON PURCHASE OF BOLERO AT RS.5,89,800/ - AND CLAIM OF DEPRECIATION OF LOADER OF RS.9,94,050/ - WITHOUT DISCUSSION AND MENTIONING HER FINDING ON SUPPORTING DOCUMENTS SUBMITTED BEFORE HER. HENCE, STRONGLY OBJECTED. 8. THAT WHEN UNDER SIMILAR FACTS, THE TRIBUNAL HAS REASONABLY ESTIMATED INCOME FROM WORKS CONTRACT AT 5% TO 6% RELATING TO ASSESSEESS OF SAME LOCALITY AND UNDER SAME GOVERNMENT DEPARTMENT AT THE WORTH THE ESTIMATION SHOULD HAVE B EEN LIMITED TO 6% OF TOTAL WORKS CONTRACT. 9. THAT THE ADDITION ON ACCOUNT OF UNEXPLAINED INVESTMENT IN BOLERO PURCHASE RS.5,89,800/ - LIABLE TO BE DELETED AS DULY EXPLAINED VIDE BANK PASS BOOK AND AFFIDAVIT FILED WITH WRITTEN SUBMISSION DT.19.5.2015. 10. T HAT THE DEPRECIATION OF RS.9,94,050/ - AS CLAIMED ON LOADER AND REFLECTED IN AUDITED P&L ACCOUNT AND BALANCE SHEET LIABLE TO BE ALLOWED, AS NOT CONSIDERED BY THE ITO MAY BE THROUGH OVER SIGHT AS NO REASON HAS BEEN ASSIGNED AND WHEN THE RENTAL INCOME FROM LO ADER AT RS.4,18,711/ - HAS BEEN ACCEPTED IN ASSESSMENT ORDER. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE DID NOT PRODUCE BEFORE THE ASSESSING OFFICER BILLS, VOUCHERS, LEDGER ACCOUNT, CASH BOOK AN D 3 ITA NO.75/CTK/2016 ASSESSMENT YEAR :2010 - 2011 EVIDENCES ON SUNDRY CREDITORS, ETC. INSPITE OF NU MBER OF OPPORTUNITIES ALLOWED TO HIM BY THE ASSESSING OFFICER. THEREFORE, THE ASSESSING OFFICER REJECTED THE BOOK RESULTS OF THE ASSESSEE AND MADE ASSESSMENT UNDER SECTION 144 OF THE ACT ON 30.11.2012 BY DETERMINING THE INCOME BY APPLYING RATE OF 8% TO TH E GROSS BILLS RECEIVED DURING THE YEAR AT RS.42,40,815/ - A ND DETERMINED THE PROFIT AT RS. 3,39,265/ - . THEREAFTER, THE ASSESSING OFF ICER ALSO ADDED RENTAL INCOME FROM LOADER OF RS.4,18,711/ - , UNEXPLAINED INVESTMENT U/S.69 OF RS.5,91,800/ - AND BANK INTEREST OF RS.765/ - AND DETERMINED THE TOTAL INCOME AT RS.13,50,540/ - AND ALLOWED DEDUCTION UNDER CHAPTER VIA OF RS.1,00,000/ - AND DETERMINED THE TOTAL INCOME AT RS.12,50,540/ - . 4. ON APPEAL, THE CIT(A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER. 5. BEFORE ME, THE SUBMISSION OF LD AUTHORISED REPRESENTATIVE OF THE ASSESSEE IS THAT THE ASSESSING OFFICER HAS ASSESSED THE INCOME FROM LOADER OF RS.4,18,711/ - SEPARATELY AFTER DETERMINING THE INCOME FROM GROSS BILLS BY APPLYING RATE OF 8%. HE SUBMITTED T HAT THE RENT AL INCOME OF THE LOADER IS THE GROSS RECEIPT OF THE ASSESSEE. THE ASSESSE HAS CLAIMED DEPRECIATION OF RS.9,94,050/ - ON THE WRITTEN DOWN VALUE OF THE LOADER. THE ASSESSING OFFICER HAS NOT ALLOWED DEDUCTION FOR THE SAME WHILE DETERMINING THE IN COME FROM LOADER. HE ARGUED THAT IF DEPRECIATION ON LOADER IS ALLOWED TO THE ASSESSEE THEN THE ASSESSEE HAS NO GRIEVANCE AGAINST THE ORDER OF THE ASSESSING OFFICER AS WELL AS THAT OF CIT(A). HE ARGUED THAT THE ASSESSING OFFICER HAS DETERMINED THE NET INC OME OF THE ASSESSEE AT RS.12,50,540/ - . 4 ITA NO.75/CTK/2016 ASSESSMENT YEAR :2010 - 2011 THE A SSESSEE HAD SHOWN INCOME OF RS.1 ,96,860/ - . H E SUBMITTED THAT IF DEPRECIATION OF RS.9,94,050/ - IS ALLOWED THEN THE TOTAL INCOME OF THE ASSESSEE WILL BE RS.2,56,490/ - , WHICH WILL BE MORE THAN THE RETURN OF INCOME FILED BY THE ASSESSEE. 6. LD DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDERS OF LOWER AUTHORITIES. 7. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD. I FIND THAT THE ASSESSEE HAD SHOWN RE CEIPT OF RENT FROM LOADER AT RS.4,18,711/ - IN THE PROFIT AND LOSS ACCOUNT AND THE ASSESSING OFFICER AFTER ESTIMATING THE INCOME FROM GROSS BILLS HAS ADDED THE SAME TO THE INCOME OF THE ASSESSEE . THE ASSESSEE HAS FILED COPY OF AUDIT REPORT PLACED AT PAPER BOOK AT PAGES 15 TO 23 AND HAS ALSO FILED DEPRECIATION CHART AT PAGE 7 OF THE PAPER BOOK. FROM THE DEPRECIATION CHART, IT IS SEEN THAT THE ASSESSEE HAS CLAIMED DEPRECIATION ON LOADER AT RS.9,94,050/ - . IN MY CONSIDERED OPINION UNDER THE INCOME TAX ACT, IN COME OF THE ASSESSEE IS CHARGEABLE TO TAX AND NOT THE GROSS RECEIPTS. THE GROSS RECEIPTS FROM LOADER DURING THE YEAR WAS RS.4,18,711/ - AS EVIDENCED BY THE COPY OF PROFIT AND LOSS ACCOUNT FILED BEFORE ME. HENCE, I AM OF THE CONSIDERED OPINION THAT THE ASSESSEE IS ENTITLED TO DEDUCTION OF DEPRECIATION OF RS9,94,050/ - FROM THE RENT OF LOADER OF RS.4,18,711/ - . AFTER DEDUCTING RENT OF LOADER OF RS.4,18,711/ - FROM THE DEPRECIATION OF RS.9,94,050/ - , THERE WILL REMAIN UNABSORBED DEPRECIATION OF RS.5,75,339/ - . THE SAME IS DEDUCTIBLE U/S.70 OF INCOME TAX ACT, FROM THE INCOME 5 ITA NO.75/CTK/2016 ASSESSMENT YEAR :2010 - 2011 DETERMINED FROM GROSS BILLS AT RS.3,39,265/ - AND THE BALANCE AMOUNT OF DEPRECIATION IS ADJUSTABLE AGAINST INCOME FROM OTHER SOURCES OF RS.5,92,565/ - AS PER PROVISIONS O F SECTION 70(1) OF T HE ACT. HENCE, I SET ASIDE THE ORDERS OF LOWER AUTHORITIES AND DIRECT THE ASSESSING OFFICER TO ALLOW DEDUCTION FOR DEPRECIATION OF RS.9,94,050/ - FROM THE RENTAL INCOME OF LOADER TO THE ASSESSEE AND THEREAFTER DETERMINE THE INCOME OF THE ASSESSEE AS PER LA W IN THE LIGHT OF DISCUSSION MADE HEREINABOVE. THUS, THE GROUNDS OF APPEAL OF THE ASSESSEE ARE PARTLY ALLOWED. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRO NOUNCED IN THE OPEN COURT ON 21 /03 /2017 IN THE PRESENCE OF PARTI ES. SD/ - ( N.S SAINI) A CCOUNTANT MEMBER CUTTACK; DATED 21 /03 /2017 B.K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : BY ORDER, SR.PRIVATE SECRETARY ITAT, CUTTACK 1. THE APPELLANT : DEBASIS SAMAL, C/O. P.VYAS, ADVOCATE, KAZI BAZAR, CUTTACK - 01. 2. THE RESPONDENT: ITO, PARADEEP. 3. THE CIT(A) CUTTACK 4. PR.CIT , CUTTACK 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//