M/s Hotel New Kenilworth International, Kullu V. ITO, Kullu

ITA 752/CHANDI/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 4986 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-05-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2006-2007
• Appeal Filed On: 28-04-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SURINDER MEENA
• Assessee Lawyers: R R THAKUR
• Keywords: Depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCHSMD, CHANDIGARH BEFORE SMT. DIVA SINGH, JUDICIAL MEMBER AND DR. B.R.R. KUMAR, ACCOUNTANT MEMBER ITA NO.752/CHD/2017 ASSESSMENT YEAR: 2006-07 HOTEL NEW KENILWORTH INTERNATIONAL VS. THE ITO MANALI, DIST. KULLU KULLU HIMACHAL PRADESH HIMACHAL PRADESH PAN NO. AABFH4479B (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI. R.R. THAKUR REVENUE BY : SHRI. SURINDER MEENA DATE OF HEARING : 22/05/2018 DATE OF PRONOUNCEMENT : 25/05/2018 ORDER PER DR. B.R.R. KUMAR: THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE A GAINST THE ORDER OF THE LD. CIT(A)-1, AMRITSAR (CAMP AT PALAMPUR) H.P. 2. IN THE PRESENT APPEAL ASSESSEE HAS RAISED THE FO LLOWING GROUNDS: 1. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS )-1 AMRITSAR CAMP AT PALAMPUR HAS WRONGLY DECIDED THE APPEAL OF THE APPELLANT WITHOUT GOING THROUGH THE CIRCUMSTANCES O F THE CASE. 2. THAT THE COMMISSIONER OF INCOME TAX (APPEALS)-1 AMRITSAR CAMP AT PALAMPUR HAS WRONGLY CONFIRMED THE ADDITION OF RS. 5,00.000/- STATED TO HAVE BEEN RETURNED TO THE CRED ITOR SH. DEVI RAM WHEREAS THE CREDIT HAS NOT BEEN RETURNED. THE A DDITION IS LIKELY TO BE DELETED. 3. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS )-1 AMRITSAR CAMP AT PALAMPUR HAS WRONGLY CONFIRMED THE ADDITION OF RS. 4,50.000/- STATED TO HAVE BEEN RETURNED TO THE CREDITOR SH. DILE RAM AND DEPOSITED IN BANK ACCOUNT OF SH. DILE RAM B Y SH. NEEL CHAND. THE ADDITION IS LIKELY TO BE DELETED. 4. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS )-1 AMRITSAR CAMP AT PALAMPUR HAS WRONGLY CONFIRM ED THE ADDITION OF RS. 24,898/- ON ACCOUNT OF DEPRECIATION OF VEHIC LE FOR PERSONAL USE. THERE IS NO PERSONAL USE OF VEHICLES BY THE AP PELLANT. THE ADDITION MAY KINDLY BE DELETED. 2 5. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS )-1 AMRITSAR CAMP AT PALAMPUR HAS WRONGLY CONFIRMED THE ADDITION OF RS. 10,448/- OUT OF TELEPHONE EXPENSES FOR PERSONAL USE . 3. GROUND NO. 2 & 3 RELATE TO LOANS: 3.1 BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE T OOK LOAN FROM HIS RELATIVE AT THE TIME OF SET UP OF BUSINESS. THE FIR M TOOK LOAN OF RS. 5,00,000/- FROM SH. DEVI RAM 7,00,000/- FROM SH. DI LE RAM. THE CREDITWORTHINESS WAS PROVED BEFORE THE LD. ASSESSIN G OFFICER. THE INCOME TAX OFFICER RECORDED THE STATEMENT OF THE CR EDITORS IN THE ABSENCE OF THE ASSESSEE IN THEIR VILLAGES WHO HAD N O KNOWLEDGE OF DATES OF GIVING AND RECEIVING BACK OF THE LOAN. LAT ER ON THE CREDITORS WERE PRODUCED BEFORE THE INCOME TAX OFFIC ER WHO CONFIRMED THE TRANSACTIONS ENTERED WITH THE ASSESSE E. IT HAS BEEN STATED THAT THE CREDITORS CHANGED STATEMENT AT THE INSTANCE OF THE ASSESSEE. THE COMMISSIONER OF INCOME TAX (APPEALS)- 1 AMRITSAR CAMP PALAMPUR HAS DISMISSED THE GROUND OF APPEAL TA KEN BY THE ASSESSEE. 3.2 DURING THE HEARING BEFORE US, IT WAS BROUGHT TO OUR NOTICE THAT CONFUSION PREVAILED AMONG THE ASSESSEE AND LOAN PAR TY AS THE LOANS WERE RECEIVED AS FIRM AND ALSO AN INDIVIDUAL. THE L OAN PARTY COULD NOT DIFFERENTIATE BETWEEN THE LOANS GIVEN FOR TWO E NTITIES, 1. AS THE PERSON RECEIVED LOAN AS INDIVIDUAL AND 2. AS PARTNE R OF THE FIRM IS SAME. WE ALSO FOUND THAT THE LOAN PARTIES ARE VILLA GERS WHO MAY NOT CERTAINLY HAVE KNOWLEDGE ABOUT PROCEDURES OF RECORD ING OF TREATMENT. 3.3 HENCE, TO DECIDE THE MATTER BASED ON THE DOCUME NTS, REPLIES OF THE ASSESSEE JUXTAPOSING THEM AGAINST THE TWO ST ATEMENTS RECORDED PERTAINING TO TWO DIFFERENT LOANS AND TO E XAMINE THE VERACITY AND ACCEPTABILITY OF THE SECOND STATEMENT BACKED UP BY DOCUMENTS, WE HEREBY FEEL IT FIT TO REMAND THE MATT ER BACK TO THE FILE OF ASSESSING OFFICER TO ADJUDICATE AFRESH ON T HIS ISSUE. 3 4. GROUND NO. 4 & 5 RELATE TO DISALLOWANCE OF CAR A ND TELEPHONE EXPENSES: 4.1 THE ASSESSING OFFICER DISALLOWED DEPRECIATION O N VEHICLE ON THE FIRM BELIEF THAT THE USE OF VEHICLE BY PARTNERS OF THE FIRM AND THEIR FRIENDS AND EMPLOYEES (AO PARA -4) WITHOUT ANY BASI S. SIMILARLY TELEPHONE EXPENSES WERE DISALLOWED AS NO REGISTER F OR CALLS HAS BEEN MAINTAINED. 4.2 WE HAVE GONE THROUGH THE MATERIAL AVAILABLE ON RECORD AND FIND THAT NO DISALLOWANCE IS CALLED FOR ON ASSUMPTI ON BASIS FOR EXPENSES ON VEHICLE USE BY THE PARTNERS AND THEIR F RIENDS. SIMILARLY THE TELEPHONE EXPENSES CANNOT BE DISALLOWED FOR THE SIMPLE REASON THAT THE ASSESSEE HAS NOT MAINTAINED CALL REGISTER WHICH IN THE PRESENT BASE IS HIGHLY IMPOSSIBLE TO MAINTAIN ONE S UCH. THE ASSESSING OFFICER HAS NOT BROUGHT ANY MATERIAL ON RECORD TO H OW THAT THE ASSESSEE IS HAVING ONLY ONE TELEPHONE CONNECTION AN D THE SAME IS BEING USED FOR PERSONAL PURPOSE. HENCE, THE DISALL OWANCE MADE BY THE ASSESSING OFFICER IS HEREBY DELETED. 4.3 AS A RESULT, APPEAL OF THE ASSESSEE IS PARTLY A LLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (DIVA SINGH) (DR. B.R.R. KUMAR ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 25/05/2018 AG COPY TO: 1.THE APPELLANT, 2. THE RESPONDENT, 3. THE CIT(A), 4. THE CIT, 5. THE DR