Akrita Kalra, Chandigarh V. ACIT, Chandigarh

ITA 756/CHANDI/2009

• Counselvise Citation: 75621514 RSA 2009
• Duration Of Justice: 2 year(s) 2 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-10-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 14-07-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: N K SAINI
• Assessee Lawyers: A K SOOD
• Keywords: Depreciation; Condonation of delay

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES A CHANDIGARH BEFORE SHRI H.L.KARWA, HON'BLE, VICE PRESIDENT AND SHRI MEHAR SINGH, ACCOUNTANT MEMBER ITA NO. 756/CHD/2009 ASSESSMENT YEAR: 2006-07 MRS AKRITA KALRA, VS. THE ACIT, CIRCLE 2(1), CHANDIGARH CHANDIGARH PAN NO. ABKPK 0809 L (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI A.K.SOOD RESPONDENT BY : SHRI N.K.SAINI DATE OF HEARING : 03.10.2011 DATE OF PRONOUNCEMENT : 05.10.2011 ORDER PER H.L.KARWA, VP THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF CIT(A), PATIALA DATED 1.4.2009 RELATING TO ASSESSME NT YEAR 2006-07. 2. IT IS OBSERVED THAT THERE IS A DELAY OF THREE DA YS IN FILING THE PRESENT APPEAL. THE ASSESSEE HAS FILED AN APPLICATION FOR CONDONATION OF DELAY STATING THAT THE ASSESSEE WAS AT THAT TIME RESIDING AT DELHI AND DAY TO DAY INCOME TAX AFFAIRS OF THE ASSESSEE WERE BEING LOOKE D AFTER BY SHRI S.K. BANSAL, CHARTERED ACCOUNTANT. ALL THE APPEAL PAPER S WERE FORWARDED BY SHRI S.K. BANSAL, CA TO THE ASSESSEE FOR HER SIGNAT URES AT DELHI. IT IS ALSO STATED THAT THE APPEAL PAPERS WERE RETURNED BACK BY THE ASSESSEE TO SHRI S.K. BANSAL, CA ON 9.7.2009. DURING THAT PERIOD, S HRI S.K. BANSAL CA 2 HAD GONE OUT OF STATION FOR AUDIT AND THE SAID APPE AL PAPERS INADVERTENTLY COULD NOT BE FORWARDED BY SHRI S.K. BANSAL, CA FOR ONWARD SUBMISSION TO THIS TRIBUNAL. IT IS ALSO STATED THAT DELAY IN FIL ING THE APPEAL WAS BECAUSE OF THE REASONS BEYOND THE CONTROL OF THE ASSESSEE A ND DELAY IN FLING THE APPEAL MAY BE CONDONED. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS. THERE IS N O MATERIAL ON RECORD TO CONTROVERT THE ABOVE PLEA OF THE ASSESSEE . WE, THEREFORE, HELD THAT THERE WAS A SUFFICIENT REASON FOR DELAY IN FIL ING THE APPEAL BEFORE THE TRIBUNAL. IT IS WELL SETTLED LAW THAT THE JURISDICT ION TO CONDONE DELAY SHOULD BE EXERCISED LIBERALLY. MATTER RELATING TO CONDONATION OF DELAY SHOULD BE JUDGED BROADLY AND NOT IN A PEDANTIC MANN ER. CONSIDERING THE FACTS OF THE PRESENT CASE AND ALSO THE SETTLED LEGA L POSITION, WE CONDONE THE DELAY AND ADMIT THE APPEAL FOR ADJUDICATION. 4. IN THIS APPEAL, THE ASSESSEE HAS RAISED THE FOLL OWING GROUNDS:- 1. THAT THE ORDERS OF CIT(A) ARE CONTRARY TO LAW AND FACTS OF THE APPELLANTS CASE. 2. THAT THE LD. ASSESSING OFFICER HAS ERRED IN DISA LLOWING 1/3 RD EXPENSES AMOUNTING TO RS. 65,091/- OUT OF TOTAL EXPENDITURE OF RS. 1,95,273/- INCURRED ON FOREIGN TRAVEL BY THE ASSESSEE. 3. THAT THE LD. ASSESSING OFFICER HAS ERRED IN MAKI NG AN ADDITION OF RS. 1,30,050/- ON ACCOUNT OF LOW HOUSEH OLD EXPENSES. 4. THAT THE LD. ASSESSING OFFICER HAS ERRED IN DISA LLOWING 1/5 TH EXPENSE AMOUNTING TO RS. 1,31,921/- OUT OF TOTAL EXPENDITURE OF RS. 6,59,906/- DEBITED IN CONVEYANCE 3 EXPENSES, DIWALI EXPENSES, ENTERTAINMENT & STAFF WELFARE, TELEPHONE EXPENSES, VEHICLE RUNNING EXPENSES AND DEPRECIATION ON CAR. 5. GROUND NO.1 OF THE APPEAL IS GENERAL IN NATURE A ND HENCE NO COMMENTS ARE REQUIRED. 6. AS REGARDS GROUND NO.2 OF THE APPEAL, BRIEF FAC TS AVAILABLE ON RECORD ARE THAT THE ASSESSEE IS ENGAGED IN COACHING STUDENTS IN ENTRANCE EXAMINATIONS OF FOREIGN AND INDIAN UNIVERSITIES. F OR THIS PURPOSE, THE PROPRIETOR (ASSESSEE) HAS TO TRAVEL ABROAD IN CONNE CTION WITH TALK / DISCUSSION IN VARIOUS FOREIGN UNIVERSITIES. DURING THE YEAR UNDER REFERENCE, THE ASSESSEE TRAVELED TO USA AND STAYED WITH HER SISTER. EXPENSES ON ACCOUNT OF AIR TICKET AND FOREIGN EXCHA NGE ENCASHMENT WERE DEBITED IN THE ACCOUNTS. THE ASSESSEE CLAIMED TOT AL FOREIGN TRAVELING EXPENSES AT RS. 1,95,273/-. THE ASSESSING OFFICER DISALLOWED 1/3 RD OF THE EXPENSES STATING THAT NO DETAILS IN REGARD TO WHAT KIND OF BUSINESS ACTIVITIES WERE CARRIED AND DETAILS OF PLACES VISIT ED HAVE BEEN FURNISHED. THE ASSESSEE HAS ALSO NOT FURNISHED COMPLETE DETAIL S OF TRAVELING EXPENSES. HE, THEREFORE, DISALLOWED 1/3 RD OF THE EXPENSES CLAIMED BY THE ASSESSEE. 7. ON APPEAL, THE CIT(A) CONFIRMED THE DISALLOWANCE STATING THAT ASSESSEE HAS NOT FILED DETAILS OF EACH EXPENDITURE ITEM WISE IN THE ABSENCE OF WHICH THE GENUINENESS OF THE CLAIM CANNOT BE VER IFIED. HE, THEREFORE, UPHELD THE ORDER OF ASSESSING OFFICER. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE ALS O PURSUED THE MATERIALS AVAILABLE ON RECORD. IN THIS CASE THE AS SESSEE FAILED TO 4 SUBSTANTIATE THE CLAIM. THE ASSESSEE FAILED TO SHO W THE NATURE OF BUSINESS ACTIVITIES CARRIED OUT AND DETAILS OF PLACES VISITE D. THE ASSESSEE HAS ALSO FAILED TO GIVE REQUIRED DETAILS OF PURPOSE OF TRIPS AND EXPENSES THEREOF. IN THE ABSENCE OF ANY EVIDENCE IN SUPPORT OF THE CLAIM , WE ARE OF THE OPINION THAT CLAIM OF THE ASSESSEE CANNOT BE ALLOWED. WE, THEREFORE, DISMISS GROUND NO.2 OF THE APPEAL. 9. AS REGARDS GROUND NO.3, THE ASSESSING OFFICER AS KED TO ASSESSEE TO FURNISH THE DETAILS OF HOUSE HOLD EXPENSES. THE AS SESSEE HAS SHOWN HOUSEHOLD WITHDRAWALS OF RS. 69,500/- IN THE ENTIRE FINANCIAL YEAR. CONSIDERING THE FACT THAT THE ASSESSEE WAS RESIDING AT DELHI WITH HER FAMILY AND ALSO THE LIFE STYLE OF THE ASSESSEE, TH E ASSESSING OFFICER TREATED THE HOUSE WITHDRAWALS SHOWN BY THE ASSESSEE ON LOWER SIDE. HE, THEREFORE, ESTIMATED THE TOTAL HOUSE HOLD EXPENDI TURE AT RS. 2 LACS FOR THE ENTIRE YEAR AFTER GIVING THE BENEFIT OF RS. 69,500/ -. THE ASSESSING OFFICER ADDED A SUM OF RS. 1,30,050/- ON ACCOUNT OF LOW HOU SE HOLD WITHDRAWALS. 10. ON APPEAL, THE CIT(A) CONFIRMED THE ORDER OF AS SESSING OFFICER AND HENCE THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL . 11. WE HAVE HEARD THE RIVAL SUBMISSIONS. SHRI A.K. SOOD, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSING OFFIC ER HAS NOT CONSIDERED THE REPLY DATED 18.2.2008 FURNISHED BY THE ASSESSEE BEFORE HIM. IN THE SAID REPLY, IT IS STATED THAT THE ASSESSEE IS HAVIN G A SMALL FAMILY CONSISTING OF HERSELF, HER HUSBAND AND TWO SMALL CHILDREN, ONE IS EIGHT YEARS AND ANOTHER IS FOUR YEARS OLD. THE ASSESSEE IS LIVING IN HER OWN HOUSE AND NO RENT IS BEING PAID. HER HUSBAND IS ALSO AN INCOME TAX ASSESSEE AND IS 5 BEING ASSESSED REGULARLY. THE HOUSE HOLD EXPENSES H AVE BEEN SHOWN AS UNDER:- A) AKRITA KALRA (ASSESSEE - RS. 69,500/- B) MR.VINEET GUPTA (HUSBAND OF ASSESSEE) - RS. 2,3 9,000/- TOTAL - RS. 3,08,500/- IT IS STATED THAT THE ASSESSEE HAS ALSO FURNISHED T HE COPY OF THE INCOME TAX RETURN OF SHRI VINEET GUPTA. SHRI A.K.SOOD, LD. C OUNSEL FOR THE ASSESSEE VEHEMENTLY ARGUED THAT CONSIDERING THE SIZE OF THE FAMILY, THE HOUSE HOLD EXPENDITURE ARE QUITE REASONABLE AND JUSTIFIED. I N THIS CASE, THE ASSESSING OFFICER HAS MADE THE ADDITION ON ACCOUNT OF HOUSE HOLD WITHDRAWALS WITHOUT CONSIDERING THE REPLY OF THE AS SESSEE DATED 18.2.2008. THERE IS NO MATERIAL ON RECORD TO CONTR OVERT THE AVERMENTS MADE IN THE ABOVE REPLY. THE ASSESSING OFFICER HAS ALSO NOT GIVEN ANY COGENT REASON WHILE ESTIMATING THE HOUSE HOLD EXPEN SES OF THE ASSESSEE AT RS. 2 LAC PER YEAR. THE ASSESSING OFFICER HAS NOT CONSIDERED THE WITHDRAWALS MADE BY THE HUSBAND OF THE ASSESSEE MR. VINEET GUPTA WHO IS ALSO ASSESSED TO INCOME TAX. THE ASSESSEE HAS ALSO FILED THE COPY OF THE INCOME TAX RETURN OF MR VINEET GUPTA BEFORE THE ASS ESSING OFFICER. IT SEEMS THAT THE ASSESSING OFFICER HAS NOT APPRECIATE D THE FACTS OF THE CASE IN RIGHT PERSPECTIVE AND THE CIT(A) HAS UPHELD THE ORDER OF ASSESSING OFFICER WITHOUT ASSIGNING ANY COGENT REASON. CONSI DERING THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE, WE DELETE THE AD DITION OF RS. 1,30,050/- MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE CIT(A) ON ACCOUNT OF LOW HOUSE HOLD WITHDRAWALS. GROUND NO.3 OF THE AP PEAL STANDS ALLOWED. 12. AS REGARDS GROUND NO.4, THE FACTS NARRATED BY T HE ASSESSING OFFICER ARE THAT THE ASSESSEE CLAIMED CERTAIN EXPENSES UNDE R THE HEAD CONVEYANCE EXPENDITURE, DIWALI EXPENSES, ENTERTAINMENT & S TAFF WELFARE, 6 TELEPHONE EXPENSES, VEHICLE RUNNING EXPENSES AN D DEPRECIATION ON CAR. THE TOTAL SUCH EXPENSES CAME TO RS. 6,59,906 /-. CONSIDERING THE NATURE OF VARIOUS PERSONAL EXPENSES, THE ASSESSING OFFICER DISALLOWED 1/5 TH OF THESE EXPENSES AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE. THE ADDITION ON THIS ACCOUNT CAME TO RS. 1,31,921/-. 13. ON APPEAL, THE CIT(A) CONFIRMED THE SAME AND HE NCE THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 14. WE HAVE HEARD THE RIVAL SUBMISSIONS. SHRI A.K. SOOD, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSING OFFIC ER MADE THE ADHOC ADDITION WITHOUT POINTING OUT ANY SINGLE ITEM OF EX PENSES WHICH WAS OF PERSONAL NATURE. ALTERNATIVELY, SHRI A.K. SOOD, LD . COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE DISALLOWANCE MADE BY TH E ASSESSEE AND CONFIRMED BY THE CIT(A) IS ON HIGHER SIDE. CONSIDE RING THE ENTIRE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE, WE FIND SUB STANCE IN THE ALTERNATIVE CONTENTION OF SHRI A.K. SOOD, LD. COUN SEL FOR THE ASSESSEE. IN OUR VIEW THE DISALLOWANCES MADE BY THE ASSESSING OF FICER UNDER THE ABOVE HEADS ARE ON HIGHER SIDE. WE, THEREFORE, DIRE CT THE ASSESSING OFFICER TO DISALLOW 1/10 TH OF THE ABOVE EXPENSES CLAIMED UNDER THE ABOVE HEADS. THIS GROUND OF APPEAL IS ALLOWED PARTLY. 15. IN THE RESULT, THE APPEAL IS ALLOWED PARTLY. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 5 TH DAY OF OCTOBER, 2011. SD/- SD/- (MEHAR SINGH) (H.L.KARWA) ACCOUNTANT MEMBER VICE PRESIDENT DATED : OCTOBER, 2011 RKK 7 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR