SHRI PRADEEP D. JOSHI, MUMBAI V. THE ITO 11(3)(2), MUMBAI

ITA 7584/MUM/2007

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 7805 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 1 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-02-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: K
• Next Hearing Date: 23-12-2009
• Assessment Year: 2003-2004
• Appeal Filed On: 24-12-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANILKUMAR MISHRA
• Assessee Lawyers: PRADEEP JOSHI
• Keywords: Depreciation; Salary income; Set aside
• Section: 2(A)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'K' BENCH, MUMBAI BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER ITA NO. 7584/MUM/2007 (ASSESSMENT YEAR: 2003-04) SHRI PRADEEP D. JOSHI INCOME TAX OFFICER 11(3)(2) 8, MEGHDOOT, 162 MANORAMA MUMBAI NAGARKAR MARG, MAHIM VS. MUMBAI 400016 PAN - AAACPJ 3615 N APPELLANT RESPONDENT APPELLANT BY: SHRI PRADEEP JOSHI RESPONDENT BY: SHRI ANIL KUMAR MISHRA O R D E R PER B. RAMAKOTAIAH, A.M. THIS APPEAL BY THE BY THE ASSESSEE IS AGAINST THE O RDER OF THE CIT(A)- XI, MUMBAI DATED 10.10.2007. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER: - THE CIT(A) ERRED IN 1. NOT APPRECIATING THE FACTS PLACED BEFORE HIM AN D COMING TO A CONCLUSION THAT THE EXPENDITURE INCURRED FOR EARNIN G INCOME FROM PROFESSION IS PERSONAL EXPENDITURE. HE SHOULD HAVE ALLOWED DEDUCTION IN RESPECT OF THE FOLLOWING EXPENSES AGAI NST INCOME FROM PROFESSION - SR. NO. PARTICULARS AMOUNT (RS.) A INTEREST ON VEHICLE LOAN 67,597/- B. VEHICLE EXPENSE 45,246/- C. VEHICLE DEPRECIATION 1,23,432/- D. INTEREST ON BANK OVERDRAFT 9,851/- E. BANK CHARGES 420/- TOTAL 2,46,546/- ITA NO. 7584/MUM/2007 SHRI PRADEEP D. JOSHI 2 ALTERNATIVELY 1(A) DEDUCTION OF RS.10,271/- (INTEREST ON BANK OVE RDRAFT RS.9,851/- AND BANK CHARGES RS.420/-) BE ALLOWED AGAINST INCOM E FROM OTHER SOURCE CONSISTING MAINLY OF BANK INTEREST, INTEREST ON COMPANY AND DIVIDEND. AND (B) DEDUCTION OF RS.2,34,275/- (INTEREST ON VEHICLE LOAN RS.67,597/-. VEHICLE EXPENSE RS.45,246/- AND VEHICLE DEPRECIATIO N RS.1,23,432/-) BE ALLOWED AGAINST INCOME FROM PROFESSION. 2(A) CALCULATING INCOME FROM HOUSE PROPERTY AT NOTI ONAL RATEABLE VALUE OF THE PROPERTY INSTEAD OF THE ACTUAL RENT RECEIVED FROM THE LET OUT PROPERTY. B. WITHOUT APPRECIATING THE FACT THAT THE FLAT AT M UMBAI DEVOLVED ON MY HUF THROUGH MY FATHERS WILL AND HENCE COMING TO AN INCORRECT CONCLUSION THAT I AM NOT ENTITLED TO THE BENEFIT OF SECTION 23(2)(A) IN RESPECT OF THE SELF OCCUPIED PORTION OF MY HOUSE PR OPERTY AT PUNE ON THE GROUND THAT I OWN 2 SELF OCCUPIED PROPERTIES. ALTERNATIVELY 2. NOT GIVING AN OPTION TO CHOOSE A SELF OCCUPIED P ROPERTY IN RESPECT OF WHICH THE BENEFIT OF SECTION 23(4) CAN BE EXERCISED . 3. THE ASSESSEE IS A CHARTERED ACCOUNTANT BY PROFESSIO N AND PARTNER IN TWO FIRMS, M/S. KULKARNI AND KHANOLKAR AND M/S. JOS HI AND PARBEKAR. HE RETURNED SALARY INCOME OF RS.90,089/- FROM R.A. POD DAR COLLEGE, HOUSE PROPERTY LOSS RS.27,217/-, INTEREST AND REMUNERATIO N FROM FIRMS AND SHARE OF PROFIT FROM FIRMS. THE A.O. DISALLOWED THE EXPEN DITURE CLAIMED IN GROUND NO. 1 AND ALSO TREATED THE PROPERTY AT PUNE AS UNDE R SELF OCCUPATION AND ESTIMATED THE INCOME THEREBY MAKING ADDITIONS. THE CIT(A) CONFIRMED THE SAME, HENCE THE ABOVE TWO GROUNDS. 4. THE ASSESSEE IN PERSON APPEARED AND EXPLAINED THE N ATURE OF HIS PROFESSION, THE NEED FOR SPENDING ON THE VEHICLE FO R PROFESSIONAL PURPOSES AND ALSO EXPLAINED THAT HE HAD RECEIVED RS.8,000/- AND RS.5,000/- P.M. FROM THE FIRMS AS REIMBURSEMENT OF CONVEYANCE EXPEN SES TOTALLING TO RS.1,56,000/- WHICH WAS SPENT ON THE SAME. A DETAI LED NOTE WAS FURNISHED AND SUBMITTED THAT THE REIMBURSEMENT TOWARDS EXPEND ITURE WAS IN CASH AND THE SAME WAS NOT EXPLAINED TO THE A.O. FURTHER WITH REFERENCE TO THE CONTENTION THAT THE MUMBAI PROPERTY IS OF HUF AND P UNE PROPERTY WAS SELF OCCUPIED, HE SUBMITTED THAT THE ORIGINAL WILL OF HI S FATHER WAS NOT LOCATED ITA NO. 7584/MUM/2007 SHRI PRADEEP D. JOSHI 3 AND COULD NOT BE SUBMITTED TO THE AUTHORITIES AND T HE COPY OF THE SAME WAS FILED AS ADDITIONAL EVIDENCE. HE ALSO SUBMITTED THA T THE CIT(A) HAS NOT GIVEN DUE CREDIT TO THE AFFIDAVIT FILED BEFORE HIM IN THE ABSENCE OF THE WILL. 5. THE LEARNED D.R., HOWEVER, RELIED ON THE ORDERS OF THE A.O. AND THE CIT(A) AND SUBMITTED THAT THERE IS NO EVIDENCE TO A CCEPT THE ASSESSEES CONTENTIONS. 6. WE HAVE CONSIDERED THE ISSUE AND PERUSED THE PAPER BOOK FIELD INCLUDING THE ADDITIONAL EVIDENCE. THE WILL COPY FI LED INDICATE THAT THE PROPERTY IN MUMBAI WAS DEVOLVED ON ASSESSEE HUF BUT THE SAME WAS NOT EXAMINED BY THE A.O. THERE ARE OTHER ASSETS ALSO WH ICH ARE WILLED TO VARIOUS PERSONS. THE VERACITY OF THE WILL AND DISTRIBUTION OF THE ASSETS SHOULD BE VERIFIED BY THE A.O. IF ANY OF THE PROPERTIES WERE TAKEN INTO INDIVIDUAL HANDS THAT MAY INDICATE THE INTENTION OF PERSON WHETHER P ROPERTY IS IN INDIVIDUAL STATUS OR HUF STATUS. IN THE CASH FLOW STATEMENT FI LED BEFORE US, THE ASSESSEE CLAIMED SOCIETY CHARGES OF RS.9,193/- BUT THERE IS NO INDICATION WHETHER THIS PERTAINS TO MUMBAI PROPERTY OR PUNE PR OPERTY. THESE REQUIRE EXAMINATION. FURTHER WITH REFERENCE TO THE CLAIM OF EXPENDITURE ON QUALIS, THE EXPENDITURE OF RS.45,246/- WAS CLAIMED AGAINST QUALIS VEHICLE STATED TO BE USED FOR PROFESSION WHEREAS THE SAME ARE LISTED AS EXPENDITURE ON MARUTI INCLUDING INSURANCE AND DEPRECIATION IN TH E ASSESSMENT ORDER AT PAGE 2. THE NATURE OF THE EXPENDITURE HAS TO BE EXA MINED. THE FACT THAT THE ASSESSEE HAS RECEIVED REIMBURSEMENT OF CONVEYANCE E XPENSES WAS NOT BEFORE THE AO. THE ASSESSEE ALSO HAD SHARE OF PROFI T FROM THE FIRMS. SINCE THE A.O. HAD NO OCCASION TO EXAMINE VARIOUS ASPECTS AND AS THE ASSESSEE HAS BROUGHT THE WILL AS ADDITIONAL EVIDENCE NOW AND FURTHER EXPLAINED THAT HE WAS ALSO IN RECEIPT OF CONVEYANCE REIMBURSEMENT UPTO RS.1,56,000/- WE ARE OF THE OPINION THAT THESE MATTERS CAN BE EXAMIN ED BY THE A.O. AFRESH AFTER GIVING DUE OPPORTUNITY TO THE ASSESSEE IN SUP PORTING VARIOUS CLAIMS AND ALSO SUPPORTING VARIOUS ALTERNATE CONTENTIONS R AISED IN THE GROUNDS. FOR THIS PURPOSE, THE ORDERS OF THE A.O. AND CIT(A) ARE SET ASIDE AND THE ASSESSMENT IS RESTORED TO THE FILE OF THE A.O. TO D O IT AFRESH AFTER EXAMINING THE FACTS AND ACCORDING TO LAW. ITA NO. 7584/MUM/2007 SHRI PRADEEP D. JOSHI 4 7. IN THE RESULT, APPEAL IS TREATED AS ALLOWED FOR STA TISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 16 TH FEBRUARY 2010. SD/- SD/- (P. MADHAVI DEVI) (B. RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 16 TH FEBRUARY 2010 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) XI, MUMBAI 4. THE CIT XI, MUMBAI CITY 5. THE DR, K BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.