Shri Vijay Kumar Mittal, P/o. M/s. V.P. Metallica, Ujjain V. Dy. C.I.T., Ujjain

ITA 76/IND/2010

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 2803 (ITAT-INDORE)
• Duration Of Justice: 3 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-06-2010
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2004-2005
• Appeal Filed On: 16-02-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: APARNA KARAN
• Assessee Lawyers: S S DESHPANDE
• Keywords: Depreciation; Loose papers
• Section: 133A

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI V.K. GUPTA, ACCOUNTANT MEMBER ITA NO.76/IND/2010 A.Y. - 2004-05 VIJAY KUMAR MITTAL, PROP. M/S. V.P. METALLICA, PAN ACFPM 5601 E C/O GOYAL & CO., TAX CONSULTANTS, 1 ST FLOOR, LM COMPLEX, TOWER CHOWK, UJJAIN (MP) APPELLANT VS DEPUTY COMMISSIONER OF INCOME TAX 1(1), UJJAIN RESPONDENT APPELLANT BY : SHRI S.S. DESHPANDE, CA RESPONDENTS BY : SMT. APARNA KARAN, SR. DR O R D E R PER JOGINDER SINGH, JUDICIAL MEMBER THIS APPEAL IS BY THE ASSESSEE AGAINST THE ORDER OF THE LEARNED CIT(A)-UJJAIN, DATED 25.11.2009 ON THE FOLLOWING GR OUNDS: 1. BECAUSE THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN RETAINING AN ADDITION OF 2 RS.1,00,000/- IN THE TRADING ACCOUNT ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. BECAUSE THE DISALLOWANCE OUT OF TELEPHONE AND CAR EXPENSES CONFIRMED BY LD. CIT(A) @20% AT RS.11,402/- FOR PERSONAL USE IS HIGHLY EXCESSIVE ON THE FACTS OF THE CASE. THE CAR IS A COMMERCIAL VEHICLE USE FOR TRANSPORTATION IN THE BUSINESS. 3. BECAUSE THE DISALLOWANCE OUT OF DEPRECIATION ON COMMERCIAL VEHICLE (MAHINDRA) AT RS.12,833/- IS UNCALLED FOR ON THE FACTS OF THE CASE. 4. BECAUSE THE INTEREST CHARGED MAY KINDLY BE MODIFIED ON REDUCTION GRANTED IN APPEAL. 2. DURING THE HEARING OF THIS APPEAL, LD. COUNSEL F OR THE ASSESSEE CONTENDED THAT THE DELAY OF ONE DAY MAY BE CONDONED AS THERE WAS MARRIAGE CEREMONY OF HIS SON NAMELY, SHRI AJAY MITT AL. THE LD. SR. DR ALSO HAD NO OBJECTION IF DELAY OF ONE DAY IS CONDON ED. KEEPING IN VIEW THE REASONS STATED IN THE CONDONATION PETITION, THE DELAY IS CONDONED. 3. THE FIRST GROUND RAISED PERTAINS TO RETAINING TH E ADDITION OF RS.1 LAC IN THE TRADING ACCOUNT. THE ASSERTION ON BEHALF OF THE ASSESSEE IS THAT THE ASSESSEE WAS ENGAGED IN MANUFACTURING ON NON FE RROUS METAL, UTENSILS AND CIRCLES ETC. A SURVEY U/S 133A WAS CON DUCTED ON 17.10.2003 AND THE ASSESSEE SURRENDERED RS.23,34,95 4/- ON ACCOUNT OF STOCK ON LOOSE PAPERS, CASH IN HAND ETC. AND THE SA ME WAS ACCEPTED BY THE DEPARTMENT. IT WAS CONTENDED THAT THE LUMP SUM ADDITION OF RS.1 LAC IS NOT JUSTIFIED AS DURING POST SURVEY PERIOD, THE G.P. IS MUCH HIGHER. THE LD. SR. DR THOUGH DEFENDED THE ASSESSMENT ORDER BUT DID NOT CONTROVERT THE FACTUAL MATRIX THAT THE G.P. WAS MUCH HIGHER AF TER THE DATE OF SURVEY. 3 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF LD. REPRESENTATIVES OF BOTH SIDES AND PERUSED THE MATERIAL AVAILABLE ON RE CORD. ADMITTEDLY, THE SURRENDERED INCOME INCLUDES STOCK OF RS.7,73,826/-, CASH OF RS.12,50,000/-, RS.1,29,981/- ON ACCOUNT OF LOOSE P APERS AND RS.1,80,000/- FOR PURCHASES (TOTAL RS.23,34,953/-). THE SURRENDERED AMOUNT WAS ALSO ACCEPTED BY THE DEPARTMENT BUT STIL L, THE LD. ASSESSING OFFICER MADE A LUMP SUM ADDITION OF RS.1,50,000/- O N ACCOUNT OF UNVERIFIABLE PURCHASES, WHICH WAS RESTRICTED TO RS. 1 LAC BY THE LD. CIT(A). THIS IS ALSO AN UNCONTROVERTED FACT THAT BE FORE SURVEY, THE G.P. WAS 19% WHEREAS DURING POST SURVEY PERIOD, IT WAS 2 4.37%. EVEN OTHERWISE, THE ADDITION WAS MADE ON LUMP SUM BASIS, WHICH IN OUR VIEW, IS WITHOUT ANY BASIS. THE SURRENDERED OF RS.23,34,9 53/- WAS MADE BY THE ASSESSEE UNDER DIFFERENT COUNTS WHICH INCLUDES RS.1,80,000/- FOR UNVERIFIABLE PURCHASES, THEREFORE, THE LUMP SUM ADD ITION CANNOT BE SAID TO BE JUSTIFIED. THE DECISION IN AJIT KUMAR JAIN VS . ITO (1 ITJ 662) (INDORE) AND M/S. BRIJMOHAN DAS DEVI VS. ACIT (8 IT J 391) (INDORE) FORTIFY THE CASE OF THE ASSESSEE. IN VIEW OF THESE FACTS, THERE IS NO JUSTIFICATION FOR MAKING FURTHER DISALLOWANCE, CONS EQUENTLY, THIS GROUND OF THE ASSESSEE IS ALLOWED. 5. THE NEXT GROUND PERTAINS TO CONFIRMING 20% DISAL LOWANCE MADE OUT OF TELEPHONE AND CAR EXPENSES. IT WAS PLEADED T HAT THE CAR WAS USED FOR COMMERCIAL PURPOSES AND FURTHER USED FOR TRANSP ORTATION IN THE 4 BUSINESS. IT WAS PLEADED THAT IT MAY BE RESTRICTED TO A REASONABLE LIMIT. ON THE OTHER HAND, THE LD. SR. DR DEFENDED THE ADDI TION. KEEPING IN VIEW THE TOTALITY OF THE CIRCUMSTANCES AND THE FACTS, TH E DISALLOWANCE IS RESTRICTED TO 10% IN PLACE OF 20% SUSTAINED BY THE LD. CIT(A), CONSEQUENTLY, THIS GROUND OF THE ASSESSEE IS PARTLY ALLOWED. 6. THE NEXT GROUND PERTAINS TO DISALLOWANCE OF DEPR ECIATION ON COMMERCIAL VEHICLE AT RS.12,833/-. AFTER HEARING TH E RIVAL SUBMISSIONS AND THE FACT THAT THE VEHICLE WAS USED FOR TRANSPOR TATION OF GOODS AS WELL AS KARIGARS AND ALSO THAT PERSONAL USE CANNOT BE RU LED OUT, THE DISALLOWANCE IS RESTRICTED TO 10% IN PLACE OF 20% S USTAINED BY THE LD. CIT(A), THEREFORE, THIS GROUND IS ALSO PARTLY ALLOW ED. 7. SINCE THE IMPUGNED ORDER HAS BEEN SUBSTANTIALLY MODIFIED, THEREFORE, CHARGING OF INTEREST WILL BE CONSEQUENTI AL IN NATURE. THE LD. ASSESSING OFFICER IS DIRECTED ACCORDINGLY. FINALLY, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOW ED. ORDER PRONOUNCED IN OPEN COURT IN THE PRESENCE OF L EARNED REPRESENTATIVES OF BOTH THE SIDES AT THE CONCLUSION OF HEARING ON 15 TH JUNE, 2010. (V.K. GUPTA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 15.6.2010 COPY TO: APPELLANT, RESPONDENT, CIT, CIT(A), DR, G UARD FILE !VYAS!