Puneet Nanda, Chandigarh V. DCIT, Chandigarh

ITA 783/CHANDI/2008

• Counselvise Citation: 78321514 RSA 2008
• Duration Of Justice: 7 year(s) 1 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-10-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2003-2004
• Appeal Filed On: 29-08-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K MITTAL
• Assessee Lawyers: PARIKSHIT AGGARWAL
• Keywords: Depreciation
• Section: 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE SHRI H.L.KARWA, VICE PRESIDENT AND MS. RANO JAIN, ACCOUNTANT MEMBER ITA NO.783/CHD/2008 ( ASSESSMENT YEAR : 2003-04) M/S PUNEET NANDA, VS. THE D.C.I.T., H.NO.2208, SECTOR 15C, CIRCLE 2(1), CHANDIGARH. CHANDIGARH. PAN: ABWPN0521E (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI PARIKSHIT AGGARWAL RESPONDENT BY : SHRI S.K. MITTAL, DR DATE OF HEARING : 28.09.2015 DATE OF PRONOUNCEMENT : .10.2015 O R D E R PER RANO JAIN, A.M . : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS), CHANDIGARH DATED 27.6.2008. 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE RE AD AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE WORTHY CIT(A) IN APPEAL NO. 252/P/05-06 THR OUGH HIS ORDER DATED 27.06.2008 HAS ERRED IN PASSING THAT OR DER IN CONTRAVENTION OF THE PROVISIONS OF SECTION 250(6) O F THE INCOME TAX ACT, 1961. 2 2. THAT ON FACTS, CIRCUMSTANCES AND LEGAL POSITION OF THE CASE, THE WORTHY CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS. 7,50,000/- TOWARDS THE INCOME SURRENDERED U/S 1 33A OF THE INCOME TAX ACT EVEN WHEN NO INCRIMINATING DOCUM ENT OR INFORMATION WAS FOUND DURING THE SURVEY AND THE AMO UNT SURRENDERED WAS ON ACCOUNT OF CONCESSION TO FILE RE TURN FOR MINIMUM AMOUNT OF RS. 7,50,000/- WHICH WAS INFACT F ILED BY THE APPELLANT. 3. THAT ON FACTS, CIRCUMSTANCES AND LEGAL POSITION OF THE CASE, THE WORTHY CIT(A) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF FOLLOWING EXPENSES DEBITED TO P&L A/C CLAIMED AGAINS T INCOME EARNED BY THE APPELLANT: ( I) SALARY TO ANKUSH KAUSHIK RS. 55,700/- (II) DEPRECIATION ON CAR RS. 34,460/- (III)TELEPHONE EXPS. RS. 10,719/- (IV)BUSINESS PROMOTION/MEETING EXPS. RS. 5,555/- TOTAL RS. 1,06,434 /- 4. THAT ON FACTS, CIRCUMSTANCES AND LEGAL POSITION OF THE CASE, THE WORTHY CIT(A) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF INTEREST OF RS. 88,443/- ON ACCOUNT OF HOUSING LO AN RAISED BY THE APPELLANT. 5. THAT ON FACTS, CIRCUMSTANCES AND LEGAL POSITION OF THE CASE, THE WORTHY CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS. 80,520/- BY CONSIDERING THE AGRICULTURAL INCOME AS BOGUS AND TREATING THE SAME UNDER THE HEAD OTHER SOURCES EVEN WHEN THE APPELLANT WAS CO-OWNER (L/3 RD SHARE) OF AGRICULTURAL LAND OF FAMILY, THE AGRICULTURAL INCOM E WAS NOT BOGUS AND NO CAPITAL FORMATION WAS MADE FROM TH E SAID INCOME. 6. THAT THE APPELLANT CRAVES LEAVE TO AMEND, ALTER OR ADD TO THE ABOVE GROUNDS OF APPEAL, BEFORE .THE APP EAL IS HEARD AND DISPOSED OFF. 3 3. BRIEFLY, THE FACTS OF THE CASE ARE THAT A SUREY WAS CONDUCTED UNDER SECTION 133A OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) ON 28.2.2003 AT THE BUSINESS PREMI SES OF M/S COSSETS MARKETING PVT. LTD. THE ASSESSEE WAS THE MANAGING DIRECTOR OF THIS COMPANY. DURING THE COURSE OF SU RVEY, SHRI ROHIT NANDA, FINANCIAL ADVISOR OF THE COMPANY, VIDE LETTER DATED 12.3.2003 AGREED TO A DISCLOSURE OF RS.7,50,0 00/- IN THE NAME OF SHRI PUNEET NANDA, THE PRESENT ASSESSEE. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, VARIOUS OPPOR TUNITIES WERE PROVIDED TO THE ASSESSEE, WHICH HE DID NOT AVA IL AND IN THE ABSENCE OF ANY MATERIAL OR EVIDENCE BEFORE THE ASSESSING OFFICER, THE ASSESSING OFFICER MADE ASSESSMENT AT A N INCOME OF RS.21,38,621/- AS AGAINST THE TOTAL INCOME OF RS.11,87,423/-, WHICH INCLUDED AGRICULTURAL INCOME AMOUNTING TO RS.80,520/- DECLARED BY THE ASSESSEE. AN ADDITION OF RS.7,50,000/- WAS MADE BY THE ASSESSING OFFICER ON ACCOUNT OF SURRENDER MADE DURING THE COURSE OF S URVEY, WHICH WAS NOT DISCLOSED IN THE RETURN OF INCOME. FURTHER A DISALLOWANCE OF RS.2,01,198/- WAS MADE ON ACCOUNT O F FOLLOWING EXPENSES : I) INTEREST RS.94,725/- II) SALARY, WAGES AND STAFF WELFARE RS.55,700/- III) DEPRECIATION RS.34,460/- IV) TELEPHONE EXPENSES RS.10,719/- V) BUSINESS PROMOTION AND MEETINGS RS. 5,554/- RS.2,01,198/- 4 4. THIS DISALLOWANCE WAS MADE ON THE BASIS THAT TH E ASSESSEE HAD NOT PRODUCED ANY BOOKS OF ACCOUNT, BIL LS OR VOUCHERS. SINCE THE ASSESSEE IS AN INDIVIDUAL REC EIVING INCOME BY WAY OF SALARY, COMMISSION, INTEREST, ETC. , IT IS VERY DIFFICULT TO BELIEVE THAT IN THE NORMAL COURSE, THE ASSESSEE COULD BE REQUIRED TO INCUR THESE KIND OF EXPENSES. THE AGRICULTURAL INCOME OF RS.80,520/- SHOWN BY THE ASS ESSEE IN HIS RETURN OF INCOME WAS ALSO DISALLOWED AS NO DETA ILS OF THIS AGRICULTURAL INCOME WERE PROVIDED TO THE ASSESSING OFFICER. 5. AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER , THE ASSESSEE WENT IN APPEAL BEFORE THE LEARNED CIT (APP EALS) CHALLENGING ALL THE ADDITIONS AND DISALLOWANCES MAD E BY THE ASSESSING OFFICER. DURING THE COURSE OF APPELLATE PROCEEDINGS, THE LEARNED CIT (APPEALS) CALLED FOR A REMAND REPORT FROM THE ASSESSING OFFICER ON VARIOUS PLEAS TAKEN BY THE ASSESSEE. HOWEVER, AFTER CONSIDERING ALL THE MATERIAL, THE LEARNED CIT (APPEALS) DISMISSED THE APPEAL OF THE A SSESSEE. 6. AGGRIEVED BY THE SAID ORDER OF THE LEARNED CIT (APPEALS), THE ASSESSEE HAS COME UP IN APPEAL BEFOR E US. AS REGARDS THE GROUND OF ADDITION OF RS.7,50,000/- ON ACCOUNT OF DISCLOSURE MADE DURING THE COURSE OF SURVEY, THE LE ARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE SURREND ER SO MADE DURING THE COURSE OF SURVEY HAS BEEN DULY DISC LOSED IN THE RETURN OF INCOME. AS REGARDS THE DISALLOWANCE OF EXPENSES, THE SUBMISSIONS MADE BEFORE THE LEARNED C IT (APPEALS) WERE REITERATED BEFORE US. REGARDING THE AGRICULTURAL INCOME, IT WAS SUBMITTED THAT THE AGRI CULTURAL 5 LAND STANDS IN THE NAME OF THE FATHER OF THE ASSESS EE. THE ASSESSEE IS A MEMBER OF HUF AND HAS GOT AN AMOUNT O F RS.80,550/- AS HIS SHARE IN THE AGRICULTURAL INCOME OF THE FAMILY. 7. THE LEARNED D.R. RELIED UPON THE ORDER OF THE ASSESSING OFFICER AS WELL AS OF THE LEARNED CIT (AP PEALS). 8. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF BO TH THE PARTIES, PERUSED THE FINDINGS OF THE AUTHORITIE S BELOW AND CONSIDERED THE MATERIAL AVAILABLE ON RECORD. IT I S SEEN THAT THE DISCLOSURE OF SURRENDER WAS MADE DURING THE COU RSE OF SURVEY. FROM THE PERUSAL OF THE COPY OF RETURN F ILED FOR THE RELEVANT ASSESSMENT YEAR AFTER THE SURVEY, WE SEE T HAT THE ASSESSEE HAS SHOWN INCENTIVE AND COMMISSION INCOME AMOUNTING TO RS.6,60,200/-, BANK INTEREST AMOUNTING TO RS.43,561/-, SALARY RS.3,76,000/- AND INCOME FROM M EETINGS AMOUNTING TO RS.2,40,300/-. AS AGAINST THESE INCOM ES, EXPENSES AMOUNTING TO RS.2,01,158/- HAVE BEEN CLAIM ED SHOWING NET PROFIT OF RS.11,18,903/-. NO AMOUNT O F INCOME SURRENDERED DURING THE COURSE OF SURVEY HAS BEEN SH OWN SEPARATELY. THE PLEA OF THE LEARNED COUNSEL FOR T HE ASSESSEE IS THAT IN COMPARISON TO THE EARLIER YEAR I.E. ASSE SSMENT YEAR 2002-03, A COPY OF THE PROFIT & LOSS ACCOUNT OF WHI CH HAS ALSO BEEN ENCLOSED IN THE PAPER BOOK, THERE IS AN I NCREASE OF RS.7,75,445/- IN THE TOTAL INCOME OF THE ASSESSEE. THEREFORE, THE SURRENDER MADE DURING THE SURVEY HAS DULY BEEN INCORPORATED UNDER VARIOUS HEADS. HOWEVER, WE SEE FROM THE PERUSAL OF THE ORDERS OF THE LOWER AUTHORITIES THAT NEITHER THE 6 ASSESSING OFFICER, NOR THE LEARNED CIT (APPEALS) HA S CONSIDERED THE ISSUE OF DISCLOSURE OF SURRENDERED I NCOME IN SUCH PERSPECTIVE. NOWHERE THE FINDING HAS BEEN RE CORDED WHETHER THE SURRENDERED INCOME IS EMBEDDED IN VARIO US HEADS OF INCOME DISCLOSED BY THE ASSESSEE. FURTHER, AS REGARDS THE DISALLOWANCE OF EXPENSES, THE LEARNED CIT (APPEALS ) AS WELL AS THE ASSESSING OFFICER IN THE ASSESSMENT PROCEEDINGS HAS NOT COMMENTED WHETHER THESE EXPENSES ARE ALLOWABLE AGAI NST THE HEADS OF INCOME SO DECLARED BY THE ASSESSEE. IN O RDER TO ASCERTAIN ALL THESE ASPECTS OF THE CASE, WE RESTORE THE ISSUES TO THE FILE OF THE ASSESSING OFFICER TO RECONSIDER ALL THESE AS PER THE SUBMISSIONS AND MATERIAL BROUGHT ON RECORD BY THE ASSESSEE. THE ISSUE IS TO BE LIMITED TO THE ADDIT IONS AND DISALLOWANCES MADE IN THE ORIGINAL ASSESSMENT ONLY AND THE ASSESSEE IS FREE TO BRING ON RECORD ANY MATERIAL OR EVIDENCE AS HE THINKS PROPER TO DEFEND HIS CASE INCLUDING THAT RELATING TO AGRICULTURAL INCOME. THEREFORE, IN VIEW OF THE A BOVE, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR ALLOWED FOR S TATISTICAL PURPOSES. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 28 TH DAY OF OCTOBER, 2015. SD/- SD/- (H.L.KARWA) (RANO JAIN) VICE PRESIDENT ACOUNTANT MEMBER DATED : 28 TH OCTOBER, 2015 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/TH E CIT/THE DR. ASSISTANT REGISTRAR, ITAT, CHANDIGARH 7