Trilok Chand Karnawat, Kolkata V. The ITO, Wd-36(4), Kolkata, Kolkata

ITA 866/KOL/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5062 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 9 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-02-2016
• Appeal Filed By: Assessee
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 05-05-2014
• Court: TRIBUNAL
• Department Lawyers: RAJAT KUMAR KUREEL
• Assessee Lawyers: N O N E
• Keywords: Depreciation; Notional interest
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH: K OLKATA [BEFORE SHRI MAHAVIR SINGH, JM] I.T.A NO.866/KOL/2014 ASSESSMENT YEAR: 2008-09 TRILOK CHAND KARNAWAT VS. INCOME-TAX OFFICER, WD-36(4), KOLKATA (PAN: AFTPK0293H) ( APPELLANT ) ( RESPONDENT ) DATE OF HEARING: 22.02.2016 DATE OF PRONOUNCEMENT: 22.02.2016 FOR THE APPELLANT: N O N E FOR THE RESPONDENT: SHRI RAJAT KUMAR KUREEL, JCI T, SR. DR ORDER THIS APPEAL BY ASSESSEE IS ARISING OUT OF ORDER OF CIT(A)-XX, KOLKATA VIDE APPEAL NO. 325/CIT(A)-XX/WD-36(4)/2011-12/KOL DATED 23.10.2013 . ASSESSMENT WAS FRAMED BY ITO, WD-36(4), KOLKATA U/S. 143(3) OF THE INCOME TAX ACT , 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR ASSESSMENT YEAR 2008-09 VIDE HIS ORDER DATED 30 .12.2010. 2. THE FIRST ISSUE IN THIS APPEAL OF ASSESSEE IS A GAINST THE ORDER OF CIT(A) IN DISALLOWING INTEREST OF RS.79,894/- ON BORROWED FUNDS NOT UTILI ZED FOR BUSINESS PURPOSE. 3. I HAVE HEARD LD. SR. DR AND GONE THROUGH FACTS A ND CIRCUMSTANCES OF THE CASE. I FIND THAT THE ASSESSEE HAS PAID INTEREST ON UNSECURED LOAN AM OUNTING TO RS.1,01,258/-. THE ASSESSEE HAS TAKEN THIS AMOUNT OF INTEREST BUT ADVANCED LOAN TO VARIOUS PARTIES. THE CIT(A) RESTRICTED THE DISALLOWANCE OF INTEREST ONLY FOR MS. PRAVEENA KARN AWAT TO WHOM AN AMOUNT OF RS. 1 LAC WAS ADVANCED, THE AO ESTIMATED NOTIONAL INTEREST AT RS. 10,000/-. I FIND THAT CIT(A) HAS NOT CONSIDERED THIS ISSUE AND PASSED A CRYPTIC ORDER ON THE SAME. HENCE, THIS ISSUE IS SET ASIDE TO THE FILE OF CIT(A) TO PASS A REASONED ORDER. THIS ISSU E OF ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. 4. THE NEXT ISSUE IN THIS APPEAL OF ASSESSEE IS AGA INST THE ORDER OR CIT(A) IN DISALLOWING A SUM OF RS. 9,800/- ON ACCOUNT OF TELEPHONE EXPENSES ON ESTIMATE BASIS. 5. I HAVE HEARD LD. SR. DR AND GONE THROUGH FACTS A ND CIRCUMSTANCES OF THE CASE. I FIND THAT THE AO HAS DISALLOWED 10% OF TELEPHONE EXPENSES AT RS.9800/- OUT OF TOTAL EXPENDITURE OF RS.97,995/- TREATING THE SAME AS PERSONAL EXPENDITU RE OF TELEPHONE. AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE CIT(A) WHO ALSO CONFIRMED T HE ACTION OF AO. I FIND THAT NEITHER THE AO NOR THE CIT(A) COULD PROVE THE ELEMENT OF PERSONAL IN NATURE AND THIS IS PURELY AN AD HOC DISALLOWANCE. ACCORDINGLY, I DELETE THE DISALLOWAN CE AND ALLOW THIS ISSUE OF ASSESSEES APPEAL. 2 ITA NO.866/KOL/2014 TRILOK CHAND KARNAWAT, AY 2008-09 2 6. THE NEXT ISSUE IN THIS APPEAL OF ASSESSEE IS AGA INST THE ORDER OF CIT(A) DISALLOWING VEHICLE EXPENSES AND DEPRECIATION. 7. I HAVE HEARD LD. SR. DR AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. I FIND FROM THE FACTS OF THE CASE THAT THE ASSESSEE HAS CL AIMED VEHICLE EXPENSES AND DEPRECIATION WHICH IS NECESSARY FOR CARRYING OUT THE BUSINESS AND NO E LEMENT OF PERSONAL NATURE WAS ATTRIBUTED. HENCE, I DELETE THE ADDITION AND ALLOW THIS ISSUE O F ASSESSEES APPEAL. 8. THE NEXT ISSUE IN THIS APPEAL OF ASSESSEE IS AGA INST THE ORDER OF CIT(A) CONFIRMING THE DISALLOWANCE OF BUSINESS PROMOTION EXPENSES AMOUNTI NG TO RS.22,722/- AND GENERAL EXPENSES AMOUNTING TO RS.29,732/-. 9. I HAVE HEARD LD. SR. DR AND GONE THROUGH FACTS A ND CIRCUMSTANCES OF THE CASE. I FIND FROM THE FACTS OF THE CASE THAT THE AO AND CIT(A) C ONFIRMED THE DISALLOWANCE OF THESE EXPENSES WITHOUT A SPEAKING ORDER. HENCE, I SET ASIDE THE O RDER OF CIT(A) AND RESTORE THIS ISSUE TO HIS FILE TO PASS A SPEAKING ORDER ON THIS AND ACCORDINGLY, T HIS ISSUE OF ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. 10. IN THE RESULT, APPEAL OF ASSESSEE IS PARTLY ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT. SD/- (MAHAVIR SINGH) JUDICIAL MEMBER DATED : 22ND FEBRUARY, 2016 JD. SR. P.S COPY OF THE ORDER FORWARDED TO: 1. APPELLANT SHRI TRILOK CHAND KARNAWAT, 6A, CLIVE R OW, R. NO. 6/9, 4 TH FLOOR, KOLKATA- 700 001. 2. RESPONDENT ITO, WARD-36(4), KOLKATA. 3. CIT(A) , KOLKATA 4. CIT , KOLKATA 5. DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER, ASSTT. REGISTRAR .