Dr. Rekha Goyal, Ludhiana V. DCIT, Ludhiana

ITA 871/CHANDI/2012

• Counselvise Citation: 87121514 RSA 2012
• Duration Of Justice: 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-11-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 06-11-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 21-08-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: AKHILESH GUPTA
• Assessee Lawyers: D K GOYAL
• Keywords: Depreciation
• Section: 143(3); 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A, CHANDIGARH BEFORE MS. SUSHMA CHOWLA, JUDICIAL MEMBER AND SHRI MEHAR SINGH, ACCOUNTANT MEMBER ITA NO. 871/CHD/2012 (ASSESSMENT YEAR : 2008-09) DR.REKHA GOYAL, VS. THE D.C.I.T., C/O SH.RAJ PAL GUPTA(ADVOCATE), CIRCLE VII, 121, GREEN PARK, CIVIL LINES, LUDHIANA. LUDHIANA. PAN: ABIPG5484D (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI D.K.GOYAL RESPONDENT BY : SHRI AKHILESH GUPTA, DR DATE OF HEARING : 06.11.2012 DATE OF PRONOUNCEMENT : 22.11.2012 O R D E R PER SUSHMA CHOWLA, J.M, : THE APPEAL FILED BY THE ASSESSEE IS AGAINST THE ORD ER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-II, LUDHIANA D ATED 29.06.2012 RELATING TO ASSESSMENT YEAR 2008-09 AGAINST THE ORD ER PASSED U/S 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: THAT THE A.O. ARBITRARILY DISALLOWED L/5THE EXPENSE S OUT OF CAR INSURANCE, CAR LOAN INTEREST , CAR PETROL & MAINTENANCE & DEPR ECIATION AS I/5TH EXPENSES HAS ALSO BEEN DISALLOWED OUT OF SAME NATUR E OF EXPENSES IN THE HAND OF HUSBAND OF THE ASSESSEE ON THE GROUND FOR P ERSONAL USE WHICH HAS BEEN SUSTAINED ARBITRARILY BY CIT (APPEAL )LUDHIANA . THAT THE A.O. DISALLOWED-L/5 TH OUT OF ENTERTAINMENT EXPENSES & TELEPHONE EXPENSES, WHICH HAS BEEN RETAINED ARBITRA RILY BY CIT (APPEAL), LUDHAINA. THE DISALLOWANCE AT L/5TH IS MOST EXCESSI VE. THAT THE AO HAS ALSO ARBITRARILY & WRONGLY ADDED RS .22821/- UNDER SECTION 14A READ WITH RULE 8D AS IT WAS EXPLAINED D URING ASSTT. PROCEEDINGS THAT NO EXPENDITURE WAS INCURRED FOR EA RNING NON TAXABLE INCOME FROM DIVIDEND & INTEREST ON PPF. THE ADDITIO N, HAS ALSO BEEN SUSTAINED ARBITRARILY BY CIT (APPEAL) LUDHIANA. THA T NEITHER THE AO NOR 2 THE CIT (APPEAL), LUDHIANA HAS POINTED OUT ANY SPEC IFIC EXPENSES INCURRED ON EARNING INCOME FROM DIVIDEND AND INTERE ST ON PPF. THE DIVIDEND INCOME HAS BEEN TAKEN BY AO AT RS.6853 91/- AS DIVIDED INCOME IS ONLY RS. 5963/-. THAT THE APPELLANT CRAVES TO ADD, ALTER, MODIFY AN Y OF THE GROUND OF THE APPEAL AT THE TIME OF HEARING . IT IS THEREFORE, PRAYED THAT THE ADDITION BY A.O. & SUSTAINED BY CIT (APPEAL) LUDHIANA AT RS. 45508/- & RS. 22821/- MAY BE DELETED OR ANY OTHER RELIEF WHICH YOUR HONOUR THINK FIT MAY PLEASE BE GRANTED. 3. THE ASSESSEE IS IN APPEAL AGAINST THE FOLLOWING ADDITIONS MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE CIT (APP EALS): A) DISALLOWANCE ON ACCOUNT OF PERSONAL USE: I) L/5 TH EXPENSES OUT OF CAR INSURANCE II) 15 TH EXPENSES OUT OF CAR LOAN INTEREST III) 1/5 TH EXPENSES OUT OF CAR PETROL & MAINTENANCE IV) 1/5 TH EXPENSES OUT OF DEPRECIATION V) L/5TH EXPENSES OUT OF ENTERTAINMENT VI) 1/5 TH EXPENSES OUT OF TELEPHONE 4. THE ASSESSEE IS AGGRIEVED BY THE ORDERS OF THE A UTHORITIES BELOW IN DISALLOWING THE AFORESAID AMOUNT FOR PERSONAL USE A ND IN THE ALTERNATIVE THE GRIEVANCE OF THE ASSESSEE IS THAT THE DISALLOWA NCE IS EXCESSIVE. 5. ON PERUSAL OF THE RECORD AND THE ORDERS PASSED B Y THE AUTHORITIES BELOW, WE ARE OF THE VIEW THAT WHERE THE ASSESSEE I S A PRACTICING DOCTOR, THE DISALLOWANCE OF PERSONAL USE OUT OF ABOVE SAID EXPENDITURE CANNOT BE RULED OUT. HOWEVER, WE DIRECT THE ASSESSING OFFICE R TO RESTRICT THE SAID DISALLOWANCE OF 1/10 TH OF THE EXPENSES. CONSEQUENTLY, THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE IN THIS REGARD ARE PA RTLY ALLOWED. 6. THE NEXT ISSUE RAISED BY THE ASSESSEE IS IN RELA TION TO DISALLOWANCE COMPUTED UNDER SECTION 14A READ WITH RULE 8D OF THE INCOME TAX RULES. THE ASSESSING OFFICER HAD DISALLOWED SUM OF RS.22,8 21/- BEING EXPENDITURE RELATABLE TO EARNING OF DIVIDEND INCOME AND INTEREST ON PPF. 3 THE CONTENTION OF THE ASSESSEE IS THAT THE TOTAL DI VIDEND INCOME WAS RS.5963/- WHICH HAS BEEN ARBITRARILY TAKEN BY THE A SSESSING OFFICER AT RS.6,85,391/-. IN THE ENTIRETY OF THE FACTS AND CI RCUMSTANCES OF THE CASE WHERE THE TOTAL DIVIDEND INCOME EARNED BY THE ASSES SEE IS ONLY RS.5963/- THERE IS NO MERIT IN DISALLOWANCE OF RS.22,821/- BE ING RELATABLE TO THE EARNING OF INCOME OF RS.5963/-. HOWEVER, THE CLAIM OF THE ASSESSEE NEEDS VERIFICATION. THUS WE DIRECT THE ASSESSING O FFICER TO VERIFY AND IN CASE THE DIVIDEND INCOME EARNED BY THE ASSESSEE IS ONLY TO THE EXTENT OF RS.5963/-, THERE IS NO MERIT IN ANY DISALLOWANCE UN DER SECTION 14A READ WITH RULE 8D OF THE INCOME TAX RULES. THUS THE SEC OND ISSUE RAISED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND DAY OF NOVEMBER, 2012. SD/- SD/- (MEHAR SINGH) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 22 ND NOVEMBER, 2012 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/TH E CIT/THE DR. ASSISTANT REGISTRAR, ITAT, CHANDIGARH