ARUN KUMAR LATH, BILASPUR(CG) V. ITO, WARD- 1(1), BILASPUR(CG)

ITA 90/BIL/2014

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 4798 (ITAT-RAIPUR)
• Duration Of Justice: 4 year(s) 4 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-10-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 19-06-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: D K JAIN
• Assessee Lawyers: R B DOSHI
• Keywords: Unexplained expenditure; Depreciation
• Section: 37(1)

Judgement Text

1 ITA NO.90/RPR/2014 IN THE INCOME TAX APPELLA TE TRIBUNAL RAIPUR BENCH: RAIPUR BEFORE SHRI R. K. PANDA, ACCOUNTANT ME MBER AND MS SUCHITRA KAMBLE, JUDI CIAL MEMBER I.T.A .NO. 90/RPR/201 4 (A.Y 2009-10) ARUN KUMAR LATH, NIRALA NAGAR, BUSTAND, BILASPUR (C.G). PAN AAJPL1693D (APPELLANT) VS ITO WARD 1(1), AAYKAR BHAWAN, VYAPAR VIHAR, BILASPUR, C.G (RESPONDENT) APPELLANT BY SHRI R.B DOSHI, CA RESPONDENT BY SHRI D.K. JAIN, DR ORDER PER SUCHITRA KAMBLE, JM THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER DATED 27/01/2014 PASSED BY CIT(A), BILASPUR (CG) FOR THE A.Y 2009-10 . 2. THE GROUNDS OF APPEAL ARE AS UNDER: 1. THAT THE ORDER OF THE LD. CIT(A) IS BAD IN LAW & F ACTS, AND IS ARBITRARY. PRAYED THAT ADDITIONS & DISALLOWANCE BE DELETED. 2. THAT THE LD. CIT(A) ERRED IN CONFIRMING THE DISALLO WANCES MADE OUT OF DEPRECIATION OF RS. 30,000/- ON THE BUS WHICH IS UNJUSTIFIED & BE ALLOWED. 3. THE LD. CIT(A) FURTHER ERRED IN MAINTAINING DISALLO WANCES U/S 37(1) AT RS. 4,58,700/- & RS. 1,00,000/- OUT OF EXPENSES DISALLOW ED BY THE LD. A.O WHICH IS UNJUSTIFIED. PRAYED THAT ALL THE EXPENSES ARE SUPPORTED & ARE FO R THE PURPOSE OF BUSINESS AND THEREFORE, NO DISALLOWANCE IS CALLED FOR. DATE OF HEARING 07.08.2018 DATE OF PRONOUNCEMENT 22.10.2018 2 ITA NO.90/RPR/2014 PRAYED TO DELETE THE DISALLOWANCE MAINTAINED BY THE LD. CIT(A) AT RS. 5,58,700/- 4. WITHOUT PREJUDICE, THE LD. CIT(A) FURTHER ERRED IN DISALLOWING AFORESAID RS. 1,00,000/- WHICH WAS NOT CLAIMED AS BUSINESS EXPEND ITURE BY THE APPELLANT NOR DISALLOWED BY THE LD. A.O, WHICH IS UNJUSTIFIED. 3. THE ASSESSEE IS AN INDIVIDUAL AND DERIVES INCOME FROM HOUSE PROPERTY, INTEREST INCOME FROM BANK / FDRS, INTEREST AND REMU NERATION FROM PARTNERSHIP FIRM M/S. SARWAMANGALA TYRES AND M/S. S ARWAMANGALA LUBRICANTS AND INCOME FROM PLYING PASSENGER BUSSES. RETURN OF INCOME FOR THE A.Y 2009-10 WAS FILED AT RS. 5,31,360/-, BESIDES AG RICULTURAL INCOME OF RS. 57,020/-. THE ASSESSING OFFICER ASSESSED THE INCOM E RS. 14,26,005/- AFTER MAKING ADDITIONS ON THREE COUNTS I.E. ADDITION OUT OF DISALLOWANCE OF DEPRECIATION OF RS. 30,000/-, DISALLOWANCE OF RS. 2 ,00,087/- OUT OF PROPORTIONATE DISALLOWANCE OF DEPRECIATION ON THE B ASIS OF RATIO OF ADMISSIBLE DEPRECIATION ON GROSS RECEIPTS AND ON NET RECEIPTS RS. 6,64,558/- OUT OF PROPORTIONATE DISALLOWANCE OF VARIOUS EXPENSES RELA TABLE TO REVENUE RECEIPTS UNDERSTATED IN THE RETURN. 4. AS REGARDS GROUND NO. 2, THE LD. AR SUBMITTED TH AT THE ADDITION OF RS. 30,000/- THE SAME IS NOT PRESSED, HENCE THE GROUND IS DISMISSED. 5. AS REGARDS GROUND NO. 3, THE LD. AR SUBMITTED TH AT THE ADDITION MADE BY THE ASSESSING OFFICER IS TOTALLY INCORRECT AS THE A SSESSING OFFICER ONLY PRESUMED THAT THE ASSESSEE MUST HAVE INCURRED SOME UNRECORDE D EXPENSES ON THE DIFFERENTIAL RECEIPT OF RS. 45,86,996/-. BUT THERE WAS NO MATERIAL ON RECORD AVAILABLE TO DRAW THIS CONCLUSION WHICH IS BASELESS AND ARBITRARY. IN FACT, NO EXISTENCE OF UNACCOUNTED EXPENDITURE FOUND OUT BY T HE ASSESSING OFFICER. THE LD. AR FURTHER SUBMITTED THAT CIT(A) MAINTAINED DIS ALLOWANCE OF RS. 4,58,700/- OUT OF BUS RUNNING EXPENSES OF RS. 45,86 ,996 AND RS. 1,00,000/- OUT OF OTHER EXPENSES LIKE REPAIRS AND MAINTENANCE, VEHICLE TAX, INSURANCE ETC. THE LD. AR FURTHER SUBMITTED THAT THE ASSESSEE SUBM ITTED THE REQUISITE DETAILS SUCH AS BUS ACCOUNT WHICH IS AT PAGE NO. 10 OF PAPE R BOOK, PROFIT AND LOSS 3 ITA NO.90/RPR/2014 ACCOUNT WHICH IS AT PAGE NO. 11 OF PAPER BOOK ALONG WITH SUMMARY WHICH IS AT PAGE NO. 12 OF PAPER BOOK TO THE ASSESSING OFFICER DURING THE ASSESSMENT PROCEEDINGS. THE LD. AR FURTHER SUBMITTED THAT THE BUS RUNNING EXPENSES OF RS.45,86,996/- SUPPORTED BY PROPER BILLS AND VOUCHE RS. THE LD. AR FURTHER SUBMITTED THAT THE EXPENSES OF RS. 50,87,165/- WAS ALSO SUPPORTED BY PROPER EVIDENCE. THE ASSESSEE PRODUCED BOOKS AND ALL BILL S / VOUCHERS BEFORE THE ASSESSING OFFICER AND THERE IS NO ADVERSE OBSERVATI ON BY THE ASSESSING OFFICER. THE LD. AR FURTHER SUBMITTED THAT DISALLOWANCE WAS ONLY ON PRESUMPTION AND SURMISES AD THERE IS NO MATERIAL ON RECORD IN SUPPO RT OF DISALLOWANCE. 6. AS REGARDS GROUND NO. 4, THE LD. AR SUBMITTED TH AT THE DISALLOWANCE OF RS. ONE LAKH OUT OF EXPENSES DEBITED TO PROFIT AND LOSS ACCOUNT BY THE CIT(A) AMOUNTS TO ENHANCEMENT OF ASSESSMENT ORDER AS THERE WAS NO SUCH DISALLOWANCE BY THE A.O IN THE ASSESSMENT ORDER. 7. LD. DR ON THE OTHER HAND RELIED UPON THE ORDERS OF THE LOWER AUTHORITIES. 8. WE HAVE HEARD BOTH THE PARTIES AND PERUSED ALL T HE RELEVANT MATERIAL AVAILABLE ON RECORD. AS REGARDS GROUND NO. 3, WHIL E MAKING DISALLOWANCE U/S 37(1) AT RS. 4,58,700/- AND RS. 1,00,000/- OUT OF E XPENSES DISALLOWED BY THE A.O HAS NOT AT ALL CONSIDERED THE EVIDENCES PRODUCE D BEFORE THE A.O AS WELL AS CIT(A). THE LD. AR SUBMITTED THAT ALL EXPENSES HAV E BEEN INCURRED FOR THE PURPOSE OF BUSINESS. THE ADDITION MADE BY THE ASSE SSING OFFICER IS ONLY ON PRESUMPTION THAT THE ASSESSEE MUST HAVE INCURRED SO ME UNRECORDED EXPENSES ON THE DIFFERENTIAL RECEIPT OF RS. 45,86,996/-. BU T THERE WAS NO MATERIAL ON RECORD AVAILABLE TO DRAW THIS CONCLUSION WHICH IS B ASELESS AND ARBITRARY. IN FACT, NO EXISTENCE OF UNACCOUNTED EXPENDITURE FOUND OUT BY THE ASSESSING OFFICER. THE EVIDENCES PRODUCED BY THE ASSESSEE DU RING THE ASSESSMENT PROCEEDINGS WERE NOT PROPERLY VERIFIED BY THE ASSES SING OFFICER. THEREFORE, IT WILL BE APPROPRIATE TO REMAND BACK THIS ISSUE TO TH E FILE OF THE A.O. AND THE A.O. TO TAKE COGNIZANCE OF THE CORRECT EXPENSES. TH US, GROUND NO. 3 IS PARTLY 4 ITA NO.90/RPR/2014 ALLOWED FOR STATISTICAL PURPOSE. AS REGARDS DISALLO WANCE OF RS. 1 LAKH THE SAME WAS NOT DISALLOWED BY THE ASSESSING OFFICER, THEREF ORE THE CIT(A) CANNOT TAKE UP AN ISSUE WHICH WAS NOT AT ALL ADJUDICATED UPON B Y THE ASSESSING OFFICER AND THAT TOO WITHOUT ISSUING ANY ENHANCEMENT NOTICE, HE NCE GROUND NO. 4 IS ALLOWED. 9. IN THE RESULT THE APPEAL OF THE ASSESSEE IS PART LY ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND OCTOBER, 2018 . SD/- SD/- (R. K. PANDA) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEM BER DATED: 22/10/2018 KRK/R.N COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT PRIVATE SECRETARY ITAT RAIPUR. 5 ITA NO.90/RPR/2014 DATE OF DICTATION 06/11/2018 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 06/11/2018 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS .10.2018 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT .10.2018 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .10.2018 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER