Sh. Rajinder Singh Khosla, Chandigarh V. ACIT, Chandigarh

ITA 909/CHANDI/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 73473 (ITAT-CHANDIGARH)
• Duration Of Justice: 5 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-02-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 15-01-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 19-09-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: J S NAGAR
• Assessee Lawyers: DEEPINDER MALHOTRA
• Keywords: Depreciation
• Section: 143(3); 14A; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B, CHANDIGARH BEFORE SHRI T.R.SOOD, ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO.909 /CHD/2013 ASSESSMENT YEAR : 2008-09 SH.RAJINDER SINGH KHOSLA, VS. THE A.C.I.T., HOUSE NO.1266, CIRCLE 3(1), SECTOR 21-B, CHANDIGARH. CHANDIGARH. PAN: AGTPK4889Q (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI DEEPINDER MALHOTRA RESPONDENT BY : SHRI J.S.NAGAR, DR DATE OF HEARING : 25.02.2014 DATE OF PRONOUNCEMENT : 26.02.2014 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), CHANDIGARH DA TED 11.06.2013 RELATING TO ASSESSMENT YEAR 2008-09 AGAINST THE ORD ER PASSED UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (IN SHOR T THE ACT). 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE REA D AS UNDER: 1) THAT LD. COMMISSIONER OF INCOME TAX (APPEALS) H AS ERRED IN LAW AS WELL AS OF FACTS IN UPHOLDING THE ADDITION O F RS.61,571/- MADE ON ACCOUNT OF DISALLOWANCE @ 20% O F THE EXPENSES OF RUNNING AND MAINTENANCE OF VEHICLES AND TELEPHONE EXPENSES. THE ADDITION MADE IS NOT ONLY EXCESSIVE AND UNREASONABLE BUT ALSO ARBITRARY AND UNJUSTIFIED . 2. THAT LD. COMMISSIONER OF INCOME TAX (APPEALS) HA S ERRED IN LAW AS WELL AS OF FACTS IN UPHOLDING THE ADDITION O F RS.51,203/- MADE ON ACCOUNT OF DISALLOWANCE UNDER S ECTION 14A OF THE INCOME TAX ACT, 1961. THE ADDITION IS N OT ONLY ARBITRARY AND CONTRARY TO THE PROVISIONS OF THE SEC TION AND 2 THE ACT BUT ALSO VARIOUS JUDICIAL DECISIONS OF THE HIGHER COURTS. 2. THE ISSUE IN GROUND NO.1 RAISED BY THE ASSESSEE IS AGAINST DISALLOWANCE @ 20% OUT OF THE CAR RUNNING AND MAINT ENANCE EXPENSES AND TELEPHONE EXPENSES. 3. THE LEARNED A.R. FOR THE ASSESSEE POINTED OUT TH AT THE EXPENDITURE IS ON THE HIGHER SIDE AND MERITS TO BE SCALED DOWN. 4. THE LEARNED D.R. FOR THE REVENUE PLACED RELIANCE ON THE ORDERS OF THE AUTHORITIES BELOW. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ASSESSEE IS RUNNING TRANSPORT BOOKING AGENCY UNDER THE NAME AND STYLE OF M/S PUNJAB CHANDIGARH TRANSPORT COMPANY. DURING T HE YEAR UNDER CONSIDERATION THE ASSESSEE HAD DEBITED EXPENDITURE RELATABLE TO THE VEHICLES I.E. CAR ON ACCOUNT OF DEPRECIATION ON CAR AT RS.1,12,706/-, INTEREST ON CAR LOAN AT RS.59,199/-, CAR INSURANCE AT RS.28,926/-, VEHICLE RUNNING AND MAINTENANCE AT RS.36,478/-, TELEPHONE A T RS.70,549, TOTALING RS.3,07,858/-. THE ASSESSING OFFICER DISALLOWED 20 % OF THE SAID EXPENDITURE FOR PERSONAL USE ON ESTIMATE BASIS AND MADE AN ADDITION THEREOF, WHICH WAS UPHELD BY THE CIT (APPEALS). TH E ELEMENT OF PERSONAL USE OF THE VEHICLES AND TELEPHONE BY THE A SSESSEE CANNOT BE RULED OUT AND HENCE WE ARE IN CONFORMITY WITH THE O RDER OF THE ASSESSING OFFICER THAT THE EXPENDITURE RELATABLE TO SUCH PERS ONAL USE IS TO BE DISALLOWED IN THE HANDS OF THE ASSESSEE. HOWEVER, IN THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE, WE RESTRICT DI SALLOWANCE TO 10% OF THE TOTAL EXPENDITURE. THE ASSESSING OFFICER IS DI RECTED TO RE-WORK THE ADDITION ON THIS ACCOUNT. THE GROUND OF APPEAL NO. 1 RAISED BY THE ASSESSEE IS PARTLY ALLOWED. 3 6. THE GROUND OF APPEAL NO.2 RAISED BY THE ASSESSEE IS NOT PRESSED AND HENCE THE SAME IS DISMISSED AS NOT PRESSED. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 26 TH DAY OF FEBRUARY, 2014. SD/- SD/- (T.R.SOOD) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 26 TH FEBRUARY, 2014 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/TH E CIT/THE DR. ASSISTANT REGISTRAR, ITAT, CHANDIGARH