Smt. Shalini Gupta, Sitapur V. Income Tax Officer, Hardoi

ITA 95/LKW/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 0573 (ITAT-LUCKNOW)
• Duration Of Justice: 10 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-12-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 01-02-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A K MISHRA
• Keywords: Depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW SMC BENCH, LUCKNOW BEFORE SHRI S UNIL KUMAR YADAV , JUDICIAL MEMBER ITA NO. 95/LKW/2017 ASSESSMENT YEAR: 2013 - 14 SMT. SHALINI GUPTA 214, DR. B.D. KAPOOR MARG ARYA NAGAR, SITAPUR V. INCOME TAX OFFICER WARD 3(3) HARDOI PAN: AGYPG8031D (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI SANJAY SAXENA, C.A. RESPONDENT BY: SHRI A. K. MISHRA, D.R. DATE OF HEARING: 07 12 2017 DATE OF PRONOUNCEMENT: 08 12 2017 O R D E R THIS APPEAL IS PREFERRED BY THE ASSESS EE AGAINST THE ORDER OF THE LD. CIT(A), BAREILLY DATED 3/11/2016, INTER ALIA, ON THE FOLLOWING GROUNDS: - 1 . THE ID. COMMISSIONER OF INCOME TAX (APPEALS), BAREILLY ERRED ON FACTS AND IN LAW IN CONFIRMING THE DISALLOWANCES OF EXPENSES BEING 30% UNDER THE HEADS ' ADVERTISEMENT', 'RETAILERS MEETING', 'STAFF WELFARE' & 'STATIONE RY' EXPENSES AGGREGATING TO RS. 44,703 / - ON SURMISES WHICH HAD BEEN ACTUALLY INCURRED FOR BUSINESS PURPOSES. 2 . THE ID. COMMISSIONER OF INCOME TAX (APPEALS), BAREILLY ERRED ON FACTS AND IN LAW I N CONFIRMING THE DISALLOWANCES OF 30% OF TELEPHONE EXPENSES & CAR EXPENSES INCLUDING DEPRECIATION ON CAR. 3 . THE ID. COMMISSIONER OF INCOME TAX (APPEALS), BAREILLY ERRED ON FACTS AND IN LAW CONF IRMING THE DISALLOWANCES OF RS. 7,698 / - BEING INSURANCE OF TATA SU MO VICTA WHICH IS PLIED AND INCOME SO ERRED IS ALSO AS PER PROVISION OF THE INCOME TAX, 1961 EVER AFTER : - 2 - : CLAIMI NG INSURANCE EXPENDITURE OF RS. 7,698 / - AND IS CONTRARY TO THE FACTS AND CIRCUMSTANCES OF THE CASE. 2 . DURING THE COURSE OF HEARING, THE LD. A.R. OF THE ASSESSEE HAS CONTENDED THAT THE ASSESSING OFFICER HAS MADE AD - HOC DISALLOWANCES WITHOUT POINTING OUT ANY SPECIFIC DEFECT. WITH REGARD TO THE DISALLOWANCES, IT WAS CONTENDED THAT NO SPECIFIC DEFECT WAS POINTED OUT BY THE ASSESSING OFFICER AND HE MADE D ISALLOWANCE OF 30% OF THE EXPENDITURE UNDER THE HEAD S ADVERTISEMENT; RETAILERS MEETING; STAFF WELFARE AND STATIONERY WHEREAS ALL THESE EXPENSES WERE INCURRED FOR THE BUSINESS PURPOSES. 3 . THE LD. D.R., ON THE OTHER HAND, HAS PLACED RELIANCE UPON THE O RDERS OF THE AUTHORITIES BELOW. 4 . HAVING CAREFULLY EXAMINED THE ORDERS OF THE LOWER AUTHORITIES IN THE LIGHT OF THE RIVAL SUBMISSIONS , I FIND THAT THE ASSESSING OFFICER HAS NOT POINTED OUT ANY SPECIFIC DEFECT IN THE CLAIM RAISED BY THE ASSESSEE AND HE MADE A D - HOC DISALLOWANCE WHICH IS NOT PERMISSIBLE. THEREFORE, I SET ASIDE THE ORDER OF THE LD. CIT(A) AND DELETE THE ADDITION OF RS.44,703/ - . 5 . SO FAR AS GROUND NO.2 IS CONCERNED, IT IS NOTICED THAT THE ASSESSING OFFICER HAS MADE DISALLOWANCE AT 30% OF TOTAL CLAI M ON TELEPHONE EXPENSES AND CAR EXPENSES. IN THIS REGARD, THE ELEMENT OF PERSONAL USE OF TELEPHONE AND CAR CANNOT BE RULED OUT, THEREFORE, DISALLOWANCE IS RESTRICTED TO 10% OF THE TOTAL CLAIM. ACCORDINGLY, I MODIFY THE ORDER OF THE LD. CIT(A) AND RESTRIC T THE DISALLOWANCE TO 10% OF THE TOTAL CLAIM RAISED ON ACCOUNT OF TELEPHONE AND CAR EXPENSES. 6 . WITH REGARD TO GROUND NO.3 , IT WAS POINTED OUT THAT ASSESSEE HAS PURCHASED VEHICLE TATA SUMO VICTA AND WAS LET OUT . THE ASSESSEE WAS SHOWING RENTAL INCOME FROM T HIS VEHICLE AND OFFERED IT TO TAX. THEREFORE, ASSESSEE IS ENTITLED FOR EXPENSES INCURRED ON INSURANCE OF THIS VEHICLE. THE : - 3 - : REVENUE AUTHORITIES HAVE NOT EXAMINED THIS ASPECT. THE LD. A.R. OF THE ASSESSEE INVITE D OUR ATTENTION TO THE BALANCE SHEET AND PRO FIT & LOSS ACCOUNT IN SUPPORT OF HIS CONTENTION THAT HE HAS BEEN SHOWING RENTAL INCOME OF THIS VEHICLE. 7 . THE LD. D.R., ON THE OTHER HAND, PLACED RELIANCE UPON THE ORDER OF THE LD. CIT(A). 8 . HAVI NG CAREFULLY EXAMINED THE ORDER OF THE LD. CIT(A), I FIND THAT S INCE THE ASSESSEE HAS OFFERED RENTAL INCOME ON THIS VEHICLE, HE IS ENTITLED FOR INSURANCE OF THE SAME VEHICLE. THEREFORE, I DO NOT FIND ANY MERIT IN THE DISALLOWANCE OF THE ENTIRE CLAIM OF INSURANCE RAISED BY THE ASSESSEE. ACCORDINGLY, I SET ASIDE THE OR DER OF THE LD. CIT(A) AND DELETE THE ADDITION IN THIS REGARD. 9 . IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION ED PAGE. SD/ - [ S UNIL KUMAR Y ADAV ] JUDICIAL MEMBER DATED: 8 TH DECEMBER, 201 7 JJ: 0712 COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT(A) 4 . CIT 5 . DR ASSISTANT REGISTRAR