Deep Restaurant , Jind V. ITO, W-1, Jind

ITA 989/CHANDI/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 1191 (ITAT-CHANDIGARH)
• Duration Of Justice: 10 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-05-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2016-2017
• Appeal Filed On: 08-07-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARVIND SUDERSHAN
• Assessee Lawyers: SHRINIKHIL GOYAL
• Keywords: Capital asset; Depreciation; Wrong claim; Revenue expenditure; Capital expenditure
• Section: 145(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, B CHANDIGARH , ! '# $ % & '# , () BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ./ ITA NO.989/CHD/2019 / ASSESSMENT YEAR : 2016-17 DEEP RESTAURANT, 1-KM, SAFIDON ROAD, JIND 126102 HARYANA . THE INCOME TAX OFFICER, WARD-1, JIND, HARYANA ./PAN NO: AAIFD1092R / APPELLANT /RESPONDENT ! /ASSESSEE BY : SHRINIKHIL GOYAL, CA ' ! / REVENUE BY : SHRI ARVIND SUDERSHAN, JCIT # $ % /DATE OF HEARING : 02.03.2020 &'() % / DATE OF PRONOUNCEMENT : 21.05. 2020 (*/ ORDER PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESS EE AGAINST THE ORDER DATED 30.04.2019 OF THE COMMISSIONER OF INCOM E TAX (APPEALS)- HISAR [HEREINAFTER REFERRED TO AS CIT (A)]. 2. THE ASSESSEE IN THIS APPEAL HAS TAKEN FOLLOWING GROUNDS OF APPEAL:- ITA NO. 989-CHD-2019 DEEP RESTAURANT, JIND 2 1. THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS. 12,86,025/- ON ACCOUNT OF DISALLOWANCE OF ADDITIONS MADE IN FIXED ASSETS AND CONSEQUENT CLAIM FOR DEPRECIATI ON. 2. THE LD. AO ERRED IN VIOLATING THE PRINCIPLES OF NAT URAL JUSTICE BY NOT GIVING SUFFICIENT OPPORTUNITY TO THE ASSESSEE FIRM TO DEFEND THE PROPOSED ADDITIONS. 3. THE LD. AO ERRED IN NOT FOLLOWING THE PROCEDURE LAI D DOWN UNDER THE ACT FOR REJECTING THE BOOKS OF ACCOU NTS UNDER SECTION 145(3) OF THE ACT. 4. BASIS THE FACTS AND CIRCUMSTANCES AND IN LAW, THE L D. CIT(A) HAS ERRED IN CONFIRMING AN ADDITION OF CAPIT AL EXPENDITURE OF RS. 11,69,750/- IN THE PROFITS AND G AINS FROM BUSINESS AND PROFESSION, AGAINST THE PRINCIPLE S LAID DOWN UNDER THE ACT. 5. THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE CONJECTURES OF THE LD. AO REGARDING THE LEGAL STATU S OF THE ASSESSEE AND ITS PARTNERS WITHOUT DUE VERIFICATION OF THE AVERMENTS MADE. 6. THE LD. CIT(A) HAS ERRED IN CONFIRMING DISALLOWANCE OF RS. 1,16,275/- ON ACCOUNT OF DEPRECIATION CLAIMED O N ABOVE SAID ADDITIONS TO FIXED ASSETS. 7. THE LD. CIT(A) HAS ERRED IN CONFIRMING THE EXPANDED JURISDICTION OF THE LD. AO IN A CASE OF LIMITED SCR UTINY. 8. THAT THE APPELLANT CRAVES LEAVE TO ADD OR AMEND ANY GROUNDS OF APPEAL BEFORE THE APPEAL IS FINALLY HEAR D OR DISPOSED OFF. 3. THOUGH, THE ASSESSEE HAS TAKEN AS MANY AS 08 GR OUNDS OF APPEAL, HOWEVER, THE SOLE CONTENTION RAISED BY THE ASSESSEE IS RELATING TO GROUND NO. 4 ONLY,WHEREBY, THE ASSESSEE HAS AGITATED THE A CTION OF THE LOWER AUTHORITIES IN MAKING / CONFIRMING THE ADDITION OF RS. 11,69,750/- ON ACCOUNT OF WRONG CLAIM OF CAPITAL EXPENDITURE. ITA NO. 989-CHD-2019 DEEP RESTAURANT, JIND 3 4. THE BRIEF FACTS RELATING TO THE ISSUE ARE THAT D URING THE YEAR, THE ASSESSEE CLAIMED AN ADDITION OF CAPITAL ASSET OF RS . 11,69,750/- AND CLAIMED DEPRECIATION ON THE SAID ASSETS. HOWEVER, THE ASSESSING OFFICER DOUBTED THE PURCHASE OF THE SAID ASSETS. HE ISSUED SUMMONS TO THE CONCERNED PARTY/PARTIES FROM WHOM THE SAID ASSETS W ERE PURCHASED. GETTING NO SATISFACTORY REPLY, THE ASSESSING OFFICE R HELD THAT THE CLAIM OF PURCHASE OF CAPITAL ASSETS WAS WRONG. HE, THERE AFTER ADDED THE VALUE OF THE SAID CAPITAL ASSETS AMOUNTING TO RS. 11,69,7 50/- INTO THE INCOME OF THE ASSESSEE. HE ALSO DENIED THE CLAIM OF DEPRE CIATION ON THE SAID CAPITAL ASSETS AMOUNTING TO RS. 1,16,275/-. THE LD. CIT(A) CONFIRMED THE ADDITIONS SO MADE BY THE ASSESSING OFFICER. THE ASSESSEE HAS, THUS, COME IN APPEAL BEFORE US. 5. THE FIRST AND FOREMOST CONTENTION OF THE LD. COU NSEL FOR THE ASSESSEE HAS BEEN THAT THE SAID EXPENDITURE OF RS. 11,69,750/- WAS A CAPITAL EXPENDITURE. THE ASSESSEE HAD NOT CLAIMED A NY DEDUCTION OF THE SAME ON ACCOUNT OF REVENUE EXPENDITURE, THEREFORE, THE ACTION OF THE ASSESSING OFFICER IN MAKING THE DISALLOWANCE AND TH EREBY ADDITION OF THE SAID AMOUNT WAS NOT JUSTIFIED. 6. WE AGREE WITH THE ABOVE CONTENTION OF THE LD. CO UNSEL FOR THE ASSESSEE THAT WHEN THERE WAS NO CLAIM OF AN ALLOWAN CE OF DEDUCTION OF AN AMOUNT, THERE DOES NOT ARISE ANY QUESTION OF DIS ALLOWANCE OF THE ITA NO. 989-CHD-2019 DEEP RESTAURANT, JIND 4 SAME. THE ASSESSEE HAD NEVER CLAIMED THE EXPENDITUR E OF RS. 11,69,750/- AS ITS REVENUE EXPENDITURE. IT IS NOT T HE CASE OF THE ASSESSING OFFICER THAT THE SAID EXPENDITURE CLAIMED TO HAVE BEEN INCURRED OF RS. 11,69,750/- WAS FROM ANY UNACCOUNTE D INCOME OF THE ASSESSEE. THE ONLY CONTENTION OF THE ASSESSING OFFI CER WAS THAT THE ASSESSEE COULD NOT PROVE THE INCURRING OF THE SAID EXPENDITURE. UNDER SUCH CIRCUMSTANCES, THE ASSESSING OFFICER AT THE MO ST COULD HAVE DENIED THE DEPRECIATION ON THE ASSETS CLAIMED TO HAVE BEEN PURCHASED FROM THE SAID EXPENDITURE. WHEN NO DEDUCTION HAS BEEN CLAIME D OF THE SAID EXPENDITURE, NO QUESTION OF ANY DISALLOWANCE OR ADD ITION OF THE SAID AMOUNT ARISES. THE ACTION OF THE ASSESSING OFFICER IN MAKING THE AFORESAID ADDITION IS WRONG AND ILLEGAL. THE ADDITI ON MADE BY THE ASSESSING OFFICER ON THIS ACCOUNT IS ACCORDINGLY OR DERED TOBE DELETED. 7. SO FAR AS THE DENIAL OF DISALLOWANCE OF CLAIM OF DEPRECIATION ON THE SAID ASSETS CLAIMED TO HAVE BEEN PURCHASED BY T HE ASSESSEE FOR AN AMOUNT OF RS. 11,69,750/- IS CONCERNED, THE LD. COU NSEL FOR THE ASSESSEE HAS NOT PRESSED THE SAID GROUND. THEREFORE , THE DISALLOWANCE MADE BY THE ASSESSING OFFICER OF DEPRECIATION AMOUN TING TO RS. 1,16,275/- IS HEREBY CONFIRMED. NO OTHER GROUND OR POINT HAS BEEN RAISED OR PRESSED . THE OTHER GROUNDS OF APPEAL ARE, THEREFORE, DISMISSED AS NOT PRESSED. ITA NO. 989-CHD-2019 DEEP RESTAURANT, JIND 5 IN VIEW OF OUR FINDINGS GIVEN ABOVE, THIS APPEAL OF THE ASSESSEE IS TREATED AS PARTLY ALLOWED. ORDER PRONOUNCED ON 21.05.2020. SD/- SD/- ( $ % & '# / ANNAPURNA GUPTA) () / ACCOUNTANT MEMBER ( / SANJAY GARG) / JUDICIAL MEMBER DATED : 21.05.2020 .. '+ ,-.- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. # / / CIT 4. # / ( )/ THE CIT(A) 5. -01 2 , %2 , 34516 / DR, ITAT, CHANDIGARH 6. 157$ / GUARD FILE