Shri Jignesh A shah, Ahmedabad V. DCIT Central Circle 1 (2), Ahmedabad

ITSSA 356/AHD/2017

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 0779 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 5 month(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 10-12-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 21-10-2019
• Assessment Year: 2010-2011
• Appeal Filed On: 10-07-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: O P SHARMA
• Assessee Lawyers: P M MEHTA
• Keywords: Business expenditure; Rule of consistency; Capital expenditure; Set aside
• Section: 153A; 37; 132; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH (BEFORE SHRI MAHAVIR PRASAD, JUDICIAL MEMBER & SHRI WASEEM AHMED, ACCOUNTANT MEMBER) IT(SS)A. NO: 356/AHD/2017 (ASSESSMENT YEAR: 2010-11) SHRI JIGNESH A SHAH 18, SHARDAKUNJ SOCIETY ROADS, VIKAS GRUH ROAD, PALDI, AHMEDABAD V/S DCIT CENTRAL CIRCLE-1(2), AHMEDABAD (APPELLANT) (RESPONDENT) PAN: AIQPS 5239M APPELLANT BY : SHRI P.M. MEHTA, AR RESPONDENT BY : SHRI O.P. SHARMA, CIT/ D.R. ( )/ ORDER DATE OF HEARING : 21 -10-201 9 DATE OF PRONOUNCEMENT : 10S-12-2019 PER MAHAVIR PRASAD, JUDICIAL MEMBER 1. THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF THE LD. CIT(A)-11, AHMEDABAD DATED 12.05.2017 PERTAINING TO A.Y. 2010-11 AND FOLLOWING GROUNDS HAVE BEEN TAKEN: IT(SS)A NO. 356/AHD/2017 . A.Y. 2010-11 2 1.IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF THE APPELLANT'S CASE, THE LEARNED CIT (A) HAS ERRED IN UPHOLDING THE ADDITION OF RS.2 2,500 (BEING 30% OF RS.75,000 BEING HOARDING INCOME) MADE FOR TREATING SUCH INCOM E AS INCOME FROM OTHER SOURCES INSTEAD OF INCOME FROM HOUSE PROPERTY AS CL AIMED BY THE APPELLANT WITHOUT APPRECIATING THE FACT THAT SUCH INCOME HAS BEEN DERIVED BY LETTING OUT TERRACE FOR DISPLAYING HOARDINGS, WHICH IS COVERED UNDER SECTION 22 OF THE ACT. 2.IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF THE APPELLANT'S CASE, THE LEARNED CIT (A) HAS ERRED IN UPHOLDING DISALLOWANCE OF EXPE NDITURE OF RS.8,97,648/- CLAIMED AS DEDUCTION UNDER SECTION 57 OF THE ACT WI THOUT APPRECIATING THE FACT THAT THE ASSESSING OFFICER HIMSELF HAS STATED THAT SUCH EXPENDITURE IS ALLOWABLE AS BUSINESS EXPENDITURE UNDER SECTION 37 OF THE ACT , BUT DENIED SUCH DEDUCTION ONLY ON THE GROUND THAT SUCH CLAIM WAS NOT MADE IN RETURN OF INCOME. 2.1 IN LAW AND IN THE FACTS AND CIRCUMSTANCES O F APPELLANT'S CASE, THE LEARNED CIT (A) OUGHT TO HAVE APPRECIATED THAT SIMILAR CLAI M OF EXPENDITURE HAS BEEN ALLOWED BY ASSESSING OFFICER HIMSELF IN A.Y. 2008-0 9, 2012-13 AND 2013-14 WHEREIN THE APPELLANT HAS CLAIMED DEDUCTION OF EXPE NDITURE UNDER THE HEAD 'INCOME FROM BUSINESS AND PROFESSION'. THE ID. CIT ( APPEALS) OUGHT TO HAVE DIRECTED THE ASSESSING OFFICER TO ALLOW SUCH EXPEND ITURE ON THE PRINCIPLE OF CONSISTENCY. 3. THE APPELLANT CRAVES LEAVE TO ADD, TO ALTE R, TO AMEND AND/OR WITHDRAW ANY OF THE GROUNDS OR GROUND OF APPEAL EITHER BEFORE OR AT THE TIME OF APPEAL HEARING. 2. FACTS OF THE CASE ARE THAT A SEARCH ACTION UNDER SECTION 132 OF THE INCOME TAX ACT, 1961, WAS CARRIED OUT IN THE CASE OF MARUTI GR OUP ON 27TH APRIL, 2011. THE APPELLANT BEING ONE OF THE MEMBERS OF THE SAID GROUP, WAS ALSO SUBJECTED TO SEARCH. IN CONSEQUENCE TO THE SEARCH, NOTICES UN DER SECTION 153A WERE ISSUED FOR A.Y. 2006-07 TO A.Y. 2011-12. IN RESPONS E TO THE SAME, RETURNS OF INCOME WERE FILED AND ASSESSMENT WAS FRAMED. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, APPELLANT FURNISHED ALL THE INFORMATION/EXPLANATION AS REQUIRED BY THE ASSESSING OFFICER FROM TIME TO TIME . 3. THE ORIGINAL RETURN OF INCOME UNDER SECTION 139 WAS FILED ON 28TH DECEMBER, 2010 DECLARING TOTAL INCOME AT RS. 6,16,950/-. THER EAFTER, RETURN OF INCOME IN IT(SS)A NO. 356/AHD/2017 . A.Y. 2010-11 3 RESPONSE TO NOTICE UNDER SECTION 153A WAS FILED BY DECLARING SAME INCOME AS WAS DECLARED IN THE ORIGINAL RETURN OF INCOME. THE ASSESSMENT WAS FRAMED BY DETERMINING TOTAL INCOME AT RS. 15,37,100/-. 4. AGAINST THE ADDITION MADE BY THE ASSESSING OFFICER, ASSESSEE PREFERRED FIRST STATUTORY APPEAL BEFORE THE LD. CIT(A) WHO CONFIRME D THE ACTION OF THE A.O. 5. NOW ASSESSEE HAS COME BEFORE US. 6. WE HAVE GONE THROUGH THE RELEVANT RECORD AND IMPUGN ED ORDER. SO FAR GROUND NO. 1 IS CONCERNED WITH REGARD TO ADDITION OF RS. 2 2,500/- BEFORE THE ASSESSING OFFICER, ASSESSEE HIMSELF WAS AGREED THAT HE DID NO T HAVE ANY OBJECTION FOR ADDITION. SINCE ASSESSEE HAS ACCEPTED BEFORE THE LD . A.O. THE SAME IS DISMISSED AS INFRUCTUOUS. 7. NOW WE COME TO NEXT GROUND RELATING TO DISALLOWANCE OF EXPENDITURE OF RS. 8,97,648/- CLAIMED AS DEDUCTION U/S 57 OF THE ACT. 8. IN THIS CASE, APPELLANT IN RESPONSE TO NOTICE U/S. 153A. APPELLANT HAS CLAIMED BUSINESS INTEREST AND OTHER BUSINESS EXPENSES AND O THER BUSINESS EXPENSES AMOUNTING TO RS. 8,97,648/- FROM BUSINESS. 9. BEFORE THE LOWER AUTHORITIES, APPELLANT SUBMITTED T HAT INADVERTENTLY, ASSESSEE TOOK THE STAND THAT EXPENSES WERE MADE FROM BUSINES S INCOME AND REQUESTED LOWER AUTHORITIES THAT IT SHOULD BE ALLOWED AS DEDU CTION FROM BUSINESS U/S 37 OF THE I.T. ACT. IT(SS)A NO. 356/AHD/2017 . A.Y. 2010-11 4 10. SECTION 37 CONTEMPLATES THAT ANY EXPENDITURE (NOT B EING EXPENDITURE OF THE NATURE DESCRIBED IN SECTIONS 30 TO 36 AND NOT BEING IN THE NATURE CAPITAL EXPENDITURE OR PERSONAL EXPENSES OF THE ASSESSEE), LAID OUT OR EXPENDED WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OF THE BUSINESS OR PROFESSION SHALL BE ALLOWED IN COMPUTING THE INCOME CHARGEABLE UNDER THE HEAD PROFITS AND GAINS OF BUSINESS OR PROFESSION. 11. IN THE INTEREST OF JUSTICE, WE SET ASIDE THIS MATTE R TO THE FILE OF LD. CIT(A) WHO WILL EXAMINE THE CLAIM OF THE ASSESSEE AND WILL CON SIDER SUBMISSION TO BE FILED BEFORE THE LD. CIT(A). THEREAFTER WILL DECIDE MATTE R AS PER PROVISIONS OF LAW. 12. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS PART LY ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 10- 12- 2019 SD/- SD/- (WASEEM AHMED) (MAHAVIR PRASAD) ACCOUNTANT MEMBER TRUE COPY JUDICIAL MEMBER AHMEDABAD: DATED 10/12/2019 RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHME DABAD