Smt. RajmaatiDevi, Basti v. ITO, Basti

ITA 332/LKW/2011 | 2006-2007
Pronouncement Date: 13-07-2011 | Result: Allowed

Appeal Details

RSA Number 33223714 RSA 2011
Assessee PAN AGNPD9988P
Bench Lucknow
Appeal Number ITA 332/LKW/2011
Duration Of Justice 1 month(s) 5 day(s)
Appellant Smt. RajmaatiDevi, Basti
Respondent ITO, Basti
Appeal Type Income Tax Appeal
Pronouncement Date 13-07-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 13-07-2011
Assessment Year 2006-2007
Appeal Filed On 08-06-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A LUCKNOW BEFORE HONBLE SHRI H.L. KARWA AND HONBLE SHRI N.K. SAINI ITA NO.332/LKW/2011 ASSESSMENT YEAR:2006-07 SMT. RAJMATI DEVI PROPRIETOR M/S P.M.C. BAIRIHAWA MALVIYA ROAD GANDHINAGAR BASTI V. ITO BASTI PAN:AGNPD9988P (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI. MANOJ BHATNAGAR C.A. RESPONDENT BY: SHRI. V. V. SINGH D.R. O R D E R PER H. L. KARWA: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. CIT(A) II LUCKNOW DATED 1.3.2011 RELATING TO ASSESSMENT YEAR 2006-07. 2. GROUND NO. 1 OF THE APPEAL READS AS UNDER:- 1. ON THE FACTS ON RECORD THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-LL LUCKNOW OUGHT TO HAVE DELETED THE ADHOC DISALLOWANCE OF RS.10 000/- MADE OUT OF REPAIRS TO MACHINERY & EQUIPMENT EXPENSES. 3. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT THE ASSESSEE HAS FILED HER RETURN OF INCOME ALONG WITH AUDITED BALANCE SHEET ON 30.10.2006 DECLARING A NET PROFIT OF ` 4 42 950 IN THE STATUS OF INDIVIDUAL. THE RETURN WAS PROCESSED UNDER SECTION 143(1) OF THE INCOME-TAX ACT 1961 (IN SHORT THE ACT) ON 5.2.2007. THE CASE WAS SELECTED FOR SCRUTINY. NOTICE UNDER SECTION 143(2) OF THE ACT WAS ISSUED TO THE ASSESSEE. THE QUESTIONNAIRE WAS ALSO ISSUED ON 22.5.2008. AFTER AFFORDING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE THE ASSESSING OFFICER MADE AN ADDITION OF ` 10 000 OUT OF REPAIR MACHINERY & EQUIPMENT EXPENSES. THE ASSESSING OFFICER HAS DISCUSSED THIS ISSUE IN PARA 3 OF THE ASSESSMENT ORDER. THE ASSESSING OFFICER HAS OBSERVED THAT THE ASSESSEE HAS DEBITED ` 89 653 UNDER THE HEAD REPAIR MACHINERY & EQUIPMENT EXPENSES. DURING THE ASSESSMENT :-2-: PROCEEDINGS THE ASSESSEE COULD NOT SUBSTANTIATE THEM COMPLETELY BY PRODUCING EVIDENCE AND PRODUCED SELF-MADE VOUCHERS. IN THE ABSENCE OF COMPLETE VERIFICATION THE ASSESSING OFFICER DISALLOWED A SUM OF ` 10 000 OUT OF REPAIR MACHINERY & EQUIPMENT EXPENSES AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE. 4. ON APPEAL THE LD. CIT(A) CONFIRMED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE ALSO PERUSED THE MATERIALS AVAILABLE ON RECORD. SHRI. MANOJ BHATNAGAR C.A. APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED THAT THE DISALLOWANCE OF ` 10 000 IS NOT JUSTIFIED. HE FURTHER SUBMITTED THAT ALL THE VOUCHERS WERE AVAILABLE IN RESPECT OF THE AFORESAID EXPENSES AND THE ASSESSING OFFICER WAS NOT JUSTIFIED IN MAKING THE DISALLOWANCE ON AD HOC BASIS ON ACCOUNT OF SELF-MADE VOUCHERS. WE FIND SUBSTANCE IN THE ABOVE SUBMISSIONS OF SHRI. MANOJ BHATNAGAR C.A. APPEARING ON BEHALF OF THE ASSESSEE. THE ASSESSING OFFICER HAS NOT POINTED OUT A SINGLE INSTANCE OF EXPENDITURE WHICH WAS NOT SUPPORTED BY VOUCHER. IT SEEMS THAT THE ASSESSING OFFICER HAS MADE THE DISALLOWANCE WITHOUT BRINGING ANY SUPPORTING EVIDENCE TO JUSTIFY HIS ACTION. IN OUR VIEW THE LD. CIT(A) HAS ALSO NOT CORRECTLY APPRECIATED THE FACTS OF THE PRESENT CASE AS WELL AS THE ARGUMENTS PUT FORTH BY THE ASSESSEE. CONSIDERING THE ENTIRE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE WE DELETE THE DISALLOWANCE OF ` 10 000. ACCORDINGLY GROUND NO. 1 STANDS ALLOWED. 6. GROUND NO. 2 OF THE APPEAL READS AS UNDER:- 2. ON THE FACTS ON RECORD THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-LL LUCKNOW OUGHT TO HAVE DELETED THE ADHOC DISALLOWANCE OF RS.25 000/- MADE OUT OF RUNNING/MAINTENANCE OF GENERATOR EXPENSES. 7. THE ASSESSING OFFICER HAS DISCUSSED THIS ISSUE IN PARA 4 OF THE ASSESSMENT ORDER. ACCORDING TO THE ASSESSING OFFICER THE ASSESSEE HAS DEBITED ` 3 44 403 UNDER THE HEAD RUNNING & MAINTENANCE OF GENERATOR EXPENSES. THE ASSESSING OFFICER HAS DISALLOWED A SUM OF ` 25 000 UNDER THIS HEAD ON THE GROUND THAT THE ASSESSEE PRODUCED CERTAIN SELF-MADE DEBIT VOUCHERS. :-3-: 8. ON APPEAL THE LD. CIT(A) CONFIRMED THE DISALLOWANCE/ADDITION AND HENCE THE ASSESSEE IS IN APPEAL BEFORE THIS TRIBUNAL. 9. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE ALSO PERUSED THE MATERIALS AVAILABLE ON RECORD. SHRI. MANOJ BHATNAGAR C.A. APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED THAT RUNNING & MAINTENANCE OF GENERATOR EXPENSES INCLUDES ` 3 01 948 TOWARDS SUPPLY OF DIESEL FROM M/S CHOUDHARY SERVICE CENTRE AND BALANCE OF AMOUNT INCLUDES MONTHLY MAINTENANCE. THE ASSESSING OFFICER WAS NOT JUSTIFIED FOR MAKING DISALLOWANCE ON AD HOC BASIS WHILE ALMOST ALL THE VOUCHERS ARE THIRD PARTY VOUCHERS WHICH WERE PRODUCED BEFORE THE ASSESSING OFFICER. IN OUR VIEW THE ASSESSING OFFICER HAS MADE AD HOC DISALLOWANCE OF ` 25 000 UNDER THIS HEAD WITHOUT BRINGING ANY MATERIAL ON RECORD. THE ASSESSING OFFICER HAS NOT POINTED OUT A SINGLE INSTANCE OF EXPENDITURE FOR WHICH THE ASSESSEE DID NOT MAINTAIN VOUCHER. ON THE OTHER HAND SHRI. MANOJ BHATNAGAR C.A. APPEARING ON BEHALF OF THE ASSESSEE VEHEMENTLY ARGUED THAT THE ENTIRE EXPENDITURE WAS INCURRED FOR THE PURPOSES OF ASSESSEES BUSINESS. CONSIDERING THE ENTIRE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE WE ARE OF THE VIEW THAT THE DISALLOWANCE OF ` 25 000 MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE LD. CIT(A) IS NOT SUSTAINABLE IN LAW. ACCORDINGLY WE DELETE THE DISALLOWANCE OF ` 25 000 AND ALLOW GROUND NO. 2 OF THE APPEAL. 10. GROUND NO. 3 OF THE APPEAL READS AS UNDER:- 3. ON THE FACTS ON RECORD THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-LL LUCKNOW OUGHT TO HAVE DELETED THE DISALLOWANCE (MADE UNDER A WRONG PRESUMPTION OF OWNERSHIP) OF RS.61 959/- (RS.29 646/- INCURRED UNDER THE HEAD RUNNING & MAINTENANCE OF VEHICLE IT'S DEPRECIATION RS.29 446/- AND INTEREST ON CAR LOAN RS.2 867/-). 11. THE ASSESSING OFFICER HAS DISCUSSED THIS ISSUE IN PARA 5 OF THE ASSESSMENT ORDER. ACCORDING TO THE ASSESSING OFFICER THE ASSESSEE HAS DEBITED `29 646 UNDER THE HEAD RUNNING AND MAINTENANCE OF VEHICLE EXPENSES. THE ASSESSING OFFICER NOTICED THAT DURING THE ASSESSMENT PROCEEDINGS THE :-4-: ASSESSEE DID NOT HAVE ANY CAR. THE ASSESSING OFFICER FURTHER OBSERVED THAT THE MARUTI CAR NO UP-32 AF-4016 IS REGISTERED IN THE NAME OF DR. S. RAI AND DEPRECIATION AND RUNNING EXPENSES HAVE BEEN CLAIMED ON IT. HE THEREFORE DISALLOWED A SUM OF `29 646 UNDER THE HEAD RUNNING AND MAINTENANCE OF VEHICLE EXPENSES. THE ASSESSING OFFICER ALSO DISALLOWED `29 446 ON ACCOUNT OF DEPRECIATION AND `2 867 ON ACCOUNT OF INTEREST ON CAR LOAN. ACCORDINGLY THE ASSESSING OFFICER MADE A DISALLOWANCE TOTALLING TO `61 959. 12. ON APPEAL THE LD. CIT(A) CONFIRMED THE ADDITION FOR THE REASONS STATED IN PARA 8.1 OF THE IMPUGNED ORDER. 13. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE ALSO PERUSED THE MATERIALS AVAILABLE ON RECORD. SHRI. MANOJ BHATNAGAR C.A. APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED THAT RUNNING AND MAINTENANCE OF VEHICLE EXPENSES ARE OF MARUTI CAR UP-32 AF-4016 WHICH IS REGISTERED IN THE NAME OF THE ASSESSEE AND IS BEING USED FOR THE PURPOSES OF BUSINESS. HE THEREFORE SUBMITTED THAT THE ASSESSING OFFICER WAS WRONG IN DISALLOWING THE EXPENSES CLAIMED UNDER THE HEAD RUNNING AND MAINTENANCE OF VEHICLE EXPENSES AMOUNTING TO `29 646 ITS DEPRECIATION OF `29 446 AND INTEREST ON CAR LOAN OF `2 867 UNDER AN IMPRESSION THAT IT IS REGISTERED IN THE NAME OF DR. S. RAI WHEREAS IT IS REGISTERED IN THE NAME OF THE ASSESSEE AND FINANCED BY URBAN COOPERATIVE BANK IN F.Y. 2000-01. ACCORDINGLY IT WAS SUBMITTED BY SHRI. MANOJ BHATNAGAR C.A. APPEARING ON BEHALF OF THE ASSESSEE THAT THE DISALLOWANCE MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE LD. CIT(A) DESERVES TO BE DELETED. WE FIND THAT THE ASSESSEE HAS FILED FORM OF CERTIFICATE OF REGISTRATION ISSUED UNDER CENTRAL MOTOR VEHICLES RULES 1989 WHICH IS AVAILABLE AT PAGE 20 OF ASSESSEES COMPILATION. AS PER THIS CERTIFICATE AN ESTEEM MARUTI CAR NO.UP-32 AF-4016 IS REGISTERED IN THE NAME OF THE ASSESSEE SMT. RAJMATI DEVI. FURTHER THE CERTIFICATE IS VALID FROM 15.9.2000 TO 14.9.2015. FROM THE SAID CERTIFICATE IT IS ALSO CLEAR THAT THE CAR IS HYPOTHECATED WITH URBAN CO-OPERATIVE BANK LTD. THIS CERTIFICATE WAS ISSUED ON 15.9.2000. THE ASSESSEE HAS ALSO SUBMITTED A COPY OF INSURANCE COVERAGE CERTIFICATE OF THE CAR WHICH IS AVAILABLE AT PAGE 22 OF THE PAPER BOOK. AS PER THIS CERTIFICATE ALSO VEHICLE IN QUESTION HAS BEEN SHOWN IN THE NAME OF SMT. RAJMATI DEVI (ASSESSEE). THE ASSESSEE HAS ALSO SUBMITTED A COPY OF SALE CERTIFICATE BY KTL LIMITED LUCKNOW WHICH IS AVAILABLE AT PAGE 23 OF :-5-: THE ASSESSEES PAPER BOOK. AS PER THIS CERTIFICATE THE NAME OF THE BUYER IS SMT. RAJMATI DEVI WIFE OF LATE SHRI. PHULESHWAR RAI. SHRI. MANOJ BHATNAGAR C.A. APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED THAT ALL THE ABOVE DOCUMENTS AS AVAILABLE IN ASSESSEES COMPILATION WERE PRODUCED BEFORE THE ASSESSING OFFICER. KEEPING IN VIEW THE ABOVE DOCUMENTS THE ISSUE IS VERY CLEAR THAT THE VEHICLE I.E. CAR NO.UP-32 AF-4016 HAS BEEN PURCHASED BY THE ASSESSEE SMT. RAJMATI DEVI IN HER NAME AND DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE WAS THE OWNER OF THE VEHICLE AND THEREFORE THERE WAS NO JUSTIFICATION IN MAKING THE DISALLOWANCE UNDER THE ABOVE HEAD. ACCORDINGLY WE ALLOW THIS GROUND OF APPEAL AND DELETE THE ADDITION OF ` 61 959. 14. IN THE RESULT APPEAL IS ALLOWED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 13.7.2011. SD/- SD/- [ N. K. SAINI] [H. L. KARWA] ACCOUNTANT MEMBER VICE PRESIDENT DATED:13.7.2011 JJ:1307 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR ASSISTANT REGISTRAR