Mr. Tahir Khan, New Delhi v. DCIT, New Delhi

ITA 432/DEL/2012 | 2007-2008
Pronouncement Date: 30-03-2012 | Result: Partly Allowed

Appeal Details

RSA Number 43220114 RSA 2012
Assessee PAN AFXPK5886L
Bench Delhi
Appeal Number ITA 432/DEL/2012
Duration Of Justice 2 month(s) 2 day(s)
Appellant Mr. Tahir Khan, New Delhi
Respondent DCIT, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 30-03-2012
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted H
Tribunal Order Date 30-03-2012
Assessment Year 2007-2008
Appeal Filed On 27-01-2012
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI H BENC H BEFORE SHRI A.N. PAHUJA AM AND SHRI C.M. GARG JM ITA NO.432/DEL./2012 ASSESSMENT YEAR : 2007-08 MRS. ISABELLE WILLEMART KHAN L/H OF LATE MR. TAHIR KHAN C/0 M/SSHARMA GOEL & COMPANY A-47 HAUZ KHAS NEW DELHI VS. DCIT CIRCLE 39(1) NEW DELHI (PAN AFXPK 5886 L) (APPELLANT) (RESPONDENT) ASSESSEE BY SHRI RAVI KUMAR AR REVENUE BY SHRI B.R.R. KUMAR DR DATE OF HEARING 29-03-2012 DATE OF PRONOUNCEMENT 30-03-2012 O R D E R A.N.PAHUJA:- THIS APPEAL FILED ON 27.01.2012 BY THE ASSESSEE AG AINST AN ORDER DATED 10.10.2011 OF THE CIT(A)-XXVIII NEW DELHI RA ISES THE FOLLOWING GROUNDS:- 1. THAT THE ORDER PASSED BY THE LEARNED CIT(A) U/S 250 OF THE INCOME- TAX ACT 1961 IS BAD IN LAW AND WRONG ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE WRON GLY APPLIED THE PROVISIONS OF SEC. 68 OF THE INCOME-TAX ACT ALLEGI NG THE NON RECONCILED AMOUNT OF THE CREDITORS ACCOUNT. 3. THE LEARNED CIT(A) ON THE FACTS AND CIRCUMSTANC ES OF THE CASE WRONGLY APPLIED THE PROVISIONS OF SEC. 68 WITHOUT CONSIDERING THE CONFIRMATIONS AND RE-CONCILIATIONS FILED BY THE APP ELLANT ASSESSEE. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A) WENT WRONG IN DISALLOWING 1/10 TH OF THE VEHICLE MAINTENANCE AMOUNTING TO ` `34 923/- WITHOUT GOING THROUGH THE PARTICULARS IN DETAIL. 5. THE DISALLOWANCE OF ` ` 72 289/- BEING 1/10 TH OF THE TOTAL DEPRECIATION IS UNCALLED FOR AND ERRONEOUS BASED ON THE FACTS AND C IRCUMSTANCES OF THE CASE. ITA NO.432/DEL./2012 2 6. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED ASSESSING OFFICER ERRED IN DISALLOWING 1/10 TH OF THE TOTAL PETROL EXPENSES AMOUNTING TO ` ` 20 022/-. 7. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE ASSESSING OFFICER ERRED IN DISALLOWING ` ` 12 048/- BEING A NOTIONAL FIGURE AND NOT EXPLAINED THE BASIS OF DISALLOWANCE. 8. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A) WITHOUT GIVING SUFFICIENT OPPORTUNITY WENT WRONG IN DISALL OWING THE AMOUNTS MENTIONED IN GROUNDS 4 TO 7. 9. THE INITIATION OF PENALTY PROCEEDINGS U/S 271(1) (C) IS ERRONEOUS AND UNWARRANTED BASED ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 10. THAT THE ASSESSEE CRAVES THE LEAVE TO ADD AM END OR MODIFY ALL OR ANY OF THE GROUNDS ON OR BEFORE THE DATE OF HEARING . 2. AT THE OUTSET CONSIDERING THE NATURE OF ISSUES INVOLVED THE BENCH REJECTED THE REQUEST FOR ADJOURNMENT AND REQUESTED THE LD. AR ON BEHALF OF THE ASSESSEE TO ARGUE THIS APPEAL. 3. WE FIND THAT THE APPEAL IS DELAYED BY 49 DAYS . IN THE REQUEST FOR CONDONATION OF DELAY IN FILING THE APPEAL THE LD. AR ON BEHALF OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAVING EXPIRED PAPERS HAD TO BE SENT TO BELGIUM FOR SIGNATURE OF WIFE OF THE ASSESSEE RESIDING IN BELGIUM RESULTIN G IN DELAY IN FILING THE APPEAL. THE LD. AR ADDED THAT DELAY BEING NOT INTENTIONAL BE CONDONED. THE LD. DR DID NOT OPPOSE THESE SUBMISSIONS OF THE LD. AR 4. . WE HAVE HEARD BOTH THE PARTIES AND GON E THROUGH THE FACTS OF THE CASE AS ALSO THE REASONS FOR DELAY. THE ISSUE BEFORE US IS AS TO WHETHER OR NOT THERE WAS SUFFICIENT CAUSE FOR DELAY IN FILING THE APPEAL . IN THE CASE OF STATE OF WEST BENGAL VS. ADMINISTRATOR HOWRAH MUNICIPALITY AIR 1 972 SC 749 THE HON'BLE SUPREME COURT WHILE CONSIDERING THE SCOPE OF EXPRES SION 'SUFFICIENT CAUSE' FOR CONDONATION OF DELAY HAVE HELD THAT THE SAID EXPRES SION SHOULD RECEIVE A LIBERAL CONSTRUCTION SO AS TO ADVANCE THE SUBSTANTIAL JUSTI CE WHEN NO NEGLIGENCE OR INACTION OR WANT OF BONA FIDE IS IMPUTABLE TO THE P ARTY. IN THE CASE OF VEDABAI ITA NO.432/DEL./2012 3 ALIAS VAIJAYANTABAI BABULAO PATIL VS. SHANTARAM BAB URAO PATIL & ORS. IT WAS HELD BY THE HONBLE APEX COURT THAT WHILE EXERCISING DIS CRETION UNDER S. 5 OF THE LIMITATION ACT 1963 TO CONDONE DELAY FOR SUFFICIE NT CAUSE IN NOT FILING THE APPEAL WITHIN THE PERIOD PRESCRIBED COURTS SHOULD ADOPT A PRAGMATIC APPROACH. IT HAS BEEN CONSISTENTLY HELD BY THE HONBLE APEX COURT TH AT IN THE MATTER OF CONDONATION OF DELAY A LIBERAL AND PRAGMATIC VIEW SHOULD BE TAKEN . IN THE FACTS AND CIRCUMSTANCES OF THE CASE ESPECIALLY WHEN THE ASSESSEE IS STATED TO HAVE EXPIRED AFTER RECEIPT OF THE IMPUGNED ORDER AND IND ISPUTABLY APPEAL PAPERS HAD TO BE SENT TO BELGIUM FOR SIGNATURES WE ARE OF THE OPINION THAT THE REASONS GIVEN ON BEHALF OF THE ASSESSEE FOR THE DELAY OF 49 DA YS APPEAR TO BE SUFFICIENT CAUSE FOR DELAY IN FILING THE APPEAL AND ACCORDINGLY TH E SAID DELAY OF 49 DAYS IN FILING THE APPEAL IS CONDONED. 5. ADVERTING NOW TO GROUND NOS. 2 & 3 IN THE APPEA L FACTS IN BRIEF AS PER RELEVANT ORDERS ARE THAT RETURN DECLARING INCOM E OF ` ` 9 38 850/- FILED ON 08.11.2007 BY THE ASSESSEE WAS SELECTED FOR SCRUT INY WITH THE SERVICE OF A NOTICE U/S 143(2) OF THE INCOME-TAX ACT 1961 (HER EINAFTER REFERRED TO AS THE ACT) ISSUED ON 24.09.2008. DURING THE COURSE OF ASSESSM ENT PROCEEDINGS THE ASSESSING OFFICER (A.O. IN SHORT) ISSUED NOTICE U/ S 133(6) OF THE ACT TO VARIOUS PARTIES FOR ASCERTAINING THE GENUINENESS OF PURCHAS ES MADE BY .THE ASSESSEE. ON VERIFICATION OF THE ASSESSEES ACCOUNTS VIS-A-VI S CONFIRMATION RECEIVED FROM THE SAID PARTIES THE AO NOTICED THE FOLLOWING DIFF ERENCE:- S.NO. NAME OF THE PARTY BALANCE AS PER ASSESSEE LEDGER[IN ` ] ] BALANCE AS PER PARTYS A/C[IN ` ] ] DIFFERENCE [IN ` ] ]] ] 1 HOTEL HILL TOP 888373 703836 184537 2 HOTEL RANG MAHAL 743902 641202 102700 3 HOTEL SAMODE PALACE 25616 19064 6552 4 RAINBOW HOLIDAYS 735421 723165 12256 5 UDAI VILAS JAIPUR 1577942 1547493 30449 TOTAL 336494 ITA NO.432/DEL./2012 4 SINCE THE ASSESSEE FAILED TO RECONCILE THE AFORESAI D DIFFERENCES AND THE CREDITS HAVING NOT BEEN EXPLAINED TO HIS SATISFACTION THE AO ADDED THE AMOUNT OF ` ` 3 36 494/-. 6. ON APPEAL THE LD. CIT(A) AFTER VERIFYING THE R ECONCILIATION SUBMITTED BY THE ASSESSEE AND HAVING REMAND REPORT OF THE AO ON THE ADDITIONAL EVIDENCE SUBMITTED BY THE ASSESSEE DELETED THE ADDITION ON ACCOUNT OF DIFFERENCE IN THE ACCOUNTS VIS--VIS THAT OF M/S HOTEL HILL TOP PALA CE & M/S HOTEL RANG MAHAL. HOWEVER ADDITIONS ON ACCOUNT OF DIFFERENCE IN ACCO UNTS WITH HOTEL SAMODE PALACE RAINBOW HOLIDAYS AND UDAI VILAS JAIPUR WER E RETAINED HOLDING AS UNDER:- 8.4 IN RESPECT OF HOTEL SAMODE PALACE THE ADDITIO N MADE BY THE ASSESSING OFFICER OF ` ` 6 552/- IS UPHELD TO THE TUNE OF ` ` 6 098/- AS EXPLAINED BY THE ASSESSING OFFICER IN HIS REMAND RE PORT. 8.5 HOWEVER THE ADDITIONS IN RESPECT OF HOTELS RA INBOW HOLIDAYS AND HOTEL UDAI VILAS ARE UPHELD IN VIEW OF THE FIND INGS OF THE ASSESSING OFFICER IN HIS REMAND REPORT (` ` 12 256+` ` 30 449/-). 7. THE ASSESSEE IS NOW IN APPEAL BEFORE US AGAINST THE AFORESAID UPHOLDING OF THE ADDITION OF ` ` 6098/-+ ` `12 256+` ` 30 449/- BY THE LD. CIT(A). THE LD. AR ON BEHALF OF THE ASSESSEE MERELY REITERATED THEIR SUBMISSIONS BEFORE THE LD. CIT(A) WHILE CONTENDING THAT THEIR EXPLANATION HAS NOT BEEN CONSIDERED. ON THE OTHER HAND THE LD. DR SUPPORTED THE FINDINGS O F THE LD. CIT(A) IN THE LIGHT OF REMAND REPORT SUBMITTED BY THE ASSESSEE. 8. WE HAVE HEARD BOTH THE PARTIES AND GONE THOUGH THE FACTS OF THE CASE. AS REGARDS DIFFERENCE IN ACCOUNTS OF THE ASSE SSEE VIS--VIS IN THE BOOKS OF HOTEL SAMODE PALACE THE LD. AR EXPLAINED BEFORE TH E LD. CIT(A) THAT DIFFERENCE WAS NOT ` 6552/- BUT ` 6098/-. THE LD. CIT(A) ACCEPTED THE DIFFERENCE OF ` 6 098/-. WHILE EXPLAINING THIS DIFFERENCE THE LD. AR SUBMIT TED THAT DIFFERENCE OF ` 5703.50 WAS ON ACCOUNT OF OPENING DIFFERENCE IN THE EARLIE R YEARS. HOWEVER THE AO POINTED OUT IN HIS REMAND REPORT THAT ACTUAL DIFFER ENCE IN OPENING BALANCE WAS ` 84295.50.. THEREAFTER THE LD. AR DID NOT MAKE ANY ATTEMPT TO RECONCILE THE SAID ITA NO.432/DEL./2012 5 DIFFERENCE BEFORE THE LD. CIT(A) NOR ANY MATERIAL H AS BEEN PLACED BEFORE US . THE LD. AR APPEARING BEFORE US APART FROM REITERATING THEIR SUBMISSIONS BEFORE THE LD. CIT(A) DID NOT IMPROVE UPON THE CASE OF THE ASSESSE E.. 8.1 AS REGARDS RECONCILIATION OF ACCOUNTS OF RA INBOW HOTELS AND UDAI VILAS THE ASSESSEE FAILED TO RECONCILE THESE ACCOUNTS BE FORE THE AO AND BEFORE THE LD. CIT(A). EVEN BEFORE US THE LD. AR DID NOT MAKE ANY ATTEMPT TO IMPROVE UPON THE CASE OF THE ASSESSEE NOR FURNISHED ANY RECONCIL IATION BEFORE US DESPITE SPECIFIC REQUEST.. 8.2 IN VIEW OF THE FOREGOING ESPECIALLY WHEN TH E LD. AR ON BEHALF OF THE ASSESSEE DID NOT PLACE ANY MATERIAL BEFORE US IN O RDER TO CONTROVERT THE AFORESAID FINDINGS OF FACTS RECORDED BY THE LD. CIT (A) SO AS TO ENABLE US TO TAKE A DIFFERENT VIEW IN THE MATTER WE ARE NOT INCLINED T O INTERFERE. THEREFORE GROUND NOS.2 & 3 IN THE APPEAL ARE DISMISSED. 9.. GROUND NOS. 4 TO 6 RELATE TO DISALLOWANCE OF 1 /10 TH OF THE VEHICLE MAINTENANCE EXPENSES DEPRECIATION OF VEHICLES AND PETROL EXPENSES. THE AO NOTICED DURING THE COURSE OF ASSESSMENT PROCEEDINGS THAT THE ASSESSEE CLAIMED AN AMOUNT OF ` ` 3 49 234/- UNDER THE HEAD VEHICLE MAINTENANCE ` 7 22 890 ON A/C OF DEPRECIATION ON VEHICLES ` 2 00 226 TOWARDS PETROL EXPENSES AND ` 1 10 231 ON A/C OF VEHICLE INSURANCE.. SINCE PERSONAL USE OF V EHICLES WAS NOT DENIED THE AO DISALLOWED 1/6 TH OF THESE EXPENSES FOR PERSONAL USE OF VEHICLES. 10. ON APPEAL THE LD. CIT(A) AFTER HAVING A REMAN D REPORT FROM THE AO REDUCED THE DISALLOWANCE TO 1/10 TH OF THE AFORESAID EXPENSES IN THE FOLLOWING TERMS:- THE ASSESSING OFFICER IN HIS REMAND REPORT HAS SUB MITTED THAT IN RESPECT OF VARIOUS DISALLOWANCES THE ADDITIONAL EVI DENCE FILED BY THE APPELLANT DURING THE COURSE OF APPELLANT PROCEE DINGS SHOULD NOT BE ADMITTED AS ENOUGH OPPORTUNITY WAS PROVIDED TO H IM DURING THE COURSE OF APPELLANT PROCEEDINGS TO EXPLAIN HIS STAN D IN RESPECT OF SUCH DISALLOWANCES WHICH WERE NOT AVAILED BY THE AP PELLANT. ITA NO.432/DEL./2012 6 HOWEVER I DO NOT FULLY AGREE WITH THE ASSESSING OF FICER IN THIS RESPECT AND ALLOW THE ADDITIONAL EVIDENCE FILED TO BE ADMITTED FOR CONSIDERATION. ON A CLOSE STUDY OF THE VARIOUS SUB MISSIONS MADE BY THE APPELLANT ITS REJOINDER AND THE ORDER OF TH E ASSESSING OFFICER AND THE REMAND REPORT I AM OF THE CONSIDERED OPIN ION THAT 1/6 TH DISALLOWANCE IN RESPECT OF VEHICLE MAINTENANCE VEH ICLE DEPRECIATION PETROL EXPENSES AND VEHICLE INSURANCE SEEMS TO BE ON A HIGHER SIDE. KEEPING IN VIEW THE NATURE OF CR EDIT WHICH INCLUDES TOUR OPERATION AND TRAVELING IN INDIA FOR WHICH THE APPELLANT IS REQUIRED TO MAINTAIN NUMBER OF VEHICLES AS PER T HE REQUIREMENT OF THE VISITING TOURISTS. I SUSTAIN THE ADDITION MADE BY THE ASSESSING OFFICER TO THE EXTENT OF 1/10 TH UNDER EACH HEAD AS DISCUSSED IN THE ORDER OF THE ASSESSING OFFICER I.E. 1/10 OF ` `3 49 234+ ` 7 22 890+ ` 1 20 481+ ` 2 00 226+ ` 18 371/- IS=` ` 34 923+ ` 72 289+ ` 12 048/-+ ` 20 022+ ` 1 837/-. THESE GROUNDS ARE PARTLY ALLOWED. 11. THE ASSESSEE IS NOW IN APPEAL BEFORE US AGAINS T THE AFORESAID FINDINGS OF THE LD. CIT(A). THE LD. AR ON BEHALF O F THE ASSESSEE REITERATED THEIR SUBMISSIONS BEFORE THE LD. CIT(A) . TO A QUERY BY THE BBENCH THE LD. AR DID NOT REPLY AS TO WHETHER THE ASSESSEE MAINTAINED ANY OT HER VEHICLES FOR HIS PERSONAL USE AND USE BY MEMBERS OF HIS FAMILY AND STAFF. IN TER ALIA THE LD. AR RELIED UPON DECISION IN CIT VS. SSP(P) LTD. 14 TAXMAN 87(P&H).O N THE OTHER HAND THE LD. DR RELIED ON THE FINDINGS OF THE LD. CIT(A). 12. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUG H THE FACTS OF THE CASE. AT THE OUTSET WE FIND THAT THE DECISION RE LIED UPON BY THE LD. AR IN SSP(P) LTD.(SUPRA) IS NOT RELEVANT SINCE THAT WAS R ENDERED IN THE CASE OF A COMPANY. LIKEWISE DECISION IN SAYAJI IRON & ENGG. VS. CIT 253 ITR 749(GUJ) WAS IN THE CONTEXT OF USE OF VEHICLES BY DIRECTORS OF THE COMPANY. THUS RELIANCE ON THESE DECISIONS IS TOTALLY MISPLACED. CONSIDERIN G THE FACTS & CIRCUMSTANCES OF THE CASE WE FIND THAT THE LD. AR DID NOT REFER US TO ANY MATERIAL WARRANTING INTERFERENCE WITH THE FINDINGS OF THE LD. CIT(A). SINCE PERSONAL USE OF VEHICLES BY THE ASSESSEE AND HIS FAMILY MEMBERS OR STAFF H AS NOT BEEN DENIED NOR IT WAS CLAIMED THAT THE ASSESSEE OR HIS FAMILY MEMBERS H AD ANY INDEPENDENT VEHICLES FOR PERSONAL USE IN OUR OPINION DISALLOWANCE OF 1 /10 TH OF THE EXPENSES ON ITA NO.432/DEL./2012 7 RUNNING AND MAINTENANCE OF VEHICLES INCLUDING DEPR ECIATION THEREON IN THE LIGHT OF PROVISIONS OF SEC. 38(2) OF THE ACT IS REASONA BLE . THEREFORE GROUND NOS. 4 TO 6 IN THE APPEAL OF THE ASSESSEE ARE REJECTED. 13.. GROUND NO.7 RELATES TO DISALLOWANCE OF ` ` 12 048/-. THE LD. AR ON BEHALF OF THE ASSESSEE EXPLAINED THAT THE LD. CIT(A ) ERRONEOUSLY ADDED 1/10 TH DEPRECIATION ON VEHICLES AGAIN WHICH ALREADY STOOD DISALLOWED BY THE AO. THE LD. DR DID NOT CONTROVERT THESE SUBMISSIONS. IN THE SE CIRCUMSTANCES WE VACATE THE FINDINGS OF THE LD. CIT(A) AND RESTORE THE MATT ER TO HIS FILE WITH THE DIRECTIONS TO ASCERTAIN AS TO WHETHER OR NOT ANY DOUBLE DISALL OWANCE ON A/C OF DEPRECIATION ON VEHICLES HAS BEEN MADE AND THEREAFTER PASS A SP EAKING ORDER IN ACCORDANCE WITH LAW AFTER ALLOWING SUFFICIENT OPPORTUNITY TO B OTH THE PARTIES. WITH THESE DIRECTIONS GROUND NO. 7 IS DISPOSED OF. 14. GROUND NOS.1 AND 8 IN THE APPEAL BEING GENERAL IN NATURE NOR ANY SEPARATE SUBMISSIONS HAVING BEEN MADE BEFORE US ON THESE GROUNDS DO NOT REQUIRE ANY SEPARATE ADJUDICATION WHILE NO ADDITION AL GROUND HAVING BEEN RAISED BEFORE US IN TERMS OF RESIDUARY GROUND NO. 10 IN TH E APPEAL ACCORDINGLY ALL THESE GROUNDS ARE DISMISSED. 15.. GROUND NO.9 RELATES TO INITIATION OF PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT. SINCE MERE INITIATION OF PENA LTY PROCEEDINGS IS NOT APPEALABLE ACCORDINGLY THIS GROUND IS DISMISSED. 16. NO OTHER PLEA OR ARGUMENT WAS MADE BEFORE US. ITA NO.432/DEL./2012 8 17. IN THE RESULT APPEAL IS PARTLY ALLOWED BUT FO R STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT SD/- SD/- (C.M. GARG) (A.N. PAHUJA) JUDICIAL MEMBER ACCOUNTANT MEMBER NS COPY OF THE ORDER FORWARDED TO :- 1. MRS. ISABELLE WILLEMART KHAN L/H OF LATE MR. T AHIR KHAN C/0 M/S SHARMA GOEL & COMPANY A-47 HAUZ KHAS NEW DELHI 2 DCIT CIRCLE 39(1) NEW DELHI 3. THE CIT CONCERNED 4. CIT (APPEALS)-XXVIII NEW DELHI 5. THE DR ITAT H BENCH NEW DELHI 6. GUARD FILE. BY ORDER DEPUTY / ASSTT.REGISTRAR ITAT DELHI