ACIT Circle I, v. Arun Barik,

ITA 4984/DEL/2007 | 2004-2005
Pronouncement Date: 05-03-2010 | Result: Dismissed

Appeal Details

RSA Number 498420114 RSA 2007
Bench Delhi
Appeal Number ITA 4984/DEL/2007
Duration Of Justice 2 year(s) 2 month(s) 16 day(s)
Appellant ACIT Circle I,
Respondent Arun Barik,
Appeal Type Income Tax Appeal
Pronouncement Date 05-03-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 05-03-2010
Date Of Final Hearing 25-02-2010
Next Hearing Date 25-02-2010
Assessment Year 2004-2005
Appeal Filed On 19-12-2007
Judgment Text
I.T.A. NO.4984 /DEL/07 1/5 IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH A NEW DELHI) BEFORE SHRI R.P. TOLANI JUDICIAL MEMBER AND SHRI A.K. GARODIA ACCOUNTANT MEMBER I.T.A. NO.4984 /DEL/2007 ASSESSMENT YEAR : 2004-05 ACIT SHRI ARUN BARIK CIRCLE-I 1284-HIRA LAL BLDG. MEERUT. V. PL SHARMA ROAD MEERUT. (APPELLANT) (RESPONDENT) PAN /GIR/NO.AAOPB-7851-N APPELLANT BY : MS. PRATIMA KAUSHIK . SR. DR. RESPONDENT BY : SHRI K. SAMPATH ADVOCATE. ORDER PER A.K. GARODIA AM: THIS IS REVENUE'S APPEAL DIRECTED AGAINST THE ORDER OF LD CIT(A) MEERUT DATED 16.8.2007 FOR ASSESSMENT YEAR 2004-05. 2. THE GROUNDS RAISED BY THE REVENUE READ AS UNDER: - 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDIT ION OF RS.4 74 189/- ON ACCOUNT OF BUSINESS EXPENDITURE WITHOUT APPRECIATIN G THE FACTS THAT THE ASSESSEE HAS NEITHER PRODUCED ORIGINAL BILLS AND VO UCHERS OF THE EXPENSES NOR PRESENTED HIMSELF FOR STATEMENTS IN SP ITE OF SEVERAL OPPORTUNITIES AFFORDED TO THE ASSESSEE. . I.T.A. NO.4984/DEL/07 2/5 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDIT ION OF RS.2 25 000/- MADE BY THE ASSESSING OFFICER U/S 28(IV) WITHOUT AP PRECIATING THE FACTS THAT THE SAID FLAT WAS USED BY THE ASSESSEE FOR HIS PERSONAL RESIDENCE AT THE AMOUNTS GIVEN BY THE COMPANY M/S KATRA LIQUOR ( P) LTD. ON BEHALF OF THE ASSESSEE. 3. IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE O RDER OF THE LD CIT(A) MAY BE SET ASIDE AND THAT OF THE ASSESSING OFFICER RESTORED. 3. BRIEF FACTS OF THE CASE REGARDING GROUND NO.1 OF THE APPEAL ARE THAT IT IS NOTED BY THE ASSESSING OFFICER ON PAGE NO.1 OF THE ASSESSMENT ORDER THAT AS PER TDS CERTIFICATE ISSUED BY M/S KATRA LIQUOR PVT. LTD . THERE IS GROSS INCOME OF RS.9 48 387/- AND TAX WAS DEDUCTED AT RS.52 161/-. IT IS OBSERVED BY THE ASSESSING OFFICER THAT THE ASSESSEE HAS CLAIMED EXP ENDITURE OF RS.4 74 189/- INCLUDING SALARY OF RS.1.90 LAKHS RENT RS.1 35 LAK HS ELECTRICITY RS.9150/- TELEPHONE RS.9120/- BUSINESS PROMOTION OF RS.29 60 0/- CONVEYANCE AND TRAVELING RS.70 010/- DEPRECIATION ON CAR RS.25 00 0/- AND MISC. EXPENSES OF RS.6309/-. THE ASSESSING OFFICER ASKED THE ASSESSE E TO FURNISH DETAILS AND IT IS ALSO OBSERVED BY THE ASSESSING OFFICER THAT THE COM PLETE DETAILS WERE NOT FURNISHED RELATING TO THE NATURE OF SERVICES PROVID ED AND UNDERTAKING WAS ALSO NOT GIVEN. IT IS ALSO OBSERVED BY THE ASSESSING OF FICER THAT IN RELATION TO SECURITY DEPOSIT AMOUNTING TO RS.2.25 LAKHS IN CONNECTION WI TH RENT AGREEMENT FOR A FLAT IN DEFENCE COLONY INDIRA NAGAR BANGALORE IT WAS STA TED BY THE ASSESSEE THAT THIS FLAT IS OFFICE-CUM-RESIDENCE. IT IS NOTED BY THE A SSESSING OFFICER THAT THIS WAS MENTIONED THAT WHEN THE QUERY WAS RAISED AND EARLIE R THE ASSESSEE WAS CLAIMING THAT THE SAID FLAT WAS USED ONLY FOR BUSIN ESS PURPOSE. IT IS ALSO OBSERVED BY THE ASSESSING OFFICER THAT EARLIER FLAT AT NASIK WHERE THE ASSESSEE WAS RESIDING WAS A 3 BED ROOM FLAT AND THE FLAT IN BANGALORE IS ALSO 3 BED ROOM FLAT. THE ASSESSING OFFICER CAME TO THE CONCLUSION THAT THE FLAT IN QUESTION IS USED OF RESIDENTIAL PURPOSE ONLY AND NOT FOR BUSINESS PU RPOSE. IT IS NOTED BY THE . I.T.A. NO.4984/DEL/07 3/5 ASSESSING OFFICER THAT WHEN THE HOUSE IS NOT BEING USED FOR BUSINESS PURPOSE THE OTHER EXPENSES CLAIMED ALSO CANNOT BE ALLOWED A ND IN THIS MANNER HE DISALLOWED THE ENTIRE EXPENSES CLAIMED BY THE ASSES SEE AT RS.4 74 189/-. REGARDING DEPOSIT OF RS.2.25 LAKHS WITH THE LANDLOR D IN CONNECTION WITH THAT FLAT IN BANGALORE IT WAS HELD BY HIM THAT THE SAME IS PERQ UISITE TAXABLE U/S 28(IV) OF THE ACT. BEING AGGRIEVED THE ASSESSEE CARRIED THE MAT TER IN APPEAL BEFORE LD CIT(A). LD CIT(A) HAS DELETED BOTH THESE ADDITIONS AND NOW THE REVENUE IS IN APPEAL BEFORE US. 4. LD DR OF THE REVENUE SUPPORTED THE ASSESSMENT OR DER WHEREAS LD AR OF THE ASSESSEE SUPPORTED THE ORDER OF THE LD CIT(A). 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE GON E THROUGH THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE ENTIRE DISALL OWANCE OF EXPENSES MADE BY THE ASSESSING OFFICER OF RS.4 74 189/- IS BASED ON THIS FINDING OF THE ASSESSING OFFICER THAT THE FLAT IN QUESTION AT BANGALORE IS E NTIRELY USED FOR RESIDENTIAL PURPOSES AND NOT FOR BUSINESS PURPOSES. THE BASIS OF THE ASSESSING OFFICERS DECISION IS THAT EARLIER ALSO THE ASSESSEE WAS STA YING AT NASIK IN A 3 BED ROOM FLAT AND SINCE THE FLAT IN QUESTION AT BANGALORE IS ALSO A 3 BED ROOM FLAT THE SAME WAS USED FOR RESIDENTIAL PURPOSES ONLY AND NOT FOR BUSINESS PURPOSES. WE ALSO FIND THAT IT IS NOTED BY THE LD CIT(A) IN PARA 2.2. OF HIS ORDER THAT THE ASSESSEE HAS CLAIMED EXPENDITURE TO THE EXTENT OF 50% ONLY AND ENTIRE RENT WAS NOT CLAIMED AS BUSINESS EXPENSES AND HENCE IT IS ADMITT ED POSITION THAT THE FLAT IN QUESTION WAS USED FOR RESIDENTIAL PURPOSES ALSO. NO W THE ONLY DISPUTE IS WHETHER IT WAS USED ONLY FOR RESIDENTIAL PURPOSES A ND WHETHER IT WAS USED PARTLY FOR BUSINESS PURPOSES AND PARTLY FOR RESIDENTIAL PU RPOSES. IN THIS REGARD WE FIND THAT IN THE PRESENT YEAR THE ASSESSEE HAS WORKED O N CONTRACT BASIS WITH M/S KATRA LIQUOR PVT. LTD. AT BANGALORE. FROM THIS COM PANY THE ASSESSEE HAS RECEIVED A SUM OF RS.9.48 LAKHS OUT OF WHICH THE A SSESSEE HAS CLAIMED DEDUCTION ON ACCOUNT OF EXPENSES OF RS.4.74 LAKHS. THE ASSESSING OFFICER HAS ASSESSED THE INCOME AS BUSINESS INCOME AND DISALLOW ED THE ENTIRE EXPENSES . I.T.A. NO.4984/DEL/07 4/5 CLAIMED BY THE ASSESSEE INCLUDING SALARY PAYMENT T ELEPHONE EXPENSES ELECTRICITY EXPENSES BUSINESS PROMOTION EXPENDITUR E AND DEPRECIATION ON CAR ETC. THE BASIS FOR MAKING THIS DISALLOWANCE IS THA T THE FLAT IN QUESTION AT BANGALORE WAS NOT USED BY THE ASSESSEE FOR THE BUSI NESS PURPOSE AS PER THE ASSESSING OFFICER. THE BASIS OF THIS IS THAT AS PE R THE STATEMENT GIVEN BY THE LANDLADY THE ASSESSEE WAS STAYING IN THE FLAT. TH E ASSESSEE IS ALSO ACCEPTING THAT HE WAS STAYING IN THE FLAT AND THAT WAS USED A S HIS RESIDENCE-SUM-OFFICE. WE DO NOT FIND ANY BASIS TO COME TO THE CONCLUSION THAT THE FLAT IN QUESTION WAS USED ONLY FOR RESIDENTIAL PURPOSES AND NOT PARTLY F OR RESIDENTIAL PURPOSE AND PARTLY FOR BUSINESS PURPOSE. HENCE WE DO NOT FIND ANY REASON TO SUSTAIN THE DISALLOWANCE MADE BY THE ASSESSING OFFICER ON ACCOU NT OF RENT AS WELL AS ON ACCOUNT OF OTHER EXPENSES BECAUSE THE DISALLOWANCE OF OTHER EXPENSES WAS MADE BY THE ASSESSING OFFICER SOLELY ON THE BASIS T HAT SINCE THE FLAT WAS NOT USED FOR BUSINESS PURPOSE OTHER EXPENSES CANNOT BE ALLOWED. REGARDING THE ADDITION MADE BY THE ASSESSING OFFICER U/S 28(IV) O F THE ACT ON SECURITY DEPOSIT OF RS.2.25 LAKHS ON ACCOUNT OF FLAT AT BANGALORE WE F IND THAT IT IS NOTED BY THE ASSESSING OFFICER ON PAGE NO.2 OF THE ASSESSMENT OR DER THAT IT WAS STATED BY THE LAND LADY IN HER STATEMENT IN HER REPLY TO QUESTION NO.6 THAT SHE HAS RECEIVED A SUM OF RS.2.25 LAKHS FROM THE ASSESSEE BY CHEQUE AN D NOT FROM M/S KATRA LIQUOR PVT. LTD. EVEN IF THIS DEPOSIT IS GIVEN B Y M/S KATRA LIQUOR PVT. LTD. THE SAME IS REFUNDABLE DEPOSIT AND HENCE IT CANNOT BE A DDED AS INCOME IN THE HANDS OF THE ASSESSEE. WE THEREFORE DELETE THIS ADDITIO N ALSO. 6. IN THE RESULT THE APPEAL OF THE REVENUE IS DISM ISSED. 7. ORDER PRONOUNCED IN THE OPEN COURT ON 5TH MARC H 2010. SD/- SD/- (R.P. TOLANI) A.K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER DT. 05.3.2010. HMS . I.T.A. NO.4984/DEL/07 5/5 COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A)- NEW DELHI. 5. THE DR ITAT LOKNAYAK BHAWAN KHAN MARKET NEW DELHI. TRUE COPY. BY ORDER (ITAT NEW DELHI).