V.T.Rajandran, Mannargudi v. ITO, Nagapattinam

ITA 531/CHNY/2010 | 2005-2006
Pronouncement Date: 16-07-2010 | Result: Partly Allowed

Appeal Details

RSA Number 53121714 RSA 2010
Assessee PAN AAIPR7725F
Bench Chennai
Appeal Number ITA 531/CHNY/2010
Duration Of Justice 2 month(s) 24 day(s)
Appellant V.T.Rajandran, Mannargudi
Respondent ITO, Nagapattinam
Appeal Type Income Tax Appeal
Pronouncement Date 16-07-2010
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted B
Tribunal Order Date 16-07-2010
Assessment Year 2005-2006
Appeal Filed On 22-04-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL BENCH B SMC CHENNAI BEFORE SHRI U.B.S. BEDI JUDICIAL MEMBER I.T.A. NO.531/MDS/2010 ASSESSMENT YEAR: 2005-06 V.T. RAJANDRAN NO. 53A AZAD STREET MANNARGUDI THIRUVARUR DT. [PAN: AAAIPR7725F] VS . THE INCOME TAX OFFICER WARD I (2) NAGAPATTINAM. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI T.T. DURAIRAJ KANDIAR REVENUE BY : SHRI P.B. SEKARAN O R D E R PER U.B.S. BEDI J.M. THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST TH E ORDER PASSED BY THE LD. CIT(A) TIRUCHIRAPPALLI 620 001 DATED 15.02 .2010 RELEVANT TO THE ASSESSMENT YEAR 2005-06 WHEREBY BESIDES CHALLENGIN G DISALLOWANCE OF 10% OF DEPRECIATION AMOUNTING TO RS. 98 411/- CLAIMED O N THE BUSINESS ASSETS THE ASSESSEE HAS ALSO CHALLENGED CONFIRMATION OF ADDITI ON OF RS.1 30 000/- ON ACCOUNT OF UNEXPLAINED CASH CREDIT. 2. AS REGARDS FIRST ISSUE THE DISALLOWANCE ON KAL YANA MANDAPAM THE ASSESSING OFFICER HAS DISALLOWED 15% OF SUCH DEPREC IATION STATING THAT DEPRECIATION CLAIMED FOR ASSESSEES PORTION KEPT FO R PERSONAL USE HAS NOT BEEN ALLOWED. ACCORDINGLY HE HAS DISALLOWED DEPREC IATION @ 15% ON THE PORTION USED/KEPT FOR PERSONAL USE I.E. 15% OF RS.9 4 8114/- = RS.1 42 217/- AND FURTHER ADDED 15% OF MUNICIPAL TAXES TO THE EXT ENT OF RS.10 941/- AND IN APPEAL IT WAS ARGUED THAT EVEN THOUGH THE ROOM WAS KEPT IN THE KALYANA MANDAPAM FOR THE ASSESSEE YET IT WAS RARELY USED B Y THE ASSESSEE AS HE IS I.T.A. NO. I.T.A. NO. I.T.A. NO. I.T.A. NO.. .. .531/MDS/10 531/MDS/10 531/MDS/10 531/MDS/10 2 NON-RESIDENT. THE LD. CIT(A) WHILE CONSIDERING THE PLEA OF THE ASSESSEE;S AR THAT THERE WAS NO PERSONAL USE OF THE ASSESSEE SO OPINED THAT THE DISALLOWANCE OF 15% OF DEPRECIATION WAS NOT CALLED FOR BEING EXCESSIVE. HE THUS DIRECTED THE ASSESSING OFFICER TO RESTRICT THI S DISALLOWANCE TO 10% OF RS.9 84 114/- (RS.98 411/-). 3. STILL AGGRIEVED THE ASSESSEE HAS COME UP IN FU RTHER APPEAL AND IT WAS ARGUED THAT THE DISALLOWANCE OF 10% OF DEPRECIATION AMOUNTING TO RS.98411/- CLAIMED ON THE BUSINESS ASSETS IS WITHOUT ANY BASIS AND WITHOUT ATTRIBUTING ANY REASONS FOR DISALLOWANCE OF ELIGIBLE DEPRECIATI ON. THEREFORE IT WAS PRAYED FOR SETTING ASIDE THE ORDERS OF THE AUTHORITIES BEL OW AND PASSING DIRECTION TO ALLOW THE ENTIRE CLAIM OF THE DEPRECIATION AS MADE BY THE ASSESSEE. 4. WHEREAS THE LD. DR SUBMITTED THAT THE LD. CIT( A) HAS BEEN JUSTIFIED IN RESTRICTING THE DISALLOWANCE OF THE DEPRECIATION FR OM 15% TO 10% AND SINCE THE ASSESSEE HAS NOT BEEN ABLE TO MAKE OUT A CASE F OR ANY FURTHER REDUCTION IN DISALLOWANCE IN RESPECT OF DEPRECIATION THEREFO RE THE ORDER OF THE LD. CIT(A) NEEDS TO BE CONFIRMED. IT WAS URGED FOR CONF IRMATION OF THE IMPUGNED ORDER. 5. AFTER HEARING BOTH THE SIDES AND CONSIDERING TH E MATERIALS ON RECORD IT IS FOUND THAT THE ASSESSEE HAS NOT BEEN ABLE TO SUB STANTIATE ITS CLAIM FOR ANY FURTHER ALLOWANCE IN THE DISALLOWANCE OF PORTION OF DEPRECIATION ON PORTION KEPT BY THE ASSESSEE FOR HIS PERSONAL USE WHICH IS FOUND TO HAVE JUSTIFIABLY BEEN RESTRICTED TO 10% BY THE LD. CIT(A) AGAINST 15 % MADE BY THE ASSESSING OFFICER WHEN THE FACT OF UTILIZING 1600 SQ.FT. ARE A KEPT FOR THE USE OF THE I.T.A. NO. I.T.A. NO. I.T.A. NO. I.T.A. NO.. .. .531/MDS/10 531/MDS/10 531/MDS/10 531/MDS/10 3 ASSESSEE FOR BUSINESS PURPOSE IS NOT ESTABLISHED. T HEREFORE KEEPING IN VIEW OF THE FACTS CIRCUMSTANCES AND MATERIALS ON RECORD I WHILE CONCURRING WITH THE FINDINGS OF LOWER AUTHORITIES UPHOLD THE ORDER OF THE LD. CIT(A) AND DISMISS THIS GROUND OF APPEAL OF THE ASSESSEE BEING WITHOUT ANY BASIS. 6. THE SECOND ISSUE RELATES TO CONFIRMATION OF DIS ALLOWANCE OF UNEXPLAINED CASH CREDIT OF RS.1 30 000/-. THE ASSES SING OFFICER NOTED THAT THERE IS A PENCIL ENTRY ON 13.06.2004 FOR RS.30 000 /- AT PAGE NO. 6 AND THERE IS ALSO PENCIL ENTRY ON 10.10.2004 FOR RS.50 000/- AT PAGE NO. 12 AND FURTHER ENTRY ON 15.10.2004 AT PAGE 12 FOR RECEIPT OF ANOTH ER SUM OF RS.50 000/- AND ALL THESE THREE ENTRIES WITHOUT ANY NARRATION OF SO URCE OF RECEIPTS. SPECIFICALLY THERE ARE PENCIL ENTRIES ON 13.06.04 AT PAGE 6 ON 1 0.10.04 AT PAGE 12 AND ON 15.10.04 AT PAGE 12 ON THE DEBIT SIDE FOR RS.30 000 /- RS.50 000/- AND RS.50 000/- RESPECTIVELY WHICH PROVES THAT THE CRE DIT INTRODUCED EARLIER HAVE BEEN SQUARE OFF WITHIN THE YEAR AND IF THESE ENTRIE S ARE GENUINE LOAN TAKEN THEN THESE CREDITS WOULD ATTRACT THE PROVISIONS OF SECTION 271D FOR VIOLATION OF PROVISIONS OF SECTION 269SS OF THE INCOME TAX ACT. THEREFORE HE CONCLUDED THAT THESE ENTRIES PROVES THAT CREDIT FOR RS.30 000 /- RS.50 000/- AND RS.50 000/- AGGREGATING TO RS.1 30 000/- INTRODUCED ON THE DATES MENTIONED ABOVE ARE UNEXPLAINED CASH CREDITS AND ASSESSABLE U NDER SECTION 68 OF THE ACT WHICH CAME TO BE ADDED BY THE ASSESSING OFFICE R IN THE INCOME OF THE ASSESSEE. AGAINST THE ACTION OF THE ASSESSING OFFIC ER THE ASSESSEE PREFERRED AN APPEAL AND THE LD. CIT(A) WHILE NOTING THAT THE ASSESSING OFFICER HAS GIVEN PROPER REASON FOR SUCH ADDITION BECAUSE THESE ENTRIES CLEARLY PROVES I.T.A. NO. I.T.A. NO. I.T.A. NO. I.T.A. NO.. .. .531/MDS/10 531/MDS/10 531/MDS/10 531/MDS/10 4 THAT THE CREDIT OF RS.30 000/- RS.50 000/- AND RS. 50 000/- INTRODUCED ON THE DATES MENTIONED AGAINST EACH ARE UNEXPLAINED CASH C REDITS AND ASSESSABLE UNDER SECTION 68 AND WHILE CONSIDERING THE REASONS OF THE ASSESSING OFFICER IN MAKING THE ADDITION TO BE PROPER THE LD. CIT(A) CONCURRED WITH THE SAME AND UPHELD SUCH ADDITION. 7. STILL AGGRIEVED THE ASSESSEE HAS COME UP IN FU RTHER APPEAL AND WHILE CONTENDING THAT THE FIRST ENTRY IS DEBIT OF RS.30 0 00/- ON ACCOUNT OF PROPRIETORS DRAWING AND OTHER TWO ENTRIES OF RS.50 000/- EACH O F PROPRIETORS CURRENT ACCOUNT RELATES TO BRINGING THE CAPITAL FROM AND OU T OF AGRICULTURAL INCOME EARNED DURING THE SAID YEAR WHICH WAS IGNORED BY T HE LD. CIT(A). THEREFORE IT WAS PLEADED FOR DELETION OF THE ADDITION MADE BY TH E ASSESSING OFFICER AND CONFIRMED BY THE LD. CIT(A). 8. WHEREAS THE LD. DR RELIED UPON THE ORDERS OF A UTHORITIES BELOW AND PLEADED FOR ITS CONFIRMATION. 9. AFTER HAVING CONSIDERED THE RIVAL SUBMISSIONS A ND GOING THROUGH THE RECORDS IT IS FOUND THAT THE ASSESSEE HAS CONTENDE D BEFORE THIS BENCH THAT FIRST ENTRY OF RS.30 000/- ON 13.06.2004 IN PROPRIE TORS DRAWING ACCOUNT IS DEBIT ENTRY OF RS.30 000/- AND WITH REGARD TO TWO O THER ENTRIES ON 10.10.2004 AND 15.10.2004 THE CONTENTION OF THE ASSESSEE THAT IT IS THE CAPITAL BROUGHT FROM AND OUT OF AGRICULTURAL INCOME WHICH HAS BEEN IGNORED BY THE ASSESSING OFFICER. NO DOUBT THE ASSESSEE HAS AGRICULTURAL IN COME OF RS.92 750/- DURING THE YEAR UNDER CONSIDERATION WHICH HAS BEEN DECLAR ED AND ACCEPTED BY THE ASSESSING OFFICER BUT WHILE CONSIDERING THESE ENTR IES THIS ASPECT HAS NOT I.T.A. NO. I.T.A. NO. I.T.A. NO. I.T.A. NO.. .. .531/MDS/10 531/MDS/10 531/MDS/10 531/MDS/10 5 BEEN CONSIDERED AT ALL. THEREFORE IN VIEW OF THE E NTIRETY OF FACTS CIRCUMSTANCES MATERIAL ON RECORD AND IN THE INTERE ST OF JUSTICE IT IS FOUND APPROPRIATE TO SET ASIDE THE ORDERS OF AUTHORITIES BELOW ON THIS POINT AND RESTORE THE MATTER BACK ON THE FILE OF THE ASSESSIN G OFFICER WITH THE DIRECTION TO DECIDE THIS ISSUE AFRESH AFTER GIVING DUE OPPORT UNITY TO THE ASSESSEE. THE ASSESSEE WOULD BE AT LIBERTY TO ADDUCE NECESSARY EV IDENCE AS HE MAY DEEM FIT TO SUBSTANTIATE ITS CLAIM IN RELATION TO THESE THREE ENTRIES. 10. AS A RESULT THE APPEAL OF THE ASSESSEE GETS P ARTLY ACCEPTED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON 16.07.2010. SD/- (U.B.S. BEDI) JUDICIAL MEMBER CHENNAI DATED THE 16.07.2010. VM/- COPY TO : APPELLANT/RESPONDENT/CIT(A)- /CIT /DR