Smt. Anupam Gupta, Parwanoo v. ITO, Solan

ITA 960/CHANDI/2011 | 2006-2007
Pronouncement Date: 25-11-2011 | Result: Partly Allowed

Appeal Details

RSA Number 96021514 RSA 2011
Assessee PAN ABXPG0531G
Bench Chandigarh
Appeal Number ITA 960/CHANDI/2011
Duration Of Justice 1 month(s) 21 day(s)
Appellant Smt. Anupam Gupta, Parwanoo
Respondent ITO, Solan
Appeal Type Income Tax Appeal
Pronouncement Date 25-11-2011
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted SMC
Tribunal Order Date 25-11-2011
Assessment Year 2006-2007
Appeal Filed On 04-10-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES SMD CHANDIGARH BEFORE SHRI H.L.KARWA HON'BLE VICE PRESIDENT AND SHRI D.K.SRIVASTAVA ACCOUNTANT MEMBER ITA NO. 960/CHD/2011 ASSESSMENT YEAR: 2006-07 SMT. ANUPAM GUPTA VS THE ITO WARD-1 PROP. M/S P.K. COMPUTERS SOLAN PARWANOO PAN NO. ABXPG0531G (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SURINDER BABBAR RESPONDENT BY : SHRI AKLILESH GUPTA DATE OF HEARING : 23.11.2011 DATE OF PRONOUNCEMENT : 25.11.2011 ORDER PER H.L.KARWA VP THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF CIT(A) SHIMLA DATED 20.7.2011 RELATING TO ASSESSME NT YEAR 2006-07. 2. IN THIS APPEAL THE ASSESSEE HAS TAKEN THE FOLL OWING GROUNDS:- 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE TH E LD. CIT(A) HAS ERRED IN NOT HOLDING THE NOTICE ISSU ED U/S 148 OF THE INCOME TAX ACT 1961 AS WITHOUT JURISDICTION AND HENCE BAD IN LAW. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE TH E LD. CIT(A) IS WRONG IN UPHOLDING THE ASSESSMENT FRAMED U/S 148 OF THE INCOME TAX ACT 1961. 2 3. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE TH E LD. CIT(A) IS NOT AT ALL JUSTIFIED IN CONCURRING WI TH THE LD. ASSESSING OFFICER AND CONFIRMING THE ADDITION O F RS. 2 19 902/-. 3. AT THE TIME OF HEARING OF THE APPEAL SHRI SURIN DER BABBAR LD. COUNSEL FOR THE ASSESSEE DID NOT PRESS FOR GROUND N OS. 1 & 2 OF THE APPEAL AND HENCE WE DISMISS THE SAME AS NOT PRESSED . 4. GROUND NO.3 OF THE APPEAL RELATES TO ADDITION OF RS. 2 19 902/-. THE ASSESSEE IS AN INDIVIDUAL RUNNING A SOLE PROPRI ETORSHIP FIRM UNDER THE NAME AND STYLE OF M/S P.K. COMPUTERS AT PARWANOO. T HE SAID FIRM IS ENGAGED IN THE ASSEMBLY OF ELECTRONIC / COMPUTER HA RDWARE PRODUCTS ON JOB WORK BASIS. BESIDES THE ASSESSEE IS HAVING R ENTAL INCOME AND INCOME FROM OTHER SOURCES. WHILE FRAMING THE ASSESSMENT U/S 143(3) / 148 OF THE INCOME TAX ACT 1961 (IN SHORT 'THE ACT') THE ASSESSING OFFICER DISALLOWED A SUM OF RS. 2 19 902/- OBSERVING AS UND ER:- A) THE ASSESSEE OWNS TWO CARS I.E. ONE CAR AND ONE SCO RPIO VEHICLE. ONLY BUSINESS DONE IS FOR M/S TRITRONIC IN DIA (P) LTD. ACTIVITIES ARE CARRIED OUT BY THE EMPLOYEES O F THE ASSESSEE. THE USAGE OF CAR & SCORPIO VEHICLE IS NO T AT ALL JUSTIFIED. THEREFORE 50% OF EXPENDITURE UNDER THE HEAD MAINTENANCE OF CAR INTEREST ON CAR LOAN AND DEPRE CIATION ON CAR & SCORPIO CLAIMED AT RS. 2 29 766/- IS REST RICTED TO 1 14 883/- AND BALANCE 50% IS DISALLOWED BEING ATTRIBUTABLE TO NON BUSINESS PURPOSES. B) SIMILARLY OUT OF TELEPHONE EXPENSES 50% OF EXPENDIT URE I.E. RS. 6 596/- IS DISALLOWED BEING ATTRIBUTABLE TO NON BUSINESS PURPOSE. 3 C) NO BILLS & VOUCHERS FOR BUILDING REPAIR AND MAINTEN ANCE ARE PRODUCED FOR VERIFICATION. MOST OF BUILDING PO RTION IS LET OUT AND ASSESSEE IS GETTING DEDUCTION OF REPAIR S ETC U/S 24. HOWEVER REPAIR AND MAINTENANCE OF BUILDING PO RTION BEING USED FOR SELF CANNOT BE RULED OUT. NO AUTHEN TICATED BILLS & VOUCHERS FOR REPAIR AND MAINTENANCE IS MAIN TAINED. THEREFORE 50% OF THIS EXPENDITURE IS DISALLOWED FO R WANT OF BILLS & VOUCHERS ETC. THEREFORE 50% OF THIS EX PENDITURE I.E. RS. 18 133/- IS DISALLOWED FOR WANT OF BILLS A ND VOUCHERS. D) THE ASSESSEE HAS CLAIMED EXPENDITURE OF BANK CHARGE S AND INTEREST. THE ONLY SOURCE OF INCOME JOB WORK RECEI PT FOR WHICH LOCAL CHEQUE IS RECEIVED. THERE IS NO RELEVAN CY OF BUSINESS OR PROFESSION RECEIPTS / INCOME FOR WHICH BANK CHARGES & INTEREST IS TOTALLY IRRELEVANT AND HENCE DISALLOWED. 5. AGGRIEVED BY THE ORDER OF ASSESSING OFFICER THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A) AND THE LD. CIT(A) VIDE HIS ORDER DATED 20.7.2011 CONFIRMED THE ADDITION OF RS. 2 19 902/- FOR THE REASONS STATED IN PARAS 6 AND 6.1 OF THE IMPUGNED ORDER AND HENCE THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE ALS O PERUSED THE MATERIALS AVAILABLE ON RECORD. IN THE INSTANT CAS E THE ASSESSING OFFICER HAS ADMITTED THAT THE ASSESSEE HAS CARRIED OUT THE BUSINESS IN THE NAME AND STYLE OF M/S P.K. COMPUTERS PARWANOO DURING THE PE RIOD RELEVANT TO ASSESSMENT YEAR 2006-07. THIS OPINION IS FOUND ON THE BASIS OF THE FOLLOWING FACTS AND CIRCUMSTANTIAL EVIDENCE:- 1. BILL BOOKS ARE MAINTAINED BILLS ARE ISSUED EVERY M ONTH. 4 2. PAYMENTS ARE RECEIVED BY CHEQUE FROM M/S TRITONIC (INDIA) PVT LTD AFTER DEDUCTION OF TDS. IN THE SCH EDULE OF FIXED ASSETS THE ASSESSEE HAS PLANT AND MACHINER Y FOR RS. 10 118/- FURNITURE AND FIXTURE AT RS. 67 088/- . 3. THE ASSESSEE HAD EMPLOYED THREE PERSONS WHOSE ESI RECORD IS MAINTAINED AND ALSO DEPOSITED. 4. M/S P.K. COMPUTERS IS LOCATED ON PLOT NO. 99 SECTO R 1 PARWANOO ON WHICH ADDRESS ALL THE CORRESPONDENCE MADE BY THE CONCERNED AUTHORITIES IS MADE. THE ASSESSING OFFICER OBSERVED THAT DURING ASSESSME NT PROCEEDINGS THE STATEMENT OF MRS ANUPAM GUPTA WAS RECORDED (PLACED IN ASSESSMENT ORDER FOR 2007-08). IN THE STATEMENT THE ASSESSEE HAS A DMITTED THAT SHE CARRIED ON BUSINESS OF ASSEMBLING ELECTRONICS PARTS OF M/S TRITONIC INDIA (P) LTD. THE ASSESSEE ALSO STATED THAT SHE WAS MANAGING THE BUSINESS AND JOB WORK CARRIED OUT BY THE EMPLOYEES. WE FIND THAT ASSESSI NG OFFICER HAS DISALLOWED 50% OF EXPENDITURE UNDER THE HEAD MAINT ENANCE OF CAR INTEREST ON CAR LOAN AND DEPRECIATION ON CAR AND SC ORPIO. SIMILARLY OUT OF TELEPHONE EXPENSES THE ASSESSING OFFICER DISALL OWED 50% BEING ATTRIBUTABLE TO NON BUSINESS PURPOSE. THE ASSESSING OFFICER FURTHER POINTED OUT THAT THE ASSESSEE DID NOT MAINTAIN BILL S AND VOUCHERS FOR BUILDING REPAIR AND MAINTENANCE. HE THEREFORE D ISALLOWED 50% OF THE EXPENSES CLAIMED UNDER THE HEAD BUILDING REPAIR AN D MAINTENANCE. THE ASSESSING OFFICER ALSO DISALLOWED ENTIRE CLAIM OF T HE ASSESSEE OF RS. 79 480/- CLAIMED UNDER THE HEAD BANK CHARGES A ND INTEREST. WHILE MAKING THE ABOVE DISALLOWANCES THE ASSESSING OFFIC ER HAS NOT POINTED OUT ANY SINGLE INSTANCE WHEN THE EXPENDITURE WAS IN CURRED FOR NON BUSINESS PURPOSES. THE ASSESSING OFFICER HAS DISAL LOWED THE ENTIRE CLAIM 5 UNDER THE HEAD BANK CHARGES AND INTEREST. IN OUR VIEW THERE IS NO JUSTIFICATION IN DISALLOWING THE ENTIRE CLAIM OF TH E ASSESSEE UNDER THE HEAD BANK CHARGES AND INTEREST PARTICULARLY WHEN ASSES SING OFFICER HIMSELF HAS ADMITTED THAT THE ASSESSEE HAS CARRIED OUT THE BUSINESS IN THE NAME AND STYLE OF M/S P.K. COMPUTERS PARWANOO. THE ASSESSI NG OFFICER HAS ALSO ADMITTED THAT THE ASSESSEE HAS MAINTAINED BOOKS OF ACCOUNT BILLS ETC. PAYMENTS WERE BEING RECEIVED BY CHEQUE AND THE ASSE SSEE HAD EMPLOYED THREE PERSONS WHOSE ESI RECORDS HAVE BEEN MAINTAINE D. AT THE SAME TIME IT IS ALSO TRUE THAT ALL THE EXPENSES CLAIMED BY THE ASSESSEE UNDER THE ABOVE HEADS WERE NOT SUPPORTED BY COGENT EVIDENCE. EVEN THE USE OF CAR AND TELEPHONE FOR BUSINESS PURPOSES CANNOT BE RULED OUT PARTICULARLY IN THE ABSENCE OF LOG BOOK AND CALL REGISTER. CONSIDERING THE ENTIRE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE WE ARE OF THE VI EW THAT THE DISALLOWANCES MADE BY THE ASSESSING OFFICER AND CON FIRMED BY THE CIT(A) ARE ON HIGHER SIDE. IN OUR CONSIDERED VIEW THE DISALLOWANCE OF RS. 50 000/- IN THIS CASE WILL MEET THE ENDS OF JU STICE. ACCORDINGLY WE ALLOW A RELIEF OF RS. 1 69 092/- TO THE ASSESSEE OU T OF RS. 2 19 092/-. THIS GROUND OF APPEAL IS ALLOWED PARTLY. 7. IN THE RESULT APPEAL IS ALLOWED PARTLY. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 25 TH DAY OF NOVEMBER 2011. SD/- SD/- (D.K.SRIVASTAVA) (H.L.KARWA) ACCOUNTANT MEMBER VICE PRESIDENT DATED : 25 TH NOVEMBER 2011 RKK 6 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR