BIMAN MUKHERJEE,NORTH LAKHIMPUR vs. INCOME TAX OFFICER, WARD-NORTH LAKHIMPUR, NORTH LAKHIMPUR

1 ITA No. 108/Gau/2017 Biman Mukherjee, AY 2012-13

IN THE INCOME TAX APPELLATE TRIBUNAL GAUHATI BENCH, “VIRTUAL HEARING” AT KOLKATA (सम�)�ी ए.टी.वक�,�याियक सद�य) [Before Shri A. T. Varkey, JM] I.T.A. No. 108/GAU/2017 Assessment Year: 2012-13 Biman Mukherjee Vs. Income-tax Officer, Ward-North (PAN: AKPPM1049L) Lakhimpur. Appellant Respondent

Date of Hearing 07.10.2021 Date of Pronouncement 12.10.2021 For the Appellant Shri Ashok Kumar Agarwala, FCA For the Respondent Shri Arup Chatterjee, Addl. CIT

ORDER This appeal has been preferred by the assessee against the order of Ld. CIT(A)-1, Guwahati dated 11.01.2017 for Assessment Year 2012-13. 2. At the outset, it is noted that this is the second round of appeal before this Tribunal. In the first round, even though the matter was heard and an order was passed on 09.08.2017, for the reasons noted in the order in MA No. 03/Ghy/2017 by order dated 01.10.2021, the order passed in the first round was recalled and the appeal was fixed for de novo hearing on 07.10.2021. 3. The only grievance of the assessee is against the action of the Ld. CIT(A)-1, Guwahati in confirming the action of the AO in making addition of the depreciation of Rs.16,320/- and Rs.9,06,000/- from contract income and Tripper income respectively which was not claimed by the assessee in his return of income since assessee had shown his income under the presumptive taxation u/s. 44AD and 44AE of the Income-tax Act, 1961 (hereinafter referred to as the “Act”).

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“On consideration of the matter I find the action of the AO to be valid. It may be noted that the appellant had admitted contract income under section 44AD of the Income Tax Act, 1961 and had admitted tipper income under section 44AE of the Income Tax Act, 1961. In view thereof, as per the provisions of subsection (2) of section 44AD and subsection (3) of section 44AE the appellant is not eligible to claim depreciation. Therefore, the addition of Rs.16,320/- and Rs.9,06,000/- made by the AO are confirmed.” 5. Aggrieved by the aforesaid order of the Ld. CIT(A), the assessee is in appeal before us. 6. Assailing the action of the Ld. CIT(A) the Ld. AR submitted that the AO has erroneously made the addition of depreciation which was not claimed by the assessee. For buttressing this aspect he drew my attention to page 13 of paper book wherein the computation of total income has been placed. From a perusal of the same, it is noted that the assessee had shown income from contract income to the tune of Rs.2,96,665/- which was 8% of Rs.37,08,298/- (gross receipt) (refer to page 14 of paper book) and the assessee had shown two tipper lorries for seven months u/s. 44AE of the Act i.e, Rs.35,000x2 = Rs.70,000/-/ And it is noted that the assessee had not claimed any depreciation from both the contract income as well as that from the tipper lorry income (refer to page 13 of paper book). Therefore, according to Ld. AR, the AO erred in

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adding the depreciation of Rs.16,320/- (for the leathe machinery) as well as Rs.9,06,000/- (for two tipper lorry) which figures have been picked up from Balance Sheet placed at page 14 of the paper book and pleaded for deletion of the same. 7. Per contra, the Ld. DR though supported the order of the Ld. CIT(A) could not controvert the contention of the Ld. AR to the effect that without the assessee claiming depreciation the AO for the leathe machinery and the two tipper lorries, had erroneously added the same when the assessee has offered tax by adopting presumptive income as per sections 44AD and 44AE of the Act. 8. Having heard both the parties. The facts are not repeated for the sake of brevity. It is noted that the assessee from his contract income has shown gross receipt of Rs.37,08,298/- for which he has offered tax by applying the presumptive taxation u/s. 44AD of the Act and offered 8% of the gross receipt i.e. Rs.2,96,665/-. The assessee also had income from two tipper lorries which after purchase has been used for seven months till 31.03.2012 for which assessee offered presumptive taxation u/s. 44AE of the Act Rs.5,000/- per month (Rs.5000x2x7) at Rs.70,000/-. The AO had made certain addition while passing the assessment order by increasing the gross receipt in respect of both the contract income as well as tipper lorry income which has been deleted by the Ld. CIT(A). However, the Ld. CIT(A) had confirmed the depreciation added by the AO by stating that since the assessee had adopted contract income u/s. 44AD and tipper income u/s. 44AE of the Act, the assessee was not eligible to claim depreciation. However, during the hearing it was brought to my notice by the Ld. AR that the assessee has not made any claim of depreciation as alleged by the AO as well as by the Ld. CIT(A). A perusal of the paper book page 13 from where computation of total income is placed it is discerned that the assessee has not claimed any depreciation on the leathe machinery and for the two tipper lorries. It is noted that the assessee in his balance sheet placed at page 14 of the paper book has reflected the depreciation on these two items, however the assessee has not claimed the depreciation while computing tax in his return since he had adopted contract income u/s. 44AD and tipper income u/s. 44AE of the Act. However, the AO

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erroneously without application of mind has assumed that assessee has claimed depreciation which fact has not been examined properly by the Ld CIT(A) while passing the impugned order. Ergo, the order of the Ld. CIT(A) is set aside and the depreciation added by the AO/Ld. CIT(A) to the tune of Rs.16,320/- and Rs.9,06,000/- is directed to be deleted. 9. In the result, the appeal of the assessee is allowed. 10. Order is pronounced in the open court on 12th October, 2021. Sd/- Dated: 12.10.2021 (Aby. T. Varkey) Judicial Member

JD(Sr.P.S.) Copy of the order forwarded to: 1. Appellant – Shri Biman Mukherjee, C/o Shri Ashok Kumar Agarwala, Dr. B. C. Das Lane, Kumarpara, Guwahati 2 Respondent – ITO, Ward-North Lakhimpur 3. CIT(A)-1, Guwahati. 4. CIT- 5. DR, ITAT, Guwahati

/True Copy, By order, Senior Pvt. Secy.