Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, DELHI BENCH ‘B’: NEW DELHI
(A) This appeal by Assessee is filed against the order of Learned Commissioner of Income Tax (Appeals)-38, New Delhi [“Ld.
CIT(A)”, for short], dated 19.03.2019 for Assessment Year 2015-16.
Grounds taken in this appeal of Assessee are as under:
S. S. Kothari 1. “ On the facts and circumstances of the case, the order passed by the Ld.CIT(A) is bad in law.
The Ld.CIT(A) has erred in law and on facts of the case in confirming disallowance of Rs. 1,86,672/- one tenth of total car expenses, on ad-hoc basis.
The Ld.CIT(A) has erred in law by not adjudicating Ground No. 4- “ The Ld. Assessing Officer has erred in laws and on facts of the case in restricting the credit of TDS to Rs.2,29,01,038/- in ITNS form as against Rs. 2,68,96,387/- claimed by the assessee in its return of income.”
(B) Assessment order u/s 143(3) of Income Tax Act was passed by the Assessing Officer [“AO)”, for short], on 26/12/2017 wherein the total income was determined at Rs. 6,43,80,887 (rounded off to Rs. 6,43,80,890) as against returned income of Rs.6,03,64,520. The disallowances/additions made in the assessment order included an amount of Rs.1,86,672 out of car expenses. The assessee had claimed Rs. 7,59,636 under the head ‘Senior Partners Car Expenses’ and Rs. 11,27,08 under the head ‘Other Car Expenses; other car expenses respectively. The total car expenses came to Rs. 11,27,081 plus Rs. 7,39,636 = 18,66,717.
The Assessing Officer disallowed 10% out of aforesaid amount of Rs. 18, 66,717 on the ground that element of personal use of this S. S. Kothari expense could not be ruled out. Vide impugned Appellate Order dated 19/03/2019, the Ld.CIT(A) confirmed this disallowance.
(B.1) Aggrieved, the assessee has taken Ground No. 2 in the present appeal before us in respect of the aforesaid disallowance of Rs.1,86,672/-. At the time of hearing before us, the appellant/assessee was represented by none. In the absence of any representation from the assessee’s side, we heard the Learned Senior Departmental Representative (“Ld. Sr. DR” for short), for Revenue. The Ld. Sr. DR relied on the orders of the Assessing Officer and the Ld. CIT(A) in support of the aforesaid disallowance of Rs. 1,86,672.
(B.2) We have heard the Ld. Sr. DR of Revenue. We have perused the materials available on record. We find that the disallowance was made by the Assessing Officer on the basis of cryptic remark that element of personal use of this expense could not be ruled out.
However, she has not discussed any materials to support the allegation that personal use of car was involved to the extent of 10% of the total expenditure. There is no discussion in the assessment order to justify the basis on which the Assessing Officer came to the S. S. Kothari conclusion that there was element of personal use of car to the extent of 10% of total of car expenses. On perusal of the impugned Appellate Order dated 19/03/2019 of the Ld.CIT(A), we find that the Ld.CIT(A) dismissed assessee’s appeal on this issue; on the ground that the assessee could not produce any details of disallowance made on account of vehicle expenses. However, she has not discussed at all as to what details were called for from the assessee regarding car expenses either during the assessment proceedings or during the appellate proceedings before the Ld.CIT(A).
(B.2.1) In view of the foregoing, we are of the view, that the disallowance out of car expenses has been made by the Assessing Officer and has been confirmed by the Ld.CIT(A) without proper reasoning or justification and without supporting materials. We also find from the perusal of record that the issue regarding disallowance of car expenses had travelled to Income Tax Appellate Tribunal (“ITAT” for short) in assesee’s own case in Assessment Year 2007-08 in wherein the disallowance out of car expenses was deleted by Coordinate Bench of ITAT, Delhi. The Ld.CIT(A) has taken cognizance of the order of ITAT for Assessment
S. S. Kothari Year 2007-08, but has not followed the same on the ground that “………..no details could be produced by the appellant of the personal vehicles of partners”. We have already noted earlier that the Ld.CIT(A) has not discussed at all as to what details were call for from the assessee regarding car expenses either during the assessment proceedings or during the appellate proceedings. On perusal of records in ITAT, we find that neither side has provided the relevant materials on the basis of which this issue can be finally decided by us. Further, the orders of Ld.CIT(A) and the AO are non speaking orders, containing cryptic remarks, and devoid of proper justification and rationale. In view of the foregoing, we are of the opinion, that this issue needs to be reconsidered by the Ld.CIT(A).
Therefore, we set aside the issue regarding disallowance of Rs.1,86,672/- out of car expenses to the file of the Ld.CIT(A) for fresh order on this issue in accordance with law, after providing reasonable opportunity to the assessee. We also direct the Ld.CIT(A) to give due consideration to the aforesaid order of Co-ordinate Bench of ITAT Delhi in assessee’s own case in ITA No. 1075/Del/2011.
Further, we direct the Ld.CIT(A) to clearly specify the required details to be produced/submitted by the assessee in this regard, and S. S. Kothari to give due opportunity to the assessee for the same, before passing the fresh order. Ground No. 2 of Appeal is disposed off in accordance with the aforesaid directions and is treated as partly allowed for statistical purposes.
(C) Ground No. 3 of Appeal is regarding credit given to the assessee in respect of tax deducted at source (“TDS” for short). In the appellate proceedings before the Ld.CIT(A), the assessee had taken ground of Appeal which reads :
“ The Ld. Assessing Officer has erred in laws and on facts of the case in restricting the credit of TDS to Rs.2,29,01,038/- in ITNS form as against Rs. 2,68,96,387/- claimed by the assessee in its return of income.”
The Ld.CIT(A) did not adjudicate this ground of appeal in the impugned appellate order dated 19/03/2019. On perusal of records in ITAT, we find that neither side has provided the relevant material on the basis of which this issue can be finally decided by us.
Therefore, this issue is set aside to the file of the Ld.CIT(A) with the direction to adjudicate the ground of appeal pertaining to credit for TDS, taken by the assessee in this regard, in the Appeal filed before
S. S. Kothari the Ld.CIT(A) The Ld.CIT(A) is further directed to give reasonable opportunity to the assessee before passing fresh order. Ground No. 3 of present Appeal before us is disposed of in accordance with the aforesaid directions and is treated as partly allowed for statistical purpose.
(D) Ground Nos. 1 & 4 of Appeal are general in nature and do not require specific adjudication.
(E) The present Appeal before us is disposed of in accordance with the aforesaid directions.
(F) The Appeal is treated as partly allowed for statistical purposes.
Order pronounced in open Court on 13th June, 2022.