RAJESH KUMAR GOEL,KOLKATA vs. DCIT, CIRCLE 49(1), KOLKATA

ITA 1316/KOL/2026Status: DisposedITAT Kolkata03 September 2026AY 2016-174 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the AO's disallowances were based on presumptions and surmises without any substantive basis or scientific method. Therefore, the disallowances could not be sustained.

What were the facts?

The assessee, a medical practitioner, claimed business expenses and car depreciation/insurance. The AO disallowed a portion of these expenses, presuming they were for personal use, and the CIT(A) partly upheld this. The assessee appealed to the ITAT.

What were the issues?

Whether disallowances of business expenses and car-related expenses made by the AO on an estimated basis are sustainable.

Which sections of the Income-tax Act were involved?

Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “D” BENCH, KOLKATA

For Appellant: Ms. Ankeeta Lohia, AR

For Respondent: Shri Praveen Das Chowdhury

Hearing: 16.07.2026Pronounced: 03.09.2026

Per Rajesh Kumar, AM:

This is an appeal preferred by the assessee against the order of the Commissioner of Income-tax (Appeals), Bengaluru (hereinafter referred to as the “Ld. CIT(A)”] dated 16.02.2026 for the AY 2016-17.

The only issue raised by the assessee in various grounds of appeal is against the confirmation of disallowances of ₹2,92,798/- and ₹75,162/- as made by the ld. AO in respect of business expenses and car depreciation/ insurance respectively in the assessment framed u/s 143(3) of the Act.

ITA No. 1316/KOL/2026 Rajesh Kumar Goel; A.Y. 2016-17 3. The facts in brief are that the assessee filed the return of income on 13.10.2016, by declaring total income of ₹65,26,530/-. The case of the assessee was selected for scrutiny and notices u/s 143(2) and 142(1) of the Act were duly issued and served upon the assessee. The assessee furnished before the ld. AO the details/ explanation called for by the ld. Assessing Officer. The assessee is a medical practitioner doing practice at his home and also visiting various nursing homes for giving his services. The profit and loss account showed a net profit of ₹59,29,968/-, which was shown as income from business and profession. The ld. AO in the scrutiny proceedings noted that since the assessee is doing chamber practice for emergency patients at his residence , he has shown the income from the said practice at at ₹5,08,000/- and professional fee from various nursing homes at ₹64,72,382/-. The ld. AO noted that the assessee has shown and debited expenses of ₹8,00,798/- in the Profit and Loss account which included audit fee, bank charges, car insurance and electrical bills, fuel, internet charges, legal fees, maintenance charges, membership fees, newspaper, printing and stationery, salary paid to driver and staff expenses , depreciation of car and car insurance. The ld. AO noted that the expenses debited in the Profit and Loss account are only allowable to the exgtent of the amount of income earned from private practice from home at ₹5,08,000/- and the difference of ₹2,92,798/- was disallowed and added to the income of the assessee. The ld. AO also noted that the assessee has two cars and the depreciation was claimed at ₹3,31,231/- and car

ITA No. 1316/KOL/2026 Rajesh Kumar Goel; A.Y. 2016-17 insurance of ₹43,577/- which were claimed in the Profit and Loss account. Accordingly, he disallowed 20% of the depreciation and car insurance towards personal expenses of the Doctor. Consequently, the ld. AO made an addition of ₹2,92,798/- in respect of personal expenses which computed by deducting from th fees received from doing practice at home, the total expenses claimed and ₹75,162/- towards disallowance of depreciation and car insurance. The ld. AO also made addition of ₹2,45,000/- in respect of house property income. The assessee challenged the order before the ld. CIT (A) and the ld. CIT (A) partly sustained the addition by deleting the addition in respect of house property while the addition in respect of disallowance of business expenses of ₹2,92,798/- in respect of expenditure claimed and ₹75,162/- in respect of depreciation/ car insurance.

After hearing the rival contentions and perusing the materials available on record, we note that the ld. AO has disallowed expenses on purely presumptions and surmises without any substantive basis. We note that the ld. AO took the receipt/fees collected by doing practice from home and the total expenses claimed by the assessee in the Profit and Loss account excluding the depreciation and insurance of Car which were of ₹8,00,798/- and difference of ₹2,92,798/- was disallowed in respect of business expenditure. Similarly, the ld. AO disallowed the 20% of the depreciation claimed on car and insurance of the car which comes to ₹75,162/-, which is purely on estimated basis. In our opinion, the disallowance made by the ld. AO is not on any scientific basis, therefore,

ITA No. 1316/KOL/2026 Rajesh Kumar Goel; A.Y. 2016-17 same cannot be sustained. Similarly, the order of ld. CIT (A) upholding the order of the ld. AO, is also not correct and cannot be sustained. Consequently, we modify the order of ld. CIT (A) on this issue and direct the ld. AO to delete the addition. The appeal is allowed.

In the result the appeal of the assessee is allowed.

Order pronounced on 03.09.2026.

Sd/- Sd/- (PRADIP KUMAR CHOUBEY) (RAJESH KUMAR) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Kolkata, Dated: 03.09.2026 Sudip Sarkar, Sr.PS Copy of the Order forwarded to: 1. The Appellant 2. The Respondent 3. CIT DR, ITAT, 4. 5. Guard file. BY ORDER, True Copy// (Manish Bhoi) Dy. Registrar Income Tax Appellate Tribunal, Kolkata

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