KUMUD CHANDRA JAIN,JAIPUR vs. ITO, WARD-1(1), JAIPUR, JAIPUR
What did the Tribunal hold?
The Tribunal held that the delay in filing the appeal was condoned due to a reasonable cause shown by the assessee, specifically the use of incorrect email addresses for issuing hearing notices by the CIT(A). Regarding the disallowance of salary expenses of Rs. 1,68,000/-, the Tribunal found no infirmity in the AO's finding. The AO had disallowed the expenses because the confirmations from employees Shri Pradeep Maal and Shri Deen Dayal Sharma were contradictory to their statements, and the assessee failed to produce supporting books of account, bank details, or mode of payment. The Tribunal confirmed this addition. Concerning the claim for depreciation of Rs. 2,11,921/- and vehicle insurance of Rs. 9,000/-, the Tribunal noted that the registration certificates and insurance of the motor cars were filed by the assessee. Therefore, the Tribunal allowed the depreciation and insurance charges. The appeal was partly allowed.
What were the facts?
The assessee, Kumud Chandra Jain, filed an appeal against an ex-parte appellate order dated 08.03.2024 passed by the Addl./Joint Commissioner of Income Tax (Appeal)-8, Mumbai, concerning Assessment Year 2009-10. This was the second round of appeal, with the Tribunal having previously set aside the assessment to the Assessing Officer (AO) for fresh consideration on salary payment, vehicle ownership for depreciation, and insurance charges. In the set-aside proceedings, the assessee provided details, but the AO disallowed salary expenses of Rs. 1,68,000/-, depreciation of Rs. 2,11,921/-, and vehicle insurance of Rs. 9,000/-, totaling Rs. 3,88,921/-, citing a lack of supporting books of account. The assessee's appeal to the CIT(A) was dismissed ex-parte despite four opportunities for hearing. The present appeal was filed with a delay of 504 days, attributed to incorrect email addresses used for hearing notices, which the Revenue did not dispute. The Tribunal condoned the delay.
What were the issues?
1. Whether the Ld. CIT(A) erred in deciding the appeal without proper service of notice and adequate opportunity of hearing to the assessee, as per Section 250 of the Income Tax Act, 1961. 2. Whether the Ld. CIT(A) erred in confirming the disallowance of Rs. 3,88,921/- (salary, depreciation, and vehicle insurance) without deciding the appeal on merits, and by stating that the assessee did not furnish submissions in support of the grounds of appeal. 3. Whether the lower authorities erred in making a disallowance of Rs. 3,88,921/- without considering that it resulted in a double disallowance, as the expenses were not allowed in the original assessment itself. Assessee's Contentions: The assessee argued that the CIT(A) passed an ex-parte order without proper notice and opportunity of hearing, and that the appeal was not decided on merits. The assessee also contended that the disallowance constituted a double disallowance. The assessee relied on the fact that the delay in filing the appeal was due to incorrect email addresses used by the CIT(A) for issuing notices. Revenue's Contentions: The Revenue did not dispute the facts presented by the assessee regarding the delay in filing the appeal.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘SMC’ BENCH, JAIPUR
Before: Smt. Annapurna Gupta & Shri T. R. Senthil Kumar
आदेश/ORDER
PER : T. R. SENTHIL KUMAR, JUDICIAL MEMBER:- This appeal is filed by the assessee as against the ex-parte appellate order dated 08.03.2024 passed by Addl./Joint Commissioner of Income Tax (Appeal)-8, Mumbai, arising out of assessment order passed u/s. 254 r.w.s. 144 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to the Asst. Year 2009-10.
This is the second round of appeal before this Tribunal. In the first round of appeal, the Coordinate Bench of this Tribunal set aside
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the assessment back to the file of AO with a direction to pass fresh assessment order regarding the payment of salary, ownership of vehicles for claiming depreciation and insurance charges. In the setting aside assessment proceeding, the assessee submitted that the details of salary paid alongwith confirmation, registration certificate of the vehicles, loan certificate from ICICI bank and insurance document of the vehicles. However, the Ld. AO disallowed the same for the sole reason that assessee has not produced supporting books of account for verification of the said expenditure, thereby Ld. AO confirmed the disallowances on account of salary expenses of Rs. 1,68,000/- depreciation of Rs. 2,11,921/- and vehicle insurance of Rs. 9,000/- in all totaling Rs. 3,88,921/-.
Aggrieved against the assessment order, the assessed filed appeal before Ld. CIT(A) who dismissed the appeal of the assessee after giving four opportunities of hearing.
Aggrieved against the exparte appellate order, the assessee filed the present appeal with a delay of 504 days and explained that Ld. CIT(A) issued hearing notices dated 14.01.2021, 14.12.2023 and 01.03.2024 to the email ID of ramdasbansal@yahoo.com and alroundconsultant@yahoo.com, whereas the email address shown in Form No. 35 is anuhual@kalanico.com. When the Revenue initiated prosecution against the assessee for filing wrong ITR, the assessee came to know about the ex-parte appellate order and then the assessee filed the present appeal with a delay of 504 days. Thus, assessee requested to condone the delay. Ld. DR could not dispute the above facts.
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Considering the above submission of the assessee, where reasonable cause has been made out, thereby the delay of 560 days in filing the above appeal is hereby condoned.
Grounds of Appeal raised by the assessee as follows:-
“1. The Ld. CIT(A) has erred on facts and in law in deciding the 1 appeal without service of notice and providing adequate opportunity of hearing to the assessee.
The Ld. CIT(A) has erred on facts and in law in confirming the disallowance of Rs.3,88,921/- out of salary, depreciation & 2 vehicle insurance for the reason that assessee has not furnished any submission in support of grounds of appeal and thereby not deciding the appeal on merit.
The lower authorities have erred on facts and in law in making disallowance of Rs.3,88,921/- without considering the fact that when in the original assessment itself, the claim of expenses is not allowed to the assessee, again making disallowance of expenses has resulted into double disallowance.
The appellant craves to alter, amend and modify any ground of appeal.”
As far as merits of the case is concerned, it is seen from the assessment order about the salary expenses of Rs. 1,68,000/-, assessee produced the confirmation of salary from two persons namely Shri Pradeep Maal and Deen Dayal Sharma. The statements recorded by them were found to be mismatched and contradictory, thus the AO in the absence of supporting books of accounts, denied the salary expenses by observing as follows:-
“During the course of set-aside assessment proceedings the assessee produced confirmation of salary of two persons in which Shri Pradeep Maal was stated in confirmation letter that he was working with M/s S.K.Bardia International as Site Incharge for the various project sites and was looking after the work of a purchase and accounting at site by the client for management of construction activities and other supervision work and getting a sum of Rs.6,000 per month but in his statement recorded on 17.05.2017 Shri Pradeep Maal stated in answer to question no.-8 as under:-
I.T.A No. 1436/JPR/2025 Page No 4 Kumud Chandra Jain
��न: 8 कृ�या बताये �क मै. S.K. Bardia Inretnational म� आप �या करते थे तथा यह भी बताये �क इस फम� म� �या �यवसाय होता है। �प�ट कर� । उ�र: इस फम� म� जैम �टोन का काय� होता था इसम� बहुत सार� Varity होती है। इन सभी Varity क� मुझे पुर� तरह से जानकार� नह�ं है। िजसक� जानकार� केवल �ी कुमुद जी को ह� है। इसम� म� जो भी माल आता था इसक� Sale एवं purchase होता था उसक� प�च�यां रखना, Bill चैक करना Quantity चैक करना उनको Payment करना, Banking Transaction करना इस तरह काय� म� करता था।
In his reply the A/R of the assessee stated in query no.-6 that S.K. Bardia International was engaged in trading of previous and semi precious stones. The statement of Shri Pradeep Maal recorded on 17.05.2017 and confirmation of Shri Pradeep Maal furnished by A/R of the assessee on 01.03.2017 was contradictory. M/s S.K.Bardia International is engaged in the business of trading of precious and semi precious stones. Simultaneously Shri Deen Dayal Sharma stated, in his confirmation letter furnished by the A/R of the assessee on 01.03.2017, that he was working with M/s S.K. Bardia International as CAD Operator for handling their various projects located in the state and getting a sum of Rs.8,000 per month towards remuneration. The same fact was confirmed by Shri Deendayal Sharma in the statement recorded u/s 131 on 31.07.2017. As per Reply of the A/R of the assessee vide letter dated 11.09.2017 in answer to query No. 6 and 7 that M/s S.K.Bardia International was engaged in trading of previous and semi previous stones. The assessee was asked to produce books of accounts/vouchers etc. for their claim of salary paid to Shri Pradeep Maal amounting to Rs.72,000 and Shri Deen Dayal Sharma amounting to Rs.96,000 respectively vide query no.4 vide this office letter no.635 dated 01.09.2017. In response to this query no.-4 the A/R of the assessee replied vide his letter dated 11.09.2017 that - "Detailed justification of salary paid to Shri Pradeep Maal amounting to Rs.72,000 and Shri Deen Dayal Sharma amounting to Rs.96,000 has already been submitted in earlier reply dated 17.05.2017. Statement of both these persons have also been recorded during the course of assessment proceedings. Thus payment and salary is fully justified." No books of account/vouchers were produced by the assessee in support of his claim of salary to both persons namely; Shri Pradeep Maal and Shri Deendayal Sharma. In absence of supporting books of accounts/vouchers claim for expenses of salary to Shri Pradeep Maal and Shri Deen Dayal Sharma amounting to Rs.1,68,000 could not be verifiable as gehuine. No books of
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account/vouchers/cash book/ bank book/ledger etc. were produced by the assessee during the course of original assessment proceedings and order u/s 144 of the Act was passed on 21.12.2011 and no books of account/vouchers/cash book/bank book/ledger etc. were produced during the course of set-aside assessment proceedings.
In absence of supporting books of account the genuineness of payment of the salary expenses cannot be verified. Simultaneously, the statement of Shri Pradeep Maal was also contradictory with the confirmation filed during the course of set-aside assessment proceedings as discussed above. I disallow the salary expenses amounting to Rs.1,68,000 claimed by the assessee in profit & loss account.”
7.1. On perusal of the above order, we do not find any infirmity in the finding of the AO except confirmation given by the assessee of two persons, but no bank details, mode of payment, dates of payments were not explained by the assessee. Therefore the addition made by the AO on salary expenses of Rs. 1,68,000/- does not require any interference, the same is hereby confirmed.
Regarding the claim of depreciation of Rs. 2,11,921/-, the finding of AO as follows:-
“Regarding claim of depreciation on air conditioner, fridge, television & music system, vacume cleaner, computer, mobile, office equipment, Car-Fiesta, Car- Accent and Scooter. No electricity expenses and repairs and maintenance have been claimed by the assessee in his P & L a/c for running of air conditioner, fridge, television, music system, vacume cleaner and computer. It is not possible to run and use of above equipments without electricity. For use of mobile it is necessary to recharge mobile by top up vouchers or post paid bill of the concerned telecommunication company but no such type of expenses have been claimed by the assessee. No details of office equipments were furnished by the assessee during the course of original assessment proceedings as well as set- aside assessment proceedings. No expenses like fuel, repairs and maintenance etc. have been claimed by the assessee in his P & L a/c for use of Car-Fiesta, Car-Accent and Scooter. Without using fuel it is not possible to run Car-Fiesta, Car-Accent and Scooter. As per copy of form no.23 of Regional Transport Officer, Ajmer produced during the course of set-aside assessment proceedings the Car- Fiesta is a diesel car which require yearly repairs and maintenance. As per
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insurance of Car-Fiesta it is found that insurance of Car-Fiesta number RJ 01 CA 2929 was insured from Future General India Insurance Company Ltd. on 19.03.2009 from the period 19.03.2009 to midnight of 18.03.2010. As per Motor Vehicle Act for use the car on road it is mandatory to take insurance cover of the car and without that no one can use the car on road. The assessee has insured the Car-Fiesta on 19.03.2009 that means he has not used the Car-Fiesta on road from the period 01.04.2008 to 18.03.2009. No supporting books of accounts/vouchers/bank statement/ledger/original bills/cash book were produced during the course of original assessment proceedings as well as set- aside assessment proceedings for verification of claim of depreciation amounting to Rs.2,11,921. In absence of supporting books of account/documents the claim of depreciation of Rs.2,11,921 on air conditioner, fridge, television & music system, vacume cleaner, computer, mobile, office equipment, Car-Fiesta, Car- Accent and Scooter etc. is disallowed.”
8.1. It is undisputed fact that the motor cars were put to use in earlier years also. The copy of registration certificate and insurance of the car were filed by the assessee at Page No. 38 to 40 of the Paper Book. Thus, the depreciation and insurance charges are hereby allowed.
In the result, the appeal filed by the assessee is hereby partly allowed.
Order pronounced in the open court on 28-10-2026
Sd/- Sd/- (ANNAPURNA GUPTA) (T.R. SENTHIL KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER
Dated 28/10/2026 Dhananjay K., Sr. PS
आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue
I.T.A No. 1436/JPR/2025 Page No 7 Kumud Chandra Jain
Concerned CIT Digitally signed by Dhananjay 4. CIT (A) Kumar 5. DR, ITAT Date: 2026.11.03 6. Guard file. '11:58:32 +05'30 By order/आदेश से, सहायक पंजीकार आयकर अपील�य अ�धकरण, जयपुर
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