M/S. CHAMPION CAR RENTAL (P) LTD.,KOLKATA vs. ITO, WARD - 2(2), KOLKATA, KOLKATA

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ITA 1602/KOL/2018Status: DisposedITAT Kolkata28 February 2019AY 2014-152 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal restricted the disallowance of the discount claim and made a lump sum addition for the cash deposits, granting partial relief to the assessee.

What were the facts?

The assessee challenged the disallowance of a discount claim and the addition of cash deposits as undisclosed income. The lower authorities disallowed the entire discount and added the full amount of cash deposits.

What were the issues?

Whether the discount offered to clients in the car hire business is allowable and whether cash deposits can be treated as undisclosed income without proper justification.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 69A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, KOLKATA BENCH “SMC” KOLKATA

Before: Shri S.S, Godara

This assessee’s appeal for assessment year 2014-15, arises against the Commissioner of Income-tax (Appeals)-1, Kolkata’s order dated 27.06.2018 passed in case No.11198/CIT(A)-1/Ward-2(2)/2016-17, involving proceedings u/s. 143(3) of the Income Tax Act, 1961; in short ‘the Act’. Heard both the parties. Case file perused.

2.

The assessee’s former substantive ground challenges correctness of both the lower authorities’ action disallowing discount claim of ₹1,32,740/- as provided to its clients in car hire service business. Learned counsel vehemently contend during the course of hearing that this assessee has admittedly provided all the relevant details to both the lower authorities who have erred on facts and in law in disallowing the same. Mr. Singh vehemently supports both the lower authorities’ action making the impugned disallowance. He fails to dispute that such discount supported by all the ITA No.1602/Kol/2018 A.Y. 2014-15 M/s Champion Car Rental (P) Ltd. Vs. ITO Wd-2(2), Kol. Page 2 relevant particulars is very much a common practice in car hire service business. I find during the course of hearing that assessee has also not been able to provide for relevant details of the beneficiaries for verification in this regard. I take into account all these facts and circumstances to restrict the impugned disallowance to ₹32,740/- only. The assessee gets part relief to the tune of ₹1 lac. Its instant former substantive ground is partly allowed.

3.

Next comes cash deposits addition of ₹17,47,927/- treated as undisclosed income u/s 69A of the Act in both the lower proceedings. I find that neither the assessee has been able to prove each and every deposits instance in its paper book running into 155 pages nor the Revenue has been able to justify that the lower authorities have added all contra entries as well during the course of hearing. I therefore hold in these peculiar facts and circumstances that a lump sum addition of ₹2,47,927/- instead of the entire deposit sums of ₹17,47,927/- would be just and proper. The Assessing Officer shall finalise necessary computation. I make it clear that instant direction both the issues shall not be treated as a precedent.

4.

This assessee’s appeal is partly accepted in above terms. Order pronounced in open court on 28/02/2019 (S.S. Godara) Judicial Member Kolkata, *Dkp/Sr.PS "दनांकः- 28/02/2019 कोलकाता आदेश क" ""त"ल"प अ"े"षत / Copy of Order Forwarded to:- 1. अपीलाथ"/Appellant-M/s Champion Car Rental (P) Ltd. AK-262, Salt Lake City Sector-II, Kolkat-91

2.

""यथ"/Respondent-ITO Ward-2(2), Aayakar Bhawan, P-7 Chowringhee Sq. Kol-69 3. संबं"धत आयकर आयु%त / Concerned CIT 4. आयकर आयु%त- अपील / CIT (A) 5. &वभागीय ")त)न"ध, आयकर अपील"य अ"धकरण कोलकाता / DR, ITAT, Kolkata 6. गाड+ फाइल / Guard file. By order/आदेश से, // उप/सहायक पंजीकार आयकर अपील"य अ"धकरण, कोलकाता ।

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