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Income Tax Appellate Tribunal, “B” BENCH : BANGALORE
Before: SHRI SUNIL KUMAR YADAV & SHRI ARUN KUMAR GARODIA
O R D E R
Per Shri A.K. Garodia, Accountant Member
This is an assessee’s appeal which is directed against the order of ld. CIT(A)-4, Bangalore dated 28.10.2016 for Assessment Year 2007-08.
The grounds raised
by the assessee are as under. “1. For that the order of the Commissioner of Income Tax (Appeals) is contrary to law, facts and circumstances of the case.
2. The Learned Commissioner of Income Tax (Appeals) has erred in confirming the disallowance of depreciation on car u/s 32 of the Act to the tune of Rs. 1,22,406/-
3. The Learned Commissioner of Income Tax (Appeals) has erred in confirming the disallowance of expenditure incurred on vehicle maintenance u/s 37(1) to the tune ofRs. 39,895/-.
4. The Learned Commissioner of Income Tax (Appeals) has erred in confirming the disallowance of interest expenditure claimed by the appellant to the tune of Rs.30,440/-. Page 2 of 4
5. For these grounds and such other grounds that may be adduced before or during the hearing of the appeal, it is prayed that the Hon’ble Tribunal may be pleased to pass such other orders as the Hon’ble Tribunal may deem fit.”
3. This appeal was fixed for hearing on 06.11.2017 and notice of hearing was sent to assessee by RPAD which has come back unserved with the remarks of postal department ‘LEFT’. Till now the, assessee has not brought on record any new address for service of notice on the assessee and therefore, we have no option but to decide the appeal of the assessee ex-parte qua the assessee. Hence appeal of the assessee was heard ex-parte qua the assessee. The ld. DR of revenue supported the order of CIT(A).
We have considered the submissions of ld. DR of revenue and gone through the orders of authorities below. The issues in dispute were decided by CIT(A) as per para no. 7 of his order and therefore, the para no. 7 from the order of CIT(A) is reproduced hereinbelow for the sake of ready reference. This reads as under:- “7. In the course of the present appeal-proceedings, the assessee has reiterated its submissions that the impugned expenditures were prima- facie allowable under the head business income. However, there is no specific material proof in the form of invoices or bills. There is also no bank statement of account to substantiate the actual incurring of the said items of expenditure. In these facts and circumstances, there is gross absence of adequate and tangible proof in support of the expenditure claimed and also that of the nexus with the assessee's income, declared under the business head. In respect of the interest paid, the assessee has not furnished any specific proof of payment or the utilization of the amounts, against which such interest was debited. It is not established therefore that the same was in assessee's normal course of business. The disallowance of Rs. 30,440/- made by the AO is therefore upheld. The assessee has claimed an amount of Rs. 39,895/- under the head vehicle maintenance. The assessee however, has not submitted any relevant proof of the actual incurring of the said expenditure by way of bills / invoices. As, also observed by the AO, the assessee has not substantiated the actual business user of these items of expenditure, during the present appeal proceedings. In these circumstances, the disallowance made in this respect is upheld. Page 3 of 4 The amounts of Rs. 1,337/- and Rs. 225/- pertains to loan processing charges and bank charges. The items are not only meagre but are also of a nature that are expected to be incurred by any business establishment in the normal course of activity, wherein some bank account would be obviously have been maintained. In these circumstances, I direct the AO to delete the aforesaid disallowances. The assessee, in respect of its claim of depreciation on car at Rs. 1,22,406/- has submitted copies of annual returns of income, filed for A.Yrs. 2011-12; 2012-13 to 2014-15, wherein some items of expenditure, against the head depreciation have been claimed. However, besides this, no other specific documentary evidence in respect of the depreciation claimed atRs. 1,22,406/- has been furnished before the undersigned to corroborate the assessee's claim that the said car was purchased as well as utilized during the year (A.Y. 2007-08) for the purpose of assessee’s routine business activity. In these circumstances, there apparently being no such evidence even before the AO, I do not find any reason to deviate from the AO’s findings. In background of the above discussion, the assessee’s appeal is partly allowed.”
From the above para reproduced from the order of CIT(A), it is seen that regarding the disallowance of depreciation on car u/s. 32 of the IT Act to the tune of Rs. 1,22,406/-, a categorical finding has been given by CIT(A) that there is no specific documentary evidence in respect of depreciation claimed at Rs. 1,22,406/- having been furnished before the CIT(A) but the assessee’s claim that the said car was purchased as well as utilized during the Assessment Year 2007-08 for the purpose of assessee’s routine business activity. In view of this categorical finding of CIT(A), we find no reason to interfere in the order of CIT(A) on this issue. Similarly regarding disallowance of expenditure incurred on vehicle maintenance u/s. 37(1) to the tune of Rs. 39,895/- and disallowance of interest expenditure claimed by the assessee to the tune of Rs. 30,440/- also, categorical finding has been given by CIT(A) that the assessee has not substantiated the actual business user of these items of expenditure during the appellate proceedings and in view of this categorical finding of CIT(A), we find no reason to interfere in the order of CIT(A) on these issues also. Page 4 of 4 6. In the result, the appeal filed by the assessee is dismissed.
Order pronounced in the open court on the date mentioned on the caption page.