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Income Tax Appellate Tribunal, ‘C’ BENCH: CHENNAI
Before: SHRI MAHAVIR SINGH & SHRI JAGADISH
Dhanalaxmi Jewellers (India) Pvt. The Asst. Commissioner of Ltd., Vs. Income Tax, 118, NSC Bose Road, Corporate Circle-1(1), Sowcarpet, Chennai-600 079. Chennai. [PAN: AADCD-8049-G] (अपीलाथ"/Appellant) (""यथ"/Respondent) अपीलाथG की ओर से/ Appellant by : Shri Abhishek Murali, C.A IJथG की ओर से /Respondent by : Shri P.Sajit Kumar, JCIT सुनवाई की तारीख/Date of Hearing : 28.05.2024 घोषणा की तारीख /Date of Pronouncement : 07.06.2024 आदेश / O R D E R PER JAGADISH, A.M : Aforesaid appeal filed by the assessee is against the order of Learned Commissioner of Income Tax, Appeal, National Faceless Appeal Centre (NFAC), Delhi [hereinafter “CIT(A)”] dated 11.03.2023 for the A.Y 2014-15 in the matter of assessment framed by Ld. Assessing Officer [AO] u/s.143(3) of the Income Tax Act, 1961 (hereinafter “the Act”) on 28.12.2016. :- 2 -:
Ground No.1 is general in nature, hence no adjudication is required.
Ground No.2 is against the addition of Rs.33,46,160/- on recovery of gold ornaments by erstwhile proprietary concern taken over by the assesse company . During the previous year relevant to assessment year, the assessee-company has taken over the business of proprietary concern of the Director Vinod Kumar Jain w.e.f 01.08.2013. The Ld. A.O noticed that the assessee company has set off loss which included loss on account theft of gold ornaments in property concern . During the year gold ornaments valued at Rs.33,46,160/- was recovered, but the same was not disclosed in the hand of company. The Ld. A.O held that since the assets and liabilities of the erstwhile proprietary concern were taken over by the company, the recovery should also be disclosed in the hand of the assessee-company and added amount of Rs.33,46,160/- to the income of the assessee. The Ld. CIT(A) has confirmed the addition on the ground that assesse has been allowed loss on proprietorship concern to be set off against the income of the current year as per Section 72A(6) of the Act and therefore any recovery of theft gold should be included in the income of appellant by same account. :- 3 -:
The Ld. A.R argued that the gold stolen earlier year was recovered during this year and has been shown as income in the hands of the director and therefore, taxing it again will be double taxation. The Ld. A.R has submitted a copy of computation of income of Shri Vinod Kumar Jain evidencing that gold ornaments recovered has been offered in the hands of Shri Vinod Kumar Jain.
The Ld. D.R has relied upon the orders of authorities below.
We have heard the rival contentions, and perused the materials available on record. The assessee-company has taken over the business of M/s Dhanalaxmi Jewelers a proprietary concern of the director of company w.e.f 01.08.2013. The assessee has claimed a loss of erstwhile proprietary concern of Rs. 1,15,64,901/-. The loss included the theft of gold ornaments of Rs. 33,46,160/-. Subsequently, during the year, the gold ornaments was recovered, but has not been offered as income by the company. The assessee has argued that the recovered gold ornaments have been offered in the hands of the earlier proprietor. We do find merit in the contention of appellant . The assessee on hand is claiming set off of loss of stolen gold from the current income, however not offering in the income on the recovery the stolen goods. The Hon’ble Supreme Court in case of ITO vs. Ch. :- 4 -:
Atchaiah [1996] 218 ITR 239 (SC), has held that the AO must tax the right person alone. Merely because a wrong person is taxed with respect to a particular income, the AO is not precluded from taxing the right person with respect to that income. Further, the person lawfully liable to be taxed can claim no immunity because the AO has taxed the said income in the hands of another person contrary to law. In view of the above, there is no infirmity in the order of Ld. CIT(A) and the order is confirmed.
Ground No.3 is against confirmation of depreciation on car of Rs. 4,26,313/- by the Ld. CIT(A) . The assessee has claimed deprecation of Rs. 4,26,313/- on Jaguar car purchased on 31.03.2014. The Ld A.O after examination of documents has found that registration and other handling charges were debited only on 10.04.2014 and balance payment was made on 08.04.2014 and therefore concluded that asset was not put to use during financial year. The Ld AO disallowed the claim of depreciation. The Ld. CIT(A) has confirmed the disallowance as the assessee has not furnished any proof that date of registration is on 31.03.2014 to substantiate its claim that asset has been put to use before 31.03.2014 . :- 5 -:
The Ld. A.R argued that the depreciation is allowable in the case of assessee as the car was purchased on 31.03.2014 and was ready to used condition.
We have heard the rival contentions, and perused the materials available on record. The Jaguar car was purchased on 31.03.2014 and final payment for the purchase was made on 08.04.2014. The Ld. AR has not been able to produce evidence that the date of registration of the car was on 31.03.2014 contrary to documentary evidence that registration expenses was debited in next year .Therefore, we do not find any infirmity in the order of the Ld. CIT(A) on this account and ground of appeal of the assesse is dismissed .
In the result, the appeal filed by the assessee is dismissed.
Order pronounced on 07th June, 2024. (महावीर िसंह) (जगदीश) (Jagadish) (Mahavir Singh) लेखा सद"य लेखा लेखा लेखा सद"य सद"य /Accountant Member सद"य उपा" / Vice President चे"ई/Chennai, "दनांक/Dated: 07th June, 2024. EDN/- :- 6 -: