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Income Tax Appellate Tribunal, DIVISION BENCH’SMD’, CHANDIGARH
Before: SMT. DIVA SINGH & DR. B.R.R. KUMAR
PER DR. B.R.R. KUMAR:
The present appeal has been filed by the Assessee against the order of the Ld. CIT(A)-1, Amritsar (Camp at Palampur) H.P.
In the present appeal Assessee has raised the following grounds:
That the Ld. Commissioner of Income Tax (Appeals)-1 Amritsar Camp at Palampur has wrongly decided the Appeal of the Appellant without going through the circumstances of the case.
That the Commissioner of Income Tax (Appeals)-1 Amritsar Camp at Palampur has wrongly confirmed the addition of Rs. 5,00.000/- stated to have been returned to the creditor Sh. Devi Ram Whereas the credit has not been returned. The addition is likely to be deleted.
That the Ld. Commissioner Of Income Tax (Appeals)-1 Amritsar Camp at Palampur has wrongly confirmed the addition of Rs. 4,50.000/- stated to have been returned to the creditor Sh. Dile Ram and deposited in bank account of Sh. Dile Ram by Sh. Neel Chand. The addition is likely to be deleted.
That the Ld. Commissioner Of Income Tax (Appeals)-1 Amritsar Camp at Palampur has wrongly confirmed the addition of Rs. 24,898/- on account of depreciation of Vehicle for personal use. There is no personal use of Vehicles by the Appellant. The addition may kindly be deleted.
That the Ld. Commissioner of Income Tax (Appeals)-1 Amritsar Camp at Palampur has wrongly confirmed the addition of Rs. 10,448/- out of Telephone expenses for personal use. 3. Ground No. 2 & 3 relate to loans:
3.1 Brief facts of the case are that the Assessee took loan from his relative at the time of set up of business. The firm took loan of Rs. 5,00,000/- from Sh. Devi Ram 7,00,000/- from Sh. Dile Ram. The creditworthiness was proved before the Ld. Assessing Officer. The Income Tax Officer recorded the statement of the creditors in the absence of the Assessee in their villages who had no knowledge of dates of giving and receiving back of the loan. Later on the creditors were produced before the Income Tax Officer who confirmed the transactions entered with the Assessee. It has been stated that the creditors changed statement at the instance of the Assessee. The Commissioner of Income Tax (Appeals)-1 Amritsar Camp Palampur has dismissed the ground of Appeal taken by the Assessee.
3.2 During the hearing before us, it was brought to our notice that confusion prevailed among the assessee and loan party as the loans were received as firm and also an individual. The loan party could not differentiate between the loans given for two entities, 1. as the person received loan as individual and 2. as partner of the firm is same. We also found that the loan parties are villagers who may not certainly have knowledge about procedures of recording of treatment.
3.3 Hence, to decide the matter based on the documents, replies of the assessee juxtaposing them against the two statements recorded pertaining to two different loans and to examine the veracity and acceptability of the second statement backed up by documents, we hereby feel it fit to remand the matter back to the file of Assessing Officer to adjudicate afresh on this issue.
Ground No. 4 & 5 relate to disallowance of car and telephone expenses:
4.1 The Assessing Officer disallowed depreciation on vehicle on the firm belief that the use of vehicle by partners of the firm and their friends and employees (AO Para -4) without any basis. Similarly telephone expenses were disallowed as no register for calls has been maintained.
4.2 We have gone through the material available on record and find that no disallowance is called for on assumption basis for expenses on vehicle use by the partners and their friends. Similarly the telephone expenses cannot be disallowed for the simple reason that the assessee has not maintained call register which in the present base is highly impossible to maintain one such. The Assessing Officer has not brought any material on record to how that the assessee is having only one telephone connection and the same is being used for personal purpose. Hence, the disallowance made by the Assessing Officer is hereby deleted.
4.3 As a result, appeal of the Assessee is partly allowed for statistical purposes.
Order pronounced in the open Court. Sd/- Sd/- (DIVA SINGH) (DR. B.R.R. KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated : 25/05/2018 AG Copy to: 1.The Appellant, 2. The Respondent, 3. The CIT(A), 4. The CIT, 5. The DR