2018 (10) TMI 1589 - AT - Income Tax

Disallowance of depreciation @ 30% on cars and various expenses incurred on cars treating the same for noncommercial purpose - Held that - CIT(A) has given a categorical finding that log books for each vehicle and even the books of account were not produced for verification before the Assessing Officer as well as before him. But while arriving at the disallowance of 30% depreciation and ₹ 50,000/- out of maintenance expenses the same was not based on any specific basis by the Assessing Officer as well as by the CIT(A). Besides, AR submitted that the documents were provided before the revenue authorities but the same was not properly considered by the Revenue. Therefore, it will be appropriate to remand back this issue to the file of the Assessing Officer to verify this issue. Addition as notional income from house property - addition on estimates basis - Held that - admittedly no benefit was derived from the house property in the year under reference by the assessee and no depreciation was claimed on the property. The business exigency required the assessee to visit Bilaspur which was pointed and demonstrated by the assessee. Therefore, the Assessing Officer merely on estimate basis cannot make the addition. Thus, Assessing Officer as well as CIT(A) was not correct in making this addition on estimated basis. TDS u/s 194C - sums credited or paid during the year to the contractor during the course of business of plying, hiring or leasing goods carriages, on furnishing PAN, to the person paying or crediting the such sum - scope of amendment in section 194C(6) - Held that - It is pertinent to note that the Assessing Officer while making additions has not taken proper cognizance of the documents produced at the time of assessment proceedings by the assessee. Therefore, it will be appropriate to admit the additional evidence at this juncture and remand back this issue to the file of the Assessing Officer to verify this issue in light of the various documents produced by the assessee. Needless to say, the assessee be given opportunity of hearing by following principles of natural justice. Ground partly allowed for statistical purpose. Admission of additional evidence - Held that - It is pertinent to note that the relevant documents were not produced before the revenue authorizes, but at the same time the Assessing Officer while making additions has not taken proper cognizance of the documents produced at the time of assessment proceedings which are not supported by the assessee with the other documents. Therefore, it will be appropriate to admit the additional evidence at this juncture and remand back this issue to the file of the Assessing Officer to verify this issue in light of the various documents produced by the assessee. Needless to say, the assessee be given opportunity of hearing by following principles of natural justice. Ground partly allowed for statistical purpose.

Summary

Issues:
1. Disallowance of depreciation on cars and lump sum expenses
2. Addition of notional income from house property
3. Non-production of books of accounts before the Assessing Officer
4. Disallowance of interest expenses
5. Addition for transportation expenses for non-deduction of tax at source
6. Addition of loan received from Smt. Radha Devi Agrawal

Issue 1 - Disallowance of Depreciation on Cars and Lump Sum Expenses:
The appellant contested the disallowance of depreciation on cars and lump sum expenses made by the Assessing Officer. The appellant argued that the vehicles were used exclusively for business purposes, and the disallowance was unjustified. The ITAT noted that the CIT(A) did not provide a specific basis for the disallowance and ordered a remand to the Assessing Officer for verification based on the documents provided by the appellant. The ITAT partially allowed Ground No. 1 for statistical purposes.

Issue 2 - Addition of Notional Income from House Property:
Regarding the addition of notional income from a house property, the appellant explained that the property was used for business purposes, and no benefit was derived from it in the relevant year. The ITAT found that the Assessing Officer's estimation of rental income was not justified as the property was used for business needs. Ground No. 2 was allowed in favor of the appellant.

Issue 3 - Non-Production of Books of Accounts:
The CIT(A) confirmed the observation that the books of accounts were not produced before the Assessing Officer. However, the ITAT noted that the documents were provided but not adequately considered by the revenue authorities. The ITAT remanded the issue to the Assessing Officer for proper verification, allowing the appellant an opportunity to be heard.

Issue 4 - Disallowance of Interest Expenses:
The disallowance of interest expenses by the CIT(A) was challenged, arguing that it was unjustified. The ITAT did not provide specific details on this issue, but it was dismissed as not pressed by the appellant.

Issue 5 - Addition for Transportation Expenses:
The appellant disputed the addition made for transportation expenses due to non-deduction of tax at source. The ITAT noted that the Assessing Officer did not consider relevant documents provided by the appellant during the assessment proceedings. The issue was remanded back to the Assessing Officer for verification, with the appellant granted an opportunity to be heard.

Issue 6 - Addition of Loan Received:
Regarding the addition of a loan received from Smt. Radha Devi Agrawal, the appellant requested verification of the genuineness of the transaction. The ITAT found that the Assessing Officer did not adequately verify the transaction and added the amount to the income unjustly. The issue was remanded back to the Assessing Officer for further examination, with the appellant given a chance to present additional evidence. Ground No. 6 was partially allowed for statistical purposes.

In conclusion, the ITAT partly allowed the appeal of the appellant for statistical purposes, remanding several issues back to the Assessing Officer for proper verification and consideration based on the documents provided by the appellant.