2022 (9) TMI 1077 - AT - Income Tax

Accrual of income - Addition on account of interest income as reflected in Form No. 26AS - assessee has submitted that at the time of filing the return of income, no such interest receipt was reflected in Form 26AS and therefore, the assessee has not taken this interest amount as part of the declared income - HELD THAT - The assessee has explained that this interest does not belonging to the assessee but the same pertains to Smt. Usha Gupta, who has invested the money in M/s Sanrachna Infra Project Pvt. Ltd,. The learned AR has referred to the income tax return of Smt. Usha Gupta, the proprietorship of Shri. Tirupati Distributors. As pertinent to note that if the said interest income was already offered to tax by Smt. Usha Gupta in her return of income then the same cannot be taxed twice. From the details filed by the assessee it is not clear in the absence of the bifurcation of the interest income of Smt. Usha Gupta as to whether she has included this amount of interest in the total income declared in the return of income. It is also a matter of verification whether this entry as reflected in Form 26AS is due to the mistake of the PAN of the assessee taken instead of Smt. Usha Gupta. Accordingly, in the facts and circumstances of the case, this issue is set aside to the record by the Assessing Officer for deciding the same afresh after proper verification and enquiry to ascertain the correct facts from the record and documents to be filed by the assessee. If it is found that the said interest income belongs to Smt. Usha Gupta and not to the assessee then the same cannot be added to the income of the assessee. Needless to say before passing the fresh order, the assessee be given an opportunity of hearing. Disallowance of depreciation on vehicle on the ground of personal use - HELD THAT - Assessing Officer has not disputed the claim of the assessee on the second vehicle which is Mahindra XUV which is otherwise a passenger vehicle. Once the claim of depreciation on passenger vehicle is accepted by the AO then the depreciation on delivery van cannot be disallowed on the ground of personal use. AO has otherwise made this disallowance on presumption and surmises without the actual fact of the use of the vehicle. Even otherwise the delivery van is hardly used for personal purpose and can be used only for the business purpose of the assessee. Accordingly, the disallowance made by the Assessing Officer on depreciation on the delivery van is not justified and the same is deleted, hence the ground no. 2 is allowed.

Summary

Issues:
1. Addition of interest income as per Form 26AS
2. Disallowance of depreciation claimed on a vehicle

Issue 1: Addition of interest income as per Form 26AS
The appellant contested the addition of interest income based on Form 26AS, arguing that the interest did not belong to them but to another individual. They explained that the TDS details were incorrectly uploaded in the appellant's PAN instead of the actual investor. The appellant provided evidence, including income tax returns and ledger accounts, to support their claim. The appellant emphasized that the interest was not received by them and should not be included in their income. However, the respondent supported the Assessing Officer's decision, stating that the interest was indeed received by the appellant. The Tribunal noted the discrepancy and lack of clarity regarding the ownership of the interest income. Consequently, the issue was remanded to the Assessing Officer for further verification and a fresh decision based on the correct facts and documents, ensuring the appellant's right to a fair hearing.

Issue 2: Disallowance of depreciation claimed on a vehicle
The Assessing Officer disallowed a portion of the depreciation claimed on a delivery van, citing personal use. The appellant argued that the delivery van was primarily used for business purposes and that the disallowance was unjustified. The Tribunal examined the details of the fixed assets and noted that the Assessing Officer had accepted the depreciation claim on another vehicle used for personal purposes. Therefore, the disallowance on the delivery van was deemed unwarranted as it was predominantly utilized for business activities. The Tribunal concluded that the disallowance lacked factual basis and was based on assumptions. Consequently, the disallowance of depreciation on the delivery van was overturned, and the appellant's appeal was partially allowed.

In conclusion, the Tribunal addressed the issues raised by the appellant regarding the addition of interest income and the disallowance of depreciation on a vehicle, providing detailed analyses and justifications for its decisions. The judgment highlighted the importance of accurate verification and fair consideration of facts in determining tax liabilities.