2022 (6) TMI 1064 - AT - Income Tax

Disallowance one tenth of total car expenses on ad-hoc basis - HELD THAT - We are of the view, that the disallowance out of car expenses has been made by the Assessing Officer and has been confirmed by the Ld.CIT(A) without proper reasoning or justification and without supporting materials. We also find from the perusal of record that the issue regarding disallowance of car expenses had travelled to ITAT in assesee s own case in Assessment Year 2007-08 2011 (12) TMI 771 - ITAT DELHI wherein the disallowance out of car expenses was deleted by Coordinate Bench of ITAT, Delhi. TDS credit denied - HELD THAT - CIT(A) did not adjudicate this ground of appeal in the impugned appellate order dated 19/03/2019. On perusal of records in ITAT, we find that neither side has provided the relevant material on the basis of which this issue can be finally decided by us. Therefore, this issue is set aside to the file of the Ld.CIT(A) with the direction to adjudicate the ground of appeal pertaining to credit for TDS, taken by the assessee in this regard, in the Appeal filed before the Ld.CIT(A) The Ld.CIT(A) is further directed to give reasonable opportunity to the assessee before passing fresh order. Ground No. 3 of present Appeal before us is disposed of in accordance with the aforesaid directions and is treated as partly allowed for statistical purpose.

Summary

Issues:
1. Disallowance of car expenses on an ad-hoc basis.
2. Restriction of credit for TDS.

Issue 1: Disallowance of car expenses on an ad-hoc basis:
The appellant contested the disallowance of Rs. 1,86,672 out of total car expenses in the assessment order for the year 2015-16. The Assessing Officer disallowed 10% of the total car expenses, citing the possibility of personal use. The Appellate Tribunal found that the disallowance lacked proper reasoning or justification, as no supporting materials were presented to establish personal use of the car to the extent of 10%. The Tribunal noted that the issue had been addressed in a previous year's case where the disallowance was deleted. However, the Tribunal observed that neither party provided relevant materials for a final decision. Consequently, the Tribunal set aside the issue for reconsideration by the Commissioner of Income Tax (Appeals) with specific directions to provide necessary details and a fair opportunity to the assessee for a fresh decision.

Issue 2: Restriction of credit for TDS:
The appellant raised a ground of appeal regarding the restriction of TDS credit to Rs. 2,29,01,038 instead of the claimed amount of Rs. 2,68,96,387. The Commissioner of Income Tax (Appeals) did not address this issue in the appellate order. The Appellate Tribunal found a lack of relevant material from both sides to make a final decision on this matter. Consequently, the Tribunal remanded the issue back to the Commissioner of Income Tax (Appeals) for proper adjudication, directing a fair opportunity for the assessee before issuing a fresh order.

In conclusion, the Appeal Tribunal partially allowed the appeal for statistical purposes, setting aside the issues of disallowance of car expenses and TDS credit for reconsideration by the Commissioner of Income Tax (Appeals) with specific directions to provide necessary details and fair opportunities for the assessee. The general grounds of appeal were not specifically adjudicated.