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TMI Blog2017 (11) TMI 637X X X X Extracts X X X X X X X X Extracts X X X X ..... as having been incurred for purpose other than that of business. The depreciation on same analogy for sum of ₹ 2,54,511/- was rightly disallowed. The Ld. CIT(A) also noted that assessee did not produce any evidence that Ranikhet premises is used for the purpose of business. Therefore, depreciation have been correctly disallowed - Decided against assessee. Disallowance of service tax - assessee did not produce any evidence before authorities below to justify his claim of deduction - Held that:- Claim of assessee cannot be verified whether service tax is paid for professional receipts earned by the assessee in assessment year under appeal. A.O. also noted that the total service tax payable by the assessee comes to ₹ 5,57,360 but assessee claimed payment of ₹ 1,83,856. Therefore, facts were not verifiable from the explanation of assessee. The assessee filed copy of the bank certificate of Axis Bank before Ld. CIT(A) which also did not reveal anything in favour of the assessee. The assessee has filed copy of the bank certificate from Axis Bank which only confirm that assessee paid service tax payment. But it is not clarified as to on which professional income asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngly, condone the delay in filing the appeal. 5. Briefly the facts of the case are that assessee filed return of income declaring income at ₹ 3,29,689. The assessee is engaged in the profession of Consultancy, Designing strategy and Organisation during the year. The assessee is having revenue from professional fees amounting to ₹ 50,66,906 in the year under appeal. The assessee is providing professional services personally. He has neither employed any professional staff nor hired professional services from outside. The salary paid to the staff is ₹ 1,05,400 only to Office boy/Chowkidar etc. The assessee is having following immovable properties shown in fixed assets schedule on which he has claimed depreciation. Sl.No. Particulars WDV as on 01.04.2011 Depreciation WDV as on 31.03.2012 1. Plot at Ranikhet 15,01,983/- NIL 15,01,983/- 2. Office at Ranikhet 10,40,302/- 52,015/- 9,88,287/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade the addition of ₹ 1,83,856. 7. The assessee challenged the additions before the Ld. CIT(A). The written submissions of assessee were reproduced in the impugned order in which the assessee briefly reiterated the same facts as pleaded before A.O. and it was also explained that assessee is providing consultancy services and advised on strategy of Medium and Large organisations, on their growth and performance improvements. The assessee charged consultancy fees and maintain office for the same purpose. The claim of the assessee has been accepted by the department in past year after year. The assessee purchased the property No.L-1/3, Hauz Khas Enclave, New Delhi, in the joint name along with his wife but entire sale consideration is paid by him in his name. It being a Government policy, the joint name of his wife has been added. The interest and depreciation, is therefore, allowable. 7.1. The Ld. CIT(A) noted that assessee has stated that he has not claimed depreciation on office premises but the depreciation referred to in the schedule of fixed assets pertains to the furniture and fixtures. The assessee was directed to clarify as to which furniture and fixture are being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... East side at ground fllor of L-1/13, Hauz Khas Enclave, New Delhi with separate entry which is used for office purpose only. The above said portion used for office purose is 249.66 sq. feet out of total area of the ground floor of 1714.16 sq. feet which comes to 14.58% of the ground floor. Balance is residential portion having separate entry utilized by the assessee for residential purpose. Moreover, there is no way inside to enter from office side to residential side. The assessee is showing office premises in the above said premises in schedule of fixed assets filed during the course of assessment proceedings which is another proof for the said office asset and also claimed depreciation @ 10% for ₹ 2,77,578 under the Head Office Premises . The remand report was confronted to the assessee who has filed the rejoinder. The assessee explained that due to privacy, the staff guest meeting and conference area have been separated. 7.2. The Ld. CIT(A) considering the explanation of assessee in the light of remand report on record noted that it is not in dispute that property No.L-1/13, Hauz Khas Enclave is being used by the assessee for both his office as well as residential pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the assessee and documents were forwarded to the A.O. at appellate stage for factual verification of use of the property for business purpose or not. The A.O. gave his remand report after physical inspection of the property in question and submitted that assessee is having one room with small pantry and one toilet for office use on north-east side at ground floor of the property. This fact has not been disputed by the assessee through any evidence or mateiral on record. During the assessment year under appeal the assessee was having total professional fees receipts of ₹ 50,66,906 and out of the same, he has declared meagre taxable income of ₹ 3,29,689. Assessee was not maintaining any employee and did not hire any professional staff for earning of such income. The interest is the only major component which is charged in P L A/c as deduction. The assessee is having only 05 clients during the year from whom he has received professional fees. These facts strengthen the findings of the A.O. that for such a small consultancy work, the assessee is required only one table, one chair and almirah for his office purpose because only one room at ground floor have been used for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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