9911796707
TMI Blog2023 (7) TMI 792X X X X Extracts X X X X X X X X Extracts X X X X ..... indings made by the assessing officer and gave no specifics explanation for non-deduction of tax at source. Accordingly, we are of the considered view that CIT(Appeals) has not erred in facts and in law in confirming the disallowance made by the assessing officer on account of non-deduction of tax on interest payments by the assessee. Addition u/s 24 - income from house property - HELD THAT:- CIT(Appeals) observed that on verification of facts it emerged that Tata Projects Ltd had made payment of Rs. 6 lakhs to the assessee after deducting tax at source under section 194J of the Act, as professional/ technical fee. Accordingly, the income against which deduction under section 24 of the Act was claimed by the assessee is not income from house property . Accordingly, the AO had correctly disallowed the claim of deduction u/s 24. Addition on account of donation expenses - AO disallowed a sum claimed as deduction by the assessee u/s 80G - CIT(A) restricted disallowance - HELD THAT:- CIT(Appeals) has taken into consideration the material placed on record by the assessee during the course of appellate proceedings, and has appropriately given relief to the assessee on the basis of documen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Judicial Member These two appeals filed by the assessee are against the order of the ld. Commissioner of Income Tax (Appeal), Gandhinagar, Ahmedabad in proceeding u/s. 250 vide orders dated 02/03/2015 & 22-09-2015 passed for the assessment years 2010-11 & 2011-12. 2. The assessee has raised the following grounds of appeal:- Assessment year 2010-11 "1. The learned Commissioner of Income Tax (Appeals) has erred in confirming the addition of Rs.37,50,000/- made by the Assessing Officer u/s.68 of the Income Tax Act, 1961 as alleged unexplained cash credits. 2. The learned Commissioner of Income Tax (Appeals) has erred in confirming the disallowance of Rs.2,21,745/- made by the Assessing Officer u/s.40(a)(ia) of the I.T. Act, 1961 3. The learned Commissioner of Income Tax (Appeals) has erred in confirming the addition of Rs.1,80,000/- made by the Assessing Officer u/s.24 of the I.T. Act,1961. 4. The learned Commissioner of Income Tax (Appeals) has erred in confirming the disallowance to the extent of Rs. 1250/-out of donation expenses. 5. The learned Commissioner of Income Tax (Appeals) has erred in confirming the addition on account of interest expenses of Rs.1,87,41 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome Tax (Appeals) has erred in confirming the disallowance made by the Assessing Officer on account of depreciation expenses of Rs.13,765/-. 13. The Appellant prays that the delay in filing of appeal may kindly be condoned. 14. The appellant craves leave to add, alter, amend or modify any of the grounds of appeal on or before the date of hearing of appeal." Condonation of Delay : 3. We observe that the appeals for assessment year 2010-11 and 2011-12 are time-barred by 427 days and 243 days respectively. The assessee has filed application for condonation of delay and submitted that both the working partners of the assessee firm Mr. Devchandbhai Thakkar and Mr. Kalpeshbhai Thakkar were suffering from cancer and were temporarily undisposed during the impugned period when appeal was to be filed before ITAT. The relevant extracts of the application for condonation of delay are beautiful reference: "2. It is hereby submitted that both the working partners of the firm namely Devchandbhai Laljibhai Thakkar and Kalpeshbhai D. Thakkar were suffering from cancer and were temporarily indisposed and even not attending business. The event of ill health occurred during the cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to Rs. 37.5 lakhs under section 68 of the Act on the ground that the assessee had taken loan from 4 persons, which remained unexplained and cannot be treated as genuine. In appeal, Ld. CIT(Appeals) dismissed the appeal of the assessee on the ground that the assessee could not prove the creditworthiness/capacity of the persons claimed to have advanced loan to the assessee. The Ld. CIT(Appeals) observed that even the persons are not assessed to tax, no books of accounts have been maintained, no bank statement or source of income which could prove that these parties had sufficient funds for the huge advances made to the assessee are available. Accordingly, in light of the circumstances, the Ld. CIT(Appeals) held that the assessing officer had correctly made addition of some of Rs. 37.50 lakhs as unexplained income of the assessee. While making the addition, Ld. CIT(Appeals) observed as under: "On careful consideration of the entire facts, 1 find that the appellant in the case Heenaben Rameshkumar from whom Rs. 10 lac was obtained had submitted that her source of income was stitching and embroidery work. However no supporting evidence for income earned have given. Copy of P &. L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case, the argument of the appellant is not satisfactory and is hereby rejected. Further, with regard to advance of RS.17,50,000/- from. Shri Rameshkumar D. Thakkar, it is seen that though he is a PAN holder, but he is not filing return of income. Source of his income is to be from agriculture and interest income. However, in support of this claim, no supporting evidences of income earned is furnished. Appellant could not even furnish copy of bank statement of Shri Rameshkumar D. Patel. He is not maintaining any books of accounts and therefore, the transaction could not be verified and it Is therefore, held that the AO has rightly held that creditworthiness of Shri Rameshbhai D. Thakker is not proved by any evidences and the AO has rightly, disallowed the loan of Rs. 17,50,000/-. This claim of the appellant is also rejected. To sum up, it is held that appellant could not prove the creditworthiness and capacity of the persons who are claimed to have advanced loan to the appellant. Even these persons are not assessed to tax, though some of them are PAN owners. No books of account, statements or source of income could prove that these parties had sufficient funds for huge adva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st was given was disallowed u/s 68 of the Act, hence interest expenses cannot be allowed in the of the present appellant. The AO had also summons to verify the signatures of the person concerned. The AO found that signatures in all the differed. One Shri Rasiklal C Thakkar who attended the AO and statement recorded confirmed that he cannot read or write either English or Hindi. In Form No. 15H Shri Thakkar had signed in English. As such the AO has contended that in all Form No. 15H, one person had made the signature. Even appellant could not rebut this argument of the A.O. In such of the matter, in absence of any argument by the appellant in this the disallowance by the AO is held justified and the disallowance of Rs.2,21,745/- u/s 40(a)(ia) of the Act is confirmed. The relevant ground of appeal is rejected. " 9. On going to the facts of the case, we observe that the assessee had made interest payment to several parties without deduction of tax at source. Before Ld. CIT(Appeals), the assessee made no specific arguments to controvert the findings made by the assessing officer and gave no specifics explanation for non-deduction of tax at source. Accordingly, we are of the consi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation in the year under consideration, hence claim of section 24 of the Income Tax cannot he denied, Further, it is contended AO assumed nature of income on the basis of mistake committed by third party and ignored actual facts of the appellant which were available for verification and verified also with no any adverse remarks ad also n such evidence/nature of income rejected. On careful consideration of the entire facts, I find that AO has in the remand report that appellant has furnished copy of Form No.16A by TATA Projects Ltd in which the nature of payments shown "1941 & Payment of Fees to profession or Technical Services", In. 26AS details it is TATA Projects Ltd has made the payment u/s 194j of the Act and deduct the TDS accordingly and therefore, the claim by the u/s 24 of the Act of Rs.1,80,000/- is not allowable to the appellant. In view of the clear cut finding given by the AO on the of documentary evidences; which the appellant has not been able to controvert with documentary evidences, the action of the AO in making the disallowance of Rs.1,80,000/- is held justified and is hereby confirmed. The relevant ground of appeal is therefore, rejected." 13. On ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... missed. Ground number 5: Ld. CIT(Appeals) erred in confirming addition on account of interest expenses of Rs. 1, 87, 418/- 18. The brief facts in relation to this ground of appeal are that during the course of assessment, the assessing officer observed that assessee had earned interest income from four parties amounting to Rs. 1,87,418/-, which was not offered to tax by the assessee in the return of income. Accordingly, the AO added the above amount as income of the assessee. In appeal, Ld. CIT(Appeals) confirmed addition on the ground that the assessee has not produced any evidence in support of its contention to controvert the findings made by the Ld. Assessing Officer. Accordingly, CIT confirmed the additions the following observations: "10.4 I have considered the facts of the assessment order, submission made by the appellant and the contention of the AO in the remand report. Appellant in the remand report has reported that appellant had not submitted any details in respect of the on account on interest income of Rs.1,87,814/-. From the facts of the case, it is dear that appellant though was given opportunity to produce evidences in respect of the claim of interest inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... considered view that Ld. CIT(Appeals) has rightly confirmed the addition in absence of any details being furnished by the assessee either before the AO or before Ld. CIT(Appeals) during the course of appellate proceedings and not furnishing any reason for non-deduction of tax at source. 26. In the result, ground number 4 of the assessee's appeal is dismissed. Ground number 5: Ld. CIT(Appeals) erred in confirming disallowance of job work charges of Rs. 5, 23, 165/- 27. The brief facts in relation to this case are that the assessee had given job work to M/s. Amba Oil industries for the job work of Kapasia crushing. During the course of assessment, the AO observed that assessee had not deducted TDS on job work expenses of Rs. 5,23,465/- paid to the aforesaid party. During the course of assessment, the AO did not furnish any details and remained absolutely silent regarding the issue of non-deduction of tax at source on payments made towards job work expenses. Accordingly, the Ld. Assessing Officer made the above disallowance in the hands of the assessee. 28. In appeal, Ld. CIT(Appeals) observed that the assessee did not file any details/give any submission with respect to non-d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce having been submitted by the assessee during the course of assessment proceedings or in appellate proceedings before Ld. CIT(Appeals). 34. In the result, ground number 6 of the assessee's appeal is dismissed. Ground number 7: Ld. CIT(Appeals) erred in confirming disallowance for donation expenses of Rs. 9,750/- 35. The brief facts in relation to this ground of appeal are that during the course of assessment, the AO noticed that the assessee had remitted a sum of Rs. 49,350/- towards donation expenses to a charitable trust, however, no documentary evidences were furnished in respect of donation of Rs. 9750/- before the AO. Accordingly, AO made a disallowance of Rs. 9,750/- and added the same to the income of the assessee. 36. In appeal, Ld. CIT(Appeals) confirmed the addition on the ground that the assessee did not attend and did not produce any evidence with regard to the donation expenses of 9750/-. 37. On going to the facts of the case and the observations made by the CIT in the appellate order, we are of the considered view that Ld. CIT(Appeals) has not erred in facts and in law in confirming the above addition in absence of any documentary evidences having been fur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penses. Hence, the order of the Tribunal disallowing about one-fourth of the expenses relating to the cars had become final under section 254(4). Under such circumstances, the fair proportion for disallowance of depreciation should be one-fourth for use of the cars for private purposes. Again, it was undisputed that the Tribunal had held in its order that all the cars were used for the business purposes as well as for the private purposes. Therefore, the Tribunal was not justified in allowing the entire depreciation claimed by the assessee and it should have disallowed one-fourth of the depreciation claimed. 40.3. In the case of Virendra K. Mehta v ACIT [2007] 106 ITD 437 (Mumbai), the Mumbai Tribunal made the following observations on disallowance of depreciation account of personal use of motor vehicles: It is a fact that in the assessment of the firm, Assessing Officer had held that 1/5th of the expenditure on motorcar is to be treated as personal in nature in the hands of the appellant i.e., the partner of the said firm. According to us, it is a case that the motorcars owned by the appellant and used for the business of the firm in which he is a partner have also partially ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
