Uttam Modi, Kolkata vs Assessee
- CitationAppeal No. 330/XXXII/13-1 4/W-54(3 )/R&T /Kol dated 29.10.2014 for the a ssess men t
Ratio decidendi
The rule this decision rests on
The Tribunal may not estimate disallowance of business expenses merely because bills and vouchers have not been produced where the assessee has lost his records, has lodged a contemporaneous police report of the loss, and has produced ledger copies of the expenses; in such circumstances, a disallowance on estimate basis is to be reduced to a reasonable percentage having regard to the genuineness of the expenditure and the volume of the transactions. Estimated disallowance of expenses partly attributable to personal use may be reduced where the assessee's business use is established and the personal element is not shown to be substantial; the personal-use component is fixed at a reasonable proportion in the exercise of the Tribunal's discretion. A loss on sale of a motor car treated as capital loss by the Assessing Officer is sustained as capital in nature, but the resulting loss is to be adjusted by reducing the written-down value of the block of assets when computing depreciation, not allowed as a separate deduction.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
I .T.A . N o. 22 36 / KOL ./ 20 1 4 As ses sm e nt y e ar : 20 06 - 20 0 7
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IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA 'SM C' BENCH, KOLKATA
Before Shri George Mathan, Judicial M ember
I.T .A. No . 223 6 /KOL/ 2 01 4 Assess ment year : 2006 -2 00 7
Utta m Mod i,.......................... ............... ........ ........ .................A pp ella nt Dre a m Re sid e nc y, Bloc k-3, Flat-2 B, Sa lua , Raja rhat, Kol ka ta -700 136 [PA N : A E RPM 8 453 J]
-Vs.-
Income Ta x Offic er,........ .............................. ........ ...................Resp ond e nt Wa rd -54(3), Kolka ta
Appeara nces by : N o n e, f or the as sessee Shri Rajesh Ku mar, JCIT, Sr. D.R., for th e Depart ment
Dat e of concluding t he hearin g : Feb ruary 26, 2015 Dat e of pr onouncing th e order : Feb ruary 26, 2015
O R D E R
Per Ge orge M athan:
This is an app eal filed by the assess ee a gain st th e order of ld. Commissioner of Income Tax (Appe als)-XXXII, Kolk ata in Appeal No. 330/XXXII/13-1 4/W-54(3 )/R&T /Kol dated 29.10.2014 for the a ssess men t year 2 006-07.
2. None rep resented on beh alf of the a sse ss ee an d Sh ri R ajesh Kuma r, JCIT, Sr. D.R. rep re sen ted on behal f of the Revenu e.
3. The as sesse e h as filed a let ter for adjournm ent which is reje cted and the appe al of the asse ss ee is di spos ed of o n merit.
4. In the assess ee's app eal, the ass es see has rai sed 15 grou nds. The grounds are a gain st the variou s disallo wanc es made by the A ssessing I .T.A . N o. 22 36 / KOL ./ 20 1 4 As ses sm e nt y e ar : 20 06 - 20 0 7
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Officer on esti mate basis and which has been confi rm ed by the ld. CIT(App eals).
5. Ld. Sr. D.R. submitted that as many of the exp ens es were not fully vouched and were also in th e n atu re of person al exp en se s, the A ss essin g Officer h ad disallowed part of the expen ses on esti mat e ba si s. He vehemently supp ort ed th e o rder of the Assessin g Of ficer and ld. CIT(App eals).
6. I have con sidered th e submi s sion of ld. Sr. D. R. , also perused the order of ld. CIT(Appeals ) and the As se ss ing O ffic er. A perusal of the as se ssm ent o rder sh ows that th e As sessin g Offi cer has di sallowed the expen s es out of the Pro fit & Lo ss A /c. at the rate of 25% to 50 % on estim ate ba sis on ac cou nt of non-pro duction of b ills and vouchers in resp ect of adv ertis ement exp enditure, book s an d periodical s, ca r rep ai rin g and tax token, data proces sin g charges, diary & calenda r, entert ain ment expen se s, gen eral exp e nses, mobile charges & t elephone expen s es, sales p ro motion exp en ses, travelling & con veyance and Xerox ch arg es. The A ss essin g Office r h as furthe r disallowed 25% of the expen s es to ward s person al use in res pect of bike expen ses and pet rol expen s es. The a ss ess ee is in the busin ess of an In suranc e A gen t. The as se sse e ha s in the co urse of a ss ess men t filed a l etter along with the Xerox copy of the FIR dated 09 .11.2006 specifying the los s of B ri ef Case co ntainin g ECG machine, PAN Card, Ban k Cheque Boo k and so me document s of paper. Admittedly this can not be called an after-thought in so far as th e F IR h as been lodged on 09 .11.200 6, wherea s the retu rn was filed on 03.07 .2006 and 143(1) was i ssu ed o n 19.04. 2007 and notices under s ection 143(2) and 142(1) issu ed much afte r. In th e co urse of as se ssm ent, th e assess ee ha s also p rod uced the led ger copie s in respect of the v ariou s expen ses. Consid e rin g t he fact that th e as ses se e has lost his do cuments and ad mitt edly is no t in a position to pro duce the ev id ence s, in the in terest of ju stice and con siderin g the volume of I .T.A . N o. 22 36 / KOL ./ 20 1 4 As ses sm e nt y e ar : 20 06 - 20 0 7
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transaction s done by the asse ssee, the esti mat ed disallowanc e on accoun t of non-production of bills and vouchers mad e b y the Assessin g Offic er in resp ect o f all th e exp ens es is reduced to 10%. Further th e e xpen ses in resp ect of the person al use rep resent in g the bike expen ses and the pet rol expen s es stand s redu ced fro m 25% to 10 %. The loss on the sale of the ca r which is t reat ed a s capital loss by the Ass es sin g Of ficer and confi rmed by the ld. CIT(App eal s) st ands confi rmed. However, th e A s se ssing Offi ce r i s directed to reduce th e said lo ss fro m th e block of asset s when co mputing the dep re ciation.
7. In the result, the appeal filed by the ass essee is p artly allowed.
Orde r p ronounced in th e open Co urt on 26 t h Feb rua ry, 2015.
Sd/-
George Mathan (Judicial M embe r)
Kolkata, th e 26 t h day of Feb ruary , 2015
Co pies to : (1) Utta m Mod i, Dre a m Re sid e nc y, Bloc k-3, Flat-2 B, Sa lua , Raja rhat, Kol ka ta -700 136
(2) Income Ta x Office r, Wa rd -54(3), Kolka ta
(3) Comm iss ioner of Income-tax (Appeal s) (4) Com mis sioner of Incom e Tax (5) The Depar tmental R epr es entative (6) Guard Fil e By order
Assistant Registrar Income Tax App ellate Tribunal Kolkata Ben ch es, Kolkata Laha/Sr. P.S.
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