M/s. Trans Air, 118, Ansal Bhawan, Kasturba Gandhi Mar, New Delhi 110 001. vs. DCIT, Central Circle 12, New Delhi.
December, 18th 2013
IN THE INCOME TAX APPELLATE TRIBUNAL
(DELHI BENCH `H' : NEW DELHI)
SHRI U.B.S. BEDI, JUDICIAL MEMBER
BEFORE SHRI B.C. MEENA, ACCOUNTANT MEMBER
(ASSESSMENT YEAR : 2003-04)
M/s. Trans Air, vs. DCIT, Central Circle 12,
118, Ansal Bhawan, New Delhi.
Kasturba Gandhi Mar,
New Delhi 110 001.
(PAN : AAAFT2744C)
ASSESSEE BY : Shri Ashwani Kumar, CA
REVENUE BY : Shri Sameer Sharma, Senior DR
PER B.C. MEENA, ACCOUNTANT MEMBER :
This appeal filed by the assessee emanates from the order of CIT (Appeals)-XXXI,
New Delhi dated 31.12.2012.
2. In this case, a notice u/s 148 of the Income-tax Act, 1961 was issued on 31.03.2010
after recording the satisfaction as per the requirement of law. The information received
from Enforcement Directorate that a Mercedes Benz car bearing registration no.DL-3CQ
1010 was purchased by M/s. Trans Air. The investigation conducted by the Enforcement
Directorate revealed that the car was actually used by Shri Jagat Singh, son of Shri Natwar
Singh and it was under his absolute control and dominion. As per the statement
reproduced in the reasons recorded, we find that Shri Chetan Gupta had stated on
2 ITA No.646/Del./2013
05.05.2006 that the car was purchased in April/May 2002 and it was used for a short while
and after which Shri Jagat Singh, s/o Shri Natwar Singh, 19, Teen Murti Lane, New Delhi
borrowed it from him and then he has been using this car up to September / October, 2005.
The Assessing Officer disallowed the depreciation and petrol expenses on the car as the
same was not being used for business purposes of the assessee and an addition of
Rs.7,30,294/- was made. The CIT (A) has confirmed this addition by holding as under :-
"3.1.6 I have considered the submissions of the AR and facts of the
case. It is not correct to say that depreciation is allowable merely on the
ground of ownership of the asset. The car must be used for the purpose of
assessee's business. The asset in question may be in the name of the
assessee firm. However, it has been proved sufficiently beyond doubt that
the said Mercedes Benz car was only in possession and use of Shri Jagat
Singh who is not connected to the assessee firm. I find that there is no merit
in the AR's argument that he was not confronted with the findings of the
ED. The facts were made known to the assessee very much in the
beginning of the assessment proceedings. The assessee had requested for
and collected the reasons recorded while issuing notice u/s 148. In these
reasoning, the facts have all been made very clear. Further when notice
under 143(2) and 142(1) were issued calling for the firm's reply, as to why
depreciation should not be disallowed for the said reasons, the firm has
chosen to remain silent. Therefore, this is not a case of not providing
opportunity or not allowing cross examination by the A.O. The assessee
never demanded it nor gave any explanation during the assessment
proceedings. In fact, in the regular assessment for the year, assessee has
claimed that all books have been burnt in fire. Hence the allegation of
violation of the principle of natural justice is not found acceptable.
Sufficient opportunity has been given to the appellant to put across his
views or lead evidences in support of its claim during the assessment stage.
The firm never asked for cross-examination of Shri Jagat Singh during the
assessment proceedings. Hence, making it one of the issue before appellate
authority is not on permissible.
3.2 Considering all the facts, I do not find any merit in the appeal. The
ground raised is rejected."
3. Now, the assessee is in appeal before us by taking the following ground:-
"That the order dated 31-12-2012 passed u/s 250 of the Income-tax Act,
1961 by the Learned Commissioner of Income-Tax (Appeals) XXXI, New
Delhi is against law and facts on the file in as much as he was not justified
in upholding the action of the Learned Assessing Officer in disallowing car
depreciation of Rs.4,74,542/- and car expenses of Rs.2,55,752/- (totaling
3 ITA No.646/Del./2013
Rs.7,30,294/-) on the ground that the car was not used by the Appellant
Firm for business purpose which is arbitrary, unjustified and against the
facts and provisions of law."
4. We have heard both the sides on the issue and also perused the record available.
We find that the statement of Shri Chetan Gupta recorded by the Enforcement Directorate
and the other evidences collected by the Enforcement Directorate have not been confronted
with the assessee with regard to the use of the car. We do not agree with the view of CIT
(A) that assessee had never asked for cross examination of Shri Jagat Singh. Even when
assessee does not ask for then also all evidence used against assessee must have been
confronted. Therefore, in the interest of justice and equity, we find it appropriate to restore
the issue to the file of the Assessing Officer so that assessee can be provided with the copy
of statement recorded by the Enforcement Directorate as well as with other material which
was used while making such addition. Therefore, we set aside the orders of the authorities
below and restore the issue to the file of the Assessing Officer to decide the issue de novo
after providing an opportunity of being heard to the assessee.
5. In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in open court on this 11th day of December, 2013.
(U.B.S. BEDI) (B.C. MEENA)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Dated the 11th day of December, 2013/TS
Copy forwarded to:
4.CIT(A)-XXI, New Delhi.
5.CIT(ITAT), New Delhi. AR, ITAT