This article provides an in-depth analysis of the case ITA No. 4800/DEL/2019, where the appellant, S.S. Kothari Mehta & Co. from New Delhi, filed an appeal against the Assistant Commissioner of Income Tax (ACIT), Circle-61(1), New Delhi, for the assessment year 2015-16. The appeal was filed on May 27, 2019, and the final tribunal order was pronounced on June 13, 2022.
S.S. Kothari Mehta & Co., represented by their counsel, filed an appeal challenging the disallowance of car expenses and the restriction of TDS credit. The case was heard by the Delhi Bench ‘B’ of the Income Tax Appellate Tribunal (ITAT) through video conferencing, with Judicial Member Shri Chandra Mohan Garg and Accountant Member Shri Anadee Nath Misshra presiding.
The appellant raised the following grounds of appeal:
The assessment order under section 143(3) of the Income Tax Act was passed by the Assessing Officer (AO) on December 26, 2017, determining the total income at Rs. 6,43,80,887 as against the returned income of Rs. 6,03,64,520. The disallowances/additions included Rs. 1,86,672 out of car expenses on the grounds that the element of personal use could not be ruled out.
During the hearing, the appellant was not represented, and the Learned Senior Departmental Representative (DR) for Revenue supported the disallowance and the impugned order.
The tribunal observed that the disallowance was made without proper reasoning or justification. The Assessing Officer did not discuss any materials to support the allegation of personal use of the car to the extent of 10% of the total expenditure. The tribunal also noted that the issue regarding the disallowance of car expenses had previously traveled to the ITAT in the assessee’s own case for AY 2007-08, where the disallowance was deleted by the Coordinate Bench of the ITAT, Delhi.
The tribunal set aside the issue regarding the disallowance of Rs. 1,86,672/- out of car expenses to the file of the Ld. CIT(A) for a fresh order on this issue in accordance with the law, after providing a reasonable opportunity to the assessee. The tribunal directed the Ld. CIT(A) to give due consideration to the previous order of the Coordinate Bench of ITAT, Delhi, and clearly specify the required details to be produced/submitted by the assessee.
The appellant also disputed the restriction of TDS credit. The Ld. CIT(A) did not adjudicate this ground of appeal. The tribunal set aside this issue to the file of the Ld. CIT(A) with the direction to adjudicate the ground of appeal pertaining to the credit for TDS. The Ld. CIT(A) is further directed to give a reasonable opportunity to the assessee before passing a fresh order.
The case ITA No. 4800/DEL/2019 concluded with the tribunal setting aside the disallowance of car expenses and the dispute over TDS credit to the Ld. CIT(A) for reconsideration. The tribunal emphasized the need for proper reasoning, justification, and supporting materials in making disallowances and adjudicating disputes. The appeal was treated as partly allowed for statistical purposes.
The final judgment of the tribunal was as follows:
This appeal by Assessee is filed against the order of Learned Commissioner of Income Tax (Appeals)-38, New Delhi, dated 19.03.2019 for Assessment Year 2015-16.
None appeared on behalf of the assessee at the time of Virtual hearing before us. The learned counsel for the assessee, vide his letter dated 14.01.2021 received through email, has requested for withdrawal of the appeal and stated that the assessee has opted to settle the dispute relating to the tax arrears for the assessment year under consideration under the ‘Vivad Se Vishwas Scheme, 2020’. A certificate to this effect under Section 5(1) of The Direct Tax Vivad Se Vishwas Act, 2020 has also been filed.
Learned Senior DR has no objection.
In view of the above, we accept the request of the assessee for withdrawal of the appeal.
In the result, the appeal of the assessee is dismissed as withdrawn.
Above decision was announced on conclusion of Virtual Hearing on 28th May, 2021.”
S.S. Kothari Mehta & Co. vs. ACIT, Circle-61(1), New Delhi: Dispute Over Car Expenses and TDS Credit
Manage the increasing number of hearings effortlessly by leveraging the legal AI revolution We are India's Leading revolutionary AI-powered legal platform where you can get enough insights into top cases and judgements.
Research Platform