Itr/8/2001 Of M/S Sharat Kumar & Com.fazilka v. Commissioner Of Income Tax,Patiala

ITR No. 8 of ZOOL} 1] IN THE HIGH COURT OF PUNJAB AND HARYANAAT CHANDIGARH ITR No. 8 of 2001Date of decision: 29.1.2020 M/s Sharat Kumar & Co. .. Applicant Vv The Commissioner of Income-lTax Patial .. Respondent CORAM:HON'BLE MR. JUSTICE AJAY TEWARIHON'BLE MR. JUSTICE AVNEBEESH JHINGHON'BLE MR. JUSTICE AVNEBEESH JHING Present:Mr. Alok Mittal, Advocate for the applicant. Mr. Vivek Sethi, Senior Standing Counsel and Mr. Varun Issar, Junior Standing Counsel for the respondent, AVNEESH JHINGAN, J. In reference under Section 256(1) of the Income Tax Act, 1961(for short, ‘the Act’), following questions of law have been referred foropinion of this Court: “1. Whether on the facts and in the circumstances of the casethe Income Tax Appellate Tribunal was right in law inholding that assessee firm was not entitled to depreciation onthe Income Tax Appellate Tribunal was right in law inholding that assessee firm was not entitled to depreciation on /+#? 2? Whether on the facts and in circumstances of the case theIncome Tax Appellate Tribunal was right in law inobserving that the yield of Narma shown by private partiescannot be said to be comparable with corresponding yieldshown by government agencies?”Income Tax Appellate Tribunal was right in law inobserving that the yield of Narma shown by private partiescannot be said to be comparable with corresponding yieldshown by government agencies?” ITR No. 8 of ZOOL|2] The facts necessary for adjudication of the questions are thatthe assessee was dealing in Narma Cotton, Cotton Seed Oil and Khal. Forthe assessment year 1990-91, return was filed. The assessment underSection 143(3) of the Act was framed vide order dated 24.10.1991 makingcertain additions and disallowing certain deductions. The depreciationclaimed on car and car expenses amounting to |481,724/- were disallowed.The yield of cotton shown by the assessee at 31.467% was found to be onlower side and 32% yield was applied. In appeal, the Appellate Authorityallowed the depreciation as well as car expenses. With regard to yield ofcotton, relief of=2,46,631/- was given and addition of =1,83,642/- wassustained. Both the assessee and the revenue filed appeals. The Tribunalvide order dated 26.6.1998 upheld the order of the Appellate Authority. With regard to question (1), the car expenses and depreciationwas rejected by the Tribunal considering the fact that the car was purchasedon 26.3.1990, two vouchers for purchase of petrol dated 26.3.1990 and28.3.1990 were produced. The vouchers were doubted as there wasregistration number written on the said vouchers whereas the number wasissued to the assessee on 10.5.1990. The assessee failed to produce anyevidence worth reliance to show that the vehicle was used during the saidperiod for business purposes. This was coupled with the fact that in thesubsequent year, 1/4['0]depreciation and car expenses were disallowed by theauthorities for personal use of the vehicle and the said position wasaccepted by the assessee. In the absence of any evidence to prove usage ofthe car for business purposes trom 26.3.1990 to 31.3.1990, the claim wasdisallowed. The finding of the Tribunal warrants no interference as there is failure to show any illegality much less perversity. ITR No. 8 of ZOOL}3] failure to show any illegality much less perversity. ITR No. 8 of ZOOL}3] As far as question (2) is concerned, the assessee was given dueopportunity to explain the low yield as compared to the yield shown byother similarly situated dealers which was even higher than 32%, but noplausible explanation was offered. A vague statement made that otherparties are mixing Desi cotton, the same was not substantiated. TheAssessing Officer restricted the yield to 32% inspite of the fact that otherdealers were showing higher than 32%, the Appellate Authority reduced itby .25%. The findings recorded by the authorities considering the similarlysituated dealers smacks of no unreasonableness or arbitrariness, the factsand evidence have been duly appreciated. The findings recorded by theTribunal are sustained. Both the questions are answered against theassessee. The reference is disposed of accordingly. (AVNEESH JHINGAN) (AJAY TEWARIT)JUDGE JUDGE 29. | 2028) Whether speaking/reasoned:Yes/NoWhether reportable:Yes/No