Itta/269/2013 Of The Commissioner Of Income Tax Ii v. Karl Agencies

IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH,HYDERABAD THE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTAAND THE HON’BLE Ms. JUSTICE G. ROHINI I.T.T.A. No. 269 of 2013 DATE: 12.07.2013 Between: Commissioner of Income Tax-II,Hyderabad. … Appellant And Karl Agencies,Hyderabad. … Respondent This court made the following: THE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTAANDTHE HON’BLE Ms. JUSTICE G. ROHINI I.T.T.A. No. 269 of 2013 JUDGMENT:(Per the Hon’ble the Chief Justice Sri Kalyan Jyoti Sengupta) This appeal is preferred and sought to be admitted on the following suggested questions of law. “(A) Whether on the facts and circumstances of the case, that the finding of the appellate Tribunal with regard to the purchase ofvehicles by the assessee and lending on hire can be said to bebased on material on record? (B) Whether on the facts and circumstances of the case, theappellate Tribunal is justified in holding that the depreciation u/s.32 should be allowed on mere purchase of the asset within therelevant previous year, even if there is no material produced bythe assessee to evidence user of the asset for businesspurposes? (C) Whether on the facts and circumstances of the case, theappellate Tribunal is justified in accepting the assessee’s plea that50% of the amount paid by the hirer represents security deposit andhence cannot be considered as lease rental income, even in theabsence of shred of evidence produced by the assessee? (D) Whether the appellate Tribunal is justified in deleting the addition made u/s. 68 of the Income Tax Act in respect of unexplained cash credit to a tune of Rs.1 lakh standing in the nameof Mohd. Faisuddin? (E) Whether the findings recorded by the appellate Tribunal as regards the aforesaid questions can be said to be based on material on record?” We have heard Sri S.R. Ashok, learned senior counsel for the appellant and gone through the impugned judgment and order of the learned Tribunal.The learned Tribunal while deciding ground No.1 with regard tosustenance of disallowance of depreciation of Rs.3,68,689/- has relied on itsearlier judgment of the assessee’s own case in ITA.No.1365/H/1983 and decided the issue, which reads as follows: “We follow the above decision of the ITAT and in the light ofthat allow depreciation on all the four trucks as the trucks were givento hirers on the same date when they were purchased and takendelivery. In other words the trucks were used for the purpose ofassessee’s business.” It is not the case of the revenue that the earlier decision of the learnedTribunal in assessee’s own case, as quoted above, has been upset or anyappeal has been preferred against it. While deciding ground No.2 with regard to sustenance of addition of50% of hire receipts as income of the assessee, the learned Tribunal again has followed its earlier decision, wherein it is held as follows: “Under the circumstances, we are of the considered view thatthe assessee is liable to tax only in respect of the income part. Theassessee has rightly shown 50% of the amount received asassessee has received 50% towards purchase price and 50%towards lease income. Under the circumstances, we are of theconsidered view that principal amount which is towards vehicle priceis not income. Therefore, same is not liable to be taxed. The additionof Rs.2,62,583/- is deleted.” While deciding ground No.3 with regard to sustenance of addition ofunexplained credit of Rs.1 lakh under Section 68 of the Act, the learnedTribunal on fact found that this credit of Rs.1 lakh was properly explained andtherefore the addition was deleted. This fact finding cannot be upset by thisCourt in exercise of its jurisdiction under Section 260A of the Income Tax Act,1961. While deciding ground No.3 with regard to sustenance of addition ofunexplained credit of Rs.1 lakh under Section 68 of the Act, the learnedTribunal on fact found that this credit of Rs.1 lakh was properly explained andtherefore the addition was deleted. This fact finding cannot be upset by thisCourt in exercise of its jurisdiction under Section 260A of the Income Tax Act,1961. The learned Tribunal has dealt with the revenue’s appeal and decidedthe matter. While deciding ground No.2 with regard to deletion ofunaccounted income arising from bogus payment of Rs.6,35,047/-, the learned Tribunal came to the following fact finding. “We find that there is no dispute that during the year underconsideration the assessee has not taken any deposits from the said 5 parties but has made repayment of deposits taking in the earlieryears. It is also not in dispute that the repayment was made bycheques. The learned CIT(A) after examining the assessee’ssubmission and the remand report of the A.O. has held that underthese circumstances the repayment cannot be said to beunaccounted payment on the part of the firm. Hence, it cannot belegally correct to assess this amount as unaccounted income of thefirm. In the absence of any contrary material brought on record bythe revenue against the aforesaid finding of the learned CIT(A) andkeeping in view that the repayment was made by cheques, we are ofthe view that the learned CIT(A) was fully justified in deleting theaddition made by the A.O.” In view of the aforesaid finding, this appeal cannot be admitted to decide the things otherwise, since it involves fact finding. Accordingly, we dismiss the appeal. ______________________ K.J. SENGUPTA, CJ Date: 12.07.2013ES _______________ G. ROHINI, J