Itta/303/2003 Of Sri Sawamal Agarwal v. Asst. Commissioner Of Income Tax Inv

HON’BLE SRI JUSTICE DILIP B. BHOSALEANDHON’BLE SRI JUSTICE A. RAMALINGESWARA RAOITTA No. 303 OF 2003 JUDGMENT:(per the Hon'ble Sri Justice A. Ramalingeswara Rao) This appeal is directed against the order dated 30-01-2003passed in I.T (S.S) A.No.220/Hyd/1997 for the block period 1986-87 to1996-97 on the file of the Income Tax Appellate Tribunal, HyderabadBench ‘A’ (for short, ‘the Tribunal’). The assessee, Sri Sawarmal Agarwal, is the appellant beforethis Court. Though the appellate order of the Tribunal had dealt withseveral questions/issues raised by the assessee, the only questionthat falls for our consideration in the present appeal is with regard tothe depreciation and payment of interest on the car purchase. Thus,the substantial question of law framed for consideration in thememorandum of appeal reads as follows: “ Whether on the facts and in the circumstances ofthe case the Hon’ble Tribunal is right in disallowing theappellants claim for depreciation and payment of intereston the car purchased by him from out of the businessfunds.” The appellant – assessee belongs to the group of Sri R.Satyaprakash Agarwal & Sons. He is the proprietor of M/s. Sitaram & Sons and has various other business concerns. Theentire group was involved in textile business. There were search andseizure operations in the premises of the assessee on 09-01-1996. During the course of assessment proceedings, noticeunder Section 158 BC of the Income Tax Act, 1961 (for short, ‘the Act’)was issued on 21-08-1996. The assessee appeared along with hisrepresentative and furnished the necessary details. After obtaining the approval of the Commissioner of Income Tax (Appeals) for getting the books of accounts audited under Section142(2A) of the Act, an order was passed on 23-12-1996. The orderwas served on the assessee and also the auditors nominated by theCommissioner of Income Tax on 26-12-1996. After receiving thespecial audit report, show cause notice dated 03-07-1997 containingthe proposed additions was served on the assessee on 04-07-1997. On the same day i.e., on 04-07-1997, the asseesee filed return ofincome for the block search period returning a total undisclosedincome of Rs.11,75,119/-. The assessee also furnished a reply to theshow cause notice on 14-07-1997. Ultimately, the assessment wascompleted and investments in purchase of car along with other itemswere shown as additions. The total unaccounted income was shownas Rs.41,15,038/-. Challenging the same, the assessee preferred anappeal before the Tribunal and the Tribunal through the impugnedorder, accepted the contention of the asseesee with regard to theinvestment made in acquisition of car and accordingly allowed set offof the income against the investment in the car. But so far asallowance of depreciation and interest is concerned, it did not acceptthe contention of the assessee on the ground that the learned counselfor the assessee was not able to provide evidence to show that the carwas used for the business purpose of the assessee. Against the saidorder of the Tribunal to the extent of disallowance of depreciation andinterest on the car, the present appeal is filed. Before the Tribunal, the assessee did not produce any evidenceto show that the car was used for business purpose and in theabsence of any evidence, the Tribunal did not accept the plea of theassessee. In the present appeal, the appellant could not demonstrateon the basis of record that the car was used for business purpose and,therefore, we cannot disturb the said finding of fact recorded by theTribunal. Accordingly, we conclude and answer the substantialquestion of law in favour of the Revenue and against the assessee. The appeal is accordingly dismissed. Miscellaneous petitions, if any, also stand closed. There shall be no order as to costs. ______________________ DILIP B. BHOSALE, J _______________________________A. RAMALINGESWARA RAO, J 24-02-2015ks