2010 (2) TMI 977 - AT - Income Tax

Appeal partially allowed: reexamination of professional receipts, depreciation upheld, relief on interest granted

The tribunal partly allowed the appeal, directing the Assessing Officer to reexamine the estimation of professional receipts, upholding the allowance of ... - Issues:1. Estimation of professional receipts and disallowance of depreciation.2. Adequacy of opportunity provided to the assessee during assessment proceedings.3. Restoration of the controversy regarding estimation of professional receipts to the Assessing Officer.4. Allowance of depreciation on office premises.5. Levy of interest under sections 234B, 234C, and 234D.Analysis:1. The appeal was against the assessment order for the assessment year 2002-03. The assessee, an advocate and a partner in a legal firm, declared income from the firm and personal professional receipts. The Assessing Officer estimated professional receipts higher than declared, leading to a significant addition. The Commissioner of Income-tax (Appeals) partially allowed relief but upheld the disallowance of depreciation. The assessee challenged these decisions on various grounds, including the estimation of income and disallowance of depreciation.2. During the assessment proceedings, the Assessing Officer obtained information from the High Court regarding the advocate's appearances. The assessee claimed inadequate opportunity to reconcile details, which were later submitted before the tribunal. The tribunal observed that the Assessing Officer did not allow sufficient time for furnishing details. Consequently, the controversy over the estimation of professional receipts was directed to be reconsidered by the Assessing Officer with proper opportunity for the assessee to be heard.3. Regarding the disallowance of depreciation on office premises, the tribunal upheld the decision of the Commissioner of Income-tax (Appeals). The premises were used for business purposes, and past records supported the claim for depreciation. The tribunal found no reason to interfere with this decision, thereby rejecting the ground of appeal related to depreciation.4. The issue of interest under sections 234B, 234C, and 234D was also addressed. The tribunal directed the Assessing Officer to provide consequential relief to the assessee concerning interest under sections 234B and 234C. Regarding section 234D, the tribunal considered precedents and concluded that it was not applicable for the assessment year 2002-03. Consequently, the ground of appeal related to section 234D was partly allowed.5. In conclusion, the tribunal partly allowed the appeal, directing the Assessing Officer to reexamine the estimation of professional receipts, upholding the allowance of depreciation, and providing relief on the issue of interest under section 234D. The order was pronounced on February 18, 2010, marking the conclusion of the proceedings.