2010 (6) TMI 898 - AT - Income Tax

Tribunal upholds CIT(A)'s decisions on appeal, business income, depreciation disallowance. Importance of adequate cause for delay.

M/s. S.S. Builders Versus Income-tax Officer – 20 (3) (3) Mumbai

The Tribunal upheld the CIT(A)'s decisions in dismissing the appeal, confirming business income, and disallowing depreciation and various expenses. The ... - Issues Involved:1. Condonation of delay in filing the appeal.2. Confirmation of business income and disallowance of returned loss.3. Disallowance of depreciation on motorcar.4. Disallowance of various expenses.Summary:1. Condonation of Delay in Filing the Appeal:The assessee challenged the CIT(A)'s refusal to condone a delay of 693 days in filing the appeal against the assessment order dated 30th January 2006. The CIT(A) noted that the appeal was filed on 1st February 2008, well beyond the due date of 10th March 2006. The assessee argued that the delay was due to an initial decision to buy peace and cooperate with the Department, but later decided to appeal when similar disallowances were made for A.Y. 2005-06. The CIT(A) found this explanation insufficient and dismissed the appeal as unadmitted. The Tribunal upheld the CIT(A)'s decision, stating that the assessee did not provide a sufficient reason for the delay and that the delay appeared to be a dilatory strategy.2. Confirmation of Business Income and Disallowance of Returned Loss:The assessee, a builder and developer, filed a return declaring a loss of Rs.4,39,658, which was initially accepted. However, upon scrutiny, the Assessing Officer (AO) found discrepancies, including missing bills and expenses debited for a project claimed to be under construction but actually completed. The AO rejected the explanation and ignored the loss, confirming the business income at Rs.1,29,100. The CIT(A) upheld this decision, and the Tribunal found no reason to overturn it.3. Disallowance of Depreciation on Motorcar:The AO disallowed depreciation of Rs.2,09,972 on a motorcar registered in the name of a partner, Ms. Nigar Khan, arguing that the asset must be owned by the firm to claim depreciation. The CIT(A) and the Tribunal upheld this disallowance, noting that the assessee did not appeal the assessment order promptly and only did so after the penalty u/s. 271(1)(c) was confirmed.4. Disallowance of Various Expenses:The AO allowed only Rs.1,70,899 of the expenses claimed, disallowing Rs.1,29,101 as not relatable to business purposes. The CIT(A) and the Tribunal upheld this decision, finding the assessee's explanations insufficient and noting that the appeal was filed as a strategy to prolong litigation.Conclusion:The Tribunal dismissed the appeal, upholding the CIT(A)'s decisions on all issues, including the refusal to condone the delay in filing the appeal, the confirmation of business income, and the disallowances of depreciation and various expenses. The Tribunal emphasized the need for sufficient cause to condone delays and found the assessee's reasons inadequate.