TMI Blog2009 (4) TMI 975X X X X Extracts X X X X X X X X Extracts X X X X ..... - on account of personal use of car and lease line charges ₹ 1,41,550/- as no TDS was deducted and accordingly completed the assessment at an income of ₹ 19,11,020/- vide order dated 06.12.2007 passed u/s. 143(3) of the Income Tax Act. 1961 (the Act). 3. On appeal the ld. CIT(A) while enhancing the income of ₹ 3.05 lacs by applying the provisions of Section 2(22)(e) of the Act directed the Assessing Officer to examine the applicability of provisions of Section 2(22)(e) in Assessment Years 2004-05 and 2006-07 and accordingly dismissed the appeal. 4. Being aggrieved by the order of the ld. CIT(A) assessee is in appeal before us. 5. Ground No. 1.1 to 2.0 are against the substances of disallowance of motor car expense ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aling to ₹ 2,01,758/-. Apart from this he also invoked the provisions of Section 2(22)(e) of the Act and directed the Assessing Officer to consider the payment of ₹ 3.05 lacs made by the company to HDFC bank for the benefit of Mr. Mangal Chand Biyani as deemed income of the assessee. Besides this, he also directed the Assessing Officer to apply the said provisions of Section 2(22)(e) of the Act in Assessment Years 2004-05 and 2006-07 and initiate the penalty proceedings u/s. 271(1)(c) of the Act. 7. At the time of hearing the ld. Counsel for the assessee while reiterating the same submissions as submitted before the ld. CIT(A) further submits that the car is registered in the personal name of Mr. Mangal Chand Biyani director ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. vs. CIT (1979) 118 ITR 261 (SC); CIT vs. Basti Sugar Mills Co. Ltd. (2002) 257 ITR 88 (Del.) and Mangal Ram Bhagwat Swarup vs. ITO in ITA No. 2953/Del/07 for AY 2001-02 dated 8.8.07. On the application of provisions of section 2(22)(e), the ld. Counsel for the assessee submits that the same is also not applicable in the assessee's case and for this proposition reliance was also placed in the case of Sunil Sethi vs. DCIT (2008) 26 SOT 95 (Del.). On the direction of the ld. CIT(A) to apply the provisions of section 2(22)(e) for the Assessment Years 2004-05 and 2006-07 the ld. counsel for the assessee submits that the ld. CIT(A) has no such power and for this proposition the reliance was also placed on the decision in CIT vs. TA Krish ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... business or profession....... 11. In CIT vs. Basti Sugar Mills Co. Ltd (supra), it has been held that depreciation on the vehicle which is not registered in the name of the assessee was an allowable deduction in the hands of the assessee. 12. In Sunil Sethi vs. DCIT (supra) a sum of ₹ 30.00 lacs was given to the assessee for making advance with respect to certain land dealings which were proposed to be entered into by the company through the assessee. The assessee as a director in the company could lawfully execute certain agreements on behalf of the company, if he is so authorized. The sum of ₹ 20.00 lacs was given by way of imprest to enter into a transaction which was for the benefit of the business of the company i. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Chand Biyani, Director of the company and accordingly the amount of ₹ 3.50 lacs could not be considered as deemed dividend in the hands of the assessee and hence deleted. 14. With regard to the allowance of depreciation and other expenses we respectfully following the ratio of decision in the case of Sayaji Iron and Engineering Co. (supra), wherein it has been held that even if there was any personal use by the Directors that was as per the terms and conditions of service and, in so far as the assessee was concerned, it was business expenditure and no part of the expenditure could be disallowed and consistent view of the Tribunal held that assessee is entitled to depreciation and other expenses as car was used by the assessee compa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he submission of the rival parties and perused the material available on record. In the absence of any adjudication of the above ground by the ld. CIT(A) we in the interest of justice consider it fair and reasonable that the matter should go back to the file of the ld. CIT(A) and accordingly we restore back the issue to the file of the ld. CIT(A) who shall decide the same afresh and according to law including the decision relied on by the ld. Counsel for the assessee in Kotak Securities (supra), after providing reasonable opportunity of being heard to the assessee and accordingly the ground taken by the assessee is allowed for statistical purposes. 21. Ground No. 4 is against levy of interest u/s. 234B. 22. At the time of hearing the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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