Shyam sunder Kedia Vs DCIT (ITAT Kolkata)
Kolkata Tribunal granted full relief to the Assessee by deleting additions made towards double taxation of income, adhoc disallowance of car expenses & notional interest on advances.
Facts
Assessee filed return on 14.02.2022 declaring total income of ₹1,61,820/-. CPC, while processing u/s 143(1) on 08.07.2022, wrongly added ₹3.43 crore under business income, though Assessee had already offered the same under correct heads (dividend, bank interest, partnership income, LTCG, STCG, remuneration, etc.). Subsequently, case was selected for scrutiny & AO framed assessment u/s 143(3) by starting computation from CPC figures, ignoring rectification request & submissions. AO further (i) disallowed 50% of car lease rent & repairs (₹12.63 lakh) on presumed personal use, & (ii) added notional interest of ₹35.20 lakh @12% on advances to Amra Abid Khan & HBC Group, despite Assessee having own capital of ₹55.85 crore. CIT(A) dismissed appeal summarily on a technical ground that appeal was wrongly mentioned as against 143(1) instead of 143(3).
Tribunal’s Findings
Double Addition of ₹3.43 Cr : Tribunal found that incomes were already declared under proper heads & taxing again under business income amounted to impermissible double taxation.
Adhoc Car Expense Disallowance ₹12.63 Lakh: Tribunal held disallowance was purely on conjecture without evidence or logbook verification. Presumption of personal use cannot justify 50% disallowance.
