M/s Ajay Kumar Sood Engineers and Contractors, Shimla V. JCIT, Shimla

ITA 1264/CHANDI/2012

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 5364 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 1 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-01-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 02-01-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 03-12-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Depreciation
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A, CHANDIGARH BEFORE SHRI T.R.SOOD, ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO.1263 /CHD/2012 (ASSESSMENT YEAR : 2006-07) MURARI LAL GUPTA, VS. THE A.C.I.T., B-71-72, SECTOR II, CIRCLE SHIMLA. NEW SHIMLA, SHIMLA. PAN: ADIPG7854K AND ITA NO.1264 /CHD/2012 (ASSESSMENT YEAR : 2007-08) AJAY KUMAR SOOD ENGINEERS VS. THE J.C.I.T., AND CONTRACTORS, SANJAY SADAN, SHIMLA. RANGE, CHOTTA SHIMLA, SHIMLA. SHIMLA. PAN: AAKFA4648J (APPELLANT) (RESPONDENT) APPELLANT BY : NONE RESPONDENT BY : SHRI AKHILESH GUPTA, DR DATE OF HEARING : 02.01.2014 DATE OF PRONOUNCEMENT : 08.01.2014 O R D E R PER SUSHMA CHOWLA, J.M. : THESE TWO APPEALS FILED BY DIFFERENT ASSESSEES ARE AGAINST THE SEPARATE ORDER OF THE COMMISSIONER OF INCOME-TAX (A PPEALS), SHIMLA EACH DATED 13.09.2012 RELATING TO ASSESSMENT YEARS 2006-07 AND 2007-08 AGAINST THE ORDER PASSED UNDER SECTION 143(3) OF TH E INCOME TAX ACT, 1961 (IN SHORT THE ACT). 2 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE IN ITA NO.1263/CHD/2012 READ AS UNDER: 1. THE ORDER OF THE LEARN ACIT IS CONTRARY TO LAW AND FACTS OF THE CASE. 2. THE LEARNED ACIT HAS ERRED IN LAW AND FACTS OF T HE CASE BY RESTRICTING THE DEPRECIATION TO 15%. 2. THE APPELLANT LEAVE TO ADD OR TO AMEND THE AFORE SAID GROUNDS BEFORE DISPOSAL OF THE APPEAL. 3. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE IN ITA NO.1264/CHD/2012 READ AS UNDER: 1. THE ORDER OF THE LEARN DCIT IS CONTRARY TO LAW AND FACTS OF THE CASE. 2. THE LEARNED DCIT HAS ERRED IN LAW AND FACTS OF T HE CASE BY RESTRICTING THE DEPRECIATION TO 15% INSTEAD OF RS.3 0% CLAIMED BY THE ASSESSEE. 2. THE APPELLANT LEAVE TO ADD OR TO AMEND THE AFORE SAID GROUNDS BEFORE DISPOSAL OF THE APPEAL. 4. THE APPEAL IN ITA NO.1264/CHD/2012 IS FILED BELA TEDLY AFTER THE DELAY OF 14 DAYS, WHICH IS CONDONED, BECAUSE OF SMA LLNESS OF DEFAULT. 5. DESPITE SERVICE OF NOTICE NONE APPEARED ON BEHAL F OF THE ASSESSEE. THE LEARNED D.R. FOR THE REVENUE POINTED OUT THAT T HE ISSUE IN THE PRESENT APPEAL IS SIMILAR TO THE ISSUE BEFORE THE H ON'BLE SUPREME COURT IN THE CASE OF CIT VS. GUPTA EXIM (P) LTD. [305 ITR 132 (SC)] AND THE FACTS BEING IDENTICAL, THE SAID RATIO IS SQUARELY A PPLICABLE TO THE CASE OF THE ASSESSEE. WE PROCEED TO DECIDE THE PRESENT APP EAL AFTER HEARING THE LEARNED D.R. FOR THE REVENUE. 6. THE FACTS IN BOTH THE APPEALS ARE IDENTICAL AND CONSEQUENTLY THE SAID APPEALS ARE BEING DISPOSED OFF BY THIS CONSOLI DATED ORDER FOR THE SAKE OF CONVENIENCE. HOWEVER, REFERENCE IS BEING M ADE TO THE FACTS IN ITA NO.1264/CHD.2012 TO ADJUDICATE THE ISSUE. 3 7. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E WAS A PARTNERSHIP CONCERN ENGAGED IN THE BUSINESS OF CIVIL CONTRACTS. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE STARTED CALL CENT RE AND HAD DECLARED LOSS OF RS.10,29,980/- FROM THE SAID CALL CENTRE. THE ASSESSEE HAD CLAIMED DEPRECIATION ON CANTER (TRUCK) @ 30%. THE EXPLANATION OF THE ASSESSEE IN THIS REGARD WAS THAT THE TRUCKS/COMMERC IAL VEHICLES WERE USED BY THE ASSESSEE TO TRANSPORT THE GOODS OWNED B Y THE CLIENT FROM THE SUPPLIER TO THE SITES OWNED BY THE CLIENTS, FROM WH ERE CONSTRUCTIONS WERE CARRIED ON. THE ASSESSING OFFICER OBSERVED THAT TH E ASSESSEE WAS A CONTRACTOR AND WAS ENGAGED IN CARRYING THE GOODS ON BEHALF OF THE CUSTOMERS BUT WAS NOT ENGAGED IN THE BUSINESS OF RU NNING VEHICLES ON HIRE. THE DECISION TO CARRY THE MATERIAL ON BEHAL F OF THE CLIENTS FROM THE SUPPLIERS TO THE SITE OF CONSTRUCTION WAS A BUS INESS STRATEGY AND COULD NOT TANTAMOUNT TO HIS BEING ENGAGED IN THE BU SINESS OF HIRING. IN VIEW THEREOF, THE ASSESSING OFFICER RESTRICTED THE DEPRECIATION TO 15% AS AGAINST 30% CLAIMED BY THE ASSESSEE. 8. THE CIT (APPEALS) HELD THAT THE VEHICLES OWNED B Y THE ASSESSEE WAS CANTER(TRUCK) ON WHICH NO HIGHER RATE OF DEPREC IATION WAS ADMISSIBLE AS IT WAS NOT ENGAGED FOR THE PURPOSE OF HIRE. IT WAS FURTHER HELD BY THE CIT (APPEALS) THAT EVEN OTHERWISE NO HIGHER RATE OF DEPRECIATION WAS ADMISSIBLE IN RESPECT OF ANY COMMERCIAL/NEW COMMERC IAL ASSET ACQUIRED BETWEEN THE PERIOD 1.4.2002 TO 31.12.2009. FURTHER RELIANCE WAS PLACED ON THE RATIO LAID DOWN BY THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. GUPTA EXIM (P) LTD. (SUPRA) FOR THE PROPOSITION THAT THE USER OF THE TRUCKS IN THE BUSINESS OF RUNNING THE TRUCKS FOR HI RE WAS THE MATERIAL TEST TO DETERMINE WHETHER THE HIGHER RATE OF DEPRECIATIO N WOULD BE APPLICABLE ON THE SAID TRUCKS. 4 9. ON PERUSAL OF RECORD WE FIND THAT THE ASSESSEE I S ENGAGED IN THE BUSINESS OF CIVIL CONSTRUCTION AND NOT ENGAGED IN T HE BUSINESS OF RUNNING THE TRUCKS ON HIRE. THE TRUCKS OWNED BY THE ASSESS EE WERE USED FOR CARRYING ON HIS OWN BUSINESS AND AS A BUSINESS STRA TEGY THE ASSESSEE WAS TRANSFERRING THE GOODS OF THE CLIENTS FROM THE SUPP LIERS TO THE SITE FOR WHICH NO SEPARATE CHARGES WERE BEING RECEIVED BY TH E ASSESSEE. IN THE ABOVE CIRCUMSTANCES, IT COULD NOT BE SAID THAT THE ASSESSEE WAS ENGAGED IN THE BUSINESS OF RUNNING THE TRUCKS ON HIRE. IN VIEW THEREOF AND FOLLOWING THE RATIO LAID DOWN BY THE HON'BLE SUPREM E COURT IN THE CASE OF CIT VS. GUPTA EXIM (P) LTD. (SUPRA) WE UPHOLD TH E ORDER OF THE CIT (APPEALS) IN RESTRICTING THE DEPRECIATION @15% AS A GAINST 30% CLAIMED BY THE ASSESSEE. THE GROUNDS OF APPEAL RAISED BY T HE ASSESSEE ARE THIS DISMISSED. 10. THE FACTS AND THE ISSUES ARISING IN ITA NO.1263 /CHD/2012 ARE SIMILAR TO THE FACTS AND ISSUES IN ITA NO.1264/CHD/ 2012 AND OUR DECISION IN ITA NO.1264/CHD/2012 SHALL APPLY MUTATI S MUTANDIS TO ITA NO.1263/CHD/2012. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE DISMISSED. 11. IN THE RESULT, BOTH THE APPEALS OF DIFFERENT AS SESSEES ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 8 TH DAY OF JANUARY, 2014. SD/- SD/- (T.R.SOOD) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 8 TH JANUARY, 2014 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/TH E CIT/THE DR. ASSISTANT REGISTRAR, ITAT, CHANDIGARH 5