Amarshiv Construction Pvt. Ltd., Baroda V. The Dy.CIT., Circle-1(1), Baroda

ITA 1328/AHD/2014

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 9503 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 8 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-01-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 09-01-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 05-05-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Depreciation; Reassessment proceedings
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 92

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD , , BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER ./ I.T.A. NO.1328/AHD/2014 ( / ASSESSMENT YEAR : 2007-08) AMARSHIV CONSTRUCTION PVT.LTD. 14, ATUL PARK SIOCIETY KARELIBAUG BARODA 390 018 / VS. THE DCIT CIRC. 1 (1) AAYAKAR BHAVAN RACE COURSE BARDOA # ./ ./ PAN/GIR NO. : AACCA 3235 E ( #% / APPELLANT ) .. ( &#% / RESPONDENT ) #%' / APPELLANT BY : SHRI M.K. PATEL, AR &#%(' / RESPONDENT BY : SHRI PRASOON KABRA, SR.DR )*(+ / DATE OF HEARING 09/01/2017 ,-./(+ / DATE OF PRONOUNCEMENT 12/01/2017 / O R D E R PER PRADIP KUMAR KEDIA, AM: THE CAPTIONED APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS)-I, BAROD A [CIT(A) IN SHORT] DATED 03/02/2014 FOR ASSESSMENT YEAR (AY)20 07-08 UNDER SECTION 115WE(3) READ WITH SECTION 115WG OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS 'THE ACT') ARISING OUT OF THE ASSESSMENT ITA NO.1328/AHD /2014 AMARSHIV CONSTRUCTION PVT.LTD. VS. DCIT ASST.YEAR 2007-08 - 2 - ORDER DATED 29/11/2012 PASSED UNDER SECTION 115WE(3 ) RWS.115WG OF THE ACT. 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE REA D AS UNDER:- 1. THE LEARNED CIT (APPEALS) ERRED IN HOLDING THAT RE OPENING OF ASSESSMENT U/S.115WG WAS PROPER. 2. THE LEARNED CIT(APPEALS) ERRED IN HOLDING THAT THE EXPENSES ON RUNNING AND MAINTENANCE OF JEEP AT THE SITE OF THE APPELLANT COMPANY ONLY WAS LIABLE FOR FRINGE BENEFIT TAX. 3. THE LEARNED CIT (APPEALS) ERRED IN CONFIRMING ADDIT ION OF RS.1,15,772/- MADE BY THE LEARNED ASSESSING OFFICER IN THE ORDER PASSED U/S.115WE(3) R.W.S. 115WG OF THE ACTG. 3. THE ASSESSING OFFICER (AO) ORIGINALLY ACCEPTED THE ASSESSMENT OF FRINGE BENEFIT TAX (FBT) UNDER SECTION 115WE(3) VID E ORDER DATED 29/12/2009. SUBSEQUENTLY, IT WAS NOTICED BY THE AO THAT FRINGE BENEFIT (FBT) CHARGEABLE TO TAX HAD ESCAPED ASSESSMENT IN R ESPECT OF CERTAIN ITEMS AND ACCORDINGLY THE ASSESSMENT WAS REOPENED A ND THE VALUE OF FRINGE BENEFITS WERE RE-ASSESSED FOR THE AY 2007-08 VIDE DATED 29/11/2012. 4. BRIEFLY STATED, THE ASSESSEE IS ENGAGED IN THE BUSINESS OF CONSTRUCTION OF ROADS ETC. AND CARRY OUT WORKS AT VARIOUS SITES. IN THE COURSE OF REASSESSMENT PROCEEDINGS, THE AO OBSERVED THAT RUNN ING AND MAINTENANCE OF JEEPS AND DEPRECIATION ALLOWANCE THE REON AND ALSO INTEREST PAID AGAINST LOAN FOR MOTOR CAR HAS NOT BE EN INCLUDED IN ITA NO.1328/AHD /2014 AMARSHIV CONSTRUCTION PVT.LTD. VS. DCIT ASST.YEAR 2007-08 - 3 - COMPUTING THE VALUE OF FRINGE BENEFITS FOR THE PUR POSES OF TAXATION. HE ACCORDINGLY, RE-COMPUTED THE VALUE OF FRINGE BENEFI TS INCLUDING AMOUNT EMANATING FROM MAINTENANCE OF JEEP, DEPRECIATION, I NTEREST PAID ETC. QUANTIFIED AT RS.1,15,772/- AND BROUGHT THE SAME TO TAX. 5. AGGRIEVED BY REASSESSMENT ORDER, THE ASSESSEE PR EFERRED APPEAL BEFORE THE CIT(A). BEFORE THE CIT(A), THE ASSESSEE SUBMITTED THAT THE JEEP WAS ACQUIRED FOR THE PURPOSE OF MOVEMENT OF ST AFF AT THE SITE OF THE COMPANY AND HAD INCURRED EXPENSES INCLUDING INTERES T ON LOAN FOR THE PURPOSE OF JEEP AMOUNTING TO RS.37,343/-. THE SAID JEEP WAS USED ONLY AT THE SITE OF THE ASSESSEE AND NO FRINGE BENEFIT W AS INVOLVED WITHIN THE MEANING OF SECTION 115WB OF THE ACT. AS REGARDS IN TEREST ON LOAN INCURRED FOR MOTOR CAR AGGREGATING TO RS.1,16,257/- , THE ASSESSEE SUBMITTED THAT AFORESAID AMOUNT INCLUDES RS.37,34 3/- TOWARDS INTEREST ON LOAN FOR THE PURPOSE OF PURCHASE OF JEEP WHICH I S NOT INCLUDIBLE IN THE VALUE OF FRINGE BENEFIT FOR THE SIMILAR REASONS. T HE ASSESSEE CONTENDED THAT IT IS ENGAGED IN THE BUSINESS OF QUARRY AND C ONSTRUCTION BUSINESS WHERE FOR THE PURPOSE OF MOVEMENT OF STAFF AT THE S ITE OF THE COMPANY, VEHICLE IN THE FORM OF JEEP IS QUITE CONVENIENT AND A NECESSITY AND NO BENEFIT TO ANY EMPLOYEE PER SE IS INVOLVED. THE CIT(A) HOWEVER DECLINED TO GRANT RELIEF TO THE ASSESSEE ON THE GRO UND THAT THE PLEA ADVANCED IS VERY GENERAL AND WITHOUT ANY DOCUMENT ARY EVIDENCE. NO LOG BOOK HAS BEEN FURNISHED WHICH COULD ESTABLISH T HAT THE JEEP WAS ITA NO.1328/AHD /2014 AMARSHIV CONSTRUCTION PVT.LTD. VS. DCIT ASST.YEAR 2007-08 - 4 - USED ONLY FOR OFFICIAL PURPOSES. APPEAL OF THE ASS ESSEE WAS ACCORDINGLY DISMISSED BY THE CIT(A). 6. THE LD.AR POINTED OUT THAT HE DOES NOT WISH TO P RESS GROUND NO.1 OF THE APPEAL CONCERNING REOPENING OF THE ORIGINAL ASSESSMENT. ON MERITS, THE LD.AR REITERATED THE SUBMISSIONS MADE B EFORE THE CIT(A) AND SUBMITTED THAT THE DISPUTE REVOLVES AROUND THE EXPE NSES INCURRED AND DEPRECIATION CLAIMED IN RELATION TO JEEP ONLY. INT EREST PORTION AGAINST LOAN FOR OTHER MOTOR CAR AMOUNTING TO RS.79,474/- I S NOT DISPUTED BY THE ASSESSEE AND THE ASSESSEE IS WILLING TO PAY FBT THE REON. 7. THE LD.DR, ON THE OTHER HAND, RELIED UPON THE OR DER OF THE CIT(A). 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FI ND THAT THE PLEA OF THE ASSESSEE MERITS ACCEPTANCE. THE LIMITED QUE STION THAT ARISES FOR ADJUDICATION IS TAXABILITY OF FBT ON USE OF JEEP. HAVING REGARD TO THE NATURE OF BUSINESS OF THE ASSESSEE, THE USE OF JEEP FOR THE PURPOSE OF MOVEMENT BETWEEN THE SITES APPEARS PLAUSIBLE. NOT WITHSTANDING THE FACT THAT THE LOG-BOOK HAS NOT BEEN MAINTAINED, THE EXPE NSE INCURRED HAS BEEN OTHERWISE ACCEPTED FOR THE PURPOSE OF BUSINESS IN T HE REGULAR ASSESSMENT. HOWEVER, IN THE SAME VAIN, WE FIND THAT THE ASSESSE E HAD CHALLENGED COMPONENT OF INTEREST ON LOAN TO THE EXTENT OF RS.3 7,343/- AND BALANCE OF AMOUNT RS.79,474/- WAS ACCEPTED BEFORE THE LOWER AU THORITIES FOR THE ITA NO.1328/AHD /2014 AMARSHIV CONSTRUCTION PVT.LTD. VS. DCIT ASST.YEAR 2007-08 - 5 - PURPOSE OF TAXATION. THUS, IN VIEW OF THE CONCESS ION GRANTED BY THE ASSESSEE, AMOUNT OF RS.79,474/- OUT OF INTEREST ON LOAN ON MOTOR VEHICLES IS AMENABLE TO FBT. 9. IN THE LIGHT OF ABOVE DISCUSSION, THE AO IS DIRE CTED TO COMPUTE THE VALUE OF FRINGE BENEFIT EXCLUDING THE RUNNING AND M AINTENANCE COST, DEPRECIATION, INTEREST PAID IN RELATION TO JEEP. AS A RESULT, GROUND NO.1 IS DISMISSED AS NOT PRESSED WHILE GROUND NOS.2 & 3 CONCERNING THE MERITS IS PARTLY ALLOWED IN TERMS OF DIRECTION NOT ED ABOVE. 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. THIS ORDER PRONOUNCED IN OPEN COURT ON 12 / 01 /201 7 SD/- SD/- () ( ) (RAJPAL YADAV) ( PRADIP KUMAR KEDIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 12/ 01 /2017 3..),.)../ T.C. NAIR, SR. PS ITA NO.1328/AHD /2014 AMARSHIV CONSTRUCTION PVT.LTD. VS. DCIT ASST.YEAR 2007-08 - 6 - !'#$%$' / COPY OF THE ORDER FORWARDED TO : 1. #% / THE APPELLANT 2. &#% / THE RESPONDENT. 3. 456+ 7+ / CONCERNED CIT 4. 7+ ( ) / THE CIT(A)-I, BARODA 5. 89:+)56 , 56/ , 4 / DR, ITAT, AHMEDABAD 6. :<* / GUARD FILE. / BY ORDER, &8++ //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION .. 10.1.17 (DICTATION-PAD 13- PAGES ATTACHED AT THE END OF THIS APPEAL-FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 10.1.17 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.12.1.17 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 12.1.17 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER