Bonny Orthotech Pvt.Ltd., Ahmedabad V. The Income tax Officer,Ward-1(2), Ahmedabad

ITA 1579/AHD/2009

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 9323 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2005-2006
• Appeal Filed On: 18-05-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NEETA SHAH
• Assessee Lawyers: B T THAKKOR
• Keywords: Depreciation; Revenue expenditure; Capital expenditure
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH C AHMEDABAD BEFORE SHRI P.K.BANSAL, ACCOUNTANT MEMBER AND SHRI MAHAVIR SINGH, JUDICIAL MEMBER ITA NO.1579/AHD/2009 ASSESSMENT YEAR:2005-06 DATE OF HEARING:16.7.09 DRAFTED:17.7.09 BONNY ORTHOTECH PVT. LTD. DALIA BUILDING, NR. V.S. BUILDING, ELLISBRIDGE, AHMEDABAD 380006 PAN NO.AAACB6253H V/S . INCOME TAX OFFICER, WARD-1(2), AHMEDABAD (APPELLANT) .. (RESPONDENT) APPELLANT BY :- SHRI B.T. THAKKOR RESPONDENT BY:- SMT. NEETA SHAH, SR.DR O R D E R PER MAHAVIR SINGH JUDICIAL MEMBER:- THIS APPEAL BY THE ASSESSEE IS ARISING OUT OF THE ORDER OF COMMISSIONER OF INCOME-TAX (APPEALS)-VI, AHMEDABAD IN APPEAL NO. CI T(A)-VI/WD.1(2)/198/07-08 DATED 22-01-2009. THE ASSESSMENT WAS FRAMED BY THE INCOME-TAX OFFICER, WARD- 1(2), AHMEDABAD U/S. 143(3) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) VIDE HIS ORDER DATED13-12-2007 FOR THE A SSESSMENT YEAR 2005-06. 2. THE FIRST ISSUE IN THIS APPEAL OF THE ASSESSEE I S AGAINST THE ORDER OF CIT(A) IN CONFIRMING THE DISALLOWANCE OF DEPRECIATION OF SCOO TER ON THE GROUND THAT THE SCOOTER IS PURCHASED IN THE NAME OF THE DIRECTOR. FOR THIS, THE ASSESSEE HAS RAISED THE FOLLOWING GROUND NO.1 :- 01. THE LEARNED CIT HAS ERRED IN CONFIRMING DISALL OWANCE OF DEPRECIATION ON SCOOTER OF RS.11340/- ON THE GROUND THAT DEPRECIATI ON IS CLAIMED ON THE ASSETS WHICH IS PURCHASED IN THE NAME OF THE DIRECT OR. THE APPELLANT SAYS AND SUBMIT THAT FOR CLAIMING DEP RECIATION U/S.32 TWO CONDITIONS ARE REQUIRED TO FULFILLED VIZ. ITA NO.1579/AHD/2009 A.Y. 2005-06 BONNY ORTHOTECH P. LTD. V. ITO WD-1(2) ABD PAGE 2 (I) THE ASSET SHOULD BE OWNED BY THE ASSESSEE AND, (II) THE ASSET SHOULD BE USED FOR PURPOSE OF THE BU SINESS. THE APPELLANT HAS FULFILLED BOTH THE ABOVE CONDITIONS. 3. AFTER HEARING THE RIVAL CONTENTIONS AND GOING TH ROUGH THE CASE RECORDS, IT IS NOTICED THAT THE ASSESSEE-COMPANY HAS PURCHASED THE SCOOTER IN THE NAME OF THE DIRECTOR FOR A SUM OF RS.30,650/- ON 30-04-2004. TH E ASSESSEE CLAIMED DEPRECIATION @ 25% AND THE ASSESSING OFFICER NOTICED FROM THE CO PY OF PURCHASE BILL THAT SCOOTER IS PURCHASED IN THE NAME OF MS. RINKU PRAVINCHANDRA MODI, WHO IS ONE OF THE DIRECTORS IN THE ASSESSEE-COMPANY AS THE SCOOTER IS PURCHASED IN THE NAME OF THE SAID DIRECTOR OF THE ASSESSEE-COMPANY, THE DEPRECIA TION WAS DISALLOWED BY THE AO. THE CIT(A) ALSO CONFIRMED THE ACTION OF THE AO. NO W BEFORE US THE ASSESSEE STATED THAT TO AVOID THE DOUBLE RTO TAX, THE COMPANY HAS P URCHASED THIS SCOOTER IN THE NAME OF INDIVIDUAL BUT THE SAME IS PURCHASED OUT OF THE FUNDS OF THE ASSESSEE- COMPANY AND THE SCOOTER WAS USED FOR THE BUSINESS P URPOSE OF THE ASSESSEE- COMPANY AND ALSO MAINTENANCE DONE BY THE ASSESSEE-C OMPANY. ON THE OTHER HAND, LD. DEPARTMENTAL REPRESENTATIVE RELIED ON THE ORDER OF LOWER AUTHORITIES. WE FIND THAT THE SCOOTER IS TO BE PUT TO USE EXCLUSIVE LY FOR THE PURPOSE OF THE ASSESSEE- COMPANY AND THE SAME WAS PURCHASED FROM THE FUNDS O F THE COMPANY. ACCORDINGLY, WE ALLOW THE DEPRECIATION AND REVERSE THE ORDERS OF THE LOWER AUTHORITIES. THIS ISSUE OF THE ASSESSEES APPEAL IS ALLOWED. 4. THE NEXT ISSUE IN THIS APPEAL OF THE ASSESSEE IS AGAINST THE ORDER OF CIT(A) CONFIRMING THE DISALLOWANCE OF PAYMENT OF EMPLOYEES CONTRIBUTION OF PF AMOUNTING TO RS.7,200/- ON THE GROUND IT IS PAID AFTER DUE DA TE. 5. AFTER HEARING THE RIVAL CONTENTIONS AND GOING TH ROUGH THE FACTS OF THE CASE, IT IS NOTICED THAT EMPLOYEES CONTRIBUTION OF PF WAS PAID PERTAINING TO THE PERIOD FROM APRIL 04 TO JUNE 04 HAS BEEN PAID ON 11-08-2004, WHICH IS BEFORE DUE DATE OF FILING RETURN OF INCOME. AS THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF DELHI HIGH COURT IN THE CASE OF CIT V. P.M. ELECTRONICS LTD. (2008) 220 CTR 635 (DEL), RESPECTFULLY FOLLOWING THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF P.M. ELECTRONICS LTD. (SUPRA) WE ALLOW THE CLAIM OF THE ASSESSEE AND THI S ISSUE OF THE ASSESSEES APPEAL IS ALLOWED. ITA NO.1579/AHD/2009 A.Y. 2005-06 BONNY ORTHOTECH P. LTD. V. ITO WD-1(2) ABD PAGE 3 6. THE NEXT ISSUE IN THIS APPEAL OF THE ASSESSEE IS AGAINST THE ORDER OF CIT(A) CONFIRMING THE DISALLOWANCE OF OFFICE RENOVATION EX PENSES OF RS.27,465/- ON THE GROUND THAT IT IS CAPITAL EXPENDITURE. FOR THIS, AS SESSEE HAS RAISED THE FOLLOWING GROUND NO.3 :- 03. THE LEARNED CIT HAS ERRED IN CONFIRMING DISALL OWANCE OF OFFICE RENOVATION EXPENSES OF RS.27465/-, ON THE GROUND THAT IT IS A CAPITAL EXPENSES. THE APPELLANT SAYS AND SUBMIT THAT THE APPELLANT HA S CARRIED OUT WORK OF WHITE WASH AND COLORS (PAINTING) THE RENTED FACTORY / OFFICE PREMISES WHICH IS CLEARLY REVENUE EXPENDITURE. 7. AFTER HEARING THE RIVAL CONTENTIONS AND GOING TH ROUGH THE CASE RECORDS, WE FIND THAT THE ASSESSEE HAS CARRIED OUT PURELY EXPEN DITURE OF WHITE WASH AND COLOUR PAINTING OF THE RENTED FACTORY / OFFICE PREMISES. T HE SAME BEING REVENUE IN NATURE AND WE ALLOW THE CLAIM OF THE ASSESSEE. THIS ISSUE OF THE ASSESSEES APPEAL IS ALLOWED. 8. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 31/08/2009 SD/- SD/- (P.K.BANSAL) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD, DATED :31/08/2009 *DKP COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT(APPEALS)-VI, AHMEDABAD 4. THE CIT CONCERNS. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, /TRUE COPY/ DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD