M/S. SYNTHETIC DYES & CHEMICALS, MUMBAI V. ITO - 23(3)(3), MUMBAI

ITA 1702/MUM/2007

• Counselvise Citation: 170219914 RSA 2007
• Duration Of Justice: 4 year(s) 10 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-12-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Next Hearing Date: 27-12-2011
• Assessment Year: 2002-2003
• Appeal Filed On: 23-02-2007
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PARTHA SARATHI NAIK
• Assessee Lawyers: M SUBRAMANIAN
• Keywords: Depreciation
• Section: 80HHC

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE SHRI B.R. MITTAL, JUDICIAL MEMBER AND SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER ITA NO. 1702/MUM./2007 (ASSESSMENT YEAR : 2002-03 ) M/S. SYNTHETIC DYES & CHEMICALS 12 HIRA MOTI APARTMENTS NEHRU ROAD, MULUND (W) MUMBAI 400 080 PAN AAAFS3845Q .. APPELLANT V/S INCOME TAX OFFICER WARD-23(3)(3) PRATYAKSHAKAR BHAVAN BANDRA KURLA COMPLEX BANDRA, MUMBAI 400 051 .... RESPONDENT ASSESSEE BY : MR. M. SUBRAMANIAN REVENUE BY : MR. PARTHASARATHI NAIK DATE OF HEARING 21.12.2011 DATE OF ORDER 29.12.2011 O R D E R PER J. SUDHAKAR REDDY, A.M. THIS APPEAL PREFERRED BY THE ASSESSEE, IS DIRECTED AGAINST THE IMPUGNED ORDER DATED 1 ST DECEMBER 2006, PASSED BY THE COMMISSIONER (APPEALS)-XXIII, MUMBAI, FOR ASSESSMENT YEAR 2002-0 3, ON THE FOLLOWING GROUNDS:- M/S. SYNTHETIC DYES & CHEMICALS ITA NO.1702/MUM./2007 2 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LEARNED C.I.T. (A) ERRED IN DISMISSING THE APPE AL AND THAT TOO WITH OUT GIVING FULL AND PROPER OPPORTUNITY OF BEING HEA RD IN THE MATTER. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED C.I.T. (A) ERRED IN DISMISSING THE APPE AL AND THAT TOO WITHOUT APPRECIATING THE FACTS AND CIRCUMSTANCES OF THE CASE FULLY AND PROPERLY. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED C.I.T. (A) ERRED IN APPROVING THE ACTIO N OF THE A.O. IN DISALLOWING AN AMOUNT OF RS.10,000/- OUT OF SALES P ROMOTION EXPENSES. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED C.I.T. (A) ERRED IN APPROVING THE ACTIO N OF THE A.O. IN DISALLOWING AN AMOUNT OF RS.10,586/- OUT OF VEHICLE EXPENSES ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LEARNED C.I.T. (A) ERRED IN APPROVING THE ACTION OF THE A.O. IN DISALLOWING AN AMOUNT OF RS.15,054/- OUT OF DEPRECI ATION CLAIMED ON MOTOR CAR AND SCOOTER. 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED C.I.T.(A) ERRED IN APPROVING THE ACTION OF THE A.O. IN DISALLOWING AN AMOUNT OF RS.5,180/- OUT OF INTEREST EXPENSE INCURRED ON CAR LOAN. 6. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED C.I.T. (A) ERRED IN APPROVING THE ACTIO N OF THE A.O. IN RE- COMPUTING AND ALLOWING 80HHC DEDUCTION AT RS.25,140 /- AS AGAINST AMOUNT CLAIMED OF RS.80,880/-. 2. GROUNDS NO.1 AND 2, BEING GENERAL IN NATURE, NO SEP ARATE ADJUDICATION IS REQUIRED BY US. 3. GROUNDS NO.3 TO 6, ARE ON THE ISSUE OF DISALLOWANCE MADE BY THE ASSESSING OFFICER ON THE FOLLOWING EXPENDITURES:- S.NO. EXPENSES AMOUNT CLAIMED ( ` ) AMOUNT DISALLOWED 1. SALES PROMOTION EXPENSES 1,28,673 10,000 2. VEHICLE EXPENSES 52,933 10,586 3. DEPRECIATION ON MOTOR CAR 75,272 4. SCOOTER & INTEREST CLAIMED ON CAR LOAN 25,902 TOTAL:- 1,01,174 20,234 M/S. SYNTHETIC DYES & CHEMICALS ITA NO.1702/MUM./2007 3 4. THE COMMISSIONER (APPEALS) UPHELD THE DISALLOWANCE ON THE GROUND THAT THE ASSESSEE DID NOT PRODUCE ANY DOCUMENT TO C ONTROVERT THE FINDINGS OF THE ASSESSING OFFICER. 5. BEFORE US, THE LEARNED COUNSEL STRONGLY DISPUTES T HE AD-HOC DISALLOWANCES. LEARNED DEPARTMENTAL REPRESENTATIVE, ON THE OTHER HAND, RELIES ON THE ORDERS OF THE AUTHORITIES BELOW. 6. ON A CAREFUL CONSIDERATION OF THE FACTS AND CIRCUMS TANCES OF THE CASE AND ON A PERUSAL OF THE PAPERS ON RECORD, WE FIND T HAT THE ASSESSING OFFICER HAS DISALLOWED ONLY AN AMOUNT OF ` 10,000, FROM OUT OF ` 1,28,673, INCURRED AS SALES PROMOTION EXPENSES. THIS IS REASONABLE. TH E ASSESSEES ARGUMENTS ARE DEVOID OF MERIT. SIMILARLY, AS FAR AS OTHER DIS ALLOWANCES ARE CONCERNED, AN ELEMENT OF PERSONAL USE CANNOT BE DENIED. THE AS SESSING OFFICER HAS DISALLOWED 20% OF THE SAID EXPENDITURE. WE FIND IT REASONABLE AND, HENCE, WE UPHOLD THE ORDER OF THE COMMISSIONER (APPEALS) A ND DISMISS THESE GROUNDS. 7. GROUND NO.7, IS ON THE ISSUE OF COMPUTATION OF RELI EF UNDER SECTION 80HHC OF THE ACT. 8. THE COMMISSIONER (APPEALS) HAS NOT FOLLOWED THE JUD GMENT OF HON'BLE JURISDICTIONAL HIGH COURT IN CIT V/S SUDARSHAN CHEM ICAL INDUSTRIES LTD. (2000) 245 ITR 769 (BOM.). THIS JUDGMENT HAS BEEN U PHELD BY THE HON'BLE SUPREME COURT IN CIT V/S LAKSHMI MACHINE WORKS, 290 ITR 667 (SC). THUS, WE DIRECT THE ASSESSING OFFICER NOT TO INCLUDE THE COMPONENTS OF EXCISE DUTY AND SALES TAX IN THE TOTAL TURNOVER. 9. COMING TO COMPUTATION OF RELIEF UNDER SECTION 80HHC , IN RESPECT OF PROFIT ON SALE OF DEPB, WE RESTORE THE MATTER TO TH E FILE OF ASSESSING OFFICER FOR DENOVO ADJUDICATION IN ACCORDANCE WITH LAW. M/S. SYNTHETIC DYES & CHEMICALS ITA NO.1702/MUM./2007 4 10. IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 29.12.2011 SD/- B.R. MITTAL JUDICIAL MEMBER SD/- J. SUDHAKAR REDDY ACCOUNTANT MEMBER MUMBAI, DATED: 29.12.2011 COPY TO : (1) THE ASSESSEE; (2) THE RESPONDENT; (3) THE CIT(A), MUMBAI, CONCERNED; (4) THE CIT, MUMBAI CITY CONCERNED; (5) THE DR, E BENCH, ITAT, MUMBAI. TRUE COPY BY ORDER PRADEEP J. CHOWDHURY ASSISTANT REGISTRAR SR. PRIVATE SECRETARY ITAT, MUMBAI BENCHES, MUMBAI