Shri Chandubhai Somabhai Patel & Co., Anand V. The Income tax Officer,Ward-2, Anand

ITA 1806/AHD/2012

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 1837 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 7 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-04-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 31-03-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 16-08-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SONIA KUMAR
• Keywords: Depreciation; Business expenditure; Principle of natural justice; Initiation of penalty proceedings
• Section: 234B

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER ./ ITA NO. 1806/AHD/2012 / ASSESSMENT YEAR: 2009-10 CHANDUBHAI SOMABHAI PATEL & COMPANY, TOBACCO MERCHANTS, NEAR TALAV, AT & PO : KUNJRAO PAN : AABFC 5750 C VS THE INCOME TAX OFFICER, WARD-2, ANAND / (APPELLANT) / (RESPONDENT) ASSESSEE(S) BY : NONE (WRITTEN SUBMISSIONS) REVENUE BY : SMT. SONIA KUMAR, SR. DR / DATE OF HEARING : 31/03/2016 / DATE OF PRONOUNCEMENT: 06/04/2016 / O R D E R PER SHRI KUL BHARAT, JUDICIAL MEMBER:- THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS)-IV, BA RODA DATED 10.05.2012, PERTAINING TO ASSESSMENT YEAR 2009-10. 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APP EAL:- 1. LEARNED CIT(A) HAS ERRED IN LAW AND ON FACT IN CONFI RMING THE ACTION OF A.O. IN TREATING THE INCOME OF RS.11,49,1 28/- OUT OF ADDITION BEING THE DEPRECIATION ON MOTOR CAR AT HIG HER RATE. 2. BOTH THE LOWER AUTHORITIES HAVE ERRED IN LAW AND ON FACTS HAS NOT CONSIDERING VARIOUS EXPLANATIONS, SUBMISSIONS AND E VIDENCES PLACED ON RECORD BY THE APPELLANT IN ITS PROPER PER SPECTIVE AND DEVOID OF APPLICATION ON MIND ON THE BASIS OF STATE MENT OF FACT FILED BEFORE HIM. 3. THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING DISALLOWANCE OF RS. 1,12,535/- BEING HIGHER RATE OF DEPRECIATION BY ITA NO. 1806/AHD/2012 CHANDUBHAI SOMABHAI PATEL & CO VS. ITO. AY : 2009-10 2 THE LOWER AUTHORITIES HAVE NOT APPRECIATED THE FACT THAT DEPRECIATION ON CAR RS.1,12,535 @ 50% ON NEW PURCHA SE OF MOTOR CAR WHICH IS GENUINE BUSINESS EXPENDITURE, AS PER N OTIFICATION NO.10/2009, DATED 19.01.2009 PLEASE REFER PAGE NO.7 . THIS ADDITION BY CIT(A) IS BAD, ILLEGAL, AND AGAINST THE PRINCIPLE OF NATURAL JUSTICE AND THEREFORE REQUIRES TO BE DELETE D. 4. THE LEARNED CIT(A) HAS ERRED IN LAW AND FACTS IN CON FIRMING THE LEVY OF INTEREST UNDER SECTION 234B AND 234C OF THE ACT. 5. THE LEARNED CIT(A) HAS ERRED IN LAW AND FACTS IN CON FIRMING THE INITIATION OF PENALTY PROCEEDINGS U/S 271(1)(C) OF T HE ACT. THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER, ED IT, DELETE, MODIFY OR CHANGE ALL OR ANY OF THE GROUNDS OF APPEAL AT TH E TIME OF OR THE HEARING OF THE APPEAL. 3. BRIEFLY STATED FACTS ARE THAT THE CASE OF THE AS SESSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT AND THE ASSESSMENT U/S.1 43(3) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS T HE ACT) WAS FRAMED VIDE ORDER DATED 26.08.2011. WHILE FRAMING THE ASSE SSMENT, THE ASSESSING OFFICER MADE DISALLOWANCE OF DEPRECIATION ON CAR CLAIMED BY THE ASSESSEE AT A HIGHER RATE. THE ASSESSEE, AGG RIEVED BY THIS ORDER, PREFERRED AN APPEAL BEFORE THE CIT(A) WHO, AFTER CO NSIDERING THE SUBMISSIONS OF THE ASSESSEE, DISMISSED THE APPEAL. 4. GROUND NOS. 1 TO 3 ARE AGAINST REJECTION OF CLAI M OF HIGHER DEPRECIATION ON SWIFT MOTOR CAR. 5. AT THE TIME OF HEARING, NO ONE APPEARED ON BEHAL F OF THE ASSESSEE; HOWEVER, A REQUEST WAS MADE VIDE LETTER D ATED 26.02.2016 TO DECIDE THE ISSUE ON THE BASIS OF WRITTEN SUBMISSION FILED BY THE ITA NO. 1806/AHD/2012 CHANDUBHAI SOMABHAI PATEL & CO VS. ITO. AY : 2009-10 3 ASSESSEE VIDE LETTER DATED 2 ND NOVEMBER, 2015. THE SUBMISSIONS IN THE LETTER DATED 2 ND NOVEMBER, 2015 ARE AS UNDER:- THE ABOVE CASE HAS BEEN FIXED ON HEARING IN D BEN CH ON 13.11.0215. 1. AS INSTRUCTED BY MY CLIENT I WOULD LIKE TO SUBMIT THE FOLLOWING AND WOULD URGE YOUR HONOUR TO KINDLY CONSIDER AND A LLOW THE SAME IN THE INTEREST OF JUSTICE. 2. YOUR APPELLANT HAS CLAIMED DEPRECIATION ON PURCHASE OF NEW MARUTI CAR FROM AMAR CAR (P) LTD ON 21.02.2009 AND C OPY OF INVOICE WAS FILED BEFORE THE INCOME TAX ASSESSMENT OFFICER ON 25.08.2011 FOR CLAIM OF HIGHER DEPRECIATION ALONGWITH SUBMISSION A S UNDER. A. LETTER DATED AUGUST 17, 2011 PLEASE REFER PAGE NO .1 B. COPY OF NOTIFICATION DATED 19.01.2009 PLEASE REFE R PAGE NO.2 TO 3 C. COPY OF NOTIFICATION IN GUJARAT PLEASE REFER PAGE NO.4 THESE ALL COPIES WERE ALSO FILED TO YOUR HONOUR ALO NGWITH SUBMISSION AT THE TIME OF FILING ALL DOCUMENTS WITH APPEAL PAPER INCLUDING INCOME TAX OFFICER AT ORIGINAL STAGE, CIT(A) AND YOURSELF. YOUR APPELLANT HAS CORRECTLY CLAIM OF DEPRECATION A S PER LAW. WE THEREFORE RESPECTFULLY URGE TO CONSIDER THIS CAS E ON MERITS AND PASS THE FINAL ORDER. WE ALSO WAVE FOR OUR PERSONAL APPE ARANCE BEFORE YOUR HONOUR. KINDLY CONSIDER AND ALLOW THE SAME IN INTEREST OF J USTICE. MY CLIENT SHALL EVER REMAIN GRATEFUL, AS DUTY BOUND, FOR THE SAME. 6. ON THE CONTRARY, LD. SR. DEPARTMENTAL REPRESENTA TIVE SUBMITTED THAT THE ASSESSEE HAS NOT DEMONSTRATED THAT THE VEH ICLE, I.E., MOTOR CAR, WAS REGISTERED AS A COMMERCIAL VEHICLE WITH MOTOR V EHICLE AUTHORITY AND WAS BEING USED FOR COMMERCIAL PURPOSES. ON THE OTHER HAND, SHE SUBMITTED THAT, ADMITTEDLY, THE VEHICLE HAS BEEN US ED FOR PERSONAL USE ITA NO. 1806/AHD/2012 CHANDUBHAI SOMABHAI PATEL & CO VS. ITO. AY : 2009-10 4 AND WAS NOT BEING USED ON HIRE. UNDER THESE FACTS, SHE SUBMITTED THAT, THE AUTHORITIES BELOW WERE JUSTIFIED IN REJECTING T HE CLAIM OF THE ASSESSEE. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. THE LD. CIT(A) REJECTED THE CLAIM OF THE A SSESSEE BY OBSERVING AS UNDER:- 5.3 I HAVE CONSIDERED THE CONTENTION OF THE ASSES SEE. HOWEVER, THE SAME IS NOT TENABLE. AS PER THE CBDTS AFORESAID N OTIFICATION, THE HIGHER RATE OF DEPRECIATION IS ENTITLED ONLY TO THE COMMERCIAL VEHICLES. IN THIS CONNECTION, IT IS TO POINT OUT THAT THE CBD T VIDE CIRCULAR NO.652 DATED 14.06.1993 HAS CLARIFIED THAT THE HIGH ER RATE OF DEPRECATION WILL NOT APPLY IF MOTOR LORRIES, MOTOR BUSES ETC. ARE USED IN SOME OTHER NON-HIRING BUSINESS OF THE ASSESSEE. IN THE INSTANT CASE, THE SWIFT MOTOR CAR CANNOT BE HELD TO BE COMMERCIAL VEH ICLE AS CONTENDED BY THE ASSESSEE. THEREFORE, THE ASSESSEE IS ENTITLED TO CLAIM DEPRECATION AT RS.48,229/- (I.E. 50% OF NORMAL DEPRECATION AS THE ASSET WAS PUT TO USE FOR A PERIOD OF LESS THAN 180 DAYS). THE BALANCE AM OUNT OF RS.1,12,535/- (RS.160764 RS.48229) IS DISALLOWED. PENALTY PROCEEDINGS U/S. 271(1)(C) OF THE ACT ARE SEPARATELY INITIATED. 8. WE DO NOT SEE ANY REASON TO INTERFERE INTO THE O RDER OF THE CIT(A) AS THE ASSESSEE HAS NOT PLACED ANY MATERIAL ON RECORD JUSTIFYING THAT THE MOTOR CAR WAS USED FOR COMMERCIAL PURPOSES AND WAS REGISTERED WITH THE MOTOR VEHICLE AUTHORITY AS A CO MMERCIAL VEHICLE. THE RELIANCE PLACED BY THE ASSESSEE ON THE CIRCULAR ISSUED BY THE CBDT, I.E., CIRCULAR NO.10/2009 DATED 19.01.2009, IS NOT APPLICABLE ON THE FACTS OF THE PRESENT CASE. THEREFORE, THE GROUND NO S. 1 TO 3 ARE DISMISSED. 9. GROUND NO. 4 IS AGAINST CONFIRMING THE LEVY OF I NTEREST U/S 234B & 234C OF THE ACT. SINCE LEVY OF INTEREST IS CONSE QUENTIAL IN NATURE, ITA NO. 1806/AHD/2012 CHANDUBHAI SOMABHAI PATEL & CO VS. ITO. AY : 2009-10 5 SAME IS HELD ACCORDINGLY. THUS, THIS GROUND RAISED IN THE APPEAL IS DISMISSED. 10. GROUND NO.5 IS AGAINST INITIATION OF PENALTY PR OCEEDINGS U/S 271(1)(C) OF THE ACT. THIS GROUND BEING PREMATURE I S DISMISSED. 11. THE GROUND UN-NUMBERED IS GENERAL IN NATURE AND NEEDS NO SEPARATE ADJUDICATION. 12 IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 6 TH OF APRIL, 2016 AT AHMEDABAD. SD/- SD/- (ANIL CHATURVEDI) ACCOUNTANT MEMBER (KUL BHARAT) JUDICIAL MEMBER AHMEDABAD; DATED 06/04/2016 *BIJU T. '#$%&'&($ / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ! ' ' # / CONCERNED CIT 4. ' ' # ( ) / THE CIT(A) 5. &'( ! , ' ! , / DR, ITAT, AHMEDABAD 6. (- . / GUARD FILE . / BY ORDER, TRUE COPY / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD