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

ITA 1842/AHD/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 80566 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 5 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-12-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 08-12-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 21-07-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: V K SINGH
• Assessee Lawyers: G A MEHTA
• Keywords: Depreciation; Cost of acquisition

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH AHMEDABAD , BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER, AND SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER. ITA.NO.1842/AHD/2011 (ASSESSMENT YEAR:2006-07) BRAND AID PVT. LTD. A/202, SHAPATH-IV, OPP.KARNAVATI CLUB, S.G. ROAD, AHMEDABAD APPELLANT VS. INCOME-TAX OFFICER, WARD-1(2), AHMEDABAD RESPONDENT PAN: AACCB1595N /BY APPELLANT : SHRI G. A. MEHTA, A.R. /BY RESPONDENT : SHRI V. K. SINGH, SR.D.R. !' /DATE OF HEARING : 08.12.2014 #$% !' /DATE OF PRONOUNCEMENT : 22.12.2014 ORDER PER SHAILENDRA KUMAR YADAV, J.M: THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-VI, I.T.A. NO. 1842/AHD/2011 A.Y. 06-07 (BRAND AID PVT. LTD. VS. ITO) PAGE 2 AHMEDABAD, DATED 09.05.2011 FOR A.Y. 2006-07 ON THE FOLLOWING GROUNDS: 1. THE APPELLANTS SUBMIT THAT THE CIT(A) HAS ERRED IN CONFIRMING THE DISALLOWANCE BY THE AO OF RS.40,500/ - BEING ROC FEES FOR INCREASE IN SHARE CAPITAL, FOR THE SMO OTH RUNNING OF THE BUSINESS. 2. THE APPELLANTS SUBMIT THAT THE CIT(A) HAS ERRED IN CONFIRMING THE DISALLOWANCE BY THE AO ON ACCOUNT OF DEPRECIATION RS. 99,453/- VEHICLE EXPENSES RS. 90,506/- AND FINANCE CHARGES RS. 82,082/- ======== TOTAL RS. 2,72,041/- ON THE GROUNDS AS PER PARA 3.3 OF HIS ORDER AND ERR ED IN RELYING ON 249 ITR 214 (SC) AND 277 ITR 204 (DELHI) . 2. AT THE OUTSET, LD. AUTHORIZED REPRESENTATIVE DID NOT PRESS GROUND NO.1. SAME IS DISMISSED AS NOT PRESSED. THE ONLY GROUND REMAINS WITH REGARDS TO DEPRECIATION ON VEHI CLE EXPENSES AND FINANCE CHARGES THEREON. 3. ASSESSING OFFICER MADE DISALLOWANCE OF RS. 2,72, 041/- ON ACCOUNT OF DEPRECIATION. ASSESSEE HAS PURCHASED TW O VEHICLES AND CLAIMED DEPRECIATION ON THE SAME AS UNDER: SR.NO.MODEL DATE OF PURCHASE COST PRICE/WDV DEPRECI ATION (I) TOYOTO INNOVA 30.11.2005 RS.7,24,692 RS.54,35 2 (II) ZEN LXI 24.4.2004 RS.3,00,674 RS.45,101 TOTAL RS.99,453 I.T.A. NO. 1842/AHD/2011 A.Y. 06-07 (BRAND AID PVT. LTD. VS. ITO) PAGE 3 ASSESSEE HAVING CLAIMED EXPENDITURE LIKE DEPRECIATI ON ON MOTOR CAR, VEHICLE EXPENDITURE AND FINANCIAL CHARGE S IN RETURN OF INCOME AS UNDER: DEPRECIATION FOR 2 CARS RS.99,453 VEHICLE EXPO DEBITED FOR 4 CARS IS RS.181013 HENCE FOR 2 CARS RS.90,506 FINANCIAL CHARGES FOR 2 CARS RS.82,082 TOTAL RS.2,72,041 WHICH WAS DISALLOWED BY ASSESSING OFFICER AND IN AP PEAL, CIT(A) CONFIRMED THE SAME BY FOLLOWING CERTAIN DECI SIONS OF ITAT AND OTHER DECISIONS AS DISCUSSED IN PARA 3.3. 4. LD. AUTHORIZED REPRESENTATIVE OPPOSED THE SAME A ND SUBMITTED BEFORE US THAT FOR EARLIER YEARS, TRIBUNA L HAS DECIDED THE SIMILAR ISSUE IN FAVOUR OF ASSESSEE FOR ONE CAR , WHICH WAS PURCHASED AND THAT YEAR WHICH IS ALSO CONSIDERED BY ASSESSING OFFICER IN A.Y 06-07, WHEREIN ASSESSING OFFICER HAD DISALLOWED EXPENSES ETC. FOR ONE NEW CAR AND ALSO FOR CAR PURC HASED IN A.Y. 05-06. THUS, ISSUE RAISED IN A.Y. 06-07 ARE S IMILAR TO THAT OF AS DONE IN A.Y. 05-06. ORDER OF THE SAME IS PLA CED ON THE RECORD, WHICH HAS NOT BEEN DISPUTED BY LD. DEPARTME NTAL REPRESENTATIVE, BUT LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT FACTS OF 05-06 AND 06-07 ARE NOT SIMILAR. SO, THE RATIO FOR A.Y. 05-06 SHOULD NOT BE APPLIED FOR 06-07. WE FIN D THAT COMPANY HAS PASSED THE RESOLUTION TO PURCHASE A CAR IN THE I.T.A. NO. 1842/AHD/2011 A.Y. 06-07 (BRAND AID PVT. LTD. VS. ITO) PAGE 4 NAME OF DIRECTOR WITH RIGHT TITLE AND OWNERSHIP INT EREST IN SAID CAR WHICH ALWAYS BE VESTED IN COMPANY AND COST OF T HE CAR WAS REFLECTED IN THE BALANCE SHEET OF COMPANY AND INSTA LLMENTS OF LOAN OF CAR WERE PAID BY COMPANY. THE SAID CARS WE RE CLAIMED TO BE USED FOR BUSINESS PURPOSE OF THE COMPANY. TH E EXPENSES FOR USE OF CAR WERE DEBITED IN BOOKS OF COMPANY. T HUS, BENEFICIAL OWNERSHIP AND DOMAIN OVER THE CAR WAS WI TH ASSESSEE COMPANY. IN VIEW OF ABOVE, WE ARE OF THE VIEW THAT NO DISALLOWANCE OF EXPENSES OF RS.2,72,041/- IN THE YE AR UNDER CONSIDERATION IS WARRANTED AND SAME IS DIRECTED TO BE DELETED. 5. AS A RESULT, APPEAL FILED BY ASSESSEE IS PARTLY ALLOWED. PRONOUNCED IN THE OPEN COURT ON THIS THE DAY OF DECEMBER, 2014. SD/- SD/- (ANIL CHATURVEDI) (SHAILENDRA KUMAR Y ADAV) ACCOUNTANT MEMBER JUDICIAL MEM BER TRUE COPY S.K.SINHA & & & & ' ' ' ' ('% ('% ('% ('% / COPY OF ORDER FORWARDED TO:- 1. +, / REVENUE 2. / ASSESSEE 3. // 0 / CONCERNED CIT 4. 0- / CIT (A) 5. '45 , , / DR, ITAT, AHMEDABAD 6. 589 :; / GUARD FILE. BY ORDER / & ,