V KAY TRANSLINES P.LTD, NAVI MUMBAI V. ITO 10(3)(4), MUMBAI

ITA 1900/MUM/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3253 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-04-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2006-2007
• Appeal Filed On: 20-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P MEENA
• Assessee Lawyers: B SHANKAR
• Keywords: Depreciation; Revenue expenditure; Capital expenditure

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES F MUMBAI . . , / BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER /AND , SHRI RAJENDRA, ACCOUNTANT MEMBER . / ITA NO.1900 MUM/2012 ! ! ! ! ' ' ' ' / ASSESSMENT YEAR 2006-07 V KAY TRANSLINES P. LTD. 616,JK CHAMBERS, SECTOR -17, VASHI, NAVI MUMBAI -400 703 ! ! ! ! / VS. THE ITO, WARD 10(3)(4), MUMBAI - 20. # ./ $ ./ PAN/GIR NO. : PAN:AAACV 4937G ( #% / APPELLANT ) .. ( &'#% / RESPONDENT ) #% ( / APPELLANT BY: SHRI B.SHANKAR &'#% ) ( / RESPONDENT BY : SHRI O.P.MEENA ! ) * / DATE OF HEARING : 01/04/2013 +,' ) * / DATE OF PRONOUNCEMENT : 01/04/2013 - / O R D E R PER I.P.BANSAL, J.M THIS IS AN APPEAL FILED BY THE ASSESSEE. IT IS DI RECTED AGAINST THE ORDER PASSED BY LD. CIT(A)-22, MUMBAI DATED 09/01/2012 FO R ASSESSMENT YEAR 2006-0. THE GROUNDS OF APPEAL RAISED BY THE ASSESS EE READ AS UNDER: 1. THE LEARNED CIT (APPEALS) HAS ERRED IN TREATING THE EXPENDITURE OF RS.1,92,660/- AS CAPITAL EXPENDITURE. 2.THE LEARNED CIT (APPEALS) HAS NOT PROPERLY GONE T HROUGH THE ENTIRE EVIDENCE PRESENTED BEFORE HIM AND HAS WRONGLY CONCLUDED THAT THESE EXPENSES ARE CAPITAL IN NATURE. . / ITA NO.1900 MUM/2012 2 3.IN THE ALTERNATE AND WITHOUT PREJUDICE TO THE ABO VE, THE LEARNED CIT (APPEALS) HAS ERRED IN NOT ALLOWING DEPRECIATION OF RS.57,79 8/- ON THE SAID EXPENDITURE OF RS.1,92,660/- TREATED BY HIM AS CAPITAL EXPENDITURE . 4.THE LEARNED ITO HAS ERRONEOUSLY PRESUMED THAT TDS HAS NOT BEEN DEDUCTED ON THE AMOUNT OF RS.1,66,360/- WHEREAS TDS HAD BEEN DE DUCTED ON AN AMOUNT OF RS.1,06,470/- LEAVING OUT RS.59890/-, AND THE SAME HAS BEEN DISALLOWED BY THE APPELLANT IN ITS INCOME TAX RETURN. 5.SEC. 40(A)(IA) DISALLOWS ONLY THOSE SUMS ON WHICH TDS HAS NOT BEEN DEDUCTED. 2. THE ISSUE RELATING TO LEGAL AND PROFESSIONAL CHA RGES WAS SENT BACK TO THE FILE OF AO FOR RE-ADJUDICATION VIDE ORDER PASSED BY ITAT DATED 29/12/2010 IN ITA NO.1562/MUM/2010. THE AO HAS DISCUSSED THIS IS SUE IN PARA 5.3. IT WAS NOTICED BY THE TRIBUNAL THAT TDS ON PAYMENTS MADE B Y THE ASSESSEE TO MR. DEEPAK JAGNADE WERE SUBJECT TO SHORT DEDUCTION OF T AX AND ALSO THE FACT THAT WHETHER THOSE PAYMENTS ARE IN THE NATURE OF CAPIT AL OR REVENUE EXPENDITURE. BEFORE AO IT WAS SUBMITTED THAT IF THE PAYMENT MADE TO MR. DEEPAK JAGNADE ARE CONSIDERED TO BE SUBJECT TO SHORT DEDUCTION OF TAX THEN PROPORTIONATE DEDUCTION SHOULD BE ALLOWED. HOWEVER, AO DID NOT A CCEPT SUCH SUBMISSION AND HAS REPEATED THE DISALLOWANCE. LD. CIT(A) HAS ALSO UPHELD THE DISALLOWANCE ON THE GROUND THAT THE PAYMENT MADE TO MR. DEEPAK JAGNADE WAS FOR GETTING NEW VEHICLES REGISTERED. SINCE THO SE PAYMENTS WERE FOR ONE TIME REGISTRATION THEY GAVE BENEFIT TO THE ASSESSEE FOR ENTIRE LIFE OF THE TRUCK. THEREFORE, THOSE EXPENDITURE ARE CAPITAL IN NATURE AND IN THIS MANNER LD. CIT(A) HAS UPHELD THE DISALLOWANCE. THE ASSESSEE I S AGGRIEVED, HENCE, HAS FILED THE AFOREMENTIONED APPEAL. 3. LD. AR HAS PRODUCED BEFORE US A CHART, WHICH IS ANNEXED AS ANNEXURE-1 TO THIS ORDER. REFERRING TO THE AFOREME NTIONED CHART HE SUBMITTED THAT AO ALSO WELL AS LD. CIT(A) WITHOUT APPLYING TH EIR MIND HAVE AGAIN REPEATED THE DISALLOWANCE. HE SUBMITTED THAT SO FAR AS IT R ELATES TO CONSULTANCY CHARGES FOR PROVIDENT FUND, RTO WORK AND TRAILER CERTIFICAT ION, ALL THESE PAYMENTS WERE LESS THAN RS.20,000/-, HENCE, DID NOT REQUIRE DEDUC TION OF TAX. FOR PROFESSIONAL CHARGES OF RTO WORK GIVEN TO MR. DEEPA K JAGNADE HE SUBMITTED . / ITA NO.1900 MUM/2012 3 THAT TDS HAS BEEN CHARGED ON THE PAYMENT OF RS.1,06 ,470/-. HOWEVER, ON REST OF THE AMOUNT OF RS.59,890/- NO TDS HAS BEEN DEDUCT ED AND THE SAID AMOUNT WAS ADDED BY THE ASSESSEE IN THE COMPUTATION OF ITS INCOME. HE SUBMITTED THAT ALONG WITH AFOREMENTIONED CHART COPY OF VOUCHE RS ARE ALSO PLACED IN THE PAPER BOOK FROM PAGES 2 TO 41. REFERRING TO THOSE INVOICES HE SUBMITTED THAT NONE OF THE PAYMENTS MADE BY THE ASSESSEE TO THE SA ID PARTIES CANNOT BE SAID TO BE GIVING ENDURING BENEFIT TO THE ASSESSEE. HE SUBMITTED THAT THEY ARE REGULAR PAYMENTS MADE BY THE ASSESSEE IN THE COURS E OF ITS BUSINESS. THUS HE SUBMITTED THAT DISALLOWANCE HAS WRONGLY BEEN SUS TAINED BY LD. CIT(A) AND APPROPRIATE RELIEF SHOULD BE GIVEN TO THE ASSESSEE . 4. ON THE OTHER HAND, LD. DR RELIED UPON THE ORDERS PASSED BY AO AND LD. CIT(A). 5. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS IN THE LIGHT OF THE MATERIAL PLACED BEFORE US. THOUGH THE COPY OF ITA T ORDER HAS NOT BEEN FILED BEFORE US BUT WE HAVE GONE THROUGH THE SUBMISSIONS MADE BY THE ASSESSEE BEFORE LD. CIT(A). WE HAVE ALSO GONE THROUGH THE D ETAILS FILED BY THE ASSESSEE WITH REGARD TO THESE EXPENDITURE. WE HAVE FOUND TH AT THE PAYMENT MADE BY THE ASSESSEE TO S.S.CONSULTANCY SERVICES, CHOPRA A UTO CONSULTANCY AND JAI KALI ENGINEERING ARE PAYMENTS MADE BY THE ASSESSEE IN THE COURSE OF ITS ROUTINE BUSINESS, WHICH WAS STATED TO BE GIVING TR UCK ETC. ON HIRE AFTER PURCHASING THE SAME. THEREFORE, THESE EXPENDITURE INCURRED BY THE ASSESSEE CANNOT BE SAID TO BE AS CAPITAL EXPENDITURE AND THE SE ALSO DO NOT REQUIRE ANY TDS AS EACH OF THE PAYMENT IS BELOW A SUM OF RS. 20,000/-. SO FAR AS IT RELATES TO PAYMENT MADE BY THE ASSESSEE TO MR. DEEP AK JAGNADE, IT WAS OBSERVED FROM THE VOUCHERS THAT HE HAS SPECIFICALLY MENTIONED TRUCK NUMBERS ON WHICH HE HAS CHARGED CONSULTANCY CHARGES. WHER EVER ANY FEE OR ENTRY TAX WAS INVOLVED THAT WAS SEPARATELY CHARGED. THEREF ORE, THE CHARGES MADE BY HIM PERTAIN TO ONLY SERVICES PROVIDED BY HIM AND TH OSE CHARGES CANNOT BE SAID TO BE RELATING TO PURCHASE OF VEHICLES. MOREOVER, ACCORDING TO THE SUBMISSIONS . / ITA NO.1900 MUM/2012 4 MADE BY THE ASSESSEE BEFORE LD. CIT(A), THE ASSESSE E HAD DEDUCTED TAX ON THESE PAYMENTS ON A SUM OF RS.1,06,470/-. REST OF THE AMOUNT OF RS.59,890/- WAS STATED TO BE ADDED TO THE INCOME OF THE ASSESSE E IN THE COMPUTATION OF INCOME FOR ARRIVING AT THE INCOME OF RS.2,18,953/-. WE HAVE ALSO GONE THROUGH THE ASSESSMENT ORDER WHERE THE AO HAS STARTED COMPU TATION OF INCOME FROM RS.2,18,953/-. THEREFORE, CONSIDERING THE ENTIRETY OF FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE OPINION THAT THE EXPENDI TURE CLAIMED BY THE ASSESSEE AT A SUM OF RS.1,92,660/- DOES NOT PERTAINS TO CAPI TAL EXPENDITURE. HENCE, DISALLOWANCE CANNOT BE SUSTAINED ON THE GROUND OF ITS BEING CAPITAL EXPENDITURE. 5.1 NOW, COMING TO THE ANOTHER ISSUE THAT WHETHE R THERE IS SHORT DEDUCTION OR NOT. ON THIS ISSUE WE FOUND THAT ASSESSEE HAD SUBMITTED FACTUAL ASPECTS BEFORE LD. CIT(A) AND THOSE FACTUAL ASPECTS HAVE NO T BEEN CONTROVERTED. THE ASSESSEE HAS STATED THAT IT HAS ALREADY DISALLOWED A SUM OF RS.59,890/- ON WHICH NO TDS WAS MADE AND THAT SAID SUM FORM PART O F A SUM OF RS.2,18,,953/- FROM WHERE THE AO HAS STARTED COMPUT ATION. SINCE THESE FACTS ARE NOT CONTROVERTED, WE FOUND THAT DISALLOWANCE ALSO CANNOT BE MADE ON THIS GROUND. 5.2 IN VIEW OF THE ABOVE DISCUSSION, WE DELETE THE DISALLOWANCE OF RS.1,92,660/- AND ALLOW THE APPEAL FILED BY THE ASS ESSEE. 6. IN THE RESULT, THE APPEAL FILED BY THE ASS ESSEE IS ALLOWED. . */ ! .* ) 0 * 1 ) * 23 ORDER PRONOUNCED IN THE OPEN COURT ON 01/04/2013 - ) +,' 0 4!/ 01/04/2013 , ) 5 6 SD/- SD/- ( / RAJENDRA ) ( . . / I.P. BANSAL ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; 4! DATED 01 / 04/2013 . / ITA NO.1900 MUM/2012 5 - - - - ) )) ) &*89 &*89 &*89 &*89 :9'* :9'* :9'* :9'* / COPY OF THE ORDER FORWARDED TO : 1. #% / THE APPELLANT 2. &'#% / THE RESPONDENT. 3. ; ( ) / THE CIT(A)- 4. ; / CIT 5. 9<5 &*! , , / DR, ITAT, MUMBAI 6. 5= > / GUARD FILE. -! -! -! -! / BY ORDER, '9* &* //TRUE COPY// ? ?? ? / 2 2 2 2 (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI . ! . ./ VM , SR. PS