S.S.K. ENGINEERING WORKS, MUMBAI V. ACIT 17(1), MUMBAI

ITA 1947/MUM/2009

• Counselvise Citation: 194719914 RSA 2009
• Duration Of Justice: 2 year(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-04-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Next Hearing Date: 31-03-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 30-03-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: D SONGATE
• Assessee Lawyers: DINESH RASIKLAL SHAH
• Keywords: Depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH E, MUMBAI BEFORE SHRI P.M. JAGTAP AND SMT. ASHA VIJAYARAGHAV AN, JM I.T.A.NO. 1947/MUM/2009 ASSESSMENT YEAR: 2004-05 M/S. S.S.K. ENGINEERING WORKS, 207, KAMDHENU CHS LTD., LOKHANDWALA COMPEX, ANDHERI (W), MUMBAI 400 053. PAN: AAAFS 5181 L VS. THE ASST. COMMISSIONER OF INCOME- TAX-17(1), MUMBAI (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI DINESH RASIKLAL SHAH RESPONDENT BY : SHRI D. SONGATE O R D E R PER P.M. JAGTAP, AM: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS)-XVII, MUMBAI, DATED 30.12.2008 AND THE GROUNDS RAISED BY THE ASSESSEE THEREIN READ AS UNDE R: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW THE LEARNED CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE OF SUND RY CREDITOR OF RS. 34,706/- OF PARESH KUMAR ENTERPRISES, THEREFORE, SA ME IS REQUIRED TO BE DELETED. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW THE LEARNED CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE OF 10% ENTIRE FLEET OF MOTOR CAR EXPENDITURE INSTEAD OF ONE MOTOR CAR WHIC H IS PERSONALLY USED BY THE PARTNER. THEREFORE THE SAID ADDITION IS REQUIRED TO BE DELETED. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW THE LEARNED CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE OF DEPR ECIATION OF 10% ON ENTIRE FLEET OF MOTOR CARS INSTEAD OF ONE CAR US ED BY THE PARTNER. THEREFORE, THE SAID ADDITION IS REQUIRED TO BE DELE TED. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW THE LEARNED CIT(A) HAS NOT DEALT WITH THIS ADDITION OF OLD SUND RY CREDITORS OF RS.2,53,687/-. THEREFORE, THE SAID ADDITION IS REQ UIRED TO BE DELETED. 3. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL ON RECORD. AS REGARDS GROUND NO.1 , IT IS OBSERVED THAT THERE WAS DIFFERENCE OF RS.34,706/- NOTICED BY THE ASSESSING OFFICER IN THE ACCOUNT OF M/S. ITA NO.1947/M/2009 S.S.K.. ENGG. WORKS. 2 PARESH KUMAR ENTERPRISES AS IT APPEARED IN THE BOOK S OF THE ASSESSEE AS COMPARED TO THE BALANCE REFLECTED IN THE BOOKS OF THE SAID P ARTY. THE SAID DIFFERENCE COULD NOT BE EXPLAINED SATISFACTORILY BY THE ASSESSEE EIT HER BEFORE THE ASSESSING OFFICER OR BEFORE THE LEARNED CIT(A) AND THE AMOUNT OF THE SAID DIFFERENCE THUS WAS ADDED BY THE ASSESSING OFFICER TO THE TOTAL INCOME OF THE ASSESSEE, WHICH THE LEARNED CIT(A) CONFIRMED. EVEN AT THE TIME OF HEARI NG BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE HAS NOT BEEN ABLE TO SATIS FACTORILY EXPLAIN THE SAID DIFFERENCE AND IN THE ABSENCE OF SUCH EXPLANATION F ORTHCOMING FROM THE ASSESSEE, WE FIND NO JUSTIFIABLE REASON TO INTERFERE WITH THE IMPUGNED ORDER OF THE LEARNED CIT(A) CONFIRMING THE ADDITION MADE BY THE ASSESSIN G OFFICER ON ACCOUNT OF UNEXPLAINED DIFFERENCE. GROUND NO.1 OF THE ASSESSEE S APPEAL IS ACCORDINGLY DISMISSED. 4. AS REGARDS GROUND NOS. 2 & 3 RELATING TO THE DI SALLOWANCE MADE OUT OF MOTOR-CAR EXPENSES AND DEPRECIATION ON MOTOR-CAR, I T IS OBSERVED THAT NO RECORD IN THE FORM OF LOG BOOK ETC. WAS MAINTAINED BY THE ASS ESSEES TO SHOW THAT THE SAID EXPENSES WERE WHOLLY AND EXCLUSIVELY INCURRED FOR THE PURPOSES OF ITS BUSINESS. SINCE THE USE OF MOTOR CARS OF THE ASSESSEE FIRM BY ITS PARTNERS FOR PERSONAL PURPOSE, COULD NOT BE RULED OUT, THE ASSESSING OFFI CER MADE A DISALLOWANCE OF 20% OUT OF MOTOR-CAR EXPENSES AND DEPRECIATION ON M OTOR-CAR ON MOTOR-CAR ON ACCOUNT OF SUCH PERSONAL USE. ON APPEAL, THE LEARN ED CIT(A) RESTRICTED THE SAID DISALLOWANCE TO 10%. 5. AFTER HAVING CONSIDERED ALL THE FACTS OF THE CAS E, WE ARE OF THE VIEW THAT THE DISALLOWANCE SUSTAINED BY THE LEARNED CIT(A) AT 10% OF THE TOTAL EXPENSES INCURRED BY THE ASSESSEE ON MOTOR-CAR AND DEPRECIA TION ON MOTOR-CAR FOR PERSONAL USE IS QUITE FAIR AND REASONABLE AND NO FURTHER REL IEF ON THIS ISSUE TO THE ASSESSEE IS WARRANTED. WE, THEREFORE, UPHOLD THE IMPUGNED O RDER OF THE LEARNED CIT(A) ON THIS ISSUE AND DISMISS GROUND NOS. 2 & 3 OF THE AS SESSEES APPEAL. ITA NO.1947/M/2009 S.S.K.. ENGG. WORKS. 3 6. AS REGARDS GROUND NO. 4, IT IS OBSERVED THAT THE LIMITED GRIEVANCE PROJECTED BY THE ASSESSEE THEREIN IS THAT THE ISSUE RELATING TO THE ADDITION OF RS. 2,53,687/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF OLD SUNDRY CREDITORS HAS NOT BEEN DECIDED BY THE LEARNED CIT(A) VIDE HIS IMP UGNED ORDER ALTHOUGH THE SAME WAS SPECIFICALLY RAISED IN GROUND NO. 2 TAKEN IN THE APPEAL FILED BEFORE HIM. SINCE THE POSITION IN THIS REGARD IS CLEARLY EVIDEN T FROM THE RECORD AVAILABLE BEFORE US, WE REMIT THIS MATTER TO THE LEARNED CIT(A) WITH A DIRECTION TO DECIDE THE SAME ON MERIT AFTER GIVING THE ASSESSEE AN OPPORTUNITY O F BEING HEARD. GROUND NO. 4 OF THE ASSESSEES APPEAL IS ACCORDINGLY TREATED AS ALL OWED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TRE ATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 27 TH DAY OF APRIL, 2011. SD. SD. (ASHA VIJAYARAGHAVAN) (P.M. JAGTAP) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED THE 27 TH APRIL, 2011. KN COPY TO: 1. THE ASSESSEE 2. THE REVENUE 3. THE CIT-17, MUMBAI. 4. THE CIT(A)-XVII, MUMBAI 5. THE DR E BENCH, MUMBAI BY ORDER /TRUE COPY/ ASST. REGISTRAR, ITAT, MUMBAI