VAMA FABRICS LTD, MUMBAI V. JT CIT (OSD) 4(3), MUMBAI

ITA 1978/MUM/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 92356 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 1 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-04-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2009-2010
• Appeal Filed On: 12-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES F MUMBAI . . , , BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI N.K.BILLAIYA, ACCOUNTANT MEMBER . / ITA NO. 1978/MUM/2013 / ASSESSMENT YEAR 2009-10 VAMA FABRICS LTD., ROOM NO.18, LAXMI BHUVAN, 76/78, OLD HANUMAN LANE, KALBADEVI, MUMBAI 400003 / VS. THE JCIT. (OSD)-43), 6 TH FLOOR, AAYKAR BHAVAN, MK ROAD, MUMBAI400020 ! ./ ./ PAN/GIR NO. : AAACV 1409K ( !$ / APPELLANT ) .. ( %&!$ / RESPONDENT ) ASSESSEE BY SHRI RAJESH KOTHARI RESPONDENT BY : SHRI P.K.BEERLA ( ) * / DATE OF HEARING : 21/04/2015 ( ) * / DATE OF PRONOUNCEMENT : 21/04/2015 / O R D E R PER I.P.BANSAL, JM: THIS IS AN APPEAL FILED BY THE ASSESSEE AND IT IS DIRECTED AGAINST ORDER PASSED BY LD. CIT(A)-8, MUMBAI DATED 15/2/2013 FOR ASSESSMENT YEAR 2009- 10. GROUNDS OF APPEAL READ AS UNDER: -ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE OF DEP RECIATION ON MOTOR CAR RS.184780/- U/S.32 OF THE IT ACT ON THE REASON THAT THE MOTOR CAR WAS NOT REGISTERED IN THE NAME OF THE ASSESSEE. NOT CONSIDERED OR REFUTING THE FINDINGS OF HONBLE MUMBAI ITAT IN THE CASE OF VIJAY FABRICS P. LTD.- F BENCH DECIDED ON 28 TH SEPTEMBER 2012 WHILE PASSING THE ORDER BY THE HONBLE CIT(A). . / ITA NO. 1978/MUM/2013 / ASSESSMENT YEAR 2009-10 2 2. IN THE PRESENT CASE DEPRECIATION ON MOTOR CAR HA S BEEN DISALLOWED BY THE AO ON THE GROUND THAT MOTOR CAR IS NOT REGISTERED I N THE NAME OF THE ASSESSEE COMPANY BUT THE SAME IS REGISTERED IN THE NAME OF T HE DIRECTOR. IT IS THE CONTENTION OF THE ASSESSEE THAT THOUGH MOTOR CAR IS IN THE NAME OF THE DIRECTOR, IT HAS BEEN SHOWN AS ASSET IN THE BOOKS OF THE COMP ANY. THE TOTAL AMOUNT OF CONSIDERATION FOR INVESTMENT IN MOTOR CAR HAD BEEN PAID FROM THE COMPANY ACCOUNT OUT OF ITS OWN FUNDS AND CAR LOAN TAKEN WA S REPAID ALONGWITH INTEREST BY THE COMPANY ITSELF. THE SAID MOTOR CAR HAS ALSO BEEN USED WHOLLY FOR THE PURPOSE OF BUSINESS OF THE COMPANY. SHRI PAHILAJ K. PARYANI, IN WHOSE NAME THE CAR IS REGISTERED IS DIRECTOR OF THE ASSESSEE C OMPANY AND IS HOLDING THE SAID CAR ON BEHALF OF THE ASSESSEE COMPANY. THUS, IT WA S CLAIMED THAT DEPRECIATION SHOULD HAVE BEEN ALLOWED IN THE HANDS OF THE ASSESS EE COMPANY. HOWEVER, LD. CIT(A) HAS NOT ADMITTED THE CLAIM OF THE ASSESSEE. 3. WE HAVE HEARD BOTH THE PARTIES AND THEIR CONTENT IONS HAVE CAREFULLY BEEN CONSIDERED. WE FOUND THAT SIMILAR ISSUE WAS DECIDE D BY THE TRIBUNAL AND REFERENCE IN THIS REGARD CAN BE MADE TO THE DECISI ON RELIED UPON BY THE ASSESSEE IN GROUNDS OF APPEAL AND COPY OF THE DECIS ION IS FILED AT PAGE -15 TO 18 OF THE PAPER BOOK, WHEREIN TRIBUNAL HAS DECIDED THIS ISSUE AS UNDER: 6. WE HAVE HEARD BOTH THE PARTIES AND THEIR CONTENT IONS HAVE CAREFULLY BEEN CONSIDERED. IT IS NOT DISPUTED THAT THE VEHICLE ON WHICH DEPRECIATION HAS BEEN DISALLOWED IS STANDING IN THE BALANCE SHEET OF THE ASSESSEE. FOR THE SAKE OF CONVENIENCE THE VEHICLE WAS GOT REGISTERED IN THE N AME OF DIRECTOR ONLY FOR THE REASON THAT IT WOULD FACILITATE IF THE VEHICLE IS S OLD TO GET IT TRANSFERRED IN OTHER NAME. ACCORDING TO THE RATIO LAID DOWN IN THE AFOR EMENTIONED DECISION OF HONBLE BOMBAY HIGH COURT, REGISTRATION OF VEHICLE PER-SE IN THE NAME OF ASSESSEE IS NOT A CONDITION PRECEDENT FOR ALLOWABILITY OF DEPRECIA TION ON THE SAID VEHICLE. IN THE PRESENT CASE THE VEHICLE IS IN THE NAME OF THE DIRE CTOR OF THE ASSESSEE COMPANY. THEREFORE, WE ARE OF THE OPINION THAT DEPRECIATION CLAIM OF THE ASSESSEE HAS WRONGLY BEEN DISALLOWED THAT TOO BY WAY OF A RECT IFICATION ORDER. SUCH RECTIFICATION COULD NOT HAVE BEEN DONE AS IT CANN OT BE SAID THAT THERE WAS ANY MISTAKE APPARENT FROM RECORD. THE ASSESSEE COULD RELY UPON THE AFOREMENTIONED DECISION OF HONBLE BOMBAY HIGH COURT TO CONTENT T HAT IT IS ENTITLED TO GET DEPRECIATION ON THE VEHICLE REGISTERED IN THE NAME OF ITS DIRECTOR. THE VALUE OF THE . / ITA NO. 1978/MUM/2013 / ASSESSMENT YEAR 2009-10 3 VEHICLE HAS BEEN SHOWN TO BE INCURRED BY THE ASSES SEE COMPANY ITSELF AND THE VEHICLE IS SHOWN AS ASSET IN THE BALANCE SHEET OF T HE ASSESSEE COMPANY. IN VIEW OF THE ABOVE DISCUSSIONS, WE ALLOW BOTH THE APPEALS FILED BY THE ASSESSEE. THE AO IS DIRECTED TO ALLOW DEPRECIATION. 4. IN THE AFOREMENTIONED DECISION, ONE OF US (JM) I S A PARTY. FOR THE SAKE OF CLARITY IT MAY BE MENTIONED THAT CITATION OF THE CA SE RELIED UPON IN AFOREMENTIONED OBSERVATION IS THE DECISION IN THE C ASE OF CIT VS. DILIP SINGH SARDAR SINGH BAGGA,201 ITR 995 (BOM). IN VIEW OF A BOVE DISCUSSION, WE DIRECT THE AO TO ALLOW THE DEPRECIATION ON MOTOR CAR. 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 21/04/2015 ( 0 1 2 21/04/2015 ( SD/- SD/- ( / N.K.BILLAIYA ) ( . . / I.P. BANSAL ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; 1 DATED 21/04/2015 / COPY OF THE ORDER FORWARDED TO : 1. !$ / THE APPELLANT 2. %&!$ / THE RESPONDENT. 3. 4) ( ) / THE CIT(A)- 4. 4) / CIT 5. 56 %)78 , * 78 , / DR, ITAT, MUMBAI 6. 9 / GUARD FILE. / BY ORDER, & 5) %) //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI . . ./ VM , SR. PS