M/s Rishmen Liqurs Pvt, V. The ACIT 3 (1),

ITA 226/IND/2008

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 0096 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 4 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-09-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 23-09-2009
• Assessment Year: misc
• Appeal Filed On: 16-05-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: APARNA KARAN
• Assessee Lawyers: SSH H P VERMA
• Keywords: Depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI BHAVNESH SAINI, JM & SHRI V.K. GUPTA, A M ITA NO.226/IND/2008 AY: 2004-05 (PAN AABCR 7810 E) RISHMAN LIQUORS PVT. LTD. 2-A, SADANA TOWERS, MEZZANINE FLOOR, ZONE-II, M.P. NAGAR, BHOPAL APPELLANT VS. ACIT-3(1), BHOPAL RESPONDENT ASSESSEE BY S/SH. H.P. VERMA & ASHISH GOYAL DEPARTMENT BY SMT. APARNA KARAN, ADDL. CIT, DR O R D E R PER SHRI V.K. GUPTA, AM THIS APPEAL FIELD BY THE ASSESSEE IS DIRECTED AGAINS T THE ORDER OF LD. CIT(A)-II, BHOPAL DATED 25.2.2008 FOR THE ABOVE AY. 2. WE HAVE HEARD THE LD. REPRESENTATIVES OF BOTH THE P ARTIES, GONE THROUGH THE MATERIAL AVAILABLE ON RECORD AND PERUSE D THE FINDINGS OF THE AUTHORITIES BELOW. 3. THE CONCISE GROUNDS RAISED BY THE ASSESSEE READ AS U NDER: 1. THAT THE LD. CIT(A) ERRED IN SUSTAINING THE ADDIT ION ON ACCOUNT OF DISALLOWANCE OF 25% OF DEPRECIATION AND C AR EXPENSES I.E. RS.1,10,183 OUT OF TOTAL EXPENSES OF RS.4,40,734. 2 2. THAT THE LD. CIT(A) ERRED IN SUSTAINING THE ADDI TION OF DISALLOWANCE OF 25% OF TELEPHONE EXPENSES I.E. RS.30,629 OUT OF TOTAL EXPENSES OF RS.1,22,518. 4. THE FACTS, IN BRIEF, ARE THAT THE AO DISALLOWED 25% O F DEPRECIATION ON CAR, CONVEYANCE EXPENSES AND TELEPH ONE EXPENSES FOR THE REASON THAT ELEMENT OF PERSONAL US E COULD NOT BE RULED OUT. ON APPEAL, THE LD. CIT(A) ALSO CONFIRM ED SAME. AGGRIEVED BY THIS, THE ASSESSEE IS IN APPEAL BEFORE US. THE LD. COUNSEL FOR ASSESSEE SUBMITTED THAT ASSESSEE WAS A P RIVATE LIMITED CO. AND THE BOOKS OF ACCOUNT HAD BEEN AUDIT ED BOTH AS PER PROVISIONS OF COMPANIES ACT, 1956 AND SEC. 44AB OF THE IT ACT, 1961 WHEREIN NO ADVERSE COMMENTS WERE MADE IN T HIS REGARD. THE ASSESSEE ALSO SUBMITTED THAT COMPLETE VO UCHERS AND OTHER DETAILS WERE AVAILABLE. THEREAFTER, THE LD. COU NSEL FOR ASSESSEE CONTENDED THAT IT WAS A CASE OF A COMPANY W HEREIN NO DISALLOWANCE COULD BE MADE ON ACCOUNT OF PERSONAL US E. FOR THIS PREPOSITION, THE LD. COUNSEL FOR ASSESSEE RELIED ON THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF SAYAJ I IRON & ENGG. CO. VS. CIT AS REPORTED IN 253 ITR PAGE NO.749 AND ON THE DECISION OF TRIBUNAL IN THE CASE OF KEYSTONE INDIA (PVT.) LTD. VS. DCIT AS REPORTED IN 99 TTJ (AHD) 386. THE LD. DR ON T HE OTHER HAND PLACED STRONG RELIANCE ON THE ORDER OF THE LD. CIT(A). 3 5. WE HAVE CONSIDERED BOTH THE SIDES, MATERIAL ON RECO RD AND ORDERS OF THE AUTHORITIES BELOW, IT IS NOTED THAT TH E ASSESSEE IS A CO. AND ITS BOOKS OF ACCOUNT ARE AUDITED. THE REVENU E AUTHORITIES HAVE DISALLOWED THE IMPUGNED EXPENSES ON ACCOUNT OF PROBABLE PERSONAL USE WHICH CANNOT BE DONE AS IT IS A CASE OF A CO. WHERE SUCH DISALLOWANCE COULD BE MADE IF IT WAS ESTABLISHED THAT THE EXPENDITURE WAS INCURRED FOR NON-BUSINESS PURPOSES. THE RATIO OF THE JUDICIAL DECISIONS CITED BY THE ASSESSEE ALSO S UPPORTS THIS VIEW. ACCORDINGLY, WE HOLD THAT THERE IS NO SUCH DISA LLOWANCE IS WARRANTED AND ACCORDINGLY, WE DIRECT THE AO TO ALLOW THE DEPRECIATION ON CAR, CONVEYANCE EXPENSES AND TELEPH ONE EXPENSES AS CLAIMED BY THE ASSESSEE. THUS, BOTH THE GROUNDS OF THE ASSESSEE STAND ALLOWED. 6. IN THE RESULT, APPEAL OF THE ASSESSEE STANDS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 24.9.2009. SD/- SD/- JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 24.9.2009 {VYAS}