C.Chandrasekar, CHENNAI V. ACIT Non Corporate Circle 7(1), CHENNAI

ITA 2339/CHNY/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 5987 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-01-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 13-08-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MRS D ROHINI
• Assessee Lawyers: JHARTA B HARILAL
• Keywords: Depreciation
• Section: 143(3); 154

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: CHENNAI , ! '!# $ , % & BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ! ./ ITA NO.2339/CHNY/2018 ' /ASSESSMENT YEAR: 2009-10 SHRI C.CHANDRASEKAR, FLAT NO.943, 54 TH STREET, TVS COLONY, ANNA NAGAR WEST EXTENSION, CHENNAI 600 101. VS. THE ASST. COMMISSIONER OF INCOME TAX, NON-CORPORATE CIRCLE-7(1), CHENNAI-600 034. [PAN: ACRPC 2025N ] ( ( /APPELLANT) ( )*( /RESPONDENT) ( + , / APPELLANT BY : MR. JHARTA B. HARILAL, FCA )*( + , /RESPONDENT BY : MRS. D. ROHINI, ADDL. CIT - + .% /DATE OF HEARING : 31.12.2018 /0' + .% /DATE OF PRONOUNCEMENT : 07.01.2019 1 / O R D E R PER INTURI RAMA RAO, ACCOUNTANT MEMBER : THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED AG AINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-7, CHENNAI (C IT(A) FOR SHORT) DATED 12.06.2010 FOR THE ASSESSMENT YEAR (AY) 2009-10. 2. THE ASSESSEE RAISED THE FOLLOWING GROUNDS OF APPEAL : 1. THE ORDER OF THE ASSESSING OFFICER AND THE COMMI SSIONER OF INCOME TAX (APPEALS) [CIT(A)], ARE OPPOSED TO LAW A ND CONTRARY TO THE FACTS AND CIRCUMSTANCES OF THE CASE . 2. THE ADDITION SUSTAINED BY THE LEARNED CIT(A) IS ERRONEOUS IN LAW. ITA NO.2339/CHNY/2018 (AY 2009-10) SHRI C. CHANDRASEKAR :- 2 -: 3. THE LEARNED CIT(A)ERRED IN NOT CONSIDERING THE C BDT NOTIFICATIONS, INCOME TAX RULES. 4. THE LEARNED CIT(A) FAILED TO APPRECIATE THAT THE APPELLANT IS ENTITLED FOR 50% DEPRECIATION ON CAR AS PER THE CBD T NOTIFICATION. 5. THE LEARNED CIT(A) ERRED IN NOT CONSIDERING THE JUDICIAL PRONOUNCEMENTS PRODUCED DURING THE COURSE OF APPELL ATE PROCEEDINGS. 3. THE BRIEF FACTS OF THE CASE ARE AS UNDER: THE APPELLANT IS AN INDIVIDUAL AND DERIVING INCOME UNDER HEAD BUSINESS. THE ASSESSMENT FOR THE AY 2009-10 WAS C OMPLETED U/S. 143(3) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT) VIDE ORDER DATED 23.12.2011 AT A TOTAL INCOME OF RS. 1,35,94,873/-. SUBSEQUENTLY, I T WAS NOTICED BY THE ASSESSING OFFICER (AO) THAT EXCESS DEPRECIATION ON CAR WAS ALLOWED AND ACCORDINGLY A NOTICE U/S. 154 OF THE ACT WAS ISSUED PROPOSING TO RECTIFY THE ASSESSMENT ORDER. IN RESPONSE TO THE SAID NOTICE, I T IS SUBMITTED BY THE ASSESSEE THAT THE TOYOTA INNOVA CAR, WHICH WAS CLAS SIFIED ON A COMMERCIAL VEHICLE BY REGISTRATION AUTHORITIES IS USED FOR BUS INESS PURPOSE AND THEREFORE, ENTITLED FOR DEPRECIATION I.E., @ 50%. THE SAID EX PLANATION WAS REJECTED BY THE AO BY HOLDING AS UNDER: 3. IT IS PERTINENT TO POINT OUT HERE THAT IN EXER CISE OF POWERS AVAILABLE TO THE CENTRAL BOARD OF DIRECT TAXES IN PRESCRIBING THE RA TES FOR DEPRECIATION, DEPRECIATION FOR COMMERCIAL VEHICLES ACQUIRED ON OR AFTER JANUARY 1, 2009 AND PUT TO USE BEFORE APRIL 1, 2009, HAS BEEN INCREASED TO 50 PER CENT VIDE NOTIFICATION NO.10 OF 2009 DATED JANUARY 19, 2009. THERE HAS BEEN AN INCREASE IN DEPRECIATION FOR COMMERCIAL VEHICLES FR OM 40 PER CENT TO 50 PER CENT. COMMERCIAL VEHICLE, SHOULD ORDINARILY MEAN AN Y VEHICLE USED FOR THE PURPOSE OF COMMERCE WHICH INCLUDES PROFESSION. BUT COMMERCIAL VEHICLE IS UNDERSTOOD IN THE NOTES TO THE DEPRECIATION SCHEDUL E AS UNDER: 6. COMMERCIAL VEHICLE MEANS HEAVY GOODS VEHICLE , HEAVY PASSENGER MOTOR VEHICLE, LIGHT MOTOR VEHICLE, M EDIUM GOODS VEHICLE AND MEDIUM PASSENGER MOTOR VEHICLE BUT D OES NOT INCLUDE MAXI-COB, MOTOR-CAB, TRACTOR AND ROOD-ROLLER . THE EXPRESSIONS ITA NO.2339/CHNY/2018 (AY 2009-10) SHRI C. CHANDRASEKAR :- 3 -: HEAVY GOODS VEHICLE, HEAVY PASSENGER MOTOR VEHIC LE, LIGHT MOTOR VEHICLE, MEDIUM GOODS VEHICLE, MEDIUM PASSENGER MOTOR VEHICLE, MAXI- COB , MOTOR- CAB , TRACTOR AND ROAD-RO LLER SHALL HOVE THE MEANINGS RESPECTIVELY ASSIGNED TO THEM IN SEC. 2 OF THE MOTOR VEHICLES ACT, 1988 (59 OF 1988). HOWEVER, THE CLASSIFICATION IN THE APPENDIX PRESCRI BED UNDER RULE 5 IN PURSUANCE OF SEC. 32(1) FOR THE PURPOSE OF UNDERSTA NDING THE ENTRY. ENTRIES UNDER ITEM ILL OF PART A OF THE APPENDIX ARE RELEVA NT IN THIS CONTEXT. ENTRY 2 FOR WHICH THE PRESCRIBED RATE IS 15 PER CENT READS AS U NDER: (2) MOTOR CARS, OTHER THAN THOSE USED IN A BUSINES S OF RUNNING THEM ON HIRE, ACQUIRED OR PUT TO USE ON OR AFTER APRIL 1, 1 990. ENTRY 3(11) FOR WHICH THE PRESCRIBED RATE OF DEPREC IATION IS 30 PER CENT READS AS UNDER: (II) MOTOR BUSES, MOTOR LORRIES AND MOTOR TAXIS US ED IN A BUSINESS OF RUNNING THEM ON HIRE. IT MAY, THEREFORE, BE SEEN T HAT MOTOR CARS QUALIFY FOR DEPRECIATION AT 20 PER CENT UNLESS RUN ON HIRE TO M ERIT DEPRECIATION AT 30 PER CENT. ENTRY 3(VIA) AS INSERTED BY THE INCOME-TAX (THIRD A MENDMENT) RULES, 2009, READS: (VIA) NEW COMMERCIAL VEHICLE WHICH IS ACQUI RED ON OR AFTER JANUARY 1, 2009, BUT BEFORE APRIL 1, 2009, AND IS PUT TO USE B EFORE APRIL 1, 2009, FOR PURPOSES OF BUSINESS OR PROFESSION, (SEE PARAGRAPH 6 OF THE NOTES OF THE DEPRECIATION TABLE]. IN THE TIGHT OF THE ABOVE, THE ITEM COMMERCIAL VEH ICLES AS WELL AS THE ENTRIES AS PRESCRIBED UNDER THE, DEPRECIATION SCHED ULE, WOULD MEAN THAT COMMERCIAL VEHICLES REFERRED IN THE DEPRECIATION SC HEDULE ARE OTHER THAN CARS FALLING UNDER ENTRY 2 AND 3(11) . THE AMENDMENT TO THE RULE IS OBVIOUSLY INTENDED TO. COVER ONLY TRUCKS AND OTHER HEAVY VEHI CLES, BESIDES OTHER COMMERCIAL VEHICLES HITHERTO ENTITLED TO DEPRECIATI ON AT 30 PER CENT. IN THE INSTANT CASE, THE ASSESSEE HAS CLAIMED DEPRE CIATION ON SKODA CAR WHICH IS NOT A COMMERCIAL VEHICLE AND THEREFORE , THE EXCESS DEPRECIATION CLAIMED REQUIRED BE DISALLOWED. ACCORDINGLY, THE AL LOWABLE DEPRECIATION IS. COMPUTED AS UNDER AND ACCORDINGLY, THE ASSESSMENT I N THIS CASE FOR THE ASSESSMENT YEAR 2009-10 IS RECTIFIED U/S 154 OF THE INCOME-TAX ACT, 1961. AS THE ASSESSEES VEHICLE WAS NOT GIVEN ON HIRE, IT IS NOT A COMMERCIAL VEHICLE AND THAT DEPRECIATION IS ALLOWABLE AT 15% O NLY. FURTHER, IT IS SEEN THAT THE SAID CAR WAS PURCHASED AFTER 30.09.2008, THE DE PRECATION HAD TO BE CLAIMED AT 50% OF 15% I.E. AT 7.5% ONLY. IT IS ALSO SEEN FROM THE RECORDS THAT THE ASSESSEE HAD CLAIMED DEPRECIATION ON UPS BATTERY AT 60% WHICH IS NOT ALL OWABLE FOR THE REASON THAT THE UPS AND BATTERY IS LIKE ANY OTHER PLANT AND MAC HINERY, AND THAT THE ALLOWABLE DEPRECIATION IS 15% ONLY. 4. BEING AGGRIEVED, AN APPEAL WAS PREFERRED BEFORE THE LD. CIT(A), WHO VIDE IMPUGNED ORDER DISMISSED THE CLAIM IN RESPECT OF MOTOR VEHICLE CAR BY ITA NO.2339/CHNY/2018 (AY 2009-10) SHRI C. CHANDRASEKAR :- 4 -: APPROVING THE REASONING OF THE AO. ON PERUSAL OF O RDERS OF LOWER AUTHORITIES, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORD ERS OF THE LOWER AUTHORITIES. ACCORDINGLY, WE, DISMISS THE APPEAL FILED BY THE AS SESSEE. 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 07 TH DAY OF JANUARY, 2019 IN CHENNAI. SD/- SD/- ( ) (GEORGE MATHAN) /JUDICIAL MEMBER ( '!# $ ) ( INTURI RAMA RAO ) % /ACCOUNTANT MEMBER /CHENNAI, 2! /DATED: 07 TH JANUARY, 2019. EDN, SR. P.S 1 + ).34 54'. /COPY TO: 1. ( /APPELLANT 4. - 6. /CIT 2. )*( /RESPONDENT 5. 4 78 ). /DR 3. - 6. ( )/CIT(A) 6. 89 : /GF