Shri. Bansidhar Shrikishan (HUF), RAIGARH(CG) V. Income Tax Officer-1, RAIGARH(CG)

ITA 245/BIL/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 94002 (ITAT-RAIPUR)
• Duration Of Justice: 3 year(s) 5 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-06-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2005-2006
• Appeal Filed On: 26-12-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D LAHURI
• Assessee Lawyers: G S AGRAWAL
• Keywords: Depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, RAIPUR BENCH, RAIPUR BEFORE S/SHRI MUKUL K SHRAWAT, ( JM) AND SHAMIM YAHYA,(AM) I TA . NO . 2 45 / BLPR / 201 1 (ASSESSMENT YEAR : 200 5 - 06 ) BANSIDHAR SHRIKISHAN (HUF), KOTBA ROAD, PO LAILUNGA, DIST - RAIGARH CG) VS. INC OME TAX OFFICER, AAYAKR BHAVAN, CHAKRADHAR NAGAR, RAIGARH (CG). APPELLANT .. RESPONDENT PAN/GIR NO. : AAEHB9602D APPELLANT BY : SHRI G S AGRAWAL RESPONDENT BY : SHRI D LAHURI DATE OF HEARING : 1 7 .6.2015 DATE OF PRONOUNCEMENT : 19. 6. 201 5 O R D E R PER MUKUL K SHRAWAT, ( JM) : THIS IS AN APPEAL FILED BY THE ASSESSEE ARISING FROM THE ORDER OF LD. CIT(A) ORDER DATED 3.10.2011 FOR THE ASSESSMENT YEAR 2005 - 06. 2. GROUND RAIS ED BY THE ASSESSEE ARE AS UNDER : 1. THAT THE ORDER OF THE LD CIT(A) IS BAD IN LAW AND ON FACTS ; 2. THAT THE LD.CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE OF RS.1,18,836/ - MADE BY T HE LD.AO ON ACCOUNT OF EXPENSES AND DEPRECIATION IN PLYING THE MINI BUS, REJECTING THE EXPLANATION THAT THE BUS WAS USED FOR THE PURPOSE OF BUSINESS PRAYED TO DELETE THE DISALLOWANCE OF RS.1,18,836/ - 3. FACTS IN BRIEF AS EMERGED FROM THE CORRESPONDING ASSESSMENT ORDER PASSED UNDER SECTION 143(3)/263 DATED 12.12.2008 TH AT THE ASSESSEE WAS PLYING BUS AND CLAIMED DEPRECIATION. THE OBSERVATIONS OF THE REVENUE ITA. NO. 245 / BLPR/201 1 2 DEPARTMENT WAS THAT THE BUS WAS GRANTED PERMIT BY RTO IN THE FINANCIAL YEAR 2005 - 06 ; HENCE THE ASSE SSEE W A S NOT ENTITLED FOR DEPRECIATION FOR THE ASSESSMENT YEAR U NDER CONSIDERATION I.E. AY 2005 - 06. THE FACTS IN THIS REGARD WERE DISCUSSED BY THE AO IN THE FOLLOWING MANNER : (IV) REGARDING THE INCOME FROM TH E BUS PLYING SHOWN AT A LOSS OF RS.1,18,836/ - THE ASSESSEE WAS ASKED TO EXPLAIN AN D ST AT E AS TO HOW THE L OSS WAS ARRIVED AT. THE ASSESSEE FURNISHED A REPLY STATING THAT THE BUS WAS PURCHASED ON 2.3.2005 AND BUS WAS PLIED FOR A DAY FOR A MARRIAGE PARTY IN THE MONTH OF MARCH, 2005 AND RECEIVED A SUM OF RS.2500/ - AS FARE AND SHOWN IN THE BUS ACCOUNT. IT HAS ALSO BEEN STATED THAT HE HAS INCURRED EXPENSES TOWARDS EMPLOYEES SALARY, ROAD TAX, INSURANCE AND DIESEL. THEREFORE , THE BUS WAS READY FOR USE AND USED IN THE MONTH OF MARCH , 2005. IN THE COURSE OF PROCEEDINGS, THE ASSESSEE WAS ASKED TO EXPLAIN AND ST ATE AS TO WHY THE LOSS OF RS.1,18,836/ - CLAIMED UNDER THE BUS ACCOUNT SHOULD NOT BE DISALLOWED SINCE NO ROOT PERMIT FROM RTO WAS OBTAINED TO RUN THE BUS DURING THE PREVIOUS YEAR RELEVANT TO THE AY 2005 - 06 . IT HAS BEEN STATED THAT THE BUS PLIED WITHOUT PERMISSION IS VIOLATION OF MOTOR VEHICLE ACT AND IT CANNOT BE SAID THAT THE BUS WAS NOT PLIED , THE DEPRECIATION CAN BE ALLOWED. IN THIS REGARD, THE ASSESSEE ALSO RELIED ON THE DECISIONS OF ANIL BULK CARRIER (P) LTD. V/S CIT (ALL) 276 - 2005 ITR 625 AND CIT V/S VI NDHYANCHAL DISTILLERY (P) LTD 196 - 2005 CTR 644 (MP). ASSESSEES EXPLANATION HAS BEEN CONSIDERED. THE DECISION ON WHICH THE ASSESSEE RELIED UPON ARE NOT IDENTICAL WITH REGARD TO THE FACTS OF THE CASE AND THEREFORE NO APPLICABLE IN VIEW OF THIS POSITION , THE ASSESSEE IS NO T ENTITLE FOR SET OFF THE LOSS CLAIMED IN BUS PLYING BUSINESS AT RS.1,18,836/ - FROM THE TOTAL INCOME OF THE ASSESSEE. 4 . THE LD. CIT(A) HAS CONFIRMED THE ACTION OF THE AO PRIMAR ILY ON THE GROUND THAT NO PRUDENT BUSINESS MAN COULD PAY SALARY OF RS.7000/ - FOR PLYING THE BUS WHICH HAS EARNED RS.2500/ - IN THE MONTH OF MARCH , 2005. IT WAS HELD THAT THE ASSESSEE WAS NOT ENTITLED FOR ANY EXPENDITURE INCURRED INCLUDING THE DEPRECIATION IN THE FINANCIAL YEAR 2004 - 05 RELEVANT TO AY 2005 - 06. 5 . ON THIS SHORT ISSUE, WE HAVE HEARD BOTH THE PARTIES. ADMITTEDLY THE FACTUAL POSITION WAS THAT THE SAID MINI BUS WAS PURCHASED ON 2.3.2005 ITA. NO. 245 / BLPR/201 1 3 FROM SHIVAM MOTORS FOR RS.4,64,035/ - . THE VEHICLE WAS REGISTERED WITH RTO ON 10.3.2005, EVIDENCE IS ON RECORD. A CERTIFICATE OF FITNESS WAS ALSO OBTAINED ON 11.3.2005. THE VEHICLE IN QUESTION WAS ENSURED ON 2.3.2005. HOWEVER , THE PERMIT WAS NOT ISSUED WITHIN THE FINANCIAL YEAR. THE PERMIT WAS ISSUED ON 31.5.2005. I.E. IN THE NE XT FINANCIAL YEAR . IN OUR OPINION, T HERE ARE NUMBER OF DECISION S WHERE IT WAS HELD THAT IF VEHICLE IS EVEN KEPT FOR READY FOR USE THEN ENTITLED FOR THE CLAIM OF DEPRECIATION . THE CA SE LAW CITED IS CIT V/S PREMIER INDUSTRIES (INDIA) LTD (2010) 323 ITR 672 (MP). THE SAME VIEW WAS EXPRESSED BY THE HONBLE CALCUTA HIGH COURT IN THE CA S E OF CIT V/S EIH LTD (2011) 54 DTR 0249 CALCUTTA HC. RESPECTFULLY FOLLOWING THESE DECISIONS , WE ARE OF T HE CONSIDERED OPINION THAT IN THE LIGHT OF SEVERAL EVIDENCES DEMONSTRATING THE FACT THAT THE VEHICLE WAS IN F ACT NOT ONLY READY TO USE BUT ALSO PUT TO USE DURING THE YEAR UNDER CONSIDERATION , WE HEREBY HOLD THA T THE REVENUE AUTHORITIES WENT WRONG IN DISALLOWING THE CLAIM OF DEPRECIATION . WE HEREBY REVERSE THE FINDING OF THE LD CIT(A) AND DIRECT THE AO TO ALLOW THE CLAIM OF DEPRECIATION . 6 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 19 JUNE , 201 5 SD SD ( SHAMIM YAHYA ) ( MUKUL K SHRAWAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER RAIPUR : 19 TH JUNE,2015. SRL , SR. PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A) - CONCERNED 4. CIT CONCERNED 5. DR, ITAT, RAIPUR CONCERNED 6. GUARD FILE. BY ORDER, TRUE COPY SENIOR PRIVATE SECRETARY /AR