ACIT, JODHPUR V. M/s. Delhi Rajasthan Tpt. Co. Ltd., JODHPUR

ITA 249/JODH/2012

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 7989 (ITAT-JODHPUR)
• Duration Of Justice: 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-12-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 21-11-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 04-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G R KONKANI
• Keywords: Depreciation
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K.SAINI, ACCOUNTANT MEMBER ITA NO. 249/JU/2012 ASSESSMENT YEAR : 2008-09 THE ACIT, VS MS/ DELHI RAJASTHAN TPT. COMPANY CIRCLE-3, JODHPUR LTD., JODHPUR PAN NO. AAACD4979N (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI G.R. KONKANI RESPONDENT BY : SHRI AMIT KOTHARI DATE OF HEARING : 21.11.2012 DATE OF PRONOUNCEMENT : 20.1.2012 ORDER PER N.K.SAINI, A.M. THIS IS AN APPEAL FILED BY THE DEPARTMENT AGAINST T HE ORDER DATED 30.3.2012 OF CIT(A), JODHPUR 2. FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPEA L:- UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE THE C IT(A) HAS ERRED IN 1. ALLOWING THE DEPRECIATION @ 80% ON FOUNDATION WORK, WIND MILL IGNORING THE FACT THAT CIVIL WORK OF FOU NDATION IS A 'BUILDING STRUCTURE' DOES NOT CONSTITUTE AS AN Y 2 INTEGRAL PART OF WIND MILL TO BE USED FOR GENERATIO N OF POWER. 2. ALLOWING THE DEPRECIATION@ 80% ON COMPONENTS & ACCESSORIES IGNORING THE FACT THAT COMPONENT & ACCESSORY UNDER REFERENCE ARE PLANT & MACHINERY AND NOT AS PART OF WIND MILL. 3. ALLOWING THE DEPRECIATION @ 15% ON EXPENSES DEBI TED FOR POWER EVACUATION, LAND PURCHASE AGREEMENT/ARRANGEMENT IGNORING THE FACT THAT EXPENS ES SO INCURRED HAVE NOT FORMED ANY DEPRECIABLE ASSET, J 4. RESTRICTING THE LUMP SUM ADDITION TO RS. 110000 /- AGAINST THE ADDITION OF RS. 210000/- MADE BY AO IGNORING THE FACT THAT COMPLETE BILLS/EVIDENCES OF EXPENSES NOT MAINTAINED ESTIMATION OVER ESTIMATION WITHOUT ANY BASIS IS NOT JUSTIFIED. 5. ALLOWING THE RELIEF OF RS. 50,000/- IN PERSONAL EXPENSES WITHOUT APPRECIATING THE FACTS BROUGHT OUT ON RECOR D BY AO. 6. IT IS PRAYED THAT ORDER OF THE AO MAY BE RESTORED A ND ORDER OF THE CIT(A) MAY BE SET ASIDE. 7. THAT THE APPELLANT RESERVES IT'S RIGHTS TO ADD, AMEND OR ALTER THE GROUND OF APPEAL ON OR BEFORE THE DATE THE APPEAL IS FINALLY HEARD. 3. GROUND NOS. 1 TO 3 RELATES TO DEPRECATION ON ACC OUNT OF FOUNDATION WORK, COMPONENT & ACCESSORIES AND POWER EVACUATION OF WINDMILL. 3 4. THE FACTS RELATED TO THESE ISSUES IN BRIEF ARE T HAT THE ASSESSEE CLAIMED DEPRECIATION @ 80% TREATING THE CIVIL WORK AS INTEG RAL PART OF WINDMILL. SIMILARLY, DEPRECIATION @ 80% WAS CLAIMED IN RESPEC T OF EXPENSES PERTAINING TO COMPONENT & ACCESSORIES AND ELECTRIC AL ITEMS OF RENEWAL DEVICE INCLUDING TRANSFORMER, INSTALLATIONS OF TRAN SMISSION LINE AND LABOUR EXPENSES FOR INSTALLATION AS WELL AS TESTING AND CO MMISSIONING. HOWEVER, THE ASSESSING OFFICER ALLOWED DEPRECIATION @ 10% A ND 15% RESPECTIVELY. THE ASSESSEE ALSO CLAIMED DEPRECIATION @ 80% IN RES PECT OF EXPENSES PERTAINING TO POWER EVACUATION CHARGES BUT THE ASSE SSING OFFICER DID NOT ALLOW ANY DEPRECIATION. 5. THE ASSESSEE CARRIED THE MATTER TO THE LD CIT(A) WHO ALLOWED THE DEPRECIATION OBSERVING THAT THE SAME ISSUE HAD BEEN DECIDED BY THE ASSESSING OFFICER ON THE DIRECTION OF ITAT FOR THE ASSESSMENT YEAR 2007-08 AND DEPRECIATION HAS BEEN ALLOWED IN ORDER DATED 3 0.11.2011 PASSED U/S 143(3) / 254 OF THE ACT. NOW THE DEPARTMENT IS IN APPEAL. 6. THE LD DR ALTHOUGH SUPPORTED THE ORDER OF ASSESS ING OFFICER BUT COULD NOT REBUT THE FINDINGS OF THE LD CIT(A). 7. IN HIS RIVAL SUBMISSIONS, THE LD. COUNSEL FOR TH E ASSESSEE SUBMITTED THAT THE DEPARTMENT IN THE EARLIER YEAR HAS ACCEPTE D THE CLAIM OF THE ASSESSEE SO THERE WAS NO OCCASION TO MAKE THE DEVIA TION FOR THE YEAR UNDER CONSIDERATION. 4 8. AFTER CONSIDERING THE SUBMISSIONS OF BOTH THE PA RTIES AND MATERIAL ON RECORD, IT IS NOTICED THAT FOR THE ASSESSMENT YEAR 2007-08, SIMILAR DISALLOWANCE WAS MADE BY THE ASSESSING OFFICER AND THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) WHICH WAS PARTLY ACCEP TED VIDE ORDER DATED 22.1.2010 AGAINST WHICH THE DEPARTMENT PREFERRED AP PEAL BEFORE THE ITAT, JODHPUR BENCH AND CROSS OBJECTION WAS FILED BY THE ASSESSEE. THE ITAT VIDE ITS ORDER DATED 11.2.2011 DISMISSED THE DEPART MENTAL APPEAL AND ACCEPTED THE CROSS OBJECTION ON CERTAIN ISSUES AND REMAINING ISSUE WERE REMANDED BACK TO THE FILE OF THE ASSESSING OFFICER WITH CERTAIN DIRECTIONS, THEREAFTER, THE ASSESSING OFFICER PASSED THE ASSESS MENT ORDER U/S 143(3) / 254 VIDE ORDER DATED 30.11.2011 AND ALLOWED 80% DEP RECIATION IN RESPECT OF CIVIL WORK AND FOUNDATION, COMPONENT & ACCESSORIES AND POWER EVACUATION CHARGES. SINCE THE DEPARTMENT HAS ACCEPTED THE CLA IM IN THE PRECEDING YEAR AND THERE WAS NO CHANGE IN THE FACTS FOR THE YEAR U NDER CONSIDERATION, WE THEREFORE, DO NOT SEE ANY MERIT IN THESE GROUNDS I. E GROUND NOS. 1 TO 3 OF THE DEPARTMENTAL APPEAL. 9. VIDE GROUND NO.4, THE GRIEVANCE OF THE DEPARTMEN T RELATES TO THE RELIEF ALLOWED TO THE ASSESSEE OUT OF ADDITION MADE BY THE ASSESSING OFFICER FOR WAY EXPENSES. 10. THE FACTS RELATING TO THIS ISSUE IN BRIEF ARE T HAT THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE DEBITED AN AMOUNT OF RS. 28,37,814/- IN THE PROFIT AND LOSS ACCOUNT AS WAY EXPENSES. THE ASSESSEE SUB MITTED TO THE ASSESSING OFFICER THAT THESE WERE IN THE NATURE OF VARIOUS EX PENSES INCURRED BY DRIVERS 5 LIKE AIR-CHECK, PUNCTURE, REPAIR AND MAINTENANCE. IT WAS ALSO STATED THAT THESE KIND OF EXPENSES WERE REIMBURSED TO THE DRIVE RS TO KEEP THEM IN EMPLOYMENT. HOWEVER, THE ASSESSING OFFICER DISALL OWED A LUMPSUM AMOUNT OF RS. 2,10,000/-. 11. THE ASSESSEE CARRIED THE MATTER TO THE LD CIT(A ) AND SUBMITTED THAT IN THE PRECEDING YEAR, UNDER THIS HEAD RS. 2,00,000/- WAS DISALLOWED WHICH WAS RESTRICTED BY THE ITAT TO RS. 1,00,000/- VIDE ORDER DATED 11.2.2011 FOR THE ASSESSMENT YEAR 2007-08. IT WAS ALSO STATED TH AT THE EXPENSES WERE INCURRED WHOLLY AND FULLY FOR THE BUSINESS PURPOSES . 12. THE LD CIT(A) AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE RESTRICTED THE DISALLOWANCE TO THE TUNE OF RS. 1,10 ,000/- BY OBSERVING IN PARA 8.3 OF THE IMPUGNED ORDER, WHICH READS AS UNDE R:- 8.3. I HAVE CONSIDERED THE REASONS FOR DISALLOWANC E AND SUBMISSION OF THE APPELLANT AND I FIND THAT THE ASSESSING OFFICER WAS NOT JUSTIFIED IN DISALLOWING THE LUMP SUM AMOUNT OF RS. 2,10,000/- O UT OF TOTAL CLAIM OF RS. 28,37,814- BEING WAY EXPENSES. THE APPELLANT 'S NATURE OF BUSINESS IS MAINLY TRANSPORT AND IN TRANSPORT BUSIN ESS THE WAY EXPENSES ALWAYS REMAIN HIGH. FURTHER, IN THE AY 200 7-08, THE HON'BLE ITAT HAS ALSO RESTRICTED THE ADDITION OF RS 2,00,0 00/- TO RS. 1,00,000/- ONLY. CONSIDERING THESE FACTS, I ALSO FIND IT JUSTI FIABLE TO RESTRICT THE DISALLOWANCE TO THE TUNE OF RS. 1,10,000/-. 13. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES. IN THE PRESENT CASE, IT APPEARS THAT LD CIT(A) FOLLOWED TH E EARLIER ORDER OF THE ITAT WHILE SUSTAINING THE DISALLOWANCE AND NOTHING CONTRARY WAS BROUGHT 6 ON RECORD FOR THE YEAR UNDER CONSIDERATION. WE, TH EREFORE, DO NOT SEE ANY VALID GROUND TO INTERFERE WITH THE FINDINGS OF THE LD CIT(A) WHO HAD FOLLOWED THE EARLIER ORDER OF THE TRIBUNAL IN ASSES SEES OWN CASE WHILE SUSTAINING THE DISALLOWANCE OF RS. 1,10,000/-. 14. THE LAST ISSUE VIDE GROUND NO.5 RELATES TO THE RELIEF OUT OF ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF PERSONA L EXPENSES. 15. THE FACTS RELATING TO THIS ISSUE IN BRIEF ARE T HAT THE ASSESSING OFFICER DURING ASSESSMENT PROCEEDINGS NOTICED THAT A SUM OF RS. 40,36,618/- WAS DEBITED IN THE PROFIT AND LOSS ACCOUNT ON ACCOUNT O F REPAIR AND MAINTENANCE. THE ASSESSING OFFICER OBSERVED THAT THE BASIS OF AC COUNTING OF PART OF SUCH EXPENSES WAS A SHEET SUBMITTED BY THE DRIVERS AFTER RETURN FROM JOURNEY AND HARDLY ANYTHING MORE WAS SHOWN TO SUPPORT CLAIM. TH E ASSESSING OFFICER ALSO OBSERVED THAT THE PAYMENT WAS MADE IN CASH AND DRIVERS WERE UNDER THE DIRECT CONTROL OF THE ASSESSEE, THE AMOUNT CLAIMED COULD HAVE BEEN MANIPULATED AS PER WILL. THE ASSESSING OFFICER MAD E A LUMPSUM DISALLOWANCE OF RS. 1,05,000/-. 16. THE ASSESSEE CARRIED THE MATTER TO THE LD CIT(A ), WHO OBSERVED THAT IN THE PRECEDING YEAR I.E. 2007-08, UNDER SIMILAR H EAD, RS. 1,00,000/- WAS DISALLOWED WHICH WAS RESTRICTED BY THE ITAT VIDE OR DER DATED 11.2.2011 TO RS. 50,000/-. THE LD CIT(A) ALSO RESTRICTED THE DI SALLOWANCE TO THE TUNE OF RS. 55,000/- NOW THE DEPARTMENT IS IN APPEAL. 7 17. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES ON THIS ISSUE AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN THE PRESENT CASE, IT IS NOTICED THAT THE LD CIT(A) WHILE SUSTAINING THE DIS ALLOWANCE OF RS. 55,000/- FOLLOWED THE EARLIER ORDER OF THE TRIBUNAL FOR THE ASSESSMENT YEAR 2007-08 IN ASSESSEES OWN CASE AND NOTHING CONTRARY TO THE SAID DECISION WAS BROUGHT ON RECORD BY THE DEPARTMENT. WE, THEREFORE , DO NOT SEE ANY VALID GROUND TO INTERFERE WITH THE FINDINGS OF THE LD CIT (A) ON THIS ISSUE. 18. IN THE RESULT, THE APPEAL IS DISMISSED. (ORDER PRONOUNCED IN THE OPEN COURT ON 20.12.2012) SD/- SD/- (HARI OM MARATHA) (N.K.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMER DATED : 20 TH DECEMBER, 2012 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR ASSISTANT REGISTRAR