Jayendra Panchapakesan, CHENNAI V. ACIT Non Corporate Circle 20(1), CHENNAI

ITA 2773/CHNY/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 0155 (ITAT-CHENNAI)
• Duration Of Justice: 9 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-06-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2013-2014
• Appeal Filed On: 26-09-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS C YAMUNA
• Assessee Lawyers: B RAMAKRISHNAN
• Keywords: Depreciation

Judgement Text

, , IN THE INCOME-TAX APPELLATE TRIBUNAL C BENCH, CHENNAI . , , BEFORE SHRI DUVVURU RL REDDY, JUDICIAL MEMBER & SHRI S. JAYARAMAN, ACCOUNTANT MEMBER ./ I.T.A.NO.2773/CHNY/2018 / ASSESSMENT YEAR :2013-14 SHRI JAYENDRA PANCHAPAKESAN, 9, 2A PADUKA APARTMENTS, 1 CROSS STREET, CIT COLONY, MYLAPORE, CHENNAI 600 004. [PAN:AFVPP5428F] VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, NON-CORPORATE CIRCLE 20(1), CHENNAI. ( /APPELLANT ) ( / RESPONDENT ) / APPELLANT BY : SHRI B. RAMAKRISHNAN, C.A. / RESPONDENT BY : MRS. C. YAMUNA, JCIT / DATE OF HEARING : 24.06.2019 /DATE OF PRONOUNCEMENT : 26.06.2019 / O R D E R PER DUVVURU RL REDDY, JUDICIAL MEMBER: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) 14, CHENNAI DATED 28.06.2018 RELEVANT TO THE ASSESSMENT YEAR 2013-14. THE ONLY EFFECTIVE GROUND RAISED IN THE APPEAL OF THE ASSESSEE IS THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF DEPRECIATION CLAIMED BY THE ASSESSEE AMOUNTING TO .1,54,875/-. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED HIS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2013-14 ON 02.08.2013 ADMITTING TOTAL INCOME OF I.T.A. NO.2773/CHNY/18 2 .53,27,890/-. THE CASE WAS SELECTED FOR SCRUTINY. AGAINST THE STATUTORY NOTICES, THE ASSESSEE FILED THE DETAILS. ON PERUSAL OF THE PARTICULARS FILED BY THE ASSESSEE, THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS LEASED OUT THE PASSAT CAR OWNED BY HIM TO THE COMPANY REAL IMAGE MEDIA TECHNOLOGIES PVT. LTD. IN WHICH, HE IS THE DIRECTOR. THE LEASE RENT WAS DISCLOSED BY THE ASSESSEE UNDER OTHER SOURCES. HE HAS CLAIMED EXPENSES UNDER SECTION 57 OF THE ACT BEING DEPRECIATION ON CAR. THE ASSESSING OFFICER OBSERVED THAT THE PERSONAL USE OF THE CAR CANNOT BE RULED OUT, ONE THIRD OF THE DEPRECIATION CLAIMED BY THE ASSESSEE WAS DISALLOWED AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. ON APPEAL, THE LD. CIT(A) CONFIRMED THE DISALLOWANCE. 3. ON BEING AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 4. WE HAVE HEARD BOTH THE SIDES, PERUSED THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. IN THIS CASE, THE ASSESSEE HAS LEASED OUT THE PASSAT CAR OWNED BY HIM TO THE COMPANY, REAL IMAGE MEDIA TECHNOLOGIES PVT. LTD., WHERE, HE IS THE DIRECTOR. COPY OF THE LEASE AGREEMENT WAS DULY FILED BEFORE THE DEPARTMENT, WHICH IS NOT IN DISPUTE. THE ASSESSEE WAS IN RECEIPT OF LEASE RENT AND THE SAME WAS OFFERED TO TAX UNDER THE HEAD INCOME FROM OTHER SOURCES. THE COMPANY HAS PROVIDED CAR FACILITY TO THE ASSESSEE, WHICH FORMS PART OF THE ASSESSEES SALARY AS PERQUISITE. THE SAME WAS OFFERED TO TAX UNDER THE HEAD SALARY IN I.T.A. NO.2773/CHNY/18 3 THE RETURN FILED BY THE ASSESSEE. THE PRESUMPTION OF THE ASSESSING OFFICER THAT THE PERSONAL USE OF THE CAR CANNOT BE RULED OUT AND DISALLOWED ONE THIRD OF THE DEPRECIATION CLAIMED BY THE ASSESSEE IS NOT ACCEPTABLE. LEASING OUT OF CAR TO THE COMPANY HAS NOTHING TO DO WITH CAR FACILITY PROVIDED BY THE COMPANY TO THE ASSESSEE, SINCE BOTH THE TRANSACTIONS ARE DISTINCT. THE ASSESSEE IS VERY WELL ENTITLED TO CLAIM DEPRECIATION ON THE CAR LEASED OUT TO THE COMPANY SINCE THE ASSESSEE HAS ADMITTED THE LEASE RENT FOR TAXATION. FORM 16 OF THE ASSESSEE CLEARLY ESTABLISHES THAT THE ASSESSEE HAS BEEN PROVIDED WITH TRANSPORT FACILITY. UNDER THESE FACTS AND CIRCUMSTANCES, WE DIRECT THE ASSESSING OFFICER TO ALLOW THE DEPRECIATION IN FULL AS CLAIMED BY THE ASSESSEE. 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON THE 26 TH JUNE, 2019 AT CHENNAI. SD/ - SD/ - (S. JAYARAMAN) ACCOUNTANT MEMBER (DUVVURU RL REDDY) JUDICIAL MEMBER CHENNAI, DATED, THE 26.06.2019 VM/- /COPY TO: 1. / APPELLANT, 2. / RESPONDENT, 3. ( ) /CIT(A), 4. /CIT, 5. /DR & 6. /GF.