M/s. Aayojan Developers, Surat V. The ACIT.,Circle-3, Surat

ITA 2783/AHD/2009

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 1999 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-12-2009
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Assessment Year: 2006-2007
• Appeal Filed On: 09-10-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: C K MISHRA
• Keywords: Depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH D AHMEDABAD BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER AND SHRI A.N.PHAUJA, ACCOUNTANT MEMBER ITA NO.2783/AHD/2009 ASSESSMENT YEAR:2006-07 DRAFTEED:15.12.09 M/S. AAYOJAN DEVELOPERS MANTHAN 1 ST FLOOR, MUKTANAND NAGAR, ADAJAN, SURAT PAN NO.AAMFA3006E V/S. ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE-3, SURAT (APPELLANT) .. (RESPONDENT) APPELLANT BY :- WRITTEN SUBMISSION RESPONDENT BY:- SHRI C.K.MISHRA, SR. DR DATE OF ORDER RESERVED: 14/12/2009 O R D E R PER MAHAVIR SINGH, JUDICIAL MEMBER:- THIS APPEAL BY THE ASSESSEE IS ARISING OUT OF THE ORDER OF COMMISSIONER OF INCOME-TAX(APPEALS)-V, SURAT IN APPEAL NO.CAS-V/48/ 008-09 DATED 11-09-2009. THE ASSESSMENT WAS FRAMED BY THE ASSTT. COMMISSIONE R OF INCOME-TAX, CIRCLE-3, SURAT U/S.143(3) OF THE INCOME-TAX ACT, 1961 (HEREI NAFTER REFERRED TO AS THE ACT) VIDE HIS ORDER DATED 27-10-2008 FOR THE ASSESSMENT YEAR 2006-07. 2. THE ONLY ISSUE IN THIS APPEAL OF HE ASSESSEE IS AGAINST THE ORDER OF CIT(A) IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN D ISALLOWANCE OF DEPRECIATION ON SKODA CAR AMOUNTING TO RS.1,63,538/-. 3. WE HAVE HEARD THE LD. SR. DEPARTMENTAL REPRESENT ATIVE AND GONE THROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. THE BRIEF FACTS ARE THAT THE ASSESSEE IS AN ESTATE DEVELOPER AND FILED ITS RETURN OF INCOME FOR THE RELEVANT ASSESSMENT YEAR 2006-07 DECLARING TOTAL INCOME AT RS.12,46,792/- ON GROSS SALE OF RS.48,65,600/-. ITA NO.2783/AHD/2009 A.Y. 2006-07 M/S. AAYOJAN DEVELOPERS V. ACIT CIR-3, SURAT PAGE 2 THE ASSESSING OFFICER DURING THE COURSE OF ASSESSME NT PROCEEDINGS ON VERIFICATION ON PROFIT & LOSS A/C. AND DEPRECIATION CHART NOTED THAT THE ASSESSEE HAS CLAIMED DEPRECIATION ON TWO CARS, THE FOLLOWING ARE DETAILS OF DEPRECIATION AS:- PARTICULARS AMOUNTS (RS) 1. DEPRECIATION ON COROLLA CAR 1,55,067 2. DEPRECIATION ON SKODA CAR 1,63,538 THE ASSESSEE BEFORE THE ASSESSING OFFICER STATED TH AT IT IS NOT MAINTAINING SEPARATE REGISTER OF PERSONAL USER & BUSINESS USER OF THE AB OVE CARS AND IN THE ABSENCE OF THE ABOVE, THE AO DISALLOWED THE DEPRECIATION ON SK ODIA CAR IN ENTERITY AT RS.1,63,538/- AND ALLOWED ONLY ON COROLLA CAR AT RS .1,55,067/-. THE ASSESSEE CONTENDED THAT THE CAR EXPENSES ARE NECESSARY FOR I NSPECTION OF THE SITE BY THE PROSPECTIVE BUYERS AND THE ASSESSEE HAS ALSO FURNIS HED RETURN OF FBT AND IT WAS THE CONTENTION THAT BOTH THE CAR WERE USED FOR EXCLUSIV ELY BUSINESS PURPOSES. THE AO HAS NOT ACCEPTED THE PLEA OF THE ASSESSEE AND DISAL LOWED THE DEPRECIATION ON MOTOR CAR, I.E. SKODA CAR OF RS.1,63,538/-. AGGRIEVED, T HE ASSESSEE PREFERRED APPEAL BEFORE CIT(A) AND CIT(A) ALSO CONFIRMED THE ACTION OF THE ASSESSING OFFICER BY GIVING FOLLOWING FINDING IN PARA-3 OF HIS APPELLATE ORDER:- 4. THE BRIEF FACT OF THE CASE IS THAT THE APPELLAT E FIRM IS A LAND DEVELOPER. DURING THE YEAR UNDER CONSIDERATION, ONLY A SINGLE PIECE OF LAND IS SOLD. THE APPELLATE IS HAVING TWO CARS. THE APPELLATE HAS CLA IMED DEPRECIATION OF RS.1,55,067/- IN RESPECT OF CAROLA CAR AND RS.1,63, 538/- IN RESPECT OF SKODA CAR. IT WAS STATED BY THE APPELLATE THAT BOTH CARS ARE USED FOR BUSINESS PURPOSES. THE LAND WAS SITUATED VERY FAR FROM CITY. THE ASSESSING OFFICER REJECTED THE PLEA OF THE APPELLATE AND ALLOWED DEPR ECIATION ON ONLY ONE CAR USED FOR BUSINESS PURPOSE AND IN RESPECT OF THE OTH ER CAR, THE SAME WAS TREATED FOR PERSONAL PURPOSE OF THE APPELLANT AND D ISALLOWED DEPRECIATION OF RS.1,63,538/-. WE FIND THAT THE ASSESSING OFFICER HAS NOWHERE BROU GHT OUT THAT THE SKODA CAR WAS NOT USED IN THE BUSINESS PURPOSES BUT IT WAS THE CL AIM OF THE ASSESSEE FROM THE VERY BEGINNING THAT THIS CAR WAS USED FOR THE BUSINESS P URPOSES AND PARTICULARLY THE ASSESSEE IS A DEVELOPER FOR THE INSPECTION OF SITE BY THE PROSPECTIVE BUYER. THE ASSESSEE HAS ALSO FURNISHED RETURN OF FBT IN SUPPOR T OF ITS CLAIM. WE FIND THAT THE ASSESSEE HAS NOT NOTED THE PERSONAL USER OF THESE C ARS AND ACCORDINGLY REASONABLE DISALLOWANCE OF 1/5 TH CAN BE MADE. ACCORDINGLY, WE DIRECT THE ASSESSING OFFICER TO ITA NO.2783/AHD/2009 A.Y. 2006-07 M/S. AAYOJAN DEVELOPERS V. ACIT CIR-3, SURAT PAGE 3 RE-COMPUTE THE DEPRECIATION ON SKODA CAR AFTER MAKI NG DISALLOWANCE AT 1/5 TH OF THE DEPRECIATION AND RE-COMPUTE THE INCOME. ACCORDINGL Y, THIS ISSUE OF THE ASSESSEES APPEAL IS PARTLY ALLOWED. 4. IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 23/12/2009 SD/- SD/- (A.N.PHAUJA) (MAHAVIR SINGH) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) AHMEDABAD, DATED :23/12/2009 *DKP COPY OF THE ORDER FORWARDED TO :- 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT(APPEALS)-V, SURAT 4. THE CIT CONCERNS. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, /TRUE COPY/ DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD