PURNIMA P. DHOTRE, MUMBAI V. ITO 19(3)(3), MUMBAI

ITA 288/MUM/2013

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3828 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-04-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 09-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: NITIN V KULKARNI
• Keywords: Business income; Depreciation; Business expenditure
• Section: 37(1)

Judgement Text

. , IN THE INCOME TAX APPELLATE TRIBUNAL SMC , BENCH MUMBAI , BEFORE SHRI R. K. GUPTA , JM ITA NO. 288 / MUM/ 20 1 3 ( ASSESSMENT YEAR : 200 9 - 20 10 ) PURNIMA P. DHOTRE, M.K.HERWADKAR & CO., 1, KAKAD INDUSTRIAL ESTATE, S.KEER MARG, OFF. L.J.ROAD, MAHIM, MUMBAI - 400 016 VS. ITO 19(3)(3), MUMBAI PAN/GIR NO. : A DPPD 2155 F ( APPELLANT ) .. ( RESPONDENT ) /ASSESSEE BY : SHRI NITIN V. KULKARNI /REVENUE BY : SMT. JOTHILAKSHMI NAYAK DATE OF HEARING : 2 ND APRIL , 201 3 DATE OF PRONOUNCEMENT : 10 TH APRIL , 2013 O R D E R TH IS APPEAL HAS BEEN PREFERRED BY THE ASSESSEE AGAINST THE ORDER DATED 4 - 9 - 2012 OF LEANED CIT(A) - 30 , MUMBAI RELA TING TO THE ASSESSMENT YEAR 200 9 - 10 . 2 . THE ASSESSEE IS OBJECTING IN CONFIRMING THE DISALLOWANCE OF BUSINESS EXPENSE RELATING TO ONE TIME ROAD TAX OF RS.50,000/ - AND CAR INSURANCE CHARGES OF RS.19,511/ - AND NOT ALLOWING THE DEPRECIATION ON THE CAR RENTED BY THE ASSESSEE. ITA NO. 288 /20 1 3 2 3 . BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HAS LEASED OUT CAR AND RECEIVED LEASE RENT ALS AMOUNTING TO RS. 1,35,000/ - . AGAINST THIS INCOME THE ASSESSEE CLAIMED ONE TIME ROAD TAX OF RS. 50,000/ - INTEREST SON CAR LOAN OF RS.44,766/ - , INSURANCE OF RS. 19,511/ - AND DEPRECIATION OF RS.1,15,440/ - . THE ASSESSEE SHOWN NET LOSS OF RS. 94,711/ - . THE AO N OTICED THAT THE ASSESSEE HAS CLAIMED THE ABOVE MENTIONED EXPENSES AS BUSINESS EXPENSES UNDER SECTION 37(1) OF THE ACT AGAINST THE RENTAL INCOME. AFTER CONSIDERING THE SUBMISSIONS, THE AO ALLOWED THE INTEREST PAID ON CAR LOAN OF RS. 44,766/ - , AND DISALLOWED REMAINING EXPENSES TREATING THE SAME AS NOT FOR BUSINESS PURPOSE. HOWEVER, THE ASSESSMENT OF THE ASSESSEE WAS COMPUTED ACCEPTING THE RETURN OF INCOME AS BUSINESS INCOME. IN APPEAL, LEARNED CIT(A ) CONFIRMED THE DISALLOWANCE MADE BY THE AO . 4 . AFTER CONSI DERING THE SUBMISSION S AND PERUSING THE ORDER OF LEARNED CIT(A) , I FOUND THAT THE ASSESSEE DESERVES TO SUCCEED IN HER APPEAL . IT IS SEEN THAT THE AO HIMSELF HAS ACCEPTED THE BUSINESS INCOME OUT OF LEASE RENTAL ON ACCOUNT OF CAR LEASED OUT. THEREFORE, IN MY CONSIDERED VIEW, THE ENTIRE EXPENDITURE CLAIMED AGAINST THE BUSINESS INCOME IS ALLOWABLE, T AX PAID FOR THE SAME CAR IS ALLOWABLE AND DEPRECIATION ON CAR IS ALSO ALLOWABLE. SIMILARLY, THE INSURANCE ON THE CAR IS ALSO ALLOWABLE BECAUSE THE CAR WAS LEASED OU T BY THE ASSESSEE AND RENTAL INCOME WAS SHOWN AS BUSINESS INCOME. THEREFORE, THE ENTIRE EXPENDITURE INCURRED ON CAR IS ALLOWABLE . ITA NO. 288 /20 1 3 3 ACCORDINGLY, I ALLOW ALL THE EXPENDITURE CLAIMED BY THE ASSESSEE AND DIRECT THE AO TO MODIFY HIS ORDER SUITABLY. \ 5 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 10 TH DAY OF APR.2013 201 3 SD/ - ( ) ( R.K.GUPTA ) / JUDICIAL MEMBER MUMBAI ; DATED : 1 0 /04/2013 /PKM , PS COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / THE CIT(A) , MUMBAI. 4. / CIT 5. / DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY// / BY ORDER, ( ASSTT. REGISTRAR) / ITAT, MUMBAI