Forward Leather Company, CHENNAI V. DCIT, CHENNAI

ITA 314/CHNY/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 64262 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-09-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 11-09-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 14-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GURU BHASHYAM JT
• Assessee Lawyers: U MKHALLULLAH
• Keywords: Depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : CHENNAI [BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER] I.T.A.NO.314/MDS/2012 ASSESSMENT YEAR : 2008-09 M/S FORWARD LEATHER COMPANY RAJA MUTTIAH ROAD CHENNAI - 3 VS THE DY. CIT BUSINESS CIRCLE X CHENNAI [PAN AAAFF 1046M] (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI U.MKHALLULLAH, C.A RESPONDENT BY : SHRI GURU BHASHYAM, JT. CIT DATE OF HEARING : 11.09.2012 DATE OF PRONOUNCEMENT : 13.09.2012 O R D E R PER N.S. SAINI, ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE ASSESSE E AGAINST THE ORDER OF THE CIT(A)-IV, CHENNAI, DATED 18.11.2011. 2. THE SOLE ISSUE INVOLVED IN THIS APPEAL IS THAT THE CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE OF GUEST HOUSE EXPENSES MADE BY THE ASSESSING OFFICER OF ` 10,40,052/-. I.T.A.NO. 314/12 :- 2 -: 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED TH E ORDERS OF THE LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD. IN THE INSTANT CASE, THE ASSESSEE CLAIMED ` 10,40,052/- AS DEDUCTION ON ACCOUNT OF GUEST HOUSE MAINTENANCE CHARGES. THE AS SESSING OFFICER DISALLOWED THE ENTIRE CLAIM OF ` 10,40,052/- WHICH WAS CONFIRMED BY THE CIT(A). IT WAS EXPLAINED BEFORE US THAT THE AS SESSING OFFICER DISALLOWED THE CLAIM BASED ON HIS FINDING THAT NO D EPRECIATION ON GUESTHOUSE WAS CLAIMED BY THE ASSESSEE FOR THE REA SON THAT GUESTHOUSE WAS USED FOR PARTNERS PERSONAL USE. TH E A.R OF THE ASSESSEE SUBMITTED AT BAR THAT IN THE SUBSEQUENT YE AR TO THE YEAR UNDER CONSIDERATION THE GUESTHOUSE WAS USED BY THE PARTNER FOR HIS PERSONAL USE AND IN THAT SUBSEQUENT YEAR NO DEPRECI ATION WAS CLAIMED. HE CLAIMED THAT DURING THE YEAR UNDER CONSIDERATION THE GUESTHOUSE WAS USED FOR ITS FOREIGN CUSTOMERS. HE EXPLAINED T HAT THE FOREIGN CUSTOMERS WERE HOUSED IN THE GUESTHOUSE OF THE COMP ANY SO AS TO AVOID MEETING COMPETITORS WITH ITS CUSTOMERS. HE V EHEMENTLY ARGUED THAT DEPRECIATION ON GUESTHOUSE WAS CLAIMED BY THE ASSESSEE IN ITS RETURN OF INCOME AND WAS ALSO ALLOWED BY THE ASSESS ING OFFICER. HE ALSO SUBMITTED THAT DEPRECIATION ON GUESTHOUSE AND MAINTENANCE EXPENSES OF GUESTHOUSE WERE ALLOWED AS DEDUCTION T O THE ASSESSEE IN THE EARLIER YEARS. WE FIND THAT NO MATERIAL LIKE C OMPUTATION OF INCOME, FINANCIAL STATEMENTS, DEPRECIATION SCHEDULE ETC. WE RE FILED BEFORE US BY I.T.A.NO. 314/12 :- 3 -: EITHER OF THE PARTIES AND THEREFORE, WE ARE NOT IN A POSITION TO VERIFY WHETHER DEPRECIATION WAS CLAIMED BY THE ASSESSEE A ND WAS ALLOWED BY THE ASSESSING OFFICER. 4. BOTH THE PARTIES BEFORE US AGREED THAT TO VERIFY TH E FACT, THE ISSUE SHOULD BE RESTORED TO THE FILE OF THE ASSESSI NG OFFICER. WE, THEREFORE, RESTORE THE ISSUE BACK TO THE FILE OF T HE ASSESSING OFFICER AND DIRECT HIM TO VERIFY WHETHER DEPRECIATION ON GU ESTHOUSE WAS CLAIMED AND ALLOWED TO THE ASSESSEE DURING THE YEA R UNDER CONSIDERATION OR NOT AND THEREAFTER ADJUDICATE THE ISSUE AFRESH AS PER LAW AFTER PROPER VERIFICATION. THUS, THE GROUNDS OF APPEAL OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THURSDAY, THE 13 TH DAY OF SEPTEMBER, 2012, AT CHENNAI. SD/- SD/- (SATBEER SINGH GODARA) JUDICIAL MEMBER (N.S.SAINI) ACCOUNTANT MEMBER DATED: 13 TH SEPTEMBER, 2012 RD COPY TO: APPELLANT/RESPONDENT/CIT(A)/CIT/DR