PHARMABEST INVESTMENTS P.LTD, MUMBAI V. ACIT CIR 7(1), MUMBAI

ITA 3165/MUM/2013

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 2152 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 7 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2015
• Appeal Filed By: Assessee
• Bench Allotted: C
• Next Hearing Date: 09-02-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 25-04-2013
• Court: TRIBUNAL
• Department Lawyers: ARVIND KUMARDR
• Assessee Lawyers: B V JAHVERI
• Keywords: Depreciation
• Section: 143(3)

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES C, MUMBAI , , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI ASHWANI TANEJA, ACCOUNTANT MEMBER ITA NO.3165/MUM/2013 ASSESSMENT YEAR: 2009-10 PHARMABEST INVESTMENT P. LTD., 20, DR. E. MOSES ROAD, MAHALAXMI, MUMBAI-400011. / VS. ACIT - CIRCLE 7(1), AAYAKAR BHAVAN, 6 TH FLOOR, R.NO.622,M.K. RD. MUMBAI- 400020 (AS SESSEE ) (REVENUE) P.A. NO. AAACP2795G !' / ASSESSEE BY SHRI B. V. JAHVERI (AR) / REVENUE BY SHRI ARVIND KUMAR (DR) # $ % & / DATE OF HEARING : 19/11/2015 % & / DATE OF ORDER: 30/11/2015 / O R D E R PER ASHWANI TANEJA (ACCOUNTANT MEMBER): THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-1 3, MUMBAI {(IN SHORT LD. CIT(A)} DATED 13.05.2013 FOR THE 2 ASSESSMENT YEAR 2009-10, DECIDED AGAINST THE ASSESS MENT ORDER PASSED BY THE ASSESSING OFFICER (IN SHORT AO ) U/S 143(3) OF THE ACT. 2 . DURING THE COURSE OF HEARING, SHRI B.V. JHAVERI, AUTHORISED REPRESENTATIVE (LD COUNSEL) ON BEHALF OF THE ASSESSEE AND SHRI ARVIND KUMAR, DEPARTMENTAL REPRESENTATIVE (LD. DR) ON BEHALF OF THE REVENUE, A RGUED THE CASE. 3. THE SOLITARY GROUND RAISED IN THIS APPEAL IS WITH REGARD TO DISALLOWANCE OF RS.7,76,456/- OUT OF DEPRECIATION O F RS.15,52,912/- ON THE OFFICE BUILDING OF THE ASSESS EE. 3.1. DURING THE COURSE OF ASSESSMENT PROCEEDINGS LD. AO MADE DISALLOWANCE @ OF 50% OF THE TOTAL DEPRECIATIO N CLAIMED BY THE ASSESSEE ON THE GROUND THAT ALTHOUGH THE ASS ESSEE HAS BEEN ABLE TO SHOW OWNERSHIP OF THE ASSESSEE IN THE NAME OF THE ASSESSEE COMPANY BUT THE ASSESSEE WAS NOT ABLE TO ESTABLISH THAT THIS PROPERTY WAS ACTUALLY USED BY I T FOR THE BUSINESS PURPOSE. IN VIEW OF THESE FACTS, TAKING HE LP OF PROVISIONS OF SECTION 38(2) OF THE ACT, THE AO MADE DISALLOWANCE @ 50% OF THE TOTAL DEPRECIATION ON THE GROUND THAT THE ASSESSEE WAS NOT ABLE TO PROVE THAT OFFICE BUILDING WAS USED FULLY FOR THE BUSINESS OF THE ASSESSEE. 3.2 BEING AGGRIEVED, THE ASSESSEE CONTESTED THE MATTER IN FIRST APPEAL BEFORE THE LD. CIT(A) WHEREIN DETAILED SUBMI SSIONS 3 WERE MADE, BUT LD. CIT(A) CONFIRMED THE DISALLOWANC E MADE BY THE AO. 3.3. BEFORE US, LD. COUNSEL OF THE ASSESSEE HAS SUBMITT ED THAT ASSESSEE WAS USING SAID PROPERTY AS IT CORPORATE OF FICE, AND THAT THE SAID PROPERTY WAS USED EXCESSIVELY FOR THE BUSINESS PURPOSE OF THE ASSESSEE AND NO OTHER USE OF THE SAI D PROPERTY WAS MADE. IT WAS ALSO SUBMITTED THAT THE AO WAS NOT ABLE TO BRING ANY CONTRARY EVIDENCES ON RECORD TO SHOW THAT THE AFORESAID PROPERTY WAS USED BY ANY OTHER PERSON AND FOR ANY OTHER USAGE, AND THEREFORE, DISALLOWANCE HAS BEEN M ADE BY THE AO ON THE BASIS OF PRESUMPTIONS ONLY. 3.4. ON THE OTHER HAND LD. DR HAS SUBMITTED THAT THE ON US WAS UPON THE ASSESSEE TO PROVE THAT THE ASSESSEE WA S ABLE TO USE THE PROPERTY FULLY FOR ITS BUSINESS PURPOSE, AN D THEREFORE, AO HAS RIGHTLY MADE THE DISALLOWANCE. 3.5 WE HAVE GONE THROUGH THE SUBMISSION MADE BY BOTH T HE SIDES. UNDISPUTED FACTS ARE THAT IMPUGNED OFFICE PR OPERTY WAS CORPORATE OFFICE OF THE ASSESSEE COMPANY. THE ASSES SEES CLAIM WAS THAT THE SAID OFFICE PROPERTY HAS BEEN USED FOR THE PURPOSE OF ASSESSEE COMPANY ONLY. THE AO HAS ALLOW ED 50% OF THE TOTAL DEPRECIATION ON THE SAID PROPERTY AND THEREBY IMPLIEDLY ACCEPTING THAT THE SAID ASSET WAS USED FO R THE PURPOSE OF THE BUSINESS OF THE ASSESSEE, AT LEAST P ARTLY IF NOT FULLY. BUT THERE ARE NO EVIDENCES WITH THE DEPARTME NT TO SHOW ANY OTHER USER, OTHER THAN FOR THE PURPOSE OF BUSIN ESS OF THE ASSESSEE. BY ACCEPTING PART USER OF THE ASSET, THE AO HAS 4 ACCEPTED THE FACTUM OF USER OF THE ASSET FOR THE PU RPOSE OF THE ASSESSEE COMPANY. UNDER THESE FACTS AND CIRCUMSTANC ES, IN ABSENCE OF ANY CONTRARY MATERIAL, THE AO SHOULD NOT HAVE DISALLOWED 50% OF THE TOTAL AMOUNT OF DEPRECIATION MERELY ON THE BASIS OF PRESUMPTIONS. KEEPING IN VIEW TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND THAT DISALLO WANCE HAS BEEN WRONGLY MADE BY THE AO AND THEREFORE, THE SAME DESERVES TO BE DELETED. THUS, THE GROUND RAISED BY THE ASSESSEE IS ALLOWED. 4 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLO WED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH NOVEMBER, 2015. SD/- (JOGINDER SINGH) SD/- (ASHWANI TANEJA) '# / JUDICIAL MEMBER $# / ACCOUNTANT MEMBER # $ MUMBAI; ( DATED ;30/11/2015 CTX? P.S/. .. %'&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. *+, / THE APPELLANT 2. -.+, / THE RESPONDENT. 3. # 0 ( * ) / THE CIT, MUMBAI. 4. # 0 / CIT(A)- , MUMBAI 5. 34 - , *& 5 , # $ / DR, ITAT, MUMBAI 6. 6! 7$ / GUARD FILE. / BY ORDER, .3* - //TRUE COPY// / (DY./ASSTT. REGISTRAR) , # $ / ITAT, MUMBAI