Shri Jayesh J.Dave, Baroda V. The ACIT.,Circle-5, Baroda

ITA 3199/AHD/2009

• Counselvise Citation: 319920514 RSA 2009
• Duration Of Justice: 1 year(s) 9 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-09-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 01-09-2011
• Assessment Year: 2003-2004
• Appeal Filed On: 30-11-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: N M DARJI
• Keywords: Depreciation; Business expenditure; Opportunity of being heard

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH AHMEDABAD (BEFORE S/SHRI BHAVNESH SAINI, JM AND A. N. PAHUJA, AM) ITA NO.3199/AHD/2009 A. Y.: 2003-04 JAYESH J. DAVE, B-902, AISHWARYA COMPLEX, NR. ELLORA PARK VEGETABLE MARKET, ELLORAPARK, BARODA VS THE A. C. I. T., CIRCLE-5, 5 TH FLOOR, AAYAKAR BHAVAN, RACE COURSE, BARODA PA NO. AANPD 1413 D (APPELLANT) (RESPONDENT) APPELLANT BY SHRI N. M. DARJI, AR RESPONDENT BY SHRI VINOD TANWANI, SR. DR DATE OF HEARING: 01-09-2011 DATE OF PRONOUNCEMENT: 02-09-2011 O R D E R PER BHAVNESH SAINI: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LEARNED CIT(A)-V, BARODA DATED 17 TH SEPTEMBER, 2009, FOR ASSESSMENT YEAR 2003-04. 2. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF BO TH THE PARTIES, PERUSED THE FINDINGS OF THE AUTHORITIES BELOW AND C ONSIDERED THE MATERIAL AVAILABLE ON RECORD. 3. ON GROUND NO.1, THE ASSESSEE CHALLENGED THE ORD ER OF THE LEARNED CIT(A) IN CONFIRMING THE DISALLOWANCE OF IN TEREST ON CAR LOAN IN A SUM OF RS.54,093/- ON ACCOUNT OF PERSONAL USE. IT IS FURTHER STATED IN THE GROUND THAT THE LEARNED CIT(A) PASSED THE APPELLATE ITA NO.3199/AHD/2009 JAYESH J. DAVE VS ACIT, CIRCLE-5, BARODA 2 ORDER WITHOUT GIVING ANY FINDING ON THE ABOVE ISSUE . THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THIS GROUND IS NOT DECIDED BY THE LEARNED CIT(A) IN THE APPELLATE ORDER. THE LEAR NED DR SUBMITTED THAT SINCE THIS GROUND IS NOT DECIDED BY THE LEARNE D CIT(A), THEREFORE, THE MATTER MAY BE RESTORED TO HIS FILE FOR DISPOSIN G OF THE SAME GROUND IN ACCORDANCE WITH LAW. 4. ON CONSIDERATION OF THE ABOVE FACTS, WE ARE OF T HE VIEW SINCE THIS GROUND IS NOT DECIDED BY THE LEARNED CIT(A), T HEREFORE, IT WOULD BE APPROPRIATE TO ASIDE THE ORDER OF THE LEARNED CI T(A) TO THAT EXTENT AND RESTORE THIS ISSUE TO HIS FILE WITH DIRECTION T O DECIDE THIS GROUND AFRESH IN ACCORDANCE WITH LAW BY GIVING REASONABLE SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. IN THE RESULT, GROUND NO.1 OF THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATIS TICAL PURPOSE. 5. THE ASSESSEE ALSO RAISED ADDITIONAL GROUND OF AP PEAL CHALLENGING THE ORDER OF THE LEARNED CIT(A) IN CONF IRMING DISALLOWANCE OF DEPRECIATION ON CAR RESTRICTING TO RS.55,356/- BEING 20% OF RS.2,26,783/-. THE LEARNED COUNSEL FOR THE A SSESSEE SUBMITTED THAT THIS ISSUE IS ARISING OUT OF THE ORD ER OF THE AO AND THE LEARNED CIT(A) AND DUE TO OVERSIGHT THE SAME COULD NOT BE RAISED IN THE GROUND OF APPEAL BEFORE THE TRIBUNAL, THEREFORE , THE SAME MAY BE ADMITTED FOR HEARING. 6. ON CONSIDERATION OF THE ABOVE FACT, WE ARE OF TH E VIEW THAT SINCE THE ISSUE IS ARISING OUT OF THE IMPUGNED ORDE RS AND DUE TO OVERSIGHT THE SAME COULD NOT BE RAISED IN THE MAIN GROUND OF APPEAL, THEREFORE, THE SAME IS ADMITTED FOR HEARING. ITA NO.3199/AHD/2009 JAYESH J. DAVE VS ACIT, CIRCLE-5, BARODA 3 7. THE LEARNED COUNSEL FOR THE ASSESSEE ON MERIT SU BMITTED THAT THE CAR WAS OWNED BY THE ASSESSEE WHICH WAS USED FO R THE PURPOSE OF BUSINESS AS THE ASSESSEE WAS ACTIVE PARTNER IN T HE FIRM AND ALSO DIRECTOR IN VARIOUS COMPANIES AND SINCE THE CAR WAS USED FOR THE PURPOSE OF BUSINESS, THEREFORE, NO DISALLOWANCE SHO ULD BE MADE OUT OF DEPRECIATION. HE HAS FURTHER SUBMITTED THAT AT T HE MOST ONE TENTH MAY BE DISALLOWED AND RELIED UPON THE ORDERS OF ITA T MUMBAI BENCH IN THE CASE OF S. S. GUPTA VS ITO, 68 TTJ 497 AND I N THE CASE OF MUKESH K. SHAH VS ITO, 92 TTJ 1060. ON THE OTHER H AND, THE LEARNED DR RELIED UPON THE ORDERS OF THE AUTHORITIE S BELOW. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. THE AS SESSEE CLAIMED DEPRECIATION ON MOTOR CAR UNDER THE HEAD I NCOME FROM THE FIRMS. THE ASSESSEE WAS REQUIRED TO PROVE THAT THE ABOVE EXPENSES HAVE BEEN INCURRED WHOLLY AND EXCLUSIVELY TO EARN T HE SAID INCOME. THE ASSESSEE SUBMITTED BEFORE THE AO THAT HE OWNED THE CAR AND USED FOR THE PURPOSE OF BUSINESS. IT WAS ALSO EXPLA INED THAT THE ASSESSEE IS ACTIVE PARTNER IN MANY FIRMS AND DIRECT OR IN VARIOUS COMPANIES; THEREFORE, HE HAS TO TRAVEL A LOT. THE A O HAS HOWEVER, NOTED THAT SINCE THE ASSESSEE CLAIMED DEDUCTION ON ACCOUNT OF BUSINESS EXPENSES, THEREFORE, ONUS IS UPON THE ASSE SSEE TO JUSTIFY THE CLAIM. THE AO NOTED THAT PERSONAL USE OF VEHICL E BY THE ASSESSEE AND HIS FAMILY MEMBERS CANNOT BE RULED OUT BECAUSE THE ASSESSEE HAS NOT MAINTAINED ANY LOG BOOK OR ANY SEPARATE REG ISTER FOR THE USE OF THE CAR FOR PERSONAL PURPOSES. IN THE ABSENCE OF ANY LOG BOOK, THE CLAIM OF THE ASSESSEE WAS NOT ACCEPTED THAT THE CAR WAS USED EXCLUSIVELY FOR THE PURPOSE OF BUSINESS. THE AO ACC ORDINGLY, ITA NO.3199/AHD/2009 JAYESH J. DAVE VS ACIT, CIRCLE-5, BARODA 4 DISALLOWED 50% OF THE EXPENSES. THE LEARNED CIT(A) CONSIDERING THE PROVISIONS OF SECTION 38(2) OF THE IT ACT AND THE F ACTS OF THE CASE CONFIRMED THE ORDER OF THE AO AND ALSO NOTED THAT T HE ASSESSEE FAIRLY CONCEDED THE PERSONAL USE OF THE VEHICLE. IN VIEW OF THE ABOVE, THE LEARNED CIT(A) RESTRICTED THE ABOVE ADDITION TO RS. 55,356/- BEING 20% OF RS.2,26,783/-. IN VIEW OF THE ABOVE FACTS IT IS CLEAR THAT THE ASSESSEE CONCEDED BEFORE THE LEARNED CIT(A) THAT TH ERE WAS PERSONAL USER OF THE VEHICLE. THE SAME FACT WAS AL SO CONFIRMED BECAUSE OF THE FACT THAT THE ASSESSEE DID NOT MAINT AIN ANY LOG BOOK TO PROVE THAT VEHICLE WAS USED FOR THE PURPOSE OF B USINESS ONLY. SINCE THE CLAIM OF DEDUCTION IS ACCEPTED BEFORE THE LEARNED CIT(A) AND THE LEARNED CIT(A) HAS ALREADY TAKEN A REASONAB LE VIEW TO RESTRICT THE DISALLOWANCE TO 20%, THEREFORE, NO FUR THER REDUCTION IN THE ADDITION IS REQUIRED AS IS ARGUED BY THE LEARNED CO UNSEL FOR THE ASSESSEE. WHETHER ONE TENTH OF THE DEPRECIATION IS TO BE CONSIDERED OR OTHERWISE DEPENDS UPON THE FACTS OF EACH AND EVE RY CASE. IN THE FACTS AND CIRCUMSTANCES NOTED ABOVE AND PARTICULARL Y WHEN THE ASSESSEE CONCEDED THE CLAIM BEFORE THE LEARNED CIT( A), THE DECISIONS CITED BY THE LEARNED COUNSEL FOR THE ASSE SSEE CANNOT BE APPLIED TO THE FACTS OF THE CASE. THERE IS NO MERIT IN THIS ADDITIONAL GROUND OF APPEAL OF THE ASSESSEE. THE SAME IS DISMI SSED. 9. NO OTHER POINT IS ARGUED OR PRESSED. ITA NO.3199/AHD/2009 JAYESH J. DAVE VS ACIT, CIRCLE-5, BARODA 5 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (A. N. PAHUJA) ACCOUNTANT MEMBER (BHAVNESH SAINI) JUDICIAL MEMBER LAKSHMIKANT/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER D Y. REGISTRAR, ITAT, AHMEDABAD