DCIT 3(1)(1), MUMBAI V. ALD AUTOMOTIVE P.LTD, MUMBAI

ITA 3303/MUM/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 7891 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-03-2017
• Appeal Filed By: Department
• Bench Allotted: Not Allotted
• Assessment Year: 2010-2011
• Appeal Filed On: 01-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAHUL RAMANCIT
• Assessee Lawyers: BRIJMOHAN POORANMAL AGA RWAL
• Keywords: Depreciation
• Section: 32; 143(3)

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL H BENCH, MUMBAI BEFORE SHRI D . T . GARASIA , J.M. AND SHRI AS H A WANI TANEJA , A . M I.T.A. NO. 3303/MUM/2015 ASSESSMENT YEAR: 2010 - 011 DCIT3(1)(1) R.NO. 607, 6 TH FLOOR AAYAKAR BHAVAN, MUMBAI - 400020 VS. ALD AUTOMOTIVE PRIVATE LIMITED 13 TH FLOOR, MAKER CHAMBE R - IV NARIMAN POINT MUMBAI - 400021 PAN: AA FCA0924K (APPELLANT) : (RESPONDENT) APPELLANT BY : - SHRI RAHUL RAMAN,(CIT D.R.) RESPONDENT BY : - SHRI BRIJMOHAN POORANMAL AGARWAL DATE OF HEARING : - 01/02/2017 DATE OF PRONOUNCEMENT : - 22 /03 /2017 O R D E R PER D. T. GARASIA, JM : THE CAPTIONED APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE CIT(A) - 08, MUMBAI DATED 27/02/2015, PERTAINING TO THE ASSESSMENT YEAR 2010 - 11, WHICH IN TURN HAS ARISEN FROM THE ORDER PASSED BY THE ASSESSING OFFICER DATED 20/03 /2013 UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). 2. THE ONLY GROUND IN THIS APPEAL READS AS UNDER: ' WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) WAS JUSTIFIED 2 ALD AUTOMOTIVE P. LTD. ITA NO. 3303/M/2015 IN ALLOWING DEPRECIATION TO THE ASSESSEE ON VEHICLES GIVEN ON LEASE WITHOUT APPRECIATING THE FACT THAT THE VEHICLES WERE NOT REGISTERED IN THE NAME OF THE ASSESSEE'S NAME BUT IN THE NAME OF THE PARTIES USING THE VEHICLES AND THE SAME WERE ALSO DIRECTLY DELIVERED TO THE PARTIES USING IT.' 3. THE SHORT FACTS OF THE CASE ARE AS UNDER: THE ASSESSEE HAS CLAIMED THAT IT IS GIVING VEHICLES ON OPERATING LEASE BASIS AND ACCORDINGLY IT CLAIMED DEPRECIATION ON THE VEHICLES LEASED. HOWEVER, THE VEHICLES ARE REGISTERED IN THE NAME OF THE PARTIES WHO ARE USING THEM AND NOT IN THE NAME OF THE ASSESSEE. THE ASSESSEE CONTENDED THAT HE WAS GIVING VEHICLES ON OPERATING LEASE BASIS AND ACCORDING LY TO CLAIM ED DEP RECIATION ON THE VEHICLE LEASED, B UT THE A.O. DISALLOWED THE DEPRECIATION. 4. THE MATTER TRAVEL LED TO CIT(A) AN D CIT(A) HAS ALLOWED THE CLAIM OF THE ASSESSEE BY OBSERVING AS UNDER: - THE ISSUE IS COVERED BY THE JUDGMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF ICDS LTD. US CIT (2013) 350 ITR 527, WHEREIN IT HAS BEEN HELD THAT SECTION 2 (30) OF THE MOTOR VEHICLE ACT IS A DEEMING PROVISION THAT CREATES A LEGAL FICTION OF OWN ERSHIP IN FAVOUR OF LESSEE ONLY FOR THE PURPOSE OF THE MOTOR VEHICLE ACT. IT HAS BEEN HELD THERE IN THAT THE LESSOR, THE ASSESSEE WAS THE OWNER OF THE VEHICLES. AS THE OWNER, IT USED THE ASSETS IN THE COURSE OF ITS BUSINESS, SATISFYING BOTH REQUIREMENTS OF SECTION 32 OF THE ACT AND HENCE WAS ENTITLED TO CLAIM OF DEPRECIATION IN RESPECT OF ADDITION MADE TO THE TRUCKS, WHICH WERE LEASED OUT. I FIND FROM PARA 4.3 OF THE ASSESSMENT ORDER THAT THE AO HAS 3 ALD AUTOMOTIVE P. LTD. ITA NO. 3303/M/2015 RELIED ON THE ASSESSMENT PASSED U/S. 143(3) DATED 30 TH DECEMBER, 2010 FOR A.Y. 2008 - 09 IN MAKING AN ADDITION OF RS. 52,17,62,572/ - . HE HAS NOT BROUGHT ON RECORD ANY NEW MATERIAL WHILE MAKING THE ABOVE ADDITION FOR THE A.Y. 2010 - 11. IN VIEW OF THE SIMILAR FACTS IN THE PRESENT CASE AND THE POSITION OF LAW ENUNCI ATED BY THE HON'BLE SUPREME COURT DELINEATED HERE - IN - ABOVE, THE ADDITION OF RS. 52,17,62,572/ - MADE BY THE AO IS DELETED . 5. THE LD. AR SUBMITTED THAT A SIMILAR ISSUE HAD ASSESSEE IN ASSESSEES OWN CASE FOR AY 2007 - 08 TO 2009 - 10 WHEREIN THE TRIBUNAL HAS DISMISSED THE APPEAL OF THE AND THEREFORE, THE DEPARTMENTAL APPEAL MAY BE DISMISSED . THE LD. D.R. HAS NO OBJECTION IF THE MATTER IS DECIDED ACCORDINGLY . 6. WE HAVE HEARD THE RIVAL CONTENTION OF BOTH THE PARTIES . L OOKING TO THE FACTS AND CIRCUMSTA NCES OF THE CASE WE FIND THAT THE ISSUE IN C ONTROVERSY IS COVE RED IN AY 2007 - 08 AND 2008 - 09 DATED 25/07/2016 AND IN AY 2009 - 10 DATED 20/07/2016 WHEREIN THE TRIBUNAL HAS HELD AS UNDER: WE FIND THAT, AS OBSERVED BY THE LEARNED CIT(A), THAT THE ISSUE IS COVERED BY THE DECISION FROM HONBLE APEX COURT IN ICDS LTD. VS. CIT (2013) 350 ITR 527 WHEREIN IT HAS BEEN HELD THAT SECTION 2(3) OF THE MOTOR VEHICLE ACT IS A DEEMING PROVISION THAT CREAT ES A LEGAL FICTION OF OWNERSHIP IN FAVOUR OF LESSEE ONLY FOR THE PURPOSE OF THE MOTOR VEHICLE ACT. IT HAS BEEN HELD THERE IN THAT THE LESSOR, THE ASSESSEE WAS THE OWNER OF THE VEHICLES. AS THE OWNER, IT USED THE ASSETS IN THE COURSE OF ITS BUSINESS, SATISF YING BOTH REQUIREMENTS OF SECTION 32 OF THE ACT AND HENCE WAS ENTITLED TO CLAIM OF DEPRECIATION IN RESPECT OF ADDITION MADE TO THE TRUCKS, WHICH WERE LEASED OUT. HOWEVER, WE ARE 4 ALD AUTOMOTIVE P. LTD. ITA NO. 3303/M/2015 MAKING IT CLEAR THAT THE LEARNED ASSESSING OFFICER IS TO SATISFY HIMSELF WHETH ER THE PARTIES WHO ARE USING THE VEHICLES MAY NOT GET THE BENEFIT OF DEPRECIATION AND IF IT IS FOUND THAT THE DEPRECIATION IS CLAIMED BY THE ASSESSEE AS WELL AS THE PARTIES WHO ARE USING THE VEHICLES, IN THAT CASE THE LEARNED ASSESSING OFFICER IS FREE TO TAKE A DECISION IN ACCORDANCE WITH LAW. WITH THESE REMARKS THE STAND TAKEN BY THE LEARNED CIT(A) IS AFFIRMED. 8. WE RESPECTFULLY FOLLOWING THE SAME THE TRIBUNAL ORDER WE DISMISSED THE DEPARTMENTAL APPEAL. JUDGEMENT PRONOUNCED IN THE OPEN COURT ON 22 ND MARCH 2017 SD/ - SD/ - ( ASHAWANI TANEJA ) ACCOUNTANT MEMBER (D.T.GARASIA) JUDICIAL MEMBER MUMBAI, DATE: 22 /03 / 2017 *RAHUL SHARMA* COPY TO: 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT(A) CONCERNED 4) THE CIT CONCERNED 5) THE D.R, H BENCH, MUMBAI 6) GUARD FILE BY ORDER DY./ASSTT. REGISTRAR I.T.A.T, MUMBAI