M/s Om Medical Centre Pvt. Ltd., Palwal V. DCIT, Faridabad

ITA 3317/DEL/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 52582 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 1 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-08-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: F
• Next Hearing Date: 17-08-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 07-07-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PRATIMA KAUSHIK
• Assessee Lawyers: ASHWANI TANEJA
• Keywords: Depreciation

Judgement Text

ITA NO. 3317/DEL/2010 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F NEW DELHI BEFORE SHRI C.L. SETHI, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER I.T.A. NO. 3317/DEL/2010 A.Y. : 2004-05 M/S OM MEDICAL CENTRE PVT. LTD. C/O RAKESH RAJ & ASSOCIATES, D-28, SOUTH EXTN.-I, NEW DELHI 110 049 (PAN/GIR NO. : AAACO4111H) VS. DCIT, CENTRAL CIRCLE, FARIDABAD (APPELLANT ) (APPELLANT ) (APPELLANT ) (APPELLANT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) ASSEESSEE BY : SH. ASHWANI TANEJA, CA DEPARTMENT BY : S MT. PRATIMA KAUSHIK, SR. D.R. ORDER ORDER ORDER ORDER PER PER PER PER SHAMIM YAHYA: AM SHAMIM YAHYA: AM SHAMIM YAHYA: AM SHAMIM YAHYA: AM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) DATED 23.4.2 010 PERTAINING TO ASSESSMENT YEAR 2004-05. 2. THE FIRST ISSUE RAISED IS THAT LD. COMMISSIONER O F INCOME TAX (APPEALS) ERRED IN UPHOLDING THE DISALLOWANCE MADE B Y THE ASSESSING OFFICER OF ` 2,30,827/- ON ACCOUNT OF DEPRECIATION ON AMBULANCE HOLDING TO BE AN NON-COMMERCIAL VEHICLE. 3. IN THIS CASE ASSESSING OFFICER NOTED THAT ASSES SEE HAS CLAIMED DEPRECIATION OF ` 3,84,712/- ON AMBULANCE @50%. A SSESSING OFFICER HELD THAT FOR A HOSPITAL THE AMBULANCE IS NOT A C OMMERCIAL VEHICLE. HENCE, IT DOES NOT FALL UNDER THE CATEGORY OF COMME RCIAL VEHICLE. HENCE, DEPRECIATION OF ` 2,30,827/- STANDS DISALLO WED. ITA NO. 3317/DEL/2010 2 4. UPON ASSESSEES APPEAL LD. COMMISSIONER OF INCOME TAX (APPEALS) CONFIRMED THE ASSESSING OFFICERS ACTION. 5. AGAINST THE ABOVE ORDER THE ASSESSEE IS IN APPEA L BEFORE US. 6. WE HAVE HEARD THE RIVAL CONTENTIONS IN LIGHT OF THE MATERIAL PRODUCED AND PRECEDENT RELIED UPON. LD. COUNSEL O F THE ASSESSEE CONTENDED THAT THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE HONBLE KERALA HIGH COURT IN THE CA SE OF C.I.T. VS. DR. K.R. JAYACHANDRAN (1995) 212 ITR 637 (KER.). IN THI S CASE ASSESSEE WAS RUNNING A PRIVATE HOSPITAL AND ALSO RUNNING AN AMBUL ANCE VAN ON HIRE. IT WAS HELD THAT ASSESSEE WAS ENTITLED TO HIGHER RA TE OF DEPRECIATION OF THE VAN. RESPECTFULLY FOLLOWING THE PRECEDENT AS ABOVE, WE HOLD THAT THE ASSESSEE COULD BE ELIGIBLE FOR DEPRECIATION A T THE RATE OF COMMERCIAL VEHICLE PROVIDED THAT THE ASSESSEE HAS RECEIVED INCOME FROM THE COMMERCIAL USE OF THE AMBULANCE. SINCE IN T HIS CASE ASSESSEE HAS RECEIVED CHARGES FOR AMBULANCE HIRE, I T IS ELIGIBLE FOR DEPRECIATION AT THE RATE OF COMMERCIAL VEHICLE. HEN CE THIS ISSUE IS DECIDED IN FAVOUR OF THE ASSESSEE. 7. THE NEXT ISSUE RAISED IS THAT LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN UPHOLDING THE ACTION OF THE ASSE SSING OFFICER IN MAKING DISALLOWANCE OF 1/10 TH OF TELEPHONE AND CAR EXPENSES AMOUNTING TO ` 38,290/- ON ACCOUNT OF POSSIBLE PERSO NAL USE BY THE COMPANY. 8. ON THIS ISSUE ASSESSING OFFICER NOTED THAT ASS ESSEE COMPANY HAS CLAIMED TELEPHONE EXPENSES OF ` 1,66,961/- AND CAR EXPENSES OF ` 2,15,939/-. ASSESSING OFFICER NOTED THAT PERSONAL USE OF TELEPHONE AND VEHICLE BY THE EMPLOYEE AND DIRECTORS OF THE COMP ANY CAN NOT BE RULED OUT. HE FURTHER OBSERVED THAT ASSESSEE IS N OT MAINTAINING ANY ITA NO. 3317/DEL/2010 3 LOG BOOK FOR VEHICLE OR TELEPHONE REGISTER, HENCE, HE DISALLOWED 1/10 TH OF THE EXPENSES AMOUNTING TO ` 38,290/-. 9. UPON ASSESSEES APPEAL LD. COMMISSIONER OF INCOME TAX (APPEALS) CONFIRMED THE ADDITION. 10. AGAINST THIS ORDER THE ASSESSEE IS IN APPEAL BE FORE US. 11. WE HAVE HEARD THE RIVAL CONTENTIONS IN LIGHT OF THE MATERIAL PRODUCED AND PRECEDENT RELIED UPON. WE FIND THAT T HIS DISALLOWANCE HAS BEEN MADE TOTALLY ON SURMISES AND CONJECTURES. NO INSTANCE HAS BEEN SHOWN THAT THERE WAS PERSONAL USE OF VEHICLE AND TELEPHONE. IT IS A SETTLED LAW THAT ADDITION BASED ON GUESS WORK IS NOT SUSTAINABLE. HENCE, WE SET ASIDE THE ORDERS OF THE AUTHORITIES B ELOW AND DECIDE THE ISSUE IN FAVOUR OF THE ASSESSEE. 12. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 17/8/2011 UPO N CONCLUSION OF HEARING. SD/- SD/- [ [[ [C.L. SETHI C.L. SETHI C.L. SETHI C.L. SETHI] ]] ] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTAN ACCOUNTAN ACCOUNTAN ACCOUNTANT MEMBER T MEMBER T MEMBER T MEMBER DATE 17/8/2011 SRB COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES