VECTOR PROJECTS (I) P.LTD, MUMBAI V. DCIT CIR 15(3)(1), MUMBAI

ITA 3533/MUM/2017

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 8135 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-12-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 15-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJEEV GUBGOTRA
• Assessee Lawyers: SANJAY SHAH
• Keywords: Depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL F BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBER AND SHRI N.K. PRADHAN , ACCOUNTANT MEMBER ITA NO. 3533 / MUM/2017 ( ASSESSMENT YEAR : 20 12 13 ) VECTOR PROJECTS INDIA PVT. LTD. 4 TH FLOOR, VECTOR HOUSE LBS MARG, NEAR ASIAN PAINTS BHANDUP WEST, MUMBAI 400 078 PAN AABCV3166E . APPELLANT V/S DY. COMMISSIONER OF INCOME TAX CIRCLE 15(3)(1), MUMBAI . RESPONDENT ASSESSEE BY : SHRI SANJAY SHAH REVENUE BY : SHRI RAJEEV GUBGOTRA DATE OF HEARING 04 . 12 .2018 DATE OF ORDER 26.12.2018 O R D E R PER SAKTIJIT DEY, J.M. THIS APPEAL BY THE ASSESSEE IS AGAINST ORDER DATED 02.03 .2017, OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) 24, MUMBAI FOR THE ASSESSMENT YEAR 2012 - 13. 2 . THE DISPUTE IN THE PRESENT APPEAL IS CONFINED TO DISALLOWANCE OF ` 9,54,286 UNDER SECTION 37((1) OF THE INCOME TAX ACT, 1961 OUT OF EXPENSES INCURRED ON MOTOR CAR, DEPRECIATION ON MOTOR CAR AND BUSINESS PROMOTION. 2 VECTOR PROJECTS INDIA PVT. LTD. 3 . BRIEFLY THE FACTS ARE, THE ASSESSEE, A COMPANY, IS ENGAGED IN UNDERTAKING TURNKEY PROJECTS AND TOTAL OFFICE FURNITURE SOLUTION WORKS. FOR THE ASSESSMENT YEAR UNDER DISPUTE ASSESSEE FILED ITS RETURN OF INCOME ON 27.09.2012 DECLARING TOTAL INCOME OF ` 5,94,60,016. DURING THE ASSESSMENT PROCEEDING S THE ASSESSING OFFICER WHILE VERIFYING THE TAX AUDIT REPORT FILED BY THE ASSESSEE NOTICED THAT THE AUDITOR HAS DISALLOWED 10% OUT OF THE EXPENSES INCURRED ON MOTOR CAR, DEPRECIATION ON MOTOR CAR AND BUSINESS PROMOTION EXPENSES AGGREGATING TO ` 9,54,286 ON ACCOUNT OF PERSONAL ELEMENT INVOLVED IN SUCH EXPENDITURE. AFTER PERUSING THE SAME THE ASSESSING OFFICER WAS OF THE VIEW THAT DISALLOWANCE MADE AT 10% OF THE EXPENDITURES CLAIMED IS ON THE LOWER SIDE. ACCORDINGLY, HE MADE FURTHER DISALLOWANCE OF 10% OUT OF THE EXPENDITURE CLAIMED BY THE ASSESSEE. THUS, IN ADDITION TO THE DISALLOWANCE OF ` 9,54,286 MADE BY THE ASSESSEE, THE ASSESSING OFFICER MADE A FURTHER DISALLOWANCE OF RS. 9,54,286. BEING AGGRIEVED OF THE AFORESAID DISALLOWANCE MADE BY THE ASSESSING OFFIC ER, THOUGH, THE ASSESSEE PREFERRED APPEAL BEFORE LEARNED COMMISSIONER (APPEALS), HOWEVER, HE ALSO SUSTAINED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER. 4 . WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED MATERIALS ON RECORD. AS COULD BE SEEN FROM THE FACTS ON RECORD, CONSIDERING THE PERSONAL ELEMENT INVOLVED IN MOTOR CAR EXPENSES, DEPRECIATION ON 3 VECTOR PROJECTS INDIA PVT. LTD. MOTOR CAR, BUSINESS PROMOTION EXPENSES, THE ASSESSEE ITSELF HA S DISALLOWED 10% OUT OF THE TOTAL EXPENDITURE CLAIMED. THE ASSESSING OFFICER WITHOUT POINTING OUT ANY SHORTCOMING IN THE DISALLOWANCE MADE BY THE ASSESSEE HAS MADE FURTHER DISALLOWANCE OF 10% BY MERELY STATING THAT THE DISALLOWANCE MADE BY THE ASSESSEE IS ON THE LOWER SIDE. THE ASSESSING OFFICER HAS NOT PROVIDED ANY REASON WHY HE CONSIDERS THE DISALLOWANCE MADE BY THE ASSESSEE TO BE ON THE LOWER SIDE. IN VIEW OF THE AFORESAID, WE HOLD THAT THE DISALLOWANCE MADE BY THE ASSESSING OFFICER IN ADDITION TO DISALL OWANCE ALREADY MADE BY THE ASSESSEE IS UNSUSTAINABLE. ACCORDINGLY, THE DISALLOWANCE OF ` 9,54,286 MADE BY THE ASSESSING OFFICER IS HEREBY DELETED. GROUND RAISED IS ALLOWED. 5 . IN THE RESULT ASSESSEE'S APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 26.12.2018 SD/ - N.K. PRADHAN ACCOUNTANT MEMBER SD/ - SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED: 26.12.2018 4 VECTOR PROJECTS INDIA PVT. LTD. COPY OF THE ORDER FORWARDED TO : ( 1 ) THE ASSESSEE; ( 2 ) THE REVENUE; ( 3 ) THE CIT(A); ( 4 ) THE CIT, MUMBAI CITY CONCERNED; ( 5 ) THE DR, ITAT, MUMBAI; ( 6 ) GUARD FILE . TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY (SR. PRIVATE SECRETARY) ITAT, MUMBAI