M/s. L.N.Hota & Company, Cuttack V. DCIT, Circle-2(1), Cuttack, Cuttack

ITA 363/CTK/2013

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 6339 (ITAT-CUTTACK)
• Duration Of Justice: 10 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-05-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 24-06-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S C MOHANTY
• Assessee Lawyers: B V R SWAMY
• Keywords: Depreciation; Principle of natural justice

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH, CUTTACK . . , . . , BEFORE SHRI P.K.BANSAL , AM & SHRI D.T.GARASIA , JM ./ ITA NO. 363 / C TK /20 1 3 ( / ASSESSMENT YEAR : 200 7 - 0 8 ) M/S L.N.HOTA & COMPANY, DURGA TALKIES COMPOUND, TOWN HALL ROAD, CUTTACK - 753009 VS. DCIT , CIR. - 2 (1), CUTTACK ./ ./ PAN/GIR NO. : A AB F L 3219 C ( / APPELLANT ) .. ( / R ESPONDENT ) /ASSESSEE BY : SHRI B.V.R.SWAMY /REVENUE BY : SHRI S.C.MOHANTY / DATE OF HEARING : 2 4 TH APRIL , 201 4 / DATE OF PRONOUNCEMENT : 01/05 /2014 / O R D E R PER BENCH : THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A) DATED 25 - 3 - 2013 BY TAKING THE FOLLOWING EFFECTIVE GROUND S : - 1. THAT THE LEARNED COMMISSIONER (APPEALS) ERRED AND HE IS NOT JUSTIFIED IN CONFIRMING THE VALUE OF FRINGE BENEFIT DETERMINED ON THE EXPENDITURE INCURRED BY THE ASSESSEE DURING THE FINANCIAL YEAR ENDED ON 31ST MARCH, 2007, RELEVANT TO THE ASSESSMENT YEAR 2007 - 08 AT RS. 93,378/ - . 2. THAT THE LEARNED COMMISSIONER (APPEALS) ERRED AND HE IS NOT JUSTIFIED IN HOLDING THAT THE MOTOR VEHICLES NAMELY - I) TATA SUMO, II) TRAVERA, III) MAHINDRA BOLERO GLX AND IV) MAX PICKUP ARE MOTOR CARS AND IN UPHOLDING THE VALUE OF FRINGE BENEFIT DETERMINED ON THE EXPENDITURE INCURRED TOWARDS REPAIR, RUNNING AND ABOVE VEHICLES . 3. THAT THE IMPUGNED APPELLATE ORDER DATED 25.3.2013, SO FAR IT RELATES TO THIS APPEAL, IS WHOLLY CONTRARY TO THE FACTS ON 2 ITA NO. 359 /201 3 RECORD, HAS BEEN PASSED AGAINST THE PRINCIPLES OF NATURAL JUSTICE AND IT IS OTHERWISE UNREASONABLE AND PERVERSE. 2 . BRIEF FACTS OF THE CASE RELATE TO THESE GROUND S ARE THAT THE AO NOTED THAT THE ASSESSEE HAS SHOWN FRINGE BENEFIT AT RS. NIL. THE AO ASKED THE ASSESSEE TO PRODUCE THE DETAILS OF BASIS OF COMPUTATION OF FRINGE BENEFITS AND THE ASSESSEE PRODUCED THE SAME AND THE FRINGE BENEFIT IS DETERMINED UNDER THE FOLLOWING HEADS : - HEADS VALUE OF EXPENDITURE PERCENTAGE VALUE OF FRINGE BENEFIT VEHICLE REPAIR & MAINTENANCE 1,08,606/ - 20 21,721 DEPRECIATION ON MOTOR VEHICLE 3,58,284 20 71,657 TRAVELLING & CONVEYANCE 6,524 20 1,305 TELEPHONE CHARGES 5,652 20 1,130 TOTAL FRINGE BENEFIT 95,813 3 . THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(A) . THE CIT(A) PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. 4 . BEFORE US, LEARNED AR FILED THE PAPER BOOK AND CONTENDED THAT THE FRINGE BENEFIT H AS BEEN COMPUTED BY THE AO ON THE REPAIRS & MAINTENANCE AND DEPRECIATION ON THE MOTOR VEHICLES NAMELY I) TATA SUMO, REGN.N O . OR 02N 9816, II) TRAVERA, REGN.NO.OR05Y2054 III) MAHINDRA BOLERO GLX , REGN.NO.OR05Y3406 AND IV) MAX PICKUP , REGN.NO.OR05Y 2054. THE SE VEHICLES ARE TRANSPORT VEHICLES WITHIN THE MEANING OF AND THE TYPES SPECIFIED BY THE MOTOR VEHICLES ACT. FOR THIS, OUR ATTENTION WAS DRAWN TOWARD PAGE 54 OF THE PAPER BOOK TO 3 ITA NO. 359 /201 3 DISTINGUISH REGARDING WHAT IS A TRANSPORT VEHICLE AND WHAT NON - TRANSPORT VEHIC LE. THE PROVISION OF SECTION 2 TO SECTION 26 OF THE MOTOR VEHICLE ACT WERE ALSO REFERRED TO WHEREIN IT HAS BEEN PROVIDED THAT MOTOR CAR MEANS ANY MOTOR VEHICLE OTHER THAN A TRANSPORT VEHICLE, OMNIBUS, ROAD - ROLLER, TRACTOR, MOTOR CYCLE OR INVALID CARRIAGE . IT WAS CONTENDED THAT SECTION 115WB(2)(H) DOES NOT INCLUDE ANY VEHICLE OTHER THAN MOTOR CAR FOR LEVY OF FRINGE BENEFIT TAX. OUR ATTENTION WAS ALSO DRAWN TOWARDS THE CBDT CIRCULAR NO .8 OF 2005 , DATED 29 TH AUGUST 2005 , IN WHICH IN ANSWER TO QUESTION NO. 85, THE CBDT HAS CLARIFIED THAT DELIVERY/DISPLAY VANS, TRUCKS, LORRIES, AMBULANCE AND TRACTORS WILL NOT BE MOTOR CARS FOR THE PURPOSE OF SECTION 115WB(2)(H). . THEREFORE, THE EXPENDITURE ON THE RUNNING, REPAIR AND MAINTENANCE OF SUCH VEHICLES IS NOT LIABLE TO FRINGE BENEFIT TAX. 5 . LEARNED DR RELIED ON THE ORDER OF THE AUTHORITIES BELOW. 6 . WE HEARD RIVAL CONTENTIONS AND CAREFULLY CONSIDERED THE SAME ALONG WITH THE ORDERS OF THE TAX AUTHORITIES BELOW. WE HAVE ALSO GONE THROUGH THE CBDT CIRCULAR NO .8 OF 2005 , DAT ED 29 TH AUGUST 2005, WHEREIN ANSWER TO QUESTION NO.85, ON WHICH THE LEARNED DR RELIED UPON, IN THIS ANSWER, THE CBDT HAS CLARIFIED THAT DELIVERY/DISPLAY VANS, TRUCKS, LORRIES, AMBULANCE AND TRACTORS ARE NOT BE MOTOR CARS , THUS, DOES NOT STATE THAT THE TAT A SUMO, TRAVERA, MAHINDRA BOLERO GLX , AND MAX PICKUP ARE TRUCKS, LORRIES, AMBULANCE AND TRACTORS. THE ONUS, IN OUR OPINION, IS ON THE ASSESSEE TO PROVE THESE VEHICLES FALL WITHIN THE CATEGORY AS HAS BEEN CLARIFIED BY THE CBDT IN REPLY TO THE QUESTION 4 ITA NO. 359 /201 3 NO. 85 . NO COGENT MATERIAL OR EVIDENCE WAS BROUGHT TO OUR KNOWLEDGE BY THE LEARNED AR EXCEPT ARGUING THAT THESE ARE TRANSPORT VEHICLES AND ARE NOT NON - TRANSPORT VEHICLES. WE HAVE GONE THROUGH THE PROVISIONS OF SECTION 115WB(2)(H). THIS SECTION NOWHERE DISTINGUIS HES BETWEEN THE TRANSPORT VEHICLE AND NON - TRANSPORT VEHICLE. IN VIEW OF THIS, WE DO NOT FIND ANY MERIT IN THE APPEAL TAKEN BY THE ASSESSEE. WE ACCORDINGLY CONFIRM THE ORDER OF THE CIT(A) . 7 . IN THE RESULT, APPEAL FILED BY THE ASSESSEE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 01/05 / 201 4 . 01/05 /2014 SD/ - SD/ - ( . . ) ( D.T.GARASIA ) ( . . ) ( P.K.BANSAL ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER CUTTACK ; DATED 01/05 /2014 . . /PKM , . / PS / COPY OF THE ORDER FORWARDED TO : / BY ORDER, / ( ASSTT. REGISTRAR) , / ITAT, CUTTACK 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) , CUTTACK 4. / CIT , CUTTACK 5. , , / DR, ITAT, CUTTACK 6. / GUARD FILE. //T RUE COPY//