MAREZBAN P. BHARUCHA, MUMBAI V. JCIT RG 11(3), MUMBAI

ITA 3712/MUM/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 8655 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-10-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 10-10-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 09-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V KRISHNA MURTHY
• Assessee Lawyers: PERCY J PARDIWALLA
• Keywords: Depreciation
• Section: 14A

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL B , BENCH MUMBAI . , BEFORE SHRI B.R.MITTAL , J M & SHRI B.R.JAIN , A M ITA NO. 3712 / MUM/ 20 1 1 ( ASSESSMENT YEAR : 2005 - 20 06 ) MAREZBAN P. BHARUCHA, 7F, HARBOUR HEIGHTS A CO - OP HSG. SOC., N.A. SAWANT MARG, COLABA, MUMBAI - 05 VS. JCIT, RANGE - 11(3), MUMBAI PAN/GIR NO. : AAAPB 5624 H ( APPELLANT ) .. ( RESPONDENT ) /A SSESSEE BY : MR. PERCY J. PARDIWALLA & MR. NITE SH JOSHI /RE VENUE BY : MR. V. KRISHNAMURTHY DATE OF HEARING : 10 TH OCT ., 2012 DATE OF PRONOUNCEMENT : 10 TH OCT.,2012 O R D E R PER B.R.MITTAL (J.M. ) : THE ASSESSEE HAS FILED THIS APPEAL FOR ASSESSMENT YEAR 2005 - 06 AGAINST ORDER OF CIT(A), DATED 21 - 2 - 2011 ON FOLLOWING GROUNDS : - 1 .0 THE LEARNED COMMISSION OF INCOME TAX (APPEALS) ERRED IN LAW AND ON FACTS IN DECIDING THE GROUNDS EX - PARTE, WITHOUT GIVING ANY OPPORTUNITY OF HEARING TO THE APPELLANT. 1.1 THE LEARNED COMMISSION OF INCOME TAX (APPEALS) ERRED IN HOLDING THAT THERE IS NO RESPONSE FROM THE APPELLANT DESPITE GIVING SEVERAL OPPOR T U NITIES . ITA NO. 3712 /20 1 1 2 1.2 WITHOUT PREJUDICE, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN NOT ADJUDICATING THE ISSUES ON MERITS BASED ON THE STATEMENT OF FACTS FILED BEFORE HIM. 2.0 THE ASSESSING OFFICER ERRED IN LAW AND ON FACTS I N HOLDING AND THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING THAT THE EXPENSES ON MOTOR CAR, LAW BOOKS, JOURNAL & PERIODICALS AND DEPRECIATION ON MOTOR CAR, COMPUTER & MOBILE, FOR WHICH DEDUCTION IS CLAIMED BY THE APPELLANT WERE INCUR RED FOR EARNING SALARY AND EXEMPT SHARE OF PROFIT FROM A REGISTERED FIRM, AND THEREFORE, PROVISIONS OF SECTION 14A OF THE ACT ARE ATTRACTED. 2.1 THE ASSESSING OFFICER ERRED IN LAW AND ON FACTS IN HOLDING AND THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) ERRED IN CONFIRMING THAT FOR THE PURPOSES OF COMPUTING DISALLOWANCE U/S. 145A EXPENDITURE INCURRED WAS TO BE APPORTIONED IN THE SAME RATIO OF SHARE OF PROFIT TO TOTAL RECEIPTS FROM THE PARTNERSHIP FIRM DURING THE YEAR. 2.2 THE ASSESSING OFFICER ERRED IN LAW AND ON FACTS IN MAKING AND THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) ERRED IN CONFIRMING THAT PROVISIONS OF SECTION 14A ARE APPLICABLE IN RESPECT OF DEPRECIATION ON COMPUTER, MOTOR CAR AND MOBILE PHONE. DEPRECIATION IS NOT AN EXPENDITURE BUT AN ALLOWANCE, HENCE, DISALLOWANCE U/S. 14A CANNOT BE INVOKED IN RESPECT OF DEPRECIATION. 3.0 THE ASSESSING OFFICER ERRED IN LAW AND ON FACTS IN HOLDING AND THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS0 ERRED IN CONFIRMING THAT HOSPITALITY EXPENSES AND VIS A CHARGES AND PASSPORT RENEWAL CHARGES WERE NOT INCURRED FOR THE PURPOSE OF PROFESSION OF THE APPELLANT AND HENCE ARE NOT ALLOWABLE U/S 37(1). 3.1 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(APPEALS) ERRED IN HOLDING THAT THE APPELL ANT HAS NOT PROVED DIRECT NEXUS BETWEEN THE EXPENDITURE AND BUSINESS EXPEDIENCY. 4.0 THE ASSESSING OFFICER ERRED IN LAW AND ON FACTS IN HOLDING AND THE LEARNED C IT(APPEALS) ERRED IN CONFIRMING THAT THE MOTOR CAR DOES NOT QUALIFY FOR DEPRECIATION @ 50%, S INCE IT IS NOT USED IN THE BUSINESS OF RUNNING ON HIRE. 2. GROUND NO.1 OF APPEAL GOES TO THE ROOT OF THE ORDER OF LEARNED CIT(A) . WE HAVE HEARD LEARNED REPRESENTATIVES OF BOTH THE PARTIES. ITA NO. 3712 /20 1 1 3 3. L EANED AR REFERRED TO PAGE 2 OF THE ORDER OF LEARNED CIT(A) AND SUBMITTED THAT ASSESSEE DID NOT GET EFFECT IVE OPPORTUNITY TO REPRESENT ITS CASE BEFORE THE LEARNED CIT(A), WITHOUT DISPUTING THE FA C T THAT LEARNED CIT(A) ISSUED NOTICES AS MENTIONED ON THE SAID PAGE BUT THE ASSESSEE FILED LETTERS BEFORE LEARNED CIT(A ) STATING THE REASONS AS TO WHY HE COULD NOT MAKE HIS REPRESENTATION BEFORE HIM. LEARNED AR SUBMITTED THAT IN THE INTEREST OF JUSTICE, MATTER BE RESTORED TO LEARNED CIT(A) TO DECIDE THE ISSUES AFRESH AFTER GIVING DUE AND PROPER OPPORTUNITY OF HEARING TO TH E ASSESSEE. 4. L EARNED DR SUBMITTED THAT HE HAS NO OBJECTION IN RESTORING THE MATTER TO THE LEARNED CIT(A) FOR HIS FRESH CONSIDERATION. 5. C ONSIDER ING THE ABOVE SUBMISSIONS OF THE LEARNED REPRESENTATIVES OF THE PARTIES AND IN THE INTEREST OF JUSTICE , WE ACCEPT GROUND NO.1 OF THE APPEAL TAKEN BY THE ASSESSEE AND ACCORDINGLY SET ASIDE THE ORDER OF LEARNED CIT(A) WITH A DIRECTION TO DECIDE GROUNDS OF APPEAL OF THE ASSESSEE AFTER GIVING DUE OPPORTUNITY OF HEARING TO THE PARTIES AND AFTER CONSIDERING SUCH EVI DENCES , AS MAY BE PLACED BEFORE HIM. SINCE THE MATTER IS RESTORED TO THE LEARNED C IT (A) FOR HIS FRESH CONSIDERATION, WE DO NOT CONSIDER NECESSARY TO ADJUDICATE THE GROUNDS NO.2 TO 4 OF THE APPEAL ON MERITS. THUS, THE APPEAL FILED BY THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES BY RESTORING THE MATTER TO LEARNED CIT(A). ITA NO. 3712 /20 1 1 4 6 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 10 TH DAY OF OCT . , 2012. 10 TH OCT . , 2012 SD/ - SD/ - ( . ) ( B.R.JAIN ) ( ) ( B.R.MITTAL ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI ; DATED : 10 TH OCT ./ 2012. /PKM , PS COPY OF THE ORDER FORWARDE D TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / THE CIT(A) - X, MUMBAI. 4. / CIT 5. / DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY// / BY ORDER, ( DY./ASSTT. REGISTRAR) / ITAT, MUMBAI