ACIT, New Delhi V. M/s K & Company, New Delhi

ITA 3823/DEL/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 81515 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 1 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-08-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 04-08-2014
• Assessment Year: 1997-1998
• Appeal Filed On: 14-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S N BHATIA
• Assessee Lawyers: VK SABHARWAL
• Keywords: Depreciation
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D, NEW DELHI BEFORE SH. S. V. MEHROTRA, AM AND SH. JOGINDER SIN GH, JM ITA NO. 3823/DEL/2013 : ASS TT. YEAR : 1997-98 ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE-23(1), NEW DELHI VS M/S K & COMPANY R-124, TEESTA HOUSE, GREATER KAILASH-I, NEW DELHI-110048 (APPELLANT) (RESPONDENT) PAN NO. AAAFK7575L ASSESSEE BY : SH. V. K. SABHARWAL, ADV. REVENUE BY : SH. S. N. BHATIA, DR DATE OF HEARING : 5.8.2014 DATE OF PRONOUNCEMENT : 7.8.2014 ORDER PER JOGINDER SINGH, JM: THE REVENUE IS AGGRIEVED BY THE IMPUGNED ORDER DATE D 21.3.2013 OF THE LD. FIRST APPELLATE AUTHORITY, NEW DELHI. 2. THE ONLY GRIEVANCE RAISED BY THE REVENUE IS WHET HER THE ASSESSEE IS ENTITLED FOR HIGHER RATE OF DEPRECIATION AT 40% ON THE MOTOR VEHICLE WHICH WERE CLAIMED FOR COMMERCIAL PURPOSES OR FOR HIRING PURPOSE. 3. DURING HEARING OF THIS APPEAL WE HAVE HEARD SHRI S. N. BHATIA, LD. DR AND V. K. SABHARWAL, LD. COUNSEL FOR THE ASS ESSEE. THE CRUX OF ARGUMENT ON BEHALF OF THE REVENUE IS THAT ALL THE V EHICLES SHOWN BY THE ASSESSEE ARE NOT COMMERCIAL VEHICLE, THUS, THE ASSE SSEE IS NOT ENTITLED TO HIGHER RATE OF DEPRECIATION AND THUS, SUPPORTED THE ADDITIONS SO MADE BY THE ASSESSING OFFICER. ON THE OTHER HAND, THE LD . COUNSEL FOR THE ITA NO. 3823/DEL/2013 K & COMPANY 2 ASSESSEE FILED CERTAIN PAPERS EXPLAINING THAT HIGHE R RATE OF DEPRECIATION WAS ONLY CLAIMED ON COMMERCIAL VEHICLES AND NOT ON OTHER VEHICLE. IT WAS ALSO CONTENDED THAT THIS ISSUE IS COVERED BY TH E DECISION OF THE TRIBUNAL IN THE CASE OF ASSESSEE ITSELF AND PRODUCE D THE COPY OF ORDER IN ITA NO. 8107/DEL/1992 FOR ASSESSMENT YEAR 1989-90. IT WAS ASSERTED THAT FOR EARLIER AND LATER YEARS SUCH CLAIM HAS BEE N ALLOWED IN FAVOUR OF THE ASSESSEE AND ONLY FOR THE IMPUGNED YEAR RELIEF HAS BEEN DENIED BY THE ASSESSING OFFICER. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL AVAILABLE ON RECORD. THE FACTS IN BRIEF AR E THAT THE ASSESSEE DECLARED INCOME OF RS. 31,00,34,856/- AND REVISED T HE SAME ON 31.3.1998 AT THE INCOME OF RS. 30,93,27,333/-. ASSE SSMENT WAS FRAMED U/S 143(3) ON 24.3.2000 AT AN INCOME OF RS. 32,16,4 8,960/-. THE ASSESSEE PREFERRED APPEAL BEFORE THE LD. CIT(A). WH ERE PART RELIEF WAS GRANTED AN INCOME WAS RECOMPUTED AT RS. 31,23,50,19 6/-. CROSS APPEALS WERE FILED BY THE ASSESSEE AS WELL AS BY THE DEPART MENT BEFORE THE TRIBUNAL WHEREIN VIDE ORDER DATED 20.8.2004 THE TRI BUNAL RESTORED THE MATTER, MORE SPECIFICALLY THE ISSUE OF DEPRECIATION , TO THE FILE OF THE ASSESSING OFFICER. THE LD. ASSESSING OFFICER MADE D ISALLOWANCE OF RS. 27,81,264/-. DURING ASSESSMENT PROCEEDINGS THE ASSE SSEE FURNISHED NAMES AND ADDRESSES OF THE LESSEES, REGISTRATION NO . OF THE VEHICLES ALONGWITH THE LEASE RENT SO RECEIVED. THE ASSESSING OFFICER WAS OF THE VIEW THAT THE ASSESSEE HAS NOT PROVED THAT THESE VE HICLES WERE USED FOR COMMERCIAL PURPOSES AND FOR THE PURPOSE OF HIRING, THUS, HE RESTRICTED ITA NO. 3823/DEL/2013 K & COMPANY 3 THE CLAIM OF DEPRECIATION ON VEHICLES TO 20%. THE A SSESSEE PREFERRED APPEAL BEFORE THE LD. CIT(A) WHEREIN IT WAS HELD TH AT THE ASSESSEE IS ENTITLED HIGHER RATE OF DEPRECIATION AT 40%. THE RE VENUE IS AGGRIEVED AND IN APPEAL BEFORE THIS TRIBUNAL. THE FACTUAL FIN DINGS RECORDED BY THE LD. CIT(A) IS REPRODUCED HERE UNDER: 4. THE ABOVE WRITTEN SUBMISSIONS HAVE BEEN CAREFUL LY CONSIDERED. I HAVE ALSO GONE THROUGH THE DOCUMENTS FILED BY THE APPELLANT COMPRISING DETAILED STATEMENT OF 281 LEAS ED VEHICLES ALONG WITH COPIES OF CERTIFICATION OF REGISTRATION AND INSURANCE POLICY DOCUMENTS. THE APPELLANT HAS FILED A DETAILE D WORKING OF DEPRECIATION CLAIMED FOR THE YEAR UNDER CONSIDERATI ON AND IT IS SEEN THAT VEHICLES ARE WITHOUT EXCEPTION TRUCKS OR BUSES. THESE DETAILS ARE STATED TO HAVE BEEN FILED BEFORE THE AS SESSING OFFICER. THE CONTENTION OF THE APPELLANT THAT COMMERCIAL VEH ICLES COULD ONLY HAVE BEEN USED FOR COMMERCIAL PURPOSES BEARS C ONSIDERABLE MERIT. THE QUESTION OF WHETHER THE VEHICLES HAD BEE N PUT TO COMMERCIAL USE BY THE LESSEES WOULD ONLY HAVE ARISE N IF THE APPELLANT HAD LEASED OUT PASSENGER VEHICLES, WHICH IS NOT THE CASE. AS THE LEASED VEHICLES ARE CLEARLY DESCRIBED AS EICHER CANTER TRUCK, SWARAJ MAZDA TRUCK, DCM TOYOTA TRUCK, TATA 407 TRUCK, MAHINDRA NISSAN BUS, TATA 608 BUS, ETC., IT MUST BE CONCLUDED THAT THE VEHICLES HAVE BEEN USED FOR COMM ERCIAL PURPOSES, AND THE APPELLANT IS THEREFORE ENTITLED T O THE HIGHER RATE OF DEPRECIATION OF 40%. THE ASSESSING OFFICER IS DIRECTED TO ALLOW THE DEPRECIATION AS PER THE CLAIM OF THE APPE LLANT. 5. WE HAVE GONE THROUGH THE ASSESSMENT ORDER, SUBMI SSIONS ADVANCED FROM BOTH SIDES AND THE MATERIAL AVAILABLE ON RECORD. UNCONTROVERTEDLY, THE LD. CIT(A) EXAMINED THE DOCUM ENTS FILED BY THE ASSESSEE DETAILS OF 281 LEASED VEHICLES ALONG WITH REGISTRATION CERTIFICATES AND INSURANCE POLICY. ALL THESE DETAIL S WERE ALSO FILED BEFORE ITA NO. 3823/DEL/2013 K & COMPANY 4 THE ASSESSING OFFICER. THE TOTALITY OF FACTS ARE IN DICATIVE OF THE FACT THAT THE VEHICLE USED AND DEPRECIATION CLAIMED OF COMMER CIAL VEHICLES ONLY. THE LEASED VEHICLES ARE CANTER TRUCK, SWARAJ MAZDA TRUCK, DCM TOYOTA TRUCK, TATA 407 TRUCK, MAHINDRA NISSAN BUS, ETC., T HUS, IT CAN BE CONCLUDED THAT THESE ARE COMMERCIAL VEHICLES AND TH EREFORE, THE ASSESSEE IS CLEARLY ENTITLED TO HIGHER RATE OF DEPRECIATION AT 40%. WE FIND NO INFIRMITY IN THE CONCLUSION DRAWN BY THE LD. CIT(A) . IT IS ALSO NOT WORTHY THAT FOR EARLIER AND LATER ASSESSMENT YEARS THE DEPARTMENT ITSELF HAS ALLOWED THE CLAIM AT HIGHER RATE OF DEPRECIATIO N, THEREFORE, IN THE ABSENCE OF ANY CONTRARY FACTS NO U-TURN IS EXPECT ED FROM THE DEPARTMENT. THE STAND OF THE LD. CIT(A) IS AFFIRMED . RESULTING INTO DISMISSAL OF THE APPEAL OF THE REVENUE. 6. FINALLY APPEAL OF THE REVENUE IS DISMISSED. 7. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN T HE PRESENCE OF LD. REPRESENTATIVE FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 5.8.2014. SD/- SD/- (S. V. MEHROTRA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 7/8/2014 *SUBODH* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR