Shroff Eye Centre, New Delhi V. ACIT, New Delhi

ITA 3894/DEL/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 3667 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 4 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-11-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: G
• Assessment Year: 2012-2013
• Appeal Filed On: 04-07-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: KAUSHLENDRA TIWARI
• Assessee Lawyers: D K GUPTA
• Keywords: Depreciation
• Section: 37

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G , NEW DELHI BEFORE SH. N. K. SAINI, AM AND SH. KULDIP SINGH , JM ITA NO. 3894 /DEL/2016 : ASSTT. YEAR : 2012 - 1 3 SHROFF EYE CENTRE, A - 9, KAILASH COLONY, NEW DE LHI - 110048 VS ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE - 61(1), NEW DELHI (APPELLANT) (RESPONDENT) PAN NO. A ABSF6789D ASSESSEE BY : SH. D. K. GUPTA, CA REVENUE BY : SH. KAUSHLENDRA TIWARI, SR. DR DATE OF HEARING : 06.11 .2 01 7 DATE OF PRONOUNCEMENT : 09 . 11 .201 7 ORDER PER N. K. SAINI, AM: THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 29.04.2016 OF LD. CIT(A) - 20, NEW DELHI. 2. THE ONLY GRIEVANCE OF THE ASSESSEE IN THIS APPEAL RELATES TO TH E SUSTENANCE OF ADDITION OF RS.1,71,238/ - MADE BY THE AO OUT OF VEHICLES REPAIRS & MAINTENANCE EXPENSES. 3 . FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE FILED ITS RETURN OF INCOME DECLARING AN INCOME OF RS.5,32,05,190/ - ON 28.09.2012. LATER ON, THE CA SE WAS SELECTED FOR SCRUTINY. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO NOTICED THAT THE ASSESSEE INCURRED EXPENSES AT RS.8,96,294/ - ON ACCOUNT OF VEHICLES REPAIRS & MAINTENANCE AND ALSO ITA NO . 3894 /DEL /201 6 SHROFF EYE CENTRE 2 CLAIMED DEPRECIATION OF RS.8,16,090/ - ON THE VEHICLES. THE AO DISALLOWED 10% OF THE AFORESAID EXPENSES ON ACCOUNT OF PERSONAL USE OF VEHICLES BY THE PARTNERS AND THE STAFF MEMBERS OF THE ASSESSEE FIRM. 4. BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) WHO SUSTAINED THE ADDITION BY OBSERVING IN PARA 6.3 OF THE IMPUGNED ORDER AS UNDER: 6.3 I HAVE CONSIDERED THE SUBMISSION OF THE APPELLANT. AS PER SECTION 37 OF THE ACT, EXPENSES INCURRED OR EXPENDED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS/PROFESSION IS TO BE ALLOWED. THE PRIMARY ONUS OF PROVING THAT SUCH EXPENDITURES HAVE BEEN INCURRED EXCLUSIVELY AND WHOLLY FOR THE PURPOSE OF BUSINESS LIES ON THE ASSESSEE. I AM INCLINED TO AGREE WITH THE AO THAT PERSONAL ELEMENT OF EXPENDITURE ON THE USAGE OF CARS/VEHICLES CANNOT BE RULED OUT AS NO LOG BOOKS ARE MAINTAINED. THEREFORE, I TEND TO AGREE WITH THE AO THAT 10% DISALLOWANCES FOR PERSONAL USAGE OF SUCH FACILITIES IS QUITE REASONABLE. 5 . NOW THE ASSESSEE IS IN APPEAL. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE A UTHORITIES BELOW AND FURTHER SUBMITTED THAT THE VEHICLES WERE USED FOR THE PURPOSE OF BUSINESS. THEREFORE, THE DISALLOWANCE MADE BY THE AO AND SUSTAINED BY THE LD. CIT(A) WAS NOT JUSTIFIED. IT WAS FURTHER STATED THAT THE DEPRECIATION IS STATUTORY ALLOWANCE AND WHEN THE VEHICLES WERE USED DURING THE COURSE OF REGULAR BUSINESS, NO DISALLOWANCE CAN BE MADE OUT OF THE DEPRECIATION. ITA NO . 3894 /DEL /201 6 SHROFF EYE CENTRE 3 6 . IN HIS RIVAL SUBMISSIONS, THE LD. DR SUPPORTED THE ORDER OF THE AUTHORITIES BELOW. 7 . WE HAVE CONSIDERED THE SUBMISSIONS OF B OTH THE PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON THE RECORD. IN THE PRESENT CASE, IT IS NOTICED THAT THE AO DID NOT POINT OUT ANY SPECIFIC ITEM OUT OF THE VEHICLES REPAIRS & MAINTENANCE WHICH WAS USED BY THE ASSESSEE FOR PERSONAL PURPOS ES. AT THE SAME TIME, THE ASSES SEE HAD ALSO NOT MAINTAINED LOG BOOK. THEREFORE, THE PERSONAL USE OF THE VEHICLES IN SUCH TYPE OF CASES CANNOT BE RULED OUT. HOWEVER, THE DISALLOWANCE MADE BY THE AO AND SUSTAINED BY THE LD. CIT(A) @ 10% APPEARS TO BE EXCESSI VE. WE, THEREFORE, TO MEET THE ENDS OF JUSTICE, DEEM IT APPROPRIATE TO SUSTAIN THE DISALLOWANCE @ 5% OF THE VEHICLES REPAIRS & MAINTENANCE AND DEPRECIATION. 8 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED . (O RD E R PRONOUNCED IN THE COURT O N 09 /11 /2017 ) SD/ - SD/ - ( KULDIP SINGH ) (N. K. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DAT ED: 09 /11 /2017 *SUBODH* COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(APPE ALS) 5 . DR: ITAT ASSISTANT REGISTRAR