THE ACIT 20(1), MUMBAI V. M/S. GYANDEV SADH, MUMBAI

ITA 3899/MUM/2008

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 2607 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-12-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 18-11-2009
• Assessment Year: 2001-2002
• Appeal Filed On: 04-06-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MOHAMAD USMAN
• Keywords: Depreciation; Difference of opinion; Change of opinion

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH G MUMBAI BEFORE SHRI P.M.JAGTAP, AM & SMT. P.MADHAVI DEVI, JM I.T.A.NO.3899/MUM/2008 - A.Y 2001-02 ASST. COMMISSIONER OF I.T. 20[1] MUMBAI VS. SHRI GYANDEV SADH PLOT NO.52, 7 TH RD., MAROL MIDC ANDHERI [E] MUMBAI 400 093. PAN NO.AJVPS 5541 C (APPELLANT) (RESPONDENT) REVENUE BY : MR. MOHAMAD USMAN. ASSESSEE BY : MR. ASHOK SHARMA. O R D E R PER P.MADHAVI DEVI, JM: THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST CIT (A)S ORDER DATED 27-3-2008. 2. IN THIS APPEAL THE ONLY GRIEVANCE OF THE REVENUE IS THAT THE CIT[A] HAS REJECTED THE FINDING OF THE AO THAT THE BUSINESS LOSSES HAVE BEEN DELIBERATELY CREATED BY THE ASSESSEE DUE TO TRANSACTIONS WITH THE PARTNERSHIP FIRM M/S PARMESHWAR FASHIONS D ESPITE THE EVIDENCES AVAILABLE WHICH POINTED OUT TO THE ABOVE ARRANGEMENT. THE REVENUE IS ALSO AGGRIEVED BY THE ORDER OF THE CIT[A ] IN ALLOWING THE DEPRECIATION ON CARS TO THE ASSESSEE EVEN AFTER THE ASSESSEE ADMITTING THAT THE CARS WERE REGISTERED IN THE NAME OF THE WI FE OF THE ASSESSEE AND NOT IN THE NAME OF THE ASSESSEE. 2 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S AN INDIVIDUAL WHO WAS CARRYING ON THE BUSINESS OF JOB WORK. FOR T HE RELEVANT ASSESSMENT YEAR HE FILED HIS RETURN OF INCOME DECLA RING INCOME OF RS.12,60,280/-. THE ASSESSMENT WAS COMPLETED U/S/14 3[3] ON 6-1-2004 DETERMINING THE TOTAL INCOME AT RS.13,17,9 30/-. SUBSEQUENTLY, THE ASSESSMENT WAS REOPENED U/S.147 O F THE INCOME TAX ACT ON THE GROUND THAT THE ASSESSEE CREATED A L OSS OF RS.5,63,436/- IN THE BUSINESS OF HIS PROPRIETARY CO NCERN M/S PALLAV CREATION SO AS TO SET OFF AGAINST OTHER HEADS OF IN COME AND THAT THE ASSESSEE HAS CLAIMED DEPRECIATION OF RS.3,43,764/- ON MOTOR CAR NO.MH06 F-8866 THOUGH IT DID NOT BELONG TO THE ASSE SSEE. ASSESSEES EXPLANATION IN THIS REGARD WAS CALLED FOR. THE ASSE SSEE SUBMITTED HIS DETAILED EXPLANATION REBUTTING THE ALLEGATIONS MADE BY THE AO AND STATED THAT REOPENING OF THE ASSESSMENT FOR A MERE CHANGE OF OPINION IS NOT PERMISSIBLE. HE SUBMITTED ANOTHER REPLY DATE D 30-11-2006 STATING THAT THOUGH THE CAR WAS NOT REGISTERED IN T HE NAME OF THE ASS, IT IS ACTUALLY ASSESSEES ASSET AND THE PAYMENT FOR THE CAR IS ALSO MADE BY THE ASSESSEE FROM HIS BANK ACCOUNT S.B. A/C NO.0 1/004293. THE AO WAS NOT SATISFIED WITH THE ASSESSEES EXPLANATION A ND HELD THAT THE ASSESSEE HAS CREATED NON-GENUINE LOSS OF RS.5,63,43 6/- DURING THE YEAR IN THE BUSINESS OF M/S PALLAV CREATIONS SO AS TO SET OFF THE SAME AGAINST OTHER HEADS OF INCOME. FOR THIS PURPOSE, HE PLACED RELIANCE UPON THE ASSESSMENT ORDER FOR THE YEAR 2003-04 IN T HE ASSESSEES OWN 3 CASE ON SIMILAR SET OF FACTS. HE ALSO DISALLOWED TH E CLAIM OF DEPRECIATION ON THE CAR. 4. AGGRIEVED, ASSESSEE FILED AN APPEAL BEFORE THE C IT[A] WHO CONFIRMED THE VALIDITY OF THE REOPENING OF THE ASSE SSMENT. HOWEVER, WITH REGARD TO THE DISALLOWANCE OF BUSINESS LOSS F OR A.Y 2001-02 AND THE DEPRECIATION ON MOTOR CAR, CIT[A] PLACED RELIA NCE UPON THE ORDER OF HIS PREDECESSOR IN THE ASSESSEES OWN CASE FOR A .Y 2003-04 FOR DELETING THE SAME. AGGRIEVED, REVENUE IS IN APPEAL BEFORE US. 5. AT THE TIME OF HEARING WHILE THE LD. DR PLACED R ELIANCE UPON THE ORDER OF THE AO, THE LD. COUNSEL FOR THE ASSESSEE P LACED RELIANCE UPON THE ORDER OF THE CIT[A] AND ALSO PLACED BEFORE US A COPY OF THE ORDER OF THE G BENCH OF THE TRIBUNAL IN I.T.A.NO.2450/M /08 DATED 4-11-2009 FOR A.Y 2003-04 IN THE ASSESSEES OWN CAS E. HE SUBMITTED THAT FOR A.Y 03-04 THE TRIBUNAL HAS CONFIRMED THE O RDER OF THE CIT[A] DELETING THE DISALLOWANCE . 6. HAVING HEARD BOTH THE PARTIES AND HAVING CONSIDE RED THEIR RIVAL CONTENTIONS AND THE MATERIAL ON RECORD, WE FIND THA T THE TRIBUNAL AT PARA-6 OF ITS ORDER HAS APPRECIATED THE FACTS OF TH E CASE AND AFTER REFERRING TO THE FINDINGS OF CIT[A] FOR THE RELEVA NT ASSESSMENT YEAR HAS HELD AS UNDER- 6. NEITHER THESE FINDINGS COULD BE CONTROVERTED AT THE END OF THE DEPARTMENT NOR BROUGHT ANY OTHER MATERIAL TO CONTRO VERT THE FINDING THE LEARNED CIT[A] . WE HAVE ALSO GONE THROUGH THE BALANCE SHEET, PROFIT AND LOSS ACCOUNT AND OTHER EVIDENCES, COPY O F WHICH ARE PLACED ON RECORD, AND FOUND THAT THE ASSESSEE IS MAINTAINING REGULAR BOOKS OF ACCOUNT. THE MAIN REASON FOR CLAIMING HIGH ER LOSS IS DEPRECIATION ON ACCOUNT OF CARS. IT IS SEEN THAT TH E CARS HAVE BEEN SHOWN IN THE ASSETS SIDE IN THE BALANCE SHEET. THEY WERE PURCHASED 4 IN EARLIER YEAR. IN EARLIER YEAR, DEPRECIATION WAS CLAIMED AND WAS ALLOWED. THE BUSINESS HISTORY OF THE ASSESSEE HAS BEEN ACCEPTED BY THE DEPARTMENT IN PAST AND NO ADVERSE INFERENCE HAS BEEN DRAWN ON ACCOUNT OF THE BUSINESS ACTIVITY DONE BY THE ASSESSEE . IN VIEW OF THESE FACTS AND CIRCUMSTANCES AND IN VIEW OF THE UNCONTRO VERTED FINDING OF THE LEARNED CIT[A] , WE CONFIRM THE ORDER OF THE CIT[A] . AS FACTS AND CIRCUMSTANCES ARE SIMILAR FOR THE RELE VANT YEAR ALSO AND AS THE AO AS WELL AS CIT[A] HAS PLACED RELIANCE UPON THE ORDER OF THEIR PREDECESSORS IN THE ASSESSEES OWN CASE FOR A.Y 03- 04, RESPECTFULLY FOLLOWING THE DECISION OF THE CO-ORDINATE BENCH [CI TED SUPRA] IN ASSESSEES OWN CASE WE REJECT THE GROUNDS OF APPEAL RAISED BY THE REVENUE. 7. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED ON THIS 8 TH DAY OF DECEMBER, 2009. SD/- SD/- (P.M.JAGTAP) (P.MADHAVI DEVI) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI: 8 TH DECEMBER, 2009. P/-* COPY TO- 1) APPELLANT 2) RESPONDENT 3) CITA MUMBAI. 4) CIT CITY MUMBAI 5) DR BENCH MUMBAI TRUE COPY BY ORDER DY /ASST.REGISTRAR,ITAT MUMBAI. 5 SR.NO. PARTICULARS DATE INITIALS 1 DRAFT DICTATED ON 18-11-09 P 2 DRAFT PLACED BEFORE AUTHOR 19-11-09 P 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER 5 APPROVED DRAFT COMES TO SR.PS/PS 6 ORDER KEPT FOR PRONOUNCEMENT 7 FILE SENT TO BENCH CLERK 8 DATE ON WHICH FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER