Deputy Commssioner of Income-tax, V. M/s. Shree Pancharatna Hotels Pvt. Ltd.,

ITA 395/PUN/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9453 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 1 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-05-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 06-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJEEV THACKER
• Assessee Lawyers: SHIVANAD KALATIKAR
• Keywords: Depreciation; Tax effect
• Section: 143(3)

Judgement Text

] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NO.395/PUN/2015 / ASSESSMENT YEAR : 2009-10 THE DY. COMMISSIONER OF INCOME TAX, CIRCLE 6, PUNE 3 RD FLOOR, B WING, PMT BUILDING, SWARGATE, PUNE 411037. . / APPELLANT V/S M/S. SHREE PANCHRATNA HOTELS PVT LTD., 7. TADIWALA ROAD, PUNE 411001. PAN :AAKCS2612P. . / RESPONDENT / APPELLANT BY : SHRI RAJEEV THACKER. / RESPONDENT BY : SHRI SHIVANAD KALATIKAR / ORDER PER ANIL CHATURVEDI, AM : THIS APPEAL FILED BY THE REVENUE IS EMANATING OUT OF TH E ORDER OF COMMISSIONER OF INCOME TAX (A) 4, PUNE DT.12.01 .2015 FOR THE ASSESSMENT YEAR 2009-10. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON R ECORD ARE AS UNDER :- 2.1 ASSESSEE IS A COMPANY STATED TO BE ENGAGED IN THE BUSINESS OF RESTAURANT AND LODGING. ASSESSEE ELECTRONICALLY FILED ITS RETURN OF INCOME FOR A.Y. 2009-10 ON 25.09.2009 DECLARING TOTAL INCOME AT / DATE OF HEARING : 17.05.2017 / DATE OF PRONOUNCEMENT: 17.05.2017 2 RS.97,04,940/-. THE CASE WAS SELECTED FOR SCRUTINY AND TH EREAFTER THE ASSESSMENT WAS FRAMED U/S 143(3) OF THE ACT VIDE ORD ER DT.31.10.2011 AND THE TOTAL INCOME WAS DETERMINED AT RS.1,26,03,750/-. AGGRIEVED BY THE ORDER OF AO, ASSESSEE C ARRIED THE MATTER BEFORE LD.CIT(A) WHO VIDE ORDER DT.02.01.2015 GR ANTED SUBSTANTIAL RELIEF TO THE ASSESSEE. AGGRIEVED BY THE ORDE R OF LD.CIT(A), REVENUE IS NOW IN APPEAL BEFORE US AND HAS RAIS ED THE FOLLOWING GROUNDS : 1. THE ORDER OF THE COMMISSIONER OF INCOME TAX (AP PEALS) IS CONTRARY TO LAW AND TO THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) IS NOT JUSTIFIED IN RESTRICTING THE DISALLOWANCE TO 25% ON ACCOUNT OF V EHICLE EXPENSES INSPITE OF AGREEING TO THE FACT AT PARA 4.3 OF THE IMPUGNED ORDER THAT THE ASSESSEE WAS NOT IN POSSESSION OF ANY EVIDENCE FOR THE SAME AND ALSO THAT THE VEHICLES WERE NOT IN THE NAME OF THE ASSESSEE COMPANY. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) IS NOT JUSTIFIED IN RESTRICTING THE DISALLOWANCE ON ACCOUNT OF DEPRECIA TION ON VEHICLES WHICH ARE IN THE NAME OF THE DIRECTORS AND THE ASSE SSEE HAS NO EVIDENCE OF HAVING THEM USED FOR THE PURPOSE OF BUS INESS WHICH IS IN GROSS VIOLATION TO THE DECISION OF HONBLE D B ENCH OF MUMBAI IN CASE OF EDWISE CONSULTANTS PVT. LTD. VS. ADDL.CIT, MUMBAI DATED 19.04.2013. 4. FOR THIS AND SUCH OTHER REASONS AS MAY BE URGED AT THE TIME OF HEARING, THE ORDER OF THE LD.CIT(A) MAY BE VACATED AND THAT OF THE ASSESSING OFFICER BE RESTORED. 3. IN THE PRESENT CASE, WE FIND THAT AO HAD DISALLOWED DEPRECIATION ON VEHICLES AND VEHICLE EXPENSES AND THE TOT AL DISALLOWANCE AGGREGATED TO RS.17,96,441/-. AGGRIEVED BY TH E ORDER OF AO, THE MATTER WAS CARRIED BEFORE LD.CIT(A) WHO GRANTED RELIEF TO THE EXTENT OF RS.13,47,331/- AND RESTRICTED THE DISALLOWANC E TO 25% I.E., RS.4,49,110/-. IN THE PRESENT APPEAL OF REVENUE, TH E REVENUE IS AGGRIEVED BY THE RELIEF OF RS.13,47,331/- GRANTE D BY 3 LD.CIT(A). WE FIND THAT THE TAX EFFECT ON THE RELIEF GRANTED BY LD.CIT(A) IS LESS THAN RS.10,00,000/- BEING THE LIMIT PRESCRIBE D BY CBDT. BEFORE US LD.D.R. FAIRLY ADMITTED THAT THE TAX EFFEC T ON THE IMPUGNED ADDITIONS IS LESS THAN THE LIMIT PRESCRIBED BY THE CBDT CIRCULAR OF 10/12/2015 BEARING NO. 21 OF 2015 AND THEREFOR E THE APPEAL BE DECIDED ACCORDINGLY. LD.A.R. SUPPORTED THE ORD ER OF LD.CIT(A). 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MA TERIAL AVAILABLE ON RECORD. ON PERUSING THE GROUNDS OF APPEAL RA ISED BY THE REVENUE, WE FIND THAT REVENUE IS AGGRIEVED BY THE OR DER OF LD. CIT(A) IN RESPECT OF THE RELIEF GIVEN BY HIM. AS PER THE ANNOUNCEMENT OF CENTRAL BOARD OF DIRECT TAXES (CBDT) DATE D 10/12/2015 (CIRCULAR NO. 21 OF 2015), NO DEPARTMENT APPEALS ARE TO BE FILED AGAINST RELIEF GIVEN BY LD. CIT(A) BEFORE THE INCOM E TAX APPELLATE TRIBUNAL UNLESS THE TAX EFFECT, EXCLUDING INTEREST, E XCEEDS RS.10 LAKHS AND IT FURTHER STATES THAT THE INSTRUCTIONS WILL APPLY RETROSPECTIVELY TO THE PENDING APPEALS ALSO. IN THE PRE SENT CASE, SINCE IT IS AN UNDISPUTED FACT THAT ON THE ADDITIONS WHICH ARE IN DISPUTE, THE TAX EFFECT IS LESS THAN RS.10 LAKHS. BEFORE US, R EVENUE HAS NOT PLACED ANY MATERIAL ON RECORD TO DEMONSTRATE T HAT THE ISSUE IN THE PRESENT APPEAL IS COVERED BY EXEMPTIONS SPE CIFIED IN CLAUSE (8) OF THE AFORESAID CBDT CIRCULAR. IN SUCH A SITUATIO N, WE ARE OF THE VIEW THAT THE MONETARY LIMIT PRESCRIBED BY THE INSTRUCTIONS OF THE AFORESAID CBDT CIRCULAR WOULD BE APPLICA BLE TO THE PRESENT APPEAL OF THE DEPARTMENT AND THEREFORE THE PRESENT APPEAL IS NOT MAINTAINABLE ON ACCOUNT OF LOW TAX EFFECT. IN SUCH 4 CIRCUMSTANCES, WE DISMISS THE APPEAL OF REVENUE WITHOUT EXPRESSING ANY OPINION ON MERITS OF THE CASE. HOWEVER, IN CASE THERE IS ANY ERROR IN THE COMPUTATION OF THE TAX EFFECT IN VOLVED OR IF FOR ANY REASON, THE AFORESAID CBDT CIRCULAR IS NOT APPLICAB LE, IT WOULD BE OPEN TO THE REVENUE TO SEEK REVIVAL OF THE APPEAL. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISS ED. PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ITSE LF I.E., ON 17 TH DAY OF MAY, 2017. SD/- SD/- ( SUSHMA CHOWLA ) ( ANIL CHATURVEDI ) ! / JUDICIAL MEMBER '! / ACCOUNTANT MEMBER PUNE; ! DATED : 17 TH MAY, 2017. YAMINI #$%&'('% / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. 4. 5. 6. CIT(A)-4, PUNE. PR.CIT-3, PUNE. #$% &&'(,* '(, / DR, ITAT, A PUNE; %+,-/ GUARD FILE. / BY ORDER, // TRUE COPY // // TRUE COPY // //// // // . /012 / ASSISTANT REGISTRAR, * '( , / ITAT, PUNE.