Ramose Infra Private Ltd., New Delhi V. ITO, New Delhi

ITA 4148/DEL/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 7370 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 3
• Next Hearing Date: 20-06-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 25-07-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: FARHAT KHAN
• Keywords: Depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: SMC-3 NEW DELHI BEFORE SMT DIVA SINGH, JUDICIAL MEMBER I.T.A .NO.-414 8/DEL/2014 (ASSESSMENT YEAR-20 11-12) RAMOSE INFRA PRIVATE LTD., E-14, EAST OF KAILASH, NEW DELHI-110065. PAN-AAACR4445F (APPELLANT) VS ITO, WARD-15(2), NEW DELHI (RESPONDENT) APPELLANT BY SH. SATYAJEET GOEL, CA RESPONDENT BY SH. FARHAT KHAN, SR.DR ORDER PER DIVA SINGH, JM THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE A SSAILING THE CORRECTNESS OF THE ORDER DATED 13.06.2014 OF CIT(A)-XVIII, NEW DEL HI PERTAINING TO 2011-12 ASSESSMENT YEAR ON THE FOLLOWING GROUNDS:- 1(I) THAT ON THE FACTS AND CIRCUMSTANCES OF THE CA SE, THE CIT(A) WAS NOT JUSTIFIED IN SUSTAINING DISALLOWANCE TO THE EXT ENT OF 20% OF CLAIM RELATING TO DEPRECIATION AND VEHICLE RUNNING EXPENS ES OUT OF DISALLOWANCE OF 50% MADE BY THE ASSESSING OFFICER ON THE ALLEGED GROUND THAT CLAIM IS EXCESSIVE. (II) THAT GENUINENESS OF THE CLAIM BEING NOT IN DIS PUTE, THERE COULD BE NO DISALLOWANCE ON THE ALLEGED GROUND OF PERSONAL USE OR EXCESSIVE CLAIM. (III) THAT FINDING OF THE LOWER AUTHORITIES IS MERELY BASED ON PRESUMPTION AND SURMISES AND IN TOTAL DISREGARD TO PAST HISTORY OF THE CASE. 2. THAT THE ENTIRE CLAIM IS IN RESPECT OF OL D VEHICLES AND NATURE OF CLAIM BEING SAME AS IN THE PRECEDING YEARS, THERE I S NO CASE OF ANY DISALLOWANCE IN THE LIGHT OF PAST ACCEPTED HISTORY. 3. THAT IN ANY CASE, CLAIM OF DEPRECIATION B EING IN CONFORMITY WITH INCOME TAX RULES, THERE IS NO GROUND OR BASIS FOR A NY DISALLOWANCE. DATE OF HEARING 20 .06.2016 DATE OF PRONOUNCEMENT 19 .0 8 .2016 I.T.A .NO.-4148/DEL/2014 PAGE 2 OF 3 4. THAT ORDERS PASSED BY LOWER AUTHORITIES A RE NOT JUSTIFIED ON FACTS AND SAME ARE BAD IN LAW. 2. THE LD.AR INVITING ATTENTION TO THE ASSESSMENT ORDE R SUBMITTED THAT THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF CIVIL CONTRAC TING. THE AO HAS MADE AN ADDITION IN THE HANDS OF THE ASSESSEE COMPANY ON ACCOUNT OF PERSONAL USER HOLDING THAT SINCE THE ASSESSEE DID NOT MAINTAIN LOG BOOKS IN RESPECT OF THE CARS & JCBS USED FOR BUSINESS PURPOSES PERSONAL USER COULD NOT BE RULED OUT. IN THE ABSENCE OF THE SAME, THE AO HAS FORMED THE BELIEF THAT THERE WAS A PERSONAL USER AN D 50% OF THE EXPENSES CLAIMED WAS DISALLOWED. BEFORE THE CIT(A), IT WAS SUBMITTE D THAT THE ASSESSEE HAD AGITATED THAT SIMILAR EXPENSES ON SIMILAR FACTS HAVE BEEN CL AIMED AND ALLOWED IN EARLIER YEARS HOWEVER HOLDING THAT THERE IS NO RES JUDICATA IN TAX PROCEEDINGS AS EACH ASSESSMENT YEAR IS DIFFERENT, THE DISALLOWANCE MADE WAS RESTRI CTED TO 20%. RELYING UPON MICROSOFT CORPORATION INDIA PVT.LTD. [2015] 337 ITR 290 (TRIB.), IT WAS HIS SUBMISSION THAT NO DISALLOWANCE IN FACT COULD HAVE BEEN MADE IN THE HANDS OF A COMPANY. 2.1. THE LD. SR.DR PLACED RELIANCE UPON THE IMPUGNE D ORDER. NO CONTRARY DECISION WAS CITED. 3. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ORDER OF THE ITAT IN MICROSOFT CORPORATION IND IA P. LTD. VS ACIT (CITED SUPRA) RELIED UPON HAS ALSO BEEN TAKEN INTO CONSIDERATION. CONSI DERING THE JUDICIAL PRECEDENT RELIED UPON IT IS SEEN THAT THE CO-ORDINATE BENCH RELYING UPON DCIT VS HARYANA OXYGEN LTD. [2011] 76 ITD 32 (DELHI) AND SAYAJI IRON & ENGINEERING CO. V CIT [2002] 253 ITR 749 (GUJ.) HAS CATEGORICALLY HELD THAT IN THE CASE OF A COMPAN Y THERE CANNOT I.T.A .NO.-4148/DEL/2014 PAGE 3 OF 3 BE A DENIAL OF VEHICLE EXPENSES ON THE GROUNDS OF P ERSONAL USER. A COMPANY BEING A SEPARATE LEGAL ENTITY DISTINCT FROM ITS DIRECTOR OR EMPLOYEES, IT HAS BEEN HELD THERE COULD BE NO OCCASION TO TREAT THE USE OF VEHICLES A S PERSONAL USER BY THE COMPANY WHO IS AN ARTIFICIAL ENTITY. I FIND THAT NO DOUBT MAINT ENANCE OF A LOG BOOK WOULD HAVE BEEN A WAY OF KEEPING CHECK ON THE USE OF VEHICLES BUT IT IS NOT POSSIBLE TO PRESUME THAT A COMPANY ENGAGED IN CIVIL CONTRACTING WOULD BE USING VEHICLES LIKE JCB FOR NON-BUSINESS USER. CONSIDERING THE OVERALL FACTUAL MATRIX AND T HE LEGAL PRECEDENT THEREON, I AM OF THE VIEW THAT THE DISALLOWANCE SUSTAINED DESERVES T O BE DELETED. 4. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 19 TH AUGUST 2016. SD/- (DIVA SINGH ) JUDICIAL ME MBER *AMIT KUMAR* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGIS TRAR, ITAT NEW DELHI