VINATI WAX IND. P. LTD, MUMBAI V. ITO 8(3)(1), MUMBAI

ITA 4234/MUM/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 62454 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-05-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: F
• Next Hearing Date: 21-05-2012
• Assessment Year: 2001-2002
• Appeal Filed On: 24-05-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: M RAJAN
• Assessee Lawyers: SALIL B LODHA
• Keywords: Depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES F , MUMBAI BEFORE SHRI VIJAY PAL RAO, J.M. AND SHRI N. K. BILL AIYA, A.M. ITA NO. : 4234/MUM/2011 ASSESSMENT YEAR : 2001-02 M/S. VINATI WAX IND. PVT. LTD. 2 ND FLOOR SHIVASHISH, ANDHERI KURLA ROAD, SAKINAKA, MUMBAI-400 072 PAN NO: AAACV 1334 K VS. ITO - 8(3)(1), AAYAKAR BHAVAN, MUMBAI-400 002 (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SALIL B. LODHA RESPONDENT BY : SHRI M. RAJAN DATE OF HEARING : 21.05.2012 DATE OF P RONOUNCEMENT : 25.05.2012 ORDER PER N. K. BILLAIYA, A.M.: WITH THIS APPEAL, THE ASSESSEE HAS QUESTIONED THE CORRECTNESS OF THE ORDER OF THE LD. CIT(A)-18, MUMBAI DATED 28.09. 2010 FOR THE A.Y. 2001-02. THE ONLY GROUND OF APPEAL RELATES TO THE DISALLOWANCE OF THE CLAIM OF DEPRECIATION OF `. 2,32,825/-. 2. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT FO R THE YEAR UNDER CONSIDERATION THE ORIGINAL RETURN OF INCOME WAS FIL ED ON 25.10.2001 DECLARING TOTAL INCOME OF `. 5,03,090/-. THE SAID RETURN WAS PROCESSED U/S.143(1). THE ASSESSMENT WAS SUBSEQUENTLY REOPEN ED U/S.147 AND ITA NO : 4234/MUM/2011 M/S. VINATI WAX IND. PVT. LTD. 2 ACCORDINGLY NOTICE U/S.148 OF THE ACT WAS ISSUED AN D SERVED UPON THE ASSESSEE ON 28.03.2008. IN RESPONSE TO THE NOTICE U/S.148, THE ASSESSEE VIDE ITS LETTER DATED 09.04.2008 REPLIED THAT THE R ETURN OF INCOME FILED ON 25.10.2001 MAY BE TREATED AS RETURN FILED IN RESPON SE TO NOTICE FILED U/S.148 OF THE ACT. ACCORDINGLY, NOTICE U/S.143(2) WAS ISSUED AND SERVED UPON THE ASSESSEE. COPY OF THE REASONS RECO RDED HAVING REOPENING OF THE ASSESSMENT WERE ALSO FORWARDED VID E LETTER DATED 27.10.2008. ON RECEIVING NO COMPLIANCE FROM THE AS SESSEE AND APPREHENDING THAT THE ASSESSMENT MAY GET BARRED BY LIMITATION, THE A.O. COMPLETED THE ASSESSMENT ON THE BASIS OF MATERIALS AVAILABLE ON RECORD. IT WAS NOTICED BY THE A.O. THAT THE INCOME UNDER TH E HEAD PROFIT AND GAINS OF THE BUSINESS WAS ARRIVED AT AFTER SETTING OFF OF DEPRECIATION OF `. 2,32,825/-. THE SAME WAS DISALLOWED, AS THE A.O. P OINTED OUT THAT THE ASSESSEE HAS RENTED OUT TWO GALAS OUT OF SIX TO ITS SISTER CONCERN FROM WHICH IT RECEIVES RENT WHICH WAS SHOWN UNDER THE HE AD INCOME FROM OTHER SOURCES. AS THE A.O. HAS TREATED THE RENT SO RECEIVED UNDER THE HEAD INCOME FROM HOUSE PROPERTY, HE DISALLOWED TH E CLAIM OF DEPRECIATION OF `. 2,32,825/-. THE MATTER WAS TAKEN BEFORE THE LD. CI T(A). 3. BEFORE THE LD. CIT(A), THE ASSESSEE REITERATED I TS CONTENTION THAT ALL THE SIX GALAS WERE USED FOR THE PURPOSE OF BUSINESS AND ACCORDINGLY DEPRECIATION HAS TO BE ALLOWED BY THE A.O. THE LD. CIT(A) CONFIRMED THE FINDING OF THE A.O. HOLDING THAT THE A.O. HAS CORRE CTLY DISALLOWED THE ITA NO : 4234/MUM/2011 M/S. VINATI WAX IND. PVT. LTD. 3 DEPRECIATION AS THE ASSET CANNOT BE SAID TO HAVE BE EN USED FOR THE PURPOSE OF BUSINESS. 4. AGGRIEVED BY THIS, THE ASSESSEE IS BEFORE US. 5. THE LEARNED COUNSEL APPEARING FOR THE APPELLANT SUBMITTED A CHART OF DEPRECIATION. THE COUNSEL ALSO SUBMITTED THE AS SESSMENT ORDER FOR THE A.Y. 2000-01 AND THE ORDER OF THE LD. CIT(A) FOR TH E A.Y. 2002-03 AND CLAIMED THAT ON SIMILAR SET OF FACTS AND CIRCUMSTAN CES IN THE IMMEDIATE PRECEDING YEAR I.E. A.Y. 2000-01, THE A.O. HIMSELF HAS RESTRICTED THE DISALLOWANCE OF DEPRECIATION ONLY TO GALA NOS. 208 AND 211 (ALLEGED TO BE GIVEN ON RENT). FURTHER THE COUNSEL POINTED OUT TH AT IN THE IMMEDIATELY SUCCEEDING YEAR I.E. A.Y. 2002-03, THE LD. CIT(A) H AS DIRECTED THE A.O. TO RESTRICT THE DISALLOWANCE OF DEPRECIATION ON GALAS WHICH WERE GIVEN ON RENT. ACCORDINGLY, THE LEARNED COUNSEL PLEADED THA T FOR THE YEAR UNDER CONSIDERATION SIMILAR VIEW SHOULD BE TAKEN. 6. THE LEARNED DR RELIED UPON THE ORDERS OF THE LOW ER AUTHORITIES. 7. AFTER HEARING THE RIVAL SUBMISSIONS AND GOING T HROUGH THE ORDERS OF THE LOWER AUTHORITIES AND ALSO THE COPY OF DEPRE CIATION CHART, COPY OF ASSESSMENT ORDER FOR THE A.Y. 2000-01 AND THE ORDER OF THE LD. CIT(A) FOR THE A.Y. 2002-03, WE FIND FORCE IN THE CONTENTION O F THE LEARNED AR. WE FIND THAT ON THE SIMILAR FACTS AND CIRCUMSTANCES IN THE IMMEDIATELY ITA NO : 4234/MUM/2011 M/S. VINATI WAX IND. PVT. LTD. 4 PRECEDING ASSESSMENT YEAR AND SUCCEEDING ASSESSMENT YEAR, THE CLAIM OF DEPRECIATION HAS BEEN ALLOWED ONLY IN RESPECT OF FO UR GALAS WHICH WERE USED BY THE ASSESSEE IN HIS BUSINESS. DEPRECIATION IN RESPECT OF GALA NOS. 208 AND 211 WERE DISALLOWED AS BOTH THE GALAS WERE GIVEN ON RENT. ACCORDINGLY, WE DIRECT THE A.O. TO RESTRICT THE DIS ALLOWANCE OF DEPRECIATION ONLY ON THAT PART WHICH RELATES TO GAL A NOS. 208 AND 211. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED ON THIS 25 TH DAY OF MAY, 2012. SD/- - SD/- ( VIJAY PAL RAO ) ( N. K. BILLAIYA ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DT: 25.05.2012 COPY FORWARDED TO : 1. THE APPELLANT, 2. THE RESPONDENT, 3. THE C.I.T. 4. CIT (A) 5. THE DR, - BENCH, ITAT, MUMBAI //TRUE COPY// BY ORDER ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI ROSHANI