KALPAJ REALTY P.LTD, MUMBAI V. ITO WD 9(2)(2), MUMBAI

ITA 4272/MUM/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 1348 (ITAT-MUMBAI)
• Duration Of Justice: 6 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-12-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 21-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BEENA SANTOSH
• Keywords: Depreciation
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI BEFORE SHRI G.S.PANNU, ACCOUNTANT MEMBER ITA NO.4272/MUM/2016 (ASSESSMENT YEAR 2012-13) M/S. KALPAJ REALTY PVT. LTD., KALPAJ VIKUNTHLAL MEHTA MARG, VILE PARLE (WEST), MUMBAI 400 056 PAN: AAACK 1559P ...... APPELLAN T VS. THE INCOME TAX OFFICER, WARD 9(2)(2) MUMBAI .... RESPONDENT APPELLANT BY : SHRI RAJESH P. SHAH RESPONDENT BY : MS BEENA SANTOSH DATE OF HEARING : 27/12/2016 DATE OF PRONOUNCEMENT : 29/12/2016 ORDER THE CAPTIONED APPEAL FILED BY THE ASSESSEE PERT AINING TO ASSESSMENT YEAR 2012-13 IS DIRECTED AGAINST AN ORDER PASSED BY CIT(A)-20, MUMBAI DATED 12/03/2016, WHICH IN TURN, ARISES OUT OF AN ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 143(3) OF THE INCOME TAX A CT, 1961 (IN SHORT THE ACT) DATED 10/11/2013. 2. IN THIS APPEAL, THE ONLY GRIEVANCE OF THE ASSES SEE IS AGAINST AN ADHOC ADDITION OF RS.2,29,440/- BEING 25% OF DEPRECIATION ON MOTOR CAR, REPAIRS & MAINTENANCE AND INSURANCE DISALLOWED BY THE INCOME- TAX AUTHORITIES BY TREATING IT AS AN EXPENDITURE OF PERSONAL ELEMENT. 2 ITA NO.4272/MUM/2016 (ASSESSMENT YEAR 2012-13) 3. BEFORE ME, THE LD. REPRESENTATIVE FOR THE ASSESS EE POINTED OUT THAT ASSESSEE IS A CORPORATE ENTITY AND THE ENTIRE EXPEN DITURE IS AUTHORIZED BY THE BOARD OF DIRECTORS AND IS IN RELATION TO THE BUSINE SS OF THE ASSESSEE. IT IS POINTED OUT THAT THERE CANNOT BE A PERSONAL ELEMENT IN CASE OF THE EXPENSES INCURRED BY A CORPORATE ENTITY AS LAID DOWN BY TH E HON'BLE GUJARAT HIGH COURT IN THE CASE OF SAYAJI IRON AND ENGG. CO. VS CIT, 253 ITR 749(GUJ). 4. ON THE OTHER HAND, LD. DEPARTMENTAL REPRESENTATI VE HAS POINTED OUT THAT THE DISALLOWANCE WAS MADE BY THE ASSESSING OFF ICER AS NO EXPLANATION WAS OFFERED BY THE ASSESSEE. 5. IN MY CONSIDERED OPINION, SINCE THE ASSESSEE IS A CORPORATE ENTITY, THE IMPUGNED ADHOC DISALLOWANCE MADE ON THE BASIS OF AL LEGED PERSONAL USE IS NOT SUSTAINABLE HAVING REGARD TO THE JUDGMENT OF THE HO NBLE GUJARAT HIGH COURT IN THE CASE OF SAYAJI IRON & ENGG. CO.(SUPRA). IN AN Y CASE, THE ASSESSEE HAS MAINTAINED BOOKS OF ACCOUNT AND THE ASSESSING OFFIC ER HAS NOT POINTED OUT ANY SPECIFIC INSTANCE OF EXPENDITURE WHICH IS OF NON-B USINESS NATURE AND IN SUCH A CIRCUMSTANCE, ADHOC DISALLOWANCE @ 25% IS UNTENABLE . THE SAME IS HEREBY DIRECTED TO BE DELETED. THUS, ASSESSEE SUCCEEDS IN THIS APPEAL. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 29/12/2016 SD/- (G.S.PANNU) ACCOCUNTANT MEMBER MUMBAI, DATED 29/12/2016 VM , SR. PS 3 ITA NO.4272/MUM/2016 (ASSESSMENT YEAR 2012-13) COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT , 2. THE RESPONDENT. 3. THE CIT(A)- 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI