M/S. ENAM SECURITIES PVT. LTD, MUMBAI V. THE CIT (A)-IV, MUMBAI

ITA 4424/MUM/2007

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 7835 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 9 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-03-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: J
• Next Hearing Date: 23-03-2011
• Assessment Year: 2003-2004
• Appeal Filed On: 08-06-2007
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SUM EET KUMAR
• Assessee Lawyers: RAJNIKANT V CHANIYARI
• Keywords: Depreciation
• Section: 143(3); 6; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES J, MUMBAI BEFORE SHRI D.K. AGARWAL (J.M.) AND SHRI T.R. SOOD ( A.M.) ITA NO. 4424/MUM /2007 ASSESSMENT YEAR : 2003-04 M/S ENAM SECURITIES PRIVATE LIMITED, 24, BD RAJBAHADUR COMPOUND, IST FLOOR, AMBALAL DOSHI MARG, MUMBAI 400 001. PAN : AAACE5146N VS. A SST. COMMISSIONER OF INCOME - TAX 4(1), AAYAKAR BHAWAN, MUMBAI-400020. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAJNIKANT V. CHANIYARI RESPONDENT BY : SHRI SUMEET KUMAR O R D E R PER D.K. AGARWAL, J.M. THIS APPEAL PREFERRED BY THE ASSESSEE IS DIRECTED A GAINST THE ORDER DATED 23.04.2007 PASSED BY THE LD. CIT (A) FOR TH E A.Y 2003-04. 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE AS SESSEE COMPANY IS ENGAGED IN THE BUSINESS OF SHARE BROKER AND ALSO DO ING INVESTMENT, TRADING AND ARBITRAGE IN SECURITIES. THE RETURN WA S FILED DECLARING TOTAL INCOME OF ` 3,00,41,600/-. HOWEVER, THE ASSESSMENT WAS COMPLET ED AT AN INCOME OF ` 3,12,20,830/- VIDE ORDER DATED 18.11.2005 PASSED U /S 143(3) OF THE INCOME TAX ACT, 1961 (THE ACT). ON A PPEAL, THE LD. CIT(A) PARTLY ALLOWED THE APPEAL. 3. BEING AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US. ITA NO. 44 24/MUM/2007 M/S ENAM SECURITIES PR IVATE LIMITED. 2 4. GROUND NO. 1 IS AGAINST THE SUSTENANCE OF DISALL OWANCE OF COMPUTER SOFTWARE EXPENSES OF ` 6,21,386/-. 5. THE A.O. ON PERUSAL OF THE EXPENSES OBSERVED THA T THE EXPENSES ON COMPUTER SOFTWARE HAS BEEN INCURRED ON PURCHASE OF NEW SOFTWARE AS WELL AS HARDWARE ITEMS WHICH HAVE GIVEN ENDURING BE NEFIT TO THE ASSESSEE AND ACCORDINGLY HE HELD THE SAME AS CAPITAL EXPENDI TURE. HOWEVER, HE ALLOWED DEPRECIATION @ 60% AMOUNTING TO ` 2,37,416/- AND ADDED THE BALANCE AMOUNT OF ` 3,83,970/- TO THE INCOME OF THE ASSESSEE. ON APPEAL, THE LD. CIT(A) WHILE UPHOLDING THE ACTION O F THE A.O. DIRECTED THE A.O. TO RECALCULATE THE DEPRECIATION AFTER VERIFICA TION. 6. AT THE TIME OF HEARING, THE LD. COUNSEL FOR THE ASSESSEE SUBMITS THAT HE DOES NOT WANT TO PRESS THE ABOVE GROUND, WH ICH WAS NOT OBJECTED TO BY THE LD. D.R. 7. THAT BEING SO AND IN THE ABSENCE OF ANY SUPPORTI NG MATERIAL PLACED ON RECORD BY THE LD. COUNSEL FOR THE ASSESSEE, THE GROUND TAKEN BY THE ASSESSEE IS, THEREFORE, REJECTED BEING NOT PRESSED. 8. GROUND NO. 2 IS AGAINST THE SUSTENANCE OF DISALL OWANCE OF EXPENSES OF ` 3 LACS OUT OF ` 7,92, 000/- DISALLOWED BY THE A.O. TREATING THE SAME AS EXPENSES ATTRIBUTABLE TO EARNING OF DIV IDEND AND IN ALTERNATIVE IT WAS CONTENDED THAT THE DISALLOWANCE SUSTAINED BY THE LD. CIT(A) IS HIGHLY EXCESSIVE. 9. AT THE TIME OF HEARING, THE LD. COUNSEL FOR THE ASSESSEE SUBMITS THAT HE DOES NOT WANT TO PRESS THE ABOVE GROUND, WH ICH WAS NOT OBJECTED TO BY THE LD. D.R. ITA NO. 44 24/MUM/2007 M/S ENAM SECURITIES PR IVATE LIMITED. 3 10. THAT BEING SO AND IN THE ABSENCE OF ANY SUPPORT ING MATERIAL PLACED ON RECORD BY THE LD. COUNSEL FOR THE ASSESSEE, THE GROUND TAKEN BY THE ASSESSEE IS, THEREFORE, REJECTED BEING NOT PRESSED. 11. GROUND NO. 3 IS AGAINST THE GRANTING OF INTERES T U/S 244A. 12. AT THE TIME OF HEARING, THE LD. COUNSEL FOR THE ASSESSE SUBMITS THAT THE A.O. VIDE HIS ORDER PASSED U/S 154 HAS GRANTED THE INTEREST TO THE ASSESSEE, THEREFORE, HE IS NOT PRESSING THE AFORESA ID GROUND, WHICH WAS NOT OBJECTED TO BY THE LD. D.R. 13. THAT BEING SO, THE GROUND TAKEN BY THE ASSESSEE IS, THEREFORE, REJECTED BEING INFRUCTUOUS. 14. GROUND NO. 4 IS AGAINST THE INITIATION OF PENAL TY PROCEEDING U/S 271(1)(C) OF THE ACT. 15. AT THE TIME OF HEARING, THE LD. COUNSEL FOR THE ASSESSEE VERY FAIRLY SUBMITS THAT THIS BEING AN INFRUCTUOUS GROUND, THE SAME MAY BE TREATED AS NOT PRESSED. 16. THAT BEING SO AND IN THE ABSENCE OF ANY SUPPORT ING MATERIAL PLACED ON RECORD BY THE LD. COUNSEL FOR THE ASSESSEE, THE GROUND TAKEN BY THE ASSESSEE IS, THEREFORE, REJECTED BEING PREMATURE/NO T PRESSED. ITA NO. 44 24/MUM/2007 M/S ENAM SECURITIES PR IVATE LIMITED. 4 17. IN THE RESULT, ASSESSEES APPEAL STANDS DISMISS ED. ORDER PRONOUNCED ON THIS 30 TH DAY OF MARCH, 2011. SD/- (T.R. SOOD) ACCOUNTANT MEMBER SD/- (D.K. AGARWAL) JUDICIAL MEMBER MUMBAI, DATED 30 TH MARCH, 2011. RK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER OF INCOME TAX (APPEALS)- IV, MUMBA I 4. COMMISSIONER OF INCOME TAX, 4, MUMBAI 5. DEPARTMENTAL REPRESENTATIVE, BENCH J, MUMBAI //TRUE COPY// BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI ITA NO. 44 24/MUM/2007 M/S ENAM SECURITIES PR IVATE LIMITED. 5 1 DRAFT DICTATED ON 22.3.11 SR PS 2 DRAFT PLACED BEFORE AUTHOR ON 23 .3.11 SR PS 3 DRAFT PROPOSED & PL ACE BEFORE THE 2 ND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY 2 ND MEMBER JM/AM 5 APPROVED DRAFT COMES TO THE SR PS SR.PS 6 KEPT FOR PRONOUNCEMENT ON SR PS 7 FILE SENT TO THE BENCH CLERK S R PS 8 DATE ON WHICH FILE GOES TO THE HEAD CLERK 9 DATE ON WHICH FILE GOES TO THE AR 10 DATE OF DESPATCH SR PS