Arvindbhai Jewellers Pvt.Ltd., Ahmedabad V. The Income Tax Officer, Ward-1(3), Now 1(1)(2), Ahmedabad

ITA 486/AHD/2015

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 6356 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 9 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-01-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2011-2012
• Appeal Filed On: 05-03-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V K SINGH
• Keywords: Depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH (BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER & SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER) ITA. NO: 486/AHD/2015 (ASSESSMENT YEAR: 2011-12) ARVIND JEWELLERS PVT. LTD. 408/5, ARVINDBHAI HOUSE, OPP. LAL BUNGLOW, OFF. C.G. ROAD, AHMEDABAD- 380009 V/S INCOME TAX OFFICER, WARD- 1 (3), [NOW 1(1)(2)] AHMEDABAD (APPELLANT) (RESPONDENT) PAN: AAECA9595R APPELLANT BY : SHRI DHIREN SHAH, AR RESPONDENT BY : SHRI V.K. SINGH, SR. D.R. ( )/ ORDER DATE OF HEARING : 01 -01-201 8 DATE OF PRONOUNCEMENT : 03-01-2018 PER N.K. BILLAIYA, ACCOUNTANT MEMBER: 1. THIS APPEAL BY THE ASSESSEE IS PREFERRED AGAINST TH E ORDER OF THE LD. CIT(A)-1, AHMEDABAD DATED 24.12.2014 PERTAINING TO A.Y. 2011- 12. ITA NO. 486/ AHD/2015 . A.Y. 2011-12 2 2. THE SUM AND SUBSTANCE OF THE GRIEVANCE OF THE ASSES SEE RELATES TO THE DISALLOWANCE OF DEPRECIATION OF MOTOR CAR, INTEREST ON VEHICLE LOAN AND MOTOR CAR EXPENSES. 3. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS WHI LE SCRUTINIZING THE BALANCE SHEET, THE A.O. NOTICED THAT THE ASSESSEE HAS PURCH ASED VEHICLES WHICH WERE REGISTERED IN THE NAME OF ONE OF THE DIRECTORS. THE A.O. ALSO NOTICED THAT THE ASSESSEE HAS CLAIMED INTEREST ON MOTOR CAR LOAN AND HAS ALSO DEBITED MOTOR CAR EXPENSES. 4. THE A.O. WAS OF THE FIRM BELIEF THAT PERSONAL ELEME NT/USES OF THE VEHICLE AND RELATED EXPENSES CANNOT BE RULED OUT AND ACCORDINGL Y DISALLOWED RS. 14,72,799/- WHICH INCLUDED DEPRECIATION OF RS. 9,99 ,375/- INTEREST OF RS. 2,34,586/- AND MOTOR CAR EXPENSES OF RS. 2,38,838/- . 5. THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT( A) AND VEHEMENTLY CONTENDED THAT SINCE THE ASSESSEE IS AN ARTIFICIAL JURIDICAL PERSON, THERE CANNOT BE ANY PERSONAL ELEMENT IN THE IMPUGNED EXPENDITURE S. AFTER CONSIDERING THE FACTS AND THE SUBMISSIONS, THE LD. CIT(A) RESTRICTE D THE IMPUGNED DISALLOWANCES TO 25% OF THE TOTAL DISALLOWANCE. 6. AGGRIEVED BY THIS, THE ASSESSEE IS BEFORE US. LD. C OUNSEL FOR THE ASSESSEE REITERATED WHAT HAS BEEN STATED BEFORE THE LOWER AU THORITIES. THE LD. D.R. STRONGLY SUPPORTED THE FINDINGS OF THE A.O. 7. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE ORD ERS OF THE AUTHORITIES BELOW. IN OUR CONSIDERED OPINION, IF THE LOWER AUTH ORITIES WERE OF THE OPINION ITA NO. 486/ AHD/2015 . A.Y. 2011-12 3 THAT THE VEHICLES HAVE BEEN PURCHASED IN THE NAME O F THE DIRECTOR THEN THE FIRST APPELLATE AUTHORITY SHOULD NOT HAVE RESTRICTED THE DISALLOWANCE TO 25%. FURTHER, IN OUR CONSIDERED OPINION, THE ASSESSEE BE ING AN ARTIFICIAL JURIDICAL PERSON CANNOT HAVE ANY PERSONAL USES OF THE VEHICLE S. 8. AFTER CONSIDERING THE FACTS IN TOTALITY, WE DO NOT FIND ANY MERIT IN THE FINDINGS OF THE LD. CIT(A). WE ACCORDINGLY SET ASIDE THE FIN DINGS AND DIRECT THE A.O. TO DELETE THE ENTIRE IMPUGNED DISALLOWANCES. 9. APPEAL FILED BY THE ASSESSEE IS ACCORDINGLY ALLOWED . ORDER PRONOUNCED IN OPEN COURT ON 03- 01- 20 18 SD/- SD/- (RAJPAL YADAV) (N. K. BILLAIYA) JUDICIAL MEMBER TRUE COPY ACCOUNTANT MEMBER AHMEDABAD: DATED 03/01/2018 RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHME DABAD