SONI HOSPITAL PRIVATE LIMITED, Jaipur V. ACIT, Jaipur

ITA 493/JPR/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5333 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 8 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-03-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 02-07-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJ MEHRA
• Assessee Lawyers: A K JAIN
• Keywords: Capital asset; Depreciation

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; ,OA JH FOE FLAG ;KN O] YS[KK LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JM & SHRI VIKRAM SINGH YA DAV, AM VK;DJ VIHY LA- @ ITA NO. 493/JP/2014 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2007-08 SONI HOSPITALS PRIVATE LIMITED, 11, CHETAK, J.L.N. MARG, JAIPUR. CUKE VS. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-5, JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ L A-@ PAN/GIR NO.: AAGCS 9508 N VIHYKFKHZ @ APPELLANT IZR;FKHZ @ RESPONDENT FU/KZKFJRH DH VKSJ LS @ ASSESSEE BY : SHRI A.K. JAIN (CA) JKTLO DH VKSJ LS @ REVENUE BY : SHRI RAJ MEHRA (JCIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 01/02/2016 MN?KKS'K .KK DH RKJH[ K @ DATE OF PRONOUNCEMENT : 30/03/2016 VKNS'K @ ORDER PER: R.P. TOLANI, J.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 30/04/2014 PASSED BY THE LEARNED CIT(A), JODHPUR CA MP AT JAIPUR FOR A.Y. 2007-08. THE EFFECTIVE GROUNDS OF APPEAL ARE AS UNDER:- 1. THE LD CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE FOLLOWING DISALLOWANCES:- ITA 493/JP/2014_ SONI HOSPITALS P LTD VS. ACIT 2 A. RS. 79785/- OUT OF TRAVELLING AND CONVEYANCE EXPENSES BY REDUCING THE DISALLOWANCE FROM 15% TO 10% OF AGGREGATE EXPENSES OF RS. 797848/-. B. RS. 74385/- OUT OF PATIENT FOODING, MISC. AND GARDEN MAINTENANCE EXPENSES BY REDUCING THE DISALLOWANCE FROM 15% TO 10% OF AGGREGATE EXPENSES OF RS. 743850/-. C. RS. 50000/- BEING AMOUNT OF DEPRECIATION ATTRIBUTABLE TO CONSTRUCTION EXPENSES DISALLOWED FOR ALLEGED NON VERIFICATION OF SUCH EXPENSES. 2. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. APROP OS GROUND NO. 1(A) AND (B), THE ADDITIONS DESERVE TO BE DELETED INASMU CH AS THE ASSESSEE IS A COMPANY AND AN INCORPORATED ENTITY AND BUSINESS E XPENDITURE INCURRED BY IT CANNOT BE DISALLOWED FOR PERSONAL USE OF EMPLO YEES OR DIRECTORS AS HELD BY THE HONBLE GUJARAT HIGH COURT IN THE CASE OF SAYAJEE IRON INDUSTRY 253 ITR 749 (GUJ). 2.1 APROPOS LAST GROUND, THE ASSESSEE CLAIMED DEPRE CIATION ON BUILDING WHICH WAS HELD AS BUSINESS ASSET, WHICH WAS PARTLY DISA LLOWED HOLDING THAT ALL THE CONSTRUCTION BILLS COULD NOT BE PRODUC ED BY THE ASSESSEE. IT WAS ASSUMED THAT THE CORRESPONDING DEPRECIATION @ 10% WAS NOT ALLOWABLE. IN OUR CONSIDERED VIEW THAT THE BUILDING I S A CAPITAL ASSET, THE CONSTRUCTION COST HAS BEEN TAKEN TO ASSET ACCOUNT A ND NO REVENUE ITA 493/JP/2014_ SONI HOSPITALS P LTD VS. ACIT 3 EXPENDITURE IS CLAIMED. THE OWNERSHIP OF THE ASSET AN D BOOK ENTRIES IN ASSET ACCOUNT IS NOT DISPUTED; ONCE THE ASSESSEE HA S CONSTRUCTED A BUILDING, HELD IT AS BUSINESS ASSET AND DEBITED THE CONSTRUCTION AMOUNT TO THE ASSET ACCOUNT AND THE SAME IS ALLOWED TO BE CAPI TALIZED; THE DEPRECIATION HAS TO BE ALLOWED THEREON ON THE BOOK V ALUE WHICH BECOMES PART OF BLOCK OF ASSET. IN VIEW THEREOF, THE DISALLO WANCE ON DEPRECATION IS DELETED. 3. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 30/03/2016. SD/- SD/- FOE FLAG ;KNO V KJ-IH-RKSYKUH (VIKRAM SINGH YADAV) (R.P.TOLANI) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ @ JAIPUR FNUKAD @ DATED:- 30 TH MARCH, 2016 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- SONI HOSPITALS PRIVATE LIMITED, JAIP UR. 2. IZR;FKHZ @ THE RESPONDENT- THE ACIT, CIRCLE-5, JAIPUR. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDR @ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 493/JP/2014) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR