Hira Jewellers P.Ltd, New Delhi V. DCIT, Circle-11(2), New Delhi

ITA 5187/DEL/2017

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 6392 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 11 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-08-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2014-2015
• Appeal Filed On: 10-08-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANIMA BARNWAL
• Assessee Lawyers: C V SAJAN
• Keywords: Capital asset; Capital expenditure
• Section: 143(3); 13

Judgement Text

PAGE | 1 INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C : NEW DELHI BEFORE SHRI KUL BHARAT , JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER (THROUGH VIDEO CONFERENCING) ITA NO. 5187 /DEL/ 2017 (ASSESSMENT YEAR: 2014 - 15 ) HIRA JEWELLERS P. LTD, HD - 3, MAIN ROAD PITAMPURA, NEW DELHI PAN: AAACH7965E VS. DCIT, CIRCLE - 11( 2 ), NEW DELHI (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI C. V. SAJAN, CA REVENUE BY: MS. ANIMA BARNWAL, SR. DR DATE OF HEARING 03/08 / 2021 DATE OF PRONOUNCEMENT 0 3 / 08 / 2021 O R D E R PER PRASHANT MAHARISHI, A. M. 1. THIS APPEAL IS FILED BY THE ASSESSEE AGAINST ORDER OF THE LD CIT(A) - 25, NEW DELHI FOR ASSESSMENT YEAR 2015 - 16, WHEREIN, THE ONLY ISSUE IS WITH RESPECT TO DISALLOWANCE OF PAYMENT OF VAT OF RS. 2,38,375/ - . THIS IS THE ONLY ISSUE IN TH IS APPEAL. 2. BRIEF FACTS OF THE CASE SHOWS THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF TRADING OF JEWELRY AND ORNAMENTS. THE ASSESSEE FILED ITS RETURN OF INCOME ON 28.08.2014 DECLARED INCOME OF RS. 99,94,280/ - . THE ASSESSMENT ORDER U/S 143(3) WAS PASSED BY THE LD AO AT RS. 1 , 02,38,900/ - . THE MAJOR ADDITIONS WAS WITH RESPECT TO THE DISALLOWANCES ON ACCOUNT OF ADDITIONAL VAT PAID BY THE ASSESSEE OF RS. 2,38,375/ - . THE LD CIT(A) ALSO CONFIRMED THE SAME. THEREFORE, THE ASSESSEE IS IN APPEAL. 3. THE PARTIES ARE HEARD AND THE ORDERS OF THE LOWER AUTHORITIES ARE PERUSED. 4. THE FACTS SHOWS THAT THE ASSESSEE HAS DEBITED A SUM OF RS. 2 , 38 , 375/ - ON ACCOUNT OF ADDITIONAL VAT PAID BY THE ASSESSEE. THE ASSESSEE SUBMITTED THAT THIS SUM WAS PAID ON ACCOUNT OF SALES OF OLD AND USED VEHICLE AND UNDER THE SCHEM E OF STATE GOVT WHEREIN, THE DEALERS WHO ARE UNWARE OF THE LEGAL PROVISION OF PAYMENT OF VAT ON SALE OF CAPITAL GOODS, THAT IT ATTRACTED THE PAYMENT OF SALES TAXES TO DEPOSIT THE SUM . SUCH DEPOSIT WAS WITHOUT PAYMENT OF ANY INTEREST IN PENALTIES . IN FY 2 012 - 13 THE ASSESSEE HAS SOLD VEHICLE OF RS. 19.08 PAGE | 2 LAKHS AND VAT @12.5 OF RS. 2,38,375/ - WAS PAID DURING THE YEAR. THIS WAS CLAIMED AS A DEDUCTION. THE LD AO HELD THE ABOVE EXPENDITURE IS NOT ALLOWABLE AS IT HAS BEEN PAID ON SALE OF FIXED ASSETS RELATING TO CAPITAL EXPENDITURE. WE FIND THAT THE VAT PAID ON SALE OF CAPITAL GOODS IS ALSO SUBJECT TO CREDIT AND SET OFF TO THE ASSESSEE. THIS SALES TAX WAS ALSO BORNE BY THE ASSESSEE. IT IS NEITHER PENALTY NOR ANY TAXES FOR INFRINGEMENT OF LAW. IT IS IN FACT THE SA LES TAX LIABILITY ARISING ON THE ASSESSEE ON SALE OF VEHICLE. THE ABOVE EXPENDITURE WAS NOT INCURRED BY THE ASSESSEE FOR ACQUISITION OF ANY CAPITAL ASSET. IN VIEW OF THIS WE DO NOT FIND ANY REASON TO HOLD THAT THE ABOVE EXPENDITURE INCURRED BY THE ASSESSEE IS ANYWAY CAPITAL IN NATURE. IN VIEW OF THIS WE REVERSE OF ORDERS OF THE LOWER AUTHORITIES AND DELETE THE DISALLOWANCES OF SALES TAX PAID BY THE ASSESSEE. ACCORDINGLY, THE SOLITARY GROUND OF APPEAL IS ALLOWED. 5. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 0 3 / 08 / 2021 . - SD/ - - SD/ - ( KUL BHARAT ) (PRASHANT MAHARISHI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 0 3 / 08 / 2021 A K KEOT COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI