AKSHAYE KHANNA, MUMBAI V. ASSISTANT COMMISSIONER OF INCOME TAX 16(1), MUMBAI

ITA 5276/MUM/2017

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 0214 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-12-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 11-08-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHISH KUMAR LD J
• Assessee Lawyers: DILKHUSH MALESHA LD
• Keywords: Depreciation; Onus to prove
• Section: 143(3)

Judgement Text

ITA NO.5276/MUM/2017 AKSHAYE KHANNA ASSESSMENT YEAR-2012-13 IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI , , BEFORE HONBLE SHRI MAHAVIR SINGH, JM AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM ./I.T.A. NO.5276/MUM/2017 ( / ASSESSMENT YEAR: 2012-13) A KSHAYE KHANNA 12/A, SUMANGAL 13, BG KHER MARG MALABAR HILLS MUMBAI-400 006 / VS. ASSISTANT COMMISSIONER OF INCOME TAX-16(1) R.NO. 439, AAYKAR BHAWAN M.K.ROAD MUMBAI 400 020 ./PAN : AAGPK-4677-B ( /APPELLANT ) : ( ! / RESPONDENT ) ASSESSEE BY : DILKHUSH MALESHA, LD. AR REVENUE BY : ASHISH KUMAR, LD. JCIT-DR / DATE OF HEARING : 29/11/2018 / DATE OF PRONOUNCEMENT : 05/12/2018 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. AFORESAID APPEAL BY ASSESSEE FOR ASSESSMENT YEAR [AY] 2012-13 AGITATE THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-4, MUMBAI [CIT(A)], APPEAL NO. CIT(A)-4/IT-11/ACIT-16(1)/2014-15 DATED ITA NO.5276/MUM/2017 AKSHAYE KHANNA ASSESSMENT YEAR-2012-13 2 12/06/2017 QUA CONFIRMATION OF CERTAIN ADDITIONS OF RS.9,22,380/- ON ACCOUNT OF EXPENDITURE ON SPEED-BOAT OWNED BY THE ASSESSEE. 2.1 BRIEFLY STATED THE ASSESSEE BEING RESIDENT INDIVIDUAL IS A FILM ACTOR BY PROFESSION. THE ASSESSMENT FOR IMPUGNED AY WAS F RAMED BY LD. ASSISTANT COMMISSIONER OF INCOME TAX-16(1), MUMBAI [AO] IN SCRUTINY ASSESSMENT U/S 143(3) ON 03/12/2014 WHEREIN THE INC OME OF THE ASSESSEE WAS ASSESSED AT RS.124.39 LACS AFTER CERTA IN ADDITIONS AS AGAINST RETURNED INCOME OF RS.105.30 LACS E-FILED BY THE ASSESSEE ON 26/09/2012. THE ASSESSEE HAS BEEN SADDLED WITH DISA LLOWANCE OF RS.9,22,380/- ON ACCOUNT OF EXPENDITURE ON SPEED-BOAT OWNED BY HIM WHICH IS THE SOLE SUBJECT MATTER OF THIS APPEAL. 2.2 DURING ASSESSMENT PROCEEDINGS, IT TRANSPIRED TH AT THE ASSESSEE CLAIMED AGGREGATE EXPENDITURE ON ACCOUNT OF SPEED-BOAT AMOUNTING TO RS.9,22,382/- WHICH COMPRISED-OFF OF DEPRECIATION O F RS.7,53,790/- & INSURANCE EXPENSES OF RS.1,68,592/-. SIMILAR EXPEND ITURE WAS DISALLOWED DURING EARLIER AYS 2009-10 & 2010-11 ALS O. THE ASSESSEE DEFENDED THE SAME BY SUBMITTING THAT THE ASSESSEE H AD FARM HOUSE AT ALIBAUG AND CREATIVE PART OF THE PROFESSIONAL WORK INCLUDIN G READING, EVALUATING STORIES AND SCRIPTS, ACTING PRACTICE, SP EECH IMPROVEMENTS, STORY SESSIONS ETC. WAS BEING DONE FROM THE PREMISE S AT ALIBAUG AND IT WAS VERY CONVENIENT TO USE SPEED-BOAT THAN ANY OTHER MODE OF TRANSPORT AS HE WAS ABLE TO TRAVEL FROM WALKESHWAR, MUMBAI TO ALIBAUG AT MINIMUM TIME. IT WAS FURTHER SUBMITTED THAT THE ASS ESSEE EARNED A SUM OF RS.96,900/- AS BOAT HIRE CHARGES DURING IMPUGNED AY AND FURTHER THE ASSESSEE, SUO-MOTO DISALLOWED 25% OF THE EXPENDITURE, BEING PERSONAL IN NATURE. HOWEVER, IN THE ABSENCE OF ANY COGENT MA TERIAL ON RECORD TO ITA NO.5276/MUM/2017 AKSHAYE KHANNA ASSESSMENT YEAR-2012-13 3 SUPPORT THE SUBMISSIONS AND FOLLOWING THE REASONING OF AY 2010-11, LD. AO DISALLOWED THE AFORESAID EXPENDITURE OF RS.9.22 LACS AND ADDED THE SAME TO THE INCOME OF THE ASSESSEE. 3. AGGRIEVED, THE ASSESSEE AGITATED THE SAME WITHOU T ANY SUCCESS BEFORE LD. CIT(A) VIDE IMPUGNED ORDER DATED 12/06/2 017 WHEREIN LD. CIT(A) CONFIRMED THE STAND OF LD. AO ON THE PREMISE THAT THE ASSESSEE WAS UNABLE TO DEMONSTRATE WITH VERIFIABLE EVIDENCE THAT SUCH SPEED-BOAT WAS ACTUALLY UTILIZED FOR PROFESSIONAL ACTIVITIES A ND NOT FOR PERSONAL PURPOSES. AGGRIEVED, THE ASSESSEE IS IN FURTHER APP EAL BEFORE US. 4. THE LD. AUTHORIZED REPRESENTATIVE FOR ASSESSEE [ AR], SHRI DILKHUSH MALESHA REITERATING THE SUBMISSIONS CONTENDED THAT THE SPEED- BOAT WAS USED FOR PROFESSIONAL PURPOSES BY THE ASSESSEE AND SIMILAR CLAIM IN AYS 2009-10 & 2010-11 HAS BEEN ALLOWED BY FIRST APPELLATE AUTHORITY. THE SAME HAS BEEN CONTROVERTED BY LD. JC IT-DR, SHRI ASHISH KUMAR WHO SUBMITTED THAT THE ONUS TO PROVE THAT THE SPEED-BOAT WAS USED FOR PROFESSIONAL PURPOSES SQUARELY LIED ON THE ASSESSEE. 5. WE HAVE CAREFULLY PERUSED THE RIVAL CONTENTIONS AND PERUSED RELEVANT MATERIAL ON RECORD. UPON PERUSAL, WE FIND THAT IT IS UNDISPUTED FACT THAT THE ASSESSEE WAS SADDLED WITH SIMILAR ADD ITIONS IN AYS 2009-10 & 2010-11, HOWEVER, THE CLAIM OF THE ASSESSEE WAS A LLOWED BY LD. FIRST APPELLATE AUTHORITY IN BOTH THE YEARS. THE APPELLAT E ORDER FOR AY 2009-10 RECORDS A CLEAR-CUT FINDING THAT THE ASSESSEE HAD B EEN USING SPEED-BOAT FOR TRAVELLING FROM MUMBAI TO ALIBAUG FOR HIS PROFESSIONAL ACTIVITIES LIKE ACTING, PRACTICE, HEALTH, MAINTENANCE, STORY TELLIN G ETC. AND HENCE, BUSINESS ASSET HAS BEEN UTILIZED BY ASSESSEE FOR CO MMUTATION FOR PROFESSIONAL WORK AND THEREFORE, THE EXPENDITURE AG AINST THE SAME WAS ITA NO.5276/MUM/2017 AKSHAYE KHANNA ASSESSMENT YEAR-2012-13 4 ALLOWABLE TO THE ASSESSEE LIKE ANY OTHER TRAVELLING MODE LIKE MOTOR-CAR ETC. ANOTHER IMPORTANT FACT TO NOTE IS THAT THE SPEED-BOAT FORMS PART OF THE 15% BLOCK OF FIXED ASSETS WHICH IS EVIDENT FROM DEPRECIATION CHART AS PLACED ON RECORD AND THEREFORE, CONSTITUTE BUSIN ESS / PROFESSIONAL ASSET FOR THE ASSESSEE. IT IS FURTHER NOTED THAT TH E ASSESSEE HAS CLAIMED IMPUGNED DEPRECIATION ON OPENING WRITTEN DOWN VALUE OF THE SPEED-BOAT WHICH IS BEING CARRIED FORWARD FROM EARLIER AY AND ALREADY MERGED UNDER 15% BLOCK OF FIXED ASSETS. FURTHER, THE ASSESSEE HA S SUO-MOTO DISALLOWED 25% OF THE EXPENDITURE ON ESTIMATED BASI S TO ACCOUNT FOR PERSONAL ELEMENT / USAGE. THEREFORE, CONSIDERING TH E TOTALITY OF FACTS, IMPUGNED ADDITIONS COULD NOT BE SUSTAINED. REVERSIN G THE STAND OF LOWER AUTHORITIES, WE ALLOW THE APPEAL. 6. IN NUTSHELL, THE APPEAL STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 05 TH DECEMBER, 2018 SD/- SD/- (MAHAVIR SINGH) (M ANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED :05/12/2018 SR.PS:-JAISY VARGHESE ! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. ! / THE RESPONDENT 3. ( ( ) / THE CIT(A) 4. ( / CIT CONCERNED 5. )* #+ , + , / DR, ITAT, MUMBAI 6. *,-. / GUARD FILE ITA NO.5276/MUM/2017 AKSHAYE KHANNA ASSESSMENT YEAR-2012-13 5 / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.