Aflon Engineering Pvt.Ltd., Ahmedabad V. The Income Tax Officer,Ward-1(1)(1), Ahmedabad

ITA 544/AHD/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5991 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-03-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 04-03-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: KINJAL V SHAH
• Keywords: Depreciation

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH A BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER ./ ITA NO.544/AHD/2016 / ASSTT. YEAR: 2012-13 AFLON ENGINEERING P.LTD. CITY MILL COMPOND KANKARIA ROAD AHMEDABAD 380 022. PAN : AABCA 9993 J VS. ITO, WARD-1(1)(1) AMBAWADI AHMEDABAD. / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI KINJAL V. SHAH, AR REVENUE BY : SHRI JAMES KURIAN, SR ! / DATE OF HEARING : 01/03/2018 '#$ ! / DATE OF PRONOUNCEMENT: 05/03/2018 %& / O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST O RDER OF LD.CIT(A)-1, AHMEDABAD DATED 28.1.2016 PASSED FOR T HE ASSTT.YEAR 2012-13. 2. IN THE FIRST GROUND OF APPEAL, GRIEVANCE OF THE ASSESSEE IS THAT HT ELD.CIT(A) HAS ERRED IN CONFIRMING THE ADHO C DISALLOWANCE OF VEHICLE EXPENSES AND DEPRECIATION. ITA NO.544 /AHD/2016 2 3. THE LD.COUNSEL FOR THE ASSESSEE, AT THE VERY OUT SET CONTENDED THAT ISSUE IN DISPUTE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE ORDER OF ITAT PASSED IN ASSTT.Y EAR 2008-09 AND 2010-11. SHE PLACED ON RECORD COPY OF THE TRIB UNAL ORDER PASSED IN ITA NO.2950/AHD/2011 AND OTHERS DATED 28. 12.2015 AND ITA NO.1828/AHD/2013 FOR A.Y.2010-11 ORDER DATE D 1.8.2016. THE TRIBUNAL IN THE ASSTT.YEAR 2010-11 WHILE DEALIN G WITH THIS ISSUE HAS MADE FOLLOWING OBSERVATIONS: 6. IN THE NEXT GROUND OF APPEAL, GRIEVANCE OF THE ASSESSEE IS THAT THE LD.CIT(A) HAS ERRED IN CONFIRMING THE D ISALLOWANCE OUT OF MOTOR CAR EXPENSES OF RS.3,51,571/- AND MOTO R CAR DEPRECIATION OF RS.2,60,667/-. 7. IT EMERGES OUT FROM THE RECORD THAT THE MOTOR CA RS WERE PURCHASED IN THE NAME OF DIRECTORS. THE AO H AS TREATED THE DIRECTORS AS A SEPARATE INDIVIDUAL ENTI TY AND OBSERVED THAT ON THESE MOTORS EXPENSES AS WELL AS DEPRECIATION IS NOT ADMISSIBLE. APPEAL TO THE CIT (A) DID NOT BRING ANY RELIEF TO THE ASSESSEE. SIMILARLY, DISA LLOWANCE WAS MADE IN THE ASSTT.YEAR 2008-09 ALSO, WHICH WAS DELE TED BY THE TRIBUNAL. THE LD.COUNSEL FOR THE ASSESSEE PLAC ED RELIANCE UPON THE ORDER OF THE ITAT PASSED IN THE ASSTT.YEAR 2008-09 AS WELL AS THE ORDER OF THE ITAT PASSED IN THE CASE OF AFLON ENGINEERING P.LTD., IN ITA NO.2950/AHD/2011. HE PL ACED ON RECORD COPIES OF THIS ORDER. A PERUSAL OF THIS ORD ER WOULD INDICATE THAT IF THE MOTOR CARS WERE PURCHASED FROM THE FUNDS PROVIDED BY THE ASSESSEE, AND THESE WERE EXCL USIVELY USED FOR THE PURPOSE OF BUSINESS OF THE ASSESSEE, T HEN, THE EXPENSES AS WELL AS DEPRECIATION WOULD BE ADMISSIBL E TO THE ASSESSEE. THE AO HAS NOWHERE ALLEGED THAT MOTORS WERE NOT PURCHASED FROM THE FUNDS OF THE ASSESSEE. HIS ONLY GRIEVANCE IS THAT THESE WERE NOT REGISTERED IN THE NAME OF THE ASSESSEE. AO, FURTHER RELIED UPON THE FINDING RECORDED BY HIM IN THE ASSTT.YEAR 2008-09. IN THE ASSTT.YEA R 2008- 09, THE TRIBUNAL HAS DELETED SUCH DISALLOWANCE. AF TER TAKING INTO CONSIDERATION THE ORDER OF THE ITAT PASSED IN ITA NO.2950/AHD/2011 IN THE ASSTT.YEAR 2008-09, I ALLOW THIS ITA NO.544 /AHD/2016 3 GROUND OF APPEAL AND DELETE THE DISALLOWANCE OF MOT OR CAR EXPENSES AS WELL AS DEPRECIATION. 4. RESPECTFULLY FOLLOWING THE ABOVE FINDING, WE ALL OW FIRST GROUND OF APPEAL AND DELETE ADHOC DISALLOWANCE CONFIRMED BY THE LD.CIT(A). 5. NOW NEXT GROUND OF ASSESSEE IS THAT THE LD.CIT(A ) HAS ERRED IN CONFIRMING ADDITION OF RS.33,694/-. 6. IT EMERGES OUT FROM THE RECORD THAT THE ASSESSEE FAILED TO DEPOSIT EMPLOYEES CONTRIBUTION TOWARDS PF WITHIN T HE DUE DATE PROVIDED IN THOSE ACTS. THE LD.CIT(A) CONFIRMED DI SALLOWANCE BY FOLLOWING DECISION OF HONBLE JURISDICTIONAL HIGH C OURT IN THE CASE OF GUJARAT STATE ROAD TRANSPORT CORPN., 366 ITR 170 . AFTER PERUSAL OF THE ORDER OF LD.CIT(A), WE ARE OF THE VI EW THAT CONCLUSION DRAWN BY THE LD.CIT(A) ARE IN CONSONANCE WITH DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT WHEREIN IT HAS BEEN HELD THAT IF AN ASSESSEE FAILS TO DEPOSIT EMPLOYEES CON TRIBUTION TO PF ACCOUNT WITHIN DUE DATE PROVIDED IN P.F. ACT, THEN EXPENDITURE WOULD NOT BE ALLOWED AS DEDUCTION. CONSIDERING ORD ER OF THE LD.CIT(A) THIS GROUND OF APPEAL IS REJECTED. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE COURT ON 5 TH MARCH, 2018. SD/- SD/- (PRADIPKUMAR KEDIA) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 05/03/2018