Piyush Colonisers Ltd., New Delhi V. DCIT, Faridabad

ITA 5475/DEL/2013

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 0032 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 7 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-05-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 22-04-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 04-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIKRAM SAHAY
• Keywords: Depreciation; Search and seizure; Wrong claim
• Section: 143(3); 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: F :NEW DELHI BEFORE SH RI G.C. GUPTA, VICE PRESIDENT AND SH RI INTURI RAMA RAO , ACCOUNTANT MEMBER ITA NO. 5475 /DEL / 2013 ASSESSMENT YEAR: 2007 - 08 PIYUSH COLONISERS LTD. VS. THE DEPUTY COMMISSIONER OF A - 16/B1, MOHAN CORPORATIVE INCOME TAX, CENTRAL CIRCLE - 1, INDUSTRIAL ESTATE, MAIN MATHURA FARIDABAD. ROAD, NEW DELHI (PAN: AADCP7023J ) (APPELLANT) (RESPONDENT) APPELLANT BY : NONE RESPONDEN T BY : SH. VIKRAM SAHAY, SR. DR DATE OF HEARING: 22.04.2015 DATE OF PRONOUNCEMENT: 06.05.2015 ORDER PER SHRI INTURI RAMA RAO , A.M. : THIS IS AN APPEAL FILED BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2007 - 08 IMPUGNING THE ORDER OF LEARNED CIT(A), (CENTRAL), GURGAON, DATED 23.07.2013 ON THE FOLLOWING GROUNDS: I. THE ORDER OF THE CIT(A) IS BAD IN LAW AND AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE. II. ON FACTS AND CIRCUMSTANCE OF THE CASE LD. CIT(A), CENTRAL, GURGAON HAS ERRED IS NOT UNDERSTANDING FACTUAL MATRIX IN THE CASE THAT THE CAR WAS PURCHASED ON 31.03.2006 BUT THE DEPRECIATION WAS NOT CLAIM IN FY 2005 - 06 RELEVANT TO A.Y. 2006 - 07. III. ON FACTS AND CIRCUMSTANCE OF THE CASE LD. CIT(A), CEN TRAL, GURGAON, HAS ERRED IN IGNORING THE SIGNIFICANT FACT THAT THE VALUE OF CAR PURCHASED ON 31.03.2006 WAS DULY SHOWN AS ASSET IN THE BALANCE SHEET FOR THE FINANCIAL YEAR 2005 - 06 RELEVANT TO ASSESSMENT YEAR 2006 - 07. 2 ITA NO. 5475/DEL/2013 A.Y. - 2007 - 08 IV. ON FACTS AND CIRCUMSTANCES OF THE CASE LD. CIT(A), CENTRAL, GURGAON HAS ERRED IN NOT UNDERSTANDING FACTUAL MATRIX OF THE CASE THAT THE DEPRECIATION ON CAR PURCHASED ON 31.03.2006 WAS CLAIMED IN F.Y. 2006 - 07 RELEVANT TO A.Y. 2007 - 08 FOR THE FIRST TIME. V. ON FACTS AND CIRCUMSTANCES OF THE CASE LD. CIT(A), CENTRAL, GURGAON, ERRED CONFIRMING ADDITION OF RS. 4,20,955/ - MADE BY A.O. ALLEGEDLY ON ACCOUNT OF WRONG CLAIM OF DEPRECIATION. VI. ON FACTS AND CIRCUMSTANCES OF THE CASE LD. CIT(A), CENTRAL, GURGAON, ERRED IN HOLDING THAT THERE WAS NO REASON WHY CAR IF PURCHASED ON 31.03.2006 SHOULD NOT HAVE BEEN SHOWN IN THE ADDITION AFTER 30.09.2005 EVEN IF DEPRECIATION WAS NOT CLAIMED. VII. ON FACTS AND CIRCUMSTANCE OF THE CASE LD. CIT(A), CENTRAL, GURGAON ERRED IN HOLDING THAT BY CHARGING THE W.D.V. OF THE LAST AND FI RST DAY OF THE FINANCIAL YEAR, THE ACCOUNTS OF THE COMPANY CAN BE SAID NOT TO REFLECT THE TRUE PICTURE. VIII. ON FACTS AND CIRCUMSTANCE OF THE CASE LD. CIT(A), CENTRAL, GURGAON, ERRED IN HOLDING THAT THE AMOUNT OF INTEREST ON CAR LOAN AMOUNT HAS NOT EVIDENCED. IX. THAT THE APPELLANT CRAVES LEAVE TO ADD OR AMEND THE GROUNDS OF APPEAL BEFORE THE APPEAL IS FINALLY HEARD OR DISPOSED OFF. 2. ON 3 RD MARCH, 2015, THE AUTHORIZED REPRESENTATIVE FILED AN APPLICATION FOR ADJOURNMENT AND THE CASE WAS ADJOURNED FOR 22 ND APR IL, 2015. HOWEVER, ON THIS DAY, WHEN THE CASE WAS CALLED, NOBODY WAS PRESENT. HENCE, WE PROCEED TO DECIDE THE APPEAL EX - PARTE ON MERITS. 3. THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS A COMPANY INCORPORATED UNDER THE PROVISIONS OF INDIAN COMPANIES ACT, 1956. THE SEARCH AND SEIZURE OPERATION WERE CONDUCTED ON 16.01.2008 IN THE BUSINESS PREMISES OF THE ASSESSEE AS WELL AS IN THE RESIDENTIAL PREMISES OF TH E DIRECTORS OF ASSESSEE COMPANY, C ONSEQUENT TO SEARCH OPERATIONS, A NOTICE UNDER SECTION 153A OF THE INCOME - TAX ACT, 1961 (FOR SHORT THE ACT ) DATED 18.11.2008 WAS I SSUED CALLING UPON THE ASSESSEE COMPANY TO FILE RETURN OF INCOME WITHIN 30 DAYS FROM THE DATE 3 ITA NO. 5475/DEL/2013 A.Y. - 2007 - 08 OF RECEIPT OF THE NOTICE. IN R ESPONSE TO THE SAID NOTICE, THE ASSESSEE COMPANY FILED THE RETURN OF INCOME ON 4 TH MARCH, 2009 DECLARING SAME INCOME AS DECLARED IN THE ORIGINAL RETURN OF INCOME. AGAINST THE SAID RETURN OF INCOME, THE ASSESSMENT UNDER SECTION 153A READ WITH SECTION 143(3) OF THE ACT CAME TO BE PASSED ON 29.12.2009, DISALLOWING DEPRECIATION OF RS. 4,20,955/ - ON THE MOTOR CAR PURCHASED ON 31 ST MARCH, 2006 . BEING AGGRIEVED, THE ASSESSEE MADE AN APPEAL BEFORE THE LEARNED CIT(A) WHO VIDE ORDER DATED 23.07.2013, DISMISSED THE AP PEAL OF THE ASSESSEE BY GIVING THE FOLLOWING FINDINGS: FURTHER, AS PER CAR ACCOUNT FILED FOR AY 2006 - 07, A MERCEDES FROM T&T MOTORS LTD. FOR RS. 26,06,425/ - HAS BEEN REFLECTED ON 31.03.2006 ALONG WITH REGISTRATION CHARGES OF RS. 46,403/ - . A COPY OF INVOICE DATED 31.03.2006 HAS ALSO BEEN FURNISHED WHICH MENTIONS THAT THE HYPOTHECATION IS TO ICICI BANK LTD. HOWEVER, LOAN PAPERS OF ICICI NOR AMOUNT OF INTEREST ON LOAN AMOUNT HAS NOT BEEN EVIDENCED. RC OF CAR HAS NOT BEEN PRODUCED EITHER. BE THAT AS IT MAY, I WOULD THINK THAT THERE WAS NO REASON WHY THE CAR IF PURCHASED ON 31.03.2006 SHOULD NOT HAVE BEEN SHOWN IN THE ADDITION AFTER 30.09.2005 EVEN IF DEPRECIATION WAS NOT BEING CLAIMED. BY CHARGING THE WDV OF THE LAST AND FIRST DAY OF THE FINANCIAL YEAR, THE ACCOUNTS OF THE COMPANY CAN BE SAID NOT TO REFLECT THE TRUE PICTURE. HENCE, I AM CONSTRAINT TO UPHOLD THE ACTION OF THE AO IN DISALLOWING THE EXCESS CLAIM OF DEPRECIATION. ASSESSEE FAILS IN THIS GROUND OF APPEAL. 4. AGGRIEVE D , THE PRESENT APPEAL WAS FILED BEFORE US. 5. NO ONE WAS PRESENT ON BEHALF OF THE ASSESSEE COMPANY AND THE LEARNED DR RELIED UPON THE ORDER OF LEARNED CIT(A) . 6. WE HAVE HEARD THE RIVAL PARTIES AND HAVE PERUSED THE MATERIAL A VAILABLE ON RECORD. ON PERUSAL OF THE ASSESSMENT ORDER, IT APPEARS THAT THE ISSUE IN APPEAL DOE S NOT EMERGE OUT OF THE MATERIAL SEIZED DURING SEARCH OPERATION . LEARNED CIT(A) DENIED THE CLAIM OF DEPRECIATION ON MERCEDES CAR PURCHASED FROM T&T 4 ITA NO. 5475/DEL/2013 A.Y. - 2007 - 08 MOTORS LTD. F OR RS. 26,06,425/ - MAINLY ON THE GROUND THAT THE ASSESSEE FAILED TO PRODUCE THE LOAN PAPERS OF ICIC I BANK AND COPY OF RC OF THE CAR . IN OUR CONSIDERED VIEW, THE CLAIM CANNOT BE DENIED ON THOSE GROUNDS. IF A COPY OF THE INVOICE IS PRODUCED THAT WOULD SUFFIC IENTLY ESTA BLISH THE OWNERSHIP OF THE CAR . S IMPLY BECAUSE THE ASSESSEE FAILED TO CLAIM DEPRECIATION IN THE YEAR IN WHICH IT WAS PURCHASED I.E. A . Y . 2006 - 07 , THAT WOULD NOT BE A BAR TO CLAIM DEPRECIATION ON THE ORIGINAL COST OF THE CAR IN THE SUCCEEDING ASS ESSMENT YEAR I.E. 2007 - 08 . THEREFORE, WE DIRECT THAT THE DEPRECIATION SHOULD BE ALLOWED ON THE CAR PURCHASED ON 31 ST MARCH, 2006. ACCORDINGLY, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. 7. IN THE RESULT, THE APPEAL IS ALLOWED. THE DECISION IS PRONOU NCED IN THE OPEN COURT ON 6 T H M A Y , 2015. S D / - S D / - ( G.C. GUPTA ) ( INTURI RAMA RAO ) VICE PRESIDENT ACCOUNTANT MEMBER DA TED: 6 T H M A Y , 2015. RK/ - COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI