AMBIT CORPORATE FINANCE P.LTD, MUMBAI V. ADDL CIT RG 3(1), MUMBAI

ITA 6249/MUM/2012

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9427 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 3 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-01-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 22-08-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 11-10-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: LOVE KUMAR
• Assessee Lawyers: NEHA BARVE
• Keywords: Depreciation
• Section: 14A

Judgement Text

, , , , , ,, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E, MUMBAI , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI SANJAY ARORA, ACCOUNTANT MEMBER ITA NO.6429/MUM/2012 ASSESSMENT YEAR: 2009-10 A SST . C OMMISSIONER OF INCOME TAX-7(2), ROOM NO.624, AAYKAR BHAWAN, M.K.ROAD, MUMBAI-400020 / VS. M/S SBM CHEMICALS & INSTRUMENTS PVT. LTD. 701/D, POONAM CHAMBERS, DR. ANNIE BESANT ROAD, WORLI, MUMBAI - 400018 ( # / REVENUE) ( $%& /ASSESSEE) P.A. NO.AABCS4417M # ' ( ' ( ' ( ' ( / REVENUE BY : SHRI LOVE KUMAR - DR $%& ' ( ' ( ' ( ' ( / // / ASSESSEE BY) MS. NEHA BARVE ' &) / / / / DATE OF HEARING : 14 /01/2 015 *+, ' &) / DATE OF PRONOUNCEMENT : 14 /01/2015 DATE OF ORDER : - - - - ' &) / 20 /01/2015 - - - - / / / / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) : THE REVENUE IS AGGRIEVED BY THE IMPUGNED ORDER DATE D 31/07/2012 OF THE LD. FIRST APPELLATE AUTHORITY, MU MBAI . THE REVENUE HAS RAISED THE FOLLOWING GROUNDS:- M/S SBM CHEMICALS & INSTRUMENTS PVT. LTD . 2 1. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN LAW AND ON FACTS IN DELETING ADDITION BY WAY OF DISALLOWANCE OF DEPRECIATION ON FLAT ALLOTTED TO TH E DIRECTOR WITHOUT PROPERLY APPRECIATED THE FACTUAL A ND LEGAL MATRIX. 2. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN LAW AND ON FACTS IN NOT APPRECIATING THAT THE RELIA NCE ON THE CBDT CIRUCULAR IS MISPLACED, BECAUSE ASSESSEE COULD NOT PROVE BUSINESS NEED TO GIVE THE FLAT. 3. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION MADE U/S 14A R.W. RULE 8D(2)(II). 2. AT THE TIME OF HEARING, SO FAR AS, DISALLOWANCE OF DEPRECIATION ON FLAT ALLOTTED TO THE DIRECTOR, LD. DR, SHRI LOVE KUMAR, DEFENDED THE CONCLUSION ARRIVED IN THE ASSESSMENT ORDER BY SUBMITTING THAT BUSINESS EXPEDIENCY WAS NOT PROVED BY THE ASSESSEE, THUS, T HE LD. COMMISSIONER OF INCOME TAX (APPEALS) GRANTED RE LIEF WITHOUT APPRECIATING THE FACTS. ON THE OTHER HAND, MS. NEHA BARVE, LD. COUNSEL FOR THE ASSESSEE DEFENDED T HE CONCLUSION ARRIVED AT IN THE IMPUGNED ORDER. 2.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACT S, IN BRIEF, ARE THAT A RENT FREE ACCOMMODATION WAS PROVI DED TO THE DIRECTOR BY THE ASSESSEE COMPANY, ON WHICH DEPRECIATION WAS CLAIMED BY THE ASSESSEE COMPANY. THE ASSESSING OFFICER DID NOT ALLOW THE CLAIMED DEPRECIATION ON THE PLEA THAT BUSINESS EXPEDIENCY OF ALLOTTING THE RENT FREE ACCOMMODATION WAS NOT PROVE D. M/S SBM CHEMICALS & INSTRUMENTS PVT. LTD . 3 ON APPEAL, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) EXAMINED THE FACTS AND FOUND THAT THE FLA T WAS IN THE NAME OF THE COMPANY AND FOR BUSINESS EXPEDIENCY, THE FLAT WAS ALLOTTED TO ONE OF ITS DI RECTOR. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) PLACED RELIANCE UPON THE DECISION IN ITO VS PRABHUKRIPA OVERSEAS LTD. IN WHICH THE DECISION FROM HONBLE ANDHRA PRADESH AND HONBLE MADRAS HIGH COURT IN VAZIR SULTAN TOBACCO COMPANY LTD. 173 ITR 290 (AP) AND NEW INDIA MARITIME AGENCIES PVT. LTD. 207 ITR 392(MAD.) RESPECTIVELY WERE CONSIDERED AND GRANTED RELIEF TO THE ASSESSEE. THE OCCUPATION OF THE FLAT BY ITS DIRECTOR WAS EXPLAINED TO BE GIVEN FOR BUSINESS EXPEDIENCY, THUS, THE DEPRECIATION ON IT HAS TO BE ALLOWED, MORE SPECIFICALLY, WHEN THE FLAT IS OWNED BY THE ASSESSEE COMPANY. IN VIEW OF THE UNCONTROVERTED FINDING IN THE IMPUGNED ORDER, WE FIND NO INFIRMITY IN THE CONCLUSION DRAWN BY THE LD. CIT(A). IT IS UPHE LD, LEADING TO DISMISSAL OF THE GROUND RAISED BY THE REVENUE. 3. THE NEXT GROUND PERTAINS TO DELETING THE ADDITIO N MADE U/S 14A OF THE ACT R.W. RULE 8D(2)(II) OF THE RULES. THE LD. DR DEFENDED THE ADDITION MADE BY THE ASSESSING OFFICER, WHEREAS, THE LD. COUNSEL FOR THE ASSESSEE SUPPORTED THE CONCLUSION DRAWN IN THE IMPUGNED ORDER. 3.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE LD. ASSESSING OFFICER MADE DISALLOWANCE OF INTE REST M/S SBM CHEMICALS & INSTRUMENTS PVT. LTD . 4 AMOUNTING TO RS.6,66,290/- U/S 14A OF THE ACT R.W. RULE 8D(2)(II) OF THE RULES AT THE RATE OF 0.5% OF THE AVERAGE INVESTMENT OF RS.3,60,57,078/- AMOUNTING TO RS.1,80,285/-. THE ASSESSEE SUO-MOTO MADE DISALLOWANCE OF THE AMOUNT OF RS.1,28,656/-. IT IS NOTED THAT THE DIFFERENCE OF RS.51,629/-(RS.1,80,28 5/- MINUS 1,28,656/-) WAS FURTHER DISALLOWED, THUS, WE FIND NO INFIRMITY IN THE ORDER OF THE LD. COMMISSIONER O F INCOME TAX (APPEALS). IT IS AFFIRMED. FINALLY, THE APPEAL OF THE REVENUE IS HAVING NO MERIT, THEREFORE, DISMISSED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSI ON OF THE HEARING ON 14/01/2015. SD/ - (SANJAY ARORA) SD/ - (JOGINDER SINGH) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; . DATED : 20/01/201 5 F{X~{T? P.S/. .. - ' 0&1 21,& - ' 0&1 21,& - ' 0&1 21,& - ' 0&1 21,&/ COPY OF THE ORDER FORWARDED TO : 1. 34 / THE APPELLANT 2. 0534 / THE RESPONDENT. 3. 6 ( ) / THE CIT, MUMBAI. 4. 6 / CIT(A)- , MUMBAI 5. 189 0& , , / DR, ITAT, MUMBAI 6. 9:$ ; / GUARD FILE. - - - - / BY ORDER, 51& 0& //TRUE COPY// < <<