V-TEX OVERSEAS PRIVATE LIMITED, MUMBAI V. ACIT 4(3), MUMBAI

ITA 6571/MUM/2013

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 2524 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-12-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2010-2011
• Appeal Filed On: 08-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIVEK BATRA
• Assessee Lawyers: M B SANGHVI
• Keywords: Depreciation

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL F BENCH, MUMBAI BEFORE SHRI N.K . BILLAIYA, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER / I .T.A. NO . 6571/MUM/2013 ( / ASSESSMENT YEAR : 2010 - 11 M/S. V - TEX OVERSEAS PVT. LTD., OFFICE NO. A 322, AHURA CENTRE, 82, MAHAKALI CAVES ROAD, ANDHERI(E), MUMBAI - 400 093 / VS. THE ACIT - 4(3), AAYAKAR BHAVAN, NEW MARINE LINES, MUMBAI - 400 020 ./ ./ PAN/GIR NO. : AABCV 7432R ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY: SHRI M.B. SANGHVI / RESPONDENT BY: SHRI VIVEK BATRA / DATE OF HEARING : 01 . 1 2 .2015 / DATE OF PRONOUNCEMENT : 01 .12 .2015 / O R D E R PER N.K. BILLAIYA, AM: THIS APPEAL BY THE ASSESSEE IS PREFERRED AGAINST THE ORDER OF THE LD. CIT(A) - 8 , MUMBAI D ATED 27 . 8 .201 3 PERTAINING TO ASSESSMENT YEAR 20 1 0 - 11 . 2. THE SOLE GRIEVANCE OF THE ASSESSEE RELATES TO THE DISALLOWANCE OF DEPRECIATION CLAIMED ON MOTOR CAR ON THE ALLEGED GROUND THAT VEHICLES WERE NOT REGISTERED IN THE NAME OF THE COMPANY. ITA. NO. 6571/M.2013 2 3. WHILE SCRUTINIZING THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION, THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAS PURCHASED MOTOR VEHICLE AND HAS CLAIMED DEPRECIATION. ON FURTHER ENQUIRY, THE AO FOUND THAT THE VEHICLE IS PURCHASED IN THE NAME OF ITS DIRECTOR . THE AS SESSEE WAS ASKED TO EXPLAIN WHY DEPRECIATION ON CAR SHOULD NOT BE DISALLOWED AS THE CARS ARE NOT IN THE NAME OF THE COMPANY. THE ASSESSEE FILED A DETAILED REPLY VIDE LETTER DATED 21.12.2012 AND STRONGLY CONTENDED THAT MERELY BECAUSE THE VEHICLES HAVE BEE N REGISTERED IN THE NAME OF THE DIRECTOR, IT WOULD NOT DEPRIVE THE COMPANY OF THE OWNERSHIP OF THE VEHICLE. IT WAS FURTHER EXPLAINED THAT ALL THE EXPENSES RELATING TO USE AND MAINTENANCE INCLUDING INSURANCE OF VEHICLE IS BORNE AND DEBITED IN THE BOOKS O F ACCOUNT OF THE COMPANY. 3.1. THIS SUBMISSION OF THE ASSESSEE DID NOT FIND FAVOUR WITH THE AO WHO WAS OF THE FIRM BELIEF THAT OWNERSHIP IS A MUST FOR THE CLAIM OF DEPRECIATION AND ACCORDINGLY DISALLOWED THE DEPRECIATION ON MOTOR VEHICLE. 4. THE ASSESS EE CARRIED THE MATTER BEFORE THE LD. CIT(A) BUT WITHOUT ANY SUCCESS. 5. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE STATED THAT AN IDENTICAL ISSUE WAS CONSIDERED BY THE TRIBUNAL IN THE CASE OF M/S. PADMSHREE WEAVING & MFG. MILLS PVT. LTD IN ITA NO. 6570/ M/2013 WHEREIN THE TRIBUNAL HAS FOLLOWED THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF ICDS LTD VS CIT 350 ITR 527. THE LD. COUNSEL PRAYED THAT THE DEPRECIATION SHOULD BE ALLOWED. ITA. NO. 6571/M.2013 3 6. PER CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE STRONGLY SU PPORTED THE FINDINGS OF THE REVENUE AUTHORITIES BUT COULD NOT BRING ANY DISTINGUISHING DECISION IN FAVOUR OF THE REVENUE. 7. WE HAVE CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE HAVE ALSO CONSIDERED THE RELEVANT DECISIONS RELIED UPON B Y THE LD. COUNSEL. WE FIND FORCE IN THE SUBMISSION OF THE LD. COUNSEL. THE CO - ORDINATE BENCH IN THE CASE OF M/S. PADMSHREE WEAVING & MFG. MILLS PVT. LTD (SUPRA) HAS DECIDED AN IDENTICAL ISSUE IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE WHEREIN IT H AS FOLLOWED THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF ICDS LTD (SUPRA). RESPECTFULLY FOLLOWING THE LAW UPHELD BY THE HONBLE SUPREME COURT, WE HOLD THAT THE ASSESSEE IS ENTITLED FOR CLAIM OF DEPRECIATION ON THE VEHICLES USED BY IT EVEN THOU GH IT HAS BEEN PURCHASED IN THE NAME OF THE DIRECTOR. WE, THEREFORE, SET ASIDE THE FINDINGS OF THE LD. CIT(A) AND DIRECT THE AO TO ALLOW THE CLAIM OF DEPRECIATION OF RS. 5,12,405/ - . 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ON 1 ST DECEMBER , 2015 SD/ - SD/ - ( PAWAN SINGH ) (N.K. BILLAIYA) /JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED : 1 ST DECEMBER , 2015 . . ./ RJ , SR. PS ITA. NO. 6571/M.2013 4 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI