Super Alloy Castings P.Ltd, Faridabad V. ACIT, Circle 2(1), Faridabad

ITA 666/DEL/2023

AI Insights

Super Alloy Castings P. Ltd. appealed against the order of the CIT (A) which confirmed the disallowance of Rs. 80,998 on account of depreciation on electrical fittings and the addition of Rs. 1,62,500 related to personal use of telephone, vehicle running expenses, and vehicle repair and maintenance for the assessment year 2017-18. The Tribunal examined the depreciation rates applied to electrical fittings in different premises and found that the higher rate of 15% claimed for factory premises was consistent with previous assessments. Additionally, regarding the personal use of expenses, the Tribunal noted that similar claims had been accepted in previous assessments and found no substantial evidence of personal use in the corporate assessee. Consequently, the Tribunal set aside the CIT (A)'s order and directed the Assessing Officer to allow the claimed depreciation and reverse the additions made.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 121715 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-08-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 21-08-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 12-03-2023
• Other Referred Cases: DCIT vs. Haryana Oxygen Ltd.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: RAJNISH BEHARI MATHUR
• Section: 32; 15; 43; 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “G” DELHI BEFORE SHRI SAKTIJIT DEY, VICE PRESIDENT & SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER I.T.A. No.666/DEL/2023 Assessment Year 2017-18 Super Alloy Castings P. Ltd. Plot No.62, Sector-6, Faridabad Haryana. Vs. ACIT Circle-2(1) Faridabad TAN/PAN: AAMCS8327D (Appellant) (Respondent) Appellant by: Shri Rajnish Behari Mathur, Adv. Respondent by: Shri Anuj Garg, Sr.DR Date of hearing: 22 08 2023 Date of pronouncement: 22 08 2023 O R D E R PER PRADIP KUMAR KEDIA, A.M.: T he c a p ti o n e d a p pe a l h as b e e n fi le d b y t he a ss es se e ag ai n s t t h e or d e r o f th e l d. C o mm i ss i o ne r o f In co me T a x (A pp ea ls)- N a t i on al F ac e l es s A ppe a l C e nt re ( N F A C) , D el h i (‘ C I T (A ) ’ i n sh or t ) d a t e d 15 . 0 2. 2 0 2 3 a ri si ng fr o m t he a s se ss me nt o rd er da t e d 1 8. 12 . 2 01 9 pa s se d by th e A s s e ssi ng O ffi c e r (A O ) un d e r S e c t i on 1 43 ( 3) o f t he In c o me T a x A c t , 19 61 ( t h e A c t ) c on ce r n in g A Y 20 17- 18 . 2. T he g r o un ds o f a pp e a l r ai s e d b y t h e as se s se e re ad a s u nd e r : “ 1 . Th a t o n t h e f a c t s an d t h e c i r c um s t a n c e s of t h e c a s e t he Ld C I T A p pe a l s w a s n o t j u s t i f ie d i n c on f i r m i n g t h e d i s al l ow a n c e of R s . 8 0 , 9 9 8 o n ac c o u n t o f D e p r e c i at i o n o n E l e c t r i c al F i t t i n g s . N o s uc h di s a l l ow a nc e h as be e n m a de i n pa s t a s s e s s m e n ts us 14 3 ( 3 ). 2 . T h a t o n t h e f a c t s a nd t h e c i r c u m s t a n c e s o f t h e ca s e t h e L d C I T A p pe a l s w a s n ot j u s t i f i e d i n t he c o n fi r m i ng t h e ad di t i o n of R s . 1 , 6 2 , 5 0 0/ - o n a c c o u nt of pe r s on al u s e o f Te l e p hon e , V e hi c l e R u nn i n g E x pe n s e s a nd V e hi c l e r e p ai r a nd m a i nt e n a n c e. N o s u c h I.T.A. No.666/Del/2023 2 d i s a l l o w an c e h a s b e e n m a d e in p as t a s s e s s m e n t s f r a me d u s 1 4 3 ( 3 ) . ” 3. W h e n t h e ma t te r w a s c al l e d for h e ar i n g, t h e l d . c o u n se l f or t h e a ss es se e su b m i t te d t ha t t h e d i sp ut e as p er g ro un d no. 1 h i n ge s on ra te o f d e p re ci a t io n a pp l i c a b le to t h e e le c t r i c fi t t i n g s. In t he c o nt e x t , t h e l d. c o u nse l su b m i t t e d t h a t t h e e l e c tr i c fi t t in gs a re i n sta l l e d i n t h e o f fi c e p re m i s e s a s w e ll as i n t h e fa c t o ry pr e m i s e s. T he d e p r e c i a t io n ha s b e en c l ai m e d @ 10 % o n t h e fi t t i ng s i ns t a ll e d in t h e o f fi ce pr e m i se s w he r e a s t he d ep re c ia t i on o n F ac t o r y G e ns e t a nd E l e c t r i c al P a ne l s o f c e r t a i n m a ch in e i n st a l l e d fo r fa ct o r y pr em i se s a re ch ar ge d a t 1 5 % a s e l i g i bl e t o t h e a s se sse e . T h e A sse s s in g Of fi c e r a s w el l a s t he C IT (A ) h as f a i l e d t o ap pre c i at e th e d is t i nc t io n b e t w ee n t he e le c t r i c f i t t i ng s i n st a l l e d i n t h e fa c t or y pr e mi se s v i s- à - vi s o f fi ce pr e m i se s a n d a l lo w ed d e p r ec i a ti o n @ 10 % o n l y o n t h e el e ct r ic fi t t i n g s in st a l l e d o n fa ct o r y pr e m is e s t oo. I t w a s fur t h e r p oi nt e d ou t t ha t fo r t h e A ss es s m e nt Y e a r 20 14 - 15 on t h e sa me mat t e r , t h e A sse s si n g O f fi c e r i ss ue d no t i c e u n d e r S e c t io n 1 4 8 on a cc o u nt o f e xc es s de pr e c i a t i o n o n su ch e l ec t r i c f i t t i ng s. H ow eve r, w h i l e fr a m i ng th e as se s s m e nt un de r S e c ti o n 14 3( 3) r . w . S ect i o n 1 47 vi de or d e r d a te d 30 . 0 3. 20 12 , t h e A ss e s si n g O ff i ce r fo un d m er i t i n t h e c la i m o f t he a ss es s ee a n d n o a d d i t i on s w er e m a de o n t h e i de nt i c a l po i n t. 4. O n a p pr a i s a l o f t h e o r de r s o f t he a u t h o ri t i e s b el o w a s w e ll a s t he f a c t s p la c e d o n re c or d , w e fi n d pa l pa bl e m er i t i n t h e pl e a o f t he a ss es se e t ow a rd s c or re ct n es s o f hi g h er d ep re ci a t i o n c l a i m e d o n e le c t r i c fi t t i n gs i n sta l l ed at t h e fa c t o ry pr e m is e s. T he A sse ss i n g O ff ic e r h i m se l f h a s a cc e pt e d th e h i g h e r cl a i m o f 1 5% i n A sse s s me nt Y ea r 2 0 1 4- 15. We t hu s se e su b s ta n t i a l fo rc e i n t h e c l a i m o f t h e a ss es se e . T he o r de r o f t he C I T (A ) i s s e t a si d e on thi s i ss ue a n d t h e I.T.A. No.666/Del/2023 3 A sse s si n g O f fi c er i s d ir e c t e d t o re ve rs e th e d i s a llow a n c e o n t hi s sc o re . H e nc e, G r ou n d N o. 1 o f t h e a pp e a l o f t he a s ses s ee i s al l ow e d. 5. A p ro p o s G ro un d N o . 2, th e l d. c ou n s e l s ub mi t t e d tha t d ur i n g t he y ea r u n d e r c o nsi de ra t i o n, th e a s ses se e ha s i nt e r a l i a i nc ur r e d e xp e n se s on t e l ep h on e , v e h i c l e r u nn i n g a n d v e h i c l e m a i n t en a n c e e t c . In t he c ou r s e o f t h e a ss e s s m en t , t he A s se s si ng O ff ic e r w h i l e f ra m i n g t he a ss e s s me n t ha s est i m a t e d 1 0% o f suc h e x pe ns e s am ou nt i ng t o Rs. 1, 6 2, 0 9 6 / - i n a g g re ga t e t o ha ve b e e n i nc u r r e d t ow a r d s p er so n a l use r o f t h e d i r e c t o r s e tc . I n t hi s re ga r ds, t he l d. c ou n s e l s u b m i t t e d t ha t s u c h p e r s o na l use r c a nn o t b e vi su a l i z e d i n th e h a n ds o f c or p o ra t e a s se ss e e a nd , a t be st , i t c a n be re g a r de d a s p e r qu i si t e s i n t he h a n ds o f t he d i r e c t o r s b e n e f i t t i ng f ro m s u c h expe ns e s. 6. O n p e r u sa l o f t he c ase re c o rd s, w e f in d me r it i n s uc h p l e a . T h e Co - or di na t e Be nc h o f t he T r i b u n a l i n t he c a s e o f D CI T v s . H ar ya n a O xyg e n L t d. (D e l ) 76 1 IT D 3 2 h a s e n d or se d t h e p l e a o f t h e a ss e s see t ow a r ds a bs e nc e o f a n y pe rs on a l u s e r i n th e c a s e o f c o r p or a te a ss es se e . In c o n s on a nc e w i t h su c h v ie w , w e fi n d me ri t i n th e p l e a o f t he as se s se e . H e n c e , G rou n d N o . 2 o f th e a pp e a l o f th e a ss e s se e i s a ll ow e d. 7. I n t h e re s ul t , th e a p p e a l o f th e a s se ss e e i s a l lo w ed . Order dictated and pronounced in the open Court on 22/08/2023 Sd/- Sd/- [SAKTIJIT DEY] [PRADIP KUMAR KEDIA] VICE PRESIDENT ACCOUNTANT MEMBER DATED: /08/2023 Prabhat