K.D. Patel Trust, Ahmedabad V. The Income Tax Officer, Ward-3(4), Ahmedabad

ITA 686/AHD/2015

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 6366 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 9 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-01-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 25-03-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ADITYA SHUKLA
• Keywords: Depreciation; Rectification of order
• Section: 154

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD , , BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER & SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER ./ I.T.A. NO.686/AHD/2015 ( / ASSESSMENT YEAR : 2009-10) K.D.PATEL TRUST PROP. OF SHREE SWAMINARAYAN MARKETING G-20, NEW MADHAVPURA MARKET NR.POLICE COMMISSIONER OFFICER SHAHIBAUG ROAD AHMEDABAD 380 004 / VS. THE ITO WARD-3(4) AHMEDABAD # ./ ./ PAN/GIR NO. : AABTK 2548 L ( #% / APPELLANT ) .. ( &#% / RESPONDENT ) #%' / APPELLANT BY : MS. URVASHI SHODHAN, AR &#%(' / RESPONDENT BY : SHRI ADITYA SHUKLA, SR.DR )*(+ / DATE OF HEARING 21/12/2017 ,-./(+ / DATE OF PRONOUNCEMENT /01/2018 / O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTA NCE OF THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF I NCOME TAX(APPEALS)-10, AHMEDABAD [CIT(A) IN SHORT] DATED 25/02/2015 ITA NO.686/AHD/ 2015 K.D. PATEL TRUST VS. ITO ASST.YEAR 2009-10 - 2 - ARISING IN THE RECTIFICATION ORDER PASSED BY THE ASSESSIN G OFFICER (AO) UNDER S.154 OF THE INCOME TAX ACT, 1961 (HEREINAFTE R REFERRED TO AS 'THE ACT') DATED 03/01/2014 RELEVANT TO ASSESSMENT YEAR (AY) 2009-10. 2. THE ASSESSEE IS AGGRIEVED BY THE REDUCTION OF THE CLAIM OF DEPRECIATION OF MOTOR CAR BY RS.1,56,507/- IN THE R ECTIFICATION PROCEEDINGS UNDER S.154 OF THE ACT. 3. BRIEFLY STATED, THE ASSESSEE IS A TRUST ENGAGED IN THE BUSINESS OF TRADING OF DETERGENTS AND WASHING POWER ETC. THE A SSESSEE IN THE RETURN OF INCOME FOR AY 2009-10 INTER ALIA CLAIMED ACCELERATED DEPRECIATION @ 50% ON HONDA CAR PURCHASED FOR RS.8,94,319/-. THE DEPRECIATION WS ACCORDINGLY CALCULATED AT RS.2,23,580/- SINCE THE CAR WAS USED FOR LESS THAN 180 DAYS. THE DEPRECIATION CLAIM WAS ALLOWED IN THE ASSESSMENT. THEREAFTER, THE AO REVISED THE AFORESAID CLAIM OF D EPRECIATION @15% INSTEAD OF 50% CLAIMED ON THE GROUND THAT THE ASSES SEE IS NOT ENGAGED IN RUNNING CARS ON HIRE AND THEREFORE DOES NOT FALL IN THE CATEGORY OF COMMERCIAL VEHICLE. THE CLAIM OF DEPRECIATION WAS A CCORDINGLY REVISED TO RS.67,073/- BY A RECTIFICATION ORDER PASSED UNDE R S.154 OF THE ACT. THE CIT(A) ALSO CONFIRMED THE AFORESAID RECTIFICATION C ARRIED OUT BY THE AO IN FIRST APPEAL. ITA NO.686/AHD/ 2015 K.D. PATEL TRUST VS. ITO ASST.YEAR 2009-10 - 3 - 4. WITH THE ASSISTANCE OF THE LD.AR FOR THE ASSESSE E, WE FIND THAT THE ISSUE IS NO LONGER RES INTEGRA AND ADJUDICATED IN FAVOUR OF ASSESSEE BY THE COORDINATE BENCH IN SHREE BALAJI PRODUCTSVS. ITO IN ITA NO.2737/AHD/2013 ORDER DATED 09/09/2016 AND SHAIVAL REALITY PVT.LTD. IN ITA NO.845/AHD/2015 ORDER DATED 20/12/2017. IN THE AFORESAID DECISIONS, IT HAS BEEN HELD ON INTERPRETATION OF EX PRESSION COMMERCIAL VEHICLE REFERRED TO IN TABLE OF DEPRECIATION ANNEX ED TO RULE-5 OF THE IT RULES THAT IT IS NOT NECESSARY THAT THE MOTOR CAR S HOULD BE USED AND EXPLOITED FOR RUNNING ON HIRE. THE CAR USED FOR BU SINESS PURPOSE IS SUFFICIENT TO CLAIM ACCELERATED DEPRECIATION. THUS , THE DENIAL OF ACCELERATED DEPRECIATION IS NOT JUSTIFIED. 5. LOOKING FROM A DIFFERENT PERSPECTIVE, THE AFO RESAID ISSUE IS SURELY A COMPLEX ISSUE WHICH INVOLVES INTERPRETATIVE PROCESS AND REQUIRES DETERMINATION OF EXPRESSION COMMERCIAL VEHICLE IN THE LIGHT OF INCOME TAX ACT, INCOME TAX RULES, MOTOR VEHICLE ACT, 1988 ETC. THEREFORE SUCH MISTAKE CANNOT BE TERMED AS AN APPARENT MISTAK E FOR THE PURPOSES OF SECTION 154 OF THE ACT. THEREFORE, THE ACTION OF T HE AO CANNOT BE UPHELD EITHER WAY. 6. CONSEQUENTLY, WE CANCEL THE IMPUGNED ORDER PASSE D UNDER S.154 OF THE ACT. ITA NO.686/AHD/ 2015 K.D. PATEL TRUST VS. ITO ASST.YEAR 2009-10 - 4 - 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . THIS ORDER PRONOUNCED IN OPEN COURT ON 02/ 01 /2018 SD/- SD/- () ( ) (RAJPAL YADAV) ( PRADIP KUMAR KEDIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 02/ 01 /2018 3..),.)../ T.C. NAIR, SR. PS !'#$%$' / COPY OF THE ORDER FORWARDED TO : 1. #% / THE APPELLANT 2. &#% / THE RESPONDENT. 3. 456+ 7+ / CONCERNED CIT 4. 7+ ( ) / THE CIT(A)-10, AHMEDABAD 5. 89:+)56 , 56/ , 4 / DR, ITAT, AHMEDABAD 6. :<* / GUARD FILE. / BY ORDER, &8++ //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION .. 21.12.17 (DICTATION-PAD 7- PAGES ATTACHED AT THE END OF THIS APPEAL-FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 22.12.17 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.3.1.2018 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 3.1.2018 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER