ITO, Jaipur V. VRINDAWAN LAL GUPTA, Jaipur

ITA 688/JPR/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 5026 (ITAT-JAIPUR)
• Duration Of Justice: 3 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-10-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2009-2010
• Appeal Filed On: 27-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Assessee Lawyers: S L PODDAR DHK
• Keywords: Depreciation; Tax effect

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH HKKXPUN] YS[KK LNL; DS LE{K BEFORE: SHRI BHAGCHAND, ACCOUNTANT MEMBER VK;DJ VIHY LA-@ ITA NO. 688/JP/2016 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2009-10 THE ITO WARD- 6 (2) JAIPUR CUKE VS. SHRI VRINDAWAN LAL GUPTA 760, BARKAT NAGAR, PUSHPANJALI MARG TONK PHATAK, JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AFCPG 5046 F VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY:SHRI R.A. VERMA, ADDL. CIT - DR FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY: SHRI S.L. PODDAR, ADVOCATE LQUOKBZ DH RKJH[K@ DATE OF HEARING : 14/10/2016 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 19 /10/2016 VKNS'K@ ORDER PER BHAGCHAND, AM THE REVENUE HAS FILED AN APPEAL AGAINST THE ORDER O F THE LD. CIT(A)-2, JAIPUR DATED 25-04-2016 FOR THE ASSESSMEN T YEAR 2009-10 RAISING THEREIN FOLLOWING GROUND OF APPEAL. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETI NG THE ADDITION OF RS. 1,52,257/- MADE BY THE AO BY ALLOWI NG DEPRECIATION @ 15% INSTEAD OF 30% ON TRUCKS AS CLAI MED BY THE ASSESSEE AS THE SAME WAS UTILIZED FOR BUSINESS PURPOSES AND NOT FOR HIRING. ITA NO. 688/JP/2016 THE ITO, WARD- 6(2), JAIPUR VS. SHRI VRINDAWAN LAL GUPTA . 2 2.1 I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IT IS OBSERVED THAT THE DEMAND / TAX EFFECT IN THE REVENUES APPEAL IN QUESTION IS BELOW RS. 10.00 LA CS . UNDER THE POWERS VESTED BY SEC. 268A(1) OF THE I T ACT, CBDT HAS REC ENTLY ISSUED CIRCULARNO.21 OF 2015 DATED 10.12.2015(F NO. 279/MI SC. 142/2007-ITJ(PT) INSTRUCTING THE AUTHORITIES BELOW DEPARTMENTAL APPEAL SHOULD NOT BE FILED BEFORE ITAT WHERE THE DEMAND/TAX EFFECT DOES NOT EXCEED RS.10 LACS. THE C IRCULAR IS SPECIFICALLY MENTIONED TO BE APPLICABLE FOR ALL PEN DING APPEALS. 2.2 SUBJECT TO SOME EXCEPTIONS, IT IS FURTHER DIRE CTED BY CBDT THAT ALL THE DEPARTMENTAL APPEALS PENDING BEFORE ITAT WHERE THE DEMAND/TAX EFFECT IS LESS THAN 10 LACS SHOULD BE EITHER WITHDR AWN OR NOT PRESSED BY THE DEPARTMENTAL REPRESENTATIVES. 2.3 THE PRESENT APPEAL IS NOT COVERED BY ANY EXCEP TIONS MENTIONED IN THE SAID CBDT CIRCULAR. SINCE THE TAX DEMAND IN DIS PUTE IN THIS DEPARTMENTAL APPEAL IS BELOW THE LIMIT SET OUT BY C BDT FOR THE APPEAL THE SAME IS NOT MAINTAINABLE IN VIEW OF FORE GOINGS. AC CORDINGLY THE APPEAL OF THE DEPARTMENT IS DISMISSED AS NOT PRESSED/WITHD RAWN. 3.1 THE APPEAL OF THE REVENUE HAS ALSO BEEN TAKEN I NTO CONSIDERATION ON MERIT ALSO BY THE BENCH. IT IS NOTED FROM THE OR DER OF THE LD. CIT(A) ITA NO. 688/JP/2016 THE ITO, WARD- 6(2), JAIPUR VS. SHRI VRINDAWAN LAL GUPTA . 3 THAT SHE HAD ALLOWED THE DEPRECIATION CLAIMED BY TH E ASSESSEE AT 30% BY OBSERVING AS UNDER:- 2.3 I HAVE PERUSED THE FACTS OF THE CASE, THE ASSESSMENT ORDER AND THE SUBMISSIONS OF THE APPELLA NT. THE ONLY ISSUE RELATES TO DEPRECIATION CLAIMED ON TRUCK S, UTILISZED BY THE ASSESSEE , AT 30% AS AGAINST 15% ALLOWED BY THE ASSESSING OFFICER. THE ASSESSEE IS IN THE BUSINESS OF TRANSPORTATION OF SUPPLY OF MILK OF JAIPUR DAIRY. A S PER THE CONTRACT, THE ASSESSEE SUPPLIES MILK, TO THE VARIOU S BOOTHS IN A PARTICULAR AREA AND THE CONTRACT IN THIS RESPECT AS WELL AS THE RATE CHART IS BASED ON THE RATE OF DIESEL PREVAILIN G AT THAT TIME. THE ASSESSING OFFICER HELD THAT SINCE THE TRU CKS ARE BEING UTILIZED IN THE ASSESSEES BUSINESS AND NOT FO R HIRING, DEPRECIATION IS ALLOWABLE ONLY AT 15%. IN THE PROCE EDINGS BEFORE ME, THE ASSESSEE SUBMITTED THAT EVEN THOUGH THE AGREEMENT WITH THE DAIRY WAS FOR TRANSPORTATION OF MILK, HOWEVER, IT FUNCTIONED AS HIRE OF TRUCKS AS EVEN TH E PAYMENTS WERE MADE KEEPING IN MIND THE RATE OF DIESEL AND WH ENEVER THESE INCREASED, RATE IN THE CONTRACT, WERE ALSO RE VISED. THE AGREEMENT WITH THE JAIPUR DAIRY AND VARIOUS OFFICE ORDERS WERE FILED DURING THE PROCEEDINGS THE AGREEMENT SPE CIFIES THAT THE DISTRIBUTOR WILL ENSURE THAT THE VEHICLE U SED FOR DELIVERY OF MILK SHALL HAVE PROPERLY INSULTATED LOA DING SPACE SO AS TO ENSURE SAFE DELIVERY OF MILK TO ALL THE OU TLETS. THE ASSESSEE HAS POINTED TO THE DIFFERENT PARAGRAPHS IN THE AGREEMENT I.E. 25,30,32,33,42 & 50, WHICH SHOW THAT THE VEHICLES HAVE TO BE USED FOR TRANSPORTATION AND THE SAME WAS THE MAIN ACTIVITY, AS PER THE CONTRACT. TWO SUCH PA RAGRAPHS ARE REPRODUCED AS FOLLOWS:- POINT NO. 25 THE DISTRIBUTOR WILL START PAYING THE VEHICLE IMMED IATELY BUT NOT LATER TAN 20 DAYS FROM THE DATE OF RELEASE OF W ORK ORDER. THE VEHICLE SHOULD BE COVERED AND INSULATED TO PROT ECT THE PRODUCT FROM RAISE IN TEMPERATURE & WEATHER SURROUN DING. THE INSULATION SHOULD BE AT LEAST AT TOP AND BOTT OM & 2 AT ITA NO. 688/JP/2016 THE ITO, WARD- 6(2), JAIPUR VS. SHRI VRINDAWAN LAL GUPTA . 4 FOUR SIDES. CONDITION OF FLOOR SHOULD HAVE GOOD FIN ISH TO DAMAGE OF CRATES. POINT NO 32 THIS AGREEMENT CAN BE REPUDIATED AT ANY IF THE VEHI CLE ARE NOT FOUND CONFIRMING TO THE SPECIFICATIONS PRESCRIB ED OR ARE NOT IN THE FIT CONDITION. THE DECISION OF THE MANAG ING DIRECTOR SHALL BE FINAL IN THIS RESPECT. THE DISTRI BUTOR SHALL HAVE NO CLAIM FOR DAMAGES WHATSOEVER ON THIS GROUND . FURTHER, RELIANCE HAS BEEN PLACED ON THE KERALA HI GH COURT IN THE CASE OF CIT VS. DR. K.R. JAICHANDRAN 212 ITR 637 (KERALA). IT HAS ALSO BEEN SUBMITTED THAT FOR T HE ASSESSMENT YEAR 2012- 13 WHERE THE ASSESSMENT IS CO MPLETED U/S 143(3), THE BUSINESS REMAINING THE SAME, DEPREC IATION CLAIM OF 30% HAS BEEN ALLOWED. FURTHER, IN ASSESSME NT YEARS 2010-11 & 2011-12 ALSO DEPRECIATION AT 30% HAS BEEN ALLOWED IN THE CASES PROCESSED UNDER SECTION 143(1) . IN VIEW OF THE DECISION AS ABOVE AND THE PAST HISTO RY OF THE CASE, THE DEPRECIATION CLAIMED BY THE ASSESS EE, IS ALLOWABLE AT 30%. THE GROUND OF APPEAL IS ALLOWED. 3.2 DURING THE COURSE OF HEARING, THE LD. DR WAS NO T ABLE TO CONTROVERT THE FINDINGS RECORDED BY THE LD. CIT(A). HOWEVER, T HE LD. AR OF THE ASSESSEE RELIED ON THE ORDER OF THE LD. CIT(A). 3.3 THEREFORE, BY CONSIDERING THE TOTALITY OF THE F ACTS AND CIRCUMSTANCES OF THE CASE, I FIND NO REASON TO INTE RFERE WITH THE ORDER OF THE LD. CIT(A) WHICH IN MY VIEW IS A REASONED ORDER AND THE SAME IS ITA NO. 688/JP/2016 THE ITO, WARD- 6(2), JAIPUR VS. SHRI VRINDAWAN LAL GUPTA . 5 CONFIRMED. THUS THE APPEAL OF THE REVENUE ON MERIT OF THE CASE IS ALSO DISMISSED. 4.0 IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED ORDER PRONOUNCED IN THE OPEN COURT ON 19/10/ 2016. SD/ HKKXPUN ( BHAGCHAND) YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 19/10/ 2016 *MISHRA VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- THE ITO, WARD- 6(2), JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- SHRI VRINDAWAN LAL GUPTA, JAIPUR 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 688/JP/2016) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ @ ASSISTANT. REGISTRAR