YOGESH M MODI, MUMBAI V. ITO 25(1)(5), MUMBAI

ITA 6921/MUM/2016

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 8556 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-11-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 28-11-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: V JUSTINE
• Assessee Lawyers: HITESH M SHAH
• Keywords: Bogus purchase; Depreciation; Competent authority

Judgement Text

ITA NO.6921/M/2016 YOGESH MODI 1 IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH E, MU MBAI BEFORE SHRI P.K.BANSAL, VICE PRESEDENT AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO.6921/MUM/2016 (ASSESSMENT YEAR-2012-13) YOGESH MODI, 208, 2 ND FLOOR, PLOT NO.26, SHALIMAR MIRACLE, S.V. ROAD JAWAHAR NAGAR, GOREGAON,(WEST) MUMBAI-400062. PAN: AACPM8521M VS. ITO 25(1)(5) , C-10, 4 TH FLOOR, PRATYAKSHYAKAR BHAWAN , BKC, BANDRA(EAST), MUMBAI-400051 (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. HITESH M SHAH -AR REVENUE BY : SH. V. JUSTINE SR DR DATE OF HEARING : 31.10.2017 DATE OF PRONOUNCEMENT : 14.11.2017 ORDER UNDER SECTION 254(1) OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER: 1. THIS APPEAL BY ASSESSEE UNDER SECTION 253 OF THE IN COME-TAX ACT (THE ACT) IS DIRECTED AGAINST THE ORDER OF LD. CIT(A)-3 7, MUMBAI DATED 02.09.2016 FOR ASSESSMENT YEAR (AY) 2012-13. THE AS SESSEE HAS RAISED SOLITARY GROUNDS OF APPEAL THAT LEARNED COMMISSIONE R (APPEALS) ERRED IN CONFIRMING THE DISALLOWANCE OF RS. 4,11,677/- BEIN G DEPRECIATION CLAIMED ON INDUSTRIAL SHED FOR THE REASONS THAT A SSET WAS NOT PUT TO USE. 2. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE FILED RET URN OF INCOME FOR RELEVANT ASSESSMENT YEAR ON 4 TH JULY 2012 DECLARING TOTAL INCOME OF RS. 16,69,131/-. THE ASSESSMENT WAS COMPLETED ON 13 MAR CH 2015 UNDER ITA NO.6921/M/2016 YOGESH MODI 2 SECTION 143(3). THE ASSESSING OFFICER WHILE PASSING ASSESSMENT ORDER BESIDES OTHER ADDITIONS AND DISALLOWANCE, DISALLOWE D DEPRECIATION ON INDUSTRIAL PREMISES/ SHED. ON APPEAL BEFORE COMMISS IONER (APPEALS) THE ACTION OF ASSESSING OFFICER FOR DISALLOWANCE OF DEP RECIATION WAS CONFIRMED. FURTHER, AGGRIEVED BY THE ORDER OF COMMI SSIONER (APPEALS) THE ASSESSEE HAS FILED PRESENT APPEAL BEFORE US. 3. WE HAVE HEARD LEARNED AR OF THE ASSESSEE AND LEARNE D DR FOR THE REVENUE AND PERUSED THE MATERIAL ON RECORD CAREFULL Y. THE LEARNED AR OF THE ASSESSEE ARGUED THAT THE ASSESSEE MADE THE EXTE NSION ON THE FACTORY BUILDING BY GETTING THE APPROVAL PLAN SANCTIONED FR OM THE LOCAL AUTHORITY ON 5 AUGUST 2011. THE ASSET/ FACTORY SHED WAS PUT T O USE BEFORE 31MARCH 2012. THE ASSESSEE FURNISHED COMPLETE EVIDENCE WITH REGARD TO SANCTION A PLAN AND COMPLETION CERTIFICATE AND OTHER EVIDENCES TO SUBSTANTIATE HIS CONTENTION INCLUDING THE OCCUPANCY CERTIFICATE FOR CLAIMING DEPRECIATION OF BUILDING ASSET. THE ASSESSING OFFICER DISALLOWED THE DEPRECIATION HOLDING THAT INSPECTION OF CONSTRUCTION OF SITE WAS INSPECTED ON 30 APRIL 2012. THE LEARNED COMMISSIONER (APPEALS) ALSO CONFI RMED THE ACTION OF ASSESSING OFFICER OBSERVING THAT SANCTION PLAN WAS ISSUED ONLY ON 12 JULY 2012. THE LOWER AUTHORITY FAILED TO APPRECIATE THAT THE INDUSTRIAL SHED ALREADY EXIST IN THE PREVIOUS YEAR AND THERE WAS AN EXTENSION OF THE PREMISES. ON THE OTHER HAND LEARNED DR FOR THE REVE NUE SUPPORTED THE ORDER OF AUTHORITIES BELOW. IT WAS FURTHER ARGUED T HAT THE ASSESSEE HAS NO ITA NO.6921/M/2016 YOGESH MODI 3 SHOWN ANY EVIDENCE TO SUBSTANTIATE THE FACT THAT TH E ADDITIONAL ASSET WAS PUT TO USE BEFORE 31.03.2012. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSION OF THE PART IES AND HAVE GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. THE ASSESS ING OFFICER WHILE FRAMING ASSESSMENT ORDER ASKED THE ASSESSEE TO FURN ISH THE JUSTIFICATION OF CLAIM OF DEPRECIATION OF ASSET FOR FINANCIAL YEAR E NDED ON 2012. THE ASSESSEE FURNISHED THE DETAILS OF ASSET ADDED DURIN G THE FINANCIAL YEAR ENDED ON 2012. THE ASSESSEE FURTHER CONTENDED THAT EXTENSION OF FACTORY BUILDING WAS APPROVED BY THE LOCAL AUTHORITY BY LET TER DATED 05 TH AUGUST 2011, THE ASSESSEE HAD PUT TO USE THE ASSET BEFORE 31 MARCH 2012. THE ASSESSEE ALSO FURNISHED THE COPY OF COMPLETION CERT IFICATE AND OCCUPANCY CERTIFICATE DATED 12 JULY 2012 ISSUED BY COMPETENT AUTHORITY. THE CONTENTION AND THE DOCUMENTARY EVIDENCES FURNISHED BY ASSESSEE WERE NOT ACCEPTED BY ASSESSING OFFICER HOLDING THAT THE DATE OF INSPECTION IN THE OCCUPANCY CERTIFICATE IS MENTIONED AS 30 APRIL 2012 . THE ASSESSING OFFICER DISALLOWED APPRECIATION OF RS. 1,80,950/-. THE ASSESSING OFFICER ALSO DISALLOWED 10% DEPRECIATION ON PURCHASES OF RS .23,07,269/- HOLDING THAT ASSESSEE HAS SHOWN BOGUS PURCHASES TRANSACTION . THE ASSESSING OFFICER DISALLOWED APPRECIATION OF RS. 2,30,727/-BE ING 10% OF ALLEGED BOGUS PURCHASES. THUS, THE ASSESSING OFFICER DISALL OWED TOTAL DEPRECIATION OF RS.4,11,677/- (RS, 180950 + RS. 2,30,727/-). WE HAVE NOTED THAT NO APPEAL AGAINST THE DISALLOWANCE OF RS.2,30,727/- WA S FILED BY ASSESSEE ITA NO.6921/M/2016 YOGESH MODI 4 BEFORE COMMISSIONER (APPEALS). IN OUR VIEW THE DISA LLOWANCE OF DEPRECIATION OF RS. 2,30,727/- ATTAINS FINALITY. BE FORE US, THE DISPUTE IS LIMITED TO THE DEPRECIATION OF RS. 1,80,950/-, THOU GH THE ASSESSEE HAS MENTIONED THE FIGURE OF DISALLOWANCE OF DEPRECIATIO N FOR RS. 4,11,677/- IN THE GROUNDS OF APPEAL RAISED BEFORE TRIBUNAL. THE L EARNED COMMISSIONER (APPEALS) UPHOLD THE ACTION OF ASSESSING OFFICER ON DISALLOWANCE OF DEPRECIATION OF RS. 1,80,950/- HOLDING THAT THE ADD ITION OF BUILDING ASSET MADE IN THE YEAR AND UNDER CONSIDERATION WAS NOT PU T TO USE. WE HAVE SEEN THAT THE ASSESSEE HAD PLACED ON RECORD THE COP Y OF COMPLETION AND OCCUPANCY CERTIFICATE DATED 12 JULY 2012. IN THE CE RTIFICATE THE DATE OF INSPECTION IS MENTIONED AS 30 APRIL 2012. THE ASSES SEE THROUGHOUT THE PROCEEDING CONTENDED THAT ADDITIONAL FACTORY SAID A DDED DURING THE RELEVANT PERIOD WAS PUT TO USE BEFORE 31 ST MUST 2012. THE ASSESSEE MIGHT HAVE APPLY FOR ISSUING THE COMPLETION CERTIFICATE T O THE AUTHORITY CONCERNED BEFORE 30 APRIL 2012 BUT NO SUCH EVIDENCE IS FURNISHED. THE ASSESSING OFFICER DENIED THE RELIEF TO THE ASSESSEE ONLY ON THE BASIS THAT THE DATE OF INSPECTION IN THE COMPLETION CERTIFICAT E IS MENTIONED AS 30 TH OF APRIL 2012. WE HAVE FURTHER SEEN THAT IN THE AUDIT REPORT, THE AUDITOR OF THE ASSESSEE HAS SHOWN THE ADDITION OF ASSET OF RS. 56,00,093/-(PAGE NO 14 OF PB). FURTHER THE ASSESSEE HAS SHOWN THE ADDIT ION IN THE FIXED ASSET OF RS. 26,39,726/- BEFORE 30 SEPTEMBER 2011 AND AT RS. 2 954091/-AFTER 30 SEPTEMBER 2011 (PAGE 10 OF PB TOTAL RS.55,93,817 /-). THERE IS NO ITA NO.6921/M/2016 YOGESH MODI 5 DISPUTE ON FACTS THAT THE PRODUCTION IN THE UNIT WA S ALREADY GOING ON. WE HAVE NOTED THAT LANDED COMMISSIONER (APPEALS) IN IT S FINDING RECORDED THAT MAJOR PART OF THE ADDITION ON ACCOUNT OF FIXED ASSET MADE IN THE YEAR UNDER CONSIDERATION, BUT IT WAS NOT PUT TO USE. WE HAVE ALSO NOTED THAT FROM THE EVIDENCE FURNISHED BY ASSESSEE IT IS NOT C LEARLY ESTABLISHED THAT THE ADDITION OF BUILDING ASSET, ADDED DURING THE YE AR BY ASSESSEE WAS PUT TO USE BEFORE 31 ST OF MARCH 2012. HOWEVER, KEEPING IN VIEW THE SMALLNESS OF THE ISSUE BEFORE THE TRIBUNAL, WE DIRE CT THE ASSESSING OFFICER TO GRANT THE RELIEF OF DEPRECIATION OF RS. 1,80,950 /- IF ASSESSEE FURNISHED ANY EVIDENCE THAT THE ASSET ADDED DURING THE RELEVA NT PERIOD WAS PUT TO USE BEFORE 31 MARCH 2012. WITH THE DIRECTION THE GR OUNDS OF APPEAL RAISED BY ASSESSEE IS PARTLY ALLOWED. 5. IN THE RESULT APPEAL OF THE ASSESSEE IS PARTLY ALLO WED. ORDER PRONOUNCED IN OPEN COURT ON 14 TH DAY OF NOVEMBER 2017. SD/- SD/- (P.K.BANSAL) (PAWAN SINGH) VICE-PRESIDENT JUDICIAL MEMBER MUMBAI; DATED 14/11/2017 S.K.PS COPY OF THE ORDER FORWARDED TO : BY ORDER, (ASSTT.REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY/