YUNUS E KHATRI, MUMBAI V. ASST CIT CEN CIR 9, MUMBAI

ITA 6939/MUM/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 100579 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-08-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: G
• Assessment Year: 2010-2011
• Appeal Filed On: 28-11-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A K KARDA M
• Assessee Lawyers: R C JAIN
• Keywords: Business income; Depreciation; Earning of tax free income
• Section: 143(3); 32

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH G, MUMBAI BEFORE SHRI D.KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA, JUDICIAL MEMBER ITA NO.6939/MUM/2013 ASSESSMENT YEAR: 2010-11 YUNUS E KHATRI, 638, GORI HOUSE, TPS III, 8 TH ROAD, KHAR (WEST) MUMBAI-400052 PAN:AEGPK3443M VS. ASSSTT. CC 9 , 6 TH FLOOR, C.G.O. ANNEXE, M.K. ROAD, MUMBAI-400020 (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI R.C. JAIN REVENUE BY : SHRI A. K. KARDAM DATE OF HEARING : 30.07.2015 DATE OF PRONOUNCEMENT : 12.08.2015 O R D E R PER D. KARUNAKARA RAO, AM: THE PRESENT APPEAL PREFERRED BY THE ASSESSEE IS DIR ECTED AGAINST THE IMPUGNED ORDER DATED 02.09.2013 PASSED BY CIT(A)-37 , MUMBAI THEREBY CONFIRMING THE DISALLOWANCE OF DEPRECIATION CLAIMED BY ASSESSEE OF ` . 2 ITA NO. 6939/M/13 YUNUS E. KHATRI 92,920/- VIDE ORDER DATED 22.12.2008 U/S. 143(3) OF THE INCOME TAX ACT, 1961. 1. THE LD. CIT(APPEALS) ERRED IN CONFIRMING THE DISALL OWANCE OF DEPRECIATION OF ` . 92,320/- ON MOTOR CAR CLAIMED AS DEDUCTION UNDER THE HEAD BUSINESS INCOME. 1.2. IN DISALLOWING THE SAME THE LD. CIT(APPEALS) ERRED IN NOT CONSIDERING THE SUBMISSION MADE BEFORE HIM IN THEIR ENTIRETY. 1.3. THE LD. CIT(APPEALS) ERRED IN RELYING UPON JUDICIAL PRONOUNCEMENTS WITHOUT APPRECIATING THE FACTS IN APPELLANTS CASE. 2. THE BRIEF FACTS OF THE CASE ARE THAT RETURN OF I NCOME WAS FILED ON 24.02.2011 FOR AY-2010-11 SHOWING TOTAL INCOME OF ` . 3,03,426/-. VIDE ASSESSMENT ORDER DATED 13.12.2012, THE INCOME WAS A SSESSED AT ` . 3,96,350/- BEFORE ADDING AGRICULTURAL INCOME. IN TH E ASSESSMENT ORDER, THE AO DISALLOWED THE CLAIM OF DEPRECIATION OF MOTO R CAR AMOUNTING TO ` . 92,920/- ON THE GROUND THAT THE SAME WAS NOT USED F OR BUSINESS. 3. AGGRIEVED BY THE ORDER OF ASSESSMENT, THE ASSESS EE FILED AN APPEAL BEFORE THE CIT(A). VIDE ITS ORDER DATED 02.09.2013 CIT(A) DISMISSED THE APPEAL AND CONFIRMED THE ASSESSMENT MADE BY AO. ASS ESSEE FILED THE PRESENT APPEAL THEREBY CHALLENGING THE ORDER OF CIT (A) DATED 02.09.2013 ON THIS ISSUE OF DEPRECIATION. BEFORE ITAT 4. DURING THE PROCEEDINGS BEFORE US, THE LD. AR SUB MITTED THAT THE ORDER DATED 02.09.2013 PASSED BY THE AO AND THE IMP UGNED ORDER DATED 3 ITA NO. 6939/M/13 YUNUS E. KHATRI 17.02.2012 ARE REQUIRED TO BE SET-ASIDE AS THE DISA LLOWANCE OF DEPRECIATION OF ` . 92,320/- HAS BEEN WRONGLY DISALLOWED IN THE ASSESSMENT. LD. AR FURTHER SUBMITTED THAT THE CAR I N QUESTION WAS USED FOR THE FIRM IN WHICH THE ASSESSEE IS A PARTNER. TH EREFORE, THE CLAIM OF DEDUCTION OF THE DEPRECIATION NEEDS TO BE ALLOWED A S AN ALLOWABLE DEDUCTION. IT WAS ALSO POINTED OUT THAT THE ASSESSE E HAS NOT CLAIMED EXPENDITURE ON RUNNING AND MAINTENANCE OF THE CAR W HICH HAS BEEN INCURRED BY THE FIRM AS HAS BEEN ALLOWED IN THE CAS E OF THE FIRM. DEDUCTION U/S. 32 OF THE INCOME TAX ACT HAS BEEN CL AIMED BY THE ASSESSEE AS THE OWNERSHIP OF THE CAR VESTED IN HIM. THE AR FURTHER SUBMITTED THAT THE AO AS WELL AS THE CIT(A) HAS MIS SED THE POINT THAT THE CAR WAS NOT USED FOR EARNING EXEMPT INCOME. THE AR CONCLUDED HIS ARGUMENTS BY REQUESTING THAT THE DEPRECIATION AS CL AIMED SHOULD BE ALLOWED. 5. ON THE OTHER HAND, THE DR REPRESENTING THE REVEN UE HAD RELIED UPON THE ORDERS PASSED BY THE AO AS WELL AS THE CIT (A). 6. WE HAVE HEARD THE LD. COUNSEL FOR THE ASSESSEE A S WELL AS THE DR REPRESENTING THE REVENUE AND HAVE PERUSED THE RECOR D AS WELL AS THE ORDERS OF REVENUE. WE ARE OF THE CONSIDERED OPINION THAT THE ASSESSEE IS A PARTNER OF M/S RAWASSA CONSTRUCTION, ALTHOUGH THE CAR IN QUESTION IS IN 4 ITA NO. 6939/M/13 YUNUS E. KHATRI THE NAME OF THE ASSESSEE. THE UNDISPUTED FACTS INCL UDE THAT THE CAR IS OWNED BY THE ASSESSEE AND HOWEVER, PETROL, REPAIRS ETC. RELATED TO THE CAR ARE MET BY THE FIRM, LOG-BOOK IS NOT MAINTAINED . THE A.O. HAS NOT MADE OUT A CASE TO CONCLUDE THAT CAR IS NOT USED BY THE FIRM FOR BUSINESS PURPOSE. ON THESE FACTS, WE ARE OF THE OPI NION THAT THE CAR IN QUESTION WAS PARTLY USED BY THE ASSESSEE HIMSELF AN D PARTLY FOR HIS PARTNERSHIP FIRM. THEREFORE, DENIAL OF ENTIRE CLAIM OF ASSESSEE APPE ARS VERY HARSH, THEREFORE, WE FIND IT APPROPRIATE TO RESTRICT THE C LAIM TO 50%. ACCORDINGLY, AO IS DIRECTED TO AMEND HIS ORDERS AND RESTRICT THE DISALLOWANCE ACCORDINGLY. THUS, THE GROUNDS RAISED BY THE ASSESSEE PARTLY AL LOWED. 7. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS P ARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 12 TH DAY OF AUGUST, 2015. SD/- SD/- (AMIT SHUKLA) (D.KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 12.08.2015 SHARWAN P.S. COPY TO: THE APPELLANT THE RESPONDENT 5 ITA NO. 6939/M/13 YUNUS E. KHATRI THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR G BENCH //TRUE COPY// BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.