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

ITA 6941/MUM/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 100756 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 28-11-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VIKRAM BATRA
• Assessee Lawyers: R C JAIN
• Keywords: Depreciation
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A, MUMBAI BEORE SHRI G.S.PANNU, ACCOUNTANT MEMBER AND SHRI RAMLAL NEGI, JUDICIAL MEMBER ITA NO. 6937/MUM/2013 (ASSESSMENT YEAR : 2010-11) AYAS E KHATRI, 638, GORI HOUSE, TPS III, 8 TH ROAD, KHAR (WEST), MUMBAI 400052 PAN: AGSPK 4168R ... APPELLANT VS. THE ACIT, CENTRAL CIR.9, 6 TH FLOOR, CGO ANNEXE, MK ROAD, MUMBAI 400020 .... RESPONDENT ITA NO. 6940/MUM/2013 (ASSESSMENT YEAR : 2010-11) KAYAS E KHATRI, 638, GORI HOUSE, TPS III, 8 TH ROAD, KHAR (WEST), MUMBAI 400052 PAN: ACWPK 6354M ... APPELLANT VS. THE ACIT, CENTRAL CIR.9, 6 TH FLOOR, CGO ANNEXE, MK ROAD, MUMBAI 400020 .... RESPONDENT ITA NO. 6941/MUM/2013 (ASSESSMENT YEAR : 2010-11) 2 ITA NO. 6937,6940&6941/MUM/2013 (ASSESSMENT YEAR : 2010-11) AVESH E KHATRI, 638, GORI HOUSE, TPS III, 8 TH ROAD, KHAR (WEST), MUMBAI 400052 PAN: AGSPK 4176H ... APPELLANT VS. THE ACIT, CENTRAL CIR.9, 6 TH FLOOR, CGO ANNEXE, MK ROAD, MUMBAI 400020 .... RESPONDENT APPELLANTS BY : SHRI R.C.JAIN REVENUE BY : SHRI VIKRAM BATRA DATE OF HEARING : 28/09/2015 DATE OF PRONOUNCEMENT : 28/09/2015 ORDER PER G.S. PANNU,AM: THE CAPTIONED THREE APPEALS HAVE BEEN PREFERRED B Y THREE DIFFERENT ASSESSEE OF THE SAME FAMILY AND SINCE SOM E OF THE ISSUES INVOLVED ARE COMMON, THEY HAVE BEEN CLUBBED AND HEA RD TOGETHER AND A CONSOLIDATED ORDER IS BEING PASSED FOR THE SAKE O F CONVENIENCE AND BREVITY. 2. ITA NO.6937/MUM/13IN THE CASE OF AYAS E KHATRI IS AN APPEAL PREFERRED AGAINST THE ORDER PASSED BY CIT(A)-37 MU MBAI DATED 02/09/2013 PERTAINING TO THE ASSESSMENT YEAR2010-11 , WHICH IN TURN HAS ARISEN OUT OF THE ORDER PASSED BY THE ASSESSING OFFICER DATED13/12/2012 UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). 3 ITA NO. 6937,6940&6941/MUM/2013 (ASSESSMENT YEAR : 2010-11) 3. IN THIS APPEAL, THE GRIEVANCE OF THE ASSESSEE IS AGAINST THE ACTION OF LOWER AUTHORITIES IN DISALLOWING DEPRECIATION ON CAR - RS.2,44,967/- AND INTEREST PAID ON LOAN RAISED TO PURCHASE CAR RS.64,874/- WHILE COMPUTING THE TOTAL INCOME. 4. BRIEFLY PUT, THE RELEVANT FACTS ARE THAT THE ASS ESSEE INDIVIDUAL IS A PARTNER IN M/S. BASERA CONSTRUCTION AND M/S. RAWASS A CONSTRUCTION AND HAS EARNED INCOME BY WAY OF REMUNERATION FROM THE S AID FIRMS AND ALSO INTEREST ON THE CAPITAL BALANCE MAINTAINED WITH THE SAID PARTNERSHIP FIRMS. AGAINST SUCH INCOMES, WHICH HAVE BEEN OFFER ED BY THE ASSESSEE UNDER THE HEAD PROFITS AND GAINS OF BUSINESS, IT WAS NOTICED THAT ASSESSEE CLAIMED DEDUCTIONS ON ACCOUNT OF DEPRECIAT ION ON CAR - RS.2,44,967/- AND INTEREST ON CAR LOAN RS.64,874/ -. THE ASSESSING OFFICER AND THEREAFTER THE CIT(A) DISALLOWED THE CL AIM OF THE ASSESSEE, AGAINST WHICH THE ASSESSEE IS IN FURTHER APPEAL BEF ORE US. 5. LD. REPRESENTATIVE FOR THE ASSESSEE CONTENDED THAT THE CAR IN QUESTION WAS BEING USED BY THE ASSESSEE FOR THE BUS INESS OF THE PARTNERSHIP FIRMS IN WHICH ASSESSEE IS A PARTNER AN D, THEREFORE, THE CLAIM OF DEDUCTION FOR DEPRECIATION AS WELL AS INTE REST ON CAR LOAN WAS LIABLE TO BE ALLOWED. IN THIS CONTEXT, LD. REPRESE NTATIVE FOR THE ASSESSEE REFERRED TO THE DECISION OF THE MUMBAI TRIBUNAL IN THE CASE OF YUNUS E. KHATRI IN ITA NO.6939/MUM/2013 DATED 12/8/2015, WHEREIN UNDER SIMILAR CIRCUMSTANCES 50% OF THE CLAIM OF DEPRECIAT ION ON CAR HAS BEEN ALLOWED. THE LD. REPRESENTATIVE FOR THE ASSESSEE A LSO POINTED OUT THAT THE AFORESAID PRECEDENT WAS RENDERED IN THE CASE OF YUNUS E. KHATRI (SUPRA), WHO WAS ALSO A PARTNER IN THE FIRM M/S. R AWASSA CONSTRUCTION, WHEREIN ASSESSEE ALSO IS A PARTNER. IT WAS, THER EFORE, CONTENDED THAT 4 ITA NO. 6937,6940&6941/MUM/2013 (ASSESSMENT YEAR : 2010-11) THE RATIO OF THE DECISION OF THE TRIBUNAL IN THE CA SE OF YUNUS E. KHATRI(SUPRA) WAS CLEARLY ATTRACTED IN THE PRESENT CASE ALSO. 6. LD. DEPARTMENTAL REPRESENTATIVE APPEARING FOR TH E REVENUE HAS NOT DISPUTED THE FACTUAL MATRIX BROUGHT OUT BY LD. REPRESENTATIVE FOR THE ASSESSEE . 7. HAVING CONSIDERED THE RIVAL SUBMISSIONS, WE FIND THAT IN THE CASE OF YUNUS E. KHATRI(SUPRA), OUR CO-ORDINATE BENCH HA S CONSIDERED SIMILAR ISSUE IN A CASE BELONGING TO THE ASSESSEE GROUP, WH EREIN THE FOLLOWING DISCUSSION IS RELEVANT:- 6. WE HAVE HEARD THE LD. COUNSEL FOR THE ASSESSEE AS 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 Q UESTION IS IN THE NAME OF THE ASSESSEE. THE UNDISPUTED FACTS INCLUDE THAT TH E CAR IS OWNED BY THE ASSESSEE AND HOWEVER, PETROL, REPAIRS ETC. RELATED TO THE CAR ARE MET BY THE FIRM, LONG-BOOK IS NOT MAINTAINED. THE A.O HAS NOT MADE OUT A CASE TO CONCLUDE THAT CAR IS NOT USED BY THE FIRM FOR BUSIN ESS PURPOSE. ON THESE FACTS, WE ARE OF THE OPINION THAT THE CAR IN QUESTI ON WAS PARTLY USED BY THE ASSESSEE HIMSELF AND PARTLY FOR HIS PARTNERSHIP FIR M. THEREFORE, DENIAL OF ENTIRE CLAIM OF ASSESSEE APPEA RS VERY HARSH, THEREFORE, WE FIND IT APPROPRIATE TO RESTRICT THE CLAIM TO 50% . ACCORDINGLY, AO IS DIRECTED TO AMEND HIS ORDERS AND RESTRICT THE DISA LLOWANCE ACCORDINGLY. 7.1 FOLLOWING THE AFORESAID PRECEDENT, WE FIND IT A PPROPRIATE TO RESTRICT THE DISALLOWANCE TO 50% OF THE DEPRECIATIO N AND INTEREST ON LOAN CLAIMED BY THE ASSESSEE. THEREFORE, WE SET AS IDE THE ORDER OF THE CIT(A) AND DIRECT THE ASSESSING OFFICER TO RECOMPUT E THE INCOME BY RESTRICTING THE DISALLOWANCE OUT OF DEPRECIATION ON CAR AND INTEREST ON CAR LOAN TO 50% OF THE AMOUNT CLAIMED. THUS, ON TH IS ASPECT ASSESSEE PARTLY SUCCEEDS. 5 ITA NO. 6937,6940&6941/MUM/2013 (ASSESSMENT YEAR : 2010-11) 8. THE ISSUE IN THE OTHER TWO CAPTIONED APPEALS IS SIMILAR TO THAT CONSIDERED IN THE CASE OF AYAS E KHATRI IN THE EAR LIER PARAS. THEREFORE, OUR DECISION IN THE CASE OF AYAS E KHATRI APPLIES MUTATIS MUTANDIS IN THE CASE OF OTHER APPEALS ALSO, SO FAR AS IT RELATE S TO ALLOWING OF DEPRECIATION IN RESPECT OF MOTOR CARS. 9. RESULTANTLY, THE CAPTIONED APPEALS OF THE ASSESS EES ARE PARTLY ALLOWED, AS ABOVE. THE ABOVE DECISION WAS PRONOUNCED IN THE OPEN COU RT IN THE PRESENCE OF BOTH THE PARTIES AT THE CONCLUSION OF T HE HEARING ON 28/09/2015. SD/- SD/- (RAMLAL NEGI) (G.S. PANNU) JUDICIAL MEMBER ACCOUNTANT ME MBER MUMBAI, DATED 28/09/2015 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT , 2. THE RESPONDENT. 3. THE CIT(A)- 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI VM , SR. PS