VENTURA SECURITIES LTD, MUMBAI V. ACIT CIR 4(2), MUMBAI

ITA 739/MUM/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 75275 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 11 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-01-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 20-01-2014
• Assessment Year: 2003-2004
• Appeal Filed On: 25-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation
• Section: 143(3)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL F , BENCH MUMBAI , BEFORE : SHRI R.C.SHARMA , A M AND SHRI AMIT SHUKLA , J M I TA NO. 739/ MUM/20 1 1 ( ASSESSMENT YEAR : 200 3 - 0 4 ) M/S VENTURA SECURITIES LTD. E; DHANNUR, GR. FLOOR, 15, SIR P.M.ROAD, FORT, MUMBAI - 01 VS. DCIT - 4 ( 2 ), MUMBAI PAN/GIR NO. : A A AC V 1361 J ( APPELLANT ) .. ( RESPONDENT ) /ASSESSEE BY : SHRI NISHIT GANDHI /REVENUE BY : SHRI RAVI PRAKASH DATE OF HEARING : 2 0 TH JANUARY , 201 4 DATE OF PRONOUNCEMENT : 2 0 TH JANUARY , 20 1 4 O R D E R PER R.C.SHARMA ( A .M.) : THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A), DATED 1 - 12 - 2010 , FOR THE ASSESSMENT YEAR 200 3 - 0 4 , IN THE MATTER OF ORDER PASSED UNDER SECTION 143(3) OF THE I.T. ACT. 2 . THE ASSESSEE I N ITS APPEAL HAS TAKEN FOLLOWING GROUNDS : - 1.1 THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 8, MUMBAI [LD. CIT(A)] ERRED IN CONFIRMING ASSESSING OFFICERS ACTION WHEREBY A.O. HAD LEVIED PENALTY U/S.271(1)(C) ON THE ADDITION MADE ON ACCOUNT OF CLAIM OF DEPRECIATION ON MOTOR CAR OF RS. 3,20,417/ - 1.2 IT IS RESPECTFULLY SUBMITTED THAT APPELLANT HAD RELIED ON VARIOUS OPINIONS AND ARTICLES TO GENUINELY CLAIM DEPRECATION AT 40% AND 50% RESPECTIVELY AND HENCE, THERE WAS NO DELIBERATE INTENTION OF THE APPELLA NT TO FURNISH ANY INACCURATE PARTICULARS OF INCOME AS IT WAS MERELY CLAIM. ITA NO. 739 /20 1 1 2 3 . RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. 4 . THE FACTS IN BRIEF ARE THAT DURING THE COURSE OF SCRUTINY ASSESSMENT THE AO PARTLY DISALLOWED ASSESSEES CLAIM FOR DEP RECIATION. ON SUCH DISALLOWANCE, HE ALSO LEVIED PENALTY UNDER SECTION 271(1)(C), WHICH WAS CONFIRMED BY THE CIT(A), AGAINST WHICH THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 5 . IT WAS ARGUED BY THE LEARNED AR THAT ASSESSEE HAD MADE FULL AND TRUE DISCLOSU RE OF ALL PARTICULARS OF INCOME, HOWEVER, MERELY BECAUSE THE AO HAS NOT ACCEPTED RATE OF DEPRECIATION ELIGIBLE FOR MOTOR VEHICLE HELD BY IT, HE ALLOWED DEPRECIATION @20% IN PLACE OF CLAIM OF ASSESSEE AT 40%. THE AO ALSO LEVIED PENALTY FOR SUCH PARTIAL DISA LLOWANCE . AS PER LEARNED AR, MERE DISALLOWANCE ON PART OF THE ASSESSEES CLAIM OF DEPRECIATION DO NOT WARRANT ANY PENALTY UNDER SECTION 271(1)(C). 6 . ON THE OTHER HAND, LEARNED DR RELIED UPON THE ORDERS OF AUTHORITIES BELOW AND CONTENDED THAT ACCORDING TO THE RATE OF DEPRECIATION ON MOTOR VEHICLE DURING THE RELEVANT ASSESSMENT YEAR WAS 20%, THEREFORE, THE AO WAS JUSTIFIED IN DISALLOWING THE EXCESS DEPRECIATION CLAIMED BY THE ASSESSEE AND THEREBY LEVYING PENALTY UNDER SECTION 271(1)(C) OF THE ACT. 7 . WE HAVE CONSIDERED RIVAL CONTENTIONS AND CAREFULLY GONE THROUGH THE ORDERS OF LOWER AUTHORITIES AND FOUND FROM THE RECORD THAT ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF STOCK BROKING IN THE CAPITAL MARKET SEGMENT. ALONG WITH THE RETURN OF INCOME ASSESSEE FURNISHED ITA NO. 739 /20 1 1 3 DETAILED CHART IN RESPECT OF DEPRECIATION CLAIMED BY IT ON VARIOUS ASSETS. IN RESPECT OF MOTOR VEHICLES THE ASSESSEE HAS CLAIMED DEPRECIATION AT THE RATE OF 40%, HOWEVER, IN THE COURSE OF ASSESSMENT, THE AO OBSERVED THAT ASSESSEE HAS NOT FURNISH ED DETAILS OF MAKE, USE AND DATE OF ACQUISITION OF THE MOTOR VEHICLE. ACCORDINGLY, HE ALLOWED ASSESSEES CLAIM OF DEPRECIATION AT 20% ONLY. WE ALSO FOUND THAT DISALLOWANCE HAS BEEN MADE BY LOWER AUTHORITIES BY OBSERVING THAT, IT IS NOT CLEAR AS TO WHAT IS THE MAKE OF THE CAR AND WHAT ACTUALLY HAS BEEN THE USE OF THE CAR IN THE COMPANY, WHETHER THE CARS ARE USED FOR TRANSPORTATION OF DIRECTOR OR EMPLOYEES OR WHETHER THEY ARE USED AS COMMERCIAL VEHICLE. AS PER APPENDIX - I OF THE I.T. RULES, 1961, PART - III(3) (2) MOTOR CAR OTHER THAN THOSE USED IN A BUSINESS OF RUNNING THEM ON HIRE, ACQUIRED OR PUT TO USE ON OR AFTER 1 ST DAY OF APRIL, 1990 SHALL BE ALLOWED DEPRECIATION @20%. ITEM 3(III) PROVIDES THAT COMMERCIAL VEHICLE WHICH IS ACQUIRED BY THE ASSESSEE ON OR AFTER 1 ST DAY OF OCTOBER, 1998, BUT BEFORE THE 1 ST DAY OF APRIL, 1999 AND IS PUT TO USE FOR ANY PERIOD BEFORE THE 1 ST DAY OF APRIL, 1999 FOR THE PURPOSES OF BUSINESS OR PROFESSION IN ACCORDANCE WITH THE THIRD PROVISO TO CLAUSE (II) OF SUB - SECTION (1) OF SE CTION 32, THE DEPRECIATION @40% SHALL BE ALLOWED. WE ALSO FOUND THAT ITEM 3(V) , WHICH PROVIDES THAT NEW COMMERCIAL VEHICLE WHICH IS AC QUIRED ON OR AFTER 1 ST DAY OF APRIL, 201 BUT BEFORE THE 1 ST DAY OF APRIL, 2002, DEPRECIATION @50% SHALL BE ALLOWED. NOTE - 6 BELOW THE TABLE DEFINES THE COMMERCIAL VEHICLE THAT A COMMERCIAL VEHICLE MEANS, HEAVY GOODS VEHICLE, HEAVY PASSENGER ITA NO. 739 /20 1 1 4 MOTOR VEHICLE, LIGHT MOTOR VEHICLE ETC. AS PER THE ASSESSEE THE CAR OWNED FALLS IN THE CATEGORY OF COMMERCIAL VEHICLE AS DEFINED IN NOTE - 6 AS IT INCLUDES THE TERM LIGHT MOTOR VE HI C LE . HOWEVER, THE AO DID NOT AGREE WITH THIS CONTENTION AND LEVIED THE PENALTY. AS PER THE OUR CONSIDERED VIEW, THE ASSESSEE HAS FURNISHED FULL AND TRUE DISCLOSURES, MERELY BECAUSE THE AO HAS NOT ACCEPTED THE ASSESSEES CLAIM OF COMMERCIAL VEHICLE, WHICH ALSO INCLUDE D THE TERM LIGHT MOTOR VEHICLE , THE PART DISALLOWANCE OF DEPRECIATION CANNOT BE MADE THE REASON FOR IMPOSITION OF PENALTY UNDER SECTION 271(1)(C) . FOR THIS PURPOSE , RELIANCE CAN BE PLACED ON T HE DECISION OF HON BLE SUPREME COURT IN THE CASE OF RELIANCE PETRO PRODUCTS LTD., 322 ITR 158 . 8 . KEEPING IN VIEW THE TOTALITY OF FACTS AND CIRCUMSTANCES OF THE CASE, WE DO NOT FIND ANY MERIT IN THE ACTION OF THE AO FOR LEVYING PENALTY. 9 . IN THE RESUL T, APPEAL FILED BY THE ASSESSEE I S ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 2 0 TH JANUARY. 201 4 . 2 0 TH JAN,2014 SD/ - SD/ - ( ) ( AMIT SHUKLA ) ( ) ( R.C.SHARMA ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED 2 0 TH /01/2014 /PKM , PS COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. ITA NO. 739 /20 1 1 5 / BY ORDER, ( ASSTT. REGISTRAR) / ITAT, MUMBAI 3. / THE CIT(A) - X, MUMBAI. 4. / CIT 5. / DR, ITAT, MUMBAI 6. GUARD FIL E. //TRUE COPY//