RAMLORD APPARELS, MUMBAI V. ACIT WD 25(3), MUMBAI

ITA 7415/MUM/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 100732 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-09-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 02-09-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 16-12-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Depreciation

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE S/SHRI B.R.BASKARAN ,AM AND AMARJIT SINGH , JM ./ I.T.A. NO . 7415 / MUM/20 1 3 ( / ASSESSMENT YEA R : 200 9 - 10 ) M/S RAMLORD APP ARELS, 9A, AKURLI INDUSTRIAL ESTATE, AKURLI ROAD, KANDIVALI (E), MUMBAI - 400101 / VS. ASSTT . COMMISSIONER OF INCOME TAX - WARD 25(3), MUMBAI . ( / APPELLANT ) .. ( / RESPONDENT ) ./ ./PAN. : AAA FR3183M / APPELLANT BY SHRI D .H.NADKARNI / RSPONDENT BY SHRI KAILASH P GAIKWAD / DATE OF HEARING : 02.9 . 201 5 / DATE OF PRONOUNCEMENT: 02 . 9. 201 5 / O R D E R P ER B .R.BASKARAN : THE ASSESSEE HAS FILED THIS APPEAL CHALLENGING THE ORDER DATED 21.10.2013 PASSED BY THE LD. CIT(A) - 35 , MUMBAI AND IT RELATES TO THE ASSESSMENT YEAR 200 9 - 10. 2. THE ASSESSEE IS AGGRIEVED BY THE DECISION OF LD. CIT(A) IN PARTI ALLY CONFIRMING THE DISALLOWANCE MADE OUT OF MOTOR CAR EXPENSES , CAR DEPRECIATION AND TELEPHONE EXPENSES . 3. THE ASSESSEE IS A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF EXPORTING OF GARMENTS . DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO NOTICE D THAT THE ASSESSEE DID NOT MAINTAIN LOGBOOK FOR THE USE OF CAR AND ALSO REGISTER FOR THE USE OF TELEPHONE. THE AO TOOK THE VIEW THAT THE USE OF TELEPHONE AND CAR FOR PERSONAL PURPOSES COULD NOT BE RULED OUT AND ITA NO. 7415/ MUM/20 1 3 2 HENCE HE DISALLOWED 20 % OF CAR EXPENSES, CA R DEPRECIATION AND TELEPHONE EXPENSES. 4. IN THE APPELLATE PROCEEDINGS, THE LD.CIT(A) REDUCED THE DISALLOWANCE TO 10%. STILL AGGRIEVED, THE ASSESSEE HAS FILED THIS APPEAL BEFORE US. 5. THE LD. AR CONTENDED THAT THE ASSESSEE IS MAINTAINING THE PROPER V OUCHERS IN RESPECT OF THE SAID EXPENSES AND HENCE NO DISALLOWANCE IS CALLED FOR. ALTERNATIVELY, THE LD. AR SUBMITTED THAT THE ASSESSEE HAS PAID FRINGE BENEFIT TAX ON THE ABOVE SAID EXPENSES AND HENCE THE DISALLOWANCE CONFIRMED BY THE LD. CIT(A) WOULD RES ULT IN DOUBLE TAXATION OF THE SAME ITEMS. THE LD. AR FURTHER PLACED RELIANCE ON THE DECISION RENDERED BY THE LD. CIT(A) IN THE ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 20 07 - 08, WHEREIN THE LD.CIT(A) HAD DELETED THE IDENTICAL ADDITION S BY CONSIDERING THE FACT THAT THE ASSESSEE HAS PAID FBT. IN THE ALTERNATIVE, THE LD. AR PLACED RELIANCE ON THE DECISION RENDERED BY THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF CR EATIVE GARMENTS V S . ACIT IN ITA NO.4516/MUM/2009 (AY - 2005 - 06) DATED 27.5.2011, WHEREI N THE TRIBUNAL HAD DELETED THE ADHOC DISALLOWANCE MADE BY THE AO . 6. ON THE CONTRARY, THE LD. DR SUBMITTED THAT THE IMPUGNED DISALLOWANCES WERE MADE FOR THE REASONS THAT THE ASSESSEE COULD NOT ESTABLISH THAT THE CAR AND TELEPHONE WERE USED ONLY FOR OFFI CIAL PURPOSES. 7. WE HEARD THE PARTIES AND PERUSED THE RECORDS. WE NOTICE FROM THE ASSESSMENT ORDER THAT THE ASSESSEE HAS ADMITTED TH A T IT DOES NOT MAINTAIN ANY LOG BOOK FOR THE USE OF CAR AND REGISTER FOR THE USE OF TELEPHONE. EVEN THOUGH THE ASSESSEE CLAIMED TO HAVE MAINTAINED THE PROPER VOUCHERS FOR THE EXPENSES SO INCURRED BY IT, THE USAGE OF CAR AND TELEPHONE FOR PERSONAL PURPOSES CANNOT ALTOGETHER BE RULED OUT. HENCE, IN OUR VIEW, THE LD. CIT(A) IS JUSTIFIED IN CONFIRMING THE DISALLOWANCE OF 10% OF THE ITA NO. 7415/ MUM/20 1 3 3 IMPUGNED EXPENSES. THE LD. AR CONTENDED THAT THE ASSESSEE HAS PAID FBT AND HENCE NO DISALLOWANCE SHOULD BE MADE. WE ARE UNABLE TO AGREE WITH THE SAID CONTENTION S . THE PAYMENT OF FBT, IN OUR VIEW, WOULD NOT AUTOMATICALLY VALID ATE THE GENUINENESS OF EXPENSES. ON THE CONTRARY, THE ASSESSEE IS REQUIRED TO PAY FBT ONLY ON THE AMOUNT ALLOWED AS DEDUCTION. THIS LEGAL POSITION HAS BEEN MADE CLEAR BY THE CBDT IN THE REPLY GIVEN TO QUESTION NO. 35 IN ITS CIRCULAR NO.8 /2005 DATED 29.8.2005. HENCE THE ASSE SSEE MAY SEEK APPROPRIATE REMEDIES IN THIS REGARD IN ACCORDANCE WITH THE LAW. 8 . IN VIEW OF THE ABOVE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF LD. CIT(A). ACCORDINGLY, WE CONFIRM THE SAME. 9 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMISSED . PRONOUNCED ACCORDINGLY ON 02ND SEPT, 2015. 02ND SEPT , 2015 SD SD ( AMARJIT SINGH ) ( B.R. BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI: 02 ND SEPT , 2015 . . . ./ SRL , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / TH E RESPONDENT. 3. ( ) / THE CIT(A) - CONCERNED 4. / CIT CONCERNED 5. , , / DR, ITAT, MUMBAI CONCERNED 6. / GUARD FILE. / BY ORDER, TRUST COPY (ASSTT. REGISTRAR ) , /ITAT, MUMBAI