M/s Masterline Telebiz Private Limited, Mohali V. DCIT, Mohali

ITA 759/CHANDI/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 4887 (ITAT-CHANDIGARH)
• Duration Of Justice: 11 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-04-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2008-2009
• Appeal Filed On: 02-05-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Assessee Lawyers: TEJ MOHAN SINGH ADV OCTE
• Keywords: Revenue expenditure; Capital expenditure
• Section: 80G

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, A CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND DR. B.R.R. KUMAR, ACCOUNTANT MEMBER ITA NO. 759/CHD/2017 ASSESSMENT YEAR : 2008-09 M/S MASTEARLINE TELEBIZ PRIVATE LTD, VS. THE DCIT, D-181, INDUSTRIAL AREA, CIRCLE 6(1), MOHALI VIII-B, MOHALI PAN NO. AABCM2265K (APPELLANT) (RESPONDENT) APPELLANT BY : SH. TEJ MOHAN SINGH, ADV OCTE RESPONDENT BY : SH. MANJIT SINGH, SR.DR DATE OF HEARING : 09.04.2018 DATE OF PRONOUNCEMENT: 09.04.2018 ORDER PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESS EE AGAINST THE ORDER DATED 21.3.2017 OF THE COMMISSIONER OF IN COME TAX [HEREINAFTER REFERRED TO AS CIT(A)]-2, CHANDIGARH. 2. THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL:- 1. THAT THE ORDER OF THE LD. CIT(A)-2 IS NOT A SPEAKIN G ORDER, IS ERRONEOUS ARBITRARY, OPPOSED TO LAW AND F ACTS OF THE CASE. 2. THAT THE LD. CIT(A) HAS ERRED IN DISALLOWING DONATI ONS MADE THROUGH BANKING CHANNELS AMOUNTING TO RS. 10,500/- U/S 80G FOR WANT OF RECEIPT. ITA NO.759/CHD/2017- M/S MASTERLINE TELBLZ PRIVATE LIMITED, MOHALI 2 3. THAT THE LD. CIT(A)-2 HAS ERRED IN DISALLOWING A SU M OF RS. 28,195/- PAID AS ROAD TAX FOR NEW VEHICLE WITHOUT CORRECTLY APPRECIATING THAT THE ROAD TAX WA S PAID FOR COMMERCIAL VEHICLES. 4. THAT THE LD. CIT(A)-2 HAS ERRED IN DISALLOWING A SU M OF RS. 86,056/- PAID FOR PURCHASE OF ALLOY AND TYRE S WITHOUT CORRECTLY APPRECIATING THE FACTS OF THE CAS E. 5. THAT THE LD. CIT(A)-2 HAS ERRED IN DISALLOWING OFFI CE EXPENSE, PRINTING AND STATIONERY AND REPAIR AND MAINTENANCE EXPENSES AGGREGATING TO RS. 2,07,000/- WITHOUT CORRECTLY APPRECIATING THE FACTS OF THE CAS E. 6. THAT THE APPELLANT CRAVES LEAVE TO ADD, TO ALTER, T O AMEND OR VARY FROM AFORESAID GROUNDS OF APPEAL AT OR BEFORE THE TIME OF HEARING OF THE SAID APPEAL . 3. GROUND NO.1 IS GENERAL IN NATURE AND DOES NOT RE QUIRE ANY ADJUDICATION. 4. GROUND NO.2 IS RELATING TO THE DISALLOWANCE OF D ONATION MADE THROUGH BANKING CHANNEL AMOUNTING TO RS. 10,50 0/- U/S 80G OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT'). THE LD. COUNSEL HAS INVITED OUR ATTENTION TO THE PAPER BOOK PAGE 7 TO SUBMIT THAT THE AMOUNT OF RS. 21000/- WAS REMITTED TO THE SHRI MATA VAISHNO DEVI SHRINE BOARD. THE CLAIM HAS BEEN REJECTED ONL Y TO THE FACT THAT THE ASSESSEE HAD NOT RECEIVED THE RECEIPT OF T HE PAYMENT. 5. AFTER HEARING THE LD. REPRESENTATIVES OF THE PAR TEIS, WE ARE OF THE VIEW THAT THE ASSESSEE HAS BEEN ABLE TO PROV E THAT THE AMOUNT HAS ACTUALLY BEEN REMITTED THROUGH BANKING CHANNEL TO ITA NO.759/CHD/2017- M/S MASTERLINE TELBLZ PRIVATE LIMITED, MOHALI 3 SHRI MATA VAISHNO DEVI SHINE BOARD, WHICH IS AN APP ROVED UNDERTAKING U/S 80G OF THE ACT. IN VIEW OF THIS, W E DO NOT FIND ANY JUSTIFICATION ON THE PART OF THE LOWER AUTHORIT IES IN DENYING THE CLAIM OF THE ASSESSEE ON THIS ISSUE. THIS GROUN D IS ACCORDINGLY ALLOWED. 6. VIDE GROUND NO. 3, THE ASSESSEE HAS AGITATED THE DISALLOWANCE OF RS. 28,195/- PAID AS ROAD TAX FOR NEW VEHICLE. THE LOWER AUTHORITIES HAVE DENIED THE CLAIM HOLDING THAT THE SAME WAS A CAPITAL EXPENDITURE. THE LD. COUNSEL FOR THE ASSESSEE BEFORE US HAS SUBMITTED THAT THE VEHICLES ARE IN TH E NAME OF THE ASSESSEE AND ARE REGISTERED AS COMMERCIAL VEHICLES. THE ROAD TAX IS PAID FROM YEAR TO YEAR BASIS. THAT WITHOUT PAYME NT OF THE ROAD TAX, THE VEHICLES CANNOT RUN ON THE ROAD. HE, THERE FORE, HAS SUBMITTED THAT THE AFORESAID EXPENDITURE IS NOT OF CAPITAL EXPENDITURE BUT REVENUE EXPENDITURE AND REQUIRED TO BE PAID FROM YEAR TO YEAR BASIS AS THE USE OF VEHICLE IS INTRINS ICALLY LINKED TO THE BUSINESS ACTIVITY OF THE ASSESSEE. 7. THE LD. DR, ON THE OTHER HAND, RELIED ON THE FIN DINGS OF THE LOWER AUTHORITIES. 8. AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE ARE OF THE VIEW THAT THE PAYMENT OF THE AFORESAID ROAD TAX IS LINKE D TO DAY TO DAY BUSINESS ACTIVITY OF THE ASSESSEE WHICH IS REQUIRED TO BE PAID ON ANNUAL BASIS. THE AFORESAID PAYMENT OF ROAD TAX DOE S NOT ADD TO THE VALUE OF THE VEHICLE OTHERWISE BUT IS LINKED TO THE RUNNING OF THE VEHICLE ON THE ROAD WHICH IS REQUIRED FOR BUSIN ESS ACTIVITY OF THE ASSESSEE. IN VIEW OF THIS, WE DO NOT FIND ANY J USTIFICATION ON ITA NO.759/CHD/2017- M/S MASTERLINE TELBLZ PRIVATE LIMITED, MOHALI 4 THE PART OF THE LOWER AUTHORITIES IN DENYING THIS C LAIM. GROUND NO. 3 IS ACCORDINGLY ALLOWED. 9. VIDE GROUND NO.4, THE ASSESSEE HAS AGITATED THE DISALLOWANCE OF RS. 86,056/- ON THE PURCHASE OF ALL OYS AND OTHER VEHICLE ACCESSORIES. THE LOWER AUTHORITIES DISALLO WED THE CLAIM OF THE ASSESSEE HOLDING THE EXPENDITURE ON THE AFOR ESAID ITEMS AS CAPITAL EXPENDITURE IN NATURE. THE LD. COUNSEL HAS INVITED OUR ATTENTION TO PAGES 33 & 34 OF THE PAPER BOOK TO STA TE THAT THE ALLOYS WHICH ARE MADE OF METAL ARE BUILD AT RS. 188 76/- AFTER GIVING THE DISCOUNT TO THE ASSESSEE OF RS. 1876-/. THE TOTAL PAYMENT RECEIVED ON THIS ITEM IS RS. 17000/-. PAPER BOOK PAGE 34 IS THE COPY OF THE BILL WHEREIN VARIOUS ITEMS HAVE BEEN MENTIONED. AFTER GOING THROUGH THE BILLS OF THESE ITEMS, WE AR E OF THE VIEW THAT THE BILLED ITEMS ADD TO THE VALUE OF THE VEHIC LES AND ARE OF LONG TERM USE. IN VIEW OF THIS, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LOWER AUTHORITIES IN DISALLOWING THE A FORESAID CLAIM OF THE ASSESSEE. GROUND NO.4 IS ACCORDINGLY DISMIS SED. 10. IN GROUND NO.5, THE ASSESSEE HAS AGITATED THE A DHOC DISALLOWANCE OF RS. 2,07,000/- OUT OF OFFICE EXPENS ES INCLUDING PRINTING AND STATIONERY. 11. THE LD. DR HAS INVITED OUR ATTENTION TO THE ASS ESSMENT ORDER AND HAS STATED THAT ASSESSEE HAS HIMSELF AGREED TO THE AFORESAID DISALLOWANCE. SINCE THE ASSESSEE HAS AGREED TO THE AFORESAID DISALLOWANCE, HENCE, WE FIND NO REASON TO INTERFERE WITH THE ORDER ITA NO.759/CHD/2017- M/S MASTERLINE TELBLZ PRIVATE LIMITED, MOHALI 5 OF THE ASSESSING OFFICER ON THIS ISSUE AND GROUND N O. 5 OF THE APPEAL IS THEREFORE, DISMISSED. 12. GROUND NO.6 IS GENERAL IN NATURE AND DOES NOT REQUIRE ANY ADJUDICATION. IN VIEW OF THIS, THE APPEAL OF THE ASSESSEE IS PART LY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (B.R.R.KUMAR) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 09.04.2018 RKK COPY TO: THE APPELLANT THE RESPONDENT THE CIT THE CIT(A) THE DR