Shaival Reality Pvt.Ltd., Ahmedabad V. Principal Commissioner of Income Tax-4,, Ahmedabad

ITA 845/AHD/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 7930 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 8 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-12-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 10-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: APARNA M AGRAWAL PR
• Assessee Lawyers: JIGAR M PATEL
• Keywords: Depreciation; Assessment record
• Section: 263

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD , , BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER & SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER ./ I.T.A. NO.845/AHD/2015 ( / ASSESSMENT YEAR : 2010-11) SHAIVAL REALITY PVT.LTD. C/O. MUKESH M. PATEL & CO. 3-4, VITHALBHAI BHAVAN NR.S.P.COLONY RLY.CROSSING AHMEDABAD-380 013 / VS. THE PR.PR.CIT-4 AHMEDABAD # ./ ./ PAN/GIR NO. : AABCS 5607 F ( #% / APPELLANT ) .. ( &#% / RESPONDENT ) #%' / APPELLANT BY : SHRI JIGAR M.PATEL, AR &#%(' / RESPONDENT BY : MS. APARNA M. AGRAWAL, PR.CIT- DR )*(+ / DATE OF HEARING 19/12/2017 ,-./(+ / DATE OF PRONOUNCEMENT 20 /12/2017 / O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTA NCE OF THE ASSESSEE AGAINST THE ORDER OF THE PRINCIPAL COMMISS IONER OF INCOME TAX- 4, AHMEDABAD [PR.CIT IN SHORT] DATED 10/02/2015 PASSED UNDER S. 263 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO A S 'THE ACT') WHEREBY THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICE R (AO) UNDER ITA NO.845/AHD/ 2015 SHAIVAL REALITY PVT.LTD. VS. PR.PR.CIT ASST.YEAR 2010-11 - 2 - S.143(3) OF THE ACT DATED 04/02/2013 CONCERNING AY 2010-11 HAS BEEN IMPUGNED. 2. BRIEFLY STATED, THE ASSESSEE FILED ITS RETURN OF INCOME FOR THE AY 2010-11 DECLARING TOTAL INCOME AT RS.(-)30,94,309/- . THE CASE WAS SELECTED FOR SCRUTINY ASSESSMENT. THE ASSESSING OF FICER (AO) FRAMED THE ASSESSMENT ORDER WHEREIN CERTAIN DISALLOWANCES WERE MADE UNDER DIFFERENT PROVISIONS OF THE ACT AND THE LOSS DECLAR ED BY THE ASSESSEE WAS REDUCED AND ASSESSED AT RS.8,49,460/-. THE PR.CIT, HOWEVER, ON REVIEW OF ASSESSMENT RECORDS FOUND THAT ASSESSMENT ORDER P ASSED BY THE AO IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE RE VENUE. THE PR.CIT ACCORDINGLY INVOKED REVISIONAL JURISDICTION CONFERR ED UNDER S.263 OF THE ACT TO SHOW CAUSE THE ASSESSEE ON THE ALLEGED INFIR MITIES IN THE ASSESSMENT ORDER. VIDE SHOW-CAUSE NOTICE UNDER S. 263 OF THE ACT DATED19/01/2015, THE PR.CIT ALLEGED THAT THE AO HAS FAILED TO EXAMINE THE ISSUE REGARDING EXCESS CLAIM OF DEPRECIATION ON MOTOR CAR BY APPLYING DEPRECIATION @ 50% AS AGAINST ELIGIBLE DEPRECIATION @ 15% TO THE ASSESSEE. THE PR.CIT OBSERVED THAT THE MOTOR CARS WHICH ARE NOT USED IN THE BUSINESS OF HIRE AS IN THE CASE OF ASSESSEE CAN NOT BE INTERPRETED TO BE COMMERCIAL VEHICLES AND HENCE WOULD NOT BE ELIGIBLE FOR ACCELERATED DEPRECIATION AS WRONGLY CLAIMED. CONSEQUENTLY, THE PR.CIT PASSED THE ORDER UNDER S.263 HOLDING THAT THE AO HAS WRONGLY FINALIZED THE ASSESSMENT ORDER UNDER S.143(3) OF THE ACT WITHOUT EXAMINING THE CORRECTNESS OF THE ASSESSEES ELIGIBILITY OF CLAIM OF DEPRECIATION AND ITA NO.845/AHD/ 2015 SHAIVAL REALITY PVT.LTD. VS. PR.PR.CIT ASST.YEAR 2010-11 - 3 - ACCORDINGLY THE ASSESSMENT ORDER IS RENDERED ERRONE OUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE. THE PR.CIT CONCLUDED THAT THE ASSESSMENT ORDER WAS PASSED BY THE AO ON WRONG ASSUMPTION OF F ACTS AND INCORRECT APPLICATION OF LAW AND HENCE SET ASIDE THE ORDER PA SSED UNDER S.143(3) OF THE ACT DATED 18/10/2011 WITH A DIRECTION TO DISALL OW THE ACCELERATED DEPRECIATION CLAIMED BY THE ASSESSEE. 3. AGGRIEVED, THE ASSESSEE PREFERRED APPEAL BEFORE THE TRIBUNAL. 4. THE LD.AR FOR THE ASSESSEE SUBMITTED THAT THE PR .CIT HAS MISDIRECTED ITSELF IN LAW IN WRONGLY APPRECIATING THE FACTS OF THE CASE. THE LD.AR CLAIMED THAT THE DEPRECIATION @ 50% ON MO TOR CAR HAS BEEN RIGHTLY CHARGED AS ELIGIBLE TO COMMERCIAL VEHICLES AS EXPOUNDED IN THE NOTES TO TABLE OF RATES FOR DEPRECIATION AS PER APP ENDIX-I TO RULE-5 OF THE INCOME TAX RULES, 1962. THE LD.AR THEREAFTER REFER RED TO THE DECISION OF THE COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF MITHORS CHEMICALS (P) LTD. HYDERABAD IN ITA NO.823/HYD/2015 AND OF S HREE BALAJI PRODUCTS VS. ITO (2016) 75 TAXMANN.COM 231 (AHMEDAB AD TRIB.) WHEREIN A NOTIFICATION NO.10/2009 DATED 19/01/2009W AS TAKEN COGNIZANCE AND HIGHER RATE OF DEPRECIATION WAS FOUN D ADMISSIBLE ON NEW INDUCTION OF MOTOR CAR IN THE BLOCK OF ASSESSMENT R EGARDLESS OF THE FACT AS TO WHETHER THE CAR WAS USED FOR HIRE PURPOSES OR NOT. THE LD.DR ACCORDINGLY SUBMITTED THAT IN THE LIGHT OF ESTABLIS HED INTERPRETATION OF LAW ON THE POINT, THE ALLEGED ERROR SOUGHT TO BE ENVI SAGED BY THE PR.CIT ITA NO.845/AHD/ 2015 SHAIVAL REALITY PVT.LTD. VS. PR.PR.CIT ASST.YEAR 2010-11 - 4 - DOES NOT EXIST. THE LD.AR ACCORDINGLY URGED THAT T HE IMPUGNED ORDER OF THE PR.CIT UNDER S.263 OF THE ACT APPEALED AGAINST, REQUIRES TO BE QUASHED AND SET ASIDE. 5. THE LD.DR RELIED UPON THE ORDER OF THE PR.CIT. 6. WE HAVE CAREFULLY EXAMINED THE RIVAL SUBMISSIONS AND PERUSED THE REVISIONAL ORDER OF THE PR.CIT PASSED UNDER S.263 O F THE ACT AS WELL AS THE CASE-LAWS CITED. 7. AS NOTICED FROM THE SHOW-CAUSE NOTICE ISSUED BY THE PR.CIT UPON THE ASSESSEE, THE OBJECTION OF THE PR.CIT IS THAT MOTOR CARS THAT ARE NOT USED IN THE BUSINESS OF HIRE CANNOT BE INTERPRETED TO BE COMMERCIAL VEHICLES AS CONTEMPLATED IN TABLE OF DEPRECIATION A ND THUS WOULD NOT BE ELIGIBLE FOR ACCELERATED DEPRECIATION. WE DO NOT F IND ANY JUSTIFICATION IN SUCH A VIEW TO ALLEGE THAT THE ORDER OF THE AO SU FFERS FROM ERROR WHICH IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. AS POINTED OUT, THE AFORESAID ISSUE HAS BEEN EXAMINED IN SEVERAL DECISI ONS OF THE COORDINATE BENCH OF THE TRIBUNAL. FOR INSTANCE, THE IDENTICAL ISSUE HAS BEEN DEALT WITH IN SHREE BALAJI PRODUCTS(SUPRA) AS WELL AS MIT HORS CHEMICALS (P) LTD.(SUPRA) IN FAVOUR OF ASSESSEE. THUS, THE AFORE SAID DECISIONS HAVE BINDING FORCE ON THE JURISDICTION OF THE AO. THIS BEING SO, A SPECIFIC ENQUIRY OR OTHERWISE CANNOT ORDINARILY CHANGE THE C OMPLEXION OF THE ITA NO.845/AHD/ 2015 SHAIVAL REALITY PVT.LTD. VS. PR.PR.CIT ASST.YEAR 2010-11 - 5 - OUTCOME. THEREFORE, NO ERROR PER SE CAN BE ENVISAGED IN THE ORDER OF THE AO IN SUCH A SITUATION. HENCE, THE REVISIONAL ORDER PASSED BY THE PR.CIT UNDER S.263 OF THE ACT TO MODIFY AND SET ASI DE THE IMPUGNED ORDER OF THE AO IS NOT SUSTAINABLE IN LAW. 8. IN THE RESULT, ORDER PASSED UNDER S.263 OF THE A CT IS QUASHED AND APPEAL OF THE ASSESSEE IS ALLOWED. THIS ORDER PRONOUNCED IN OPEN COURT ON 20/ 12 /2017 SD/- SD/- () ( ) (RAJPAL YADAV) ( PRADIP KUMAR KEDIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 20/ 12 /2017 3..),.)../ T.C. NAIR, SR. PS !'#$%$' / COPY OF THE ORDER FORWARDED TO : 1. #% / THE APPELLANT 2. &#% / THE RESPONDENT. 3. 456+ 7+ / CONCERNED PR.CIT 4. 7+ ( ) / THE PR.CIT(A)-CONCERNED 5. 89:+)56 , 56/ , 4 / DR, ITAT, AHMEDABAD 6. :<* / GUARD FILE. / BY ORDER, &8++ //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD