Technicaliya Consultants P Ltd., CHENNAI V. ACIT, CHENNAI

ITA 892/CHNY/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 90608 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 2 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2015
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 27-05-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 08-04-2014
• Court: TRIBUNAL
• Department Lawyers: P RADHAKRISHNAN
• Assessee Lawyers: T BANUSEKAR
• Keywords: Depreciation
• Section: 37(1)

Judgement Text

, , IN THE INCOME-TAX APPELLATE TRIBUNAL A BENCH, CHE NNAI , . ! ! ! ! , ' ' ' ' #$ #$ #$ #$ BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER & SHRI V. DURGA RAO, JUDICIAL MEMBER I.T.A. NO. 892/MDS/2014 ASSESSMENT YEAR : 2009-10 M/S. TECHNICALIYA CONSULTANTS PVT. LTD., 41, VASANTHA AVENUE, MRC NAGAR, R.A. PURAM, CHENNAI 600 028. [PAN: AAACT2501J] VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, COMPANY CIRCLE III(2), CHENNAI. ( %& %& %& %& /APPELLANT ) ( '(%& '(%& '(%& '(%& / RESPONDENT ) %& ) * / APPELLANT BY : SHRI T. BANUSEKAR, C.A. '(%& ) * / RESPONDENT BY : SHRI P. RADHAKRISHNAN, JCIT ) + / DATE OF HEARING : 27.05.2015 ,-. ) + /DATE OF PRONOUNCEMENT : 30.06.2015 / / / / / O R D E R PER V. DURGA RAO, JUDICIAL MEMBER : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) III, CHE NNAI DATED 29.11.2013 RELEVANT TO THE ASSESSMENT YEAR 2009-10. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE C OMPANY IS RENDERING CONSULTANCY SERVICES AND FILED ITS RETURN OF INCOME , WHEREIN IT HAS CLAIMED DEPRECIATION ON CERTAIN EXPENSES. IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER HAS OBSERVED THAT THE FIXED ASSETS SCHEDULE OF ASSESSEE INCLUDES I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NO. .. .892 892892 892/M/1 /M/1 /M/1 /M/14 44 4 2 AN AMOUNT OF . 16,90,608/- BEING THE MOTOR CARS AND A DEPRECIATI ON OF . 2,53,591/- ON THE SAME. THE ASSESSEE WAS ASKED TO P RODUCE COPY OF RC BOOKS IN RESPECT OF THE SAID MOTOR CARS. ASSESSEE F ILED THE SAME. IT WAS SEEN FROM THE SAME THAT THE SAID MOTOR CARS REPRESE NT A HONDA CITY, TOYOTA INNOVA AND CHEVRLOLET TAVERA. OF THE ABOVE EXCEPT H ONDA CITY, THE OTHER TWO VEHICLES ARE REGISTERED IN THE NAME OF DIRECTOR S AND NOT IN THE NAME OF ASSESSEE THEREBY INDICATING THAT THE SAME HAD BEEN UTILIZED FOR PERSONAL USE OF THE DIRECTORS. THE ASSESSEE WAS ASKED TO SHOW-CA USE AS TO WHY NOT THE DEPRECIATION, INTEREST EXPENDITURE, DRIVER'S SALARY , FUEL AND INSURANCE ON THE TWO VEHICLES CHARGED TO PROFIT AND LOSS ACCOUNT, BE DISALLOWED. THE ASSESSEE FAILED TO FILE ITS SUBMISSIONS. THE ASSESS EE ALSO FAILED TO FILE THE RESPECTIVE EXPENDITURE RELATING TO THE TWO VEHICLES . HENCE, AN AMOUNT OF . 2,53,591/- REPRESENTING DEPRECIATION ON MOTOR CARS, 54,640/- REPRESENTING INTEREST ON CAR LOANS, . 4,74,763/- BEING VEHICLE MAINTENANCE AND DIESEL EXPENSES AND . 1,20,474/ - REPRESENTING MISCELLANEOUS EXPENSES A S INSURANCE ON VEHICLES AND DRIVER'S SALARY ARE NOT R EADILY AVAILABLE, AND THEREFORE, THE ASSESSING OFFICER HAS DISALLOWED THE ABOVE EXPENSES AND ADDED BACK TO THE INCOME OF THE ASSESSEE. 3. ON APPEAL, THE LD. CIT(A), CONFIRMED THE ORDER PASSED BY THE ASSESSING OFFICER, BY OBSERVING AS UNDER: 7.6. THE FACTS HAVE BEEN CAREFULLY CONSIDERED. I DO NOT AGREE WITH THE CONTENTION OF THE APPELLANT/AR THAT DISPLAYING A YE LLOW NAME BOARD I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NO. .. .892 892892 892/M/1 /M/1 /M/1 /M/14 44 4 3 WOULD DENT THE IMAGE OF THE COMPANY. IN FACT, THE C ONSULATE VEHICLES OF VARIOUS EMBASSIES HOLDS YELLOW NAME BOARD WITH CD O R CC FOLLOWED BY A NUMBER. EVEN GOVERNMENT VEHICLES ON HIRE HAVE A YELLOW NAME BOARD WITH A MENTION THAT THE SAME ON ONE DUTY FOR CENTRAL OR STATE GOVERNMENT. COLOUR IS AN INDICATION TO IDENTIFY TH E OWNERSHIP OF THE VEHICLES BY THE TRANSPORT AUTHORITIES TO FIND EASIL Y WHETHER IT IS FOR OWN USE OR OTHERWISE, FOR THE PURPOSE OF MOTOR VEHICLE TAXATION. NO WAY, IT WOULD INDICATE OR IMPACT THE STATUS OR THE IMAGE OF THE PERSON TRAVELLING IN IT OR OWNER OF THE VEHICLE. HENCE, TH E DISALLOWANCE MADE BY THE AO ON THE GROUND IS UPHELD. 4. ON BEING AGGRIEVED, THE ASSESSEE IS IN APPEAL B EFORE US. THE LD. COUNSEL FOR THE ASSESSEE HAS VEHEMENTLY ARGUED THAT SIMPLY IT IS IN THE NAME OF THE DIRECTORS, IT CANNOT BE SAID THAT IT IS USED FOR PERSONAL PURPOSE OF THE DIRECTORS. THE DIRECTORS ARE ONLY LOOKING AFTER THE BUSINESS OF THE ASSESSEE COMPANY. THEREFORE, THE CLAIM OF THE ASSES SEE HAS TO BE ALLOWED. ALTERNATIVELY, BY PLEADING ADDITIONAL GROUND THAT T HE CLAIM OF THE ASSESSEE IN RESPECT OF HONDA CAR MAY BE ALLOWED. 5. ON THE OTHER HAND, THE LD. DR STRONGLY SUPPORTE D THE ORDERS OF AUTHORITIES BELOW. 6. WE HAVE HEARD BOTH SIDES, PERUSED THE MATERIALS ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. THE ASSESS EE HAS CLAIMED DEPRECIATION, INTEREST ON CAR LOANS, VEHICLE MAINTE NANCE, DRIVER'S SALARY, FUEL AND INSURANCE EXPENSES ON HONDA CITY, TOYOTA INNOVA AND CHEVRLOLET TAVERA. IN THE ASSESSMENT ORDER, THE ASSESSING OFFI CER HAS OBSERVED THAT THE CAR HONDA CITY IS REGISTERED IN THE NAME OF THE ASSESSEE AND THE OTHER I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NO. .. .892 892892 892/M/1 /M/1 /M/1 /M/14 44 4 4 TWO VEHICLES ARE REGISTERED IN THE NAME OF DIRECTOR S AND OBSERVED THAT THE SAME TWO CARS HAVE BEEN UTILIZED FOR PERSONAL USE O F THE DIRECTORS. THE ASSESSING OFFICER ASKED THE ASSESSEE TO FILE THE DE TAILS OF THE TWO VEHICLES AND HE ASSESSEE HAS FAILED TO FILE DETAILS AS REQUI RED BY THE ASSESSING OFFICER. THEREFORE, THE ASSESSING OFFICER DISALLOWE D THE ABOVE EXPENSES UNDER SECTION 37(1) OF THE ACT. ON APPEAL, THE LD. CIT(A) HAS CONFIRMED THE ORDER OF THE ASSESSING OFFICER. WHEN THE ASSESSEE W AS NOT ABLE TO FILE THE DETAILS IN RESPECT OF USE OF THE CARS, INTEREST ON CAR LOANS, DRIVER'S SALARY, FUEL, INSURANCE, ETC. ON THE TWO VEHICLES, WE FIND THAT, WITHOUT DETAILS, THE CLAIM OF THE ASSESSEE CANNOT BE ALLOWED, PARTICULAR LY, WHEN THESE TWO VEHICLES ARE IN THE NAME OF THE DIRECTORS. THE CLAI MS OF THE ASSESSEE IN RESPECT OF TWO VEHICLES NAMELY, TOYOTA INNOVA AND C HEVRLOLET TAVERA ARE RIGHTLY DISALLOWED BY THE ASSESSING OFFICER AND CON FIRMED BY THE LD. CIT(A). ACCORDINGLY, WE FIND NO INFIRMITY IN THE ORDER PASS ED BY THE LD. CIT(A). 7. SO FAR AS ALTERNATIVE PLEA OF THE ASSESSEE IS C ONCERNED, THE SAME ARISES AS ADDITIONAL GROUND, WE FIND THAT THERE IS JUSTIFICATION IN THE ALTERNATIVE PLEA FOR THE REASON THAT THE VEHICLE I. E. HONDA CITY IS IN THE NAME OF THE COMPANY ITSELF. IN VIEW OF THE ABOVE, WE SET ASIDE THE ORDER OF THE LD. CIT(A) ON THIS ISSUE AND REMIT THE ISSUE RAISED BY THE ASSESSEE IN RESPECT OF THE VEHICLE HONDA CITY TO THE FILE OF THE ASSESSING OFFICER TO DECIDE THE ISSUE IN ACCORDANCE WITH LAW. WE ALSO DIRECT THE ASSESSEE TO FILE ALL THE DETAILS I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NO. .. .892 892892 892/M/1 /M/1 /M/1 /M/14 44 4 5 BEFORE THE ASSESSING OFFICER WITHOUT FAIL. THUS, TH E ALTERNATIVE PLEA RAISED IN THE ADDITIONAL GROUND IS ALLOWED FOR STATISTICAL PU RPOSES. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON TUESDAY, THE 30 TH OF JUNE, 2015 AT CHENNAI. SD/ - SD/ - (CHANDRA POOJARI) ACCOUNTANT MEMBER (V. DURGA RAO) JUDICIAL MEMBER CHENNAI, DATED, THE 30.06.2015 VM/- / ) ''+01 21.+ /COPY TO: 1. %& / APPELLANT, 2. '(%& / RESPONDENT, 3. 3 ( ) /CIT(A), 4. 3 /CIT, 5. 14 ''+' /DR & 6. 5! 6 /GF.