ITO, Cir. 6,, Pune v. Suma Shilp Ltd., Pune

ITA 1062/PUN/2009 | 2005-2006
Pronouncement Date: 31-01-2011 | Result: Dismissed

Appeal Details

RSA Number 106224514 RSA 2009
Assessee PAN AACCS4724N
Bench Pune
Appeal Number ITA 1062/PUN/2009
Duration Of Justice 1 year(s) 4 month(s) 26 day(s)
Appellant ITO, Cir. 6,, Pune
Respondent Suma Shilp Ltd., Pune
Appeal Type Income Tax Appeal
Pronouncement Date 31-01-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 31-01-2011
Assessment Year 2005-2006
Appeal Filed On 04-09-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A PUNE BEFORE SHRI I.C. SUDHIR (JM) AND SHRI D. KARUNAKARA RAO (AM) ITA NO. 1062 & 1063/PN/2009(ASSTT. YEARS : 2005 - 06 & 2006 - 07 ) INCOME TAX OFFICER CIR. 6 PUNE .. APPELLANT V. SUMA SH ILP LTD. 93/5A ERANDWANE PUNE 411 004 PAN : AACCS4724N . RESPONDENT A PPELLANT BY : SHRI ABAY DAMLE RESPONDENT BY : SHRI S.U. PATHAK ORDER PER I.C. SUDHIR JM IN THESE APPEALS REVENUE HAS QUESTIONED FIRST APPELLATE ORDER ON COMMON GR OUNDS INVOLVING THE ISSUE AS TO WHETHER THE LD CIT(A) HAS ERRED IN ALLOWING THE CLAIMED DEPRECIATION ON MOTOR CAR WHICH WAS REGISTERED IN THE NAME OF ONE OF ITS DIRECTORS. 2. IN SUPPORT OF THE GROUNDS THE LD. D.R. HAS BASICALLY PLACED RELIANCE ON THE ASS ESSMENT ORDER WHEREBY THE A.O HAS DISALLOWED THE CLAIMED DEPRECIATION ON MOTOR CAR. THE LD. D.R. ALSO CITED DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF M.M. FISH ER IES (P) LTD. V/S. CIT 277 ITR 204 (DEL.) 3. THE LD. A.R. ON THE OTHER HAND TR IED TO JUSTIFY THE FIRST APPELLATE ORDER. HE SUBMITTED THAT THE FACTS OF THE PRESENT CASE ARE DIFFERENT FROM THE FACTS IN THE CASE OF M.M. FISH ER IES (P) LTD. V/S. CIT (SUPRA) BEFORE THE HONBLE DELHI HIGH COURT WHEREIN THE DIRECTOR HAD PURCHASED THE VEHIC LE WHEREAS IN THE PRESENT CASE OWNERSHIP OF THE VEHICLE WAS LYING WITH THE COMPANY AS THE SAME WAS PURCHASED WITH THE FUNDS OF THE COMPANY. IN THIS REGARD HE REFERRED PAGE NO. 1 ITA NO 1062 & 1063/PN/2009 SUMA SHILP LTD. ASSTT. YEAR 2005 - 062006 - 07 PAGE O F 5 2 PARA NO. 1.3 OF THE PAPER BOOK. HE SUBMITTED THAT THE CARS IN QUESTION WE RE PURCHASED BY THE COMPANY AND REGISTERED IN THE NAME OF THE MANAGING DIRECTOR OF THE COMPANY. THOUGH THE CARS WERE REGISTERED IN THE NAME OF MANAGING DIRECTOR OF THE COMPANY THE COMPANY HAD PASSED NECESSARY RESOLUTIONS AUTHORIZING THE PURCHASE IN THE NAME OF MANAGING DIRECTOR. THE CARS WERE USED BY THE ASSESSEE COMPANY FOR ITS BUSINESS. THE MANAGING DIRECTOR HAD NOT CLAIMED OWNERSHIP NOR DEPRECIATION IN RESPECT OF THOSE CARS. THE SAID MOTOR CARS ARE APPEARING IN THE FIXED ASSETS SCHEDULE OF THE C OMPANY. LD. A.R. PLACED RELIANCE ON FOLLOWING DECISIONS : 1) CIT V/S. SALKIA 326 ITR 182 (ALHD.) 2) S MASH EELECTRICALS PVT. LTD. V/S. CIT ITA NO. 1394/PN/2006 (A.Y. 2003 - 04 ORDER DT. 29 TH AUGUST 2008) 4. THE LD. A.R. SUBMITTED FURTHER THAT IT IS NOW ESTA BLISHED PROPOSITION OF LAW THAT IN CASE OF TWO INTERPRETATIONS ON AN ISSUE IN DIFFERENT DECISIONS OF HONBLE COURTS THE DECISION WHICH IS FAVOURABLE TO THE ASSESSEE WILL BE FOLLOWED. IN SUPPORT HE PLACED RELIANCE ON THE DECISION OF HONBLE SUPREME COU RT IN THE CASE OF MYSORE MINERALS LTD. V/S. CIT 239 ITR 775 (S.C) 5. HAVING GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW IN VIEW OF THE ABOVE ARGUMENTS WE FIND THAT THE LD CIT(A) HAS RIGHTLY DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE FOLLOWING TH E DECISION OF PUNE BENCH OF THE TRIBUNAL IN THE CASE OF ROHAN BUILDERS AND DEVELOPERS PVT. LTD. V/S. ACIT IN ITA NO. 942/PN/2006 (A.Y. 2004 - 05) ORDER DT. 29.8.2008 WHICH ALSO FINDS SUPPORT FROM THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT DISCUSSED BY THE LD CIT(A). THE ITA NO 1062 & 1063/PN/2009 SUMA SHILP LTD. ASSTT. YEAR 2005 - 062006 - 07 PAGE O F 5 3 RELEVANT PARA NO S . 4 AND 4.1 OF THE FIRST APPELLATE ORDER ARE BEING REPRODUCED HEREUNDER FOR READY REFERENCE : 4. DURING THE COURSE OF APPELLATE PROCEEDINGS THE APPELLANT COMPANY HAS STATED THAT THOUGH THE MOTOR CARS WERE REGISTERE D IN THE NAME OF THE MANAGING DIRECTOR THE COMPANY HAD PASSED NECESSARY RESOLUTION AUTHORISING THIS PURCHASE AND THAT THE CARS WERE TO BE USED BY THE APPELLANT COMPANY FOR ITS BUSINESS AND THAT THE MANAGING DIRECTOR HAD NOT CLAIMED OWNERSHIP OR DEPRECIAT ION IN RESPECT OF THE AFORESAID VEHICLES. FOR THE PURPOSE OF ITS SUBMISSIONS REGARDING THE CONCEPT OF BENEFICIAL OWNERSHIP THE APPELLANT COMPANY CITED DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF MYSORE MINERALS LTD. VS. CIT 239 ITR 775; IN WHIC H IT WAS HELD THAT WHEN ASSESSEE WAS IN POSSESSION OF THE BUILDING ON PART PAYMENT OF THE PRICE THOUGH THE BUILDING WAS NOT REGISTERED IN THE NAME OF THE ASSESSEE STILL THE ASSESSEE WAS OWNER OF THE BUILDING FOR THE PURPOSE OF CLAIM OF DEPRECIATION U/S 3 2 OF THE I.T. ACT. IT WAS FURTHER STATED THAT IN THE CASE OF DILIP SINGH SARDARSINGH BAGGA 201 ITR 995 (BOMBAY) ALSO IT WAS DECIDED THAT THE BENEFICIAL OWNER OF MOTOR VEHICLE WAS ENTITLED TO THE DEPRECIATION AND REGISTRATION UNDER MOTOR VEHICLES ACT WAS NOT AN ESSENTIAL PREREQUISITE FOR DETERMINATION OF OWNERSHIP. THE JURISDICTIONAL HIGH COURT HELD THAT THE FACT THAT THE TR ANSFER WAS NOT RECORDED UNDER THE MOTOR VEHICLES ACT OR THE VEHICLE STOOD IN THE NAME OF THE VENDOR WHEN THE ASSESSEE WAS USING THE VEHICLE FOR THE PURPOSE OF OF HIS BUSINESS COULD NOT BE USED FOR DENIAL OF DEPRECIATION. SIMILAR DECISION WAS GIVEN IN THE CASE OF CIT VS MIRZA ATAULLAHA BAIG AND ANOTHER (1993) 202 ITR 291 (BOM.). FINALLY THYE APPELLANT RELIED ON THE LATEST DECISION OF ITAT PUNE BENCH IN THE CASE OF ROHAN BUILDERS & DEVELOPERS PVT. LTD. VS. ACIT IN ITA NO. 942/PN/06 FOR A.Y. 2004 - 05 THE ORDER BEING DATED 29.08.2008. IN THIS CASE THE ITAT PUNE HAS HELD THAT THE DECISION GIVEN BY ITAT IN THE CASE OF SUNEET ENGG. PVT. L TD. IN ITA NO.778/PN/2004 NEED NOT BE FOLLOWED BEING PER INCURIAM IN NATURE AND ACCORDINGLY ALLOWED DEPRECIATION TO THE COMPANY ON MOTOR CARS REGISTERED IN THE NAME OF DIRECTORS OF THE COMPANY. ITA NO 1062 & 1063/PN/2009 SUMA SHILP LTD. ASSTT. YEAR 2005 - 062006 - 07 PAGE O F 5 4 4.1 I HAVE CONSIDERED THE FACTS OF THE CASE AND THE EXPLA NATION OFFERED BY THE APPELLANT AND HAVE GONE THROUGH THE LATEST DECISION OF ITAT PUNE BENCH DATED 29.08.2008 IN THE CASE OF ROHAN BUILDERS & DEVELOPERS PVT. LTD. VS. ACIT. IT IS NOTICED THAT THE ITAT HAS CONSIDERED THE TWO DECISIONS OF BOMBAY HIGH COURT MENTIONED ABOVE I.E. IN THE CASE OF CIT VS. DILIP SINGH SARDARSHINGH BAGGA AND CIT VS. MIRZA ATAULLAHA BAIG AND ANOTHER AS WELL AS THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF MYSORE MINERALS LTD. IT WAS HELD THAT DEPRECIATION WAS ALLOWABLE I N RESPECT OF VEHICLES OWNED BY THE COMPANY AND USED FOR ITS BUSINESS EVEN THOUGH IT WAS REGISTERED IN THE NAMES OF THE DIRECTORS OF THE COMPANY. IN VIEW OF THE ABOVE DISCUSSION IT IS HELD THAT THE DEPRECIATION WAS ALLOWABLE TO THE APPELLANT IN RESPECT O F THE MOTOR CARS PURCHASED BY IT AND USED FOR THE PURPOSE OF ITS BUSINESS THOUGH REGISTERED IN THE NAME OF THE MANAGING DIRECTOR. GROUND NOS. 1 AND 2 ARE THEREFORE ALLOWED. THE PUNE BENCH OF THE TRIBUNAL IN ITS RECENT DECISION IN THE CASE OF S MASH E LECTRICALS PVT. LTD. V/S. CIT ITA NO. 1394 /PN/2006 (A.Y. 2003 - 04 ORDER DT. 29 TH AUGUST 2008) HA S ALSO DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. WE THUS DO NOT FIND REASON TO INTERFERE WITH THE FIRST APPELLATE ORDER IN THIS REGARD. THE SAME IS UPHE LD. ISSUE RAISED IN THE PRESENT APPEAL IS THUS DECIDED IN FAVOUR OF THE ASSESSEE. THE GROUNDS INVOLVING THE ISSUE ARE THUS REJECTED. 6. IN THE RESULT APPEALS ARE DISMISSED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 31ST JANUARY 2011 SD/ - SD/ - ( D. KARUNAKARA RAO ) ACCOUNTANT MEMBER ( I.C. SUDHIR ) JUDICIAL MEMBER ITA NO 1062 & 1063/PN/2009 SUMA SHILP LTD. ASSTT. YEAR 2005 - 062006 - 07 PAGE O F 5 5 PUNE DATED THE 31ST JANUARY 20 1 1 US COPY OF THE ORDER IS FORWARDED TO : 1. THE A PPELLANT 2. THE RESPONDENT 3. THE CIT - III PUNE 4. CIT(A) - II P UNE 4 . THE D.R. A BENCH PUNE 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL PUNE