MNC Electricals Pvt. Ltd., New Delhi v. DCIT, New Delhi

ITA 1628/DEL/2011 | 2006-2007
Pronouncement Date: 22-07-2011 | Result: Allowed

Appeal Details

RSA Number 162820114 RSA 2011
Assessee PAN CYCLE5076T
Bench Delhi
Appeal Number ITA 1628/DEL/2011
Duration Of Justice 3 month(s) 17 day(s)
Appellant MNC Electricals Pvt. Ltd., New Delhi
Respondent DCIT, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 22-07-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted I
Tribunal Order Date 22-07-2011
Date Of Final Hearing 06-07-2011
Next Hearing Date 06-07-2011
Assessment Year 2006-2007
Appeal Filed On 04-04-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES: I NEW DELHI BEFORE SMT. DIVA SINGH JUDICIAL MEMBER AND SHRI B.K. HALDAR ACCOUNTANT MEMBER ITA NO: 1628/DEL/2011 A.Y. : 2006-2007 M/S M.N.C. ELECTRICALS P.LTD. VS. DCIT CIRCLE 6(1) 22 MOLARBAD BADARPUR NEW DELHI NEW DELHI (APPELLANT) (RESPONDENT) APPELLANT BY : SH. S.K.BANSAL C.A. RESPONDENT BY : DR.B.R.R.KUMAR SR.D.R. O R D E R PER DIVA SINGH JUDICIAL MEMBER THIS IS THE APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 30.11.10 OF CIT(A)-IX NEW DELHI PERTAINING TO A .Y. 2006-07. 2. FOLLOWING GROUNDS HAVE BEEN RAISED BY THE ASSESSEE IN THE APPEAL. 1. THAT THE ORDER OF LD.CIT(A)-IX NEW DELHI IS BA D IN LAW AND ON FACTS. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE LD.CIT(A) : (A) PASSED THE ORDER WITHOUT PERUSING THE FACTS OF THE CASE FULLY AND ALSO WITHOUT CONSIDERING THE REPLY FILED BY THE APPELLANT BEFORE HIM. (B) ERRED IN HOLDING THAT NO DOCUMENTARY EVIDENCE W AS FILED DURING THE COURSE OF APPELLATE PROCEEDINGS. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E LD.CIT(A) ERRED IN CONFIRMING THE ADDITION MADE OF RS. 55 097 /- TO THE RETURNED VALUE OF FRINGE BENEFITS ON ACCOUNT OF REP AIR RUNNING AND MAINTENANCE EXPENSES OF PICK UP VAN TRACTORS A ND ITA 1628/DEL/2010 PAGE 2 OF 6 A.Y. 2006-07 M/S MNC ELECTRICALS PVT.LTD. NEW DELHI DEPRECIATION ON MOTORCYCLE. THE ADDITION SO MADE I S ILLEGAL AND THE APPELLANT PRAYS THAT THE SAME MAY BE DELETE D. 4. THAT THE APPELLANT PRAYS FOR GRANT OF PERMISSIO N TO ADD ALTER MODIFY OR SUBSTITUTE ANY OR ALL OF THE GROUN DS OF APPEAL. 3 . RELEVANT FACTS OF THE CASE ARE THAT IN THE COURSE OF ASSESSMENT PROCEEDINGS THE AO OBSERVED THAT THE ASSESSEE HAD C LAIMED AN EXPENDITURE OF RS. 4 75 776/- ON ACCOUNT OF VEHICLE REPAIR RUNNING AND MAINTENANCE EXPENSES UNDER THE FOLLOWING HEADS. SL. NO. UNDER THE HEAD AMOUNT RS. 1. RUNNING & MAINTENANCE (VEHICLE) 346472 2. RUNNING & MAINTENANCE (CAR) 109346 3. INTEREST ON CAR LOAN 14882 4. DEPRECIATION ON MOTORCYCLE 5076 TOTAL: 47 5776 THE A.O. WAS OF THE VIEW THAT THE ABOVE INCOME AT TRACTS THE PROVISIONS OF THE FRINGE BENEFIT TAX WHICH HAVE NOT BEEN INCLU DED IN THE FRINGE BENEFIT INCOME OF THE ASSESSEE FOR THE YEAR UNDER C ONSIDERATION. THE A.O. FURTHER OBSERVED THAT THE ASSESSEE WAS ONLY SHOWING RS. 2 00 289/- FOR REPAIRS RUNNING AND MAINTENANCE EXP ENDITURE FOR FRINGE BENEFIT VALUE. THE BALANCE OF RS. 2 75 487/- (RS. 4 75 776 2 00 289) WAS HELD TO BE ATTRACTING THE PROVISIONS OF FRINGE BENEFIT TAX. IN VIEW OF THE FACT THAT NO SPECIFIC REASONING WAS GIVEN FOR E XCLUSION OF THIS 20% OF RS. 2 75 097/- WAS ADDED TO THE INCOME OF THE ASSE SSEE THEREBY MAKING AN ADDITION OF RS. 55 097/-. 4. AGGRIEVED BY THIS THE ASSESSEE WAS IN APPEAL BEF ORE THE LD.CIT(A). ITA 1628/DEL/2010 PAGE 3 OF 6 A.Y. 2006-07 M/S MNC ELECTRICALS PVT.LTD. NEW DELHI 5 . BEFORE THE CIT(A) ALMOST HALF A DOZEN ADJOURNMEN TS WERE SOUGHT ON BEHALF OF THE ASSESSEE WHICH WERE GRANTED. HOWE VER SINCE ON THE LAST DATE NO ONE APPEARED CONSIDERING THE FACTS BEFORE THE A.O. ASSESSEES APPEAL WAS DISMISSED BY THE CIT(A). 6. AGGRIEVED BY THIS THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 7. LD.A.R. SUBMITTED THAT THE ASSESSEE IS ENGAGED I N THE LAYING OF ELECTRICAL LINES AND MANUFACTURING OF POWER HOUSE E TC. ON TURN KEY BASIS FOR DIFFERENT STATE ELECTRICITY BOARDS AND GOVERNME NT UNDERTAKINGS AND IT ALSO UNDERTAKES TRADING AND FABRICATION OF ELECT RICAL ITEMS I.E. DISTRIBUTOR TRANSFORMER M.SEAL HT CABLE BOX XLPE ETC. IT IS ALSO STATED BY THE LD.A.R. THAT THE ASSESSEE IS REQUIRED TO TR ANSPORT TRANSFORMERS ETC. FOR THE SAID PURPOSE THE ASSESSEE HAS USED MA HINDRA PICK UP VAN TRACTOR CANTER ETC. AND THE A.O. HAS WRONGLY CONSI DERED A SUM OF RS. 3 46 472/- WHICH HAS BEEN INCURRED FOR RUNNING REP AIR AND MAINTENANCE OF THESE VEHICLES I.E. TRACTOR MAHINDR A PICK UP VAN AND ALSO A SUM OF RS. 5 076/- WHICH WAS CLAIMED AS DEPRECIAT ION ON MOTOR CYCLES FOR THE PURPOSE OF FRINGE BENEFIT. IT WAS SUBMITTE D THAT APART FROM THESE VEHICLES THE ASSESSEE ALSO OWNS OTHER VEHICLES LIKE EICHER TRACTOR MAHINDRA PICK UP VAN EICHER CANTER TATA QUALIS. INVITING ATTENTION TO THE WRITTEN SUBMISSIONS PLACED BEFORE THE CIT(A) IT WAS SUBMITTED BY THE ASSESSEE THAT THE TRACTOR AND MAHINDRA PICK UP VAN WERE USED AT SITE FOR CARRYING/DELIVERING OF THE MATERIAL; EICHER CANTER MAHINDRA PICK UP VAN AND TATA QUALIS WERE USED FOR CARRYING THE MATERIAL TO FAR OFF SITES ITA 1628/DEL/2010 PAGE 4 OF 6 A.Y. 2006-07 M/S MNC ELECTRICALS PVT.LTD. NEW DELHI WHERE CABLES ARE BEING LAID; AND TRACTOR WAS USED F OR CARRYING ELECTRIC POLES AT SITE DIGGING HOLES FOR INSTALLATION OF P OLES AND FOR DRAWING OF CONDUCTOR WIRE SO AS TO TIGHT THE CABLE ON THESE POLES. THE DETAILS OF THE AMOUNT SPENT TOWARDS COST OF FUEL REPAIR AND M AINTENANCE OF THESE VEHICLES HAS BEEN BOOKED UNDER THE HEAD RUNNING AN D MAINTENANCE OF VEHICLES. OUR ATTENTION WAS INVITED TO PAGE 15 OF THE PAPER BOOK. IT WAS EMPHASIZED THAT FOR FRINGE BENEFIT TAX (FBT) PURPO SES THE VEHICLES LIKE MOTOR CYCLE IS NOT CLASSED AS A CAR ARE A MOTOR BIKE. SINCE DELIVERY VANS PICK UP VANS LORRIES AND TRACTORS ARE NOT M OTOR CARS EXPENDITURE ON THE RUNNING REPAIR AND MAINTENANCE OF SUCH VEHI CLES IS NOT LIABLE TO FBT. IT WAS SUBMITTED BY THE LD.A.R. THAT SECTION 115 WB(2) WHICH DEFINES DEEMED FRINGE BENEFITS WHICH ARE NARRATED IN COLUMN 1 OF PART B OF THE TABLE. AS PER S.115WB(2)(H) DEEMED FRINGE BENEFIT IS TO BE CONSIDERED ON REPAIR RUNNING (INCLUDING FUEL) MA INTENANCE OF MOTORCARS AND THE AMOUNT OF DEPRECIATION THEREON. FOR FBT PURPOSES A VEHICLE NOT CLASSED AS A CAR IS : - A MOTOR BIKE - - ANY GOODS-CARRYING VEHICLE WITH A CAPACITY OF ONE TONNE OR MORE. SINCE DELIVERY/PICK UP VANS LORRIES AND TRACTOR A RE NOT MOTORCARS WITHIN THE MEANING OF CLAUSE (H) OF SUB SECTION (2) OF SECTION 115 WB. THEREFORE EXPENDITURE ON THE RUNNING REPAIR AND M AINTENANCE OF SUCH VEHICLES IS NOT LIABLE TO FBT. ITA 1628/DEL/2010 PAGE 5 OF 6 A.Y. 2006-07 M/S MNC ELECTRICALS PVT.LTD. NEW DELHI LD.D.R. SUBMITTED THAT MORE THAN ADEQUATE OPPORTUNI TY HAS BEEN GIVEN BEFORE THE CIT(A) AND EVEN BEFORE THE A.O. RELIANC E WAS PLACED ON THE FINDING THAT NO SPECIFIC REASON WAS GIVEN BY THE AS SESSE FOR EXCLUSION OF THIS AMOUNT BEFORE THE AO. IT WAS HIS ARGUMENT THA T HAD THE FACTS BEEN PLACED BEFORE THE AO THEN HE WOULD HAVE HAD AN OCCA SION TO CONSIDER THE SAME. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. 9. ON CAREFUL CONSIDERATION OF THE ABOVE WE ARE OF THE VIEW THAT IN THE PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE LO OKING AT THE PROVISIONS OF THE ACT AND CLAIM OF THE ASSESSEE IN PRINCIPLE THE SAME IS TO BE ALLOWED. HOWEVER SINCE RELEVANT FACTS HAVE NOT BEE N CONSIDERED BY THE AUTHORITIES BELOW IN VIEW OF THE FACT THAT NO EXP LANATION WAS OFFERED BEFORE THEM IT IS CONSIDERED APPROPRIATE TO RESTORE THE ISSUE BACK FOR VERIFICATION OF FACTS. IN PRINCIPLE THE CLAIM IS T O BE ALLOWED HOWEVER FACTS NEED TO BE VERIFIED. ACCORDINGLY FOR THIS LIMITED PURPOSE THE ISSUE IS RESTORED BACK TO THE FILE OF AO WITH A DIRECTION TO DECIDE THE SAME IN ACCORDANCE WITH LAW BY WAY OF A SPEAKING ORDER AFTE R GIVING TO THE ASSESSEE A REASONABLE OPPORTUNITY OF BEING HEARD. 10. IN THE RESULT THE APPEAL FILED BY THE ASSES SEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 22 ND JULY 2011. SD/- SD/- (B.K. HALDAR ) (DIVA SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 22 ND JULY 2011 *MANGA ITA 1628/DEL/2010 PAGE 6 OF 6 A.Y. 2006-07 M/S MNC ELECTRICALS PVT.LTD. NEW DELHI COPY OF THE ORDER FORWARDED TO: 1. APPELLANT; 2.RESPONDENT; 3.CIT; 4.CI T(A); 5.DR; 6.GUARD FILE BY ORDER DY. REGISTRAR