M/s. Manraj Motors Pvt. Ltd.,, Jalgaon v. Deputy Commissioner of Income-tax,,

ITA 2002/PUN/2013 | 2010-2011
Pronouncement Date: 30-04-2015 | Result: Allowed

Appeal Details

RSA Number 200224514 RSA 2013
Assessee PAN AADCM5079R
Bench Pune
Appeal Number ITA 2002/PUN/2013
Duration Of Justice 1 year(s) 5 month(s) 15 day(s)
Appellant M/s. Manraj Motors Pvt. Ltd.,, Jalgaon
Respondent Deputy Commissioner of Income-tax,,
Appeal Type Income Tax Appeal
Pronouncement Date 30-04-2015
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 30-04-2015
Assessment Year 2010-2011
Appeal Filed On 14-11-2013
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A PUNE BEFORE MS. SUSHMA CHOWLA JUDICIAL MEMBER AND SHRI R.K. PANDA ACCOUNTANT MEMBER ITA NO.2002/PN/2013 ASSESSMENT YEAR : 2010-11 MANRAJ MOTORS PVT. LTD. S-557 M.I.D.C. AREA AJANTHA ROAD JALGAON PAN : AADCM5079R . APPELLANT VS. THE DY. COMMISSIONER OF INCOME TAX CIRCLE- 2 JALGAON. . RESPONDENT APPELLANT BY : SHRI NIKHIL PATHAK RESPONDENT BY : SHRI CHANDIP SINGH DATE OF HEARING : 29-04-2015 DATE OF PRONOUNCEMENT : 30-04-2015 ORDER PER SUSHMA CHOWLA JM: THIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE OR DER OF CIT(A)-2 NASHIK DATED 19.09.2013 RELATING TO ASSESSMENT YEAR 2010-1 1 PASSED UNDER SECTION 143(3)(II) OF THE INCOME-TAX ACT 1961. 2. THOUGH THE ASSESSEE HAS RAISED SEVERAL GROUNDS O F APPEAL BUT THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THE ISSUE RAISED IN THE PRESENT APPEAL IS AS PER GROUND OF APPEAL NO.1 WHICH READS AS UNDER :- 1. THE LEARNED CIT(A) ERRED IN REJECTING APPELLANT S CLAIM FOR DEPRECIATION OF RS.7 04 516/- ON MOTOR CARS MERELY ON THE GROUND TH AT THEY ARE REGISTERED IN THE NAME OF DIRECTOR OF THE COMPANY. 3. THE ASSESSEE IS AGGRIEVED BY THE ORDERS OF THE A UTHORITIES BELOW IN REJECTING THE CLAIM OF THE ASSESSEE VIS--VIS DEPRE CIATION ON MOTOR CARS WHICH WERE REGISTERED IN THE NAME OF THE DIRECTORS OF THE ASSESSEE COMPANY. 4. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSE SSING OFFICER NOTED THAT THE ASSESSEE HAD CLAIMED DEPRECIATION ON VEHICLES WHIC H THOUGH APPEARED IN THE ITA NO.2002/PN/2013 2 BALANCE SHEET OF THE ASSESSEE COMPANY BUT WERE REGI STERED IN THE NAME OF THE DIRECTORS OF THE ASSESSEE COMPANY. THE CLAIM OF TH E ASSESSEE BEFORE THE ASSESSING OFFICER WAS THAT THE COMPANY BEING THE RE AL AND BENEFICIAL OWNER WAS ENTITLED TO DEPRECIATION ON SUCH VEHICLES WHICH WE RE USED FOR THE PURPOSE OF BUSINESS OF THE ASSESSEE COMPANY. THE ASSESSING OF FICER WAS OF THE VIEW THAT SINCE THE VEHICLES WERE REGISTERED IN THE NAME OF T HE DIRECTORS THEY WERE LEGAL OWNERS AND AS SUCH THE ASSESSEE COMPANY WAS NOT ENT ITLED TO THE CLAIM OF DEPRECIATION. ACCORDINGLY THE ASSESSING OFFICER D ISALLOWED THE DEPRECIATION CLAIMED BY THE ASSESSEE ON SUCH VEHICLES. 5. THE CIT(A) UPHELD THE ORDER OF THE ASSESSING OFF ICER RELYING ON THE RATIO LAID DOWN BY THE MUMBAI BENCH OF THE TRIBUNAL IN ED WISE CONSULTANTS PVT. LTD. VS. ADDL. CIT REPORTED IN 143 ITD 307 (MUM) IN TUR N REJECTING THE RELIANCE OF THE ASSESSEE ON THE RATIO LAID DOWN BY THE PUNE BENCH O F THE TRIBUNAL IN SHRI PANCHGANGA AGRO IMPEX P. LTD. VS. ITO IN ITA NO.956 /PN/2009 RELATING TO ASSESSMENT YEAR 2005-06 ORDER DATED 31.05.2011. 6. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF T HE CIT(A). 7. THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESS EE POINTED OUT THAT THE DEPRECIATION ON MOTOR CARS WAS CLAIMED BY THE ASSES SEE AS THE COST OF THE SAID CARS WAS MET BY THE ASSESSEE AND THE SAID CARS APPE ARED AS ASSETS IN THE BALANCE SHEET OF THE ASSESSEE COMPANY. FURTHER EV EN THE COST OF REPAIRS/RUNNING OF THE MOTOR CARS WAS MET BY THE CO MPANY ITSELF AND VEHICLES WERE BEING USED FOR CARRYING ON ITS BUSINESS. THE ASSESSEE EXPLAINED THAT CARS WERE PURCHASED IN THE NAME OF DIRECTOR TO SAVE ON S TATE LEVIES AND TAXES. THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE FURT HER PLACED RELIANCE ON THE RATIO LAID DOWN BY THE PUNE BENCH OF THE TRIBUNAL I N ACIT VS. TALERA MOTORS PVT. LTD. IN ITA NO.1208/PN/2009 RELATING TO ASSESSMENT YEAR 2006-07 ORDER DATED 11.05.2011 AND ALSO ON SHRI PANCHGANGA AGRO IMPEX P . LTD. VS. ITO (SUPRA). IT ITA NO.2002/PN/2013 3 WAS FURTHER POINTED OUT BY THE LD. AUTHORIZED REPRE SENTATIVE FOR THE ASSESSEE THAT THERE WAS NO MERIT IN THE ORDER OF THE CIT(A) IN PLACING RELIANCE ON THE DECISION OF THE MUMBAI BENCH OF THE TRIBUNAL IN EDW ISE CONSULTANTS PVT. LTD. VS. ADDL. CIT (SUPRA). THE LD. AUTHORIZED REPRESENTATI VE FOR THE ASSESSEE POINTED OUT THAT THE MUMBAI BENCH OF THE TRIBUNAL HAD TAKEN CONTRARY VIEWS AS IN EDWISE CONSULTANTS PVT. LTD. VS. ADDL. CIT (SUPRA) AND REF ERENCE WAS MADE TO THE DECISIONS OF THE MUMBAI BENCH OF THE TRIBUNAL IN M/ S ORBIT MARKETING PVT. LTD. VS. ITO IN ITA NO.8514/MUM/2010 RELATING TO ASSESSM ENT YEAR 2005-06 ORDER DATED 17.10.2012 AND NAVJEEVAN SYNTHETICS PVT. LTD. VS. ACIT IN ITA NO.8876/MUM/2010 RELATING TO ASSESSMENT YEAR 2007-0 8 ORDER DATED 04.03.2013. 8. THE LD. DEPARTMENTAL REPRESENTATIVE FOR THE REVE NUE POINTED OUT THAT THE VEHICLES WERE REGISTERED IN THE NAME OF THE DIRECTO RS OF THE ASSESSEE COMPANY AND SINCE THE ASSESSEE WAS A PRIVATE LIMITED COMPAN Y THE SAME WERE IN THE DOMAIN AND CONTROL OF THE DIRECTORS AND HENCE THERE WAS NO MERIT IN ALLOWING DEPRECIATION ON SUCH VEHICLES. 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION HAD CLAIM ED DEPRECIATION ON VEHICLES WHICH WERE REGISTERED IN THE NAME OF ONE OF ITS DIR ECTORS. THE COST OF THE SAID VEHICLES WERE ADMITTEDLY BORNE BY THE ASSESSEE COMP ANY OUT OF ITS OWN FUNDS AND THE SAID VEHICLES WERE REFLECTED AS ASSETS OF T HE ASSESSEE COMPANY IN THE LIST OF FIXED ASSETS AS ON THE END OF THE YEAR. TH E EXPENDITURE OF RUNNING AND REPAIRS OF THE SAID VEHICLES HAS BEEN BORNE BY THE ASSESSEE COMPANY. THE SAID VEHICLES WERE BEING USED BY THE ASSESSEE COMPANY FO R ITS BUSINESS THE EXPLANATION OF THE ASSESSEE FOR REGISTERING THE SAM E IN THE NAME OF THE DIRECTORS OF THE ASSESSEE COMPANY WAS THAT THERE WAS SAVING I N THE REGISTRATION COST. BUT MERELY BECAUSE THE VEHICLES WERE REGISTERED IN THE NAME OF THE DIRECTORS OF THE ASSESSEE COMPANY DOES NOT ESTABLISH THE CASE OF THE REVENUE FOR NOT ALLOWING ITA NO.2002/PN/2013 4 DEPRECIATION ON SUCH ASSETS. THE CONCEPT OF FINANC IAL OWNERSHIP HAS BEEN LAID DOWN BY THE HONBLE SUPREME COURT IN MYSORE MINERAL S LTD. VS. CIT (1999) 239 775 (SC) AND HENCE FOLLOWED IN SERIES OF DECISIONS ADMITTEDLY WHERE THE FUNDS OF THE ASSESSEE COMPANY HAVE BEEN UTILIZED FOR THE PUR CHASE OF VEHICLES EVEN THOUGH THE VEHICLES ARE NOT REGISTERED IN THE NAME OF THE ASSESSEE COMPANY DOES NOT ESTABLISH THE CASE OF THE REVENUE ESPECIAL LY WHERE THE DOMAIN/CONTROL OF THE SAID ASSETS WAS WITH THE COMPANY ITSELF AND THE VEHICLES WERE BEING UTILIZED FOR THE PURPOSE OF CARRYING ON BUSINESS OF THE ASSESSEE COMPANY. WE HOLD THAT THE ASSESSEE IS ENTITLED TO THE CLAIM OF DEPRECIATION ON SUCH VEHICLES WHICH WERE OWNED BY IT AND WAS BEING USED FOR ITS B USINESS THOUGH IT WAS REGISTERED IN THE NAME OF THE DIRECTORS. IN THIS R EGARD WE FIND SUPPORT FROM THE RATIO LAID DOWN BY THE PUNE BENCH OF THE TRIBUNAL I N ACIT VS. TALERA MOTORS PVT. LTD. IN ITA NO.1208/PN/2009 RELATING TO ASSESSMENT YEAR 2006-07 ORDER DATED 11.05.2011 WHEREIN RELIANCE WAS PLACED ON THE RATI O LAID DOWN BY ANOTHER DECISION OF THE PUNE BENCH OF THE TRIBUNAL IN ROHAN BUILDERS AND DEVELOPERS PVT. LTD. VS. ACIT IN ITA NO.942/PN/2006 RELATING T O ASSESSMENT YEAR 2004-05 ORDER DATED 29.08.2008 AND IT WAS HELD AS UNDER :- 4. AFTER HEARING BOTH THE PARTIES AND PERUSING THE MATERIAL ON RECORD WE FIND THAT THE ISSUE RAISED IN THIS APPEAL IS SQUARELY CO VERED BY THE DECISION OF PUNE BENCH OF THE TRIBUNAL IN THE CASE OF ROHAN BUILDERS AND DEVELOPERS PVT. LTD. (SUPRA) WHEREIN IT HAS BEEN HELD THAT THE DEPRECIAT ION WAS ALLOWABLE TO BE ASSESSEE IN RESPECT OF THE MOTOR CARS PURCHASED BY IT AND USED FOR THE PURPOSE OF ITS BUSINESS THOUGH REGISTERED IN THE NAME OF T HE MANAGING DIRECTOR. IN THE PRESENT CASE THE ASSESSEE PURCHASED THE VEHICLES C ALLED DEMO CARS IN THE NAME OF THE DIRECTORS THOUGH OWNERSHIP THEREOF DID NOT LIE WITH THE ASSESSEE. THE FACTS OF THE PRESENT CASE ARE IN PARI MATERIA W ITH THOSE IN THE CASE OF ROHAN BUILDERS AND DEVELOPERS PVT. LTD. (SUPRA). SO RES PECTFULLY FOLLOWING THE SAID DECISION OF THE TRIBUNAL WE DO NOT FIND ANY INFIRM ITY IN THE ORDER OF THE CIT(A) IN ALLOWING THE CLAIM OF THE ASSESSEE. WE UPHOLD THE SAME. 10. SIMILAR PROPOSITION HAS BEEN LAID DOWN BY THE P UNE BENCH OF THE TRIBUNAL IN ITO VS. SHREE PANCHGANGA AGRO IMPEX PVT. LTD. (S UPRA). THE CIT(A) HAD DENIED THE CLAIM OF DEPRECIATION ON VEHICLES IN TU RN RELIANCE WAS PLACED ON THE RATIO LAID DOWN BY THE MUMBAI BENCH OF THE TRIBUNAL IN EDWISE CONSULTANTS PVT. LTD. VS. ADDL.CIT (SUPRA). WE FIND NO MERIT IN THE SAID RELIANCE PLACED UPON BY ITA NO.2002/PN/2013 5 THE CIT(A) ESPECIALLY IN CIRCUMSTANCES WHERE SIMILA R ISSUE OF ALLOWANCE OF DEPRECIATION ON VEHICLES WHICH WERE REGISTERED IN T HE NAME OF THE DIRECTORS OF THE ASSESSEE COMPANY AND CLAIM OF DEPRECIATION IN T HE HANDS OF THE COMPANY ITSELF THE MUMBAI BENCH OF THE TRIBUNAL HAD ALLOWE D THE CLAIM OF THE ASSESSEE. IN THIS REGARD WE FIND SUPPORT FROM THE RATIO LAID DOWN BY THE MUMBAI BENCH IN M/S ORBIT MARKETING PVT. LTD. VS. ITO (SUPRA) AND N AVJEEVAN SYNTHETICS PVT. LTD. VS. ACIT (SUPRA). IN VIEW OF THE ISSUE BEING SETTL ED IN FAVOUR OF THE ASSESSEE BY SERIES OF DECISIONS OF PUNE BENCH OF THE TRIBUNAL A ND MUMBAI BENCH OF THE TRIBUNAL WE REVERSE THE ORDER OF THE CIT(A) AND DI RECT THE ASSESSING OFFICER TO ALLOW THE ASSESSEES CLAIM OF DEPRECIATION OF RS.7 04 516/- ON VEHICLES OWNED BY THE ASSESSEE COMPANY WHICH WERE REGISTERED IN THE NAME OF THE DIRECTORS OF THE ASSESSEE COMPANY. THE GROUND OF APPEAL NO.1 RAISED BY THE ASSESSEE IS THUS ALLOWED. 11. IN THE RESULT THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED ON THIS 30 TH DAY OF APRIL 2015. SD/- SD/- (R.K. PANDA) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE DATED: 30 TH APRIL 2015 SUJEET COPY OF THE ORDER IS FORWARDED TO: - 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A)-2 NASHIK; 4) THE CIT-2 NASHIK; 5) THE DR A BENCH I.T.A.T. PUNE; 6) GUARD FILE. BY ORDER //TRUE COPY// ASSISTANT REGISTRAR I.T.A.T. PUNE