S.KUMARS ONLINE LTD, MUMBAI v. DCIT CIR 7(2), MUMBAI

ITA 4393/MUM/2012 | 2006-2007
Pronouncement Date: 31-07-2015 | Result: Allowed

Appeal Details

RSA Number 439319914 RSA 2012
Assessee PAN AADCS9248J
Bench Mumbai
Appeal Number ITA 4393/MUM/2012
Duration Of Justice 3 year(s) 1 month(s) 2 day(s)
Appellant S.KUMARS ONLINE LTD, MUMBAI
Respondent DCIT CIR 7(2), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 31-07-2015
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted E
Tribunal Order Date 31-07-2015
Date Of Final Hearing 23-01-2014
Next Hearing Date 23-01-2014
Assessment Year 2006-2007
Appeal Filed On 28-06-2012
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH MUMBAI BEFORE SHRI A.D. JAIN JUDICIAL MEMBER AND SHRI RAJENDRA ACCOUNTATN MEMBER ITA NO. 4393 /MUM./ 2012 ( ASSESSMENT YEAR : 200 6 07 ) S. KUMARS ONLINE LIMITED AVADH AVADHESH PARISAR SHREE RAM MILLS PREMISE S G.K. MARG WORLI MUMBAI 400 018 PAN AADCS9248J .. APPELLANT V/S DY. COMMISSIONER OF INCOME TAX CIRCLE 7(2) AAYAKAR BHAVAN 101 M.K. ROAD MUMBAI 400 020 .... RESPONDENT ASSESSEE BY : SHRI YOGESH JAIJODE REVENUE BY : SHRI CHANDRA VIJAY DATE OF HEARING 22 .0 7 .2015 DATE OF ORDER 31.07.2015 O R D E R PER A.D. JAIN JUDICIAL MEMBER TH E PRESENT APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 9 TH JANUARY 2012 PASSED BY THE COMMISSIONER ( APPEALS) 13 MUMBAI FO R THE ASSESSMENT YEAR 20 06 07 . THE GROUND RAISED BY THE ASSESSEE IS AS UNDER: THE LEARNED CIT(A) ERRED IN CONFIRMING THE ORDER OF THE ASSESSING OFFICER MAKING DISALLOWANCE OF DEPRECIATION OF ` 32 04 454 CLAIMED BY THE ASSESSEE ON THE PRETEXT THAT THE A SSESSEE HAS DONE PETTY BUSINESS IN TEXTILE. IT IS SUBMITTED THAT SUCH DISALLOWANCE OF THE DEPRECIATION IS MADE WITHOUT CONSIDERING THE FACT THAT THE ASSESSEE CONTINUED BUSINESS DURING THE YEAR ALSO AND THEREFORE THE CLAIM OF DEPRECIATION OF S. KUMARS ONLINE LIMITED 2 ` 32 04 454 S HOULD BE ALLOWED. 2. THE ONLY ISSUE WHICH AR ISES HEREIN IS WITH REGARD TO THE DISALLOWANCE OF DEPRECIATION OF ` 32 04 454. T HE FACTS ARE THAT THE ASSESSEE IS A LIMITED COMPANY ENGAGED IN THE BUSINESS OF SOFTWARE DEVELOPMENT AND CONSULTANCY. DURING THE YE AR UNDER CONSIDERATION THE ASSESSEE HA D SHOWN INCOME UNDER THE HEAD INCOME FROM BUSINESS . THE ASSESSING OFFICER DISALLOWED THE AMOUNT OF ` 32 04 454 ON ACCOUNT OF DEPRECIATION CLAIMED BY THE ASSESSEE ON THE GROUND THAT THE ASSESSEE HAD DONE PETTY BUSI NESS IN TEXTILE S AND THE TOTAL INCOME SHOWN BY THE ASSESSEE AS PER BALANCE SHEET WAS ` 4 29 509. ACCORDING TO THE ASSESSING OFFICER THE CLAIM OF DEPRECIATION OF THE ASSESSEE WAS NOT JUSTIFIED AS THE ASSESSEE FAILED TO SUBSTANTIATE ITS CLAIM. 3. T HE LEARNED CIT(A) CONFIRMED THE DISALLOWANCE ON THE GROUND THAT NO BUSINESS THROUGH E COMMERCE WAS CARRIED OUT BY THE ASSESSEE DURING THE YEAR . S INCE MOST OF THE DEPRECIATION EXPENDITURE RELATED TO NET WORKING EXPENDITURE DISALLOWANCE ON DEPRECIATION MADE BY THE AS SESSING OFFICER WAS UPHELD. 4. BEFORE US THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE DISALLOWANCE MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE LEARNED CIT(A) IS ERRONEOUS IN LAW AS WELL AS ON FACTS. THE LEARNED COUNSEL FOR THE ASSESSEE DRE W OUR ATTENTION TO THE BALANCE SHEET AND S. KUMARS ONLINE LIMITED 3 PROFIT & LOSS ACCOUNT OF THE YEAR UNDER CONSIDERATION AS WELL AS THE ASSESSMENT ORDERS FOR THE EARLIER YEAR AND THE SUBSEQUENT YEARS. 5. ON THE OTHER HAND THE LEARNED DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDERS OF THE ASSESSING OFFICER AND REQUESTED THAT THE DISALLOWANCE BE CONFIRMED. 6. AFTER HEARING THE RIVAL CONTENTIONS AND ON PERUSAL OF THE MATERIAL AVAILABLE ON RECORD WE ARE OF THE CONSIDERED OPINION THAT THE DISALLOWANCE MADE BY THE ASSESSING OFFICER AS CON FIRMED BY THE LEARNED CIT(A) IS INCORRECT. IT IS SEEN FROM THE BALANCE SHEET AND THE PROFIT & LOSS ACCOUNT AVAILABLE AT PAGE S 4 TO 26 OF THE PAPER BOOK FILED BY THE ASSESSEE THAT THE ASSESSEE HA D CARRIED OUT BUSINESS DURING THE YEAR. THIS FACT HAS BEEN A CCEPTED EVEN BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER. IT MAY BE SEEN THAT THE ASSESSING OFFICER HA D COMPUTED THE INCOME OF THE ASSESSEE UNDER THE HEAD INCOME FROM BUSINESS . SINCE THE BUSINESS WAS CARRIED ON THE ASSESSEE IS ELIGIBLE FOR THE CLAIM OF DEPRECIATION. IT IS FURTHER SEEN THAT THE ASSESSEE HAS SUBMITTED COPIES OF BILLS AND INVOICES OF THE FIXED ASSETS. NOTHING ADVERSE HAS BEEN FOUND BY THE AUTHORITIES BELOW. THUS THE ASSESSING OFFICERS ASSERTION THAT THE ASSESSEE FAILED TO SUBSTANTIATE ITS CLAIM IS WITHOUT ANY BASIS. MORE OVER IT IS FURTHER SEEN THAT IN THE ASSESSMENT YEAR 2008 09 THE ASSESS MENT HAS BEEN DONE UNDER SECTION 143(3) OF S. KUMARS ONLINE LIMITED 4 THE ACT WHEREIN THE CLAIM OF DEPRECIATION HAS BEEN MADE BY THE ASSESSEE AND THE SAME HAS BEEN ALLOWED BY THE ASSESSING OFFICER . T HE COPY OF THE ASSESSMENT ORDER IS AVAILABLE AT PAGE S 42 43 OF THE PAPER BOOK. THE C OPY OF COMPUTATION AND BALANCE SHEET FOR THE YEAR ENDING 31 ST MARCH 2007 SHOWS THAT DEPRECIATION HAS BEEN CLAIMED FOR ` 24 54 796 FOR THE ASSESS MENT YEAR 2007 08. SIMILARLY COPY OF COMPUTATION AND BALANCE SHEET AVAILABLE AT PAGE S 38 TO 41 OF THE PAPER BOOK SHOW THAT THE DEPRECIATION HAS BEEN CLAIMED FOR ` 2 2 17 621 FOR THE ASSESSMENT YEAR 2008 09 WHICH HAS BEEN ALLOWED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER DATED 29 TH OCTOBER 2010 PASSED UNDER SECTION 143(3) OF THE ACT. THUS KEEPING IN VIEW OF THE AFORESAID FACTS AND EVIDENCE S THE ACTION OF THE ASSESSING OFFICER IN MAKING DISALLOWANCE OF DEPRECIATION FOR THE YEAR UNDER CONSIDERATION FOUND TO BE SELF CONTRADICTORY AND UNJUSTIFIED AND THE SAME IS DIRECTED TO BE DELETED. THUS THE GROUND RAISED BY THE ASSESSEE IS ACCEPTED. 7. IN THE RESULT THE ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT O N 31.07.2015 SD/ - R AJENDRA ACCOUNTA NT MEMBER SD/ - A.D. JAIN JUDICIAL MEMBER MUMBAI DATED : 31.07.2015 S. KUMARS ONLINE LIMITED 5 COPY OF THE ORDER FORWARDED TO : (1) THE ASSESSEE; (2) THE REVENUE; (3) THE CIT(A); (4) THE CIT MUMBAI CITY CONCERNED; (5) THE DR ITAT MUMBAI; (6) GUARD FILE . TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY (DY./ASSTT. REGISTRAR) ITAT MUMBAI