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Pearl Freight Services Private Limited Versus ACIT 10 (3) , Mumbai

2018 (1) TMI 142 - ITAT MUMBAI

Entitled to the depreciation on the block of asset consisting of motor car remaining after crediting sale proceeds of the motor car sold during the year - Held that:- We have observed that the assessee sold motor car but there were other motor cars also existing in the block of assets and the said block of asset of motor car has not ceased to exist as on 31.03.2009 . The assessee has claimed loss on the sale of motor car of ₹ 26,686 which was wrongly debited to P&L account, however the ass .....

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e have observed that the assessee has incurred expenses of ₹ 95,94,810/- on account of renovation expenses of the premises for his hospitality business wherein renovation was carried out by the assessee . The assessee could not file the evidences before the A.O to substantiate its claim that these are revenue expenses allowable under the Act. The assessee has furnished additional evidences before learned CIT-A who has refused to admit the same . After considering the material on record and .....

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d by the assessee because in any case assessee has itself submitted that assessee will claim these expenses in A.Y 2010-11 based on actual payments for the bonus made to the employees in the month of October 2009 which in our considered view is in consonance with provisions of Section 43B(c) r.w.s. 36(1)(ii) . The learned counsel for the assessee has fairly agreed before us that this ground may be dismissed. Hence keeping in view entire factual matrix of the issue we dismiss this ground in the l .....

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f expenses can be allowed in A.Y 2010-11 after verification by the AO . The learned CIT-A has dismissed this ground on the basis of submissions made by the assessee. We do not find any infirmity in the decision of learned CIT-A in dismissing this ground as in any case there will be no prejudice to the assessee as the same expenses shall be allowed in the subsequent year i.e. 2010-11 in which assessee has paid the TDS to the credit of Central Government , after due verification and examination by .....

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014 - Dated:- 2-1-2018 - SHRI JOGINDER SINGH JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER For The Assessee : Shri. S.L Jain And V.A Mishra For The Revenue : Shri. Rajat Mittal ORDER PER RAMIT KOCHAR, Accountant Member This appeal, filed by the assessee, being ITA No. 4014/Mum/2014 for assessment year 2009-10 is directed against the appellate order dated 20.02.2014 passed by learned Commissioner of Income-tax (Appeals)-22, Mumbai (hereinafter called the CIT(A) ) for assessment year 20 .....

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red in completing the assessment U/S 143(3) of the Income Tax Act, 1961 without taking the account of facts available, and detailed explanations submitted duly placed on records by the appellant, in the course of assessment proceedings. The assessing officer has also made presumptive and arbitrary disallowances/ additions. 2. The learned assessing officer had made disallowances for loss on sale of motor car of ₹ 26686/-stated to have wrongly debited to profit and loss Account even the bloc .....

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iture and is added back without correctly analyzing the commercial expediency involved without giving opportunity to submit detailed explanation in the element of expenses which is no more in existence. If the amount has been incurred for business expediency, quality of payments and quantum may not be a deciding factor for making such additions. 4. An addition of ₹ 26,11,067/- is made by the assessing officer as the amount added to the assesses returned income, being amount payable in Bala .....

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Act,1961 and added to the appellant total income on ground of delay in payments of Tax Deducted at Source for the period of April to Feb 2009 before 31st March,2009.The Assessing Officer failed to appreciate that Tax Deducted at Source has been paid before the due dates of filling the return. Appellant is allowable for deduction of full amount hence the same should be allowed as expenses. As per order passed by CIT (A)22 it is directed to verify and allow the credit for taxes paid to the extent .....

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he act, which may be deleted. 8. The assessee prays and craves to you to allow him to add/delete/modify/ratify/alter and crave to alter any/all grounds for appeal before the matter is being heard by you. 3. The assessee in this case filed an appeal late by 42 days with the tribunal beyond the time stipulated u/s 253(3) . It is the submission of ld. Counsel for the assessee that the assessee filed an appeal late by 42 days as the CA of the assessee Shri. V.A Mishra who was looking after the affai .....

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ts. The affidavit of Director is also placed in file. The learned DR objected to condonation of delay in filing of this appeal late by 42 days beyond the time stipulated u/s 253(3) of the 1961 Act. Thus, keeping in view interest of substantial justice vis-a-vis technicalities and in the light of decision of Hon ble Supreme Court in the case of Collector , Land Acquisition v. Mst. Katiji & Ors. (1987) 167 ITR 0471(SC) , we are inclined to condone the delay of 42 days in filing this appeal lat .....

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claimed by the assessee is not allowable as deduction . The A.O disallowed the same and added it to the income of the assessee in an assessment framed u/s 143(3) vide assessment order dated 12-12-2011. The assessee carried the matter in appeal to the file of the Ld. CIT-A by filing first appeal and the claim of the assessee was rejected by learned CIT-A because the assessee had itself submitted before learned CIT(A) that it did not wish to press this ground of appeal. The assessee has now come .....

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k where the submissions were made before learned CIT-A wherein the assessee agreed to the said addition. Ld DR on the other hand submitted that matter can be restored to the file of the A.O for re-computation of the claim of depreciation by reworking the block of asset as on 31.03.2009. 4.1. We have heard both the parties and perused the material on record . We have observed that the assessee sold motor car but there were other motor cars also existing in the block of assets and the said block o .....

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be restored to the file of the A.O for re-computation of depreciation in accordance with law after necessary verifications and examination. Needless to say that the AO shall provide proper and adequate opportunity of being heard to the assessee in denovo proceedings in accordance with principles of natural justice in accordance with law. We order accordingly. 5.1. The next issue is w.r.t. disallowance of Renovation expenses. The A.O observed that the assessee has debited ₹ 95,94,810/- in .....

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ny could not manage the start of the business because of local problems and other non-approval/non-sanctioning of various licenses and therefore its directors were of the view that the Company will be unable to take up this business in near future. Sir, the expenses on account of renovation on a rented property may not stand for capitalization for the reason that the assessee is not going to benefit for the expenses being incurred on such account in future and there is no benefit of the expenses .....

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d u/s 143(3) . 5.3 Aggrieved by the assessment framed by the AO u/s 143(3), the assessee filed first appeal before learned CIT(A) and furnish additional evidences which were not admitted by learned CIT-A and the ground of the assessee was dismissed as in the opinion of learned CIT-A , Rules 46A of the Income Tax Rules, 1962 was not complied with . The learned CIT-A partly allowed certain expenses as revenue while the rest of the expenses on renovation was disallowed by holding the same to be cap .....

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renovation expenses before the learned CIT-A but however learned CIT-A has not admitted these additional evidences and these evidences goes to the root of the matter and in the interest of the substantial justice , the same may be admitted and then the appeal of the assessee be either adjudicated on merits by tribunal or else matter can be set aside and restored to the file of the A.O for the denovo adjudication of the issue on merits in accordance with law after verification of evidences by th .....

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e issue on merits after verification of the evidences. 5.7 We have considered rival contention and perused the material on record . We have observed that the assessee has incurred expenses of ₹ 95,94,810/- on account of renovation expenses of the premises for his hospitality business wherein renovation was carried out by the assessee . The assessee could not file the evidences before the A.O to substantiate its claim that these are revenue expenses allowable under the Act. The assessee has .....

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the A.O for fresh adjudication of the issue on merits in accordance with law. Needless to say proper and adequate opportunity of being heard shall be provided by the A.O to the assessee in accordance with principle of natural justice in accordance with law. We order accordingly. 6.1 The next issue is with regard to disallowance of provision of bonus for the F.Y 2008-09 made by the assessee in its books of accounts for FY 2008-09 of ₹ 26,11,067/- but the same was paid in the F.Y 2009-10 in .....

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t 2009 the expenses can be claimed in AY 2010-11. 6.2 We did not find any infirmity in the order of learned CIT-A in dismissing the ground of appeal as not been pressed by the assessee because in any case assessee has itself submitted that assessee will claim these expenses in A.Y 2010-11 based on actual payments for the bonus made to the employees in the month of October 2009 which in our considered view is in consonance with provisions of Section 43B(c) r.w.s. 36(1)(ii) . The learned counsel f .....

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April to February 2009 was not paid before 31.03.2009 , but was paid on 29-09-2009 and hence it violated provision of Section 40(1)(ia) but it was claimed that the same was paid before filing of return of income . We have observed that the assessee has itself submitted before learned CIT-A that assessee has claimed these expenses on which income-tax was deducted at source which was paid late beyond the period prescribed u/s 40(a)(ia) , in AY 2010-11 and thus, the claim of expenses can be allowe .....

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ground. 8.1 The next ground raised by the assessee was w.r.t. non granting of total TDS receivable by the assessee, wherein the assessee has been allowed credit of prepaid taxes to the tune of ₹ 44,04,422/- by Revenue as against the claim of TDS of ₹ 54,75,552/- on the grounds that the same was not reflected in 26AS. The learned CIT-A has already appreciated the grievance of the assessee and directed the A.O to verify the claim of the assessee and allow the credit of prepaid taxes b .....

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