IMAGE INFOTAINMENT LIMITED,ALWARPET, CHENNAI vs. ACIT, CORPORATE CIRCLE-2(2), CHENNAI

ITA 364/CHNY/2023Status: DisposedITAT Chennai05 October 2023AY 2019-203 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that since the cars were part of a larger block of assets eligible for depreciation and the sale consideration was reduced from the block, the profit on the sale of the cars could not be treated as the assessee's income.

What were the facts?

The assessee sold two cars, which were part of a block of assets eligible for depreciation. The profit from the sale was credited to the Profit & Loss Account, but the sale consideration was reduced from the block of assets for depreciation calculation.

What were the issues?

Whether profit on sale of a car, which is part of a block of assets eligible for depreciation, can be treated as income of the assessee.

Which sections of the Income-tax Act were involved?

Section 143(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “B” BENCH, CHENNAI

Before: HON’BLE SHRI V. DURGA RAO, JM & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM

O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2019-20 arises out of the order of learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [CIT(A)] dated 25-01-2023 in the matter of an intimation issued by Centralized Processing Centre u/s. 143(1) of the Act on 04-05-2020. Though the assessee has raised multiple grounds of appeal

, however, the only ground urged before us is ground no.6 wherein the assessee is aggrieved by addition of an amount of Rs.8.69 Lacs to its income which represent profit on sale of car. This addition has been made by CPC u/s 143(1).

2. The material facts are that the assessee sold two cars during the year and credited the profit arising there-from in the Profit & Loss Account. However, since this car was forming part of block of asset eligible for depreciation, the resultant sale consideration was reduced from the block of asset and the depreciation was claimed on the balance amount. On the basis of these facts, the assessee submitted that profit on sale of car could not be considered as its income. However, Ld. CIT(A) rejected the same against which the assessee is in further appeal before us.

3. Upon perusal of computation of income and depreciation chart as placed on record, it could be seen that the two cars forms part of larger block of asset which is eligible for depreciation. The sale consideration of Rs.17.77 Lacs has been reduced from the block and depreciation has been claimed only on the net value which is in consonance with the provisions of the act. In such a case, profit on sale of car could not be treated as assessee’s income. By deleting the impugned addition, we allow this ground of appeal.

4. The appeal stand partly allowed. Order pronounced on 05th October, 2023. (V. DURGA RAO) (MANOJ KUMAR AGGARWAL) "ाियक सद!/JUDICIAL MEMBER लेखासद! / ACCOUNTANT MEMBER चे5ई Chennai; िदनांक Dated : 05-10-2023 DS आदेशकीTितिलिपअ&ेिषत/Copy of the Order forwarded to : 1. अपीलाथ"/Appellant 2. !"थ"/Respondent 3. आयकरआयु>/CIT 4. िवभागीय!ितिनिध/DR 5. गाडCफाईल/GF

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