What did the Tribunal hold?

The Tribunal held that since the vehicles were registered in the company's name and the perquisite for the director's car use was already added to their individual income, the disallowance on account of maintenance or personal use was not warranted.

The assessee company incurred vehicle repair and maintenance expenses. The Assessing Officer made an adhoc disallowance and also a proportionate disallowance for personal use of company cars. The CIT(A) confirmed these disallowances.

What were the issues?

Whether disallowance of vehicle repair and maintenance expenses and proportionate disallowance for personal use of company car is justified when perquisite for director's use is already taxed.

M/S Sharman Udyog Pvt. Ltd… vs DCIT | ITAT Chandigarh 2019

आदेश/Order

Per Sanjay Garg, Judicial Member:

The present appeal has been preferred by the assessee against the order dated 11.6.2018 of the Commissioner of Income Tax (Appeals)-5, Ludhiana [hereinafter referred to as ‘CIT(A)’].

An adjournment has been sought by the Ld. Authorized Representative in this case, however, after going through the record of the case, we deem it appropriate to decide the case after hearing the Ld.

ITA No. 1065/Chd/2018- Shri Sharman Udyog Pvt Ltd., Ludhiana 2 DR. However, Shri Sudhir Seghal, Ld. Advocate voluntarily offered to

assist this Court on behalf of the assessee.

The sole issue raised in this appeal is relating to the adhoc

disallowance made by the Assessing Officer and confirmed by the Ld.

CIT(A) out of vehicle repair & maintenance expenses and also

proportionate disallowance of personal use of Company Car.

We have heard the rival contentions of the Ld. Representatives of

the parties and gone through the record. Shri Sudhir Sehgal, Ld. proxy

counsel for the assessee, at the outset, invited our attention to the order

of the CIT(A), wherein, it has been mentioned that vehicles were

registered in the name of the assessee company and the perquisite of car

used by the director is added in their individual Income-tax return.

Once the prerequisite of car has been added into the income of the

director and the vehicle were registered in the name of the company,

under the circumstances, the disallowance on account of maintenance of

car or personal use of the director was not warranted.

In view of this, we do not find any justification on the part of the

lower authorities to make the impugned addition. The same is

accordingly ordered to be deleted.

ITA No. 1065/Chd/2018- Shri Sharman Udyog Pvt Ltd., Ludhiana 3 The appeal of the assessee is hereby allowed. Order dictated and pronounced in the Open Court immediately on completion of hearing.

Sd/- Sd/- (अ�नपूणा� गु�ता / ANNAPURNA GUPTA) (संजय गग� / SANJAY GARG) लेखा सद�य/ Accountant Member �या�यक सद�य/ Judicial Member

Dated : 31.10.2019 “आर.के.”

आदेश क� ��त�ल�प अ�े�षत/ Copy of the order forwarded to : 1. अपीलाथ�/ The Appellant 2. ��यथ�/ The Respondent 3. आयकर आयु�त/ CIT 4. आयकर आयु�त (अपील)/ The CIT(A) 5. �वभागीय ��त�न�ध, आयकर अपील�य आ�धकरण, च�डीगढ़/ DR, ITAT, CHANDIGARH 6. गाड� फाईल/ Guard File

आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar

M/S SHARMAN UDYOG PVT. LTD.,LUDHIANA vs. DCIT, C-III, LUDHIANA

What did the Tribunal hold?

What were the facts?

What were the issues?

Recent GST High Court judgments