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Income Tax Appellate Tribunal, MUMBAI BENCH “H”, MUMBAI
Before: Shri Mahavir Singh & Shri G Manjunatha
Date of hearing 09 -01-2018 Date of pronouncement -01-2018 O R D E R
Per G Manjunatha, AM :
This appeal of the assessee is directed against the order of CIT(A)- 33, Mumbai dated 30-03-2016 for the assessment year 2011-12. The following are the grounds taken by the assessee:- “1. The Commissioner of Income Tax (Appeals) - 33, Mumbai [hereinafter / referred to as 'CIT(A)] erred in confirming the disallowance of depreciation of Rs. 10,44,0327- and society charges of Rs.3,78,8317- claimed on Housing accommodation on the ground that these expenses are not incurred wholly and exclusively for the purpose of the Appellant's business.
The CIT(A) erred in confirming the adhoc disallowance of Rs.5,20,5837- made by the AO, being 5% of various expenses debited to the Profit & Loss A/c as not incurred wholly and exclusively for business purpose.”
2 ITA 3881/Mum/2016 2. The ld. AR of the assessee submitted that the issues under appeal stand covered by the order of the Tribunal in assessee’s own case for the assessment year 2009-10. The Ld.DR agreed to the proposition. 3. With regard to ground No.1, we find that the “E” Bench of the Tribunal in for the assessment year 2009-10 decided the issue in favour of the assessee with the following observations:-
Briefly stated the facts are, the Assessing Officer in course of assessment proceedings, while examining assessee’s claim of depreciation noticed that depreciation of ` 9,49,005 was in relation to premise other than office. He also found that the assessee had paid society charges of ` 1,62,567. He further found that these deductions claimed were not allowed in the earlier assessment year. He, therefore, called upon the assessee to explain why the deduction claimed should not be disallowed. Though, the assessee objected to the proposed disallowance but the Assessing Officer rejecting the claim of the assessee, disallowed the deduction claimed.
The learned Commissioner (Appeals) also confirmed the disallowance. 9. Learned Authorised Representative submitted, similar issue also arose in the assessee’s own case for the assessment year 2008–09 and the Tribunal restored the matter back to the file of the Assessing Officer for considering afresh. In this context, he drew our attention to Para–22 of the order passed by the Tribunal as referred to above. The learned Departmental Representative also agreed that the matter should be restored back to the Assessing Officer for deciding afresh in terms of direction of the Tribunal in assessment year 2008–09. 10. We have considered the submissions of the parties and perused the material available on record. It is observed, while deciding similar issue in assessee’s own case in ITA no.7282/Mum./2011, dated 17th June 2015, for assessment year 2008–09, the Tribunal held as under:– “22. The issue in ground of appeal no. 4 is against the disallowance of depreciation on residential premises of Rs.7,91,136/- the claim of the assessee before the authorities below was that it had provided the said residential premises but its employees who were working with the assessee for the past several years. The AO further, denied the said claim of the assessee as no evidence was produced by the assessee in support thereof. The CIT(A) also upheld the order of CIT(A) for the absence of any evidence having been filed by the assessee
3 ITA 3881/Mum/2016 merely because depreciation was allowed in the earlier years, was denied to the assessee in the present year in the absence of any details. The assessee is in appeal against the such disallowance of depreciation on residential building, which is claimed to be being used by the employees of the assessee. Similar issue of claim of depreciation on the said asset arose in Assessment Year 2001-02 wherein the premises were allotted to one of the employee of the assessee firm and depreciation on the said asset was allowed by the AO vide order passed under section 143(3) of the Act, dated 19.02.2004, the said residential flat is as per assessee, still being used by the employees and the per quest on account of the said residential accommodation is added in the hands of the employees. The claim of the assessee was denied by the authorities below in the absence of the particulars of the person having not been provided by the assessee. In all fairness we are of the view that the matter needs to be looked into by the AO, in order to verify claims of the assessee. Following the principles of natural justice we may it fit deem to the restore this issue back to the file of the AO to verify the names of the employees to whom the premises have been allotted and in whose hands the perk has been offered. Reasonable opportunity of hearing shall be afforded to the assessee. The ground of appeal no. 4 raised by the assessee is thus allowed for statistical purposes.”
11. As there is no material difference in facts, respectfully following the aforesaid view of the Tribunal, we restore the matter back to the file of the Assessing Officer with similar direction. This ground is allowed for statistical purposes.”
4. Consistent with the view already taken by the Tribunal, we restore the matter back to the file of the Assessing Officer with similar direction.
This ground is allowed for statistical purposes. 5. With respect to the second ground, this ground also stands decided by the Tribunal against assessee with the following observations:-
“12. In ground no.3, assessee has challenged ad–hoc disallowance of ` 1,04,564 being 5% of various expenses aggregating to ` 20,91,282. 13. While completing assessment, the Assessing Officer made ad– hoc disallowance of 5% on various expenditure claimed by the assessee for want of supporting details and vouchers. Though the assessee challenged 4 ITA 3881/Mum/2016 the disallowance before the learned Commissioner (Appeals), he also confirmed the disallowance.
Learned Counsel for both the parties agreed that the issue in dispute is decided against the assessee by the Tribunal in order passed for assessment year 2008–09. On a perusal of the order of the Tribunal referred to above, it is noticed that while deciding the issue of ad–hoc disallowance of 5% out of various expenses, the Tribunal did not interfere in the matter and upheld the disallowance. Following the order of the Tribunal, we uphold the disallowance by dismissing the ground raised by the assessee.”
Consistent with the earlier decision of the Tribunal, we dismiss the ground raised by the assesse. 6. In the result, the appeal filed by the assessee is partly allowed, for statistical purpose.
Order pronounced in the open court on 31st January, 2018.