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Income Tax Appellate Tribunal, DELHI BENCH: ‘D’, NEW DELHI
Before: SH. H.S. SIDHU & SH. O.P. KANT
ORDER PER O.P. KANT, A.M.: This appeal by the assessee is directed against order dated 19/07/2013 of learned Commissioner of Income-tax (Appeals), Karnal, for assessment year 2008-09, raising following grounds:
“1.That the order of the learned Commissioner of Income Tax(Appeals) is against law and facts.
2. That in the facts and circumstances of the case of the appellant firm the order of the learned Commissioner of Income Tax(Appeals) in confirming disallowance of Rs.487386/- in respect of claim of Depreciation on Car is altogether illegal, void and uncalled for.
3. That in the facts and circumstances of the case of the appellant firm the order of the learned Commissioner of Income Tax(Appeals) in confirming disallowance of Rs.379997/- in respect of building additions is altogether arbitrary, illegal and uncalled for.
That the order of the learned Commissioner of Income Tax(Appeals) in confirming disallowance of Rs.98619/- in respect of legal expenses paid to advocate in arbitration case is altogether illegal, void and uncalled for.
That in the facts and circumstances of the case of the appellant firm the order of the learned Commissioner of Income Tax(Appeals) in confirming disallowance of Rs.68156/- in respect disallowance in respect of Car Insurance made by AO is altogether, arbitary, illegal, void and uncalled for.”
At the outset, the Ld. counsel of the assessee submitted that grounds in appeal are covered against the assessee by the order of the Income Tax Appellate Tribunal (in short “the Tribunal”) in the case of the assessee for assessment years 2004-05 to 2007-08 in to 740/Del/2011 and the appeal filed against the said order of the Tribunal has also been dismissed by the Hon’ble High Court of Punjab and Haryana in decision dated 04/02/2014 in ITA No. 133 of 2013.
The Ld. CIT(DR) also concurred with the above facts and accordingly submitted that instant appeal also need to be dismissed. 4. We have heard the rival submission and perused the relevant material including the order of the Tribunal (supra) and the decision of the Hon’ble Punjab and Haryana (supra) in the case of the assessee. 5. The ground No. 1 raised in the appeal is general in nature, therefore, same is dismissed as infructuous . 6. In ground No. 2, the assessee has raised issue of disallowance of Rs.4,87,386/- in respect of claim of depreciation on car. We find that identical grounds was raised in ITA No. 739/Del/2011 in the case of the assessee for assessment year 2006-07 before the Tribunal (supra), which we are reproducing as under:
“2. `That in the facts and circumstances of the case of the appellant the order of the learned CIT(A) in confirming disallowance of depreciation on car amounting to Rs.309943/- is altogether arbitrary, illegal and void and uncalled for.”
6.1 The Tribunal in para-19 of the order dismissed the ground with the finding as under:
“19. We have heard both the parties and gone through the facts of the case. Indisputably and as pointed out by the Id. CIT(A) in the AY 2004-05 in the case of Liberty Footwear Company that in para 2(i) of their letter dated 9th November, 2010, assessee admitted that no business was carried on by them. Similar is the situation in Liberty Enterprises & Liberty Group Marketing Division in the AY 2004-05.In the AYs 2006-07 & 2007-08 in Liberty Footwear Company, in Liberty Enterprises & Liberty Group Marketing Division, the Id. CIT(A) upheld the disallowance on the ground that nothing has been brought on record such as log book etc. to establish that the car was used for the purposes of business of these assessees, especially in view of the fact that all the assets were handed over to Liberty Shoes Ltd. in terms of the agreement. In the AY 2006-07 in Liberty Group Marketing Division ,the Id. CIT(A) while quoting the submissions of the assessee that all cars were used by the Directors of the Liberty Shoes Ltd. and also by its partners to carry out administrative, manufacturing and sales activities and the assessee having not produced any evidence such as log book etc. while the entire business was let out as a going concern to Liberty Shoes Ltd. with the stipulation that the assessee firm will not engage itself in the business (clause 4(a) of the Agreement), the Id. CIT(A) upheld the disallowance. Since the Id. AR on behalf of the assessee did not place before us any material, controverting the aforesaid findings of the Id. CIT(A) so as to enable us to take a different view in the matter, accordingly, the aforesaid grounds relating to disallowance of car expenses and depreciation on car, are dismissed.”
6.2 Against the order of the Tribunal, the assessee went into appeal before the Hon’ble High Court, however, the appeal of the assessee was dismissed on the ground that no substantial question of law arose. Thus, respectfully following the finding of the Tribunal (supra) and the Hon’ble High Court (supra), we dismiss the ground No. 2 of the appeal.
In ground No. 3, the assessee has challenged the addition of Rs.3,79,997/- in respect of building additions, sustained by the Ld. CIT- A. An Identical issue was raised in in the case of the assessee for assessment year 2006-07, as under:
“3. That in the facts and circumstances of the appellant the order of learned CIT(A) in confirming disallowance of depreciation of Rs.3,50,152/- in respect of building addition is altogether, arbitrary, illegal, void and uncalled for.”
7.1 The Tribunal (supra) has dismissed the ground with following observations:
“44 We have heard both the parties and gone through the facts of the case. Indisputably, Administrative Block constructed at Gharaunda was used by the public limited company i.e. Liberty Shoes Ltd. to whom the assessee leased its assets. The Id. CIT(A) upheld the findings of the AO in the AY 2006-07 in the case of Liberty Enterprises on the ground that no justification was given for constructing the new building/ making additions -to the existing buildings not was there any such clause in the agreement putting an obligation on the assessee for constructing any new budding for the lessee. Since the new building was not used for the purposes of business of the assessee, the Id. CIT(A) rejected the submissions of the assessee.. Similar is the position in the AY 2007-08 in Liberty Enterprises and in the AY 2006-07 in the case of Liberty Group Marketing Division. Since the Id. AR on behalf of the assessee did not dispute these findings of facts recorded by the Id. CIT(A) nor placed before us any material, controverting the aforesaid findings of the Id. CIT(A), so as to enable us to take different view in the matter, we are not inclined to interfere . Accordingly, .ground no.3 in the appeal in the case Liberty Enterprises for the AYs 2006-07 & 2007- OS as also ground no.5 in the appeal for the AY 2006-07 in Liberty Group Marketing Division, are dismissed.”
7.2 Thus, respectfully following the above finding of the Tribunal, this ground of the appeal is dismissed.
In ground No. 4, the assessee has challenged the disallowance of legal expenses paid to arbitrator etc. of Rs.98,619/-, sustained by the Ld. CIT-A. An Identical ground was raised in in the case of the assessee for assessment year 2007-08, which reads as under:]
“4. That the order of the learned CIT(A) in confirming disallowance of legal expenses of Rs.2,54,646/- for arbitration case is arbitrary, illegal, void and uncalled for.”
8.1 The finding of the Tribunal (supra) on the issue in dispute is reproduced as under:
“60. We have heard both the parties and gone through the facts of the case. As is apparent from the aforesaid facts, the assessee did not adduce any justification for these expenses before the AO while before the Id. CIT(A) it was claimed that legal charges were paid against challenging performance of the business agreement in the Court. However, no documents/evidence in support of this claim were placed before the Id. CIT(A). The situation is no better before us. The Id. AR on behalf of the assessee did not refer us to any such document, evidencing that services were rendered by the aforesaid three persons in relation to performance of the business agreement nor as to how this agreement relates to the assessee. In these circumstances, especially when the Id. AR on behalf of the assessee did not place before us any material, controverting the aforesaid findings of the Id. CIT(A), so as to enable us to take different view in the matter, we are not inclined to interfere . Accordingly, .ground no.4 in the appeal in Liberty Enterprises for the AY 2007-08 is dismissed.”
8.2 Thus, respectfully following the above finding of the Tribunal, the ground No. 4 of the appeal is dismissed 9. In ground No. 5, the assessee has challenged confirmation of disallowance of Rs.68,156/- in respect of insurance of car. Since while deciding the ground No. 2 of the appeal, we found that the assessee did not produce any evidence such as log-book etc. to establish that the car was used for the purpose of business of the assessee and accordingly, the claim of depreciation denied to the assessee has been upheld. Following the same reasoning, the expenses on insurance of the car are also not allowed and the ground of the appeal is dismissed.
In the result, appeal of the assessee is dismissed. The decision is pronounced in the open court on 29th May, 2017.