M/S VALLABH YARNS PVT. LTD.,LUDHIANA vs. JCIT, R-2, LUDHIANA

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH ‘B’, CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND MS.ANNAPURNA GUPTA, ACCOUNTANT MEMBER

ITA No.1250/Chd/2017 (Assessment Year : 2010-11) M/s Vallabh Yarns Pvt. Ltd., Vs. The J.C.I.T., B-XXIV/353/1, Sunder Nagar, Range-2, Ludhiana. PAN: AAACV5322K (Appellant) (Respondent)

Appellant by : Shri Amarjit Kamboj, CA Respondent by : Smt.Chanderkanta, Sr.DR Date of hearing : 22.03.2018 Date of Pronouncement : 28.03.2018

ORDER PER ANNAPURNA GUPTA, A.M.:

This appeal has been preferred by the assessee against

the order of Ld. Commissioner of Income Tax(Appeals)-2,

Ludhiana [hereinafter referred to as ‘CIT(Appeals)’] dated

17.5.2017 relating to assessment year 2010-11.

under:

on car Rs.6,36,604/- totaling Rs.11,47,652/-, on adhoc basis towards non business purpose, without considering the fact that the assessee is a corporate assessee.” 3. The only issue raised in the present appeal is relating

to the adhoc disallowance of Telephone and car expenses for

the reason that they were incurred for personal use of the

assessee.

1/6 t h of the Telephone expenses claimed by the assessee

amounting to Rs.46,514/- & 1/6 t h of the car expenses

incurred by the assessee amounting to the Rs.1,91,275/-

for the reason that no log book had been maintained by the

assessee for the same and, therefore, the possibility of

incurring the said expenses for personal purposes could not

be ruled out.

that the assessee was a company and no personal use of

any asset could be attributed to it. Ld. counsel for

assessee relied upon the following decisions in support of

its contention:

1) CIT v/s Dinesh Mills Ltd. (2005) 148 Taxman 76.

2) M/s Mitsui and company India Pvt. Ltd. Vs. Addl.CIT, Range 6, New Delhi ITA No. 1362/Del/2011 dated 03- 06-2011.

3) Principle CIT v/s Rimjhim Ispat Ltd. (2016) 282 ITR 152 (ALL).

order of the CIT(Appeals).

we find merit in the contention of Ld. Counsel for the

assessee that no disallowance on account of personal use of

car and telephone expenses can be made in the case of

company assesses that too on an adhoc basis. The reliance

placed by the assessee in this regard on the decision of the

Hon’ble Gujarat High Court in the case of CIT Vs. Dinesh

Mills Ltd. (2005) 148 Taxman 76 (Guj) wherein it has been

categorically held that no personal use of car or telephone

expenses can be attributed to company assessee and,

therefore, cannot form the basis for disallowing the

expenses. This proposition has been reiterated in a number

of other decisions also as pointed out by the Ld. Counsel for

the assessee. The Ld. DR has not brought to our notice any

contrary decision in this regard. In view of the above, we

delete the disallowance made of 1/6 t h of telephone and car

expenses incurred by the assessee amounting to

Rs.46,514/- & Rs.1,91,275/- respectively.

Ground No. 1(a) & (b) raised by the assessee are,

therefore, allowed.

Order pronounced in the Open Court.

Sd/- Sd/- (SANJAY GARG) (ANNAPURNA GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated 28th March, 2018 *Rati* Copy to: 1. The Appellant 2. The Respondent 3. The CIT 4. The CIT(A) 5. The DR

Assistant Registrar, ITAT, Chandigarh