M/s. Container Corporation of India Ltd., New Delhi V. ACIT, New Delhi

ITA 1030/DEL/2017

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 6732 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 8 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 23-02-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: NIDHI SRIVASTAVA
• Assessee Lawyers: S KRISHNANADV
• Keywords: Depreciation; Principle of natural justice
• Section: 80IA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI B BEN CH, NEW DELHI BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER, AND MS SUCHITRA KAMBLE, JUDICIAL MEMBER, ITA NO.1551/DEL/2017 [ASSESSMENT YEAR: 2013-14] ACIT, CIRCLE-6(2), ROOM NO.390, CR BUILDING, NEW DELHI M/S CONTAINER CORPORATION OF INDIA LTD., CONCOR BHAWAN, C-3, MATHURA ROAD, NEW DELHI-110076 PAN-AAACC1205A REVENUE ASSESSEE ITA NO.1030/DEL/2017 [ASSESSMENT YEAR: 2013-14] M/S CONTAINER CORPORATION OF INDIA LTD., CONCOR BHAWAN, C-3, MATHURA ROAD, NEW DELHI-110076 ACIT, CIRCLE-6(2) NEW DELHI PAN - AAACC1205A ASSESSEE REVENUE ASSESSEE BY SHRI S. KRISHNAN,ADV. REVENUE BY MS. NIDHI SRIVASTAVA CIT- DR DATE OF HEARING 26/08/2019 DATE OF PRONOUNCEMENT 30/10/2019 ORDER PER SUCHITRA KAMBLE, JUDICIAL MEMBER THE REVENUE AS WELL AS THE ASSESSEE ARE IN APPEAL A GAINST THE ORDER DATED 27/01/2017 PASSED BY THE CIT(A)-2, NEW DELHI, FOR ASSESSMENT YEAR 2013-14 2 ITA NOS. 1030/DEL/2017 AND 1551/DEL/2017 2. GROUNDS OF APPEAL ARE AS UNDER:- ITA NO. 1030/DEL/2017 A.Y. 2013-14 (ASSESSEES APPE AL) 1. LD. CIT (A) ERRED ON FACTS AND IN LAW IN CONFIRMING THE DISALLOWANCE OF RS. 45,12,19,128/- BEING CLAIM U/S 80IA OF THE ACT ON ICDS/CFS WHICH A RE INLAND PORTS, IGNORING THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE APPELLANTS OWN CASE IN ASSESSMENT YEAR 2003-04 TO 2005-06. 2. LD. CIT(A) ERRED, ON FACT AND IN LAW IN CONFIRMING THE DISALLOWANCE OF RS. 2,92,28,553/- BEING THE CLAIM OF DEDUCTION ON ACCOUNT OF ADVANCE LEASE RENT PAID FOR THE LAND TAKEN ON LONG TERMS LEASE FOR BUSINESS PURPOSES ON PRO RATA BASIS, IGNORING THE FACT THAT SIMILAR CLAIM HAD BEEN ALLOWED IN EARLIER YEARS. 3. THE APPELLANT PLEADS OF THE GROUNDS TO BE ALLOWED. ITA NO. 1551/DEL/2017 A.Y. 2013-14 (REVENUES APPEA L) 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.282,63,60,260/ - MADE ON ACCOUNT OF DISALLOWANCE OF DEDUCTION U/S 80IA ON RAIL SYSTEM (ROLLING STOCK). 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW, THE LD. CIT(A) HAS /ERRED IN DELETING THE ADDITION OF RS.2,78,347/- MA DE ON ACCOUNT OF DISALLOWANCE OF DEPRECIATION ON THE ASSETS RETIRED FROM ACTIVE USE. 3. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND IN LAW, THE LD. CIT(A) HAS RED IN DELETING THE ADDITION OF RS.2,78,130/- MADE ON ACCOUNT OF DISALLOWANCE OF DEPRECIATION ON THE ASSETS WHICH WERE NOT REGISTERED IN THE NAME OF THE ASSESSEE. 3. THE ASSESSEE IS A GOVERNMENT COMPANY UNDER THE M INISTRY OF RAILWAYS, WHICH IS ENGAGED IN THE BUSINESS OF HANDL ING AND TRANSPORTATION OF CONTAINERIZED CARGO. ITS OPERATING ACTIVITIES AR E MAINLY CARRIED OUT AT ITS INLAND CONTAINER DEPOTS (ICDS), CONTAINER FREIGHT S TATIONS (CFS) AND PORT SIDE CONTAINER TERMINALS (PSCT) SPREAD ALL OVER THE COUNTRY. ITS WAGONS ARE RUNNING FOR INDIAN RAILWAYS SYSTEM FOR CARRIAGE OF CONTAINER TRAFFIC. THUS, THE ASSESSEE IS ENGAGED IN DEVELOPING, OPERAT ING AND MAINTAINING INFRASTRUCTURE FACILITIES. THE ASSESSEE CLAIMED DED UCTION OF 3 ITA NOS. 1030/DEL/2017 AND 1551/DEL/2017 RS.45,12,19,128/- U/S 80IA OF THE ACT IN RESPECT OF INCOME FROM ICDS/CFS. THE ASSESSING OFFICER DISALLOWED THE CLAIM ON THE G ROUND THAT ICDS/CFS ARE NOT INLAND PORTS AND AS SUCH THEY ARE NOT INFRA STRUCTURE FACILITIES ELIGIBLE FOR DEDUCTION U/S 80IA OF THE ACT. THE ASS ESSING OFFICER ALSO DISALLOWED INCOME FROM RAIL SYSTEM (ROLLING STOCKS) AMOUNTING TO RS. 282,63,60,260/-. THE ASSESSING OFFICER FURTHER MADE ADDITION IN RESPECT OF DEPRECIATION ON ASSETS RETIRED FROM ACTIVE USE AT R S. 2,78,347/, DISALLOWANCE ON DEPRECIATION ON ASSETS NOT REGISTER ED AT RS. 2,78,130/- AND ALSO DEPRECIATION ON LAND AT RS.2,92,28,553/-. THUS , THE ASSESSING OFFICER ASSESSED INCOME AT RS. 11,45,60,05,368/-. 4. BEING AGGRIEVED BY THE ASSESSMENT ORDER, THE ASS ESSEE FILED APPEAL BEFORE THE CIT(A). THE CIT(A) PARTLY ALLOWED THE AP PEAL OF THE ASSESSEE. 5. AS REGARDS TO ASSESSEES APPEAL, GROUND NO. 1, T HE LD. AR SUBMITTED THAT THE SAME IS COVERED IN FAVOUR OF THE ASSESSEE IN ASSESSEES OWN CASE BY THE DECISION OF THE HONBLE SUPREME COURT (2018) 40 4 ITR 397 (SC). 6. THE LD. DR COULD NOT CONTROVERT THE SAME. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED ALL T HE RELEVANT MATERIAL AVAILABLE ON RECORD. THE HONBLE SUPREME COURT HELD AS UNDER: IT IS PERTINENT TO NOTE THAT THE ISSUE IS ALREADY C OVERED IN FAVOUR OF THE 4 ITA NOS. 1030/DEL/2017 AND 1551/DEL/2017 ASSESSEE IN ASSESSEES OWN CASE BY THE HONBLE APEX COURT AND THE FACTS ARE IDENTICAL IN THE PRESENT ASSESSMENT YEAR. THUS, GROUND NO. 1 OF ASSESSEES APPEAL IS ALLOWED. 8. AS REGARDS TO GROUND NO. 2 OF THE ASSESSEES APP EAL, THE LD. AR REQUESTED THAT THE SAME MAY BE REMANDED BACK AS IN EARLIER ASSESSMENT YEARS, THIS ISSUE HAS BEEN ALLOWED BY THE REVENUE A UTHORITIES. 9. THE LD. DR RELIED UPON THE ASSESSMENT ORDER AND THE ORDER OF THE CIT(A). 10. WE HAVE HEARD BOTH THE PARTIES AND PERUSED ALL THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS PERTINENT TO NOTE HERE T HAT THE REVENUE HAS ALLOWED THIS CLAIM OF DEDUCTION ON ACCOUNT OF ADVAN CE LEASE RENT PAID FOR THE LAND TAKEN ON LONG TERM LEASE FOR BUSINESS PURP OSES ON PRO RATA BASIS IN THE EARLIER ASSESSMENT YEARS I.E. 2009-10 AND 20 07-08 WHERE THE TRIBUNAL HAS REMANDED BACK THE MATTER ON THIS ISSUE . THE LD. AR ALSO REQUESTED TO REMAND BACK THIS ISSUE FOR VERIFICATIO N BY THE ASSESSING OFFICER. FROM THE PERUSAL OF THE ASSESSMENT ORDER, IT CAN BE SEEN THAT THE ASSESSING OFFICER HAS FOLLOWED THE PRINCIPLE OF CON SISTENCY IN RESPECT OF EARLIER YEARS ASSESSMENT ORDERS WHICH NOW STANDS AL LOWED IN FAVOUR OF ASSESSEE AS PER THE DIRECTIONS OF THE TRIBUNAL FOR A.Y. 2009-10 AND 2007- 08. THEREFORE, IT WILL BE APPROPRIATE TO REMAND BAC K THIS ISSUE TO THE FILE OF 5 ITA NOS. 1030/DEL/2017 AND 1551/DEL/2017 THE ASSESSING OFFICER FOR PROPER ADJUDICATION. NEED LESS TO SAY, THE ASSESSEE BE GIVEN OPPORTUNITY OF HEARING BY FOLLOWING PRINCI PLES OF NATURAL JUSTICE. GROUND NO. 2 OF THE ASSESSEES APPEAL IS PARTLY ALL OWED FOR STATISTICAL PURPOSE. 11. AS REGARDS TO REVENUES APPEAL, THE LD. AR SUBM ITTED THAT IN RESPECT OF GROUND NO. 1, THE ORDER OF THE TRIBUNAL HAS BEEN CONFIRMED BY THE HONBLE SUPREME COURT IN ASSESSEES OWN CASE IN FAV OUR OF THE ASSESSEE BY DISMISSING THE SLP FILED BY THE REVENUE. THE LD. AR FURTHER POINTED OUT THE FINDINGS OF THE CIT(A). 12. THE LD. DR COULD NOT CONTROVERT THE SAME. 13. WE HAVE HEARD BOTH THE PARTIES AND PERUSED ALL THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS PERTINENT TO NOTE THAT T HE CIT(A) HAS CORRECTLY NOTED THAT THE ISSUE IN RESPECT OF DISALLOWANCE OF THE CLAIM OF DEDUCTION OF RS. 2,82,63,60,260/- U/S 80IA OF THE ACT ON RAIL SY STEM (ROLLING STOCK) IS DECIDED IN FAVOUR OF THE ASSESSEE BY THE TRIBUNAL I N A.Y. 2003-04, 2004-05 AND 2005-06 WHICH IS NOW CONFIRMED BY THE HONBLE A PEX COURT VIDE ORDER DATED 7.05.2018 AND 02.07.2018 THEREBY DISMISSING T HE SLP FILED BY THE REVENUE [SLP (CIVIL) DIARY NO. 13966/2018 AND 14875 /2018]. THE FACTS ARE IDENTICAL IN THE PRESENT ASSESSMENT YEAR AS WEL L AND NO DISTINGUISHING FACTS WERE POINTED OUT BY THE LD. DR. THEREFORE, GR OUND NO. 1 OF REVENUES 6 ITA NOS. 1030/DEL/2017 AND 1551/DEL/2017 APPEAL IS DISMISSED. 14. AS REGARDS TO GROUND NO. 2 OF THE REVENUES APP EAL, THE LD. AR SUBMITTED THAT THE DEPRECIATION IS ALLOWED BY THE T RIBUNAL IN ASSESSEES OWN CASE FOR A.Y. 2010-11 (ITA NOS. 77 & 186/DEL/20 15 ORDER DATED 23.08.2018) IN FAVOUR OF ASSESSEE. 15. THE LD. DR RELIED UPON THE ASSESSMENT ORDER. 16. WE HAVE HEARD BOTH THE PARTIES AND PERUSED ALL THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS PERTINENT TO NOTE THAT T HE TRIBUNAL FOR A.Y. 2010- 11 HAS FOLLOWED THE ORDER FOR A.Y. 2008-09 WHICH IS APPROVED BY THE HONBLE DELHI HIGH COURT BEING ITA NO. 917-918/2017 VIDE ORDER DATED 31.10.2017 WHICH IS NOW CONFIRMED BY THE HONBLE AP EX COURT VIDE ORDERS DATED 7.05.2018 AND 02.07.2018 THEREBY DISMISSING T HE SLP FILED BY THE REVENUE [SLP (CIVIL) DIARY NO. 13966/2018 AND 14875 /2018]. THEREFORE, THIS ISSUE IS ALSO COVERED IN FAVOUR OF THE ASSESSE E. GROUND NO. 2 OF THE REVENUES APPEAL IS DISMISSED. 17. AS REGARDS TO GROUND NO. 3, THE LD. AR SUBMITTE D THAT THE ASSESSEE CLAIMED DEDUCTION OF RS.2,78,130/- ON ACCOUNT OF DE PRECIATION ON ASSETS NOT REGISTERED IN ASSESSEE'S NAME. THE ASSESSING OF FICER DISALLOWED THE CLAIM ON THE GROUND THAT THE DEPRECIATION IS ALLOWA BLE ON ASSETS OWNED BY THE ASSESSEE AND AS THE ASSESSEE DID NOT OWN THE BU ILDING, THE DEPRECIATION 7 ITA NOS. 1030/DEL/2017 AND 1551/DEL/2017 WAS NOT ALLOWABLE. THE ASSESSING OFFICER DID NOT CO RRECTLY APPRECIATE THE FACTS AND RELEVANT LAW IN DISALLOWING THE CLAIM. TH E BUILDING WAS ALLOTTED TO THE ASSESSEE, CONSIDERATION WAS PAID, POSSESSION WA S TAKEN AND IT WAS USED BY ASSESSEE FOR BUSINESS PURPOSES. THE LD. AR FURTH ER SUBMITTED THAT DISALLOWANCE OF THE CLAIMS IS NOT JUSTIFIED AS SIMI LAR CLAIM DISALLOWED BY THE ASSESSING OFFICER IN EARLIER YEAR WAS ALLOWED I N APPEAL BY THE CIT (A). THE LD. AR RELIED UPON THE ORDER OF THE CIT(A). 18. THE LD. DR RELIED UPON THE ASSESSMENT ORDER. 19. WE HAVE HEARD BOTH THE PARTIES AND PERUSED ALL THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS PERTINENT TO NOTE THAT T HE ISSUE IS ALREADY DECIDED IN FAVOUR OF THE ASSESSEE IN EARLIER ASSESSMENT YEA RS BY THE REVENUE AUTHORITIES. THE CIT(A) RIGHTLY ALLOWED THE CLAIM A S THERE IS NO DISTINGUISHING FACTS IN THE PRESENT ASSESSMENT YEAR . THEREFORE, GROUND NO. 3 OF THE REVENUES APPEAL IS DISMISSED. 20. IN RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALL OWED FOR STATISTICAL PURPOSE AND APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30/10/2019 . S SD/- D/- SD/- SD/- [R.K. PANDA] [SUCHITRA KAMBLE] ACCOUNTANT MEMBER JUDICIAL MEMBER 8 ITA NOS. 1030/DEL/2017 AND 1551/DEL/2017 DELHI; DATED: ........./10/2019. F{X~{T? F{X~{T? F{X~{T? F{X~{T? FA FA FA FA P.S P.SP.S P.S COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI DATE OF DICTATION /09 /2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER /09 /2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.PS /PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P S/PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WE BSITE OF ITAT DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WH ICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER