IVY Product Intermediaries Limited, Bangalore V. JCIT, Bangalore

ITA 1065/BANG/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 7219 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 5 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-11-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 1994-1995
• Appeal Filed On: 25-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PADMA MEENAKSHI
• Keywords: Depreciation; Condonation of delay

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ITA NO.1065/BANG/2016 ASSESSMENT YEAR : 1994-95 M/S. IVY PRODUCT INTERMEDIARIES LIMITED, (EARLIER KNOWN AS ING VYSYA FINANCIAL SERVICES LTD.,/THE VYSYA BANK LEASING LTD.), 22, M. G. ROAD, BENGALURU-560 001. PAN : AAACT8127G VS. JOINT COMMISSIONER OF INCOME TAX, SPECIAL RANGE 6, BENGALURU. APPELLANT RESPONDENT ASSESSEE BY : SHRI. S. ANANTHAN, CA REVENUE BY : SMT. PADMA MEENAKSHI, JCIT DATE OF HEARING : 13.11.2017 DATE OF PRONOUNCEMENT : 17.11.2017 O R D E R PER SUNIL KUMAR YADAV, JUDICIAL MEMBER THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST T HE ORDER OF CIT(A), INTERALIA , ON THE FOLLOWING GROUNDS: GROUND NO. I - NON-CONDONATION OF DELAY IN FILING APPEAL 1. THE COMMISSIONER OF INCOME TAX (APPEAL) - 7, BENGAL URU ['HEREINAFTER REFERRED TO AS 'THE CIT(A)'] ERRED IN NOT CONDONING DELAY IN FILING APPEAL AND THEREBY DISMISSING THE APPELLANT'S APPEAL IN IIMINE ON TECHNICAL GROUND WITHOUT DECIDING ON THE MERITS OF THE CASE. 2. HE FURTHER ERRED IN NOT CONSIDERING THE SPECIFIC DI RECTIONS GIVEN BY THE HONBLE TRIBUNAL TO DECIDE THE CASE ON MERITS 3. HE FAILED TO APPRECIATE AND OUGHT TO HAVE HELD THAT THERE ARE GOOD AND SUFFICIENT REASONS FOR THE DELAY IN FILING THE APPEAL. 4. THE APPELLANT PRAYS THAT THE DELAY BE CONDONED AND CIT (A) BE DIRECTED TO ADMIT THE SAID APPEAL TO BE HEARD ON MERITS. ITA NO. 1065/BANG/2016 PAGE 2 OF 4 GROUND NO. II - CONTEMPT OF TRIBUNAL ORDER 1. HE FURTHER ERRED IN NOT CONSIDERING THE SPECIFIC DI RECTIONS GIVEN BY THE HON'BLE TRIBUNAL TO DECIDE THE CASE ON MERITS AND THEREBY C OMMITTED CONTEMPT OF THE HON'BLE TRIBUNAL. 2. HE FAILED TO APPRECIATE AND OUGHT TO HAVE HELD THAT ORDER OF TRIBUNAL WAS BINDING ON THE FIRST APPELLATE AUTHORITY AND THE FAILURE TO FOLLOW THE SAME MAY CONSTITUTE CONTEMPT OF TRIBUNAL'S ORDER. GROUND NO. III - DISALLOWANCE OF DEPRECIATION OF RS .24,50,937 ON LEASED ASSETS 1. 1. THE LEARNED CIT(A) ERRED IN NOT DECIDING THE ISS UE ON MERITS AND THEREBY DISALLOWING DEPRECIATION OF RS.24,50,937 IN RESPECT OF ASSETS LEASED TO KEDIA DISTILLERIES LTD. 2. 2. THE APPELLANT PRAYS THAT IT BE HELD THAT THE AS SETS DO EXISTED IN AY 1994-05 AND DEPRECIATION BE ALLOWED TO APPELLANT BEING OWNE R THEREOF. GROUND NO. IV WITHOUT PREJUDICE GROUND- NON ALLOW ANCE OF CAPITAL PORTION ON LEASED ASSETS EMBED IN LEASE RENTALS. 1. WITHOUT PREJUDICE TO THE ABOVE, THE LEARNED CIT(A) ERRED IN NOT DECIDING THE ISSUE ON MERITS AND THEREBY NOT GRANTING REDUCTION ON ACC OUNT OF CAPITAL PORTION EMBED IN LEASE RENTALS IN RESPECT OF ASSETS LEASED TO KED IA DISTILLERIES LTD. 2. THE APPELLANT PRAYS THAT IN THE EVENT IF SUCH TRANS ACTIONS ARE ULTIMATELY HELD TO BE FINANCE TRANSACTION AND DEPRECIATION ON THE SAME IS DENIED TO THE APPELLANT, IT BE GRANTED REDUCTION OF CAPITAL PORTION EMBED IN LEASE RENTALS IN RESPECT OF SUCH ASSETS. THE APPELLANT CRAVES LEAVE TO ADD, AMEND, 'ALTER OR DELETE ANY OF THE ABOVE GROUNDS OF APPEAL AS MAY BE ADVISED IN DUE COURSE. 2. DURING THE COURSE OF HEARING, THE LEARNED COUNSE L FOR THE ASSESSEE HAS INVITED OUR ATTENTION THAT VIDE ORDER DATED 25.05.2005, THE TRIBUNAL HAS SET ASIDE THE ORDER OF THE CIT(A) DISMISSING THE APPEAL OF THE ASSESSEE BE ING BARRED BY LIMITATION, WITH THE DIRECTION TO READJUDICATE THE APPEAL ON MERIT. THO UGH THE TRIBUNAL HAS NOT GIVEN ANY SPECIFIC FINDING IN THE ORDER WITH REGARD TO THE CO NDONATION OF THE DELAY IN FILING OF THE APPEAL BUT WHEN ONCE THE MATTER IS SET ASIDE TO THE CIT(A) TO DECIDE THE APPEAL ON MERIT, IT AMOUNTS TO THE DISPOSAL OF THE GROUND OF DELAY IN FILING OF APPEAL BEFORE THE ITA NO. 1065/BANG/2016 PAGE 3 OF 4 CIT(A) BY CONDONING THE DELAY IN FILING OF APPEAL B EFORE THE CIT(A). THOUGH THE CIT(A) WAS REQUIRED TO ADJUDICATE THE ISSUES AFRESH ON MERIT BUT THE CIT(A) INSTEAD OF DISPOSING OF THE APPEAL ON MERIT HAD DISMISSED T HE APPEAL OF THE ASSESSEE BEING BARRED BY LIMITATION. THE LEARNED COUNSEL FOR THE ASSESSEE FURTHER CONTENDED THAT ON THIS ISSUE ALONE EARLIER APPEAL WAS DISMISSED BY TH E CIT(A) AND THE ORDER OF THE CIT(A) WAS SET ASIDE BY THE TRIBUNAL BUT THE CIT(A) INSTEAD OF DECIDING THE APPEAL ON MERIT HAD DISMISSED THE APPEAL SUMMARILY ON THE GRO UND OF LIMITATION. THE LEARNED COUNSEL FOR THE ASSESSEE FURTHER CONTENDED THAT SIN CE THE DIRECTION OF THE TRIBUNAL WAS NOT COMPLIED WITH BY THE CIT(A), THE ORDER MAY BE SET ASIDE AND MATTER MAY BE RESTORED WITH THE DIRECTION TO READJUDICATE THE APP EAL ON MERIT AFTER MAKING IT CLEAR THAT THE DELAY IN FILING OF THE APPEAL HAS BEEN CON DONED. THE LEARNED DR ON THE OTHER HAND HAS SUBMITTED THAT THE TRIBUNAL HAS SET ASIDE THE MATTER BACK TO THE CIT(A) TO DECIDE THE APPEAL ON MERIT AND THE MERIT INCLUDES DISPOSAL OF THE ISSUE OF LIMITATION. THEREFORE, TH E CIT(A) HAS RIGHTLY ADJUDICATED THE APPEAL ON THE POINT OF LIMITATION AND HAVING NOTICE D THAT THE APPEAL IS BARRED BY LIMITATION, THE CIT(A) DISMISSED THE SAME. 3. HAVING CAREFULLY EXAMINED THE ORDERS OF AUTHORIT IES BELOW, VIS--VIS THE ORDER OF TRIBUNAL, WE FIND THAT WHILE DISPOSING THE APPEAL, THE TRIBUNAL HAS RESTORED THE MATTER TO THE FILE OF THE CIT(A) WITH THE DIRECTION TO READJUDICATE THE ISSUE AFRESH ON MERIT AFTER GIVING ADEQUATE OPPORTUNITY TO THE ASSE SSEE. THIS APPEAL BEFORE THE TRIBUNAL WAS FILED AGAINST THE ORDER OF THE CIT(A) DISMISSING THE APPEAL BEING BARRED BY TIME. BASICALLY, THE MAIN ISSUE INVOLVED IN THA T APPEAL WAS THE ISSUE OF LIMITATION OR WHETHER THE APPEAL WAS BARRED BY TIME OR NOT. T HE TRIBUNAL HAS SET ASIDE THE ORDER OF THE CIT(A) MEANING THEREBY THE FINDINGS BY THE CIT(A) HOLDING THAT APPEAL IS BARRED BY LIMITATION WAS SET ASIDE BY THE TRIBUNAL. THEREAFTER, THE TRIBUNAL RESTORED THE MATTER BACK TO THE CIT(A) WITH THE DIRECTION TO READJUDICATE THE ISSUES AFRESH AFTER GIVING ADEQUATE OPPORTUNITY TO THE ASSESSEE, MEANIN G THEREBY HAVING SETTING ASIDE THE ORDER OF THE CIT(A) DISMISSING THE APPEAL BEING BARRED BY LIMITATION, THE TRIBUNAL REVERSED THE VIEW BY THE CIT(A) THAT THE APPEAL IS BARRED BY LIMITATION. WHEN THE MATTER WAS RESTORED BACK TO CIT(A), THE CIT(A) WAS REQUIRED TO ADJUDICATE THE ISSUE ON MERIT AND NOT ON THE ISSUE OF LIMITATION. DESPI TE THIS CLEAR FINDING OF THE TRIBUNAL, ITA NO. 1065/BANG/2016 PAGE 4 OF 4 THE CIT(A) HAS AGAIN DISMISSED THE APPEAL ON THE PO INT OF LIMITATION. THIS FINDING OF THE CIT(A) DOES NOT APPEAR TO US TO BE PROPER. WE ACCORDINGLY SET ASIDE THE ORDER OF THE CIT(A) AND RESTORE THE MATTER TO THE CIT(A) WIT H A DIRECTION TO ADJUDICATE THE APPEAL ON MERIT AFTER AFFORDING OPPORTUNITY OF BEIN G HEARD TO THE ASSESSEE. THIS TIME WE WANT TO MAKE IT CLEAR THAT THE ISSUE RELATING TO LIMITATION POINT HAS BECOME RES INTEGRA IN THE LIGHT OF THE ORDER OF THE TRIBUN AL DATED 25.05.2005. THEREFORE, NOW THE CIT(A) IS NOT REQUIRED TO ADJUDICATE THE ISSUE OF LIMITATION. THE ISSUES ON MERIT ARE REQUIRED TO BE ADJUDICATED. WE ACCORDINGLY RES TORE THE APPEAL TO HIS FILE FOR FRESH ADJUDICATION. 4. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON NOVEMBER, 201 7. SD/- SD/- ( INTURI RAMA RAO ) (SUNIL KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER PLACE : BANGALORE DATED : 17/11/2017 /NSHYLU/* COPY TO : 1 APPELLANT 2 RESPONDENT 3 CIT(A)-II BANGALORE 4 CIT 5 DR, ITAT, BANGALORE. 6 GUARD FILE BY ORDER SR. PRIVATE SECRETARY, ITAT, BANGALORE.