M/S DIVYAMOTI HOTELS AND RESORTS PVT. LTD., JAIPUR V. INCOME TAX OFFICER, WARD-5-2, JAIPUR

ITA 1068/JPR/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 9813 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-09-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 13-09-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: POONAM ROY DCIT DHK
• Keywords: Depreciation

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH FOT; IKY JKO] U;KF;D LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JUDICIAL MEMBER VK;DJ VIHY LA -@ ITA NO. 1068/JP/2018 FU/KZKJ.K O'KZ@ ASSESSMENT YEAR : 2012-13 M/S DIVYAMOTI HOTELS AND RESORTS PVT. LTD., NEW ADD: 1/3, HATHROI MARKET, AJMER ROAD, JAIPUR. OLD ADD: SHOP NO. 13 TO 21, 5 TH FLOOR, SUNNY MARKET, ATISH MARKET, MANSAROVAR, JAIPUR. C UKE VS. I.T.O., WARD 5(2), JAIPUR. LFKK;H YS[KK LA -@THVKBZVKJ LA -@ PAN/GIR NO.: AACCD 1923 C VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKS J LS @ ASSESSEE BY: SHRI SIDDARTH RANKA (ADV) JKTLO DH VKSJ LS @ REVENUE BY : SMT. POONAM ROY (DCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 23/09/2019 MN?KKS 'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 25/09/2019 VKNS'K@ ORDER PER: VIJAY PAL RAO, J.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 26/06/2018 OF LD. CIT(A)-2, JAIPUR FOR THE A.Y. 2012-13. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. LOWER AUTHORITIES GROSSLY ERRED IN DISALLOWING DEPRECIATION CLAIMED ON PLANT AND MACHINERY WHICH STANDS INSTALLED AT THE BUSINESS PREMISES OF THE ASSESSEE AMOUNTING TO RS. 10,32,463/- U/S 32 OF THE ACT ON ITA 1068/JP/2018 M/S DIVYAMOTI HOTELS & RESORTS PVT. LTD. VS ITO 2 ACCOUNT OF THE FACT THAT DURING THE YEAR UNDER CONSIDERATION, NO BUSINESS ACTIVITY HAS BEEN CARRIED OUT. 2. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, MODIFY OR AMEND ANY GROUND ON OR BEFORE THE DATE OF HEARING. 2. THE ASSESSEE IS A PRIVATE LIMITED COMPANY AND WAS HAVING NO BUSINESS ACTIVITY DURING THE YEAR UNDER CONSIDERATION. THE ASSESSEE FILED ITS RETURN OF INCOME DECLARING LOSS OF RS. 5,91,889/-. DURING THE ASSESSMENT PROCEEDINGS, THE A.O. OBSERVED THAT THE ASSESSEE HAS DECLARED LOSS BEFORE DEPRECIATION ON PLANT AND MACHINERY, ACCORDINGLY, THE A.O. HAS MADE DISALLOWANCE OF DEPRECIATION ON PLANT AND MACHINERY OF RS. 10,32,463/-. THE ASSESSEE CHALLENGED THE ACTION OF THE A.O. BEFORE THE LD. CIT(A), HOWEVER, SINCE NO BODY HAS APPEARED BEFORE THE LD. CIT(A), THEREFORE, THE APPEAL OF THE ASSESSEE WAS DISMISSED AND THE ADDITION MADE BY THE A.O. WAS CONFIRMED. 3. BEFORE THE TRIBUNAL, THE LD. AR OF THE ASSESSEE HAS SUBMITTED THAT THE SAID AMOUNT OF DEPRECIATION OF RS. 10,32,463/- WAS ALREADY DISALLOWED BY THE ASSESSEE IN HIS RETURN OF INCOME DECLARING LOSS OF RS. 5,91,889/-. HE HAS REFERRED TO THE RETURN OF INCOME AND COMPUTATION OF TOTAL INCOME AND SUBMITTED THAT AS PER THE P&L ACCOUNT, LOSS FOR THE YEAR IS RS. 16,24,352/-. HOWEVER, THE ASSESSEE HAD ADDED BACK THE DEPRECIATION OF RS. 10,32,463/- AND THEREFORE, THE INCOME FROM BUSINESS OR PROFESSION WAS DECLARED AT LOSS OF RS. 5,91,889/-. THUS, THE LD. COUNSEL ITA 1068/JP/2018 M/S DIVYAMOTI HOTELS & RESORTS PVT. LTD. VS ITO 3 HAS SUBMITTED THAT SINCE THE RETURNED INCOME WAS ARRIVED AT AFTER SUO MOTO DISALLOWANCE OF DEPRECIATION AND THEREFORE, THE ADDITION MADE BY THE A.O. ON ACCOUNT OF DEPRECIATION IS A DOUBLE ADDITION. 4. ON THE OTHER HAND, THE LD DR HAS SUBMITTED THAT THE ASSESSEE HAS NOT RAISED THIS FACT EITHER BEFORE THE A.O. OR BEFORE THE LD. CIT(A), THEREFORE, CLAIM OF THE ASSESSEE CANNOT BE ACCEPTED AT THIS STAGE. 5. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD. THERE IS NO DISPUTE THAT THE ASSESSEE HAS DECLARED LOSS OF RS. 5,91,889/- IN THE RETURN OF INCOME FILED ON 21/09/2012. THE A.O. HAS STATED IN THE ORDER THAT THE SAID LOSS WAS DECLARED BEFORE DEPRECIATION, HOWEVER, IT IS MANIFEST FROM THE RETURN OF INCOME AND COMPUTATION OF TOTAL INCOME THAT THE SAID LOSS OF RS. 5,91,889/- HAS ARRIVED AFTER THE SUO MOTO DISALLOWANCE OF DEPRECIATION OF RS. 10,32,463/- MADE BY THE ASSESSEE. ONCE THE COMPUTATION OF TOTAL INCOME AND THE RETURN OF INCOME ARE MATCHING SO FAR AS THE DECLARED INCOME BY THE ASSESSEE BEING LOSS WHICH ARRIVED AFTER THE DISALLOWANCE OF DEPRECIATION IN QUESTION THEN IT IS CLEAR THAT THE A.O. HAS MADE THE DISALLOWANCE OF THE SAME AMOUNT WHICH WAS ALREADY DISALLOWED BY THE ASSESSEE SUO MOTO. ACCORDINGLY, THE DISALLOWANCE MADE BY THE A.O. AMOUNTS A DOUBLE DISALLOWANCE/ADDITION TO THE INCOME OF THE ASSESSEE. EVEN IF THE ASSESSEE HAS NOT RAISED THIS ITA 1068/JP/2018 M/S DIVYAMOTI HOTELS & RESORTS PVT. LTD. VS ITO 4 ISSUE BEFORE THE LD. CIT(A) AND THE ORDER WAS PASSED EX PARTE. THE INCOME OF THE ASSESSEE REQUIRED TO BE ASSESSED WITH THE BASIS OF CORRECT FACTS. THE A.O. CANNOT TAKE ADVANTAGE OF THE MISTAKE COMMITTED BY THE ASSESSEE WHILE OFFERING THE INCOME TO TAX AND THEREFORE, ONCE THIS FACT EMERGED FROM THE RECORD THAT THE ASSESSEE HAS ALREADY MADE SUO MOTO DISALLOWANCE OF THE SAME AMOUNT OF DEPRECIATION THEN THE DISALLOWANCE MADE BY THE A.O. IS NOT SUSTAINABLE. ACCORDINGLY, THE DISALLOWANCE OF DEPRECIATION MADE BY THE A.O. IS DELETED. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH SEPTEMBER, 2019 SD/- FOT; IKY JKO (VIJAY PAL RAO) U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 25 TH SEPTEMBER, 2019 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- M/S DIVYAMOTI HOTELS AND RESORTS PVT. LTD., JAIPUR. 2. IZR;FKHZ @ THE RESPONDENT- THE I.T.O., WARD 5(2), JAIPUR. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 1068/JP/2018) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR