ACIT, CHENNAI V. M/s. Balaji Hotels & Enterprises Ltd., CHENNAI

ITA 1099/CHNY/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 51810 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-08-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 25-08-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 14-06-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BENCH A CHENN AI BEFORE SHRI U.B.S.BEDI, JUDICIAL MEMBER AND SHRI N.S.SAINI, ACCOUNTANT MEMBER .. ITA NO.1099/MDS./2011 ASSESSMENT YEAR: 2004-05 THE ASST. COMMISSIONER OF INCOME TAX, COMPANY CIRCLE I(3), CHENNAI-34. VS. M/S.BALAJI HOTELS & ENTERPRISES LTD., 9,BAZULLAH ROAD, T.NAGAR, CHENNAI 600 034. PAN AAACB 1445 P (APPELLANT) (RESPONDENT) DEPARTMENT BY : SHRI SHAJI P. JACOB, SR.DR ASSESSEE BY : NONE DATE OF HEARING : 25.08.2011 DATE OF PRONOUNCEMENT : 25.08.2011 O R D E R PER N.S.SAINI, ACCOUNTANT MEMBER : THIS IS AN APPEAL FILED BY THE REVENUE AGAINST T HE ORDER OF LEARNED COMMISSIONER OF INCOME TAX(A)-III, CHENNAI DATED 09.03.201. 2. THE REVENUE HAS TAKEN THE FOLLOWING GROUNDS:- 1) THE ORDER OF THE LD. LEARNED COMMISSIONER OF I NCOME TAX(A) IS CONTRARY TO THE LAW AND FACTS OF THE CASE . PAGE 2 OF 5 ITA.1099 /MDS/11 M/S.BALAJI HOTELS & ENTERPRISES LTD. 2) THE LEARNED LEARNED COMMISSIONER OF INCOME TAX( A) ERRED IN DIRECTING THE LEARNED ASSESSING OFFICER TO ALLOW DEPRECIATION ON ASSETS PERTAINING TO SALE AND LEASE BACK TRANSACTIONS ENTERED INTO BETWEEN RSEB. 2.1) IT IS SUBMITTED THAT THE ORDERS OF THE TRIBUNA L RELIED UPON BY LEARNED COMMISSIONER OF INCOME TAX(A) IN TH E ASSESSEES OWN CASE FOR THE EARLIER ASSESSMENT YEAR S HAVE NOT BECOME FINAL AND THE DEPARTMENT HAVE PREFERRED APPEALS U/S.260A BEFORE THE HIGH COURT. 3. FOR THESE AND OTHER GROUNDS THAT MAY BE ADDUCED AT THE TIME OF HEARING IT IS PRAYED THAT THE ORDER OF THE LEARNED LEARNED COMMISSIONER OF INCOME TAX(A) BE S ET ASIDE AND THAT OF THE LEARNED ASSESSING OFFICER BE RESTORED. 3. NOTICE OF HEARING WAS ISSUED TO THE RESPONDENT ASSESSEE BY REGISTERED POST WITH ACKNOWLEDGEMENT DUE ON 17.0 6.2011. THE NOTICE WAS SERVED ON THE ASSESSEE ON 18.06.2011 AS EVIDENCED BY THE ACKNOWLEDGMENT CARD OF THE POST OF FICE PLACED ON RECORD. NONE WAS PRESENT FOR THE ASSESSEE, WHEN THE CASE WAS CALLED FOR HEARING AND NEITHER ANY ADJOURNMENT APPLICATION WAS FILED. THE BENCH WAS OF THE OPINION THAT THE A PPEAL CAN BE PAGE 3 OF 5 ITA.1099 /MDS/11 M/S.BALAJI HOTELS & ENTERPRISES LTD. DISPOSED OFF IN THE ABSENCE OF THE RESPONDENT ASSES SEE AND THEREFORE, THE APPEAL WAS HEARD EXPARTE QUA ASSESSE E RESPONDENT. 4. WE HAVE HEARD THE LEARNED DEPARTMENTAL REPRESEN TATIVE. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE C OMPANY FILED ITS RETURN OF INCOME FOR ASSESSMENT YEAR 2004-05 AT A L OSS OF RS.10,15,43,540/-. THE SAME WAS ASSESSED U/S.143(3 ) ON 15.11.2006 AT A LOSS OF RS.5,54,381/-. WHILE DOING SO, THE LEARNED ASSESSING OFFICER DISALLOWED DEPRECIATION O N ASSETS LEASED BY THE ASSESSEE TO RAJASTHAN STATE ELECTRICI TY BOARD FOR THE REASON THAT THE DEPARTMENT HAS NOT CONSIDERED T HE LEASE TRANSACTIONS AS GENUINE FROM ITS INCEPTION AND HAS NOT ALLOWED DEPRECIATION IN RESPECT OF THE ASSETS LEASED TO RAJ ASTHAN STATE ELECTRICITY BOARD IN THE EARLIER ASSESSMENT YEARS. 5. ON APPEAL, THE LEARNED COMMISSIONER OF INCOME TAX(A) ALLOWED THE CLAIM OF DEPRECIATION TO THE ASSESSEE F OLLOWING THE ORDER OF THE TRIBUNAL PASSED ON 7 TH MARCH, 2007 IN ASSESSEES OWN CASE IN ITA NOS. 126 & 1495/MDS./05 IN THE ASSE SSMENT YEARS 2000-01 & 2001-02. THE LEARNED COMMISSIONER OF INCOME TAX(A) HAS OBSERVED AS UNDER:- PAGE 4 OF 5 ITA.1099 /MDS/11 M/S.BALAJI HOTELS & ENTERPRISES LTD. 4. THE APPELLANT, DURING THE APPELLATE PROCEEDING S, HAS FILED A COPY OF THE ORDER PASSED BY THE HONBLE ITAT IN ITA NOS.126 & 1495/MDS./2005 DATED 7 TH MARCH, 2007 FOR A.Y.S. 2000-01 AND 2001-02 IN ITS O WN CASE. IN THE ABOVE ORDER, THE ITAT HAS HELD AS UND ER: GROUND (3) : AFTER HEARING BOTH THE PARTIES, WE FI ND THAT AS FAR AS DEPRECIATION RELATING TO ASSETS LEAS ED TO RAJASTHAN STATE ELECTRICITY BOARD IS CONCERNED, SIN CE THAT TRANSACTION HAS BEEN ACCEPTED TO BE GENUINE BY THE TRIBUNAL VIDE CONSOLIDATED ORDER DATED 4 TH AUGUST, 2006 IN ITA NOS.830 & 1400/MDS./99 AND 143/2001, THEREFORE DEPRECIATION HAS TO BE ALLOWED AND THUS W E SET ASIDE THE ORDER OF THE LD. LEARNED COMMISSIONER OF INCOME TAX(A) AND DIRECT THE LEARNED ASSESSING OFFICER TO ALLOW DEPRECIATION ON ASSETS LEASED OUT TO RAJASTHAN STATE ELECTRICITY BOARD. 5. I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CA SE AND THE SUBMISSION OF THE APPELLANT. I HAVE ALSO GO NE THROUGH THE ORDER OF THE HONBLE ITAT IN WHICH SIMI LAR ISSUE HAD BEEN RAISED BY THE APPELLANT IN ITS OWN C ASE IN THE A.YS.2000-01 AND 2001-02. THE HONBLE ITAT HAS DECIDED THE ISSUE IN FAVOUR OF APPELLANT. PAGE 5 OF 5 ITA.1099 /MDS/11 M/S.BALAJI HOTELS & ENTERPRISES LTD. RESPECTFULLY FOLLOWING THE DECISIONS OF THE HONBLE TRIBUNAL (SUPRA), THE LEARNED ASSESSING OFFICER IS DIRECTED TO DELETE THE ADDITION. ACCORDINGLY, THE G ROUND IS ALLOWED. 6. THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS REL IED ON THE ORDER OF THE LEARNED ASSESSING OFFICER. HE COUL D NOT POINT OUT ANY SPECIFIC ERROR IN THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(A). FURTHER, NO MATERIAL WAS BROUGHT ON RECORD BY THE REVENUE TO SHOW THAT THE ABOVE QUOTED ORDER OF THE TRIBUNAL WAS REVERSED IN APPEAL BY A HIGHER FORUM. THEREFOR E, WE DO NOT FIND ANY GOOD REASON TO INTERFERE WITH THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(A). IT IS CONFIRMED. T HE GROUNDS OF APPEAL OF THE REVENUE ARE DISMISSED. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED IN THE COURT AT THE CLOSE OF THE H EARING ON 25 TH AUGUST, 2011. SD/- SD/- SD/- ( U.B.S.BEDI ) ( N.S.SAINI ) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 25 TH AUGUST, 2011. K S SUNDARAM COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE