HOEC (Bordahl) India Limited, Baroda V. The ACIT, Circle-1(2), , ( New Circle-1(1)(2)), Baroda

ITA 1141/AHD/2015

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5786 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 10 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-03-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 05-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MUDIT NAGPAL HEARING CONCLUDED
• Keywords: Corroborative evidences
• Section: 143(3)

Judgement Text

ITA NO.1141/AHD/2015 ASSESSMENT YEAR: 2010-11 PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH, AHMEDABAD [CORAM: PRAMOD KUMAR AM AND S S GODARA JM] ITA NO.1141/AHD/2015 ASSESSMENT YEAR: 2010-11 HOEC BARDAHL INDIA LIMITED, ..................APPELLANT HOEC HOUSE, TANDAIJA ROAD, O.P. ROAD, VADODARA 390 020 (GUJARAT) [PAN : AAACH 5324 F] VS. ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE 1(2), VADODARA . ............................RESPONDENT APPEARANCES BY URVASHI SHODHAN FOR THE APPELLANT MUDIT NAGPAL FOR THE RESPONDENT HEARING CONCLUDED ON: 04.01.2018 ORDER PRONOUNCED ON : 28.03.2018 O R D E R PER PRAMOD KUMAR, AM: 1. THIS IS AN APPEAL FILED BY THE ASSESSEE AND IS D IRECTED AGAINST THE ORDER DATED 24.02.2015 PASSED BY THE LEARNED CIT(A) IN THE MATT ER OF ASSESSMENT UNDER SECTION 143(3) OF THE INCOME TAX ACT 1961 (THE ACT HEREIN AFTER), FOR THE ASSESSMENT YEAR 2010-11. 2. GRIEVANCES RAISED BY THE ASSESSEE ARE AS FOLLOWS :- 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) HAS CONFIRMED THE DISALLOWANCE OF RS.19,90,800/- MADE BY ASSESSING OF FICER ON ACCOUNT OF WAREHOUSING EXPENSES PAID BY THE APPELLANT. 1.1 THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) HAVE CONFIRMED THE ADDITION EVEN AFTER THE FACT THAT THE BASIS ON WHIC H THE ADDITION WAS MADE BY THE LEARNED ASSESSING OFFICER IN THE ASSESSMENT PROCEED INGS, WAS ACCEPTED IN THE REMAND REPORT SENT BY THE ASSESSING OFFICER. ITA NO.1141/AHD/2015 ASSESSMENT YEAR: 2010-11 PAGE 2 OF 4 3. DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEED INGS, THE ASSESSEE HAS MADE PAYMENT OF RS.70,56,000/- ON ACCOUNT OF WAREHOUSING SERVICES. THIS AMOUNT WAS COMPUTED ON THE BASIS OF RS.30/- PER SQ. FT. HE WA S, HOWEVER, OF THE VIEW THAT THE PLOT SIZE, ON WHICH WAREHOUSE EXISTS, IS 1,307 SQ. METER S WHICH WORKS OUT TO 14,070 SQ. FT. ONLY. THE AMOUNT PAYABLE IN THIS 14,070 SQ. FT. WO RKED OUT TO ONLY RS.50,65,200/-. THE ASSESSING OFFICER THUS DISALLOWED THE BALANCE AMOUN T OF RS.19,90,800/-. AS FOR THE SITE MAP SHOWING BUILT UP AREA OF 19,600 SQ. FT., HE REJ ECTED THE SAME BY OBSERVING AS FOLLOWS :- THE MAP ATTACHED WITH THE ABOVE DETAILS IS A PROJE CT PLAN APPROVED BY THE JOINT DIRECTOR OF INDUSTRIAL SAFETY AND HEALTH, THANA. AS PER THE PROJECT PLAN PRODUCED, IT IS CLEARLY MENTIONED THAT THE APPROVAL HAS BEEN GRANTED ON 3 RD JULY, 2012 FOR BUILDING OF 3 RD FLOOR CONSTRUCTION HAVING THE BUILT UP AREA 19,600 SQ. FT. THEREFORE, IT IS FAIRLY EVIDENT THAT THE SO CALLED BUILT UP AREA WAS NOT IN EXISTENCE BEFORE JULY, 2012 SINCE THE PLAN FOR BUILDING THIS 3 STOREY STRUCTURE WAS APPROVED IN THE MONTH OF JULY, 2012. THE PROJECT PLAN FURNISHED BY THE ASSESSEE REGARDIN G TOTAL BUILT UP AREA INCLUDING BASEMENT 1, BASEMENT 2, GROUND FLOOR, SEC URITY OFFICE, FIRST FLOOR AND SECOND FLOOR WAS INFECT A PROJECT PLAN WHICH WAS AP PROVED BY THE APPROPRIATE AUTHORITY IN JULY 2012 AS PER THE DOCUMENTARY EVIDE NCE PRODUCED BY THE ASSESSEE COMPANY DURING THE COURSE OF ASSESSMENT PR OCEEDING. SINCE, THE PROJECT OF THE 3 STORIED STRUCTURE WAS APPROVED IN 2012 THEREFORE THERE IS NO QUESTION OF ITS EXISTENCE DURING THE PREVIOUS YEAR DEPICTING F.Y. 2009-10. HENCE, THE CLAIM OF THE ASSESSEE ON THE BASIS OF SU PER BUILT UP AREA BEING NON EXISTENCE IN THE PREVIOUS YEAR RELEVANT TO CURRENT A.Y. IS NOT ALLOWABLE. 4. AGGRIEVED, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LEARNED CIT(A) BUT WITHOUT ANY SUCCESS. THE ASSESSEE IS NOW IN SECOND APPEAL BEFORE US. 5. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF APPLIC ABLE LEGAL POSITION. 6. WE HAVE NOTED IN THE REMAND REPORT, THE ASSESSIN G OFFICER HIMSELF HAS ACCEPTED THAT THE ACTUAL AREA WAS 19,579 SQ. FTS., THE SAME IS REPRODUCED AS FOLLOWS :- IN THIS CONNECTION, VIDE LETTER DATED 04.02.2015, THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE ATTENDED AND FURNISH ED FURTHER DOCUMENTS AS SUPPORTING EVIDENCES IN RESPECT OF HIS CLAIM. THE ASSESSEE HAS SUBMITTED THAT THE ALLEGED WAREHOU SE WAS IN EXISTENCE FROM THE YEAR 1990. THE ASSESSEE FURTHER SUBMITT ED, A COPY OF OCCUPANCY CERTIFICATE ISSUED IN THE YEAR 1990 ISSUED BY CIDO, MUMBAI VIDE NO.EE(BP)/IND/TTC/D-8/351 DATED 22-10-1990 ALONG WI TH THE CERTIFIED COPY OF ITA NO.1141/AHD/2015 ASSESSMENT YEAR: 2010-11 PAGE 3 OF 4 APPROVED MAP NO. NO. MIDC DIV.I VIDE BP/540/4045 WH ICH IS ALSO DULY CERTIFIED BY EXECUTIVE ENGINEER DATED 30-09-1989. THIS CERTIF ICATE WHICH WAS ISSUED TO THE ORIGINAL OWNER OF THE WAREHOUSE AND THAT THIS PROVE S THAT THE WAREHOUSE IS IN EXISTENCE SINCE THE YEAR 1990 ALONG WITH BASEMENT A ND TWO FLOORS. THE A.R OF THE ASSESSEE SUBMITTED THAT, THE THEN A. O. AFTER VERIFYING THE MAP (APPROVED PROJECT PLAN ISSUED BY JT. DIRECTOR, INDUSTRIAL SAFETY AND HEALTH, THANE) DATED 03.7.2012 CAME TO THE CONCLUSION THAT SINCE THE PERMISSION WAS GIVEN ON 03.7.2012, FOR CONSTRUCTION OF SECOND FLOO R, HELD THAT THE CLAIM OF THE ASSESSEE ON THE BASIS OF SUPER BUILT UP AREA IN THE YEAR UNDER CONSIDERATION IS NOT ALLOWABLE. THE ASSESSEE FURTHER SUBMITTED THAT FROM THE DOCUME NTS WHICH ARE SUBMITTED NOW, CLEARLY SHOWS THAT THE WAREHOUSE WIT H BASEMENT AND TWO FLOORS WERE IN EXISTENCE SINCE THE YEAR 1990. THE ASSESSEE COMPANY INTENDED TO MANUFACTURE OF CLEANING AND POLISHING PRODUCTS AND FOR THE VERY SAME PURPOSE HAS APPLIED BEFORE THE JT. DIRECTOR, INDUSTRIAL HEA LTH AND SAFETY, THANE. FOR THIS PURPOSE, MAP OF THE WAREHOUSE WAS SUBMITTED WITH AL ONG OTHER DETAILS, FROM THIS CERTIFICATE ALSO IT CAN BE SEEN THAT BASEMENT WISE, FLOOR WISE, ROOM WISE SPECIFICATIONS WITH SQ. MTR. WAS CERTIFIED BY THE S AID DEPARTMENT. THEREFORE IT IS HUMBLY SUBMITTED THAT THIS EVIDENCE MAY BE TAKEN IN TO CONSIDERATION. THE DOCUMENTS, MAP AND OTHER CERTIFICATES FURNISHED BY THE ASSESSEE WERE CAREFULLY CONSIDERED. ON VERIFICATION OF THE O RIGINAL MAP ISSUED BY THE CIDCO, MUMBAI, ISSUED ON 30.9.1989 IT REVEALS THAT THE WAREHOUSE EXISTED WITH BASEMENT AND TWO FLOORS. IN THE MAP DATED 03.7.2012 ALSO BASEMENT AND TWO FLOOR WAS SHOWN ALONG WITH SPECIFICATIONS IN SQ. MT RS. ASSESSEE HAS ALSO SUBMITTED CHART OF CALCULATION OF TOTAL AREA CONVER TED FROM SQ. MTRS TO SQ. FT WHICH WORKS TO 19579 SQ. FT. IT IS PERTINENT TO MEN TION HERE THAT THESE DOCUMENTS WERE NOT FURNISHED BEFORE THE A.O. AT THE TIME OF A SSESSMENT PROCEEDINGS. LOOKING TO THE FACTS OF THE CASE, THE ISSUE MAY BE DECIDED BY YOUR HONOUR ON MERITS. 7. IN VIEW OF THE ABOVE FACTUAL SITUATION, CLEARLY THE DISALLOWANCE MADE BY THE ASSESSING OFFICER WAS ON ERRONEOUS IMPRESSION OF FA CTS WHICH NOW STANDS RECTIFIED. IT IS DIFFICULT TO UNDERSTAND THAT AS TO HOW IN THE LIGHT OF ABOVE REMAND REPORT, THE ASSESSING OFFICER CAN STILL JUSTIFY HIS EARLIER STAND NOW. T HESE PAPERS, BASED ON WHICH THE ABOVE REMAND REPORT WAS GIVEN, WERE NOT BEFORE THE ASSESS ING OFFICER AT THE TIME OF ORIGINAL ASSESSMENT PROCEEDINGS. IN ANY CASE, DISALLOWANCE MADE BY THE ASSESSING OFFICER PROCEEDS ON THE FALLACIOUS ASSUMPTION THAT THE BUIL T UP AREA OF A PLOT CANNOT EXCEED THE PLOT SIZE. IN A CONSTRUCTION AT MORE THAN ONE LEVE L OF THE FLOOR, THIS CAN HARDLY BE A VALID ASSUMPTION. ITA NO.1141/AHD/2015 ASSESSMENT YEAR: 2010-11 PAGE 4 OF 4 8. IN THE LIGHT OF THE ABOVE DISCUSSIONS AND BEARIN G IN MIND ENTIRETY OF THE CASE, WE UPHOLD THE PLEA OF THE ASSESSEE. ACCORDINGLY, DISA LLOWANCE RS.19,90,800/- STANDS DELETED. THE ASSESSEE GETS THE RELIEF ACCORDINGLY. 9. IN THE RESULT, THE APPEAL IS ALLOWED. PRONOUNCE D IN THE OPEN COURT ON THIS 28 TH DAY OF MARCH, 2018. SD/- SD/- S S GODARA PRAMOD KUMAR (JUDICIAL MEMBER) (ACCOUNTANT MEM BER) DATED: 28 TH MARCH, 2018 PBN/* COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) CIT (4) CIT(A) (5) DR (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD