Income tax Officer, V. Umesh U. Pardeshi, Pune

ITA 119/PUN/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 9045 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 2 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-03-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 16-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation; Search and seizure
• Section: 143(3); 260A; 132

Judgement Text

] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NOS.60 TO 66/PUN/2016 / ASSESSMENT YEARS : 2005-06 TO 2011-12 THE ASST.COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 1, NASHIK. . / APPELLANT V/S M/S. ASHOKA INFRAWAYS PVT LTD., S.NO.861, ASHOKA HOUSE, ASHOKA MARG, WADALA, NASHIK 422 011. PAN : AADCA4889P. . / RESPONDENT . / CO NOS.114 TO 119/PUN/2017 (ARISING OUT OF ITA NOS.60 TO 65/PUN/2016 / ASSESSMENT YEARS : 2005-06 TO 2010-11 M/S. ASHOKA INFRAWAYS PVT LTD., S.NO.861, ASHOKA HOUSE, ASHOKA MARG, WADALA, NASHIK 422 011. PAN : AADCA4889P. . CROSS-OBJECTOR V/S THE ASST. C OMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 1, NASHIK. . APPELLANT IN THE APPEAL. ASSESSEE BY : NONE. REVENUE BY : SHRI RAJEEV KUMAR, CIT. / DATE OF HEARING : 27.03.2018 / DATE OF PRONOUNCEMENT: 28.03.2018 2 / ORDER PER SUSHMA CHOWLA, JM : 1. THE REVENUE HAS FILED PRESENT APPEALS AGAINST THE CONSOLIDATED ORDER OF COMMISSIONER OF INCOME TAX (APPEALS ) 12, PUNE DATED 27.10.2015 RELATING TO ASSESSMENT YEARS 200 5-06 TO 2011-12 AGAINST THE ORDER PASSED UNDER SECTION 143(3) R .W.S. 153C OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). THE AS SESSEE HAS FILED CROSS-OBJECTIONS AGAINST THE APPEALS FILED BY THE REVE NUE RELATING TO ASSESSMENT YEARS 2005-06 TO 2010-11. 2. THE APPEALS FILED BY REVENUE AND THE CROSS-OBJECTIONS FILED BY THE ASSESSEE WERE HEARD TOGETHER AND ARE BEING DIS POSED OF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. HOWE VER, IN ORDER TO ADJUDICATE, WE ARE REFERRING TO THE FACTS AND ISSUE IN ITA NO.60/PUN/2016 AND C.O.NO.114/PUN/2017. 3. THE REVENUE IN ITA NO.60/PUN/2016 HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN DELETING IN ALLOWING THE DEPRECIATION AT 25% ON LICENCE TO COLLECT TOLL. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) WAS JUSTIFIED IN HOLDING THAT ASSESSE E WAS ELIGIBLE TO CLAIM DEPRECIATION ON LICENCE TO COLLE CT TOLL CONSIDERING IT AS AN INTANGIBLE ASSET IN TERMS OF S ECTION 32(1)(II) OF THE ACT. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS FAILED TO APPRECIATE THAT THE DEPA RTMENT HAS NOT ACCEPTED THE DECISION OF THE ITAT, PUNE AND A N APPEAL HAS BEEN FILED UNDER SECTION 260A OF THE ACT BEFORE THE HONBLE BOMBAY HIGH COURT. 4. THE APPELLANT CRAVES TO ADD, AMEND OR DELETE ANY OF THE ABOVE GROUNDS. 3 4. THE ASSESSEE IN C.O.NO.114/PUN/2017 HAS RAISED THE FOLLOWING CROSS-OBJECTIONS: THE LEARNED CIT(A) ERRED IN NOT DECIDING THE GROUN D NOS.1, 2 AND 3 RELATING TO THE VALIDITY OF THE NOTICE ISSUED UNDER SECTION 153C, THE PROCEEDINGS FOR ASSESSMENT UNDER SECTION 153C R.W.S . 143(3) AND THE ASSESSMENT ORDER PASSED UNDER SECTION 153C R.W. S. 143(3), ON THE GROUND THAT, APPELLANTS APPEAL IS ALLOWED ON M ERITS. THEREFORE, IT IS PRAYED TO ALLOW APPELLANTS GROUND CHALLENGIN G THE VALIDITY OF NOTICE UNDER SECTION 153C, ASSESSMENT PROCEEDINGS U NDER SECTION 153C AND THE ASSESSMENT ORDER PASSED UNDER SECTION 153C R.W.S 143(3). 2. APPELLANT CRAVES LEAVE TO ADD, AMEND OR MODIFY A NY GROUND OF APPEAL BEFORE OR AT THE TIME OF HEARING. 5. THE ISSUE RAISED IN THE APPEAL FILED BY THE REVENUE IS AG AINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) IN ALLOWING THE DEPRECIATION AT 25% ON LICENCE TO COLLECT TOLL. DESPITE SERV ICE OF NOTICE, NONE APPEARED ON BEHALF OF THE ASSESSEE NOR ANY APPLICATION HAS FILED FOR ADJOURNMENT. HOWEVER, THE ISSUE ARISING IN TH E PRESENT APPEAL IS SQUARELY COVERED BY THE SERIES OF THE DECISIONS OF THE TRIBUNAL AND ALSO THE CASE OF THE ASSESSEE ITSELF. HE NCE, WE PROCEED TO DISPOSE OF THE PRESENT BUNCH OF APPEALS AND CROSS- OBJECTIONS AFTER HEARING THE LD.D.R. FOR THE REVENUE. 6. BRIEFLY IN THE FACTS OF THE CASE, THE ASSESSEE HAD ORIGIN ALLY FILED THE RETURN OF INCOME DECLARING NIL. THE ASSESSEE WAS E NGAGED IN INFRASTRUCTURE DEVELOPMENT AND MAINTENANCE OF TOLL STAT IONS. THE HOLDING COMPANY M/S. ASHOKA BUILDCON WAS AWARDED TH E CONSTRUCTION OF DEWAS BY-PASS STARTING FROM K.M 159/4 OF BHOPAL UJJAIN ROAD (SH-18) AND JOINING KM 577/6 OF AGRA BOMBAY ROAD, (N.H.3) INTERSECTING NH-3 IN KM 567/8 AND SH 18 IN KM 151/8 (TOTAL LENGTH 19.8 KMS) INCLUDING CONSTRUCTION OF ONE MEDIUM BRIDGE, 27 NOS. OF CULVERTS, JUNCTIONS AND ROTARIES, PROTECT ION WORK, 4 TOLL TAX BARRIERS AND BOOTH, PLANTATION, FENCING, TRUCK PARK ING LAY- BYE AND LONGITUDINAL DRAINS ETC. ON BOT (BUILD OPERATE & TRA NSFER) BASIS. THE SAID ASHOKA BUILDCON LTD., HAD ASSIGNED ALL ITS RIGHTS AND OBLIGATION UNDER THE SAID CONTRACT IN FAVOUR OF THE CO MPANY. THE COMPANY WAS ENTITLED TO COLLECT TOLL TAX FOR 3999 DAYS AFTER TOLL NOTIFICATION DATE I.E. FROM 24 TH MAY 2014 TILL 6 TH MAY 2015. THUS ASSESSMENT YEAR 2005-06 WAS THE FIRST YEAR OF OPERATIO N OF THE ASSESSEES BUSINESS ACTIVITY. AS PER DIRECTORS REPORT, THE ASSESSEE COMPANY HAD COMMISSIONED THE PROJECT ON 23 RD MAY 2004. THE ASSESSEE COMPANY, AS PER DIRECTIONS OF THE PWD, MP, WAS C OLLECTING TOLL ONLY AT ONE PLAZA INSTEAD OF 3 TOLL PLAZAS AND THE C OMPANY WAS IN THE PROCESS OF ASCERTAINING THE COMPENSATION RECEIVABLE FROM PWD FOR LOSS OF TOLL. IN THE RETURN OF INCOME THE ASSE SSEE HAD CLAIMED DEPRECIATION ON INTANGIBLE ASSET BEING RIGHT TO CO LLECT THE TOLL DURING THE PERIOD INVOLVED IN THE GOVERNMENT NOTIFICATION GRANTING SUCH RIGHTS (11 YEARS). SUCH DEPRECIATION WAS CLA IMED AT 25% ON THE REDUCING BALANCE METHOD FOR THE INCOME-TAX P URPOSES AT RS.15,26,38,581/-. THE AMOUNT OF LICENCE WAS INCLUDED IN THE GROSS BLOCK OF ASSETS RS.61,05,54,325/- BEING THE FIRST YEAR S OPENING VALUE. THE SPAN OF THE SAID RIGHT AS PER THE NOT IFICATION WAS MAY, 2004 TO MAY 2015, I.E. FOR THE PERIOD OF 136 MONTH S. THE ASSESSING OFFICER IN THE ORIGINAL ASSESSMENT HAD DENIED THE CLAIM OF DEPRECIATION ON THE RIGHT TO COLLECT TOLL HOLDING THE SAME NOT TO BE AN INTANGIBLE ASSET. HOWEVER, THE COMMISSIONER OF INCOME T AX (APPEALS) REVERSED THE ORDER OF ASSESSING OFFICER. 7. SEARCH AND SEIZURE ACTION UNDER SECTION 132 OF THE AC T WAS CARRIED OUT IN THE ASHOKA GROUP OF CASES ON 20.04.2010. DURING 5 THE COURSE OF SEARCH, INCRIMINATING DOCUMENTS PERTAINING TO THE ASSESSEE COMPANY WERE SEIZED FROM THE SEARCHED PREMISE S OF M/S. ASHOKA BUILDCON LTD. THE PROCEEDINGS WERE INITIATED AGAIN ST THE ASSESSEE UNDER SECTION 153C OF THE ACT. IN RESPONSE T O NOTICE ISSUED BY THE ASSESSING OFFICER UNDER SECTION 153C OF THE ACT, THE ASSESSEE FILED RETURN OF INCOME DECLARING TOTAL INCOME AT NIL. THE ASSESSMENT PROCEEDINGS WERE TAKEN UP FOR SCRUTINY. DURI NG THE COURSE OF THE PROCEEDINGS, THE ASSESSEE VEHEMENTLY STA TED THAT WHEN THE COMMISSIONER OF INCOME TAX (APPEALS)S ORDER RE VERSING THE ORDER OF THE ASSESSING OFFICER IN THE ORIGINAL ASSESSMEN T HAD ATTAINED FINALITY, THE DECISION BECOMES BINDING AS FAR AS TH E ASSESSING OFFICER WAS CONCERNED. THE ASSESSING OFFICER REJE CTING THE SAID PLEA OF THE ASSESSEE AND IN VIEW OF THE FACT THAT THE ORDER OF CIT / ITAT WERE SUBJUDICED BEFORE THE HIGHER APPELLATE FORUM HELD THAT THE MATTER HAD NOT REACHED FINALITY. HENCE, THE DEP RECIATION CLAIMED ON THE RIGHT TO COLLECT TOLL WAS HELD NOT TO BE ALLO WABLE TO THE ASSESSEE. 8. THE COMMISSIONER OF INCOME TAX (APPEALS) FIRST DECIDED THE VALIDITY OF THE NOTICE ISSUED UNDER SECTION 153C OF THE ACT AND HELD THE SAME AGAINST THE ASSESSEE. IN RESPONSE TO THE ISS UE RAISED ON MERITS, THE COMMISSIONER OF INCOME TAX (APPEALS) OBSERVED THAT THE TRIBUNAL IN ASSESSEES OWN CASE IN ITA NOS.185 AND 186/P N/2012 FOR ASSESSMENT YEARS 2006-07 AND 2007-08, ORDER DATED 29.04.2013 HAD HELD THE ASSESSEE TO BE ENTITLED TO CLAIM DEPRECIATION @ 25% ON THE RIGHT TO COLLECT TOLL BY TREATING THE SAME AS INTANGIBLE ASSET. THE ASSESSEE WAS ELIGIBLE FOR DEPRECIAT ION. THE RELEVANT FINDINGS OF THE TRIBUNAL ARE REPRODUCED AT PAGES 11 AND 12 OF THE APPELLATE ORDER. THE COMMISSIONER OF INCOME TAX (A PPEALS) 6 FOLLOWING THE SAME, DIRECTED THE ASSESSING OFFICER TO ALLOW THE DEPRECIATION @ 25% AS CLAIMED BY THE ASSESSEE AND ALSO DIRECTED THE ASSESSING OFFICER TO WITHDRAW THE REDUCTION ALLOWED ON AMORTIZATION OF COSTS FOR ASSESSMENT YEAR 2005-06. 9. THE REVENUE IS IN APPEAL AGAINST THE ORDER OF COMMISSION ER OF INCOME TAX (APPEALS). ON PERUSAL OF THE RECORDS, WE FIND THAT THE ASSESSMENT IN THE PRESENT CASE WAS COMPLETED UNDER S ECTION 153C OF THE ACT R.W.S. 143(3) OF THE ACT. THOUGH, THE ASSESSEE DID NOT PUT IN AN APPEARANCE BEFORE THE TRIBUNAL, HOWEVER, THE ASSESS EE HAS FILED THE PAPER BOOK WHICH IS AVAILABLE ON RECORD. THE ISSUE WHICH IS RAISED IN THE APPEAL OF REVENUE IS AGAINST THE CLAIM OF DEPRECIATION ON THE RIGHT TO COLLECT TOLL, BEING AN INTANGIBLE ASSET. THE ASSESSING OFFICER WAS OF THE VIEW THAT NO SUCH DEPREC IATION WAS ALLOWABLE. WHEREAS, THE COMMISSIONER OF INCOME TAX (APPEALS) FOLLOWING THE EARLIER ORDER OF THE TRIBUNAL (SUPRA) IN ASSESS MENT YEARS 2006-07 AND 2007-08 ALLOWED THE CLAIM OF THE ASSES SEE. THE COPY OF THE SAID ORDER OF THE TRIBUNAL IS AVAILABLE AT PAGES 45 TO 51 OF THE PAPER BOOK. THE YEAR UNDER APPEALS ARE STARTIN G FROM ASSESSMENT YEARS 2005-06 TO 2011-12. THE ASSESSMENT HAS BEEN COMPLETED AS POINTED EARLIER UNDER SECTION 153C R.W.S 14 3(3) OF THE ACT. IN THE FIRST INSTANCE, WE HOLD THAT THE ASSESSEE IS ENTITLED TO THE CLAIM OF DEPRECIATION AT 25% ON THE RIGHT TO COLLECT TOLL BEING AN INTANGIBLE ASSET. ACCORDINGLY, WE UPHOLD THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) IN THIS REGARD AND ALSO UPHOLD THE DIRECTION TO THE ASSESSING OFFICER TO WITHDRAW THE DEDUCTION ALLOWED ON AMORTIZATION OF THE COSTS FOR ASSESSMENT YEAR 2005-06. THE RELEVANT PORTION OF THE ORDER OF THE TRIBUNAL ARE REPRO DUCED IN THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) AT 7 PAGES 11 AND 12 AND THE FOR THE SAKE OF BREVITY, THOUG H WE ARE REFERRING TO THE SAME BUT ARE NOT REPRODUCING THE SAME. 10. IT MAY BE POINTED OUT THAT SIMILAR ISSUE ALSO AROSE BE FORE THE TRIBUNAL IN THE CASE OF ASHOKA INFRASTRUCTURE LTD., IN ITA NOS.1452 TO 1457/PN/2014 RELATING TO ASSESSMENT YEARS 2006-07 TO 2011- 12. SIMILAR ISSUE AROSE IN THE SAID APPEAL AND WAS DECIDED IN FAVOUR OF THE ASSESSEE. THE COPY OF THE SAID ORDER IS AV AILABLE AT PAGES 54 TO 93 OF THE PAPER BOOK FILED BY THE ASSESSEE. ACCORDINGLY, WE DISMISS THE GROUNDS OF THE APPEAL OF REVENUE. 11. BEFORE PARTING, WE MAY ALSO REFER TO THE ORDER OF ASSE SSING OFFICER PASSED UNDER SECTION 143(3) R.W.S 153C OF THE ACT WHERE HE HAS RAISED AN ISSUE OF DISALLOWANCE OF DEPRECIATION AS RIGHT TO COLLECT TOLL WHICH WAS ALREADY ADJUDICATED IN THE 143(3) PROC EEDINGS AGAINST THE ASSESSEE. ONCE THE ISSUE HAD ALREADY BEEN DECIDED THEN ON SIMILAR GROUND, THE ASSESSING OFFICER IS PRECLUDED FRO M AGAIN DISALLOWING CLAIM OF THE ASSESSEE IN THE ORDER PASSED UNDER SECTION 143(3) R.W.S 153C OF THE ACT. 12. THE FACTS AND ISSUES RAISED IN ITA NOS.61/PUN/2016 TO 66/PUN/2016 ARE IDENTICAL TO THE FACTS AND ISSUES RAISED IN ITA NO.60/PUN/2016 AND ACCORDINGLY, OUR DECISION IN ITA NO.60/PUN/2016 WOULD APPLY MUTATIS-MUTANDIS TO ITA NOS.61/PUN/2016 TO 66/PUN/2016. 13. NOW COMING TO THE CROSS-OBJECTIONS FILED BY THE ASSE SSEE, WHICH ARE AGAINST THE INVOKING OF JURISDICTION UNDER SECTION 153C 8 OF THE ACT. THE SAID ISSUE BECOMES ACADEMIC IN VIEW OF OUR DECIDING THE ISSUE ON MERITS IN FAVOUR OF THE ASSESSEE AND IN THE ABSENCE OF THE ASSESSEE RAISING ANY ARGUMENT IN THIS REGARD. WE DISM ISS THE SAME BEING ACADEMIC. THEREFORE, ALL THE C.O. NOS.114/PUN/20 17 TO 119/PUN/2017 ARE DISMISSED AS ACADEMIC. 14 IN THE RESULT, THE APPEALS FILED BY THE REVENUE AND TH E CROSS- OBJECTIONS FILED BY THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED ON 28 TH DAY OF MARCH, 2018. SD/- SD/- (ANIL CHATURVEDI) (SUSHMA CHOWLA) #$ / ACCOUNTANT MEMBER $ / JUDICIAL MEMBER PUNE; DATED : 28 TH MARCH, 2018. YAMINI %&'()(& / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. 4. 5. CIT(APPEALS)-12, PUNE. / CIT CONCERNED. '#$ %%&',) &', / DR, ITAT, A PUNE; $+,-/ GUARD FILE. / BY ORDER // TRUE COPY // ./0%1&2 / SR. PRIVATE SECRETARY ) &', / ITAT, PUNE.