The ACIT,Vapi Circle, Vapi V. Vapi Waste & Effulent Management Company Ltd., Vapi

ITA 1294/AHD/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 0900 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 3 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-08-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 07-07-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 06-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: M G PATEL
• Keywords: Depreciation
• Section: 143(3)

Judgement Text

ITA NO . 1 294 / AHD/20 1 3 A.Y. 200 9 - 10 PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH, AHMEDABAD BEFORE SHRI ANIL CHATURVEDI , ACCOUNTANT MEMBER AND SHRI S.S. GODARA, JUDICIAL MEMBER ITA NO. 1294 / AHD /201 3 ASSESSMENT YEAR : 200 9 - 10 ASSTT. COMMISSIONER OF INCOME TAX VS. VAPI WASTE & EFFLUENT MANAGEMENT VAPI CIRCLE, VAPI. COMPANY LIMITED, PLOT NO.135/ V I A HOUSE, CHAR RASTA, GIDC, VAPI. [PAN A A A CV 8289 P ] (APPELLANT ) (RESPONDENT) A PPELLANT BY : SHRI PRAS O ON KABRA, SR. D.R. RE SPONDENT BY : S HRI M.G. PATEL , A.R. DATE OF HEARING : 0 7 .0 7 . 20 16 DATE OF PRONOUNCEMENT : 22 . 0 8 .2016 O R D E R PER S.S. GODARA , J.M. TH IS REVENUE S APPEAL FOR A SSESSMENT Y EAR 2009 - 10 , ARISE S FROM ORDER OF THE CIT(A), VALSAD DATED 3 1 .01.2013 , PASSE D IN CASE NO.CIT(A) /VLS/50/12 - 13 , IN PROCEEDINGS UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . 2. THE REVENUE S SUBSTANTIVE PLEADINGS RAISED IN THE INSTANT APPEAL READ AS FOLLOWS : - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD. CIT ( A ) HAS ERRED IN ACCEPTING THE PRINCIPLE OF MUTUALITY IN THE CASE OF THE COMPANY. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT ( A ) HAS ERRED IN ALLOWING THE DEPRECIATION AMOUNTING TO RS.1,35,89,900/ - . 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE L D . CIT ( A ) HAS ERRED IN ALLOWING THE EMPLOYEES CONTRIBUTION TO PF & ESIC AMOUNTING TO RS.24,199/ - AS THE PA Y MENT WAS MADE AFTER THE EXPIRY OF DUE DATE. ITA NO . 1 294 / AHD/20 1 3 A.Y. 200 9 - 10 PAGE 2 OF 3 3. BOTH THE LEARNED R EPRESENTA TIVES REITERATE THEIR RESPECTIVE STAND IN THE COURSE OF HEARING BEFORE US. A PERUSAL OF THE CASE FILE REVEALS THAT A CO - ORDINATE BENCH OF THE TRIBUNAL IN ASSESSEE S OWN CASE FOR PRECEDING ASSESSMENT YEAR DECIDED ON 20.04.2012 HAS ADJUDICATED THE MAIN ISS UE OF APPLICATION OF MUTUALITY AS UNDER : - 19. WE HAVE PERUSED THE ASSESSMENT ORDER, ORDER OF THE CIT(A), SUBMISSION OF THE AUTHORIZED REPRESENTATIVE AND HEARD THE ARGUMENT FROM BOTH SIDES. THE BASIC OBJECT OF THE COMPANY IS TO GIVE TREATMENT OF EFFLUENT IN THE FORM OF LIQUID AND SOLID TO PREVENT THE POLLUTION IN VAPI INDUSTRIAL AREA ON THE SUGGESTION OF THE HON BLE GUJARAT HIGH COURT. THE COMPANY IS LIMITED BY GUARANTEE. THERE IS NO SHARE CAPITAL OF THE MEMBERS. ONLY SUBSCRIPTION IS MADE ON THE BASIS OF WASTAGE DELIVERED BY THEIR PLANTS. NO DIVIDEND HAS BEEN DISTRIBUTED BY THE COMPANY SO FAR. THE OBJECT MENTIONED IN THE MAIN AND ANCILLARY OBJECT ARE AS PER THE LINE OF THE COMPANY ACT BUT IT IS NOT FOR PROFIT EARNING. THE BOARD OF DIRECTOR HAS TO PASS RESO LUTION TO ALLOW THE OUTSIDER TO GET THE SERVICES OF THE COMPANY. NO DIRECTOR IS OUTSIDE FROM THE MEMBERS OF VAPI INDUSTRIAL ASSOCIATION. ON THE BASIS OF DECISION OF HON BLE GUJARAT HIGH COURT IN THE CASE OF SPORTS CLUB OF GUJARAT (SUPRA) THE ASSESSEE ALSO HAS DECLARED THE INTEREST INCOME IN RETURN AS TAXABLE ON FIXED DEPOSIT WITH BANK HOWEVER, IT WAS ADMITTED THAT NO OUTSIDER HAD PROVIDED THE SERVICES OF THE COMPANY BUT THE AO IS DIRECTED TO VERIFY THE CLAIM OF THE ASSESSEE WHETHER ANY OUTSIDER IS GETTING S ERVICES OR NOT FROM NON - MEMBERS, HAS TO BE TAXED ACCORDINGLY AFTER GIVING FULL OPPORTUNITY TO THE ASSESSEE. THE ASSESSEE IS ALSO DIRECTED TO COOPERATE WITH THE A.O. AND GIVE ALL THE EVIDENCES AS REQUIRED BY THE A.O. FOR HIS SATISFACTION. THE REVENUE APPEAL ON ALLOWANCE OF DEPRECIATION BY THE CIT(A) HAS NO BEARING AS THE PRINCIPLE OF MUTUALITY HAS BEEN ACCEPTED BY THIS COURT. THE OTHER GROUNDS OF APPEAL OF THE ASSESSEE LIKE DEDUCTION U/S 80 IA, DISALLOWANCE UNDER HEAD OPERATING EXPENSES AND CARRY FORWARD LOS S OF EARLIER YEAR HAS NO MEANING WHEN PRINCIPLE OF MUTUALITY HAS BEEN HELD IN FAVOUR OF THE APPELLANT. 3.1 THE REVENUE FAILS IN POINTING OUT ANY DISTINCTION ON FACTS OR LAW. ITS ONLY ARGUMENT IS THAT THE SAME HAS NOT BECOME FINAL SINCE ITS APPEALS ARE P ENDING BEFORE THE H ON BLE JURISDICTIONAL HIGH COURT. WE FIND THE SAME TO BE NO REASON TO ADOPT A DIFFERENT APPROACH IN THE IMPUGNED ASSESSMENT YEAR. WE AFFIRM CIT(A) S FINDINGS UNDER CHALLENGE IN THESE FACTS AND CIRCUMSTANCES. REVENUE S OTHER SUBSTANTIV E GROUND ARE RENDERED ACADEMIC IN VIEW OF OUR ADJUDICATION ON MUTUALITY PRINCIPLE IN ASSESSEE S FAVOUR. ITA NO . 1 294 / AHD/20 1 3 A.Y. 200 9 - 10 PAGE 3 OF 3 4 . THIS R EVENUE S A P PEAL IS DISMISSED. P RONOUNCED IN THE OPEN COURT TODAY ON THE 22 ND DAY OF AUGUST, 2016. SD/ - SD/ - ANIL CHATURVEDI S.S. GODARA (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) AHMEDABAD, THE 22 ND DAY OF AUGUST , 2016 PBN/* COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIV E (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD