ASSISTANT CIT CIRCLE 9(3)(1), Mumbai V. M/S FEDEX EXPRESS TRANSPORTATION & SUPPLY CHAIN SERVICES INDIA PVT. LTD., Mumbai

ITA 1437/MUM/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 2924 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-03-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2011-2012
• Appeal Filed On: 11-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAMTHA MULLAMUDI
• Assessee Lawyers: ARPIT AGRAWAL
• Keywords: Depreciation; Revised return; TDS; Set aside
• Section: 143(3); 263

Judgement Text

IN THE INC OME TAX APPELLATE TRIBUNAL F BENCH, MUMBAI BEFORE SHRI PAWAN SING H , JM & SHRI S. RIFAUR RAHMAN, AM ./ I.T.A. NO . 1437 / MUM/ 2019 ( / ASSESSMENT YEAR: 2011 - 12 ) ACIT CIR 9(3 ) (1) , 2 ND FLOOR, R. NO. 2 ND FLOOR , AAYAKAR BHAVAN, M. K. ROAD, MUMBAI - 400 020 / VS. M/S FEDEX EXPRESS TRANSPORTATION & SUPPLY CHAIN SERVICES INDIA PVT. LTD, BOOMERANG, 801, A - WING, CHANDIVALI FARM ROAD, NEAR CHANDIVALI STUDIO, ANDHERI(EAST), MUMBAI - 400072 ./ ./ PAN NO. AA BCF 6516 A ( / APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : SMT. SAMTHA MULLAMUDI, DR / RESPONDENTBY : SHRI ARPIT AGRAWAL , AR / DATE OF HEARING : 2 0.02.2020 / DATE OF PRONOUNCEMENT : 06.03. 2020 / O R D E R PER S. RIFAUR RAHMAN, ACCOUNTANT MEMBER : THE PRESENT APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER OF LD. COMMIS S IONER OF INCOME TAX (APPEALS) 16 IN 2 I.T.A. NO. 1437 /MUM/201 9 M/S FEDEX EXPRESS TRANSPORTATION & SUPPLY CHAIN SERVICES INDIA PVT. LTD SHORT REFERRED AS LD. CIT(A) , MUMBAI, DATED 24.12.18 FOR A SSESSMENT YEAR (IN SHORT A Y ) 2011 - 12 . 2 . T HE BRIEF FACTS OF THE C ASE ARE THAT ASSESSEE COMPANY FILED ITS RETURN OF INCOME FOR A.Y. 2011 - 12 ON 30.09.2011, DECLARING TOTAL LOSS OF RS. 13,12,13,466/ - AND SUBSEQUENTLY FILED A REVISED RETURN DECLARING TOTAL LOSS OF RS. 62,71,22,057/ - ON 21.11.2012. THE CASE WAS SELECTED FOR SCRUTINY AND AN ORDER U/S 143(3) OF THE I.T. ACT WAS PASSED ON 18.03.2014 DETERMINING TOTAL LOSS OF RS. 62,70,56,154/ - BY MAKING ADDITION OF RS. 65,903/ - ON ACCOUNT OF UNDISCLOSED TD S. FURTHER, LD. PR.CIT - 9 MUMBAI HAS PASSED AS ORDER U/S. 263 OF THE I.T. ACT, 1961 ON 21.02.2016. LATER, THE AO HAS PASSED AN ORDER U/S 143(3) R.W.S. 263 OF THE ACT DATED 30.12.2016 AND MADE DISALLOWANCE OF DEPRECIATION ON GOODWILL AMOUNTING TO RS. 37,12,5 6,443/ - AND DISALLOWANCE ON NON - COMPETE FEES AMOUNTING TO RS. 2,50,86,078/ AND ADDITION OF RS.65,903/ - ON ACCOUNT OF UNDISCLOSED TDS. 3 . AGGRIEVED WITH THE ABOVE ORDER, ASSESSEE PREFERRED APPEAL BEFORE LD. CIT(A) AND LD. CIT(A), AFTER CONSIDERING THE SUBM ISSION OF THE ASSESSEE, DELETED THE DISALLOWANCE MADE BY 3 I.T.A. NO. 1437 /MUM/201 9 M/S FEDEX EXPRESS TRANSPORTATION & SUPPLY CHAIN SERVICES INDIA PVT. LTD AO AND ALLO WED THE APPEAL OF THE ASSESSEE WITH THE FOLLOWING OBSERVATIONS: - 6. I HAVE CAREFULLY PERUSED THE ASSESSMENT ORDER AND THE SUBMISSIONS MADE BY THE AR IN SUPPORT OF HIS ARGUMENTS. AFTER TAKING INTO CONSIDERATION, THE A.O'S FINDINGS AND THE APPELLANT'S ORAL AND WRITTEN SUBMISSIONS MADE DURING THE COURSE OF HEARING AS WELL AS FACTS OF THE CASE, DECISION ON VARIOUS GROUNDS ARE ADJUDICATED AS UNDER: 6.1. SINCE THE HON'BLE IT AT HAS SET ASIDE / QUASHED THE ORDER U/S.263 PASSED BY PR.CIT - 9, THE ORDER PASSED BY A.O. U/S. 143(3) R.W.S. 263 IN RESPONSE TO THE DIRECTIONS ISSUED U/S.263 BY PR.CIT - 9 IS NO MORE A VALID ORDER. HENCE ORDER PASSED BY A.O. U/S. 143(3) R.W.S. 263 DOES NOT SURVIVE. THEREFORE , RESPECTFULLY FOLLOWING THE JUDGEMENT OF HON'BLE ITAT IN ITA NO.3621/MUM/2016 FOR A.Y.2011 - 12 DATED 17.11.2017, THE APPEAL OF THE APPELLANT IS ALLOWED. 4 . AGGRIEV ED WITH THE ABOVE ORDER, REVENUE HAS PREFERRED THE APPEAL BEFORE US ON THE GROUND MENTIONED HEREIN BELOW: - 1. WHETHER THE LD. CIT(A) IS CORRECT IN LAW BY REFERRING TO THE FINDINGS OF AO IN ORIGINAL ASSESSMENT 4 I.T.A. NO. 1437 /MUM/201 9 M/S FEDEX EXPRESS TRANSPORTATION & SUPPLY CHAIN SERVICES INDIA PVT. LTD ORDER AND NOT CONSIDERING THE FINDIN GS IN THE ASSESSMENT ORDER U/S.1 43(3) RWS 263 AFTER SETTING ASIDE THE ORIGINAL ASSESSMENT BY LD. PCIT IN WHICH VALUATION OF GOODWILL AND DEPRECIATION ATTRIBUTABLE TO THE ASSESSEE WAS RESTRICTED TO 25% OF CLAIM AMOUNT. 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) WAS JUSTIFIED IN LAW IN NOT APPRECIATING THE FACT THAT DECISION OF HON'BLE ITAT HAS NOT BEEN ACCEPTED BY THE REVENUE AND FURTHER APPEAL HAS BEEN PREFERRED BEFORE THE HON'BLE HIGH COURT, WHICH IS PENDING AS ON DATE. 3. THE APPELLANT PRAYS THAT THE ORDER OF THE LD. CIT(A) ON THE ABOVE GROUND BE SET ASIDE AND THAT THE AO BE RESTORED. 4. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GROUNDS OR ADD A NEW GROUND WHICH MAY BE NECESSARY. 5 . BEFORE US, LD. DR SUBMITTED THAT LD. CIT(A) IS NOT CORRECT IN LAW BY REFERRING TO THE FINDINGS OF AO IN ORIGINAL ASSESSMENT ORDER AND NOT CONSIDERING THE FINDIN GS IN THE ASSESSMENT ORDER U/S. 1 43(3) R . W . S 263 AFTER SETTING ASIDE THE ORIGINAL ASSESSMENT BY LD. PCIT IN WHICH VALUATION OF GOODWILL AND DEPREC IATION ATTRIBUTABLE TO THE ASSESSEE WAS RESTRICTED TO 25% OF CLAIM 5 I.T.A. NO. 1437 /MUM/201 9 M/S FEDEX EXPRESS TRANSPORTATION & SUPPLY CHAIN SERVICES INDIA PVT. LTD AMOUNT. HE FURTHER SUBMITTED THAT LD. CIT(A) WAS NOT JUSTIFIED IN LAW IN NOT APPRECIATING THE F ACT THAT DECISION OF HON'BLE IT AT HAS NOT BEEN ACCEPTED BY THE REVENUE AND FURTHER APPEAL HAS BEEN PREFERRED BEFORE THE HON'BLE HIGH COURT, WHICH IS PENDING AS ON DATE. LASTLY, HE PRAYED THAT THE ABOVE GROUND BE SET ASIDE AND THAT THE AO BE RESTORED. 6 . ON THE OTHER HAND, LD. A R SUPPORTED THE ORDERS PASSED BY LD. CIT(A). 7 . CONSIDERED THE RIVAL SUBMISSIONS AND MATERIAL PLACED ON RECORD, WE NOTICE FROM THE RECORD THAT S INCE THE COORDINATE BENCH OF IT AT HAS SET ASIDE / QUASHED THE ORDER U/S. 263 OF THE ACT PASSED BY PR. CIT , THE ORDER PASSED BY A.O. U/S. 143(3) R.W.S. 263 IN RESPONSE TO THE DIRECTI ONS ISSUED U/S. 263 BY PR. CIT IS NO MORE A VALID ORDER. HENCE ORDER PASSED BY A.O. U/S. 143(3) R.W.S. 263 DOES NOT SURVIVE. THEREFORE, WE ARE OF THE CONSIDERED VIEW THAT LD. CIT(A) HAS RIGHTLY ALLOWED THE APPEAL OF THE ASSESSEE BY RESPECTFULLY FOLLOW ING THE DECISION OF COORDINATE BENCH OF I TAT IN ITA N O. 3621/MUM/2016 FOR A.Y.2011 - 12. ACCORDINGLY, GROUNDS RAISED BY THE REVENUE ARE DISMISSED . 6 I.T.A. NO. 1437 /MUM/201 9 M/S FEDEX EXPRESS TRANSPORTATION & SUPPLY CHAIN SERVICES INDIA PVT. LTD 8 . IN THE NET RESULT, THE APPEAL FILED BY THE REVENUE STA NDS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 6 TH MARCH 2020 . SD/ - SD/ - ( PAWAN SINGH ) (S. RIFAUR RAHMAN ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED : 06 . 0 3 .2020 SR.PS . DHANANJAY / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT - CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD F I LE / BY ORDER, . / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI