DCIT, New Delhi V. M/s. Central Warehousing Corp., New Delhi

ITA 1459/DEL/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 6718 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 4 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-07-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 25-07-2016
• Assessment Year: 2000-2001
• Appeal Filed On: 11-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S SAMPATH
• Keywords: Depreciation
• Section: 14A

Judgement Text

ITA NOS. 1455 TO 1459/D/14 CENTRAL WAREHOUSING CORP. PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: B NEW DELHI BEFORE SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER & SHRI O.P. KANT, ACCOUNTANT MEMBER ITA NOS. 1455 TO 1459/DEL/2014 ( ASSESSMENT YEARS: 1989-90, 93-94, 97-98, 99-00, 200 0-01) DCIT CIRCLE 3(1) NEW DELHI. VS CENTRAL WAREHOUSING CORP. 4/1, SIRI INSTITUTION AREA, AUGUST KRANTI MARG, HAUZ KHAS, NEW DELHI. AAACC1206D ASSESSEE BY SH. ANIL KUMAR SHARMA, SR. DR REVENUE BY SH. S. SAMPATH, CA ORDER PER SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER : THESE BUNCHES OF FIVE APPEALS HAVE BEEN PREFERRED BY THE DEPARTMENT ON IDENTICAL ISSUE AND THE GROUNDS ARE ALSO COMMON. W E REPRODUCE GROUNDS OF APPEAL IN ITA NO. 1455/DEL/2014 FOR A READY REFERENCE. TH E GROUNDS READ AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT (A) HAS ERRED IN LAW AND ON FACTS IN HOLDING THAT THE DEDUC TIBLE INCOME U/S 10(29) IS TO BE COMPUTED AFTER EXCLUDING DEPRECIATI ON AS PART OF EXPENDITURE AND TAKING GROSS RECEIPTS FROM WAREHOUS ING AND CFS/ICD IGNORING THE FACT THAT DEPRECIATION IS CLAIMED LIKE ANY OTHER BUSINESS ITA NOS. 1455 TO 1459/D/14 CENTRAL WAREHOUSING CORP. PAGE 2 OF 3 EXPENSE IN THE P&L ACCOUNT WHICH GOES ON TO REDUCE THE TAX LIABILITY OF THE ASSESSEE. 2. THE APPELLANT CRAVES LEAVE FOR RESERVING THE RIGHT TO AMEND, MODIFY, ALTER, ADD OR FOREGO ANY GROUND(S) OF APPEAL AT ANY TIME BEFORE OR DURING THE HEARING OF THIS APPEAL. 2. THE SHORT QUESTION WHICH NEEDS ADJUDICATION IS T HAT WHETHER THE DEDUCTIBLE INCOME U/S 10(29) OF THE I.T. ACT, 1961 IS TO BE CO MPUTED AFTER EXCLUDING DEPRECIATION AS PART OF THE EXPENDITURE AND TAKING GROSS RECEIPTS FROM WAREHOUSING AND CFS/ICD OR NOT. 3. THE LD. AR SUBMITTED THAT THE ISSUE IS COVERED I N FAVOUR OF THE ASSESSEE BY THE DECISION OF THE APEX COURT IN NECTAR BEVERAGES P. LTD. VS. DCIT 314 ITR 314, WHEREIN THE HONBLE APEX COURT HAS HELD THAT THE DE PRECIATION IS AN ALLOWANCE AND NOT EXPENDITURE. 4. THE LD. CIT DR PLACED RELIANCE ON THE ORDER OF T HE AO AND SUBMITTED THAT THE LD. CIT (A) HAS WRONGLY IGNORED THE FACT THAT D EPRECIATION WAS LIKE ANY OTHER BUSINESS EXPENSE WHICH GOES ON TO REDUCE THE TAX LI ABILITY OF THE ASSESSEE. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND ALSO PER USED THE RELEVANT RECORDS. IT HAS BEEN HELD IN THE CASE OF HOSHANG D. NANAVATI IN ITA NO. 3567/MUM/2007 THAT SECTION 14A DEALS ONLY WITH THE EXPENDITURE AN D NOT ANY STATUTORY ALLOWANCE ITA NOS. 1455 TO 1459/D/14 CENTRAL WAREHOUSING CORP. PAGE 3 OF 3 ADMISSIBLE TO THE ASSESSEE. THE DECISION WAS ARRIV ED AT AFTER CONSIDERING THE DECISION IN THE CASE OF NECTAR BEVERAGES P. LTD. VS . DCIT (2009) 314 ITR 314. THIS DECISION WAS APPROVED BY THE ITAT AHMEDABAD SP ECIAL BENCH IN VISHNU ANANT MAHAJAN VS. ACIT IN ITA NO. 3002/AHD./2009, W HEREIN THE SPECIAL BENCH HELD THAT DEPRECIATION WAS AN ALLOWANCE AND NOT EXP ENDITURE. THE LD. CIT (DR) HAS NOT BEEN ABLE TO DISPLACE THE RATIO OF THESE CA SES. THUS, ON CONSIDERATION, WE FIND THAT FOR THE PURPOSE OF SECTION 10(29) DEPRECI ATION DOES NOT PAR TAKE THE CHARACTER OF EXPENDITURE FOR THE PURPOSES OF APPORT IONMENT. THEREFORE, WE ARE IN AGREEMENT WITH THE FINDINGS OF THE LD. CIT (A) ON T HIS ISSUE AND WE DECLINE TO INTERFERE. 6. IN THE RESULT, ALL THE FIVE APPEALS OF THE DEPAR TMENT ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 29/07/2016 SD/- SD/- (O.P. KANT) (SUDHANSHU SRIVASTAVA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 29.07.2016 *KAVITA ARORA COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI ITA NOS. 1455 TO 1459/D/14 CENTRAL WAREHOUSING CORP. PAGE 4 OF 3