THE STANDARD BATTERIES LTD, MUMBAI V. DCIT RG 5(3), MUMBAI

ITA 1492/MUM/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 2578 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 6 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-09-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 07-09-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 04-03-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Business income; Depreciation; Rule of consistency; Unabsorbed depreciation

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUM BAI . . , , !' , # , $ BEFORE SHRI R.C.SHARMA, AM AND SHRI AMARJIT SINGH, JM / I.T.A. NO.1492/MUM/2014 ( #% & / ASSESSMENT YEAR: 2010-11) THE STANDARD BATTERIES LIMITED RUSTOM COURT BUILDING, OPP. PODAR HOSPITAL, DR. ANNIE BESANT ROAD, WORLI MUMBAI 400 030. % / VS. DCIT-5(3) AAYAKAR BHAVAN, CHURCHGATE MUMBAI. ./ ./PAN/GIR NO. : AAACT 1391 A ( /APPELLANT ) .. ( / RESPONDENT ) / DATE OF HEARING: 07.09.2016 /DATE OF PRONOUNCEMENT:28.09.2016 / O R D E R PER AMARJIT SINGH, JM: THE ASSESSEE HAS FILED THE PRESENT APPEAL AGAINST T HE ORDER DATED 05.12.2013 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) -9, MUMBAI [HEREINAFTER REFERRED TO AS THE CIT(A)] R ELEVANT TO THE A.Y.2010-11. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS:- ASSESSEE BY: SHRI BHAVIN SHAH DEPARTMENT BY: SHRI G. NANTHAKUMAR ITA NO.1492/M/2014 A.Y. 2010-11 2 BEING AGGRIEVED BY THE ORDER PASSED UNDER SECTION 250 OF THE INCOME TAX ACT, 1961 ('ACT') BY THE LEARNED COMMISSIONER OF INCO ME TAX (APPEALS)-9, MUMBAI (HEREINAFTER REFERRED TO AS 'THE CIT(A)'), YOUR APPELLANT SUBMITS THE FOLLOWING GROUNDS OF APPEAL FOR YOUR SYMPATHETIC CONSIDERA TION: ON THE FACTS AND IN THE CIRCUMSTACNES OF THE CASE A ND IN LAW: 1. THE LEARNED CIT(A) ERRED IN CONFIRMING THE AO'S ACTION OF NOT RECOGNIZING THE CONTINUITY OF BUSINESS ACTIVITY OF THE APPELLANT. H E OUGHT TO HAVE APPRECIATED THAT DURING THE CONCERNED YEAR, ASSESSEE COMPANY CONTI NUED TO BE ENGAGED IN THE ACTIVITY OF TRADING BUSINESS AS IN THE PAST. 2. THE LEARNED CIT(A) ERRED IN CONFIRMING THE AO'S ACTION OF RESTRICTING THE EXPENDITURE INCURRED FOR THE PURPOSE OF BUSINESS TO THE TUNE OF RS.1,53,735/- BEING 10% OF THE TRADING SALES FOR THE YEAR AND F URTHER ERRED IN CONFIRMING DISALLOWANCE OF EXPENSES OF RS. 43.74 LACS WITHOUT APPRECIATING THAT THE SAID EXPENDITURE IS INCURRED FOR THE PURPOSE OF BUSINESS CARRIED ON BY THE APPELLANT. 3. THE LEARNED CIT(A) FURTHER ERRED IN RESTRICTING THE OTHER EXPENDITURE TO RS.1 ,24, 114/- BEING 2% OF OTHER INCOME OF RS. 62,05, 707/- FOLLOWING THE EARLIER YEARS, AND ALSO TAXED THE SAME UNDER THE HEAD 'INCO ME FROM OTHER SOURCES' RATHER THAN 'BUSINESS INCOME' AS RETURNED BY THE ASSESSEE COMPANY. HE OUGHT TO HAVE APPRECIATED THAT THE OTHER INCOME AGGREGATI NG TO RS. 62.06 LACS COMPRISING OF (A) INTEREST ON FD AND LOANS RS. 58.1 4 LACS, (B) INTEREST ON INCOME TAX REFUND RS.2.48 LACS AND (C) RENTAL INC OME RS. 1.43 LACS, WAS EARNED IN THE COURSE OF CARRYING ON THE BUSINESS OF THE COMPANY AND AS SUCH COULD HAVE BEEN TAXED ONLY UNDER THE HEAD 'BUSINE SS INCOME'. 4. THE LEARNED CIT(A) ALSO ERRED IN CONFIRMING THE DENIAL OF SET OFF OF BROUGHT FORWARD BUSINESS LOSS / UNABSORBED DEPRECIATION O F EARLIER YEARS AMOUNTING TO RS.259.60 LAKH IN LIGHT OF ALLEGED DISCONTINUITY OF BUSINESS ACTIVITY AND RESULTANT ABSENCE OF BUSINESS INCOME. 5. THE LEARNED CIT(A) FURTHER ERRED IN CONFIRMING D ENIAL OF SET OFF OF BROUGHT FORWARD UNABSORBED DEPRECIATION OF RS.84.30 LAKHS A GAINST THE TAXABLE INCOME COMPUTED FOR THE YEAR AND CARRY FORWARD OF BUSINESS / UNABSORBED DEPRECIATION OF THE SAME. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED ITS RETURN OF INCOME ON 20.09.2010 DECLARING TOTAL INCOME AT NIL FOR A.Y.2010-11. ITA NO.1492/M/2014 A.Y. 2010-11 3 THE RETURN OF INCOME WAS PROCESSED U/S.143(3) OF TH E INCOME TAX ACT, 1961 ( IN SHORT THE ACT) ON 31.01.2013. NOTI CE U/S. 143(2) DATED 26.09.2011 WAS ISSUED AND SERVED UPON THE ASS ESSEE. SUBSEQUENTLY, NOTICE U/S.142(1) DATED 13.02.2012 WA S ISSUED AND SERVED UPON THE ASSESSEE . THEREAFTER, THE AO DISAL LOWED CERTAIN CLAIM RAISED BY THE ASSESSEE AND ASSESSED THE INCOME OF T HE ASSESSEE TO THE TUNE OF RS.1,81,04,960/- AND TAXED ACCORDINGLY. FEE LING AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A)-9, MUMBA I WHO DISMISSED THE APPEAL, THEREFORE, THE ASSESSEE HAS FILED THE A PPEAL BEFORE US. 4. AT THE TIME OF HEARING THE LD. REPRESENTATIVE FOR T HE ASSESSEE HAS FAIRLY CONCEDED/SUBMITTED THAT ALL THE ISSUES I N THE APPEAL HAVE BEEN DECIDED AGAINST THE ASSESSEE BY THE CO-ORDINAT E BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2007-08 IN ITA NO.5383/MUM/2010 DATED 4.4.2012 . IT HAS ALSO B EEN ADMITTED THAT THEREAFTER IN CONNECTION WITH THE RELEVANT ISS UES, THE TRIBUNAL IN ASSESSEES OWN CASE HAS ALSO DISMISSED THE APPEAL O F THE ASSESSEE IN ASSESSMENT YEAR 2009-10 AND 2011-12 BY VIRTUE OF TH E ORDER DATED 22.01.2016 AND 27.07.2015 IN ITA NO.4342/M/2012 AND ITA NO.3448/MUM/2015 RESPECTIVELY (PLACED ON RECORD). A CCORDINGLY, WE RESPECTFULLY FOLLOWING THE SAID ORDER OF THE TRIBUN AL AS WELL AS FOLLOWING THE PRINCIPLE OF CONSISTENCY/ (NATURAL J USTICE) DISMISSED THE APPEAL OF THE ASSESSEE . ITA NO.1492/M/2014 A.Y. 2010-11 4 5. IN THE RESULT, APPEAL OF THE ASSESSEE HAS BEEN ORDE RED TO BE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH SEPTEMBER,2016. 28 , 2016 SD/- SD/- (R.C.SHARMA) (AMARJIT SINGH) ! / ACCOUNTANT MEMBER # /JUDICIAL MEMBER ' # MUMBAI; $! DATED : 28 TH SEPTEMBER, 2016 JV, SR. PS ' (# !) *)& / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. % ( ) / THE CIT(A)- 4. % / CIT 5. &' ( ))*+ , *+ , ' # / DR, ITAT, MUMBAI 6. ( ,- . / GUARD FILE. % / BY ORDER, & ) //TRUE COPY// + / ' /(DY./ASSTT. REGISTRAR) , ' # / ITAT, MUMBAI