ITD CEMINDIA JV, MUMBAI V. ASST CIT 19(2), MUMBAI

ITA 1505/MUM/2014

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 2677 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-11-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: I
• Assessment Year: 2009-2010
• Appeal Filed On: 04-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ANUJ KISNADWALLA
• Keywords: Depreciation; Principle of natural justice; Revenue expenditure; Capital expenditure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH I, MUMBAI BEFORE SHRI R.C.SHARMA, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO.1505/MUM/2014 ASSESSMENT YEAR: 2009-10 M/S ITD CEMINDIA JV, NATIONAL PLASTIC BUILDING, A-SUBHASH ROAD, PARANJAPE B SCHEME, VILE PARLE, (E), MUMBAI-400057 PAN: AAAAI1305D VS. ASST. CIT- 19(2), 3 RD FLOOR, PIRAMAL CHAMBERS, MUMBAI-400012 (APPELLANT) (RESPONDENT) ASSESSEE BY SHRI ANUJ KISNADWALLA REVENUE BY : SHRI MANOJ MISHRA (DR) DATE OF HEARING : 20.08.2015 DATE OF PRONOUNCEMENT : 04.11.2015 O R D E R PER PAWAN SINGH, JM: 1. THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A)-30 MUMBAI DATED 27.12.2013 IN RESPECT OF ASSESSMENT YEAR (AY) 2009-10 ON THE FOLLOWING GROUNDS OF APPEAL: 1. THE HON'BLE COMMISSIONER OF INCOME TAX (APPEALS) -30, HAS ERRED IN LAW AND FACTS IN PASSING THE ORDER U/S 250 OF THE ACT I N GROSS VIOLATION OF PRINCIPLES OF NATURAL JUSTICE. 2 ITA NO. 1505/M/14 M/S ITD CEMINDIA JV 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-30 HAS ERRED IN FACTS AND IN L AW IN UPHOLDING THE ACTION OF THE AO IN DISALLOWING REIMBURSEMENT OF SA LARY AND RELATED EXPENSES TO THE TUNE OF ` . 5,67,80,664/ - U/S 40(A)(IA) OF THE INCOME TAX AC T, 1961. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-30 HAS ERRED IN FACTS AND IN L AW IN UPHOLDING THE ACTION OF THE AO IN DISALLOWING EXPENSES ON ACCOUNT OF SHUTTERING MATERIAL OF ` . 39,44,706/ - AS REVENUE EXPENDITURE. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-30 HAS ERRED IN FACTS AND IN L AW IN REJECTING THE CLAIM OF THE ASSESSEE FOR GRANT OF DEPRECIATION ON ENTIRE SHUTTERING MATERIAL OF ` . 5,37,25,110/ - INSTEAD OF LIMITING DEPRECIATION ON ` .39,44,706/ -ONLY, 2. ASSESSEE, WHO IS AN AOP IS ENGAGED IN THE BUSINE SS OF REHABILITATION AND UPGRADING HIGHWAYS, FILED ITS RETURN OF INCOME ON 3 0.09.2009 DECLARING TOTAL LOSS OF ` . 20,45,580/-, THE RETURN OF INCOME WAS SELECTED FOR SCRUTINY AND THE ASSESSING OFFICER (AO) WHILE MAKING THE ASSESSMENT MADE THE DISALLOWA NCE U/S 40(A)(IA) OF THE INCOME-TAX ACT, 1961 OF ` . 5,67,80,664/- ON THE GROUND THAT PAYMENT OF SALAR Y OR REMUNERATION MADE BY ASSOCIATION IS NOT ALLOWABLE A ND DEDUCTIBLE EXPENDITURE, AND FURTHER DISALLOWED A SUM OF ` . 67,88,996/- ON ACCOUNT OF PAYMENT OF COMMISSION, ` . 19,15,898/- ON ACCOUNT OF ADMINISTRATIVE EXPENSES A ND ` . 39,44,706/- ON ACCOUNT OF CAPITAL EXPENSES AND INITIATED PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT IN ITS ORDER DATED 27.12.2011. 3. AGAINST THE ORDER OF AO, THE ASSESSEE FILED AN A PPEAL BEFORE THE CIT(A). THE CIT(A) WHILE DISPOSING OF THE APPEAL CONFIRMED THE DISALLOWANCE OF ` . 5,67,80,664/- MADE U/S 40(A)(IA) OF THE ACT AND ADDITION OF ` . 19,15,898/- ON ACCOUNT OF ADMINISTRATIVE EXPENSIVE OF `. 39,44,706/- ON ACCOUNT OF CAPITAL EXPENDITURE , AND DELETED THE ADDITION OF ` . 67,88,996/- ON ACCOUNT OF COMMISSION, AGAINST WHICH THE PRESENT APPEAL WAS FILED BEFORE US. 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL AVAILABLE ON RECORD. 5. THE LD. AUTHORISED REPRESENTATIVE (AR) OF THE AS SESSEE WHILE ARGUING THE GROUNDS OF APPEAL HAS NOT PRESSED THE GROUND NO.1, HENCE THE SAME IS TREATED AS DISMISSED. 6. IN RESPECT OF GROUND NO.2, 3 AND 4 THE LD. AR OF ASSESSEE HAS ARGUED THAT ITD CEMENTATION INDIA LTD. HAD PROVIDED THE EMPLOYEE FO R DOING THE WORK OF IN ITD CEM 3 ITA NO. 1505/M/14 M/S ITD CEMINDIA JV INDIA JV, AND IT WAS RAISING THE DEBIT NOTES RELATI NG TO THE SALARY OF THE EMPLOYEE ON THE ASSESSEE, WHO HAD MADE THE TDS @ 2% PLUS SURCHA RGE U/S194 C OF ON THE AMOUNT PAID TO THE ITD CEMENTATION INDIA LTD, ON TH E BASIS OF CREDIT NOTES RAISED BY THEM. IT WAS FURTHER ARGUED THAT IT IS A CONTRAC TUAL ARRANGEMENT AS PER JV AGREEMENT AND IN FACT THE EMPLOYEE WORKING FOR THE JOINT VENTURE WERE THE EMPLOYEE OF ITD CEMENTATION LTD, TAX DEDUCTION WAS NOT REQUI RED TO BE MADE BY THE ASSESSEE U/S 192 OF THE IT ACT IN RESPECT OF PAYMENTS MADE T O ITD CEMENTATION INDIA LTD, TOWARD THE SALARY OF THEIR EMPLOYEE WORKING FOR THE JOINT VENTURE, SINCE THE PAYMENT WAS MADE TOWARDS THE REIMBURSEMENT OF SALARY OF AND RELATED EXPENSES. THE ASSESSEE HAS GIVEN CONFIRMATION RECEIVED FROM ITD C EMENTATION INDIA LTD THAT IT HAD NOT CLAIMED EXPENSES ON THE SALARY AMOUNT REIMBURSE D. 7. THE LD. AR OF ASSESSEE FURTHER RELIED UPON THE JUDGMENT OF ASSESSEE OWN CASE IN RESPECT OF AY 2008-09 BEING ITA NO. 4335/MUM/12 WHE REIN THE IDENTICAL ISSUES WERE RAISED AND THE SAME WAS DECIDED IN FAVOUR OF THE AS SESSEE VIDE JUDGMENT DATED 09.04.2014, THE ISSUES/GROUNDS RAISED IN THE PRESEN T APPEAL AND THE ASSESSES APPEAL IN RESPECT OF AY 2008-09 ARE IDENTICAL AND RESPECTF ULLY FOLLOWING THE JUDGMENT OF CO- ORDINATE BENCH IN RESPECT OF THE ASSESSEE, THE GROU ND NO.2 OF THE PRESENT APPEAL IS IDENTICAL TO THE GROUND NO. 2 OF THE EARLIER YEAR O F APPEAL AND GROUND NO. 3 AND 4 ARE IDENTICAL TO THE GROUND NO. 6 OF THE APPEAL OF THE ASSESSEE FOR THE AY 2008-09. THE GROUND NO. 6 OF APPEAL NO.ITA NO. 4335/MUM/12 OF AS SESSEE WAS REMANDED TO THE FILE OF AO VIDE ORDER DATED 09.04.2014, HENCE THE P RESENT GROUND PERTAINING TO THE SHUTTERING MATERIAL IS ALSO REMANDED TO THE FILE O F AO , WITH THE DIRECTION TO DECIDE THE SAME IN ACCORDANCE WITH THE DIRECTION CONTAINED IN THE OF APPEAL NO. ITA NO. 4335/MUM/12. 8. AS A RESULT, APPEAL FILED BY THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY 4 TH OF NOVEMBER, 2015. SD/- SD/- (R.C.SHARMA) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 04.11.2015 4 ITA NO. 1505/M/14 M/S ITD CEMINDIA JV SHARWAN P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR I BENCH BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.