Apeejay Surrendra Park Hotels Ltd., Kolkata V. D.C.I.T.-CC-III, Kolkata

ITA 159/KOL/2020

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 5794 (ITAT-KOLKATA)
• Duration Of Justice: 11 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-02-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 06-02-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAYANTA KHANRA
• Assessee Lawyers: MANISH TIWARI
• Keywords: Rule of consistency; Revenue expenditure
• Section: 143(3); 192

Judgement Text

1 ITA NO.159/KOL/2020 APEEJAY SURRENDRA PARK HOTELS LTD., AY 2011-12 IN THE INCOME TAX APPELLATE TRIBUNAL A(SMC) BENCH , KOLKATA ( . . , ) [BEFORE SHRI A. T. VARKEY, JM] I.T.A. NO. 159/KOL/2020 ASSESSMENT YEAR:2011-12 APEEJAY SURRENDRA PARK HOTELS LTD. (PAN:AAACB7961L) VS. DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-III, KOLKATA. APPELLANT RESPONDENT DATE OF VIRTUAL HEARING 01.02.2021 DATE OF PRONOUNCEMENT .02.2021 FOR THE APPELLANT SHRI MANISH TIWARI, AR FOR THE RESPONDENT SHRI JAYANTA KHANRA, JCIT, SR. D R ORDER THIS IS AN APPEAL PREFERRED BY THE ASSESSE E AGAINST THE ORDER OF THE LD.CIT(A)-21, KOLKATA DATED 19.12.2019 FOR AY 2011-12. 2. THE ONLY GROUND THAT HAS BEEN RAISED BY THE ASSE SSEE IS AGAINST THE ACTION OF LD. CIT(A) IN CONFIRMING THE DISALLOWANCE OF RS.56,28,7 18/- CLAIMED BY THE ASSESSEE AS AMORTIZATION EXPENDITURE OF LEASEHOLD LAND. 3. AT THE OUTSET, THE LD. AR OF THE ASSESSEE SHRI M ANISH TIWARI DREW OUR ATTENTION TO THE FACT THAT THIS ISSUE IS SQUARELY COVERED IN ASS ESSEES OWN CASE BY THE DECISION OF THE TRIBUNAL IN EARLIER ASSESSMENT YEARS I.E. AYS 2009- 10 AND 2012-13. ACCORDING TO LD. AR , THE ASSESSEE HAD MADE A PAYMENT OF RS.13.94 CR. FOR GAINING CONTROL OVER THE PROPERTY WHICH WAS NECESSARY TO THEIR SMOOTH RUNNING OF ITS HOTEL BUSINESS. THEREFORE, THE EXPENSES CLAIMED WAS AMORTIZED AND EXPENDITURE WAS CLAIMED F ROM AY 2003-04 ONWARDS WHICH WAS ALLOWED THROUGHOUT BY THE AO U/S. 143(3) OF THE INC OME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FROM AY 2004-05 TO 2008-09 BY PASS ING SCRUTINY ASSESSMENT ORDERS U/S. 143(3) OF THE ACT. THE LD. AR DREW OUR ATTENTION T O THE RESPECTIVE ASSESSMENT ORDERS PASSED BY AO U/S. 143(3) OF THE ACT PLACED IN THE P APER BOOK WHICH RELATES TO AY 2004-05 2 ITA NO.159/KOL/2020 APEEJAY SURRENDRA PARK HOTELS LTD., AY 2011-12 TO 2008-09. HOWEVER, THE AO IN AY 2009-10, DISALLO WED THE CLAIM BY HOLDING THE EXPENDITURE AS CAPITAL IN NATURE. THE LD CIT(A) REV ERSED THE ACTION OF AO AND ALLOWED THE CLAIM OF ASSESSEE. ON FURTHER APPEAL BY THE REVENUE , THE TRIBUNAL WAS PLEASED TO UPHOLD THE ACTION OF LD. CIT(A) WHEREIN HE APPLIED THE PRINCIP LE OF CONSISTENCY SINCE THERE WAS NO CHANGE IN FACTS OR LAW PERMEATING IN ALL THE PREVIO US ASSESSMENT YEARS, BY ORDER DATED 03.07.2015 IN ITA NO. 12/KOL/2013 IN ACIT VS. M/S. APEEJAY SURRENDRA PARK HOTELS LTD., WHEREIN THE TRIBUNAL HELD AS UNDER: 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFU LLY CONSIDERED THE SAME ALONG WITH THE ORDER OF TAX AUTHORITIES BELOW. WE NOTED THAT THE ASSESSEE HAS MADE THE SIMILAR CLAIM IN THE ASSESSMENT YEARS 2004-05, 2005-06, 2006-07, 2007-08 AND 2008-09 AND THE ASSESSING OFFICER WHILE MAKING THE ASSESSMENT UNDER SECTION 1 43(3) ACCEPTED THE CLAIM OF ASSESSEE VIDE RESPECTIVE ORDERS DATED 18.12.2006, 31.12.2007 , 26.12.2008, 15.12.2009 AND 31.12.2010. THERE IS NO CHANGE IN THE FACTS DURING THE IMPUGNED ASSESSMENT YEAR. THE ASSESSING OFFICER, IN OUR OPINION, IS BOUND TO FOLL OW THE RULE OF CONSISTENCY UNTIL AND UNLESS EITHER THE LAW HAS BEEN AMENDED. IT IS NOT DENIED THAT THE FACTS INVOLVED IN THIS YEAR ARE SIMILAR TO THE FACTS INVOLVED IN THOSE YEARS. NO D OUBT THE PRINCIPLES OF RES JUDICATE ARE NOT APPLICABLE IN THE INCOME TAX PROCEEDINGS AS EACH OF THE ASSESSMENT YEARS IS AN INDEPENDENT ASSESSMENT YEAR, BUT THERE MUST BE SUBSTANTIAL GROU ND FOR THE REVENUE TO DIFFER IF THE VIEW TAKEN BY THE ASSESSING OFFICER IN THE PRECEDING ASS ESSMENT YEAR. OUR AFORESAID VIEW IS DULY SUPPORTED BY THE DECISION OF THE HONBLE JURISDICTI ONAL HIGH COURT IN THE CASE OF CIT VS., HINDUSTHAN MOTORS LIMITED REPORTED IN 192 ITR 619. WE, THEREFORE, RESPECTFULLY FOLLOWING THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COU RT CONFIRM THE ORDER OF CIT(APPEALS) IN RESPECT OF THE GROUND NO.1 DELETE THE ADDITION OF R .58,66,864/-. 4. AND ACCORDING TO THE LD. AR THIS VIEW HAS BEEN R EITERATED BY THE TRIBUNAL IN ASSESSEES OWN CASE FOR AY 2012-13 BY ORDER DATED 2 9.01.2020 A COPY OF WHICH IS PLACED AT PAGES 5 TO 8 OF THE PAPER BOOK. IN THE AFORESAID F ACTS AND CIRCUMSTANCES, HE PLEADS THAT SINCE THERE IS NO CHANGE IN FACTS OR LAW, THE VIEW OF THE TRIBUNAL IN ASSESSEES OWN CASE ON IDENTICAL FACTS AND CIRCUMSTANCES SHOULD BE FOLLOWE D AND ALLOW THE ASSESSEES APPEAL. 5. PER CONTRA, THE LD. DR SUPPORTED THE ACTION OF T HE LD. CIT(A) AND DOES NOT WANT ME TO INTERFERE. HOWEVER, ON A POINTED QUESTION FROM THE BENCH TO THE LD. DR AS TO WHETHER THERE WAS ANY CHANGE IN FACTS OR LAW WHICH COULD HA VE ALLOWED ME TO TAKE A DIFFERENT VIEW, THE LD. DR FAIRLY CONCEDED THAT THERE IS NO CHANGE IN FACTS OR LAW IN THIS ASSESSMENT YEAR VIS A VIS PREVIOUS ASSESSMENT YEARS. 6. HEARD RIVAL SUBMISSIONS AND GONE THROUGH THE FAC TS AND CIRCUMSTANCES OF THE CASE. THE AFORESAID STATED FACTS ARE NOT REPEATED FOR THE SAKE OF BREVITY. IT IS AN ADMITTED FACT THAT 3 ITA NO.159/KOL/2020 APEEJAY SURRENDRA PARK HOTELS LTD., AY 2011-12 ASSESSEE HAD INCURRED AN EXPENDITURE OF RS.13.94 CR . FOR GAINING CONTROL OVER THE PROPERTY WHICH WAS NECESSARY TO THEIR SMOOTH RUNNING OF ITS HOTEL BUSINESS, WHICH EXPENDITURE WAS AMORTIZED AND CLAIMED AS REVENUE EXPENDITURE; AND W HICH WAS ALLOWED BY AO FROM AYS 2003-04 TO AY 2008-09; AND THEREAFTER IN AY 2009-10 THE AO TOOK A VIEW THAT THE AMOUNT WAS CAPITAL IN NATURE AND DISALLOWED THE SAME WHICH VIEW WAS REVERSED BY THE LD. CIT(A) AND THE REVENUES APPEAL AGAINST THE ACTION OF THE LD. CIT(A) GOT DISMISSED AND THE TRIBUNAL WAS PLEASED TO UPHOLD THE ACTION OF THE LD . CIT(A) THEREBY ALLOWING THE CLAIM OF THE ASSESSEE (SUPRA). THIS VIEW OF THE TRIBUNAL HA S BEEN FOLLOWED IN ASSESSEES OWN CASE BY THE COORDINATE BENCH FOR AY 2012-13 ALSO. EVEN THO UGH RES JUDICATA IS NOT APPLICABLE FOR INCOME TAX PROCEEDING, HOWEVER, RULE OF CONSISTENCY AS A PRINCIPLE HAS BEEN UPHELD BY THE HONBLE SUPREME COURT IN THE CASE OF RADHASOAMI SAT SANG VS CIT (193 ITR 321), WHEREIN THE HONBLE SUPREME COURT HAS HELD THAT IF THE FACT S PERMEATING IN THE EARLIER YEARS ARE THE SAME AND THERE IS NO CHANGE IN FACTS AND LAW, THEN THE VIEW TAKEN EARLIER SHOULD NOT BE DISTURBED BY APPLYING THE PRINCIPLE OF RULE OF CONS ISTENCY. THIS VIEW HAS ALSO BEEN ENDORSED BY THE HONBLE JURISDICTIONAL HIGH COURT I N THE CASE OF CIT VS. HINDUSTHAN MOTORS LTD. 192 ITR 619. THEREFORE, FOLLOWING THE JUDICIA L DISCIPLINE THE DIVISION BENCH ORDER OF THIS TRIBUNAL IN ASSESSEES OWN CASE FOR AYS 2009-1 0 AND 2012-13 ARE BINDING ON ME AND NEED TO BE FOLLOWED AND, THEREFORE, I AM INCLINED T O ALLOW THE APPEAL OF THE ASSESSEE AND REVERSE THE IMPUGNED ORDER OF LD. CIT(A) AND ALLOW THE AMORTIZATION EXPENDITURE OF RS.56,28,718/- CLAIMED BY THE ASSESSEE. 7. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED . ORDER IS PRONOUNCED IN THE OPEN COURT ON 5 TH FEBRUARY, 2021. SD/- (ABY. T. VARKEY) JUDICIAL MEMBER DATED : 5 TH FEBRUARY, 2021 JD(SR.P.S.) 4 ITA NO.159/KOL/2020 APEEJAY SURRENDRA PARK HOTELS LTD., AY 2011-12 COPY OF THE ORDER FORWARDED TO: 1. APPELLANT APEEJAY SURRENDRA PARK HOTELS LTD. 1 7, PARK STREET, KOLKATA- 700016. 2 RESPONDENT DCIT, CC-III, KOLKATA. 3. 4. 5. CIT(A)-21, KOLKATA (SENT THROUGH E-MAL) CIT , KOLKATA DR, ITAT, KOLKATA. (SENT THROUGH E-MAL) / TRUE COPY, BY ORDER, ASSISTANT REGISTRAR