BLUE BLENDS (I) P.LTD, MUMBAI V. DCIT RG 4(1), MUMBAI

ITA 168/MUM/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 3848 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 3 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-04-2016
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 01-10-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 04-01-2013
• Court: TRIBUNAL
• Department Lawyers: PRAKASH L PATHADE
• Assessee Lawyers: SANJUKTA CHOW DHURY
• Keywords: Depreciation

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B , BENCH MUMBAI BEFORE SHRI R.C.SHARMA, AM & SHRI PAWAN SINGH , JM ./ ITA NO. 168 / MUM/20 1 3 ( / ASSESSMENT YEAR : 20 0 9 - 10 ) M/S BLUE BLEN DS (I) LTD., JBF HOUSE, 13, OLD OFFICE LANE, KALBADEVI ROAD, MUMBAI - 400002 VS. DCIT, RANGE - 4(1), MUMBAI ./ ./ PAN/GIR NO. : A A ACB 1690 C ( / APPELLANT ) .. ( / RESPONDENT ) /ASSESSEE BY : MS. S ANJUKTA CHOWDHURY /REVENUE BY : SHRI PRAKASH L. PATHADE / DATE OF HEARING : 0 7 / 04 /201 6 / DATE OF PRONOUNCEMENT 27 / 04 /201 6 / O R D E R PER R.C.SHARMA (A.M) : THIS IS AN APPEAL FILED B Y TH E ASSESSEE AGAINST THE ORDER OF CIT(A) - MUMBAI, FOR THE ASSESSMENT YEAR 20 0 9 - 20 10 , IN THE MATTER OF ORDER PASSED U/S.143(3) OF I.T.ACT. 2. THE ONLY GRIEVANCE OF THE ASSESSEE RELATES TO DISALLOWANCE OF RS.5,42,831/ - U/S.14A R.W.R.8D AGAINST EARNING OF EXEMPT DIVIDEND INCOME OF RS.352/ - . 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. FACTS IN BRIEF ARE THAT THE ASSESSEE COMPANY IS A SICK COMPANY SINCE THE F.Y.1999 - 2000 AND WAS SO DECLARED - SICK COMPANY BY THE BIFR. IT DID NOT INCUR ANY DIRECT OR INDIR ECT EXPENDITURE DURING THE YEAR UNDER CONSIDERATION TO EARN AN INCOME NOT INCLUDIBLE IN TAXABLE INCOME. ALL ITS ITA NO. 168 / 1 3 2 INVESTMENTS ARE STRATEGIC INVESTMENTS IN ITS SISTER OR ASSOCIATES CONCERNS FOR ITS BUSINESS PURPOSES W HICH WERE MADE BEFORE MORE THAN 15 TO 20 Y EARS BACK FOR WHICH NO BORROWED FUNDS WERE USED . WE ALSO FOUND THAT I T HAS NOT MADE ANY NEW INVESTMENTS IN LAST 5 - 10 YEARS AND ALL OF IT S MOVABLE AND IMMOVABLE ASSETS ARE CHARGED TO ITS SECUR E D INSTITUTIONAL LENDERS AND BANKS. DURING THE YEAR UNDER CONSIDE RATION I T GOT A DIVIDEND OF RS.352/ - ON 18 SHARES IT HOLDS IN ASSIAN PAINTS LTD FOR WHICH IT HAS NOT INCURRED ANY DIRECT OR INDIRECT EXPENSES AND COST OF ITS INVESTMENT IN ASIAN PAINTS LTD. IS RS. 3900 / - ONLY OUT OF ITS TOTAL INVESTMENTS OF RS. 107409142/ - . 4. FROM THE RECORD, WE FOUND THAT ASSESSEE HAS NOT INCURRED ANY EXPENDITURE FOR EARNING DIVIDEND OF RS.352/ - . ACCORDINGLY, WE DO NOT FIND ANY JUSTIFICATION FOR THE DISALLOWANCE MADE U/S.14A AMOUNTING TO RS.5,42,831/ - . 5. THE ASSESSEE IS ALSO AGGRIEVED FO R DISALLOWANCE ON DEPRECIATION OF RS.13,09,788/ - CLAIMED ON CERTAIN ASSETS ON ITS MANUFACTURING UNIT. THE AO DISALLOWED CLAIM OF DEPRECIATION ON THE PLEA THAT CERTAIN UNITS OF ASSESSEE COMPANY WERE CLOSED. HOWEVER, THE ASSESSEE HAS NOT MAKE ANY CLAIM OF DE PRECIATION ON ITS PLANT AND MACHINERY AND ELECTRONIC INSTALLATION. THE AO ASKED THE DETAILS OF UNIT - WISE CLAIMED BY THE ASSESSEE AND DISALLOWED CLAIM OF RS.13,09,788/ - , WHICH WAS CONFIRMED BY THE CIT(A). 6. LD. AR PLACED ON RECORD DECISION OF HONBLE DEL HI HIGH COURT IN THE CASE OF OSWAL AGRO MILLS, 238 CTR 113, WHEREIN IT WAS ALSO HELD THAT ITA NO. 168 / 1 3 3 DESPITE OF NON - USER OF ASSETS, DEPRECIATION IS ALLOWABLE, IF IT IS PART OF BLOCK OF ASSETS. SIMILAR VIEW HAS BEEN TAKEN BY HONBLE KERALA HIGH COURT IN CASE OF TRAV ANCORE CHEMICALS & MFG. CO. LTD., 142 TAXMAN 316. 7. WE HAVE CONSIDERED RIVAL CONTENTIONS AND FOUND THAT ASSETS ON WHICH AO HAS DISALLOWED THE CLAIM OF DEPRECIATION WAS FORMING PART OF BLOCK OF ASSETS. RESPECTFULLY, FOLLOWING THE DECISION OF HONBLE HIGH COURTS DISCUSSED ABOVE, NO DISALLOWANCE OF DEPRECIATION CAN BE MADE IN RESPECT OF ASSETS FORMING PART OF BLOCK OF ASSETS. ACCORDINGLY, THE AO IS DIRECTED TO DELETE THE DISALLOWANCE OF DEPRECIATION SO MADE. 8 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOW ED . O RDER PRONOUNCED IN THE OPEN COURT ON THIS 27/04 / 201 6 . SD/ - ( PAWAN SINGH ) SD/ - ( R.C.SHARMA ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED 27/04 /201 6 . . /PKM , . / PS / COPY OF THE ORDER FORWARDED TO : / BY ORD ER, / ( ASSTT. REGISTRAR) , / ITAT, MUMBAI 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A), MUMBAI. 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. //TRUE COPY//