DCIT, Circle-8(1), Kolkata, Kolkata V. M/s EIH Ltd., Kolkata

ITA 1708/KOL/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 1836 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 4 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-01-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 26-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S DASGUPTA
• Assessee Lawyers: A K GUPTA
• Keywords: Depreciation
• Section: 143(3); 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B, BENCH KOLKATA BEFORE SHRI N.V. VASUDEVAN, JM &DR. A.L.SAINI, AM ./ITA NO.1708 & 1709/KOL/2016 ( / ASSESSMENT YEARS: 2008-09) DCIT, CIR-8(1), KOLKATA AAYAKAR BHAWAN, 5 TH FLOOR, P-7, CHOWRINGHEE SQ., KOLKATA 69. VS. M/S EIH LTD. 4, MANGOE LANE, KOLKATA 1. ./ ./PAN/GIR NO. : AAACE 6898 B (APPELLANT) .. (RESPONDENT) APPELLANT BY : SHRI S. DASGUPTA, ADDL.CIT(DR) RESPONDENT BY : SHRI A.K. GUPTA, FCA / DATE OF HEARING : 07/12/2017 /DATE OF PRONOUNCEMENT : 17/01/2018 / O R D E R PER DR. ARJUN LAL SAINI, AM: THE CAPTIONED TWO APPEALS FILED BY THE REVENUE, PERTAINING TO A.Y. 2008-09, ARE DIRECTED AGAINST THE ORDERS PASSED BY THE LD. COMMISSIONER OF INCOME TAX(APPEALS),WHICH IN TURN ARISE OUT OF ASSESSMENT ORDERS PASSED BY THE ASSESSING OFFICER UNDER SECTION 263/251/143(3) AND U/S115 WG/115WE(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). 2. WITH REFERENCE TO REVENUE`S APPEAL IN ITA NO.1709/KOL/2016, FOR A.Y. 2008-09, THE LD. COUNSEL FOR THE ASSESSEE, AT THE OUTSET, HAS POINTED OUT THAT THE ASSESSMENT ORDER UNDER SECTION 263/251/143(3) OF THE I.T. ACT, HAD BEEN PASSED BY THE ASSESSING OFFICER ON DATED 10.03.2014, AS PER THE DIRECTION AND ORDER OF THE COMMISSIONER OF INCOME TAX UNDER SECTION 263 OF THE ACT. SINCE, THE ORDER PASSED BY THE COMMISSIONER OF INCOME TAX, UNDER SECTION 263 OF THE INCOME TAX ACT, 1961, HAS BEEN QUASHED BY THE HONBLE TRIBUNAL, IN ITA NO.529/KOL/2013, A.Y 2008-09, WHEREIN THE HONBLE ITAT OBSERVED THAT ASSESSING OFFICER TOOK ONE OF THE POSSIBLE VIEWS, THEREFORE, M/S EIH LTD. ITA NO.1708 & 1709/KOL/2016 ASSESSMENT YEARS: 2008-09 PAGE | 2 ORDER PASSED BY THE ASSESSING OFFICER CANNOT BE TERMED ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. THEREFORE, TRIBUNAL IN ITA NO.529/KOL/2013 HAS QUASHED THE ORDER PASSED BY THE COMMISSIONER OF INCOME TAX U/S 263 OF THE ACT. SINCE, THE ORDER PASSED BY THE COMMISSIONER OF INCOME TAX, U/S 263 OF THE ACT, HAS BEEN QUASHED BY THE ITAT, THEREFORE, CONSEQUENTIAL ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER DOES NOT HAVE ANY LEG TO STAND, THAT IS, IT WOULD BE CANCELLED. THEREFORE, THE PRESENT APPEAL,(IN ITA NO.1709/KOL/2016) FILED BY THE REVENUE BECOME INFRACTUOUS AND DOES NOT REQUIRE ANY ADJUDICATION. 3. NOW, WE SHALL TAKE ITA NO.1708/KOL/2016, FOR A.Y 2008-09, WHEREIN THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1.THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE DISALLOWANCE MADE BY AO U/S 115WC(2)(F) AND 115WB(2)(I) OF THE ACT. 2.THAT THE APPELLANT RESERVES THE RIGHT TO AMEND, ALTER OR ADD TO ANY GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING OF THE APPEAL. 4. AT THE OUTSET, THE LD. COUNSEL FOR THE ASSESSEE HAS POINTED OUT THAT THIS ISSUE IS FULLY COVERED BY THE JUDGMENT OF THE ITAT IN ASSESSEES OWN CASE IN ITA NO.353/KOL/2013, A.Y 2009-10, WHEREIN THE ITAT OBSERVED AS FOLLOWS: 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IT IS NOT IN DISPUTE THAT THE ASSESSEE IN THE INSTANT CASE ASSESSEE HAD EARNED SUBSTANTIAL REVENUE BY OPERATING THE AIRCRAFTS AS A SEPARATE ORGANIZED ACTIVITY. THE LD CIT(A) HAD OBSERVED THAT THE ASSESSEE HAS A SEPARATE AVIATION DEPARTMENT TO CARRY OUT THE SAID OPERATIONS WHICH FACT HAS NOT BEEN CONTROVERTED BY THE REVENUE BEFORE US. HENCE IT COULD BE SAFELY CONCLUDED THAT THE SAME IS CARRIED OUT AS A SEPARATE AND DISTINCT ACTIVITY IN AN ORGANIZED MANNER. NOW THE NEXT QUESTION THAT ARISES IS WHETHER THE SAME COULD BE CONSTRUED AS BUSINESS ACTIVITY OF THE ASSESSEE. IN THIS REGARD, WE FIND THAT THE LD AO HIMSELF HAD ACCEPTED THAT THE ASSESSEE IS ENGAGED IN AIR CHARTERING BUSINESS IN INCOME TAX PROCEEDINGS U/S 143(3) OF THE ACT. IT IS NOT IN DISPUTE THAT THE LD AO HAD ASSESSED THE CHARTERING INCOME AS INCOME FROM BUSINESS OF THE ASSESSEE. WITH REGARD TO THE DISALLOWANCE MADE ON ACCOUNT OF PERSONAL ELEMENT OF EXPENSES THEREON, WE FIND THAT THIS TRIBUNAL HAD DELETED THE SAME IN ITA NO. 352/KOL/2013 FOR ASST YEAR 2009- 10 (I.E THE YEAR UNDER APPEAL BEFORE US FOR FBT PROCEEDINGS), DATED 5.4.2017. HENCE IT COULD BE SAFELY CONCLUDED THAT THE AIRCRAFTS WERE USED ONLY FOR COMMERCIAL PURPOSES AND WHOLLY AND EXCLUSIVELY ONLY FOR THE PURPOSE OF ITS AIR CHARTERING BUSINESS. WE ARE ALSO IN AGREEMENT WITH THE FINDINGS OF THE LD CIT(A) THAT WHAT IS RELEVANT IS WHETHER THE ASSESSEE HAD EARNED SUBSTANTIAL REVENUE BY PROVIDING AIRCRAFTS ON CHARTER / HIRE. ONCE THAT IS PROVED, THAT ALONE SHOULD BE THE CRITERIA FOR DETERMINING WHETHER THE ASSESSEE IS IN THE AIRCRAFT BUSINESS OR NOT, RATHER THAN CONSIDERING THE ISSUE FROM THE PERSPECTIVE OF HAVING PERMIT TO OPERATE SCHEDULED VS NON-SCHEDULED TRANSPORT SERVICES. WITH REGARD TO THE RELIANCE PLACED BY THE LD DR ON THE DECISION OF DELHI TRIBUNAL IN THE CASE OF PUNJ LLOYD LTD SUPRA, THE FACTS M/S EIH LTD. ITA NO.1708 & 1709/KOL/2016 ASSESSMENT YEARS: 2008-09 PAGE | 3 IN THAT CASE WERE THAT THE LD AR IN THAT CASE HAD NOT PRESSED FOR THE RELEVANT GROUND BEFORE THE DELHI TRIBUNAL AND ACCORDINGLY THE SAME WAS DISMISSED. THEREAFTER THE DELHI TRIBUNAL HAD PROCEEDED TO GIVE THEIR FINDINGS ONLY ON THE PERSONAL USE OF THE EXPENDITURE AND WHETHER THE EMPLOYEES WERE INDEED BENEFITTED FROM THE USAGE OF AIRCRAFTS FOR THEIR PERSONAL PURPOSES OR NOT. HENCE WE HOLD THAT THE RELIANCE PLACED ON THE DECISION OF DELHI TRIBUNAL WHERE THE ASSESSEE HAD CONCEDED THE DISALLOWANCE, CANNOT BE USED AS A BINDING PRECEDENT AND HENCE WOULD NOT ADVANCE THE CASE OF THE REVENUE IN THE INSTANT CASE. HENCE WE HOLD THAT THE ASSESSEE SHOULD BE CONSIDERED AS ONE INTER ALIA ENGAGED IN THE BUSINESS OF CARRIAGE OF PASSENGERS OR GOODS BY AIRCRAFTS AND SHOULD BE ELIGIBLE FOR THE BENEFITS PROVIDED IN SECTION 115WC(2)(F) OF THE ACT AND CONSEQUENTLY THE ASSESSEE IS NOT LIABLE TO FBT ON THE EXPENSES INCURRED TOWARDS REPAIRS, RUNNING & MAINTENANCE OF AIRCRAFTS, DEPRECIATION THEREON AND INTEREST ON AIRCRAFT LOAN. HENCE WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD CIT(A) IN THIS REGARD. ACCORDINGLY, THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 5. THE LD. DR FOR THE REVENUE HAS FAIRLY AGREED WITH THE SUBMISSIONS OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE SAID ISSUE UNDER CONSIDERATION IS FULLY COVERED BY THE JUDGMENT OF THE ITAT IN ASSESSEES OWN CASE IN ITA NO.353/KOL/2013(SUPRA). 6. HAVING HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD, WE ARE OF THE VIEW THAT AS THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE JUDGMENT OF THE COORDINATE BENCH OF THIS TRIBUNAL (SUPRA), IN THE ASSESSEE`S OWN CASE, AND THERE IS NO CHANGE IN FACTS AND IN LAW, SO FAR THE PRESENT ISSUE IS CONCERNED, AND THE REVENUE HAVE NOT PUT, BEFORE US, ANY MATERIAL TO CONTROVERT THE AFORESAID FINDINGS OF THE CIT(A) AND THE LD. CIT(A) HAS ALLOWED THE APPEAL OF THE ASSESSEE BY FOLLOWING DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE ITA NO.353/KOL/2013, M/S.EIH LIMITED, FOR A.Y 2009-10. WE FIND NO REASON TO INTERFERE OF THE SAID ORDER OF CIT(A) AND THE SAME IS HEREBY UPHELD. THEREFORE, THIS APPEAL OF THE REVENUE IS DISMISSED. 7. IN THE RESULT, THE APPEALS FILED BY THE REVENUE (ITA NO. 1708/KOL/2016) ARE DISMISSED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 17/01/2018. SD/- (N.V. VASUDEVAN) SD/- (DR. A.L.SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER /KOLKATA; DATED 17/01/2018 [ RS SPS] M/S EIH LTD. ITA NO.1708 & 1709/KOL/2016 ASSESSMENT YEARS: 2008-09 PAGE | 4 / COPY OF THE ORDER FORWARDED TO : TRUE COPY BY ORDER SENIOR PRIVATE SECRETARY, HEAD OF OFFICE/D.D.O, I.T.A.T, KOLKATA BENCHES, KOLKATA . 1. / THE APPELLANT DCIT, CIR-8(1), KOLKATA 2. / THE RESPONDENT- M/S EIH LTD. 3. ( ) / THE CIT(A), 4. / CIT 5. , , / DR, ITAT, KOLKATA 6. / GUARD FILE.