Deputy Commissioner of Income tax, Circle-7(2)(1), Bengaluru V. M/s Happy Valley Developers, Bengaluru

ITA 198/BANG/2018

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 4754 (ITAT-BANGALORE)
• Duration Of Justice: 4 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-06-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 22-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B R RAMESH JT BENGALURU
• Assessee Lawyers: MUKESH SHET
• Keywords: Depreciation; Opportunity of being heard; Additional depreciation
• Section: 143(3); 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ITA NO S . 198 & 199/BANG/2018 ASSESSMENT YEAR S : 2008 - 09 & 2009 - 10 THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 7(2)(1), BENGALURU. VS. M/S. HAPPY VALLEY DEVELOPERS, NO.184, 1 ST FLOOR, LYRICS, 17 TH MAIN, BANASHANKARI II STAGE, BENGALURU 560 070. PAN: AAAAH 1868A APP ELLANT RESPONDENT A PPELLANT BY : SHRI B.R. RAMESH, JT.CIT(DR)(ITAT), BENGA LURU RE SPONDENT BY : SHRI MUKESH SHET, CA DATE OF HEARING : 17 . 0 5 .201 8 DATE OF PRONOUNCEMENT : 01.06. 201 8 O R D E R PER N.V. VASUDEVAN, JUDICIAL MEMBER THESE ARE TWO APPEALS FILED BY THE REVENUE AGAINST THE COMMON ORDER DATED 30.09.2016 OF THE CIT(APPEALS), MYSORE RELATING TO ASSESSMENT YEARS 2008-09 & 2009-10. GROUNDS OF APP EAL RAISED BY THE REVENUE IN BOTH THESE APPEALS ARE COMMON AND IT REA DS AS FOLLOWS:- 1. THE ORDER OF THE LEARNED CIT(A) IS OPPOSED TO L AW AND FACTS OF THE CASE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE CIT(APPEALS) ERRED IN RELYING ON THE DECISION OF HO N'BLE ITAT, BANGALORE IN ASSESSEE'S OWN CASE FOR AYS 2008 -09 & 200910, VIDE ORDER IN ITA NO. 305 & 306/BANG/2013 ITA NOS.198 & 199/BANG/2018 PAGE 2 OF 4 DATED 06.12.2013, AND NOT DECIDING THE ISSUE OF ADD ITIONAL DEPRECIATION ON WINDMILLS ON MERITS, WHEN THE DECIS ION OF THE HON'BLE TRIBUNAL HAS NOT REACHED ITS FINALITY A ND DEPARTMENTAL APPEAL IS PENDING BEFORE THE HON'BLE H IGH COURT'? 3. FOR THESE AND OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING, IT IS PRAYED THAT THE ORDER OF THE CIT(A) IN SO FAR AS IT RELATES TO THE ABOVE GROUNDS MAY BE REVERSED AND THAT OF THE ASSESSING OFFICER MAY BE RESTORED. 4. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND AND/OR DELETE ANY OF THE GROUNDS MENTIONED ABOVE. 2. THE ASSESSEE IS AN AOP ENGAGED IN THE BUSINESS OF FORMING LAYOUTS AND SELLING PLOTS. FOR THE AYS 2008-09 & 2 009-10, RETURNS OF INCOME WERE FILED BY THE ASSESSEE ON 31.7.2008 AND 27.9.2009 DECLARING TOTAL INCOME OF RS.4,17,26,300 AND A LOSS OF RS.2,2 0,75,968 RESPECTIVELY. ORDER OF ASSESSMENT U/S. 143(3) OF THE ACT WAS PASS ED ON 16.11.2010 & 10.12.2011 RESPECTIVELY FOR THE AYS 2008-09 & 2009- 10. 3. THE AFORESAID ORDERS OF ASSESSMENT WERE REVISED BY THE CIT, BANGALORE-III, BANGALORE, IN EXERCISE OF HIS POWERS U/S. 263 OF THE ACT BY TWO ORDERS, BOTH DATED 21.10.2013. THE GROUND ON W HICH THE ORDER U/S. 263 WAS PASSED BY THE CIT WAS THAT OVER AND ABOVE 8 0% REGULAR DEPRECIATION ON WINDMILLS, THE AO ALLOWED ADDITIONA L DEPRECIATION OF 20% ON THE WINDMILLS. ACCORDING TO THE CIT, THE ALLOWA NCE OF 20% ADDITIONAL DEPRECIATION ON WINDMILLS WAS ERRONEOUS & PREJUDICI AL TO THE INTERESTS OF THE REVENUE. ACCORDINGLY, THE CIT DIRECTED THE AO TO W ITHDRAW THE ADDITIONAL DEPRECIATION GRANTED TO THE ASSESSEE AND MAKE THE A SSESSMENT AFRESH, AFTER AFFORDING OPPORTUNITY OF BEING HEARD TO THE A SSESSEE. CONSEQUENT TO THE ORDER OF THE CIT, THE AO PASSED ORDER U/S. 143( 3) R.W.S. 263 OF THE ACT DATED 19.2.2013 FOR AYS 2008-09 AND 2009-10 WITHDRA WING 20% ADDITIONAL DEPRECIATION. ITA NOS.198 & 199/BANG/2018 PAGE 3 OF 4 4. AGAINST THE AFORESAID ORDER, THE ASSESSEE PREFER RED APPEALS BEFORE THE CIT(APPEALS). BEFORE THE CIT(APPEALS) THE ASSE SSEE POINTED OUT THAT AS AGAINST THE ORDER PASSED U/S. 263 OF THE ACT BOT H DATED 21.1.2013 FOR THE AYS 2008-09 & 2009-10 RESPECTIVELY, THE ASSESSE E FILED APPEALS BEFORE THE TRIBUNAL IN ITA NOS.305 & 306/BANG/2013. THE T RIBUNAL VIDE ITS ORDER DATED 06.12.2013 WAS PLEASED TO QUASH THE ORDER U/S . 263 OF THE ACT. TAKING NOTE OF THE FACT THAT THE VERY BASIS OF ASSE SSMENT WITHDRAWING ADDITIONAL DEPRECIATION DID NOT SURVIVE CONSEQUENT TO THE ORDER OF THE CIT U/S. 263 OF THE ACT HAVING BEEN QUASHED BY THE TRIB UNAL, THE CIT(APPEALS) ALLOWED THE APPEALS OF THE ASSESSEE AND DELETED THE ADDITION MADE TO THE TOTAL INCOME OF THE ASSESSEE, CONSEQUENT TO DISALLO WANCE OF ADDITIONAL DEPRECIATION. 5. AGGRIEVED BY THE AFORESAID ORDERS OF THE CIT(APP EALS), THE REVENUE HAS PREFERRED THE PRESENT APPEALS BEFORE THE TRIBUN AL. AS CAN BE SEEN FROM THE GROUNDS OF APPEAL OF THE REVENUE, THE ONLY REASON ASSIGNED IN THE GROUNDS OF APPEAL IS THAT THE DECISION OF THE TRIBU NAL HAS NOT ATTAINED FINALITY AND THE REVENUE HAS PREFERRED APPEALS BEFO RE THE HONBLE HIGH COURT AND THE SAME IS PENDING. WE ARE OF THE VIEW THAT PENDENCY OF AN APPEAL AGAINST THE ORDER OF THE TRIBUNAL CANNOT BE THE BASIS NOT TO GIVE EFFECT TO THE ORDER OF TRIBUNAL. CONSEQUENTLY, WE FIND NO MERIT IN THESE APPEALS BY THE REVENUE AND DISMISS THE SAME. PRONOUNCED IN THE OPEN COURT ON THIS 1 ST DAY OF JUNE, 2018. SD/- SD/- ( INTURI RAMA RAO ) ( N.V. VASUDEVAN ) ACCOUNTANT MEMBER JUDICIAL MEMBER BANGALORE, DATED, THE 1 ST JUNE, 2018. / D ESAI S MURTHY / ITA NOS.198 & 199/BANG/2018 PAGE 4 OF 4 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY ITAT, BANGALORE.