DCIT, Circle - 8(1), , Kolkata V. M/s. Apeejay Surrendra Park Hotels Limited , Kolkata

ITA 2158/KOL/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 7471 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 3 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-01-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 16-01-2020
• Assessment Year: 2012-2013
• Appeal Filed On: 12-10-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAM BILASH MEENA
• Assessee Lawyers: MANISH TIWARI
• Keywords: Depreciation
• Section: 143(3); 14A; 115JB; 139(1)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH A KOLKATA BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND DR. A.L. SAINI, ACCOUNTANT MEMBER ITA NO. 2158 / KOL / 2018 ASSESSMENT YEAR :2012-13 DCIT, CIRCLE-8(1), AAYAKAR BHAWAN,5 TH FLOOR,P-7,CHOWRINGHEE SQUARE,KOLKATA-700 069 V/S . M/S APEEJAY SURRENDRA PARK HOTELS LTD., THE PARK, 17, PARK STREET, KOLKATA-700 016 [ PAN NO.AAACB 7961 L ] PAN NO. /APPELLANT .. / RESPONDENT /BY APPELLANT SHRI RAM BILASH MEENA, CIT-DR /BY RESPONDENT SHRI MANISH TIWARI, FCA /DATE OF HEARING 16-01-2020 /DATE OF PRONOUNCEMENT 29-01-2020 / O R D E R PER S.S.GODARA, JUDICIAL MEMBER:- THIS ASSESSEES APPEAL FOR ASSESSMENT YEAR 2012-13 ARISES AGAINST THE COMMISSIONER OF INCOME TAX (APPEALS)-3, KOLKATAS O RDER DATED 08.08.2018 PASSED IN CASE NO.592/CIT(A)-3/CIR-8(1)/KOL/15-16 I NVOLVING PROCEEDINGS U/S 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE A CT. HEARD BOTH THE PARTIES. CASE FILE PERUSED. 2. THE REVENUES FIRST SUBSTANTIVE GROUND IS THAT C IT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE DISALLOWANCE / ADDITIO N OF 56,28,718/- MADE BY THE ASSESSING OFFICER IN RESPECT OF AMORTIZATION OF LEASEHOLD LAND. THE CIT(A)S DETAILED DISCUSSION TO THIS EFFECT READS A S UNDER:- 1. OBSERAVASTIONS AND DECISION: ITA NO.2158/KOL/2018 A.Y. 2012-13 DCIT CIR-8(1), KOL. VS. M/S APEEJAY SUR RENDRA PARK HOTELS LTD. PAGE 2 GROUND NO. 1 OF APPEAL IN THIS CASE IS REGARDING DI SALLOWANCE OF RS.5628718/- TOWARDS AMORTIZATION OF LEASEHOLD LAND. IT HAS BEEN SUBMITTED ON THIS ISSUE THAT THE HON'BLE ITAT IN ASSESSEES OWN CASE FOR A.Y 2009-10 IN ITA NO.12/KOL/2013 , VIDE ORDER DATED 03/07/2013, HAS DISMISSED THE APPEAL OF THE REVENUE ON THE SAID ISSUE. THE HON'BLE ITAT WHILE DECIDING THE ISSUE REGARDING AMORTIZATION OF LEASHED LANDS HAS HELD IN PARA NO. 3 AS UNDER:- WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY CONSIDER THE SAME ALONG WITH THE ORDER OF TAX AUTHORITIES BELOW. WE NOTED T HAT THE ASSESSEE HAS MADE THE SIMILAR CLAIM IN THE ASSESSMENT YEARS 2004-05, 2005-06, 2006-07, 2007- 08 & 2008-09 AND THE ASSESSING OFFICER WHILE MAKING THE ASSESSMENT UNDER SECTION 143(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 INVOLVED IN TH IS YEAR ARE SIMILAR TO THE FACTS INVOLVED IN THOSE YEAR. NO DOUBT THE PRINCIPLES OF RES JUDICATE ARE NOT APPLICABLE TO THE INCOME-TAX PROCEEDINGS AS EACH OF THE ASSESSMENT YEARS IS AN INDEPENDENT ASSESSMENT YEAR, BUT THERE MUST BE S UBSTANTIAL GROUND FOR THE REVENUE TO DIFFER IF THE VIEW TAKEN BY THE ASSE SSING OFFICER IN THE PRECEDING ASSESSMENT YEAR. OUR AFORESAID VIEW IS DU LY SUPPORTED BY THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT I N THE CASE OF CIT-VS.- HINDSTHAN FOLLOWING THE DECISION OF THE HON'BLE JUR ISDICTIONAL HIGH COURT CONFIRM THE ORDER OF CIT(APPEALS) IN RESPECT OF THE GROUND NO. 1 DELETE THE ADDITION OF RS.58,66,864/- ON PERUSAL OF THE ABOVE ORDER, IT IS OBSERVED THAT THE ISSUE HAS BEEN DECIDED IN FAVOUR OF THE APPELLANT. FURTHER THE DEPARTMENT HAS ALSO ACCEPTED THE CLAIM OF THE APPELLANT ON THIS ISSUE IN AY 2010-11 2011-12. RESP ECTFULLY FOLLOWING THE DECISION OF THE JURISDICTIONAL ITAT IN ASSESSEES OWN CASE THE CLAIM OF AMORTIZATION OF LEASEHOLD LAND OF RS.5628718/- IS HEREBY ALLOWED . 3. SUFFICE TO SAY, IT HAS COME ON RECORD THAT CIT(A ) HAS ADOPTED JUDICIAL CONSISTENCY ON THIS FIRST ISSUE GOING BY THE CO-ORD INATE BENCHS ORDER (SUPRA) DELETING THE SIMILAR DISALLOWANCE OF AMORTIZATION O F LEASEHOLD LAND. THE REVENUE IS FAIR ENOUGH IN NOT PIN-POINTING ANY DIST INCTION ON FACTS OR LAW. WE THEREFORE REJECTED ITS INSTANT FIRST SUBSTANTIVE GR OUND. 4. NEXT COMES SEC. 2(24)(X) R.W.S. 36(1)(VA) DISALL OWANCE OF 1,72,000/- IN RESPECT OF EMPLOYEES CONTRIBUTION TOWARDS PF/ESI DI SALLOWED IN ASSESSMENT AND DELETED IN THE LOWER APPELLATE PROCEEDINGS. SUF FICE TO SAY, WE NOTICE THAT THE ASSESSEE HAD DEPOSITED THE IMPUGNED SUM BEFORE DUE DATE OF FILING RETURN U/S 139(1) OF THE ACT. THE CIT(A) HAS FOLLOWED HON' BLE JURISDICTIONAL HIGH COURTS DECISION IN DECISION IN CIT VS. M/S VIJAY SHREE LTD. (2011) 224 TAXMAN 12(CAL) HAS ALREADY DECIDED THE VERY ISSUE IN ASSES SEES FAVOUR AS RELIED ITA NO.2158/KOL/2018 A.Y. 2012-13 DCIT CIR-8(1), KOL. VS. M/S APEEJAY SUR RENDRA PARK HOTELS LTD. PAGE 3 UPON IN THE CIT(A)S FINDINGS. WE THEREFORE REJECT REVENUES INSTANT LATTER SUBSTANTIVE GROUND AS WELL. 5. NEXT COMES THE REVENUES THIRD SUBSTANTIVE GROUN D SEEKING TO REVIVE INTEREST ON LONG TERM LOANS TO CAPITAL WORK-IN-PROG RESS AMOUNTING TO 2,02,28,759/- DISALLOWED IN THE COURSE OF ASSESSMEN T AND DELETED IN CIT(A)S ORDER READING AS FOLLOWS: GROUND NO. 5 OF APPEAL IS REGARDING CAPITALIZATION OF INTEREST WITH REFERENCE TO CAPITAL WORK-IN-PROGRESS. THE ASSESSING OFFICER HAS OBSERVED THAT LAST YEAR I.E. FY 2010-11 THE APPELLANT COMPANY CAPITALIZED INTEREST OF RS.17650759/- TOWARDS WORK IN PROGRESS. THE ASSESSING OFFICER FURTHER OBSERVED TH AT NO SUCH CAPITALIZATION OF INTEREST WAS DONE IN FY 2011-12. HE ACCORDINGLY EST IMATED INTEREST RELATING TO CAPITALIZATION OF WORK IN PROGRESS OF RS.20228759/- . IN THIS REGARD IT HAS BEEN SUBMITTED THAT DURING THE PREVIOUS YEAR THE APPELLA NT HA CAPITALIZED A SUM OF RS.17802887/- WITH RESPECT TO INTEREST ON LONG TERM LOANS RELATING TO CAPITAL WORK IN PROGRESS. IT HAS FURTHER BEEN SUBMITTED THAT THE CA PITALIZED INTEREST IS REFLECTED IN THE DEPRECIATION AND INTEREST SCHEDULE OF THE BALANCE S HEET. IN THIS CASE THE APPELLANT HAS SUO MOTO CAPITALIZED INTEREST ON LONG TERM LOAN OF RS.17802887/-. HENCE THERE IS NO CASE AS STATED BY THE ASSESSING OFFICER FOR INTE REST PAYMENT NOT BEING CONSIDERED IN CAPITAL WORK IN PROGRESS. THE ESTIMATION OF INTE REST OF RS.20228759/- MADE BY THE ASSESSING OFFICER IS THEREFORE ERRONEOUS AS THE ACT UAL AMOUNT OF INTEREST OF RS.1782887/- HAS BEEN CAPITALIZED. ACCORDINGLY THE ADDITION MADE B THE ASSESSING OFFICER OF RS.20228759/- IS HEREBY DELETED . 6. LEARNED CIT-DR VEHEMENTLY CONTENDED THAT THE ASS ESSING OFFICER HAD RIGHTLY DISALLOWED THE IMPUGNED INTEREST SINCE THER E WAS NO SUCH CAPITALIZATION IN THE RELEVANT PREVIOUS YEAR. THE SAME IS FOUND TO BE AGAINST THE FACTS ON RECORD SINCE THE CIT(A) HAS MADE IT CLEAR THAT THE ASSESSEE HAD SUO MOTU CAPITALIZED INTEREST ON LONG TERM CAPITAL LOANS ON 1,78,02,887/-. HE HAS THEREFORE DELETED THE IMPUGNED DISALLOWANCE BASED O N ESTIMATION ONLY. WE THEREFORE CONCLUDE THAT THE CIT(A) HAS RIGHTLY DELE TED THE IMPUGNED INTEREST DISALLOWANCE. 7. THE REVENUES FOURTH SUBSTANTIVE GRIEVANCE SEEKS TO RESTORE THE DEPRECIATION OF 92,490/- IN RESPECT OF SOFTWARE EXPENSES. WE NOTICE FROM THE CIT(A)S DETAILED DISCUSSION THAT HE HAS ALLOWED TH E ADMISSIBLE 20% DEPRECIATION ON THE ASSESSEES SOFTWARE AMOUNTING T O 46,62,451/- (INCLUDING COST, TRAINING AND TRAVELLING) EXPENSES. THE REVENU E FAILS TO DISPUTE THAT THE SUCH IMPUGNED CLAIM ADMITTEDLY SATISFIES THE RELEVA NT DEPRECIATION RATE IN THE ITA NO.2158/KOL/2018 A.Y. 2012-13 DCIT CIR-8(1), KOL. VS. M/S APEEJAY SUR RENDRA PARK HOTELS LTD. PAGE 4 INCOME TAX RULES, 1962. WE THEREFORE UPHOLD THE CIT (A)S FINDINGS QUA THIS FOURTH ISSUE AS WELL. 8. LASTLY COMES U/S 14A R.W.S. 8D DISALLOWANCE OF 50,150/- AS WELL AS ITS BOOK PROFIT COMPUTATION U/S 115JB OF THE ACT. WE FI ND THAT THE CIT(A) HAS GONE BY THIS TRIBUNALS CO-ORDINATE BENCHS ORDER I N REI AGRO LTD. VS. DCIT (2013) 144 ITD (141) (KOL) UPHELD BY HON'BLE JURISD ICTIONAL HIGH COURT IN ITAT NO.1811 OF 2012 DATED 14.05.2013. WE FIND NO REASO N TO ACCEPT THE REVENUES INSTANT LAST SUBSTANTIVE GRIEVANCE ONLY D IVIDEND YIELDING INVESTMENT OUGHT TO BE INCLUDED FOR THE PURPOSE OF COMPUTATION OF THE IMPUGNED DISALLOWANCE. 9. COMING TO SEC. 115JB MAT ASPECT, CASE LAW (2017) 82 TAMANN.COM 415 (DEL-TRIB) ACIT VS. VINEET INVESTMENTS HAS ALREADY SETTLED THE ISSUE THAT SUCH A DISALLOWANCE AMOUNT IS NOT TO BE INCLUDED. W E THUS AFFIRM CIT(A)S FINDINGS QUA THIS LAST ISSUE AS WELL. 10. THIS REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT 29/ 01/2020 SD/- SD/- ( &) (( &) ( A.L.SAINI) (S.S.GODARA) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) KOLKATA, *DKP SR.P.S )- 29 / 01 /20 20 / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-DCIT, CIRCLE-8(1), AAYAKAR BHAWAN, 5 TH FL. P-7 CHOWRINGHEE SQ, KOLKATA-069 2. / RESPONDENT 3. 4 5 / CONCERNED CIT KOLKATA 4. 5- / CIT (A) KOLKATA 5. 8 ((4, 4, / DR, ITAT, KOLKATA 6. = / GUARD FILE. BY ORDER/ , /TRUE COPY/ 4,