The ACIT, Circle- 4, Baroda V. M/s. Paramount Technologies Ltd., Baroda

ITA 2182/AHD/2014

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5936 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 7 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-03-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 05-06-2017
• Assessment Year: 1995-1996
• Appeal Filed On: 30-07-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation; Opportunity of being heard
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH BEFORE: SHR I RAJPAL YADAV , JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER THE ACIT, CIRCLE - 4, BARODA (APPELLANT) VS M/S. PARAMOUNT TECHNOLOGIES LTD., A/4, GIDIC, MAKARPURA, BARODA PAN:AABCP6161B (RESPONDENT) REVENUE BY : S H RI RAJDEEP SINGH , SR. D . R. ASSES SEE BY: NONE DATE OF HEARING : 09 - 01 - 2 018 DATE OF PRONOUNCEMENT : 07 - 03 - 2 018 / ORDER P ER : AMARJIT SINGH, ACCOUNTANT MEMBER : - THIS R EVENUE S APPEAL FOR A.Y. 1995 - 96 , AR ISES F ROM ORDER OF THE CIT(A) - III, BARODA DATED 27 - 05 - 2014 , IN PROCEEDINGS UNDER SECTION 143(3) R.W.S. 254 OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT 2. THE REVENUE HAS RAISED THE FOLLOWING GROUND S OF APPEAL : - 1. ON THE FACTS OF THE CASE AND ON THE CIRCU MSTANCES AND IN LAW, THE CIT (A) - III BARODA ERRED IN PASSING A STATUS - QUO ORDER RUNNING OVER EYES ON THE DIRECTIONS OF HON'BLE ITAT 'D' BENCH AHEMDABAD VIDE ORDER DATED 14.12.2012 FOR A FRESH DECISION IN THE LIGHT OF THE DECISION OF HON'BLE ITAT SPECIAL BE NCH MUMBAI IN THE CASE OF INDUSIND BANK LTD. 2. WHILE DELETING THE ADDITION OUT OF THE CLAIM OF DEPRECIATION OF RS. 50,03,031/ - THE CIT (A) - III IGNORED THE DICTUM LAID DOWN BY HON'BLE ITAT SPECIAL BENCH IN THE CASE OF INDUSL ND BANK LTD THAT IT IS THE LESS EE WHO IS ACTUAL I T A NO . 2182 / A HD/20 14 A SSESSMENT YEAR 1995 - 96 I.T.A NO. 2182 /AHD/20 14 A.Y. 1995 - 96 PAGE NO ACIT VS. M/S. PARAMOUNT TECHNOLOGIES LTD. 2 & REAL OWNER OF THE ASSET AND THE LESSOR IS NOT ENTITLED FOR CLAIM OF DEPRECIATION AND SUCH RATIO IS ALSO UPHELD BY HON'BLE SUPREME COURT IN THE CASE OF ASEA BROWN BOVERI LTD REPORTED IN 154 TM 512 (SC). 3. ON THE FACTS OF THE CASE AND ON THE CIRCUMSTANCES AND IN LAW, THE CIT (A) - III BARODA HAS ERRED IN DELETING THE ADDITION OUT OF THE CLAIM OF DEPRECIATION OF RS. 50,03,031 / - IGNORING THE FACT THAT WITHOUT TAKING DELIVERY OF ASSETS, THE ASSESSEE LEASED BACK THE ASSET TO RAJASTHAN STATE ELEC TRICITY BOARD, FROM WHOM THE ASSETS WERE PURCHASED AND THIS WAS SHAM TRANSACTION AS ALSO SUPPORTED BY HON HIGH COURT OF MADRAS IN THE CASE OF MARG CONSTRUCTION LTD REPORTED IN 45 TAXMANN.COM 430 [2014] AND BY ITAT MUMBAI BENCH T, IN THE CASE OF HATHWAY INV ESTMENTS [2013]. 3 . ALL THE GROUNDS OF APPEAL OF THE ASSESSEE ARE INTERCONNECTED THEREFORE THE SAME ARE ADJUDICATED TOGETHER. THE BRIEF FACTS OF THE CASE IS THAT I N THIS CASE ASSESSMENT U/S. 143(3) WAS COMPLETED ON 31 ST MARCH 1995 AND TOTAL INCOME WAS DETERMINED AT RS. 48, 59 ,527 / - AFTER DIS ALLOW ING THE CLAIM OF DEPRECIATION OF RS. 50 , 03 ,031/ - AND FINANCIAL CONSULTING CHARGES OF RS. 2 LACS. AGGRIEVED ASSESSEE HAS FILED APPEAL BEFORE THE LD. CIT(A) WHO HAS DISMISSED THE APPEAL OF THE ASSESSEE. SUBSEQ UENTLY, THE ITAT HAS RESTORED THE MATTER BACK TO THE FILE OF CIT(A) FOR RE - ADJUDICATION . THEREAFTER, THE CIT(A) VIDE ORDER DATED 15 TH JAN, 2009 HAS CONFIRMED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER. THE ITAT HAS AGAIN VIDE ITS ORDER DATED 15 TH DEC EMBER, 2012 RESTORED THE MATTER BACK TO THE ASSESSING OFFICER WITH THE FOLLOWING OBSERVATIONS . '............IT WAS SUBMITTED BY THE LD AR THAT NOW , THERE IS A DECISION OF SPECIAL BENCH OF THE TRIBUNAL AVAILABLE ON THIS ISSUE REGARDING ALLOWABILITY OF DEPR ECIATION RENDERED IN THE CASE OF INDUSIND BANK LTD VS ADDL. CIT AS REPORTED IN ITA NO. 6566/MUM/ 2002 AND IT 6O6/MUM/2OO3 DATED 14.03.2012(8B). HE FURTHER SUBMITTED THAT THIS DECISION OF SPECIAL BENCH OF THE TRIBUNAL IS A RECENT DECISION RENDERED ON 14.03. 2012 AND HENCE, THE SAME WAS NOT AVAILABLE AT THE TIME WHEN LD. CIT(A) DECIDED THIS ISSUE IN THE YEAR 2009 AND , THEREFORE, THERE SHOULD BE AFRESH DECISION IN ALL THESE CASES IN THE LIGHT OF THIS DECISION OF SPECIAL BENCH OF THE TRIBUNAL. LD D R OF THE REV ENUE ALSO AGREED TO THIS PROPOSITION AND HENCE, WE SET ASIDE THE ORDER OF LD CIT (A) IN ALL THESE CASES AND RESTORE THE MATTER BACK TO THE FILE OF THE AO FOR FRESH DECISION. THE AO SHOULD DECIDE THE ISSUE REGARDING ALLOW ABILITY OF DEPRECIATION IN THE LIGH T OF THIS DECISION OF SPECIAL BENCH OF THE TRIBUNAL CITED BY THE LD. AR BEFORE US AS NOTED ABOVE AND CONSEQUENTLY, HE SHOULD ALSO DECIDE AFRESH THE ISSUE REGARDING ALLOW ABILITY OF INTEREST/ LEASE CHARGES PAYMENT AND I.T.A NO. 2182 /AHD/20 14 A.Y. 1995 - 96 PAGE NO ACIT VS. M/S. PARAMOUNT TECHNOLOGIES LTD. 3 ALSO ABOUT ALLOW ABILITY OF CONSULTANCY CHARGES OF RS 2 LACS IN ONE OF THE APPEALS. NEEDLESS TO SAY, THE AO SHOULD PROVIDE REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE.' 4. DURING THE COURSE OF SET ASIDE PROCEEDINGS, T HE ASSESSEE HAS SUBMITTED BEFORE THE ASSESSING OFFICER THAT THE I MPUGNED ISSUES ARE COVERED IN ITS FAVOUR BY T HE JUDGMENT OF HON BLE HIGH COUR T OF GUJARAT VIDE APPEAL NO. 166 OF 200 DATED 17 TH JULY, 2012 FOR ASSESSMENT YEAR 1995 - 96 IN ITS OWN CASE. THE ASSESSING OFFICER HA D NOT ACCEPTED THE SUBMISSION OF THE ASSESSEE AND STATED THAT T HESE TRANSACTIONS WERE ONLY OF FINANCIAL NATURE. HE HAD FURTHER STATED THAT IN RESPECT OF SIMILAR ADDITION FOR ASSESSMENT YEAR 1996 - 97 THE REVENUE HA D FILED APPEAL BEFORE THE HON,BLE HIGH AGAINST THE DECISION OF ITAT. 5 . AGGRIEVED ASS ESSEE FILED APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) HAS ALLOWED THE APPEAL BY OBSERVING AS UNDER: - 4. I HAVE CONSIDERED THE APPELLANT'S SUBMISSIONS AND THE ASSESSING OFFICER'S OBSERVATIONS. SINCE ON IDENTICAL FACTS THE ISSUE HAS BEEN DECIDED IN FAV OUR OF THE APPELLANT'S SISTER CONCERN M/S. PARAMOUNT LTD BY THE HON'BLE HIGH COURT OF GUJARAT AND ALSO IN VIEW OF THE FACT THAT THE APPELLATE ORDERS IN THE CASE OF PARAMOUNT LTD HAD BEEN RELIED UPON BY THE CIT(A) IN THE APPELLATE ORDER AGAINST THE ORIGINAL ASSESSMENT ORDERS IN THE CASE OF THE APPELLANT, HEN CE, THE ISSUES STAND COVERED IN FAVOUR OF THE APPELLANT FOR ALL THESE 3 ASSESSMENT ORDERS. IT MAY BE MENTIONED HERE THAT SALE AND LEASE BACK TRANSACTIONS HAVE TAKEN PLACE ONLY IN THE ASSESSMENT YEAR 1995 - 96 AND THE PAYMENTS OF INTEREST TO WIPRO FINANCE LTD. MADE BY THE APPELLANT IN THE SUBSEQUENT ASSESSMENT YEARS ARE ON ACCOUNT OF SUCH TRANSACTIONS MADE IN A.Y. 1995 - 96 ONLY. SINCE THE SALE AND LEASE BACK TRANSACTION MADE IN A.Y. 1995 - 96 HAS BEEN HELD TO BE GENUINE TRANSACTIONS, HENCE THE ASSESSING OFFICER IS DIRECTED TO ALLOW ALL THE EXPENSES IN THE NATURE OF DEPRECIATION, FINANCE CHARGES, CONSULTANCY CHARGES, ETC PAID BY THE APPELLANT IN ALL THESE 3 ASSESSMENT YEARS. HENCE, ALL THE ADDITIONS MADE IN ALL TH ESE 3 ASSESSMENT YEARS ARE DIRECTED TO BE DELETED. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD CAREFULLY. IN VIEW OF THE AFORESAID FACTS THE LD. CIT(A) HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE AFTER FOLLOW ING TH E DE CISION OF M/S P ARAMOUNT LTD ON IDEN TICAL FACTS DECIDED BY THE HON BLE HIGH COURT OF I.T.A NO. 2182 /AHD/20 14 A.Y. 1995 - 96 PAGE NO ACIT VS. M/S. PARAMOUNT TECHNOLOGIES LTD. 4 GUJARAT . THE LD . DR COU LD NOT CONTROVERT THE SAME WITH DISTINGUIS HABLE DECISION , THEREFORE, WE DO NOT FIND ANY REASON TO INTERFERE IN THE DECISION OF LD. CIT(A). ACCORDI NGLY THE APPEAL OF THE REVENUE STANDS DISMISSED . 7. IN THE RESULT , THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PR ONOUNCED IN THE OPEN C OURT ON 07 - 03 - 201 8 SD/ - SD/ - ( RAJPAL YADAV ) ( AMARJIT SINGH ) JUDICIAL MEMBER AC COUNTANT MEMBER AHMEDABAD : DATED 07 /03 /2018 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,