ITD CEMINDIA JV, MUMBAI V. ASST COT 19(2), MUMBAI

ITA 2351/MUM/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 4572 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-01-2016
• Appeal Filed By: Assessee
• Bench Allotted: I
• Next Hearing Date: 07-12-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 08-04-2014
• Court: TRIBUNAL
• Department Lawyers: SATYANARAYANA RAJU
• Assessee Lawyers: ANU KISNADWALLA JITENDRA SHAH
• Keywords: Depreciation; Principle of natural justice; Revenue expenditure
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL I BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI SANDEEP GOSAIN, JUDICIAL MEMBER I.T.A. NO.2351/M/2014 (ASSESSMENT YEAR: 2010 - 2011 ) M/S. ITD CEMINDIA JV, NATIONAL PLASTIC BUILDING, A - SUBHASH ROAD, PARANJAPE B SCHEME, VILE PARLE (E), MUMBAI 400 057. / VS. ACIT - 19(2), 3 RD FLOOR, PIRAMAL CHAMBERS, MUMBAI 400 012. ./ PAN : AAAA1305D ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SHRI VIJAY MEHTA & MR. ANU KISNADWALLA, JITENDRA SHAH / RESPONDENT BY : SHRI SATYANARAYANA RAJU, DR / DATE OF HEARING : 07.01.2016 / DATE OF PRONOUNCEMENT : 14 .01.2016 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE ASSESSEE ON 8.4.2014 IS AGAINST THE ORDER OF THE CIT (A) - 30, MUMBAI DATED 20.2.2014 FOR THE ASSESSMENT YEAR 2010 - 2011. IN THIS APPEAL, ASSESSEE RAISED THE FOLLOWING GROUNDS WHICH READ AS UNDER: 1. THE HONBLE CIT (A) HAS ERRED IN LAW AND FACTS IN PASSING THE ORDER U/S 250 OF THE ACT IN GROSS VIOLATION OF PRINCIPLES OF NATURAL JUSTICE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD CIT (A) HAS ERRED IN FACTS AND IN LAW IN UPHOLDING THE ACTION OF THE AO IN DISALLOWING REIMBURSEMENT OF SALARY AND RELATED EXPENSES TO THE TUNE OF RS. 4,33,33,687/ - U/S 40(A)(IA) OF THE ACT. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD CIT (A) HAS ERR ED N FACTS AND IN LAW IN UPHOLDING THE ACTION OF THE AO IN DISALLOWING EXPENSES ON ACCOUNT OF SHUTTERING MATERIAL OF RS. 54,76,488/ - AS REVENUE EXPENDITURE. 4. ON THE FACTS AND IN THE CIRC UMSTANCES OF THE CASE, THE LD CIT (A) HAS ERRED IN FACTS AND IN LAW IN REJECTING THE CLAIM OF THE ASSESSEE FOR GRANT OF DEPRECIATION ON ENTIRE SHUTTERING MATERIAL OF RS. 5,61,57,021/ - INSTEAD OF LIMITING DEPRECIATION ON RS. 54,76,488/ - . 2 2. AT THE OUTSET, LD COUNSEL FOR THE ASSESSEE BROUGHT OUR ATTENTION TO THE ABOVE GROUNDS AND MENTIONED THAT GROUND NO.1 IS NOT PRESSED. ACCORDINGLY, THE SAID GROUND NO.1 IS DISMISSED AS NOT PRESSED . 3. GROUND NO.2 RELATES TO THE DISALLOWANCE OF RS. 4,33,33,68 7/ - ON ACCOUNT OF REIMBURSEMENT OF SALARY AND RELATED EXPENSES MADE U/S 40(A)(IA) OF THE ACT. BRIEFLY STATED RELEVANT FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN ASSOCIATION OF PERSONS (AOP) HAVING A JOINT VENTURE (JV) AGREEMENT WITH ITD CEMENTATION IN DIA LIMITED, AN INDIAN COMPANY, AND ITALIAN - THAI DEVELOPMENT PUBLIC COMPANY LIMITED, A FOREIGN ENTERPRISE. ASSESSEE IS ENGAGED IN THE BUSINESS OF HIGHWAY CONSTRUCTIONFILED THE RETURN OF INCOME DECLARING THE TOTAL INCOME OF RS. NIL AFTER SETTING OFF OF C URRENT YEAR LOSS OF RS. 60,47,156/ - . THE CASE WAS SELECTED FOR SCRUTINY THROUGH CASS. AO COMPLETED THE ASSESSMENT U/S 143(3) OF THE ACT AND THE ASSESSED INCOME WAS DETERMINED AT RS. 4,83,75,711/ - . IN THE ASSESSMENT, AO MADE CERTAIN DISALLOWANCES AND THE DISALLOWANCE OF RS. 4,33,33,687/ - MADE U/S 40(A)(IA) OF THE ACT ON ACCOIUNT OF SALARY RELATED TO EMPLOYEES OF ITD CEMENTATION INDIA LIMITED IS ONE OF THEM, WHICH IS THE SUBJECT MATTER OF GROUND NO.2 OF THE INSTANT APPEAL. AGGRIEVED WITH THE SAID DECISION , ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, CIT (A) FOLLOWING HIS OWN ORDER ON IDENTICAL GROUND FOR THE AY 2009 - 2010, DISMISSED THE ASSESSEES APPEAL. AGAIN AGGRIEVED WI TH THE SAID ORDER OF THE CIT (A), ASSESSEE IS IN FURTHER APPEAL BEFORE THE TRIBUNAL BY RAISING THE INSTANT GROUND NO.2. 4. BEFORE US, LD COUNSEL FOR THE ASSESSEE NARRATED THE ABOVE MENTIONED FACTS AND SUBMITTED THAT AN IDENTICAL ISSUE WAS CAME UP FOR ADJ UDICATION BEFORE THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE AY 2009 - 2010 AND THE TRIBUNAL DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE BY FOLLOWING THE ITATS ORDER FOR THE AY 2009 - 10. PARA 7 OF THE SAID TRIBUNALS ORDER DATED 4.11.2015 IS RELEVANT IN THI S REGARD. AFTER HEARING BOTH THE PARTIES AND ON PERUSAL OF THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS THE CITED DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE AY 2009 - 2010 (SUPRA) IN ASSESSEES OWN CASE, WE FIND PARA 7 IS RELEVANT IN THIS R EGARD. CONSIDERING THE SIGNIFICANCE OF THE SAID PARA 7 OF THE TRIBUNALS ORDER DATED 4.11.2015 (SUPRA) AND FOR THE SAKE OF COMPLETENESS OF THIS ORDER THE SAID PARA 7 IS EXTRACTED AS UNDER: - 3 7. THE LD AR OF THE ASSESSEE FURTHER RELIED UPON THE JUDGMENT OF ASSESSEE OWN CASE IN RESPECT OF AY 2008 - 2009 BEING ITA NO.4335/MUM/2012, WHEREIN THE IDENTICAL ISSUES WERE RAISED AND THE SAME WAS DECIDED IN FAVOUR OF THE ASSESSEE VIDE JUDGMENT DATED 9.4.2014, THE ISSUES / GROUNDS RAISED IN THE PRESENT APPEAL AND THE AS SESSEES APPEAL IN RESPECT OF THE AY 2008 - 2009 ARE IDENTICAL AND RESPECTFULLY FOLLOWING THE JUDGMENT OF COORDINATE BENCH IN RESPECT OF THE ASSESSEE, THE GROUND NO.2 OF THE PRESENT APPEAL IS IDENTICAL TO THE GROUND NO. 2 OF THE EARLIER YEAR OF APPEAL............... 5. CONSIDERING THE ABOVE, WE ARE OF THE OPINION THAT THE IDENTICAL ISSUE HAS CONSISTENTLY BEEN DECIDED BY THE TRIBUNAL IN FAVOUR OF THE ASSESSEE. THEREFORE, RESPECTFULLY FOLLOWING THE EARLIER ORDERS OF THE TRIBUNAL ON THE SIMILAR ISSUE AS WELL AS FOLLOWING THE PRINCIPLES OF CONSISTENCY, WE DECIDE THE ISSUE INVOLVED IN GROUND NO.2 IN FAVOUR OF THE ASSESSEE. ACCORDINGLY, GROUND NO.2 RAISED BY THE ASSESSEE IS ALLOWED . 6. GROUND NO.3 AND 4 RELATE THE DISALLOWANCE OF EXPENSES OF RS. 54,76,488/ - ON ACCOUNT OF SHUTTERING MATERIAL AND DEPRECIATION THEREON. IN THIS REGARD, LD COUNSEL FOR THE ASSESSEE BROUGHT OUR ATTENTION TO THE SAID ORDER OF THE TRIBUNAL (SUPRA) IN ASSESSEES OWN CASE FOR THE AY 2009 - 2010, DATED 4.11.2015 AND MENTIONED THAT VIDE PARA 7, THE TRIBUNAL ADJUDICATED THE SIMILAR ISSUE AND REMANDED THE MATTER TO THE AOS FILE. AFTER HEARING BOTH THE PARTIES AND ON PERUSAL OF THE CONTENTS OF THE SAID PARA 7 OF THE TRIBUNALS ORDER (SUPRA), WE FIND THE SAME IS RELEVANT AND FOR THE SAKE OF COMPLETENESS OF THIS ORDER, RELEVANT LINES FROM THE SAID PARA 7 ARE EXTRACTED AS UNDER: - 7. ........ GROUND NO.3 AND 4 ARE IDENTICAL TO THE GROUND NO.6 OF THE APPEAL OF THE ASSESSEE FOR THE AY 2008 - 2009. THE GROUND NO.6 OF APPEAL ITA NO.4335/M UM/12 OF THE ASSESSEE WAS REMANDED TO THE FILE OF THE AO VIDE ORDER DATED 9.4.2014, HENCE THE PRESENT GROUND PERTAINING TO THE SHUTTERING MATERIAL IS ALSO REMANDED TO THE FILE OF THE AO, WITH THE DIRECTION TO DECIDE THE SAME IN ACCORDANCE WITH THE DIRECTIO N CONTAINED IN THE APPEAL ITA NO.4335/MUM/2012. 8. CONSIDERING THE ABOVE, WE ARE OF THE OPINION THAT THE IDENTICAL ISSUE HAS CONSISTENTLY BEEN ADJUDICATED BY THE TRIBUNAL AND THE MATTER WAS REMANDED IN THE EARLIER YEARS . THEREFORE, RESPECTFULLY FOLLOWING THE EARLIER ORDERS OF THE TRIBUNAL ON THE SIMILAR ISSUE AS WELL AS FOLLOWING THE PRINCIPLES OF CONSISTENCY, WE REMAND THE ISSUE INVOLVED IN GROUND NOS.3 & 4 OF THE PRESENT APPEAL . ACCORDINGLY, GROUND NO S . 3 AND4 RAISE D BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES . 4 ORDER PRONOUNCED IN T HE OPEN COURT ON 1 4 T H JANUARY, 2016. S D / - S D / - ( SANDEEP GOSAIN ) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; 14 .1.2016 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI