M/s Vision Enterprises., Panaji V. Income Tax Officer, Ward-1 (2), Panaji., Panaji

ITA 241/PAN/2015

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 1398 (ITAT-PANAJI)
• Duration Of Justice: 3 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-09-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 09-09-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 22-05-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAMESH S MUTAGAR
• Keywords: Depreciation; Question of law
• Section: 56(2); 32; 147; 10; 2; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH, PANAJI BEFORE SHRI N.S. SAINI , HONBLE ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, HONBLE JUDICIAL MEMBER ITA NO S . 241 & 242 /PNJ/201 5 (ASST. YEAR S : 20 1 0 - 1 1 & 2011 - 12 ) M/S. VISION ENTERPRISES, VISION HOUSE NO. 179/C - 1, JOSE FALCAO ROAD, BAIRO ALTO DOS PILOTOS, PANAJI GOA. VS. IT O , WARD - 1(2), PANAJI GOA. PAN NO. AAFFV 9338 R (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI JITENDRA JAIN ADV. DEPARTMENT BY : SHRI RAMESH S. MUTAGAR - D R DATE OF HEARING : 09 / 0 9 /2015 . DATE OF PRONOUNCEMENT : 09 / 0 9 /201 5 . O R D E R PER N.S. SAINI , ACCOUNTANT MEMBER TH E S E ARE THE APPEAL S FILED BY THE ASSESSEE AGAINST THE SEPARATE ORDER S OF COMMISSIONER OF INCOME TAX (APPEALS) - 1, PANAJI , PASSED IN ASSESSMENT YEARS 2010 - 11 & 2011 - 12, BOTH DATED 0 3 /0 3 /201 5 . 2. AT THE OUTSET AUTHORIZED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT ASSESSEE HAS FILED ADDITIONAL GROUNDS VIDE APPLICATION DATED 14/08/2015 AND SUBMITTED THAT THEY AS UNDER: - 5. IN THE PECULIAR CIRCUMSTANCES OF THE CASE, THE ASSESSEE PRAYS FOR ALLOWING THE ADDITIONAL GROUND OF APPEAL WHICH IS AS UNDER: THE INCOME TAX OFFICER, WARD 1(2), PANAJI GOA ERRED IN REFERRING THE ISSUE OF VALUATION OF LAND AND BUILDING U/S. 142A T O THE DEPARTMENTAL VALUER AS THE VALUATION IS 2 ITA NO S . 241 & 242 /PNJ/201 5 PERMISSIBLE ONLY IN THE MATTERS RELATED TO SECTIONS 69, 69A, 69B & 56(2) OF I. T. ACT 6. THE ABOVE GROUND OF APPEAL DOES NOT REQUIRE EXAMINATION OF FRESH FACTS FOR INVESTIGATION AS THE SAME WERE ALREADY BROU GHT ON RECORD OF THE ASSESSING OFFICER AND COMMISSIONER OF INCOME TAX (APPEALS) AND IT IS PURELY A LEGAL GROUND BASED ON FACTS AS EXISTING IN THE MATTER UNDER APPEAL. 7. THE RULE 11 OF INCOME - TAX (APPELLATE TRIBUNAL) RULES PERMITS THE ADMISSION OF ADDITI ONAL GROUND OF APPEAL IN THE MATTER PENDING BEFORE THE INCOME TAX APPELLATE TRIBUNAL, FURTHER THE SUPREME COURT IN THE MATTER OF NATIONAL THERMAL POWER CO. LTD. V. COMMISSIONER OF INCOME - TAX 229 ITR 383 HAS HELD THAT TRIBUNAL HAS JURISDICTION TO EXAMINE A QUESTION OF LAW WHICH THOUGH NOT AROSE BEFORE LOWER AUTHORITIES BUT AROSE BEFORE IT FROM FACTS AS FOUND BY LOWER AUTHORITIES AND HAVING A BEARING ON TAX LIABILITY OF ASSESSEE. HE SUBMITTED THAT ALTHOUGH THESE GROUNDS OF APPEAL WERE RAISED BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS), BUT COMMISSIONER OF INCOME TAX (APPEALS) HAS NOT ADJUDICATED THE SAME. 3 . DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT HE HAD NO OBJECTION FOR ADMITTING THE ADDITIONAL GR O UNDS OF APPEAL NOW RAISED BY THE ASSESSEE. 4 . THEREFORE, THE ADDITIONAL GROUNDS OF THE ASSESSEE RAISED IN ASSESSMENT YEAR 2010 - 11 IN I.T.A.NO. 241/PNJ/2015 WERE ADMITTED BY THE BENCH AND THE PARTIES WERE ALLOWED TO MAKE THEIR SUBMISSIONS THEREON. 5. AUTHORIZED REPRESENTATIVE OF THE ASSESSEE POINTED O UT FROM FORM 35 OF THE APPEAL MEMO FILED BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) THAT THE ABOVE ADDITIONAL GROUNDS OF APPEAL WERE RAISED BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) AS GROUND NOS. 6 & 7, WHICH READS AS UNDER: - 6. IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE INCOME TAX OFFICER, WARD 1(2), PANAJI GOA ERRED IN REFERRING THE VALUATION OF LAND AND BUILDING OWNED BY THE APPELLANT FIRM 3 ITA NO S . 241 & 242 /PNJ/201 5 TO THE VALUATION CELL OF I.T. DEPT. U/S 142 A OF I.T. ACT FOR THE PURPOSE OF DISALLOW ING THE DEPRECIATION ON VALUE OF HOTEL BUILDING ALTHOUGH THE SAID SECTION CANNOT BE INVOKED BY THE ASSESSING OFFICERS FOR THE ABOVE PURPOSE. 7. IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE INCOME TAX OFFICER, WARD 1(2), PANAJI GOA ERRED IN REFERRING TH E VALUATION OF LAND AND BUILDING OF THE APPELLANT FIRM TO THE VALUATION CELL OF I.T. DEPT. FOR THE PURPOSE OF DETERMINING THE VALUES OF LAND AND BUILDING SEPARATELY EVEN WHEN THE PROVISIONS OF SECTION 32 AND 43(1) OF I.T. ACT DO NOT AUTHORIZE THE ASSESSING OFFICER, TO REFER TO THE VALUATION CELL OF I.T. DEPT. THE VALUATION OF FIXED ASSETS OF ABOVE NATURE. 6 . SINCE THE SPECIFIC GROUNDS OF APPEAL RAISED BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) WERE NOT ADJUDICATED BY THE COMMISSIONER OF INCOME TAX (A PPEALS), THEREFORE, WE RESTORE THESE GROUNDS OF APPEAL TO THE FILE OF THE COMMISSIONER OF INCOME TAX (APPEALS) FOR ADJUDICATING THE SAME AFTER ALLOWING REASONABLE OPPORTUNITY OF HEARING TO BOTH THE PARTIES. THUS, THESE ADDITIONAL GROUNDS OF APPEAL ARE ALL OWED FOR STATISTICAL PURPOSES. 7 . AUTHORIZED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT THE GROUND N O .1 OF THE APPEAL RAISED IN ASSESSMENT YEAR 2010 - 11 READS AS UNDER: - 1. THE INCOME TAX OFFICER WARD 1(2) PANAJI - GOA ERRED IN REOPENING THE CASE OF THE APPELLANT FIRM UNDER SECTION 147 OF THE ACT AND THE CIT(A) ERRED IN CONFIRMING THE ABOVE ACTION OF THE ASSESSING OFFICER IN HIS APPELLATE ORDER PASSED FOR THE YEAR . 8 . AT THE TIME OF HEARING HE SUBMITTED THAT HE IS NOT PRE SSING THIS GROUND OF APPEAL AND ALSO MADE AN ENDORSEMENT TO THIS EFFECT IN FORM 36 OF THE APPEAL MEMO FILED BEFORE THE TRIBUNAL. THEREFORE, THIS GROUND OF APPEAL OF THE ASSESSEE IS DISMISSED AS NOT PRESSED. 9. GROUND NOS. 2 TO 5 OF THE APPEAL IN ASSESSME NT YEAR 2010 - 11 ARE AS UNDER: - 2. THE INCOME TAX OFFICER WARD 1(2) PANAJI GOA ERRED IN MAKING DISALLOWANCE OF DEPRECIATION OF RS. 1,51,66,399/ - IN 4 ITA NO S . 241 & 242 /PNJ/201 5 HIS ASSESSMENT ORDER PASSED FOR THE YEAR AFTER REOPENING OF THE CASE OF THE APPELLANT FIRM U/S. 147 OF THE ACT AND THE CIT (A) ERRED IN NOT DIRECTING THE ABOVE ASSESSING OFFICER TO DELETE THE DISALLOWANCE OF RS 1,51,66,399/ - MADE IN THE ASSESSMENT ORDER IN ENTIRETY . 3. THE CIT (A) ERRED IN DIRECTING THE ASSESSING OFFICER TO ADOPT THE VALUE OF LAND AS RS. 12,62,92,000/ - WHICH WAS DETERMINED BY THE VALUATION CELL OF INCOME TAX DEPARTMENT INSTEAD OF RS. 10,00,00,000/ - AS DETERMINED BY THE GOVERNMENT, APPROVED VALUER APPOINTED BY THE APPELLANT FIRM, FOR THE PURPOSE OF DISALLOWING THE DEPRECIATION ON THE ABOVE VALUE OF THE LAND FORMING PART OF THE BUILDING. 4. IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE CIT (A) ERRED IN DIRECTING THE ASSESSING OFFICER TO ALLOW THE DEPRECIATION ON THE VALUE OF COMMERCIAL RIGHTS WHICH FALL IN THE CATEGORY OF INTANGIBLE ASSETS AT THE RATE OF 10% INSTEAD OF AT THE RATE OF 25% SPECIFIED IN INCOME TAX RULES. 5. IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE CIT (A) WAS UNJUSTIFIED IN DIRECTING THE ASSESSING OFFICER TO ALLOW THE DEPRECIATION ON COMMERCIAL RIGHTS AT THE RATE OF 10% WHICH IS APPLICABLE TO BUILDINGS ON THE GROUND THAT THE HIGHER RATE OF 25% WHICH IS APPLICABLE TO COMMERCIAL RIGHTS WAS NOT CLAIMED BY THE APPELLANT FIRM IN ITS RETURN OF INCOME ALTHOUGH THE EXPLANATION 5 TO SECTION 32(1)(II) OF THE ACT PROVIDES THAT THE DEPRECIATION U/S 32 IS AVAILABLE TO ANY ASSESSEE AT PRESCRIBED RATES WHETHER OR NOT THE SAID ASSESSEE HAS CLAIMED THE DEDUCTION FOR DEPRECIATION IN COMPUTING TOTAL INCOME. GROUND NOS. 2 TO 4 OF THE APPEAL IN ASSESSMENT YEAR 2011 - 12 ARE AS UNDER: - 2. THE CIT (A) ERRED IN DIRECTING THE ASSESSING OFFICER TO ADOPT THE VALUE OF LAND AS RS. 12,62,92,000/ - WHICH WAS DETERMINED BY THE VALUATION CELL OF INCOME TAX DEPARTMENT INSTEAD OF RS. 10,00,00,000/ - AS DETERMINED BY THE GOVERNMENT, APPROVED VALUER APPOINTED BY THE APPELLANT FIRM, FOR THE PURPOSE OF DISALLOWING THE DEPRECIATION ON THE ABOVE VALUE OF THE LAND FORMING PART OF THE BUILDING. 3 . IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE CIT (A) ERRED IN DIRECTING THE ASSESSING OFFICER TO ALLOW THE DEPRECIATI ON ON THE VALUE OF COMMERCIAL RIGHTS WHICH FALL IN THE CATEGORY OF INTANGIBLE ASSETS AT THE RATE OF 10% INSTEAD OF AT THE RATE OF 25% SPECIFIED IN INCOME TAX RULES. 5 ITA NO S . 241 & 242 /PNJ/201 5 4. IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE CIT (A) WAS UNJUSTIFIED IN DIRECTING THE ASSESSING OFFICER TO ALLOW THE DEPRECIATION ON COMMERCIAL RIGHTS AT THE RATE OF 10% WHICH IS APPLICABLE TO BUILDINGS ON THE GROUND THAT THE HIGHER RATE OF 25% WHICH IS APPLICABLE TO COMMERCIAL RIGHTS WAS NOT CLAIMED BY THE APPELLANT FIRM IN ITS RETURN OF INCOME ALTHOUGH THE EXPLANATION 5 TO SECTION 32(1)(II) OF THE ACT PROVIDES THAT THE DEPRECIATION U/S 32 IS AVAILABLE TO ANY ASSESSEE AT PRESCRIBED RATES WHETHER OR NOT THE SAID ASSESSEE HAS CLAIMED THE DEDUCTION FOR DEPRECIATION IN COMPUTING TOTAL INCOME . 10 . THE ABOVE GROUNDS OF APPEAL ARE ON THE MERITS OF ALLOWING OF DEPRECIATION. AS WE HAVE RESTORED THE ADDITIONAL GROUNDS OF APPEAL TO THE FILE OF THE COMMISSIONER OF INCOME TAX (APPEALS) WHEREIN THE ASSESSEE HAS CHALLENGED THE JURISDICTION OF THE ASSE SSING OFFICER TO REFER THE MATTER TO THE DVO FOR DETERMINING THE VALUATION OF LAND AND BUILDING AND AS THE ISSUE OF DEPRECIATION IS RELATED TO THE VALUATION OF LAND AND BUILDING ON WHICH THE DEPRECIATION IS ALLOWED TO THE ASSESSEE , T HEREFORE, THESE GROUND S OF APPEAL BEING CONSEQUENTIAL TO THE ADDITIONAL GROUNDS OF APPEAL ARE ALSO RESTORED TO THE FILE OF THE COMMISSIONER OF INCOME TAX (APPEALS) FOR ADJUDICATING THE SAME AFRESH AS PER LAW AFTER ADJUDICATING THE ADDITIONAL GROUNDS OF APPEAL. THUS, THESE GROU NDS OF APPEAL OF THE ASSESSEE RAISED IN ASSESSMENT YEARS 2010 - 11 & 2011 - 12 ARE ALSO ALLOWED FOR STATISTICAL PURPOSES . 11 . IN THE RESULT, APPEAL S OF THE ASSESSEE F O R ASSESSMENT Y E A R 2 0 1 0 - 1 1 I S P A R T L Y A L L O W E D F O R S T A T I S T I C A L P U R P O S E A N D F O R ASSESSMENT Y E A R 2 0 1 1 - 1 2 I S ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE COURT AT THE CLOSE OF THE HEARING ON WEDNESDAY , THE 0 9 TH DAY OF SEPTEMBER , 201 5 AT GOA . S D / - S D / - (GEORGE MATHAN) (N.S.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 0 9 TH SEPTEMBER , 201 5 . 6 ITA NO S . 241 & 242 /PNJ/201 5 VR/ - COPY TO: 1 . THE ASSESSEE. 2 . THE REVENUE. 3 . THE CIT 4 . THE CIT(A) 5 . THE D.R . 6 . GUARD FILE. BY ORDER ASSISTANT REGISTRAR I.T.A.T., PANAJI 7 ITA NO S . 241 & 242 /PNJ/201 5 DATE INITIAL ORIGINAL DICTATION PAD & DRAFT ARE ENCLOSED IN THE FILE 1. DRAFT DICTATED ON 0 9 .0 9 .2015 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 09 .09 .2015 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 09 /0 9 /2015 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER 09 /0 9 /2015 JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 0 9 /0 9 /2015 SR.PS 6. DATE OF PRONOUNCEMENT 09 /0 9 /2015 SR.PS 7. FILE SENT TO THE BENCH CLERK 09 /0 9 /2015 SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER