The DCIT, Circle-5, Ahmedabad V. M/s. Rasna Pvt. Ltd., Ahmedabad

ITA 25/AHD/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 72973 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 1 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-02-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 11-02-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 05-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P VAISHNAV
• Assessee Lawyers: PF JAIN
• Keywords: Depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH BEFORE: SRI D.K TYAGI, JUDICIAL MEMBER AND SHRI N.S. SAINI, ACCOUNTANT M EMBER DY. CIT, CIRCLE-5, AHMEDABAD (APPELLANT) VS RASNA P. LTD, 2 ND FLOOR, C.U. SHAH CHAMBERS, ASHRAM ROAD, AHMEDABD- 380009 PAN: AABCR5577P (RESPONDENT) REVENUE BY: SRI O.P. VAISHNAV, CIT-D.R . ASSESSEE BY: SRI P.F. JAIN, A.R. DATE OF HEARING : 11-02-2014 DATE OF PRONOUNCEMENT : 14-02-20 14 / ORDER PER : D.K. TYAGI, JUDICIAL MEMBER:- THIS IS THE REVENUES APPEAL AGAINST THE ORDER OF LD. CIT(A)-XI AHMEDABAD DATED 25-10-2010. ITA NO. 25/AHD/2011 ASSESSMENT YEAR 2007-08 I.T.A NO. 25/AHD/2011 A.Y. 2007-08 PAGE NO DCIT VS. RASNA P. LTD 2 2. REVENUE HAS TAKEN FOLLOWING EFFECTIVE GROUND:- 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE DISALLOWANCE OF RS. 8,05,08,113/- MADE ON ACCOUNT O F PROVISION FOR DAMAGED GOODS. 2. THE LD CIT(A) HAS ERRED IN LAW AND ON FACTS IN D ELETING THE DISALLOWANCE OF DEPRECIATION OF RS. 36,33,728/- ON INTANGIBLE ASSETS IN THE FORM OF NON-COMPETE TERRITORY RIGHTS. 3. THE FIRST GROUND RELATES TO DISALLOWANCE OF RS. 8,5,813/- MADE ON ACCOUNT OF PROVISION FOR DAMAGED GOODS. 4. LD. CIT(A) HAS DEALT THIS GROUND AS UNDER:- 2.2. I HAVE CONSIDERED THE SUBMISSIONS MADE BY THE A. R. OF THE APPELLANT AND THE OBSERVATIONS OF THE ASSE SSING OFFICER IN THE ASSESSMENT ORDER. I AM INCLINED TO ACCEPT THE CON TENTIONS PUT FORTH BY THE A. R. OF THE APPELLANT. SIMILAR ISSUE AROSE IN THE APPELLANT'S OWN CASE FOR EARLIER ASSESSMENT YEARS AND THE SAME HAS ALREADY BEEN DECIDED IN FAVOUR OF THE APPELLANT BY MY PREDECESSO R AS WELL AS HON'BLE JURISDICTIONAL I.T.A.T., AHMEDABAD. IN THE IMMEDIATELY PRECEDING A.Y. 2006-07, SIMILAR DISALLOWANCE WAS DE LETED BY MY PREDECESSOR VIDE HIS ORDER DATED 30-06- 09. THE TRI BUNAL VIDE ITS ORDER DATED 29-10-2009 IN ITA NO. 2491/AHD/2009, UP HELD THE ORDER OF CIT(A). HOWEVER, IN THE SUBSEQUENT ORDER DATED 0 9-07-2010 IN ITA NO. 1951/AHD/2008 FOR A.Y. 2005-06, TRIBUNALS FIND ING ON THIS ISSUE IS AS UNDER:- ' WE FIND THAT THE DETAILS OF ACTUAL EXPENDITURE IN CURRED IN THE SUBSEQUENT YEAR BY THE ASSESSEE OUT OF THE PROVISIO N OF RS. 54,41,218/- MADE DURING THE YEAR HAVE NOT BEEN BROU GHT ON RECORD. IN ABSENCE OF THE ABOVE, WE ARE UNABLE TO A DJUDICATE THE ISSUE COMPLETELY. WE. THEREFORE, RESTORE THE IS SUE BACK TO THE LEARNED ASSESSING OFFICER AND DIRECT HIM TO ADJUDIC ATE THE ISSUE AFRESH IN LIGHT OF THE DECISION OF THE TRIBUN AL QUOTED ABOVE AND AFTER ALLOWING PROPER OPPORTUNITY OF HEAR ING TO THE ASSESSEE. THUS, THIS GROUND OF APPEAL OF THE REVENU E IS ALLOWED FOR STATISTICAL PURPOSES.' I.T.A NO. 25/AHD/2011 A.Y. 2007-08 PAGE NO DCIT VS. RASNA P. LTD 3 2.2.1. IT IS SEEN THAT THE PROVISION MADE DURING TH E YEAR IS RS. 2,07,14,615/-. A. O. IS DIRECTED TO VERIFY THE ACTU AL EXPENDITURE INCURRED IN THE SUBSEQUENT YEAR BY THE APPELLANT OU T OF THE SAID AMOUNT. IF THE ACTUAL EXPENDITURE IS EQUAL TO OR MO RE THAN THE SAID SUM, HE SHALL DELETE THE ENTIRE DISALLOWANCE. IF TH E ACTUAL EXPENDITURE IS LESS THAN THE SAID SUM, DISALLOWANCE TO THE EXTE NT OF THE SHORT-FALL WILL SURVIVE, AND THE BALANCE DISALLOWANCE WILL GET DELETED. THUS, SUBJECT TO VERIFICATION, THIS GROUND OF APPEAL IS A LLOWED. SINCE LD. CIT(A) HAS FOLLOWED THE EARLIER ORDER OF THE TRIBUNAL FOR A.Y. 2005-06 IN ASSESSEES OWN CASE, WE ARE NOT INCLINED TO INTERFERE WITH THE ORDER OF LD. CIT(A) AND THE SAME IS HEREBY UPHELD. THIS GROUND OF REVENUES APPEAL IS DISMISSED. 5. GROUND NO. 2 RELATES TO DISALLOWANCE OF DEPRECIA TION OF RS. 36,33,728/- ON INTANGIBLE ASSETS IN THE FORM OF NO N-COMPETE TERRITORY RIGHTS. LD. CIT(A) HAS DEALT THIS GROUND AS UNDER:- 3.2. I HAVE CONSIDERED THE SUBMISSIONS MADE BY THE A. R. OF THE APPELLANT AND THE OBSERVATIONS OF THE ASSESSING OFF ICER IN THE ASSESSMENT ORDER. FOR THE A.Y. 2005-06, IN THE APPE LLANT'S OWN CASE, TRIBUNAL VIDE THE ORDER DATED 09-07-2010 IN ITA NO. 1951/AHD/2008 HELD AS UNDER:- ' 9. WE FIND THAT ON THE SAME ISSUE ON THE IDENTICA L FACTS THE LD. COMMISSIONER OF INCOME-TAX [APPEALS] HAD GIVEN THE SAME FINDING AS QUOTED ABOVE IN THE A.Y. 2003-04 AND 200 4-05. THE REVENUE IN THOSE YEARS HAD ACCEPTED THE FINDING OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) AND HAD NOT FI LED APPEAL BEFORE THE TRIBUNAL AGAINST THE FINDING OF T HE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS). THE LEARNED DEPARTMENTAL REPRESENTATIVE COULD NOT POINT OUT ANY DISTINGUISHING FEATURES IN THE ABOVE YEAR UNDER APP EAL. THEREFORE, WE DO NOT FIND ANY GOOD REASON TO INTERF ERE WITH THE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (AP PEALS) I.T.A NO. 25/AHD/2011 A.Y. 2007-08 PAGE NO DCIT VS. RASNA P. LTD 4 WHICH IS CONFIRMED AND THE GROUND OF APPEAL OF THE REVENUE IS DISMISSED. THEREFORE, FOLLOWING THE TRIBUNAL DECISION, A.O. IS DIRECTED TO DECIDE THE ISSUE IN THE LIGHT OF THE FINAL DECISION OF THE HONBLE HIGH COURT FOR A.Y. 2002-03. THIS GROUND OF APPEAL IS ALLOWED , SUBJECT TO THE FINAL DECISION OF HONBLE GUJARAT HIGH COURT. SINCE LD. CIT(A) HAS DECIDED THIS GROUND FOLLOWING THE ORDER OF THE TRIBUNAL FOR A.Y. 2005-06 IN ASSESSEES OWN CASE, W E ARE NOT INCLINED TO INTERFERE WITH THE ORDER OF LD. CIT(A) AND THE SAME IS HEREBY UPHELD. THIS GROUND OF REVENUES APPEAL IS ALSO DISMISSED. 6. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE AT CAPTION PAGE SD/- SD/- (N.S. SAINI) ( D.K. TYAGI) ACCOUNTANT MEMBER J UDICIAL MEMBER AHMEDABAD : DATED 14/02/2014 AK / COPY OF ORDER FORWARDED TO:- 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,