ACIT, Coimbatore V. K.V.Jayaraman, Coimbatore

ITA 255/CHNY/2014

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 8767 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-02-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 28-01-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 03-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GURU BHASHYAM
• Keywords: Depreciation
• Section: 143(3); 32

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : CHENNAI . . , . . , !' [BEFORE SHRI B.R. BASKARAN, ACCOUNTANT MEMBER AND SHRI S. S. GODARA, JUDICIAL MEMBER] ./ I.T.A.NO.255/MDS/2014 / ASSESSMENT YEAR : 2010-11 THE ASSTT. COMMISSIONER OF INCOME-TAX CIRCLE II COIMBATORE VS. SHRI K.V.JAYARAMAN 17B, SUNDARAM LAYOUT RAMANATHAPURAM COIMBATORE 641 045 [PAN ADJPV 7536 L ] ( #$ / APPELLANT) ( %&#$ /RESPONDENT) / APPELLANT BY : SHRI GURU BHASHYAM, JCIT /RESPONDENT BY : NONE / DATE OF HEARING : 28-01-2015 / DATE OF PRONOUNCEMENT : 4-02-2015 ' / O R D E R PER S.S.GODARA, JUDICIAL MEMBER THIS REVENUES APPEAL FOR ASSESSMENT YEAR 2010- 11, IS DIRECTED AGAINST ORDER OF THE COMMISSIONER OF INC OME-TAX (APPEALS)-I COIMBATORE DATED 20.11.2013, PASSED IN APPEAL NO.59 /12-13, DELETING DEPRECIATION DISALLOWANCE @ 50% OF ` 17,00,423/-, IN PROCEEDINGS UNDER SECTION 143(3) OF THE INCOME-TAX ACT, 1961 ( IN SHORT THE ACT). I.T.A.NO.255/14 :- 2 -: 2. FACTS OF THE CASE ARE IN A NARROW COMPASS. THE AS SESSEE/ AN INDIVIDUAL IS ENGAGED IN THE BUSINESS OF BORE WELLS, HOTEL AND REAL ESTATE. HE RUNS CHERAN HOTEL. THE ASSESSEE HAD F ILED HIS RETURN ON 15.10.2010 ADMITTING INCOME OF ` 24,89,490/-. THE ASSESSING OFFICER TOOK UP SCRUTINY. HE INTER ALIA NOTICED DEPRECIA TION CLAIM @ 10% AMOUNTING TO ` 34,00,845/- QUA THE AFORESAID HOTEL BUILDING. THE ASSESSEE PLEADED TO HAVE INAUGURATED THE HOTEL ON 7 .9.2009. HE PLACED ON RECORD INVITATION CARD AND OTHER EVIDENCE IN SUPPORT. IT WAS EXPLAINED THAT THE HOTEL BUSINESS HAD BEEN DONE FRO M JANUARY 2010. RELEVANT VAT DOCUMENTS AND RETURNS FILED WERE ENCLO SED. THE ASSESSING OFFICER OBSERVED IN ASSESSMENT ORDER DATE D 26.6.2012 THAT HOTEL IN QUESTION HAD BEEN PUT TO USE ONLY IN NOVEM BER 2009 I.E LESS THAN 180 DAYS U/S 32 OF THE ACT. THIS MADE HIM TO RESTRICT THE IMPUGNED DEPRECIATION CLAIM FROM ` 34,00,845/- TO 50% THEREOF I.E ` 17,00,423/-. THE BALANCE AMOUNT STOOD DISALLOWED/A DDED IN THE ASSESSEES TAXABLE INCOME. 3. THE CIT(A) HAS ACCEPTED THE ASSESSEES CONTENTIONS AS UNDER: I.T.A.NO.255/14 :- 3 -: 9. GROUND NOS.9, 10 & 11: THESE GROUNDS OF APPEAL IS REGARDING THE DISALLOWANCE OF DEPRECIATION. THE APPELLANT IN THE GROUNDS OF APPEAL SUBMITTED THAT THE CLAIM OF DEPRECIATION ON HOTEL CHERAN AT ` 34,00,845/- HAS BEEN DISALLOWED AT THE RATE OF 50% MERELY STATING THAT THE HOTEL WAS PUT TO USE ONLY FROM THE MONTH OF JANUARY. THE APPELLANT SUBMITS THAT THE HOTEL WAS PUT TO USE ON AND FROM 07.09.2009 I.E FROM THE DATE OF INAUGURATI ON. THE HOTEL WAS RUN ON TRIAL BASIS TO ADDRESS THE TEETHING TROU BLES AND ALSO TO KNOW THE TASTE OF THE PEOPLE FOR STABILIZING THE RE STAURANT. 10. I HAVE GONE THROUGH THE GROUNDS OF APPEAL AND ALSO THE ORDER OF THE ASSESSING OFFICER. THE ASSESSING OFFIC ER IN HIS ORDER STATED THAT THE HOTEL CHERAN WAS PUT TO USE ONLY IN THE MONTH OF NOVEMBER 2009 ONWARDS FOR LODGING PURPOSES AND FROM JANUARY 10 FOR RESTAURANT PURPOSES. THE ASSESSEE BEFORE THE AS SESSING OFFICER FILED THE INVITATION CARD SHOWING THAT THE HOTEL WAS INAUGURATED ON 07.09.2009. EVEN THOUGH THE HOTEL WAS OCCUPIED FOR LODGING PURPOSE FROM NOVEMBER 2009 AS STATED BY THE ASSESSING OFFICER IN THE ORDER, THE HOTEL WAS INAUG URATED ON 07.09.2009 AND THE HOTEL WAS FUNCTIONAL FROM 07.09.2009. THE ASSESSING OFFICER HAS NOT DISPUTED THE FACT THAT TH E HOTEL WAS INAUGURATED ON 07.09.2009. THE OCCUPATION OF ROOMS CANNOT BE A CRITERIA FOR ALLOWING DEPRECIATION ON THE ASSET I .E. THE HOTEL. THE ASSESSING OFFICER IS DIRECTED TO ALLOW THE CLAI M OF DEPRECIATION OF THE APPELLANT. THESE GROUNDS OF APP EAL ARE ALLOWED. THEREFORE, THE REVENUE IS IN APPEAL. 4. WE HAVE HEARD THE REVENUE AND GONE THROUGH THE CAS E FILE. THE PRESENT CASE WAS LISTED FOR HEARING ALONG WITH THE ASSESSEES TWO APPEALS I.T.A.NOS.2203 & 2204/MDS/2014 FOR ASSESSME NT YEARS 2009- 10 AND 2010-11. HE HAS FILED AN ADJOURNMENT LETTER . THE CASE RECORD REVEALS THAT HE HAD ALSO CHALLENGED THIS VERY CIT(A )S ORDER IN I.T.A.NO.2211/MDS/2013 ALLEGING LACK OF OPPORTUNITY OF HEARING. A CO- I.T.A.NO.255/14 :- 4 -: ORDINATE BENCH OF THE 'TRIBUNAL' RESTORED THE ISSU E BACK TO THE CIT(A). THE LOWER APPELLATE AUTHORITY HAS REITERATED THE EA RLIER FINDINGS IN ITS CONSEQUENTIAL ORDER DATED 1.8.2014 (SUBJECT MATTER OF APPEAL I.T.A.NO.2204/MDS/2014). IN THESE CIRCUMSTANCES, W E DO NOT FIND ANY JUSTIFICATION IN EITHER ACCEPTING THE ASSESSEES ADJOURNMENT PETITION OR THE REVENUES PLEA TO REMIT BACK THE CASE TO C IT(A). THEREFORE, THE PRESENT CASE FILE IS DELINKED AND BEING DECIDED SEPARATELY. 5. NOW WE COME TO THE MERITS OF THE CASE. THE REVENUE SUBMITS THAT THE ASSESSING OFFICER HAD RIGHTLY CONC LUDED THAT THE ASSESSEES HOTEL HAD BEEN PUT TO USE FOR LESS THAN 180 DAYS FOR DISALLOWING DEPRECIATION @ 50%(SUPRA). THE CIT(A) OBSERVES THAT THE ASSESSEES HOTEL HAD BEEN INAUGURATED ON 7.9.2009. IT HAS ALSO BEEN HELD THAT IT WAS FUNCTIONAL FROM THE SAID DATE ITSE LF. THE ASSESSING OFFICER APPEARS TO HAVE TAKEN INAUGURATION OF LODGI NG FACILITY DATE IN NOVEMBER 2009 FOR PARTLY DISALLOWING THE CLAIM. TH E REVENUE CHALLENGES THIS FINDING BY MAKING ORAL SUBMISSIONS ONLY. NO SUPPORTIVE EVIDENCE OR MATERIAL HAD BEEN FILED. THEREFORE, W E FIND NO REASON TO INTERFERE WITH THE LOWER APPELLATE ORDER. THE REV ENUES GROUNDS ARE REJECTED. I.T.A.NO.255/14 :- 5 -: 6. THE REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED ON WEDNESDAY, THE 4 TH OF FEBRUARY, 2015, AT CHENNAI. SD/- SD/- ( . . ) (B.R. BASKARAN) / ACCOUNTANT MEMBER ( . . ) (S. S. GODARA) ! '# / JUDICIAL MEMBER $! / CHENNAI %' / DATED: 4 TH FEBRUARY, 2015 RD '&'' ()'*) / COPY TO: ' 1 . / APPELLANT ' 2. / RESPONDENT 3. ' +',- / CIT(A) 4. ' + / CIT 5. )./' 0 / DR 6. /1'2 / GF