DCIT, Jaipur V. TCI INFRASTRUCTURE FINANCE LTD., Jaipur

ITA 256/JPR/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 5113 (ITAT-JAIPUR)
• Duration Of Justice: 5 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-09-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2010-2011
• Appeal Filed On: 18-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R A VERMA

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH HKKXPAN] YS[KK LNL; ,OA JH YFYR DQEKJ] U;KF;D LN L; DS LE{K BEFORE: SHRI BHAGCHAND, AM & SHRI LALIET KUMAR, JM VK;DJ VIHY LA- @ ITA NO. 256/JP/2016 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2010-11 DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-2, JAIPUR. CUKE VS. M/S TCI INFRASTRUCTURE FINANCE LTD., 2 ND FLOOR MEGHALAYA TOWERS, CHURCH ROAD, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ L A-@ PAN/GIR NO.: AAACT 9014 E VIHYKFKHZ @ APPELLANT IZR;FKHZ @ RESPONDENT JKTLO DH VKSJ LS @ REVENUE BY : SHRI R.A. VERMA (ADDL.CIT) FU/KZKFJRH DH VKSJ LS @ ASSESSEE BY : SHRI P.C. PARWAL (CA) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 22/08/2016 MN?KKS'K .KK DH RKJH[ K @ DATE OF PRONOUNCEMENT : 14/09/2016 VKNS'K @ ORDER PER: LALIET KUMAR, J.M. THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER DATED 17/12/2015 PASSED BY THE LD CIT(A), ALIGARH AT JAIPU R (CAMP OFFICE) FOR THE A.Y. 2010-11. THE SOLE EFFECTIVE GROUND OF APPEA L ARE AS UNDER:- 1 WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW, THE LD CIT(A) IS JUSTIFIED IN ALLOWIN G THE AMORTIZATION OF PROJECT DEVELOPMENT EXPENSES OF ITA 256/JP/2016_ DCIT VS. M/S TCI INFRASTRUCTURE FINANCE LTD. 2 RS. 1,21,06,000/- IN RESPECT OF PALI PROJECT WITHI N THE MEANING OF SECTION 35D. 2. THE LEARNED SR.D.R. ARGUED THAT THE ASSESSEE IS I N THE INFRASTRUCTURE PROJECTS. THE ASSESSEE DEVELOPED THES E FACILITIES ON THE BASIS OF BUILD, OPERATE AND TRANSFER THE PROJECT TO THE GOVERNMENT AS PER THE TERMS AND CONDITIONS OF THE CONTRACT. IT IS FUR THER ARGUED THAT THE TOTAL COST OF PROJECT IS TO BE ALLOWED PROPORTIONATE LY WITH RESPECT TO LENGTH OF CONTRACT BUT NOT AS PER THE METHOD FOLLOWE D BY THE ASSESSEE. THE ASSESSEE SHOULD FOLLOW THIS METHOD CONTINUOUSLY WI THOUT ANY CHANGE. THE ASSESSEE CLAIMED THESE EXPENDITURES IN LIMITED Y EARS NOT FOR THE WHOLE YEAR OF CONTRACT AND IT HAS BEEN REVISED EVERY YEAR FOR CLAIMING THE EXPENSES. THERE IS NO SCIENTIFIC METHOD TO CLAIM THE EXPENDITURE. THERE MUST BE CONSISTENCY FOR CLAIMING THE EXPENDITURE, T HEREFORE, HE SUPPORTED THE ORDER OF THE ASSESSING OFFICER. 3. ON THE OTHER HAND, THE LD AR OF THE ASSESSEE HAS SUBMITTED THAT THE HONBLE ITAT, JAIPUR BENCH, JAIPUR IN ASSESSEES OWN CASE BEING ITA NO. 337/JP/2012 AND 836/JP/2011 FOR THE A.Y. 2007-0 8 AND 2008-09 ORDER DATED 13/06/2014 HAVE DISMISSED BOTH THE APPE ALS OF THE REVENUE. BEING THE FACTS OF THE PRESENT CASE ARE IDENTICAL T O THE FACTS OF THE EARLIER YEARS CASES, THEREFORE, APPEAL OF THE ASSESSEE MAY BE ALLOWED. ITA 256/JP/2016_ DCIT VS. M/S TCI INFRASTRUCTURE FINANCE LTD. 3 4. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. THE CO ORDINATE BENCH HAS CONSIDERED THIS ISSUE IN ASSESSEES OWN CASE FOR THE APPEAL MENTIONED ABOVE. THE COORDINATE BENCH HAS PASSED THE SPEAKING ORDER IN THE APPEAL MENTIONED ABOVE AND ALLOWED THE APPEALS IN FA VOUR OF THE ASSESSEE. THE FINDINGS OF THE COORDINATE BENCH IS R EPRODUCED HEREUNDER: WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PA RTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. TH E EXPENSES CLAIMED BY THE ASSESSEE ARE NOT PRELIMINAR Y BUT WERE WORKED IN PROGRESS AS PER THE EXPENDITURE INCURR ED ON INFRASTRUCTURE BY IT. THESE EXPENSES ARE OF THE NATU RE OF REVENUE BUT CANNOT BE CLAIMED IN ONE YEAR BECAUSE T HE ASSESSEE IS TO BE RECOVERED ITS INVESTMENT AS WELL A S PROFITS FROM TOLL TAX UP TO TOLL PERIOD OF RESPECTIVE PROJE CT. THESE EXPENDITURES ARE NOT CAPITAL IN NATURE AS THE ASSET S OWNED BY THE STATE GOVT. AND USED FOR THE PURPOSE OF PUBL IC. THE ASSESSEE HAD CLAIMED THESE EXPENSES ON THE BASIS OF TERMS AND CONDITIONS OF THE CONTRACT AS WELL AS ESTIMATED TOLL RECEIPTS FOR THE PERIOD OF CONTRACT. WHEN THE ASSES SEE HAS SHOWN REVENUE RECEIPTS ACCORDINGLY THE EXPENDITURE I S TO BE ALLOWED ON MATCHING PRINCIPLE OF ACCOUNTANCY. IN ASS ESSEES OWN CASE BY THE COORDINATE BENCH IN ITA NO. 1545 TO 1547/JP/2008 A.YS 2003-04 TO 2005-06 AND ITA NO. 106/JP/2010 A.Y. 2006-07 HAS DECIDED VIDE ORDER DAT ED 22/5/2009 FOR A.YS 2003-04 TO 2005-06 AS UNDER:- ITA 256/JP/2016_ DCIT VS. M/S TCI INFRASTRUCTURE FINANCE LTD. 4 THE FIRST APPELLATE ORDER ON THE ISSUE IS REASONED ONE, TO WHICH WE FULLY CONCUR WITH, HENCE, THE SAME IS UPHE LD WITH THIS FINDING THAT THE A.O., WHOSE APPROACH HAS BEEN RELIED UPON BY THE LD. D.R. BEFORE US, WAS NOT JUSTIFIED I N DISALLOWING THE ABOVE CLAIMED AMORTIZATION OF EXPEN SES INCURRED ON THE DEVELOPMENT OF THE ABOVE INFRASTRU CTURE PROJECTS. THE GROUNDS ARE ACCORDINGLY REJECTED. AFTER RESPECTFULLY FOLLOWING THE COORDINATE BENCH DE CISION IN ASSESSEES OWN CASE AND FACTS DISCUSSED ABOVE, WE AR E OF THE CONSIDERED VIEW THAT THE ORDER OF THE LEARNED C IT(A) WERE JUSTIFIED IN BOTH THE YEARS. BY RESPECTFULLY FOLLOWING THE ORDER OF THE COORDINAT E BENCH IN ASSESSEES OWN CASE, WE UPHOLD THE ORDER OF THE LD CIT(A). 5. IN THE RESULT, THE REVENUES APPEAL IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 14/09/2016. SD/- SD/- HKKXPAN YFYR DQEKJ (BHAGCHAND) (LALIET KUMAR) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ @ JAIPUR FNUKAD @ DATED:- 14 TH SEPTEMBER, 2016 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- THE DCIT, CIRCLE-2, JAIPUR. 2. IZR;FKHZ @ THE RESPONDENT- M/S TCI INFRASTRUCTURE FINANCE LTD., JAIPUR. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) ITA 256/JP/2016_ DCIT VS. M/S TCI INFRASTRUCTURE FINANCE LTD. 5 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 256/JP/2016) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR