DCIT Corporate Circle 1(2), CHENNAI V. Bay Container Terminal (P) Ltd., CHENNAi

ITA 2614/CHNY/2017

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 2987 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 4 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-03-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 12-04-2018
• Assessment Year: 2012-2013
• Appeal Filed On: 31-10-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S SRIDHAR SHRI L SHIBI
• Keywords: Bogus purchase; Depreciation; Revenue expenditure; TDS; Set aside
• Section: 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: CHENNAI , ! '!# $ , % & BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ! ./ ITA NOS.1214/CHNY/2015, 642/CHNY/2016 & 2614/CHNY/2 017 ' /ASSESSMENT YEARS: 2010-11, 2011-12 & 2012-13 DY. COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE-1(2), CHENNAI. VS. M/S. BAY CONTAINER TERMINAL PVT. LTD., NO.21, OLD NO.18, SWAMI SIVANANDA SALAI, CHEPAUK, CHENNAI 600 005. [PAN : AAACB 3622L ] ( ( /APPELLANT) ( )*( /RESPONDENT) ! ./ ITA NO.1260/CHNY/2015 ' /ASSESSMENT YEARS: 2010-11 M/S. BAY CONTAINER TERMINAL PVT. LTD., NO.21, OLD NO.18, SWAMI SIVANANDA SALAI, CHEPAUK, CHENNAI 600 005 VS. ASST. COMMISSIONER OF INCOME TAX, COMPANY CIRCLE-1(2), CHENNAI. [PAN: AAACB 3622L] ( ( /APPELLANT) ( )*( /RESPONDENT) ( + , / ASSESSEE BY : SHRI S. SRIDHAR, ADVOCATE SHRI L. SHIBI, C.A )*( + , /REVENUE BY : SHRI A.R.V. SREENIVASAN, JCIT - + .% /DATE OF HEARING : 20.12.2018 /0' + .% /DATE OF PRONOUNCEMENT : 04.03.2019 1 / O R D E R PER INTURI RAMA RAO, ACCOUNTANT MEMBER : THESE ARE THE MATTERS REMANDED BACK TO THIS TRIBUNA L FOR FRESH CONSIDERATION BY HONBLE HIGH COURT OF MADRAS. ITA NOS.1214/CHNY/2015, 642/CHNY/2016, 2614/CHNY/20 17 & 1260/CHNY/2015 :- 2 -: 2. THE BRIEF FACTS OF THE CASE ARE AS UNDER: THE APPELLANT IS A COMPANY INCORPORATED UNDER THE P ROVISIONS OF THE COMPANIES ACT, 1956 AND IT IS ENGAGED IN THE BU SINESS OF STORAGE, HANDLING AND REPAIRS OF MARINE CONTAINERS. THE RET URN OF INCOME FOR THE AY 2010-11 WAS FILED ON 29.09.2010 AND SAME WAS REV ISED ON 25.12.2010 AT A TOTAL INCOME OF RS. 1,10,90,812/-. AGAINST THE SAID RETURN OF INCOME, THE ASSESSMENT WAS COMPLETED BY A SST. CIT, COMPANY CIRCLE-I(2), CHENNAI VIDE ORDER DATED 28.03.2013 U/ S. 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) ADMITTING TOTAL INCOME OF RS. 5,78,00,385/-. WHILE DOING SO, THE AO MADE ADDITION OF RS. 12,10,942/- INVOKING THE PROVISIONS OF S. 40(A)(I) OF THE ACT O N THE GROUND THAT THE APPELLANT HAD FAILED TO DEDUCT TDS ON THE SOFTWARE PURCHASES AND ALSO DISALLOWED THE CLAIM FOR PLOT DEVELOPMENT EXPENDITU RE OF RS. 4,29,93,011/- AND DISALLOWED THE EXPENSES ON PURCHA SES OF RS. 25,05,619/-. 3. BEING AGGRIEVED BY THE ABOVE ADDITION, AN APPEAL WAS PREFERRED BEFORE LD. CIT(A), WHO VIDE IMPUGNED ORDER HELD THA T OUT OF THE EXPENSES INCURRED ON FOREIGN EXCHANGE OF RS. 12,10,942/- A S UM OF RS. 10,13,612/- PERTAINING TO TRAVELLING EXPENSES AND THE BALANCE O F RS. 1,97,330/- REPRESENTS TOWARDS ELECTRONIC DATA INTERCHANGE CHAR GES. THE LD. CIT(A) HELD THAT THE PROVISIONS OF TDS WERE NOT APPLICABLE IN RESPECT OF ITA NOS.1214/CHNY/2015, 642/CHNY/2016, 2614/CHNY/20 17 & 1260/CHNY/2015 :- 3 -: TRAVELLING EXPENDITURE OF RS. 10,13,612/- ONLY ON T HE BALANCE AMOUNT OF RS. 1,97,330/- THE ACTION OF AO WAS UPHELD. AS REG ARDS, ADDITION OF PLOT DEVELOPMENT EXPENDITURE, THE LD. CIT(A) AFTER CONSI DERING THE BREAKUP OF THE EXPENDITURE HAD DIRECTED THE AO TO TREAT THE SE CURITY CHARGES OF RS. 69,12,521/- AS REVENUE EXPENDITURE AND ON THE BALAN CE AMOUNT OF ADDITION WAS CONFIRMED THE ACTION OF THE AO ALLOWIN G DEPRECIATION @ 5%. AS REGARDS ADDITION OF BOGUS PURCHASES OF RS. 25,05 ,619/-, THE LD. CIT(A) CONSIDERING THE FACT THAT THE APPELLANT ITSELF HAS PAID THE VAT ON THE SAID PURCHASES AND DIRECTED THE AO TO DELETE THE ADDITIO N. BEING AGGRIEVED, THE APPELLANT AS WELL AS REVENUE FILED APPEALS BEFO RE THIS TRIBUNAL, THE TRIBUNAL IN ITA NO.1214/MDS/2015 & 1260/MDS/2015 VI DE ORDER DATED 25.05.2016 THE APPEAL OF THE REVENUE WAS SET ASIDE TO THE FILE OF AO FOR FURTHER INQUIRIES AS TO THE GENUINENESS OF THE PURC HASES MADE AND AS REGARDS, THE APPEAL OF THE ASSESSEE WAS DISMISSED. BEING AGGRIEVED BY THE ORDER OF THE TRIBUNAL, THE ASSESSEE CARRIED THE MATTER TO THE HON'BLE HIGH COURT OF MADRAS AND THE HONBLE HIGH COURT VID E ORDER DATED 21.02.2017 IN ITA NO.786/16 & 787 OF 2016 SET ASIDE THE MATTER TO THE TRIBUNAL FOR FRESH CONSIDERATION. THUS, THE PRESEN T APPEALS WERE BEFORE US. 4. NOW, WE SHALL TAKE UP THE ASSESSEES APPEAL IN I TA NO.1260/CHNY/2015 FOR ASSESSMENT YEAR (AY) 2010-11. ITA NOS.1214/CHNY/2015, 642/CHNY/2016, 2614/CHNY/20 17 & 1260/CHNY/2015 :- 4 -: 5 . WE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATE RIAL ON RECORD. THE ASSESSEE CHALLENGES THE ADDITION ON ACC OUNT OF DISALLOWANCE OF PLOT DEVELOPMENT EXPENDITURE HOLDING TO BE CAPIT AL AND ALLOWED DEPRECIATION @ 5%. IT IS CONTENDED THAT THE EXPEND ITURE WAS INCURRED ON LEASE HOLD LAND AND THE EXPENDITURE IS REVENUE IN N ATURE AND THE AO AS WELL AS LD. CIT(A) WAS NOT JUSTIFIED IN HOLDING THE EXPENDITURE AS CAPITAL IN NATURE. FROM THE PERUSAL OF THE ASSESSMENT ORDER AS WELL AS THE DETAILS FILED, IT APPEARS THAT THE LOWER AUTHORITIES HAD NO T EXAMINED WHETHER THE EXPENDITURE HAS RESULTED INTO CREATION OF ASSET NOR LOOKED INTO THE NATURE OF THE EXPENDITURE THEREFORE, IN THE ABSENCE OF THI S MATERIAL EVIDENCE ON RECORD, WE REMIT BACK THE ISSUE TO THE FILE OF THE AO FOR FRESH CONSIDERATION FOR THE PURPOSE OF EXAMINING THE EVID ENCE IN SUPPORT OF CLAIM AND DECIDES THE ISSUE ACCORDINGLY IN ACCORDAN CE WITH LAW. 6. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS P ARTLY ALLOWED FOR STATISTICAL PURPOSES. REVENUES APPEAL IN ITA NO.1214/CHNY/2015 FOR AY 20 10-11 : 7. THE APPEAL OF THE REVENUE DOES NOT SURVIVE BEFORE U S AS THE HONBLE HIGH COURT VIDE PARA 9 OF THE ORDER HAD DIS POSED OF THE MATTER BY CONFIRMING THE ACTION OF THE TRIBUNAL REMANDING THE MATTER TO THE FILE OF AO. ITA NOS.1214/CHNY/2015, 642/CHNY/2016, 2614/CHNY/20 17 & 1260/CHNY/2015 :- 5 -: 8. IN THE RESULT, THE APPEAL OF THE REVENUE HAD BEC OME INFRUCTUOUS AND DISMISSED AS SUCH. REVENUES APPEALS IN ITA NOS.642/CHNY/2016 FOR AY 2 011-12 & 2614/CHNY/2017 FOR AY 2012-13 : 9. THESE ARE THE APPEALS FILED BY THE REVENUE CONTESTI NG THAT THE LD. CIT(A) OUGHT NOT HAVE ALLOWED THE PLOT REVENUE EXPE NDITURE AS REVENUE EXPENDITURE. THE LD. CIT(A) CONSIDERING THE SUBMISS IONS MADE BY THE APPELLANT HELD THAT THE EXPENDITURE WAS INCURRED ON LY TOWARDS MAINTENANCE / UPKEEP OF THE YARD HELD THAT THESE EX PENSES ARE ONLY IN THE NATURE OF REVENUE EXPENSES SUCH AS COST OF MATE RIALS AND SUNDRY REPAIRS AND COST OF YARD LEVELING ETC. AND ALSO CON SIDERING THE FACT THAT THESE EXPENDITURE CAME TO BE ALLOWED BY THE LD. CIT (A) FOR AY 2005-06 & 2008-09 REVENUE EXPENDITURE. ON PERUSAL OF THE LD. CIT(A) ORDER, WE DO NOT FIND ANY INFIRMITY IN THE REASONING OF THE LD. CIT(A) IN ALLOWING THE SAME AS REVENUE EXPENDITURE. IN THE CIRCUMSTANCES, WE DO FIND ANY MERIT IN THE APPEALS FILED BY THE REVENUE. 10. IN THE RESULT, THE APPEALS FILED BY THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 4 TH MARCH, 2019 IN CHENNAI. SD/- SD/- ( ) (GEORGE MATHAN) /JUDICIAL MEMBER ( '!# $ ) (INTURI RAMA RAO) % /ACCOUNTANT MEMBER /CHENNAI, 2! /DATED: 4 TH MARCH, 2019 . EDN, SR. P.S ITA NOS.1214/CHNY/2015, 642/CHNY/2016, 2614/CHNY/20 17 & 1260/CHNY/2015 :- 6 -: 1 + ).34 54'. /COPY TO: 1. ( /APPELLANT 4. - 6. /CIT 2. )*( /RESPONDENT 5. 4 78 ). /DR 3. - 6. ( )/CIT(A) 6. 89 : /GF