M/s.Asian Institute of Film and Media Studies P. Ltd, Trivandrum V. The ACIT, Trivandrum

ITA 269/COCH/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 7315 (ITAT-COCHIN)
• Duration Of Justice: 6 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-01-2017
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 11-01-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 14-06-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Depreciation; Additional evidence
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 143(3); 92

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI GEORGE GEORGE K., JUDICIAL MEMBER I.T.A. NO. 269 /COCH/201 6 ASSESSMENT YEAR : 2008 - 09 M/S. ASIAN INSTITUTE OF FILM & MEDIA STUDIES (P) LTD., 731-735, NILA, TECHNO PARK CAMPUS, KARIYAVATTOM, THIRUVANANTHAPURAM-695 581. [PAN: AAFCA 7697B] VS. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE-1(1), TRIVANDRUM. (ASSESSEE - APPELLANT) (REVENUE - RESPONDENT) ASSESSEE BY SHRI RAJA KANNAN, ADV. REVENUE BY SHRI A. DHANARAJ , SR. DR DATE OF HEARING 11/01/2017 DATE OF PRONOUNCEMENT 12 TH /01 /201 7 O R D E R PER GEORGE GEORGE K.,JUDICIAL MEMBER: THIS APPEAL AT THE INSTANCE OF THE ASSESSEE IS DIR ECTED AGAINST THE ORDER OF THE CIT(A), TRIVANDRUM DATED 12/04/2016. THE RELEV ANT ASSESSMENT YEAR IS 2008-09. 2. THOUGH SEVERAL GROUNDS ARE RAISED, ALL THE GROU NDS RELATE TO THE SOLITARY ISSUE WHETHER THE CIT(A) IS JUSTIFIED IN CONFIRMING THE O RDER OF THE ASSESSING OFFICER IN DISALLOWING THE CLAIM OF DEPRECIATION AMOUNTING TO RS. 14,44,203/-. I.T.A. NO.269/COCH/2016 2 3. THE BRIEF FACTS OF THE CASE ARE AS FOLLOWS: THE ASSESSEE IS A COMPANY ENGAGED IN THE BUSI NESS OF ANIMATION FILM PRODUCTION AND IMPARTING TRAINING ON ANIMATION AND DIGITAL ARTS. FOR THE ASSESSMENT YEAR 2008-09, THE RETURN OF INCOME WAS F ILED ON 28/10/2008 DISCLOSING A LOSS OF RS.1,84,647/-. THE SCRUTINY A SSESSMENT U/S. 143(3) OF THE ACT WAS COMPLETED VIDE ORDER DATED 21/12/2010 FIXIN G THE TOTAL INCOME AT RS.25,98,985/-. THE REASON FOR ENHANCING THE INCOME WAS ON ACCOUNT OF DISALLOWANCE OF LAUNCH EXPENSES AMOUNTING TO RS.4,4 4,942/- AND FRANCHISE EXPENSES AMOUNTING TO RS.81,811/-. FURTHER, THE CL AIM OF DEPRECIATION AMOUNTING TO RS. 14,44,203/- WAS ALSO DISALLOWED BY THE ASSESSING OFFICER. 4. AGGRIEVED BY THE ORDER OF THE ASSESSMENT, THE ASSESSEE PREFERRED AN APPEAL TO THE FIRST APPELLATE AUTHORITY. THE CIT(A) REVER SED THE FINDINGS OF THE ASSESSING OFFICER AS REGARDS THE DISALLOWANCE ON AC COUNT OF FRANCHISE EXPENSES AND LAUNCH EXPENSES AND CONFIRMED THE FINDINGS OF T HE ASSESSING OFFICER AS REGARDS THE DISALLOWANCE OF THE CLAIM OF DEPRECIATI ON AMOUNTING TO RS. 14,44,203/- . 5. AGGRIEVED BY THE ORDER OF THE CIT(A), THE ASSES SEE HAS PREFERRED THE PRESENT APPEAL BEFORE THE TRIBUNAL. THE LD. COUNSEL FOR TH E ASSESSEE SUBMITTED THAT THE CLAIM OF DEPRECIATION PREFERRED BY THE ASSESSEE WAS DISALLOWED BY THE ASSESSING I.T.A. NO.269/COCH/2016 3 OFFICER SOLELY FOR THE REASON THAT THE INVOICE FOR THE FIXED ASSET VALUED AT RS. 24,07,095/- ON WHICH THE DEPRECIATION IS CLAIMED WA S NOT IN THE NAME OF THE ASSESSEE BUT IN THE NAME OF THE GROUP COMPANY. IT WAS SUBMITTED THAT THE ASSESSEE HAS FILED THE NECESSARY PROOF BEFORE THE C IT(A) TO SHOW THAT THE ASSESSEE WAS THE ACTUAL OWNER OF THE FIXED ASSET ON WHICH THE DEPRECIATION WAS CLAIMED. IT WAS SUBMITTED THAT THE CIT(A), HOWEVER STATED OTHER REASONS TO DISALLOW THE CLAIM OF DEPRECIATION, WHICH WAS NOT P UT TO THE ASSESSEE FOR ITS REBUTTAL. IT WAS CONTENDED THAT THE REASONS STATED IN CLAUSES (A) TO (K) IN PARA 3.3 OF THE IMPUGNED ORDER OF THE CIT(A) FOR DENYING THE BENEFIT OF DEPRECIATION IS FACTUALLY INCORRECT. IT WAS STATED THAT HAD THE ASSESSEE BEEN GIVEN AN OPPORTUNITY TO REBUT THE POINTS RAISED IN THE CIT(A ) ORDER, THE SAME COULD HAVE BEEN EASILY CLARIFIED TO THE CIT(A). THE ASSESSEE HAS ALSO FILED A PAPER BOOK COMPRISING OF 243 PAGES, INTER ALIA, ENCLOSING COPI ES OF THE PURCHASE ORDER BY THE ASSESSEE, CONFIRMATION FROM THE GROUP COMPANY THAT IT HAD NOT CLAIMED DEPRECIATION, ETC. THE ASSESSEE HAS ALSO FILED A P ETITION UNDER INCOME TAX (APPELLATE TRIBUNAL) RULES, 1963 FOR FILING ADDITIO NAL EVIDENCE WHICH IS PLACED AS ANNEXURE F TO ANNEXURE K OF THE PAPER BOOK FILED BY THE ASSESSEE. AN AFFIDAVIT OF THE DIRECTOR OF THE ASSESSEE-COMPANY WAS ALSO FI LED STATING THEREIN THE REASONS WHY THE ADDITIONAL EVIDENCES WERE NOT FILED BEFORE THE LOWER AUTHORITIES. IT WAS SUBMITTED THAT ANNEXURE F TO ANNEXURE K ARE DOCUMENTS TO PROVE THAT THE FINDINGS OF THE CIT(A) IN THE IMPUGNED ORDER WH ICH WAS RENDERED BEHIND THE BACK OF THE ASSESSEE IS FACTUALLY INCORRECT. IT WA S STATED THAT THE ADDITIONAL I.T.A. NO.269/COCH/2016 4 EVIDENCE NOW FURNISHED BEFORE THE TRIBUNAL GOES TO THE ROOT OF THE MATTER AND IN THE INTEREST OF JUSTICE AND EQUITY, THE SAME NEEDS TO BE ADMITTED AND TAKEN ON RECORD. THE LD. DR PRESENT WAS DULY HEARD. 6. I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. ADMITTEDLY IN THIS CASE, THE CLAIM OF DEPRECIATION WAS DISALLOWED BY THE ASSESSING OFFICER SOLELY FOR THE REASON THAT THE IN VOICE OF THE FIXED ASSET WAS NOT IN THE NAME OF THE ASSESSEE BUT IN THE NAME OF GROU P COMPANY. HOWEVER, IN THE IMPUGNED ORDER OF THE CIT(A), THERE ARE FURTHER REASONS STATED FOR DISALLOWING THE CLAIM OF DEPRECIATION WHICH ARE LIS TED IN PARA 3.3 OF THE SAID ORDER. THE FINDINGS GIVEN BY THE CIT(A) HAD NECESSI TATED THE PRODUCTION OF ADDITIONAL EVIDENCE BEFORE THE TRIBUNAL TO PROVE TH AT THE CIT(A) IS FACTUALLY WRONG. THE ADDITIONAL EVIDENCE PRODUCED BY THE ASS ESSEE IS A CONFIRMATION LETTER DATED 06.06.2016 FROM M/S. TOONZ ANIMATION I NDIA(P) LTD. (ANNEXURE K IN THE PAPER BOOK); THE MEMORANDUM AND ARTICLES OF ASS OCIATION OF THE ASSESSEE AND M/S. TOONZ ANIMATION INDIA (P) LTD. (ANNEXURE G & I IN THE PAPER BOOK); CERTIFICATE DATED 08.06.2016 OF M/S. TOONZ ANIMATIO N (P) LTD. CONFIRMING THAT IT DOES NOT HAVE A BRANCH OFFICE IN MUMBAI (ANNEXURE J IN THE PAPER BOOK) AND THE COLLABORATION AGREEMENT AND SAMPLE CERTIFICATE (ANN EXURE-H) IN THE PAPER BOOK). THESE ADDITIONAL EVIDENCES NOW PRODUCED BEFORE THE TRIBUNAL ARE IMPORTANT EVIDENCES WHICH GOES TO THE ROOT OF THE ISSUE AND F OR PROPER ADJUDICATION, THE SAME NEEDS TO BE TAKEN ON RECORD AND I ACCORDINGLY, DIRECT THE REGISTRY TO TAKE I.T.A. NO.269/COCH/2016 5 THEM ON RECORD. SINCE THE ADDITIONAL EVIDENCES ARE TAKEN ON RECORD, IN THE INTEREST OF JUSTICE AND EQUITY, THE MATTER NEEDS DE NOVO CONSIDERATION BY THE CIT(A). THEREFORE, THE ISSUE OF CLAIM OF DEPRECIAT ION IS RESTORED TO THE FILE OF THE CIT(A). THE CIT(A) SHALL DISPOSE OF THE APPEAL AS EXPEDITIOUSLY AS POSSIBLE AFTER AFFORDING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 12 TH- 01-2017. SD/- (GEORGE GEORGE K.) JUDICIAL MEMBER PLACE: KOCHI DATED: 12 TH JANUARY, 2017 GJ COPY TO: 1. M/S. ASIAN INSTITUTE OF FILM & MEDIA STUDIES (P) LTD., 731-735, NILA, TECHNO PARK CAMPUS, KARIYAVATTOM, THIRUVANANTHAPURAM-695 5 81. 2. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE -1(1), TRIVANDRUM. 3. THE COMMISSIONER OF INCOME-TAX(APPEALS),TRIVANDR UM. 4. THE PR. COMMISSIONER OF INCOME-TAX, TRIVANDRUM. 5. D.R., I.T.A.T., COCHIN BENCH, COCHIN. 6. GUARD FILE. BY ORDER (ASSISTANT REGISTRA R) I.T.A.T., COCHIN I.T.A. NO.269/COCH/2016 6