The ACIT, Circle-2(1)(1), Ahmedabad V. M/s. Gujarat State Road Transport Corporation, Ahmedabad

ITA 2690/AHD/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 6804 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 7 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-07-2019
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 01-12-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: SU RENDRA KUMAR
• Keywords: Business income
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER& MS. MADHUMITA ROY, JUDICIAL MEMBER I.T.A. NO.2690/AHD/2017 (ASSESSMENT YEAR :2013-14) THE ASSISTANTS COMMISSIONER OF INCOME TAX, CIRCLE 2(1)(1), AHMEDABAD. VS. GUJARAT STATE ROAD TRANSPORT CORPORATION, 1 ST FLOOR, CENTRAL OFFICE, VAHAN VYAVAHAR BHAVAN, ASTODIA, AHMEDABAD. [ PAN NO. AAACG 5587 H ] ( APPELLANT ) .. ( RESPONDENT ) APPELLANT BY : SHRI SULABH PADSHAH, A.R. RESPONDENTBY: SHRI SURENDRA KUMAR, CIT-D.R. DATE OF HEARING 11.07.2019 DATE OF PRONOUNCEMENT 25.07.2019 O R D E R PER MS. MADHUMITA ROY - JM: THE INSTANT APPEAL FILED BY THE REVENUE IS DIRECTE D AGAINST THEORDER DATED 15.09.2017 PASSED BY THE COMMISSIONER OF INCO ME TAX (APPEALS) 10, AHMEDABAD ARISING OUT OF THE ORDER DATED 23.02.2016 PASSED BY THE DY. COMMISSIONER OF INCOME TAX, CIRCLE-2(2)(1), AHMEDAB AD UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REF ERRED AS TO THE ACT)FOR ASSESSMENT YEAR 2013-14 WITH THE FOLLOWING GROUNDS: 1. THE LD. CIT(A) HAS ERRED IN LAW ON FACTS IN DELETI NG THE ADDITION OF RS.58,40,04,189/-MADE ON ACCOUNT OF MOTOR ACCIDENT CLAIMSOFEARLIER YEARS, WITHOUT PROPERLY APPRECIATING THE FACTS OF THE CASE AND THE MATERIAL BROUGHT ON RECORD. 2. THE LD. CIT(A) HAS ERRED IN LAW ON FACTS IN DELETIN G THE ADDITION OF RS.6,55,49,995/-MADE ON ACCOUNT OF CAPITALIZATION O F RECONDITIONING OF BUSES & ASSEMBLIES ETC. ITA NO.2690/AHD/2017 ACIT VS. GUJARAT STATE ROAD TRANSPORT CORPORATION ASST.YEARS 2013-14 - 2 - 3. THE LD. CIT(A) HAS ERRED IN LAW ON FACTS IN TREATIN G THE INCOME FROM LICENSE FEES OF CANTEEN AMOUNTING TO RS. 4,97,20,806/- AS B USINESS INCOME, WITHOUT PROPERLY APPRECIATING THE FACTS OF THE CASE AND THE MATERIAL BROUGHT ON RECORD. 4. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GR OUND OR ADD A NEW GROUND, WHICH MAY BE NECESSARY. 2. GROUND NO.1 IN THIS GROUND REVENUE HAS CHALLENGED THE DELETION OF ADDITION OF RS.58,40,04,189/- MADE ON ACCOUNT OF MO TOR ACCIDENT CLAIMS OF EARLIER YEARS, WITHOUT PROPERLY APPRECIATING THE FA CTS OF THE CASE AND THE MATERIAL ON RECORD AS ALLEGED. 3. THE LEARNED REPRESENTATIVE OF THE RESPECTIVE PAR TIES AT THE OUTSET OF THE PROCEEDING HAVE AGREED THAT THE ISSUE IS SQUARELY C OVERED IN FAVOUR OF THE ASSESSEE BY AND UNDER A JUDGMENT DATED 29.01.2018 P ASSED IN ITA NO.507/AHD/2016 IN ASSESSEES OWN CASE FOR A.Y. 201 2-13. A COPY OF THE SAID ORDER HAS ALSO BEEN HANDED OVER TO US. WE HAVE CARE FULLY CONSIDERED THE ORDER PASSED BY THE HONBLE TRIBUNAL AS MENTIONED HEREINA BOVE THE RELEVANT PORTION WHEREOF IS AS FOLLOWS: 3. LEARNED REPRESENTATIVES FAIRLY AGREE THAT THE AFORESAID ISSUE IS COVERED, IN FAVOUR OF THE ASSESSEE, BY THE ORDER DA TED 28.04.2017 PASSED BY THE COORDINATE BENCH, IN ASSESSEES OWN CASE FOR TH E ASSESSMENT YEAR 2009- 10, WHEREIN THE TRIBUNAL HAS HELD AS UNDER:- 9. WE FIND THAT MERELY BECAUSE THE MACT AWARDS AR E BOOKED BY THE ASSESSEE AT A LATER POINT OF TIME THAN THE DATE OF THE AWARD CANNOT BE REASON ENOUGH TO DECLINE THE CLAIM FOR DEDUCTION IN RESPECT OF THESE AWARDS. IT IS SOMETIMES POSSIBLE, RATHER ITS INHERE NT MECHANISM OF THE SYSTEM AS IT EXISTS, THAT SOMETIMES THERE IS CONSID ERABLE DELAY IN COMMUNICATING THE AWARDS GRANTED BY MACT. THE AWARD S ARE GENERALLY CONVEYED THROUGH THE LAWYERS REPRESENTING THE ASSESSEE AND IT DOES TAKE TIME IN MANY CASES. IT IS NOT THE CASE OF THE ASSESSING OFFICER THAT THE SUBSEQUENT CLAIMS ARE DUPLICATION OF CLAIMS IN RESPECT OF THE SAME LIABILITY, AND THE ASSESSEE DOES NOT ST AND TO GAIN AS A RESULT OF THIS DELAY IN ACCOUNTING. IN ANY EVENT, T HE QUANTIFICATION OF CLAIMS IS VERIFIED BY THE STATUTORY AUDITORS AS ALS O THE CAG AUDIT TEAMS, AND THE SAME METHOD OF ACCOUNTED IS BEING FO LLOWED BY THE ITA NO.2690/AHD/2017 ACIT VS. GUJARAT STATE ROAD TRANSPORT CORPORATION ASST.YEARS 2013-14 - 3 - ASSESSEE FOR LAST 50 YEARS. AS THERE IS NO CHANGE I N METHOD OF ACCOUNTING, AS THERE IS NO DUPLICATION OF CLAIMS, A ND, AS ASSESSEE DOES NOT ANYWAY GAIN ANYTHING FROM DELAYING ACCOUNTING F OR THESE CLAIMS, WE SEE NO REASONS TO REJECT THE CLAIMS MERELY BECAU SE THESE CLAIMS ARE ACCOUNTING FOR, IN THE BOOKS OF ACCOUNTS, AT A POIN T OF TIME LATER THAN AWARDS BEING GRANTED I.E. WHEN THE ASSESSEE GETS TO KNOW ABOUT THE SAME. IN ANY EVENT, THE CIT(A) HAS GIVEN A CATEGORI CAL DIRECTION TO THE ASSESSING OFFICER FOR VERIFICATION OF CLAIM ON ACCO UNT OF THE LIABILITY HAVING BEEN CRYSTALLIZED IN THE RELEVANT PREVIOUS Y EAR. GRIEVANCE OF THE ASSESSING OFFICER, REGARDING CRYSTALLIZATION OF LIABILITY, DOES NOT, THEREFORE, SURVIVE ANY LONGER. IN VIEW OF THESE DIS CUSSIONS, AS ALSO BEARING IN MIND ENTIRETY OF THE CASE, WE APPROVE TH E CONCLUSIONS ARRIVED AT BY THE CIT(A) AND DECLINE TO INTERFERE I N THE MATTER. 4. WE SEE NO REASONS TO TAKE ANY OTHER VIEW OF THE MATTER THAN THE VIEW SO TAKEN BY THE CO-ORDINATE BENCH. RESPECTFULLY FOLLOW ING THE VIEWS SO TAKEN BY THE CO-ORDINATE BENCH (SUPRA) IN ASSESSEES OWN CAS E FOR AY 2009-10 IN ITA NO.1192/AHD/2014, WE REJECT THE GRIEVANCE OF THE AS SESSING OFFICER. IN THE ABSENCE OF ANY CHANGED CIRCUMSTANCES, WE FIN D NO REASON TO TAKE A DIFFERENT VIEW OTHER THAN WHAT HAS ALREADY BEEN D ECIDED BY THIS TRIBUNAL AND HENCE RESPECTFULLY RELYING ON THE SAME, WE REJECT T HE GROUND PREFERRED BY THE REVENUE. 4. GROUND NO.2 IN THIS GROUND REVENUE HAS CHALLENGED DELETION OF A DDITION OF RS.6,55,49,995/- MADE ON ACCOUNT OF CAPITALIZATI ON OF RECONDITIONING OF BUSES AND ASSEMBLIES ETC. 5. AT THE TIME OF HEARING OF THE INSTANT APPEAL, LE ARNED ADVOCATE APPEARING FOR THE ASSESSEE SUBMITTED BEFORE US THAT THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY AND UNDER AN O RDER DATED 24.01.2013 PASSED BY THE CO-ORDINATE BENCH IN ITA NO.2785/AHD2 009 IN ASSESSEES OWN CASE FOR A.Y. 2005-06 IN APPEAL PREFERRED BY THE RE VENUE. A COPY WHEREOF HAS ALSO BEEN SUBMITTED BEFORE US. HOWEVER, THE LEARNED DR FAILED TO CONTROVERT SUCH SUBMISSIONS MADE BY THE LEARNED AR. ITA NO.2690/AHD/2017 ACIT VS. GUJARAT STATE ROAD TRANSPORT CORPORATION ASST.YEARS 2013-14 - 4 - 6. HEARD THE RESPECTIVE PARTIES, PERUSED THE RELEVA NT MATERIALS AVAILABLE ON RECORD. WE HAVE CAREFULLY CONSIDERED THE ORDER PASS ED BY THE CO-ORDINATE BENCH AS MENTIONED HEREINABOVE. WE FIND THAT IDENTI CAL ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE. THE RELEVANT PORTION WHE REOF IS AS FOLLOWS: 12. THE GROUND NO.2 OF THE REVENUES APPEAL READS AS UNDER: 2. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE DISALLOWANCE OF RS.9,73,94,965/- MADE BY THE AO BEI NG THE EXPENSES OF RECONDITIONING OF BODY AND ENGINE EXPENSES. 13. THE LEARNED DR SUPPORTED THE ASSESSMENT ORDER WHEREAS IT WAS SUBMITTED BY THE LEARNED COUNSEL OF THE ASSESSEE TH AT THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE TRIBU NAL IN ASSESSEES OWN CASE FOR A.Y.1995-1996, 1997-1998, 1990-1991 AND 1991-19 92 IN ITA NO.22, 1871, 2794 AND 3429/AHD/2002. IT WAS SUBMITTED THAT COPY OF THIS DECISION OF THE TRIBUNAL IS AVAILABLE AT PAGE NO.31 TO 41 OF TH E PAPER BOOK. 14. WE HAVE CONSIDERED RIVAL SUBMISSION AND HAVE P ERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE LEARNED DR COULD NOT CONTROVERT THIS CONTENTION OF THE LEARNED AR OF THE ASSESSEE THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE TRIBUNAL DECISION IN ASSESSEES OWN CASE FOR VARIOUS EARLIER ASSESSMENT YEARS. THE COPY OF THE TRIBUNAL DECISION IS AVAILABLE IN THE P APER BOOK, AND WE ALSO FIND THAT AS PER PARA-11 OF THE TRIBUNAL DECISION, THIS ISSUE WAS DECIDED BY THE TRIBUNAL IN FAVOUR OF THE ASSESSEE, AND FOR THE SAK E OF READY REFERENCE, THIS PARA-11 FROM THE ORDER OF THE TRIBUNAL IS REPRODUCE D BELOW: 11. AS IS EVIDENT FROM THE FACT OF THE CASE IN HA ND, EXPENDITURE HAD BEEN INCURRED TO PRESERVE AND MAINTAIN AN ALREADY EXITING ASSET, AND THE OBJECT OF THE EXPENDITURE WAS NOT TO BRING A NEW ASSET INTO EXISTENCE OR TO OBTAIN A NEW ADVANTAGE. THE OBJECT BEHIND SECTION 31(I) IS TO PRESERVE AND MAINTAIN THE ASSET AND NOT TO BRING IN A NEW ASSET. IN THE LIGHT OF AFORESAID DECISIONS OF THE H ONBLE SUPREME COURT IN SARVANA SPINNING MILLS P LTD. (SUPRA) AND OF HON BLE GUJARAT HIGH COURT IN MIHIR TEXTILES (SUPRA) AS ALSO THE FACTS A ND CIRCUMSTANCES OF THE CASE, WE DO NOT FIND ANY INFIRMITY IN THE FINDI NGS OF LD.CIT(A) HOLDING THAT THE EXPENSES ARE BASICALLY ON REPAIRS AS THESE EXPENSES DO NOT BRING IN TO EXISTENCE ANY NEW ASSET OR ADVAN TAGE. THUS, GROUND NO.1 RAISED BY THE REVENUE IN ALL THE FOUR APPEAL I S DISMISSED. ITA NO.2690/AHD/2017 ACIT VS. GUJARAT STATE ROAD TRANSPORT CORPORATION ASST.YEARS 2013-14 - 5 - SINCE THE LEARNED DR COULD NOT POINT OUT ANY DIFFER ENCE IN THE FACTS IN THE PRESENT YEAR, WE DO NOT FIND ANY REASON TO TAKE A C ONTRARY VIEW IN THE PRESENT YEAR, AND HENCE, WE DECLINE TO INTERFERE WITH ORDER OF THE CIT(A) ON THIS ISSUE AND THE GROUND OF THE APPEAL OF THE REVENUE IS REJE CTED AND THE APPEAL OF THE REVENUE IS DISMISSED. IN THE ABSENCE OF ANY CHANGED CIRCUMSTANCES, WE FIN D NO REASON TO TAKE VIEW OTHER THAN THAT ALREADY BEEN DECIDED BY THIS T RIBUNAL AND HENCE RESPECTFULLY RELYING ON THE SAME, WE REJECT THE GRO UND PREFERRED BY THE REVENUE. 7. GROUND NO.3 THE REVENUE HAS CHALLENGED THE ORDER PASSED BY THE LEARNED CIT(A) IN TREATING THE INCOME FROM LICENCE FEES OF CANTEEN AMOUNTING TO RS.4,97,20,806/- AS BUSINESS INCOME, WITHOUT PRO PERLY APPRECIATING THE FACTS OF THE CASE AND MATERIALS BROUGHT ON RECORD AS ALLE GED. 8. AT THE VERY OUTSET OF HEARING OF THE INSTANT APP EAL, THE LEARNED AR FAIRLY SUBMITTED THAT THIS ISSUE IS COVERED AGAINST THE ASSESSEE BY AND UNDER THE JUDGMENT PASSED BY THE CO-ORDINATE BENCH IN ITA NO. 507/AHD/2016 FOR A.Y. 2012-13 IN ASSESSEES OWN CASE COPY WHEREOF HAS ALS O BEEN SUBMITTED BEFORE US. WE HAVE PERUSED THE SAME AND WE FIND THE FOLLOW ING WAS THE OBSERVATION OF THE LEARNED TRIBUNAL WHILE DISMISSING THE APPEAL PREFERRED BY THE REVENUE : 7. WITH REGARD TO THE AFORESAID ISSUE, THE LEARNE D REPRESENTATIVES FAIRLY AGREE THAT THE SAME IS COVERED, IN FAVOUR OF THE RE VENUE, BY ANOTHER ORDER OF THE COORDINATE BENCH OF THIS TRIBUNAL DATED 24.01.2 013, PASSED IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2005-06, WHEREIN T HE TRIBUNAL HAS HELD AS UNDER:- 8. WE HAVE CONSIDERED RIVAL SUBMISSION AND HAVE PE RUSED THE ORDERS OF THE AUTHORITIES BELOW AND THE JUDGMENT CITED BY THE LEARNED COUNSEL OF THE ASSESSEE. FIRST, WE DISCUSS REGARDING THE AP PLICABILITY OF JUDGMENT OF HONBLE PUNJAB AND HARYANNA HIGH COURT) RELIED ON BY THE LEARNED COUNSEL OF THE ASSESSEE. IN THAT CASE, A FINDING IS GIVEN THAT THE RENTAL OF THE PREMISES WAS FIXED AND IT DID NOT CHANGE WITH THE CHANGE OF OCCUPANTS AND IT WAS DEDUCTED FROM THE WA GES OF THE ITA NO.2690/AHD/2017 ACIT VS. GUJARAT STATE ROAD TRANSPORT CORPORATION ASST.YEARS 2013-14 - 6 - EMPLOYEE OR EMPLOYEES OCCUPYING THE PREMISES. IT CA NNOT BE SHOWN BY THE LEARNED COUNSEL OF THE ASSESSEE IN THE PRESENT CASE THAT THESE FACTS ARE IDENTICAL IN THE PRESENT CASE ALSO, EVEN IN THE RESPECT OF INCOME FROM RENT TOWARDS STAFF QUARTER. ADMITTEDLY, THE MA JOR PART OF THE INCOME FOR THE LICENCE FEE OF CANTEEN IS ITA NO. 50 7/AHD/2016 DCIT VS. GUJARAT STATE ROAD TRANSPORT CORPN A.Y. 2012-13 PAGE 3 OF 3 NOT FROM STAFF, BUT FROM OUTSIDERS AND HENCE THIS JUDGM ENT IS NOT APPLICABLE TO THIS RECEIPT AT ALL, AND EVEN FOR THE RECEIPT OF RENT ON ACCOUNT OF STAFF QUARTER, THE JUDGMENT IS NOT APPLI CABLE BECAUSE IT COULD NOT BE SHOWN BY THE LEARNED AR OF THE ASSESSE E THAT THE FACTS ARE IDENTICAL. REGARDING THE ARGUMENT THAT THIS INCOME WAS TAXED UNDER THE HEAD INCOME FROM BUSINESS IN EARLIER YEARS, WE FIND THAT ON THE PLEA OF CONSISTENCY, IT CANNOT BE HELD THAT IF A MI STAKE IS COMMITTED BY THE AO IN EARLIER YEARS, THE SAME SHOULD BE PERPETU ATED. THIS IS NOT CASE OF THE ASSESSEE THAT THE RENTAL INCOME IS NOT IN RESPECT OF HOUSE PROPERTY OWNED BY THE ASSESSEE, AND HENCE IN OUR CO NSIDERED OPINION, THIS RENTAL INCOME IS TAXABLE UNDER THE HEAD INCOME FROM HOUSE PROPERTY, AS HAS BEEN HELD BY THE AUTHORITIES BELOW , AND HENCE, WE DO NOT FIND ANY REASON TO INTERFERE WITH ORDER OF THE LEARNED CIT(A) ON THIS ISSUE, AND THIS GROUND OF THE APPEAL OF THE AS SESSEE IS DISMISSED. 8. WE SEE NO REASONS TO TAKE ANY OTHER VIEW OF THE MATTER THAN THE VIEW SO TAKEN BY THE CO-ORDINATE BENCH. RESPECTFULLY FOLLOW ING THE VIEWS SO TAKEN BY THE CO-ORDINATE BENCH (SUPRA) IN ASSESSEES OWN CAS E FOR AY 2005-06 IN ITA NO.2598/AHD/2009, WE UPHOLD THE GRIEVANCE OF THE AS SESSING OFFICER. TAKING INTO CONSIDERATION THE ENTIRE ASPECT OF THE MATTER AND THE VIEW TAKEN BY THE HONBLE CO-ORDINATE BENCH IN THE ABSEN CE OF ANY CHANGED CIRCUMSTANCES, WE FIND NO ALTERNATIVE BUT TO DECLIN E TO ENTERTAIN THE CLAIM OF ASSESSEE. HENCE, REVENUES GROUND OF APPEAL IS ALLO WED. 9. IN THE RESULT, REVENUES APPEAL IS PARTLY ALLOWE D. THIS ORDER PRONOUNCED IN OPEN COURT ON 25/07/2019 SD/- SD/- ( WASEEM AHMED) ( MS. MADHUMITA ROY ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 25/07/2019 ITA NO.2690/AHD/2017 ACIT VS. GUJARAT STATE ROAD TRANSPORT CORPORATION ASST.YEARS 2013-14 - 7 - PRITIYADAV, SR.PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. () / THE CIT(A)-10, AHMEDABAD. 5. , ! ', #$%% / DR, ITAT, AHMEDABAD 6. &' () / GUARD FILE. / BY ORDER, //TRUE COPY// / (DY./ASSTT.REGISTRAR) !, #$ / ITAT, AHMEDABAD 1. DATE OF DICTATION. 11.07.2019 (DICTATION PAGES 3) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 16.07.2019 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S 25.07.2019 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S. 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER