The DCIT, Central Circle-1(3), Ahmedabad V. The Sandesh Limited, Ahmedabad

ITA 283/AHD/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 80332 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 7 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-09-2014
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 21-08-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 03-02-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: M G PATEL
• Keywords: Depreciation
• Section: 14A

Judgement Text

, , , , C, IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD, C BENCH . .. . . .. . , !' !' !' !', , , , #$ %&'( #$ %&'( #$ %&'( #$ %&'(, , , , )* + ) ' )* + ) ' )* + ) ' )* + ) ' BEFORE S/SHRI G.C. GUPTA, VICE-PRESIDENT AND ANIL CHATURVEDI, ACCOUNTANT MEMBER) ITA NO.283/AHD/2011 [ASSTT.YEAR : 2007-2008] DCIT, CENT.CIR.1(3) AHMEDABAD. /VS. THE SANDESH LTD. SANDESH BHAVAN LAD SOCIETY ROAD AHMEDABAD. PAN :AAACT 5730 D ( (( (-. -. -. -. / APPELLANT) ( (( (/0-. /0-. /0-. /0-. / RESPONDENT) + 1 2 )/ REVENUE BY : SHRI NIMESH YADAV, SR.DR 4& 1 2 )/ ASSESSEE BY : SHRI M.G. PATEL 5 1 &(*/ DATE OF HEARING : 21 ST AUGUST, 2014 678 1 &(*/ DATE OF PRONOUNCEMENT : 05/09/2014 )9 / O R D E R PER G.C. GUPTA, VICE-PRESIDENT: THIS APPEAL BY THE REVENUE FOR THE ASSTT.YEAR 2007-2008 IS DIRECTED AGAINST TH E ORDER OF THE CIT(A). 2. THE GROUND NO.1 OF THE APPEAL OF THE REVENUE IS AS UNDER: 1. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN DIRECTING THE AO TO DELETE ADDITION MADE ON ACCOUNT OF REJECTION OF CLAIM OF DEPRECIATION AMOUNTING TO RS.58,12,951/- IN RESPECT OF PLANT & MACHINERY, PURCHASED UNDER SALE AND LEASE BACK TRAN SACTION WITH RAJASTHAN STATE ELECTRICITY BOARD. ITA NO.283/AHD/2011 -2- 3. THE LEARNED COUNSEL FOR THE ASSESSEE, AT THE OUT SET, SUBMITTED THAT THE ISSUE OF DEPRECIATION IN RESPECT OF PLANT & MACHINE RY IS COVERED IN FAVOUR OF THE ASSESSEE WITH THE DECISION OF ITAT, AHMEDABA D BENCH IN ASSESSEES OWN CASE FOR EARLIER ASSESSMENT YEARS IN ITA NO.104 7/AHD/2000 FOR A.Y.1996-97, 951/AHD/2002 AND 1033/AHD/2002 FOR A.Y .1997-98, 952/AHD/2002 AND 1034/AHD/2002 FOR A.Y.1998-99, 375 0/AHD/2002 FOR A.Y.1999-00, 4401/AHD/2003 FOR A.Y.2000-01, 3534/AH D/2004 FOR A.Y.2001-02, 2325/AHD/2005 FOR A.Y.2002-03, 1998/AH D/2008 CO NO.133/AHD/2008 FOR A.Y.2005-06 BY ORDER DATED 9/1/ 2009 WHEREIN THE ISSUE WAS DECIDED IN FAVOUR OF THE ASSESSEE. THE L EARNED DR COULD NOT CONTROVERT THE SUBMISSIONS OF THE LEARNED COUNSEL F OR THE ASSESSEE. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED THE O RDERS OF THE AO AND THE CIT(A) AND ALSO THE ORDER OF THE ITAT, AHMEDABA D CITED SUPRA. IN VIEW OF THE FACT THAT THE ISSUE IN THIS GROUND OF T HE APPEAL OF THE REVENUE REGARDING DEPRECIATION ON PLANT & MACHINERY BEING C OVERED IN FAVOUR OF THE ASSESSEE WITH THE DECISION OF THE ITAT, AHMEDAB AD BENCH IN ASSESSEES OWN CASE FOR EARLIER ASSESSMENT YEARS VI DE ORDER DATED 9-1-2009 (SUPRA) WHEREIN HELD THAT THE TRANSACTION OF SALE A ND LEASE BACK WITH RSEB ON SIMILAR FACT HAS BEEN TREATED AS GENUINE BY THE HONBLE JURISDICTIONAL HIGH COURT AS WELL AS THE JURISDICTIONAL TRIBUNAL, AND RESPECTFULLY FOLLOWING THE SAME, THE ISSUE IS DECIDED IN FAVOUR OF THE ASSESSEE. ACCORDINGLY, THE GROUND NO.1 OF THE APPEAL OF THE R EVENUE IS DISMISSED. 4. THE GROUND NO.2 OF THE APPEAL OF THE REVENUE IS AS UNDER: 2. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN DIRECTING THE AO TO DELETE THE ADDITION MADE ON ACCOUNT OF PARTIA L REJECTION OF CLAIM OF DEPRECIATION AMOUNTING TO RS.2241/- IN RES PECT OF MOTOR BUSES LEASED TO AMTS. ITA NO.283/AHD/2011 -3- 5. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THE ISSUE OF DEPRECIATION IN RESPECT OF MOTOR BUSES IS COVERED I N FAVOUR OF THE ASSESSEE WITH THE DECISION OF THE ITAT, AHMEDABAD BENCH IN A SSESSEES OWN CASE FOR THE EARLIER ASSESSMENT YEARS ORDER DATED 9.1.20 09 (SUPRA). THE LEARNED DR COULD NOT CONTROVERT THE SUBMISSIONS OF THE LEAR NED COUNSEL FOR THE ASSESSEE. WE HAVE CONSIDERED RIVAL SUBMISSIONS. I N VIEW OF THE FACT THAT THE ISSUE IN THIS GROUND OF THE APPEAL OF THE REVEN UE BEING COVERED IN FAVOUR OF THE ASSESSEE WITH THE DECISION OF THE ITA T, AHMEDABAD BENCH IN ASSESSEES OWN CASE FOR THE EARLIER ASSESSMENT YEAR S, ORDER DATED 9.1.2009 (SUPRA), THE ISSUE IS DECIDED IN FAVOUR OF THE ASSE SSEE, AND THE GROUND NO2. OF THE REVENUE IS DISMISSED. 6. THE GROUND NO.3 OF THE REVENUE IS AS UNDER: 3. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN HOLDING THAT RULE 8D IS APPLICABLE FROM A.Y.2008-09 AND THEREBY DELETING ADDITION MADE U/S.14A AMOUNTING TO RS.9,53,995/- 7. THE LEARNED DR HAS SUBMITTED THAT THE ISSUE OF A DDITION UNDER SECTION 14A WAS RESTORED TO THE FILE OF THE AO BY T HE TRIBUNAL IN ASSESSEES OWN CASE FOR EARLIER ASSESSMENT YEARS VI DE ITS ORDER DATED 9.1.2009 (SUPRA). THE LEARNED AR HAS SUPPORTED THE SUBMISSIONS OF THE LEARNED DR. WE HAVE CONSIDERED RIVAL SUBMISSIONS. WE FIND THAT THE ITAT, AHMEDABAD IN ASSESSEES OWN CASE FOR EARLIER ASSESSMENT YEAR VIDE THEIR ORDER DATED 9.1.2009 (SUPRA) HAS RESTORED THE ISSUE TO THE FILE OF THE AO FOR RECONSIDERATION IN THE LIGHT OF RULE 8D. AC CORDINGLY, THE ISSUE IN THIS GROUND OF THE APPEAL OF THE REVENUE IS RESTORE D TO THE FILE OF THE AO FOR RE-ADJUDICATION IN ACCORDANCE WITH LAW AFTER PR OVIDING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE, AND IN THE LIGHT OF THE PROVISION OF RULE 8D . WE DIRECT ACCORDINGLY. ITA NO.283/AHD/2011 -4- 8. THE GROUND NO.4 OF THE REVENUE IS AS UNDER: 4. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING ADDITION OF RS.6,97,153/- MADE ON ACCOUNT OF COMPUT ER SOFTWARE EXPENSES, EVEN THOUGH THE SOFTWARE PROGRAMME WAS CU STOMIZED RESULTING INTO ENDURING BENEFIT TO THE ASSESSEE. 9. THE LEARNED DR RELIED ON THE ORDER OF THE AO. T HE LEARNED COUNSEL FOR THE ASSESSEE HAS RELIED ON THE ORDER OF THE CIT (A). WE HAVE CONSIDERED RIVAL SUBMISSIONS. WE FIND THAT THE EXPENDITURE IN CURRED BY THE ASSESSEE ON ACCOUNT OF COMPUTER SOFTWARE DID NOT RESULT IN E NDURING BENEFIT TO THE ASSESSEE. THE CIT(A) HAS RECORDED THAT SINCE THE T ECHNOLOGIES ARE FAST CHANGING AND DAY-TO-DAY SYSTEMS ARE BEING DEVELOPED IN A NEW WAY, SOFTWARE EXPENSES MAY BE NEEDED LIKE RAW-MATERIAL A S HELD BY THE PUNJAB & HARYANA HIGH COURT IN CIT VS. VARINDER AGRO CHEMI CALS LTD., 309 ITR 272. THERE BEING NO MISTAKE IN THE ORDER OF THE CI T(A) ON THIS ISSUE, THE SAME IS CONFIRMED AND THE GROUND NO.4 OF THE REVENU E IS DISMISSED. 10. IN THE RESULT, APPEAL OF THE REVENUE IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE. SD/- SD/- ( %&'( %&'( %&'( %&'( / ANIL CHATURVEDI) )* + )* + )* + )* + /ACCOUNTANT MEMBER ( . .. . . .. . /G.C. GUPTA) !' !' !' !' /VICE-PRESIDENT C OPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT. BY ORDER