DCIT - 12(2)(1), MUMBAI V. D.V.BUILDERS & DEVELOPERS PVT. LTD., MUMBAI

ITA 2862/MUM/2018

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 4386 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 5 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-10-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2014-2015
• Appeal Filed On: 07-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AKHTAR ANSARI
• Keywords: Depreciation; Tax effect; Set aside

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI SHRI SHAMIM YAHYA (AM) & SHRI AMARJIT SINGH (JM) I.T.A. NO. 2862/MUM/2018 (ASSESSMENT YEAR 2014-15 ) DCIT-12(2)(1) ROOM NO. 223 2 ND FLOOR, AAYAKAR BHAVAN, M.K. ROAD MUMBAI-400 020. VS . M/S. D.V. BUILDERS & DEVELOPERS PVT. LTD. B-29, SHOP NO. 8&9, DREAMLAND CHS LTD. SECTOR-11, SHANTI NAGAR MIRA ROAD EAST THANE-4011 107. PAN : AACCD1205B (APPELLANT) (RESPONDENT) ASSESSEE BY SHRI HITESH SHAH DEPARTMENT BY SHRI AKHTAR ANSARI DATE OF HEARING 15.10.2020 DATE OF PRONOUNCEMENT 19.10.2020 O R D E R PER SHAMIM YAHYA (AM) :- THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS) [IN SHORT LEAR NED CIT(A)] DATED 19.12.2017 AND PERTAINS TO ASSESSMENT YEAR 2014-15. 2. THE GROUNDS OF APPEAL READ AS UNDER : 1. WHETHER ON THE FACTS AND IN CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD.CIT(A) ERRED IN ALLOWING THE APPEAL OF THE ASSESS EE WITHOUT APPRECIATING THE FACT THAT ASSESSEE COMPANY HAS FOLLOWED THE MERCAN TILE SYSTEM OF ACCOUNTING AND BOOK THE EXPENSES ON PAYMENT BASIS WH ICH IS CONTRADICT THE ACCOUNTING POLICY. 2. WHETHER ON THE FACTS AND IN CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD.CLT(A) ERRED IN ALLOWING THE APPEAL OF THE ASSESS EE WITHOUT APPRECIATING THE FACT THAT DURING THE COURSE OF ASSESSMENT PROCEEDIN GS, THE AO HAS DONE IN DEPTH SCRUTINY THEREAFTER ADDITION WAS MADE ON THE BA SIS OF THAT SUCH EXPENSES IS NOT RELATED TO BUSINESS ACTIVITY. 3. WHETHER ON THE FACTS AND IN CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD.CIT(A) ERRED IN ALLOWING THE APPEAL OF THE ASSESS EE WITHOUT APPRECIATING THE FACT THAT AO HAS CORRECTLY APPORTIONED THE DEPRECIAT ION BETWEEN DIFFERENT PROJECTS OF THE ASSESSEE. M/S. D.V. BUILDERS & DEVELOPERS PVT. LTD. 2 4. THE APPELLANT PRAYS THAT THE ORDER OF THE CIT (A) ON THE GROUNDS BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 3. AT THE OUTSET LD COUNSEL OF THE ASSESSEE SUBMITT ED THAT THE TAX EFFECT IN THIS CASE IS BELOW THE LIMIT OF RS. 50,00,000/- FIX ED BY CBDT VIDE CIRCULAR NO. 17/2019 DATED 8/8 2019 FOR FILING APPEAL BEFORE TH E ITAT. FOR THIS HE SUBMITTED FOLLOWING COMPUTATION :- GROUND DESCRIPTION DISALLOWANCE IN THE ASSESSMENT ORDER AMOUNT (RS.) RELIEF GRANTED BY LEARNED CIT(A)-20 (RS.) GROUND NO. 1 LABOUR CHARGES DISALLOWED 109,32,534 80,16,086 GROUND NO. 2 COMPENSATION DISALLOWED 56,91,750 39,33,675 GROUND NO. 3 DEPRECIATION DISALLOWED 23,17,965 23,17,965 GROUND NO. 4 SERVICE TAX DISALLOWED 7,05,540 7,05,540 AGGREGATE TOTAL 196,47,789 149,73,226 ADDITION CONTESTED BY REVENUE IN SECOND APPEAL TAX EFFECT @ 33.99% 109,32,534 37,15,968 23,17,965 7,64,928 132,50,499 44,80,897 TAX EFFECT AS INCOME TAX THEREON @ 33.99% HENCE, LD COUNSEL SUBMITTED THAT THIS APPEAL BY THE REVENUE IS NOT MAINTAINABLE. 4. PER CONTRA LEARNED DEPARTMENTAL REPRESENTATIVE C OULD NOT DISPUTE THAT THE TAX EFFECT IS BELOW THE SAID LIMIT. HE COULD NO T POINT OUT THAT THE APPEAL FALLS IN ANY OF THE EXCEPTIONS CARVED IN SAID CIRCU LAR. 5. UPON CAREFUL CONSIDERATION WE FIND THAT, AS THE TAX EFFECT IS BELOW THE LIMIT FIXED BY CBDT FOR FILING APPEALS BEFORE THE I TAT, THIS APPEAL BY THE REVENUE IS LIABLE TO BE DISMISSED IN LIMINE. M/S. D.V. BUILDERS & DEVELOPERS PVT. LTD. 3 6. ACCORDINGLY THE APPEAL STANDS DISMISSED AS SUCH. ORDER PRONOUNCED UNDER RULE 34(4) OF THE ITAT RULE S ON 19.9.2020. SD/- SD/- (AMARJIT SINGH) (SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI; DATED : 19/10/2020 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// ( ASSISTANT REGISTRAR) PS ITAT, MUMBAI