D.C.I.T. CENT Cir-III, Kol, Kolkata V. M/s. Ideal Auto Credit Ltd., Kolkata

ITA 308/KOL/2010

• Counselvise Citation: 30823514 RSA 2010
• Duration Of Justice: 4 year(s) 1 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-04-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Next Hearing Date: 31-05-2011
• Assessment Year: 2002-2003
• Appeal Filed On: 12-02-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAVI JAIN
• Assessee Lawyers: ARVIND AGARWAL
• Keywords: Depreciation; Reasonable cause

Judgement Text

I.T.A. NOS.: 308-314-KOL-2010 ASSESSMENT YEAR : 2002-03 TO 2008- 09 & CO-129-133-KOL-2010 ASSESSMENT YEAR : 2002-03 TO 2006-07 PAGE 1 TO 5 1 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA B BENCH, KOLKATA CORAM : SHRI MAHAVIR SINGH (JUDICIAL MEMBER) AND SHRI SHAMIM YAHYA (ACCOUNTANT MEMBER) I.T.A. NOS.: 308, 309, 310, 311, 312, 313 & 314/KOL ./ 2010 ASSESSMENT YEAR:2002-03, 2003-04,2004-05, 2005-06, 2006-07, 2007- 08 & 2008-09 DEPUTY COMMISSIONER OF INCOME TAX,.............. ..APPELLANT CENTRAL CIRCLE-III, KOLKATA, 18, RABINDRA SARANI, 5 TH FLOOR, KOLKATA-700 001 -VS.- IDEAL AUTO CREDIT LIMITED,......................... .....................RESPONDENT 50, J.L. NEHRU ROAD, KOLKATA-700 071 [PAN : AAACI 5696 M] & C.O. NOS. : 129, 130, 131, 132 & 133/KOL./2010 (IN I.T.A. NOS.: 308, 309, 310, 311 & 312/KOL./ 2010) ASSESSMENT YEAR: 2002-03, 2003-04, 2004-05, 2005-06 & 2006-07 IDEAL AUTO CREDIT LIMITED,......................... .................CROSS OBJECTOR 50, J.L. NEHRU ROAD, KOLKATA-700 071 -VS._ DEPUTY COMMISSIONER OF INCOME TAX,.............. ..RESPONDENT CENTRAL CIRCLE-III, KOLKATA, 18, RABINDRA SARANI, 5 TH FLOOR, KOLKATA-700 001 APPEARANCES BY: SHRI RAVI JAIN, CIT, D.R., FOR THE DEPARTMENT SHRI ARVIND AGARWAL, ADVOCATE, FOR THE ASSESSEE DATE OF CONCLUDING THE HEARING : MARCH 31, 2014 DATE OF PRONOUNCING THE ORDER : APRIL 1 ST , 2014 O R D E R PER BENCH: 1. THESE APPEALS BY THE REVENUE AND CROSS OBJECTION S BY THE ASSESSEE ARE ARISING OUT OF THE RESPECTIVE ORDERS OF LD. COM MISSIONER OF INCOME I.T.A. NOS.: 308-314-KOL-2010 ASSESSMENT YEAR : 2002-03 TO 2008- 09 & CO-129-133-KOL-2010 ASSESSMENT YEAR : 2002-03 TO 2006-07 PAGE 1 TO 5 2 TAX (APPEALS) FOR THE CONCERNED ASSESSMENT YEARS. S INCE THE ISSUES RAISED IN THESE APPEALS ARE COMMON, THEY ARE HEARD TOGETHE R AND ARE BEING DISPOSED OF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 2. WE FIRST TAKE UP THE REVENUES APPEALS. THE COMM ON ISSUES RAISED READ AS UNDER: (1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD. CIT(APPEALS) WAS NOT JUSTIFIED IN ALLOWING HIGH ER RATE OF DEPRECIATION ON LEASED VEHICLES WHEN THE ASSESSE E- COMPANY WAS NOT ENGAGED IN THE BUSINESS OF RUNNING THEM ON HIRE. (2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD. CIT(APPEALS) WAS NOT JUSTIFIED IN ALLOWING THE APPEAL OF THE ASSESSEE-COMPANY CLAIMING HIGHER RATE OF DEPREC IATION WHEN BOARDS CIRCULAR NO. 652 DATED 14.06.1993 CLEA RLY STATES THAT HIGHER RATE OF DEPRECIATION WILL NOT BE ALLOWED IF MOTOR LORRIES ARE USED IN SOME OTHER NON-HIRING BUSINESS. (3) THE IMPUGNED ORDER OF THE LD. CIT(A) BE VACATED AND THAT OF THE ASSESSING OFFICER BE RESTORED. 3. SINCE THE FACTS ARE IDENTICAL, WE ARE DECIDING T HESE ISSUES WITH REFERENCE TO THE ASSESSMENT ORDER AND THE LD. CIT(A PPEALS)S ORDER FOR THE ASSESSMENT YEAR 2003-03. IN THIS CASE, ASSESSMENT W AS FRAMED UNDER SECTION 153A/143(3) OF THE INCOME TAX ACT, 1961. IN THIS CASE, ASSESSEE- COMPANY WAS ENGAGED IN THE BUSINESS OF PROVIDING FI NANCE LEASE FOR MOTOR, LORRIES AND TRUCKS IN ITS LEASING BUSINESS A ND HAS CLAIMED DEPRECIATION @ 40% ON SUCH LEASED VEHICLES. HOWEVER , ASSESSING OFFICER WAS OF THE OPINION THAT SUCH HIGHER RATE OF DEPRECI ATION WAS DISALLOWED IN THE EARLIER YEARS ON THE BASIS OF CBDT CIRCULAR NO. 652 DATED 14.06.1993. IN THAT CIRCULAR, IT WAS STATED THAT HI GHER RATE OF DEPRECIATION WILL NOT BE ALLOWABLE IF MOTOR, LORRIES ARE USED IN SOME OTHER NON-HIRING BUSINESS. HOWEVER, ASSESSING OFFICER ALSO NOTED THA T ITAT IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 1999-2000 HAS HELD THA T IT IS THE END USER I.T.A. NOS.: 308-314-KOL-2010 ASSESSMENT YEAR : 2002-03 TO 2008- 09 & CO-129-133-KOL-2010 ASSESSMENT YEAR : 2002-03 TO 2006-07 PAGE 1 TO 5 3 OF THE SPECIFIED ASSET, WHICH IS RELEVANT FOR DETER MINING THE PERCENTAGE OF DEPRECIATION AND IT WAS ALSO HELD THAT ASSESSING OFFICER WAS NOT JUSTIFIED IN IGNORING THE USE OF THE MOTOR VEHICLES IN THE HA NDS OF THE LESSEE WHICH WAS NO DOUBT FOR HIRE PURCHASE AND TRANSPORT BUSINE SS. FURTHERMORE, TRIBUNAL IN ITS FURTHER ORDER IN ASSESSEES OWN CAS E HAS HELD THAT DEPRECIATION WAS TO BE ALLOWED @ 40% UNDER THE INCO ME TAX ACT. HOWEVER, THE MATTER WAS UNDER APPEAL BEFORE THE HON BLE KOLKATA HIGH COURT. SINCE THE MATTER WAS PENDING BEFORE THE HON BLE KOLKATA HIGH COURT, ASSESSING OFFICER ALLOWED DEPRECIATION @ 25% ONLY ON THE LEASED ASSETS. UPON ASSESSEES APPEAL, LD. CIT(APPEALS) NO TED THAT ITAT IN ASSESSEES OWN CASE FROM THE ASSESSMENT YEARS 1999- 2000 TO 2005-06 HAS HELD THAT DEPRECIATION WAS TO BE ALLOWED @ 40%. IN THESE CIRCUMSTANCES, WHEN THE TRIBUNAL HAD HELD THAT DEPRECIATION WAS TO BE ALLOWED @ 40%, LD. CIT(APPEALS) HELD THAT THE DECISION OF ITAT HAS TO BE FOLLOWED. ACCORDINGLY, HE DIRECTED THE ASSESSING OFFICER TO A LLOW DEPRECIATION ON THE VEHICLES @ 40%. 4. AGAINST THE ABOVE ORDER OF LD. CIT(APPEALS), REV ENUE IS IN APPEALS BEFORE THE TRIBUNAL. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. SINCE THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN C ASE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF LD. CIT(APPEALS). ACCORDI NGLY WE UPHOLD THE SAME. 6. IN THE RESULT, APPEALS FILED BY REVENUE STAND DI SMISSED. 7. NOW WE TAKE UP THE ASSESSEES CROSS OBJECTIONS. IN THIS CASE, IT WAS NOTED THAT THERE IS A DELAY OF 166 DAYS IN FILING T HE CROSS OBJECTIONS. ASSESSEE HAS FILED AN AFFIDAVIT FROM AN EMPLOYEE SH RI SANJEET KUMAR RAI IN THIS REGARD. IN THE SAID AFFIDAVIT, SHRI SANJEET KUMAR RAI HAS STATED THAT I.T.A. NOS.: 308-314-KOL-2010 ASSESSMENT YEAR : 2002-03 TO 2008- 09 & CO-129-133-KOL-2010 ASSESSMENT YEAR : 2002-03 TO 2006-07 PAGE 1 TO 5 4 HE WAS LOOKING AFTER THE INCOME-TAX MATTERS OF THE ASSESSEES GROUP COMPANIES. DUE TO ILL-HEALTH, HE WAS ON LONG LEAVE AND DID NOT JOIN OFFICE DURING THE MONTH OF MARCH, APRIL, MAY AND JUNE, 201 0. IT HAS FURTHER BEEN STATED THAT ASSESSMENT ORDER IN RELATION TO THE APP EALS BEFORE LD. CIT(APPEALS) AND ANOTHER DOCUMENTS BEING GROUNDS OF APPEAL AND DEPARTMENTAL APPEAL MEMORANDUM BEFORE THE ITAT WAS UNDER HIS SUPERVISION AND THE SAME HAD BEEN MISPLACED BY HIM. THAT AFTER EXTENSIVE SEARCH HE WAS ABLE TO LOCATE IN THE LAST WEEK OF AUGUST, 2010. 8. FURTHERMORE, ASSESSEE-COMPANY HAS ALSO FILED AN AFFIDAVIT FROM THE DIRECTOR OF THE COMPANY STATING THAT NON-FILING OF THE CROSS OBJECTIONS IN TIME WAS DUE TO THE REASON THAT THE PERSON WHO WAS LOOKING AFTER THE INCOME-TAX MATTERS WAS ON LONG LEAVE AND HAD MISPLA CED THE DOCUMENTS. ;; 9. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD ON THE ISSUE OF CONDONATION OF DELAY. WE FIND THAT NO COGENT REASONABLE CAUSE HAS BEEN ATTRIBUTED FOR THE DELAY OF 166 DAYS IN THIS CASE FOR FILING THE CROSS OBJECTIONS. THE PLEA THAT ASSESSEES EMPLOYEE WAS ON LONG LEAVE AND HAS MISPLACED THE DO CUMENTS CANNOT BE SAID TO BE A REASONABLE CAUSE FOR THE DELAY OF 166 DAYS IN FILING THESE APPEALS. LD. COUNSEL OF THE ASSESSEE HAS RELIED UPO N THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF COLLECTOR, LAND A CQUISITION VS.- MST. KATIJI & OTHERS. THIS DOES NOT SUPPORT THE CASE OF THE ASSESSEE. IN THE SAID CASE, THERE WAS A DELAY OF 4 DAYS IN FILING OF APPE AL BY THE STATE. IN THAT CASE, HONBLE APEX COURT HAS EXPOUNDED THAT WHEN SU BSTANTIAL JUSTICE AND TECHNICAL CONSIDERATION ARE PITTED AGAINST EACH OTH ER, THE CAUSE OF SUBSTANTIAL JUSTICE DESERVES TO BE PREFERRED. WE FI ND THAT IN THE PRESENT CASE THERE IS AN INORDINATE DELAY OF 166 DAYS AND T HE REASONABLE CAUSE ATTRIBUTED BY THE ASSESSEE FOR JUSTIFYING THE DELAY IS NOT ACCEPTABLE. UNDER THESE CIRCUMSTANCES, WE ARE NOT INCLINED TO C ONDONE THE DELAY IN THIS CASE. ACCORDINGLY, THESE CROSS OBJECTIONS ARE DISMISSED AS TIME BARRED. I.T.A. NOS.: 308-314-KOL-2010 ASSESSMENT YEAR : 2002-03 TO 2008- 09 & CO-129-133-KOL-2010 ASSESSMENT YEAR : 2002-03 TO 2006-07 PAGE 1 TO 5 5 10. IN THE RESULT, APPEALS FILED BY THE REVENUE STA ND DISMISSED AND CROSS OBJECTIONS FILED BY THE ASSESSEE STAND DISMIS SED BEING TIME-BARRED. ORDER PRONOUNCED IN THE OPEN COURT ON 1 ST DAY OF APRIL, 2014. SD/- SD/- MAHAVIR SINGH SHAMIM YAHYA (JUDICIAL MEMBER) (ACC OUNTANT MEMBER) KOLKATA, THE 1 ST DAY OF APRIL, 2014 COPIES TO : (1) DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-III, KOLKATA, 18, RABINDRA SARANI, 5 TH FLOOR, KOLKATA-700 001 (2) M/S. IDEAL AUTO CREDIT LIMITED, 50, J.L. NEHRU ROAD, KOLKATA-700 071 (3) CIT (4) CIT(A) (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ETC ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.