MAHINDRA & MAHINDRA FINANCIAL SERVICES LTD, MUMBAI V. ASST CIT RG 6(3), MUMBAI

ITA 3150/MUM/2013

• Counselvise Citation: 315019914 RSA 2013
• Duration Of Justice: 2 year(s) 3 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-08-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 13-08-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 25-04-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VIJAY KUMAR SONIDR
• Assessee Lawyers: BHAVEN SHAH
• Keywords: Depreciation; Opportunity of being heard; Revenue expenditure
• Section: 143(3); 37

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B, MUMBAI , , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI ASHWANI TANEJA, ACCOUNTANT MEMBER ITA NO.3070/MUM/2013 ASSESSMENT YEAR: 2009-10 ASSISTANT COMMISSIONER OF INCOME TAX, CIR-6(3), R. NO.522, 5 TH FLOOR, AAYAKAR BHAVAN, MUMBAI-400020 / VS. M/S MAHINDRA & MAHINDRA FINANCIAL SERVICES LTD. SADHANA HOUSE, BEHIND MAHINDRA TOWER, 2 ND FLOOR, 507, P.B. MARG, WORLI, MUMBAI-400018 ( / REVENUE) ( '#$ /ASSESSEE) P.A. NO.AAACM2931R ITA NO.3150/MUM/2013 ASSESSMENT YEAR: 2009-10 M/S MAHINDRA & MAHINDRA FINANCIAL SERVICES LTD. SADHANA HOUSE, BEHIND 2 ND FLOOR, MAHINDRA TOWER, 507, P.B. MARG, WORLI, MUMBAI-400018 / VS. ASSISTANT COMMISSIONER OF INCOME TAX, CIR-6(3), R. NO.522, 5 TH FLOOR, AAYAKAR BHAVAN, MUMBAI-400020 ( '#$ /ASSESSEE) ( / REVENUE) P.A. NO.AAACM2931R / REVENUE BY SHRI VIJAY KUMAR SONI-DR '#$ / ASSESSEE BY SHRI BHAVEN SHAH % & ' ( / DATE OF HEARING : 13/08/2015 ' ( / DATE OF ORDER: 31/08/2015 MAHINDRA & MAHINDRA FINANCIAL SERVICES ITA NO.3070 AND 3150/MUM/2013 2 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE ASSESSEE AS WELL AS REVENUE ARE IN CROSS APPEA LS AGGRIEVED BY THE IMPUGNED ORDER DATED 23/01/2013 OF THE LD. FIRST APPELLATE AUTHORITY, MUMBAI. 2. FIRST, WE SHALL TAKE UP THE APPEAL OF THE ASSES SEE (ITA NO.3150/MUM/2013), WHEREIN, FIRST GROUND RAISE D BY THE ASSESSEE PERTAINS TO DISALLOWANCE OF DEPRECIATI ON OF RS.1,33,21,141/- ON OPENING WDV OF LEASED ASSET. 2.1. AT THE OUTSET, THE LD. COUNSEL FOR THE ASSESS EE CLAIMED THAT THE IMPUGNED ISSUE IS COVERED IN FAVOU R OF THE ASSESSEE BY THE ORDER OF THE TRIBUNAL (ITA NO.2846/MUM/2007) (A.Y.2003-04) AND ITA NO.405/MUM/2008 ORDER DATED 02/04/2014. THIS FACTUA L MATRIX WAS NOT CONTROVERTED BY THE LD. DR. 2.2. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN VIEW O F THE ABOVE, WE FIND THAT THE I BENCH OF THE TRIBUNAL ( ITA NO.2846/MUM/2007) (A.Y. 2003-04) AND ITA NO.405/MUM/2008 (A.Y. 2004-05) AND ALSO ITA NO.3280/MUM/2009(A.Y. 2005-06) FOLLOWED THE DECISIO N FROM HONBLE APEX COURT IN CASE OF ICDS LTD. VS CIT (C.A. NO.3286 TO 3290 OF 2008) AND THE COORDINATE BENCH I N THE CASE OF DEVELOPMENT CREDIT BANK LTD. VS DCIT (ITA NO.3006/MUM/2006 AND ITA NO.4892/MUM/2003, ETC. ) MAHINDRA & MAHINDRA FINANCIAL SERVICES ITA NO.3070 AND 3150/MUM/2013 3 AND ALSO IN THE CASE OF SICOM LTD. (ITA NO.901/MUM/ 2013) BORKADIS DREDGING LTD. ITA NO.6151/MUM/2010 AND HON BLE JURISDICTIONAL HIGH COURT IN G.R. SHIPPING ITA NO.9 58 OF 2009 DECIDED IN FAVOUR OF THE ASSESSEE. RESPECTFUL LY FOLLOWING THE DECISION FROM HONBLE APEX COURT IN T HE CASE OF ICDS LTD. (SUPRA) AND DCB LTD. (SUPRA) THIS ISSUE I S DECIDED IN FAVOUR OF THE ASSESSEE. 3. NEXT GROUND PERTAINS TO CONFIRMING THE CLASSIFICATION OF UPS AND BATTERIES AS ELECTRICAL I NSTALLATION AND NOT AS INTEGRAL PART OF COMPUTER, THUS, DENYING DEPRECIATION CLAIMED AT THE RATE OF 60%, THEREBY, R ESTRICTING TO CLAIM TO RS.11,39,403/- APPLYING THE RATE OF 15% INSTEAD OF RS.26,11,369/-, CLAIMED BY THE ASSESSEE. WE NOT E THAT THIS ISSUE HAS BEEN DECIDED BY THE TRIBUNAL VIDE OR DER DATED 31/07/2012 (ITA NO.2846/MUM/2007) WHEREIN, VIDE PAR A 12 TO 17 OF THE ORDER, THE ASSESSING OFFICER WAS DIREC TED TO ALLOW A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSE SSEE. ON THE SAME REASONING, WE SEND THIS MATTER TO THE FILE OF THE LD. ASSESSING OFFICER, THUS, THIS GROUND IS ALLOWED FOR STATISTICAL PURPOSES. THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR ST ATISTICAL PURPOSES. 4. IN THE APPEAL OF THE REVENUE, THE FIRST GROUND PERTAINS TO UPS & BATTERIES AS INTEGRAL PART OF COM PUTER ALLOWING DEPRECIATION AT 60%. IN THE AFORESAID ORD ER OF THE ASSESSEE, THIS GROUND WAS SEND TO THE FILE OF THE A SSESSING MAHINDRA & MAHINDRA FINANCIAL SERVICES ITA NO.3070 AND 3150/MUM/2013 4 OFFICER. ON THE SAME REASONING, AS CONTAINED IN TH E EARLIER ORDER OF THE TRIBUNAL, THIS GROUND IS SENT TO THE F ILE OF THE LD. ASSESSING OFFICER TO EXAMINE THE CLAIM OF THE ASSE SSEE, THUS, THIS GROUND IS ALLOWED FOR STATISTICAL PURPOSES. 4.1. THE NEXT GROUND PERTAINS TO DELETING THE DISALLOWANCE OF RS.7,58,48,857/- RELATING TO ARRANG ING LONG TERM BORROWINGS, AMORTISED IN THE BOOKS OF ACCOUNT NOT DEBITED IN THE PROFIT & LOSS ACCOUNT BUT CLAIMED AS DEDUCTION U/S 37 OF THE ACT. THE CRUX OF ARGUMENT ADVANCED BY LD. DR IS IDENTICAL TO THE GROUND RAISED. ON THE OTHER HA ND, THE LD. COUNSEL FOR THE ASSESSEE, CLAIMED THAT THE AMOUNT W AS PAID THROUGH CHEQUE, THE DETAILS OF WHICH ARE AVAILABLE AT PAGE 14 OF THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS). 4.2. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE NOTE T HAT THE ASSESSING OFFICER IS GOING BY THE ACCOUNTING ENTRIE S AND IN EARLIER YEAR, THE CLAIM OF THE ASSESSEE WAS ALLOWED WHILE FRAMING THE ASSESSMENT ORDER U/S 143(3) OF THE ACT. IT IS ALSO NOTED THAT THE LD. COMMISSIONER OF INCOME TAX (APPE ALS) DULY CONSIDERED THE CLAIM OF THE ASSESSEE AND FOUND THAT THE NATURE OF EXPENDITURE INCURRED IS THE SAME AS WAS I N THE PAST. THE ASSESSEE DURING THE YEAR MODIFIED ITS ACC OUNTING OF THE SAID EXPENDITURE AND AMORTISED THE AMOUNT IN TH E BOOKS ON THE BASIS OF DURATION FOR WHICH THE AMOUNT WAS B ORROWED. THE CASE OF THE ASSESSEE IS EVEN OTHERWISE COVERED BY THE DECISION OF THE TRIBUNAL IN ACIT VS TATA HOUSING DE VELOPING COMPANY LTD. (2011) 45 SOT 9. THE GIST OF WHICH HAS BEEN MAHINDRA & MAHINDRA FINANCIAL SERVICES ITA NO.3070 AND 3150/MUM/2013 5 REPRODUCED AT PAGE 15 OF THE IMPUGNED ORDER. THE DE TAILS FILED BY THE ASSESSEE CLEARLY SHOWS THAT THE EXPEND ITURE WAS INCURRED DURING THE YEAR AND THIS FACT HAS NOT BEEN DISPUTED BY THE ASSESSING OFFICER. IN THE PAST, IDENTICAL CL AIM WAS ALLOWED AS REVENUE EXPENDITURE BY THE DEPARTMENT, T HUS, WITHOUT BRINGING ANY CONTRARY MATERIAL AND ALSO FOR THE SAKE OF CONSISTENCY, NO U-TURN IS PERMITTED. EVEN OTHERW ISE, THE ASSESSING OFFICER HAS NOT POINTED OUT ANY ERROR IN THE ACCOUNTING METHOD OF THE ASSESSEE. THE IMPUGNED AMO UNT HAS BEEN CLAIMED AS EXPENDITURE IN THE CURRENT YEAR U/S 37 (1) OF THE ACT. THE TOTALITY OF FACTS CLEARLY INDIC ATES THAT IT HAS TO BE ALLOWED AS REVENUE EXPENDITURE. WE FIND NO IN FIRMITY IN THE CONCLUSION DRAWN BY THE LD. COMMISSIONER OF INC OME TAX (APPEALS). THE APPEAL OF THE REVENUE IS PARTLY ALLOWED FOR STA TISTICAL PURPOSES. FINALLY, THE APPEAL OF THE ASSESSEE AS WELL AS OF T HE REVENUE ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES . THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 13/08/2015. SD/ - (ASHWANI TANEJA) SD/ - (JOGINDER SINGH) '# / ACCOUNTANT MEMBER $# / JUDICIAL MEMBER % & MUMBAI; ) DATED : 31/08/2015 F{X~{T? P.S/. . . MAHINDRA & MAHINDRA FINANCIAL SERVICES ITA NO.3070 AND 3150/MUM/2013 6 %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. +,- / THE APPELLANT 2. ./,- / THE RESPONDENT. 3. 0 0 % 1 ( + ) / THE CIT, MUMBAI. 4. 0 0 % 1 / CIT(A)- , MUMBAI 5. 34 .' , 0 +( ' 5 , % & / DR, ITAT, MUMBAI 6. 6# 7& / GUARD FILE. / BY ORDER, /3+ . //TRUE COPY// / (DY./ASSTT. REGISTRAR) , % & / ITAT, MUMBAI