ACIT, New Delhi V. Oriental Pathways (Agra) Pvt. Ltd., New Delhi

ITA 3171/DEL/2017

• Counselvise Citation: [2019] 114 COUNSELVISE.COM (IT) 2200 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 6 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-11-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2013-2014
• Appeal Filed On: 18-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRAMITA M BISWAS
• Keywords: Depreciation; Business expenditure; Rule of consistency
• Section: 271(1)(c); 143(3); 139(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: E NEW DELHI BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER & SHRI K.NARSIMHA CHARY, JUDICIAL MEMBER ITA NO.3171/DEL/2017 ASSESSMENT YEAR: 2013-14 ACIT, CENTRAL CIRCLE 26, NEW DELHI. VS ORIENTAL PATHWAYS (AGRA) PVT. LTD., 21/48, COMMERCIAL COMPLEX, MALCHA MARG, DIPLOMATIC ENCLAVE, NEW DELHI 110 021. PAN : AAACO 7826 R APPLICANT RESPONDENT AND ITA NOS. 3172 & 3173/DEL/2017 ASSESSMENT YEARS :2011-12 & 2013-14 ACIT, CENTRAL CIRCLE 26, NEW DELHI. VS ORIENTAL PATHWAYS (INDORE) PVT. LTD., OSE COMMERCIAL BLOCK, ASSET 5B, AERO CITY, HOSPITALITY DISTRICT, IGI AIRPORT, NEW DELHI 110 037 PAN : AAACO 7825 N (APPLICANT) (RESPONDENT) ASSESSEE BY SHRI K. V. S. R. KRISHNA, C.A. REVENUE BY MS. PRAMITA M. BISWAS, CIT-DR DATE OF HEARING 14.11.2019 DATE OF PRONOUNCEMENT 19.11.2019 2 ORDER PERK. NARSIMHACHARY, JM CHALLENGING THE ORDERS PASSED BY THE LEARNED COMMI SSIONER OF INCOME TAX (APPEALS)-31, NEW DELHI (LD. CIT(A)) I N THE CASE OF THE ORIENT PATWAYS (AGRA) FOR THE ASSESSMENT YEAR 2013- 14 AND IN THE CASE OF PATWAYS (INDORE) FOR THE ASSESSMENT YEARS 2011-12 A ND 2013-14, REVENUE PREFERRED THESE APPEALS ON IDENTICAL GROUND S. WE, THEREFORE, FIND IT JUST AND CONVENIENT TO DISPOSE OF THESE THR EE APPEALS BY WAY OF THIS COMMON ORDER WITH REFERENCE TO THE FACTS IN TH E CASE OF THE ORIENT PATWARIES (AGRA) FOR THE ASSESSMENT YEAR 2013-14. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEES A RE THE COMPANIES ENGAGED IN THE BUSINESS OF DEVELOPMENT, CONSTRUCTIO N AND MAINTENANCE OF HIGHWAY PROJECTS IN UTTAR PRADESH AND RAJASTHAN ON BUILD, OPERATE AND TRANSFER (BOT) BASIS. FOR THE ASSESSMENT YEAR 2013- 14, THE ASSESSEE FILED THE RETURN OF INCOME ON 29/9/2013 DECLARING NIL INC OME WITH THE CURRENT YEAR LOSS TO THE TUNE OF RS. 10,85,07,142/-. ASSESS MENT UNDER SECTION 143(3) OF THE ACT WAS COMPLETE BY ORDER DATED 18/3/ 2016 AT A LOSS OF RS.7,55,58,440/- AFTER MAKING A DISALLOWANCE OF RS. 55,32,54,343/- ON ACCOUNT OF DEPRECIATION AND AN ADDITION OF RS. 12,9 3,76,740/- ON ACCOUNT OF BUSINESS EXPENSES. 3. PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT T O LEVY THE PENALTY WERE INITIATED IN RESPECT OF THE DISALLOWANCES/ADDI TIONS, AND WERE COMPLETE BY ORDER DATED 30/09/2016 WITH THE LEVY OF PENALTY OF RS. 1,01,81,149/-. 3 4. ASSESSEE PREFERRED APPEAL BEFORE THE LD. CIT(A) AND CONTENDED THAT THE REASON FOR REDUCTION OF THE LOSS WAS ON AC COUNT OF DISALLOWANCE OF CLAIM FOR DEPRECIATION ON ROAD TO THE TUNE OF RS . 16,25,25,442/- AND IN TURN ALLOWED THE EXPENDITURE ON CONSTRUCTION OF THE ROAD TO BE AMORTISED AND WRITTEN OFF OVER THE PERIOD OF AGREEMENT RESULT ING IN ALLOWING RS. 12,95,76,740/-, AND THERE IS NO DIFFERENCE IN THE C OST OF ROAD ON WHICH DEPRECIATION WAS CLAIMED BY THE ASSESSEE AND LATERO N WRITTEN OFF WAS GRANTED BY THE LEARNED ASSESSING OFFICER HENCE THE PENALTY CANNOT BE SUSTAINED. 5. LD. CIT(A) BY WAY OF IMPUGNED ORDER DEALT WITH T HIS ISSUE AND RECORDED THAT A SIMILAR QUESTION HAD ARISEN IN ASSE SSEES OWN CASE FOR THE IMMEDIATELY PRECEDING YEAR, NAMELY, ASSESSMENT YEAR 2012-13 AND ON A CONSIDERATION OF THE CONTENTIONS AND MATERIAL BEFOR E HIM, IN THE LIGHT OF THE DECISIONS REPORTED IN CIT VS. BRAHMAPUTRA CONSO RTIUM LTD (2012) 348 ITR 339 AND ACIT VS. RELIANCE PETRO PRODUCTS PRIVAT E LIMITED (2010) 322 ITR 158, HIS PREDECESSOR HAD TAKEN THE VIEW THAT TH E PENALTY CANNOT BE SUSTAINED. SINCE THE FACTS AND CIRCUMSTANCES AND TH E BASIS FOR LEVY OF THE PENALTY WAS IDENTICAL, FOR THIS YEAR ALSO LD. CIT(A ) HAD TAKEN A SIMILAR VIEW AND DELETED THE PENALTY. 6. CHALLENGING THE SAID ORDER DELETING THE PENALTY, REVENUE PREFERRED THIS APPEAL CONTENDING THAT THE INCORRECT CLAIM OF DEPRECIATION ON ROADS WAS WITHDRAWN BY THE ASSESSEE ON 14/03/2015, NAMELY , AFTER A LAPSE OF ONE YEAR SINCE THE ISSUE OF CBDT CIRCULAR DATED 23/ 4/2014 AND AFTER RECEIVING THE SPECIFIC SHOW CAUSE NOTICE DATED 12/0 3/2015 FROM THE LEARNED ASSESSING OFFICER. IT IS FURTHER SUBMITTED BY THE LD. DR THAT IT IS ABETTED CASE OF FURNISHING OF INACCURATE PARTICULAR S OF THE INCOME OF THE 4 ASSESSEE LEADING TO THE CONCEALMENT OF INCOME AS TH E ASSESSEE NEVER BOTHERED TO REVISE ITS RETURN OF INCOME FILED UNDER SECTION 139(1) OF THE ACT AND WITHDREW ITS CLAIM ONLY WHEN THERE WAS NO A LTERNATIVE. 7. PER CONTRA, AT THE OUTSET IT IS BROUGHT TO OUR N OTICE BY THE LD. AR THAT THERE IS NOTHING ILLEGALITY OR IRREGULARITY IN THE LD. CIT(A) FOLLOWING THE ORDER PASSED BY HIS PREDECESSOR IN THE PRECEDIN G ASSESSMENT YEAR, NAMELY, FOR THE ASSESSMENT YEAR 2012-13. HE FURTHER SUBMITTED THAT SUCH AN ORDER OF THE LD. CIT(A) FOR THE ASSESSMENT YEAR 2012-13 WAS UPHELD BY A COORDINATE BENCH OF THIS TRIBUNAL IN ITA NO. 2965 /DEL/2016 BY ORDER DATED 28/02/2018. HE FURTHER BROUGHT TO OUR NOTICE THAT THE THESE ORDERS OF THE TRIBUNAL WERE CHALLENGED BEFORE THE HONBLE HIGH COURT BY REVENUE, AND THE HONBLE HIGH COURT BY ORDER DATED 28/08/2018 UPHELD THE FINDINGS OF THE TRIBUNAL AND DISMISSED THE REVE NUES APPEAL. 8. WE HAVE GONE THROUGH THE RECORD IN THE LIGHT OF THE SUBMISSIONS MADE ON EITHER SIDE. THERE IS NO DISPUTE OF THE FAC T THAT THE FINDINGS OF THE LD. CIT(A) FOR ASSESSMENT YEAR 2012-13 WERE UPH ELD BY A COORDINATE BENCH OF THIS TRIBUNAL IN ITA 2965/DEL/2016 BY ORDE R DATED 28/02/2018 AND THE APPEAL OF THE REVENUE PREFERRED AGAINST SUC H ORDER OF THE TRIBUNAL WAS DISMISSED BY THE HONBLE HIGH COURT BY WAY OF DECISION REPORTED IN (2018) 103 CCH 10 (DELHI). WE FURTHER F IND THAT FOLLOWING THE DECISION OF THE HONBLE HIGH COURT THIS TRIBUNAL IN THE CASE OF ACIT VS. M/S ORIENTAL NAGPUR BYEPASS CONSTRUCTIONS PRIVATE L IMITED IN ITA NO. 3169/DEL/2010 BY ORDER DATED 14/10/2019 HELD THAT T HE PENALTY LEVIED UNDER SIMILAR CIRCUMSTANCES CANNOT BE SUSTAINED. 5 9. IT IS NOT THE CASE OF THE REVENUE THAT THE FACTS INVOLVED IN THIS CASE FOR THIS YEAR ARE IN ANY WAY DIFFERENT FROM THE FAC TS INVOLVED FROM THE EARLIER YEARS SO AS TO PROMPT US TO TAKE A DIFFEREN T VIEW. IN VIEW OF THE CONSISTENT VIEW TAKEN BY ALL THE APPELLATE FORA, IN THE CASE OF ASSESSEE AND ITS SISTER CONCERNS, WE ARE OF THE CONSIDERED O PINION THAT RULE OF CONSISTENCY DEMANDS THAT SIMILAR ADDITION HAS TO BE TAKEN UNDER SIMILAR CIRCUMSTANCES IN ASSESSEES OWN CASE. WE ACCORDINGL Y, HOLD THAT THE PENALTY LEVIED BY THE LEARNED ASSESSING OFFICER CAN NOT BE SUSTAINED. ITA NO. 3172 AND 3173/DEL/2017 ON A PERUSAL OF THE RECORD WE FIND THAT THE FACTS AND CIRCUMSTANCES AND THE BASIS FOR LEVY OF PENALTY IN THESE TWO APPEALS ARE IDENTICAL TO THE FACTS AND CIRCUMSTANCES INVOLVED I N ITA NO. 3171/DEL/2013. IN CASE OF ORIENT PATWAYS (INDORE) P RIVATE LIMITED ALSO, FOR THE ASSESSMENT YEAR 2012-13, COORDINATE BENCH O F THIS TRIBUNAL UPHELD THE DELETION OF PENALTY AND THE SAME WASCONF IRMED BY THE HONBLE HIGH COURT. THE ISSUE, IN CASE OF PATWAYS ( INDORE) PRIVATE LIMITED ALSO IS NO LONGER RES INTEGRA AND HAS SQUARELY BEEN COVERED BY THE DECISION OF HONBLE HIGH COURT. WE, THEREFORE, WHIL E RESPECTFULLY FOLLOWING THE CONSISTENT VIEW HOLD THAT THE PENALTY LEVIED FOR ASSESSMENT YEARS 2011-12 AND 2013-14 IS NOT SUSTAINABLE AND TH E APPEALS OF THE REVENUE OR DEVOID OF MERITS AND DISMISSED THE SAME. IN THE RESULT ALL THETHREE APPEALS OF REVENUE ARE D ISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 19 TH NOV, 2019. SD/- SD/- (R.K. PANDA) (K. NARASIMHA CHARY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 19 TH NOV, 2019 6 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI