STAR SEARCH TECHNOLOGIES P. LTD, MUMBAI V. ITO WAD 2(30(2), MUMBAI

ITA 3180/MUM/2010

• Counselvise Citation: 318019914 RSA 2010
• Duration Of Justice: 1 year(s) 6 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-10-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: J
• Next Hearing Date: 17-10-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 23-04-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D S SUNDER SINGH
• Assessee Lawyers: S A KANJI
• Keywords: Depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH J : MUMBAI BEFORE SHRI R.S. PADVEKAR, ( JUDICIAL MEMBER) AND SHRI RAJENDRA SINGH,(ACCOUNTANT MEMBER) ITA NO.3180/MUM/2010 ASSESSMENT YEAR : 2006-07 STAR SEARCH TECHNOLOGIES PVT. LTD. 136, GREAT WESTERN BLDG. NAGINDAS MASTER ROAD EXTN. FORT, MUMBAI-400 001. ..( APPELLANT ) P.A. NO. ( AAGCS 1492 M ) VS. INCOME TAX OFFICER WAR 2(3)(2), ROOM NO.581 A, AAYAKAR BHAVAN, M. K. ROAD, MUMBAI-400 020 ..( RESPONDENT ) APPELLANT BY : SHRI S. A. KANJI RESPONDENT BY : SHRI D. S. SUNDER SINGH DATE OF HEARING : 17.10.2011 DATE OF PRONOUNCEMENT : 28 TH OCTOBER, 2011 O R D E R PER RAJENDRA SINGH (AM). THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 21.1.2010 OF CIT(A) FOR THE ASSESSMENT YEAR 2006-07 . THE ASSESSEE IN THIS APPEAL HAS RAISED DISPUTES ON TWO GROUNDS WHICH REL ATE TO DISALLOWANCE OF PRE-OPERATIVE EXPENSES UNDER SECTION 35D OF THE INC OME TAX ACT AND DISALLOWANCE OF DEPRECIATION. ITA NO.3180/M/10 A.Y:06-07 2 2. BRIEFLY STATED, FACTS OF THE CASE ARE THAT THE A SSESSEE FOR THE RELEVANT YEAR HAD CLAIMED DEDUCTION OF RS.3,96,834/- UNDER S ECTION 35D OF THE IT ACT ON ACCOUNT OF PRE-OPERATIVE EXPENSES. THE ASSESSEE HOWEVER NEITHER PRODUCED THE BOOKS OF ACCOUNT NOR GAVE ANY EXPLANAT ION REGARDING PRE- OPERATIVE EXPENSES. THE AO, THEREFORE, DISALLOWED T HE CLAIM. ASSESSEE HAD ALSO CLAIMED DEPRECIATION OF RS.3,02,400/- IN RESPE CT OF ASSET IP. THE ASSESSEE NEITHER GAVE ANY DETAILS NOR EVEN EXPLAINE D AS TO WHAT IP STOOD FOR. THE AO, THEREFORE DISALLOWED THE CLAIM OF DEP RECIATION. ASSESSEE DISPUTED THE DECISION OF AO AND SUBMITTED BEFORE CI T(A) THAT THE DETAILS REGARDING PRE-OPERATIVE EXPENSES AND DEPRECIATION RELATED TO CALENDAR YEAR 2001 AND THEREFORE, THE SAME COULD NOT BE PRODUCED BEING VERY OLD. THE ASSESSEE HOWEVER ADMITTED THAT IN EARLIER YEARS NO SCRUTINY ASSESSMENT HAD BEEN MADE. THE ASSESSEE ALSO EXPLAINED THAT THE DE PRECIATION WAS IN RESPECT OF IP WHICH WAS INTELLECTUAL PROPERTY RIG HTS BEING INTANGIBLE ASSET IN RESPECT OF WHICH DEPRECIATION HAD BEEN ALLOWED IN T HE EARLIER YEAR. THE ASSESSEE HOWEVER DID NOT FILE ANY DETAILS IN RESPEC T OF BOTH THE CLAIMS EVEN BEFORE CIT(A). CIT(A) THEREFORE OBSERVED THAT THE CLAIM HAD NEVER BEEN EXAMINED IN THE EARLIER YEARS AND ACCORDINGLY HE CO NFIRMED THE ORDER OF AO DISALLOWING THE CLAIM IN THE ABSENCE OF DETAILS BEI NG FURNISHED BY THE ASSESSEE. AGGRIEVED BY THE SAID DECISION, ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. ITA NO.3180/M/10 A.Y:06-07 3 3. BEFORE US THE LD. AUTHORISED REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAD GIVEN BREAKUP OF PRE-OPERATIV E EXPENSES AMOUNTING TO RS.19,84,172/- BEFORE CIT(A) WHICH ARE AVAILABLE AT PAGE-23 OF THE PAPER BOOK. THE CLAIM UNDER SECTION 35D HAD BEEN ALLOWED IN THE EARLIER YEARS UNDER SECTION 143(1) AND THIS WAS THE THIRD YEAR AN D THEREFORE, CLAIM SHOULD BE ALLOWED. REGARDING INTELLECTUAL PROPERTY RIGHTS, IT WAS ADMITTED BY THE LD. AR THAT NO DETAILS WERE GIVEN EITHER BEFORE AO OR CIT(A). HOWEVER, IT WAS SUBMITTED THAT DEPRECIATION HAD BEEN ALLOWED IN THE EARLIER YEAR. THE LD. AR HAD NOT OBJECTION IN CASE THE MATTER WAS SENT BACK TO AO FOR NECESSARY VERIFICATION. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAND SUPPORTED THE ORDERS OF AUTHORITIES BELOW AND PLACE D RELIANCE ON THE FINDINGS GIVEN IN THE RESPECTIVE ORDERS. 4. WE HAVE PERUSED THE RECORDS AND CONSIDERED THE R IVAL CONTENTIONS CAREFULLY. THE ASSESSEE HAD MADE CLAIM UNDER SECTI ON 35D IN RESPECT OF PRELIMINARY EXPENSES WHICH HAD BEEN AMORTISED AND C LAIMED @ 20% PER YEAR. THIS IS THE THIRD YEAR. THE ASSESSEE HAS CL AIMED THAT IN EARLIER YEARS THE CLAIM HAD BEEN ALLOWED. HOWEVER, THE MATTER REQ UIRES VERIFICATION AS THE ASSESSEE HAD NOT FILED COMPLETE DETAILS BEFORE AO. SIMILARLY WITH REGARD TO CLAIM OF DEPRECIATION ON THE INTELLECTUAL PROPERTY RIGHTS, THE ASSESSEE HAD NOT GIVEN ANY DETAILS. IN RESPECT OF THIS CLAIM ALSO, IT HAS BEEN SUBMITTED THAT DEPRECIATION HAD BEEN ALLOWED IN THE EARLIER YEARS. THE MATTER THUS REQUIRES VERIFICATION. WE THEREFORE SET ASIDE THE ORDER OF CIT(A) AND RESTORE THE MATTER BACK TO THE FILE OF AO FOR PASSING A FRESH O RDER AFTER NECESSARY ITA NO.3180/M/10 A.Y:06-07 4 EXAMINATION OF RECORDS AND IN ACCORDANCE WITH LAW A ND AFTER ALLOWING OPPORTUNITY OF HEARING TO THE ASSESSEE. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 28.10.2011. SD/- SD/- (R.S. PADVEKAR) (RAJENDRA SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 28.10.2011. JV. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR BENCH TRUE COPY BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.