DCIT 5(2), MUMBAI V. INDIA SECURITIES LTD, MUMBAI

ITA 3396/MUM/2013

• Counselvise Citation: 339619914 RSA 2013
• Duration Of Justice: 1 year(s) 5 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-10-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: I
• Next Hearing Date: 22-10-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 02-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PAVAN KUMAR BEER LA
• Keywords: Depreciation
• Section: 5(2)

Judgement Text

, , , , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES I, MUMBAI , ! , ' BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI RAJENDRA, ACCOUNTANT MEMBER ITA NO.3396/MUM/2013 (A.Y.2009-10) DCIT 5(2) ROOM NO.571, 5 TH FLOOR, AAYAKAR BHAVAN M.K. ROAD MUMBAI-400 020. # # # # / VS. M/S. INDIA SECURITIES LTD. ESSAR HOUSE, 11 KK MARG MUMBAI-400 034. ( %& / // / APPELLANT) ( '(%& / RESPONDENT) P.A. NO.AAACI 9010 K %& ) * ) * ) * ) * /APPELLANT BY SHRI PAVAN KUMAR BEERLA '(%& ) * ) * ) * ) * /RESPONDENT BY SHRI VIJAY MEHTA # ) +, / / / / DATE OF HEARING : 22.10.2014 -./ ) +, / DATE OF PRONOUNCEMENT : 22.10.2014 0 0 0 0 / / / / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER)/ : THE ONLY GROUND RAISED IN THIS APPEAL BY THE REVENU E PERTAINS TO DELETING THE DISALLOWANCE OF RS.10,97,877/- ON ACCO UNT OF DEPRECIATION PROVIDED ON NON-PERFORMING ASSETS. AT THE TIME OF H EARING THE LD. DR SHRI PAVAN KUMAR BEERLA BROADLY DEFENDED THE CONCLU SION DRAWN BY THE LD.AO BY CONTENDING THAT SINCE NO INCOME WAS GENERA TED OUT OF THE ASSET, THEREFORE, THE LD. CIT(A) IGNORED THE FACTS. ON THE OTHER HAND THE LD. COUNSEL FOR THE ASSESSEE SHRI VIJAY MEHTA DEFEND ED THE IMPUGNED I TA NO.3396/MUM/2013 INDIA SECURITIES LTD. 2 ORDER BY CONTENDING THAT THE ISSUE IS COVERED IN FA VOUR OF THE ASSESSEE BY THE DECISION OF THE TRIBUNAL IN ITS OWN CASE FOR ASSESSMENT YEAR 2001-02 TO 2005-06. 2. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL AVAILABLE ON RECORD. BEFORE COMING TO ANY CONCLUSION WE ARE REPRODUCING HEREUNDER THE RELEVANT PORTION FROM THE AFORESAID ORDER OF THE TRIBUNAL DATED 10/10/2012 (ITA NO.2591 AND 2818/MUM/2009) :- 8.1 WE HAVE HEARD LEARNED DR AS WELL AS LD. AR AN D CONSIDERED THE RELEVANT MATERIAL ON RECORD. LD. AR OF THE ASSESSEE HAS POINTED OUT THAT THIS ISSUE HAS BEEN C ONSIDERED AND DECIDED BY THIS TRIBUNAL IN ASSESSEES OWN CAS E FOR THE ASSESSMENT YEARS 2001-02, 2002-03, 2003-04, 2004-05 AND 2006-07. AT THE OUTSET WE NOTE THAT THIS ISSUE HAS BEEN REPEATEDLY CONSIDERED AND DECIDED BY THIS TRIBUNAL IN ASSESSEES OWN CASE. FOR THE ASSESSMENT YEAR 2006- 07 IN ITA NO.805/2010 THIS TRIBUNAL HAS DECIDED THIS ISSU E IN PARA 3 AND 4 OF THE ORDER DATED 30/9/2010 AS UNDER :- 3. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE PAR TIES AND PERUSED THE RECORD. WE FIND THAT ON IDENTICAL S ET OF FACTS THE ISSUE HAS BEEN DECIDED IN ASSESSMENT YEAR 2004- 05 BY THE ITAT IN ASSESSEES OWN CASE IN ITA NOS.2781/M/2 007 (ASSESSEES APPEAL) AND 3223/M/07 (REVENUES APPEAL ) EVEN DATED . FOR THE SAKE OF CLARITY THE GROUND, FACTS AND FINDINGS OF THE ITAT IN ASSESSMENT YEAR 2004-05 ARE REPRODUC ED BELOW:- 13. GROUND NO.2 OF THE REVENUE IS THAT THE CIT(A) ERRED IN DELETING THE DEPRECIATION AMOUNTING TO RS.11,18,833 /- BEING DEPRECIATION PROVIDED ON NON-PERFORMING ASSETS. 14. BRIEFLY THE FACTS RELATING TO THIS GROUND ARE T HAT THE AO NOTICED THAT THE ASSESSEE HAS CLAIMED DEPRECIATION OF RS.11,18,883/- IN RESPECT OF ASSETS AGAINST WHICH N O INCOME HAS BEEN ACCOUNTED FOR. THE AO DID NOT ACCEPT THE ASSESSEES SUBMISSION THAT DEPRECIATION ON THESE AS SETS IS ADMISSIBLE EVEN OF BEING NO INCOME IN THE YEAR UNDE R CONSIDERATION. THE CIT(A) FOLLOWED HIS PREDECESSORS DECISION IN ASSESSMENT YEAR 2002-03 AND ALLOWED THE DEPRECIA TION CLAIM OF THE ASSESSEE OBSERVING THAT FACTS ARE IDEN TICAL AND I TA NO.3396/MUM/2013 INDIA SECURITIES LTD. 3 THERE IS NO REASON TO DEVIATE FROM THE FINDING GIVE N BY HIS PREDECESSOR. 15. THE LD. AR HAS SUBMITTED THAT THE ISSUE IS COVE RED IN FAVOR OF THE ASSESSEE BY THE DECISION OF THE ITAT I N ASSESSEES OWN CASE IN REVENUES APPEAL FOR ASSESSM ENT YEAR 2001-02. THE RELEVANT FINDING OF ITAT IS REPRO DUCED BELOW:- 19 WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS THE PA PER BOOK FILED BEFORE US. THE AO HAS FAILED TO DISTINGUISH T HE CONCEPT OF THE USE OF THE ASSET BY MAKING THE SAME AS SUBJEC T MATTER OF LEASE TRANSACTIONS FROM THE ACTUAL USE OF THE AS SET BY THE LESSEE, WHO PAYS THE LEASE RENTALS. CIT(A) HAS RIGH TLY RECTIFIED THE ORDER AS DISCUSSED IN THE IMPUGNED OR DER. FACTUALLY, THE ASSESSEE CLAIMED DEPRECIATION UNDOUB TEDLY IN RESPECT OF THE LEASE ASSET LEASED OUT BY THE ASSESS EE TO THE LESSEES DESPITE FAILURES BY THE LESSEES IN MATTER S OF PAYMENT OF LEASE RENTALS AND ALSO DESPITE ASSESSEE S DECISION NOT TO RECOGNIZE THE INCOME IN VIEW OF THE REAL INCOME CONCEPT. ASSESSEE CLAIMED THE SAME IN VIEW O F THE FACT OF EXISTENCE OF LEASE AND ALSO THE NON-TERMINA TION OF LEASE AGREEMENTS, WHICH IS STILL IN FORCE. WHEN THE ASSETS ARE THE SUBJECT MATTER OF LEASE TRANSACTIONS, THE ALLEG ED ASSETS ARE IN USE BY THE ASSESSEE IN ANY CASE, THERE IS NO DISPUTE ABOUT THE OWNERSHIP OF THE SAID ASSET. UNDER THESE CIRCUMSTANCES, THE CLAIM OF DEPRECIATION MUST NOT B E LINKED TO THE RECOGNIZING OF THE LEASE INCOME IN RESPECT OF T HE SAID LEASE ASSETS. THEREFORE, WE ARE OF THE CONSIDERED O PINION THAT THE ORDER OF THE CIT(A) DOES NOT CALL FOR ANY INTER FERENCE. ACCORDINGLY, GROUND NO.4 OF THE REVENUE IS DISMISSE D. 16. THE LD. DR RELIED UPON THE ORDER OF THE AO. 17. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE PA RTIES AND PERUSED THE RECORD. WE FIND THAT ON IDENTICAL S ET OF FACTS THE ITAT HAS ALREADY DECIDED THE ISSUE IN ASSESSMEN T YEAR 2001-02 IN ASSESSEES OWN CASE CITED SUPRA, THEREFO RE, WE RESPECTFULLY FOLLOW THE DECISION OF ITAT IN THAT YE AR AND IN THE LIGHT OF THAT WE HEREBY CONFIRM THE ORDER OF CIT(A) . ACCORDINGLY, GROUND NO.2 IS DISMISSED. 2.1 IN THE PRESENT APPEAL BEFORE US IT IS NOT THE C ASE OF EITHER SIDE THAT THE FACTS ARE NOT IDENTICAL TO EARLIER YEARS, THERE FORE, TO MAINTAIN CONSISTENCY AND UNIFORMITY, RESPECTFULLY FOLLOWING THE AFORESAID ORDERS OF I TA NO.3396/MUM/2013 INDIA SECURITIES LTD. 4 THE TRIBUNAL WE FIND NO INFIRMITY IN THE CONCLUSION DRAWN BY THE LD. CIT(A), CONSEQUENTLY, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION O F THE HEARING ON 22 ND DAY OF OCTOBER, 2014 . 0 ) -./ 1 #2 22.10.2014 . ) 8 SD/- SD/- (RAJENDRA) (JOGINDER SINGH) ! ! ! ! / ACCOUNTANT MEMBER ! ! ! ! / JUDICIAL MEMBER MUMBAI; 1 # DATED : 22 ND OCTOBER, 2014. JV. 0 ) '+9 :9/+ 0 ) '+9 :9/+ 0 ) '+9 :9/+ 0 ) '+9 :9/+/ COPY OF THE ORDER FORWARDED TO : 1. %& / THE APPELLANT 2. '(%& / THE RESPONDENT. 3. ; ( ) / THE CIT, MUMBAI. 4. ; / CIT(A)-13, MUMBAI 5. 9>8 '+# , , / DR, ITAT, MUMBAI 6. 8? @ / GUARD FILE. 0# 0# 0# 0# / BY ORDER, (9+ '+ //TRUE COPY// A AA A/ // /B B B B (DY./ASSTT. REGISTRAR) , , , , / ITAT, MUMBAI.