TATA MOTORS LTD ( SUCCESSOR TO TELCO DEALERS LEASING AND FINANCE CO. LTD), MUMBAI V. JCIT SP RG 13, MUMBAI

ITA 3524/MUM/2013

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 7822 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 7 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-12-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Assessment Year: 1994-1995
• Appeal Filed On: 06-05-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A MOHAN SH V JUSTIN
• Assessee Lawyers: DINESH VYAS; SRIHARI M IYER
• Keywords: Depreciation; Wholly owned subsidiary
• Section: 143(3); 32; 147; 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E , MUMBAI BEFORE SHRI G.S. PANNU (AM) AND SHRI RAM LAL NEGI (JM) ITA NO. 3524 /MUM/201 3 ( ASSESSMENT YEAR: 1994 - 95 ) M/S TATA MOTORS LIMITED (SUCCESSOR TO TELCO DEALERS LEASING & FINANCE CO. LTD.), BOM BAY HOUSE, 24, HOMI MODY STREET, HUTATMA CHOWK, MUMBAI - 400001 PAN : AAACT 2727Q VS. THE DEPUTY COMMISSIONER OF INCOME TAX, LARGE TAXPAYER UNIT (LTU), CENTRE - 1, WORLD TRADE CENTRE, 29 TH FLOOR, CUFFE PARADE, MUMBAI - 4000 0 5 ITA NO. 4462 /MUM/201 4 ( ASS ESSMENT YEAR: 1996 - 97 ) M/S TATA MOTORS LIMITED (SUCCESSOR TO TELCO DEALERS LEASING & FINANCE CO. LTD.), BOMBAY HOUSE, 24, HOMI MODY STREET, HUTATMA CHOWK, MUMBAI - 400001 PAN : AAACT 2727Q VS. THE ASSISTANT COMMISSIONER OF INCOME TAX 2(1), 5 TH FLOOR, A AYAKAR BHAVAN, M.K. MARG MUMBAI - 400020 ITA NO. 1722 /MUM/201 2 ASSESSMENT YEAR: 1997 - 98 ) THE A CIT 2(3), ROOM NO. 552, 5 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI 400020 PAN : AAACT1629E VS. M/S TATA FINANCE LTD. (NOW TATA MOTORS LTD.), BOM BAY HOUSE, 24, HOMI MODY STREET, FORT, MUMBAI - 400001 ITA NO S . 3524/MUM/2013, 4463/MUM/2014, 1722 & 1488/MUM/2012 ASSESSMENT YEAR S : 1994 - 95, 1996 - 97, 1997 - 98 & 1998 - 99 2 & ITA NO. 1488 /MUM/201 2 ASSESSMENT YEAR: 1998 - 99 ) M/S TATA MOTORS LIMITED (SUCCESSOR TO TATA FINANCE LTD.), BOMBAY HOUSE, 24, HOMI MODY STREET, FORT, MUMBAI - 400001 PAN : AAACT1629 F VS. THE AC IT 2(3), AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 400020 ASSESSEE BY : SH. DINESH VYAS AND SH. SRIHARI M IYER (AR) REVENUE BY : SH. A MOHAN SH. V. JUSTIN (CIT DR) DATE OF HEARING: 21/09 /2017 DATE OF PRONOUNCEMENT: 19 /12 /2017 O R D E R PER RAM LAL NEGI, JM THESE ARE THE APPEALS FILED BY THE ASSESSEE AND THE REVENUE PERTAINING TO THE ASSESSMENT Y EAR S 1994 - 95, 1996 - 97, 1997 - 98 AND 1998 - 99 . VIDE ITA NO. 3524 /M UM/2013, THE ASSESSEE HAS CHALLENGED THE IMPUGNED ORDER PAS SED BY THE LD. CIT (A ) - 6, MUMBAI, WHEREBY THE LD. CIT (A) HAS PARTLY ALLOWED THE APPEAL FILED BY THE ASSESSEE AGAINST ASSESSMENT ORDER PASSED U/S 143 (3) READ WITH SECTION 1 47 OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT). VIDE ITA NO. 4462/MUM/2014 THE ASSESSEE HAS CHALLENGED THE IMPUGNED ORDER DATED 19/03/2014 PASSED BY THE LD. CIT (A) - 6, MUMBAI, WHEREBY THE LD. CIT (A) HAS PARTLY ALLOWED THE APPEAL OF THE ASSESSEE FILED BY THE ASSESSEE AGAINST ASSESSMENT ORDER PASSED U/S 143 (3) READ WITH SECTION 2 54 OF THE INCOME TAX ACT. THIRD APPEAL I.E. ITA NO. 1722/MUM/2012 HAS BEEN PREFERRED BY THE REVENUE AGAINST THE ORDER DATED 30/12/20111 PASSED BY THE COMMISSIONER OF ITA NO S . 3524/MUM/2013, 4463/MUM/2014, 1722 & 1488/MUM/2012 ASSESSMENT YEAR S : 1994 - 95, 1996 - 97, 1997 - 98 & 1998 - 99 3 INCOME TAX ( APPEALS ) - 6, MUMBAI, WHEREBY THE LD. CIT (A) HAS PARTLY ALLOWED THE FILED BY TH E ASSESSEE AGAINST ORDER GIVING EFFECT TO THE ITAT ORDER PASSED IN ITA NO. 4417 AND 43 14/MUM/ 2005 DATED 29/11/2009. VIDE ITA NO. 1488/MUM/2012 THE ASSESSEE HAS CHALLENGED THE IMPUGNED ORDER PASSED BY COMMISSIONER OF INCOME TAX (APPEALS) - 6, MUMBAI, WHEREBY THE LD. CIT (A) HAS DISMISSED THE APPEAL FILED BY THE ASSESSEE AGAINST ORDER GIVING EFFECT TO ITAT ORDER PASSED IN ITA NO. 4417 AND 4314/MUM/2005, SECTION 143 (3) READ WITH SECTION 254 OF THE I.T. ACT. SINCE, ALL THE FOUR APPEALS PERTAIN TO THE SAME ASSESS EE FOR THE DIFFERENT ASSESSMENT YEARS, ALL THE APPEALS WERE CLUBBED, HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON AND CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. ITA NO. 3524 /MUM/201 3 (ASSESSMENT YEAR: 1994 - 95) BRIEF F ACTS OF THE CASE ARE THAT THE ITAT RESTORED THE APPEAL OF THE ASSESSEE PERTAINING TO THE ASSESSMENT YEAR 1994 - 95 TO THE FILE OF THE CIT(A) FOR FRESH ADJUDICATION AS THE ASSESSEE HAD RAISED ADDITIONAL GROUND OF APPEAL CHALLENGING THE VALIDITY OF REOPENING OF THE ASSESSMENT . IN PURSUANCE THEREOF THE LD. CIT (A) PASSED IMPUGNED ORDER AND DISMISS ED THE SAID GROUND AND REITERATED ITS FINDINGS A LREADY GIVEN ON THE OTHER ISSUES . THE ASSESSEE CHALLENGED THE SAID ORDER BEFORE THE CIT(A). THE LD. CIT(A) AFFIRMED THE ACTION OF THE AO . AGAINST THE SAID ORDER THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 2. THE ASSESSEE HAS RAISED THE FOLLOWING EFFECTIVE GROUNDS OF APPEAL AGAINST THE IMPUGNED ORDER PASSED BY THE LD. CIT (A): - 1. PROCEEDINGS INITIATED UNDER SECTION 147 IS INVALID AND BAD IN LAW: 1.1 THE LEARNED CIT (A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE VALIDITY OF THE PROCEEDINGS UNDER SECTION 147 OF THE ACT. THE LEARNED ITA NO S . 3524/MUM/2013, 4463/MUM/2014, 1722 & 1488/MUM/2012 ASSESSMENT YEAR S : 1994 - 95, 1996 - 97, 1997 - 98 & 1998 - 99 4 CIT (A) OUGHT TO HAVE APPRECIATED BASED ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THAT THE REASS ESSMENT PROCEEDINGS UNDER SECTION 147 IS BAD IN LAW, ILLEGAL AND WITHOUT AND/OR IN EXCESS OF JURISDICTION. 1.2 THE LEARNED CIT (A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE VALIDITY OF THE PROCEEDING UNDER SECTION 147 OF THE ACT DISREGARDING THE FACTS T HAT THE INFORMATION REGARDING CLAIM OF DEPRECIATION ON ASSETS GIVEN ON LEASE WAS ALREADY AVAILABLE ON RECORDS AND HENCE THE REASSESSMENT PROCEEDING UNDER SECTION 1147 IS INVALID AND BAD IN LAW BEING BASED ON SAME SET OF FACTS AND MATERIAL ALREADY ON RECORD S. 2. WITHOUT PREJUDICE TO GROUND NO. 1 ABOVE: 2.1 THE LEARNED CIT (A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE DISALLOWANCE OF DEPRECIATION SIMPLY BASED ON THE EARLIER ORDER DATED 30/11/2004 PASSED BY THE THEN CIT (A). THE CIT (A) OUGHT TO HAVE EXAMINE D THE FACTS AND CONSIDERED THE SUBMISSIONS OF THE APPELLANT AND DECIDED THE ISSUE AFRESH ON MERITS. 2.2 DISALLOWANCE OF DEPRECIATION ON ASSETS GIVEN ON LEASE TO SAHNEY KRIKWOOD PVT LTD.: 2.2.1 THE LEARN ED CIT (A) HAS ERRED IN LAW AND ON FACTS OF THE CASE IN CONFI RMING THE DISALLOWANCE OF DEPRECIATION OF RS. 20,00,000 ON ASSETS ACQUIRED FROM M/S SAHNEY KRIKWOOD PVT. LTD. AND LEASED BACK TO THEM ON PRESUMPTION THAT THE CAPTIONED TRANSACTION OF SALE AND LEASE BACK WAS ONLY A FINANCE TRANSACTION. 2.2.2 THE CIT (A) HAS ERRE D IN LAW AND ON FACTS IN CONFIRMING DISALLOWANCE OF DEPRECIATION ON ASSETS LEASED TO SAHNEY KRIKWOOD PVT. LTD. DISREGARDING THE INFORMATION, DOCUMENTS AND SUBMISSIONS FILED BY THE APPELLANT. 2.3 DISALLOWANCE OF DEPRECIATION ON ASSETS GIVEN ON LEASE TO PABST C OLA CO. LTD.: ITA NO S . 3524/MUM/2013, 4463/MUM/2014, 1722 & 1488/MUM/2012 ASSESSMENT YEAR S : 1994 - 95, 1996 - 97, 1997 - 98 & 1998 - 99 5 2.3.1 THE CIT (A) HAS ERRED IN LAW AND ON FACT IN CONFIRMING THE DISALLOWANCE OF DEPRECIATION OF RS. 14,18,250/ - ON ASSETS PURCHASED FROM KEMPSBERG BREWERIES PVT. LTD. AND LEASED TO PABST COLA CO. LTD. ON THE PRESUMPTION THAT THE ASSETS WERE NOT I N EXISTENCE AND THE TRANSACTION WAS MERELY A FINANCE TRANSACTION. 2.3.2 THE CIT (A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE DISALLOWANCE OF DEPRECIATION DISREGARDING THE FACT THAT THE AO HAS DISALLOWED THE DEPRECIATION FOR THE REASON THAT SUPPLIER OF TH E GOODS, KEMPSBERG BREWERIES PVT. LTD., HAVE NOT RESPONDED TO THE NOTICE OF THE AO. THE CIT (A) OUGHT TO HAVE CONSIDERED THE INFORMATION, DOCUMENTS AND SUBMISSIONS FILED BY THE APPELLANT. 2.3.3 THE CIT (A) HAS ERRED IN LAW AND ON FACTS ON CONFIRMING THE DISALLO WANCE OF DEPRECIATION DISREGARDING THE INFORMATION, DOCUMENTS AND SUBMISSIONS FILED BY THE APPELLANT. 3. BEFORE US, T HE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE DOES NOT WANT TO PRESS GROUND NO. 1 OF THE APPEAL. HENCE, THIS GROUND OF AP PEAL IS DISMISSED AS NOT PRESSED. 4. GROUND NO. 2 PERTAINS TO DISALLOWANCES OF DEPRECIATION OF RS. 20,00,000/ - ON ASSETS ACQUIRED FROM M/S SAHNEY KRIKWOOD AND LEASED BACK AND RS. 14,18,25/ - ON ASSETS PURCHASED FROM KEMPSBERG BREWERIES LTD. AND LEASED TO PABST COLA CO. (TOTAL RS. 34,18,250/ - ) THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THIS ISSUE IS COVERED BY THE ORDER DATED 12/06/2017 PASSED BY THE ITAT IN THE APPELLANTS OWN CASE FOR THE ASSESSMENT YEARS 1994 - 95 TO 1997 - 98 IN ITA NOS. 1484 TO 1487/M UM/2012 AND 7166 TO 7168/MUM/2010, ORDER DATED 06/01/2017 PASSED BY THE ITAT IN THE ASSESSEES OWN CASE FOR THE ASSESSMENT YEARS 1997 - 1998 AND 1998 - 99 IN ITA NO. 6214/MUM/03 AND 7148/MUM/04, ORDER DATED 25/06/2014 PASSED BY THE ITAT IN THE CASE OF SHEBA P ROPERTIES (ASSESSEES WHOLLY OWNED SUBSIDIARY ITA NO S . 3524/MUM/2013, 4463/MUM/2014, 1722 & 1488/MUM/2012 ASSESSMENT YEAR S : 1994 - 95, 1996 - 97, 1997 - 98 & 1998 - 99 6 COMPANIES) FOR A.Y. 1998 - 99, 2006 - 07 AND 2008 - 09 AND ORDER DATED 16/06/2008 PASSED BY THE ITAT IN THE CASE OF SHEBA PROPERTIES FOR THE ASSESSMENT YEARS 1996 - 97 AND 1997 - 98. THE LD. COUNSEL FURTHER SUBMITTED THA T APART FROM THE DECISIONS OF THE ITAT, THIS ISSUE IS COVERED BY THE JUDGMENT OF THE HONBLE SUPREME COURT PASSED IN ICDS LTD. VS. CIT (350 ITR 527 SC ) AND THE HONBLE HIGH COURT OF BOMBAY PASSED IN CIT VS. APOLLO FINVEST INVESTMENT LTD. ITA NO. 2298 OF 2 013 BOM . THEREFORE, THIS GROUND OF THE APPEAL IS LIABLE TO BE DISMISSED BEING DEVOID OF ANY MERIT. 5. ON THE OTHER HAND, THE LD. DEPARTMENTAL REPRESENTATIVE (DR) DID NOT CONTROVERT THE SUBMISSIONS OF THE LD. COUNSEL, HOWEVER, RELIED ON THE ORDER PASSED BY THE LD. CIT (A). 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND ALSO CAREFULLY GONE THROUGH THE MATERIAL ON RECORD INCLUDING THE CASES RELIED UPON BY THE LD. COUNSEL FOR THE ASSESSEE. WE NOTICE THAT THE ASSESSEE HAD RAISED THE IDENTICAL ISSUE IN ITA NO. 148 4/MUM/2012 FOR THE A.Y. 1994 - 95. IN THE SAID YEAR, THE RETURN OF THE ASSESSEE WAS COMPLETED U/S 143 (3) OF THE ACT. THE ASSESSING OFFICER DISALLOWED DEPRECIATION ON LEASE ASSETS. THE LD. CIT (A) CONFIRMED THE ACTION OF THE AO. IN SECOND APPEAL, THE ITAT RESTORED THE MATTER BACK TO THE FILE OF AO WITH THE DIRECTION TO EXAMINE THE ISSUE OF DISALLOWANCE OF DEPRECIATION OF LEASE ASSETS DE NOVO IN THE LIGHT OF THE VARIOUS JUDICIAL PR ONOUNCEMENTS . THE AO IN SET ASIDE PROCEEDINGS AGAIN DISALLOWED THE DEPRECIATIO N IN THE ORDER PASSED U/S 143 (3) READ WITH SECTION 254 OF THE ACT. THE ACTION WAS AGAIN CHALLENGED BEFORE THE LD. CIT (A). THE LD. CIT (A) FURTHER CONFIRMED THE ORDER PASSED BY THE AO. AGAINST THE SAID ORDER, APPEAL WAS FILED BEFORE THE ITAT IN THE SECO ND ROUND . S IMILAR DISALLOWANCES WERE MADE BY THE AO, WHICH WERE SUSTAINED BY CIT (A) FOR THE A.Y. 1997 - 98 AND 1998 - 99 AND THE ASSESSEE FILED APPEAL BEFORE THE TRIBUNAL AND THE TRIBUNAL DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE AND ITA NO S . 3524/MUM/2013, 4463/MUM/2014, 1722 & 1488/MUM/2012 ASSESSMENT YEAR S : 1994 - 95, 1996 - 97, 1997 - 98 & 1998 - 99 7 DELETED THE ADDITION. THE LD. COUNSEL FURTHER RELIED UPON THE DECISION OF TRIBUNAL IN ASSESEES OWN WHOLLY OWNED SUBSIDIARY COMPANY IN SHEBA PROPERTY LTD. VS. DCIT (SUPRA). IT WAS FURTHER ARGUED THAT HONBLE GUJARAT HIGH COURT IN THE CASE OF ACIT VS. GUJARAT LEASE FINANCE LTD. (2008) 174 TAXMANN 28, ALLOWED THE SIMILAR DISALLOWANCES. THE ASSESSEE FURTHER RELIED UPON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF ICDS LTD. VS. CIT (SUPRA). AFTER HEARING THE RIVAL CONTENTIONS THE CO - ORDINATE BENCH OF THE TRIBUNAL DECIDED TH IS ISSUE IN FAVOUR OF THE ASSESSEE. THE FINDINGS OF THE TRIBUNAL ARE REPRODUCED HEREIN BELOW: - 5. WE HAVE CONSIDERED THE RIVAL SUBMISSION OF THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD CAREFULLY. BESIDES THE YEAR UNDER CONSIDERATION, THE LD. CIT (A) SUSTAINED THE SIMILAR DISALLOWANCE OF DEPRECIATION OF LEASED ASSET FOR AYS 1995 - 96, 1996 - 97, 1997 - 98 AND 1998 - 99. THE ASSESSEE HAS FILED APPEAL BEFORE THE ITAT VIDE ITA NO. 6214/MUM/2003 FOR A Y 1997 - 98 AND ITA NO. 7148/MUM/2004 FOR AY 1198 - 99 AND THE TRIBUNAL PASSED THE FOLLOWER ORDER: - 18.15. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US. WE FIND THAT IMPUGNED ASSETS UNDERLYING LEASE AGREEMENTS WERE VERY MUCH IN EXISTENCE, THAT PURCHASE CONSIDERATION OF ASSETS WAS DIS CHARGED BY THE ASSESSEE THROUGH BANKING CHANN ELS , THAT COPIES OF THE CHEQUES WERE ALSO PRODUCED, THAT THE LEASE TRANSACTIONS WERE COMPLETED AS PER ALL LEGALLY PRESCRIBED PROCEDURES, THAT IT WAS A RIGHTFUL OWNER OF LEASED ASSETS THAT THE LESSEES HAD CONFIRM ED THE OWNERSHIP OF ASSETS, THAT THEY HAD NOT CLAIMED DEPRECIATION IN THEIR BOOKS OF ACCOUNT FOR PURCHASE AND LEASE OF ASSETS, THAT LEASE RENTALS EARNED BY THE ASSESSE E WAS OFFERED TO TAX AND SAME WAS ASSETS BY THE AO.S IN THE YEAR UNDER CONSIDERATION AS W ELL AS IN THE SUBSEQUENT AY.S. HERE, WE WOULD LIKE TO DISCUSS THE MATTER OF I.C.D.S. LTD. (SUPRA). IN THAT CASE THE HONBLE APEX COURT HAS HELD AS UNDER: - THE PROVISION ON DEPRECIATION IN THE INCOME - TAX ACT, 1961, READS THAT THE ASSET MUST BE OWNED, WHOL LY OR PARTLY, BY THE ASSESSEE AND USED FOR THE PURPOSES OF THE BUSINESS. THEREFORE , IT IMPOSES A TWIN REQUIREMENT OF OWNERSHIP AND USAGE FOR BUSINESS FOR A SUCCESSFUL CLAIM UNDER SECTION 32 OF THE ACT. THE SECTION REQUIRES THAT THE ASSESSEE MUST USE TH E ASSET FOR THE PURPOSE OF BUSINESS . IT DOES NOT MANDATE USAGE OF THE ASSET BY THE ASSESSEE ITSELF. AS LONG AS THE ASSET IS UTILIZED FOR THE PURPOSE OF BUSINESS OF THE ASSESSEE, THE REQUIREMENT OF ITA NO S . 3524/MUM/2013, 4463/MUM/2014, 1722 & 1488/MUM/2012 ASSESSMENT YEAR S : 1994 - 95, 1996 - 97, 1997 - 98 & 1998 - 99 8 SECTION 32 WILL STAND SATISFIED, NOTWITHSTANDING NON - USAGE OF THE ASSET ITSELF BY THE ASSESSEE. THE DEFINITIONS OF OWNERSHIP ESSENTIALLY MAKE OWNERSHIP OF FUNCTION OF LEGAL RIGHT OR TITLE AGAINST THE REST OF TH WORLD. HOWEVER, IT IS NOMEN GENERALISSIMUM, AND ITS MEANING IS TO BE GATHERED FROM THE CONNECTION I N WHICH IT IS USED, AND FROM THE SUBJECT - MATTER TO WHICH IT IS APPLIED. AS LONG AS THE ASSESSEE HAS A RIGHT TO RETAIN THE LEGAL TITLE AGAINST THE REST OF THE WORLD, IT WOULD BE THE OWNER OF THE ASSET IN THE EYES OF LAW. AS THE ASSESSEE WAS THE OWNER OF TH E ASSETS LEASED OUT TO DIFFERENT PARTIES, SO , IT WAS ENTITLED TO CLAIM DEPRECIATION. THE FAA HAD GONE THROUGH THE LEASE AGREEMENTS, CONFIRMATION LETTERS AND OTHER RELEVANT MATERIAL. AS THE EXISTENCE OF ASSETS AND THEIR USE IS IN DOUBT, SO, THE AO IN OUR O PINION WAS NOT JUSTIFIED IN DENYING THE CLAIM OF DEPRECIATION MADE BY ASSESSEE. WE ALSO FIND THAT FAA HAD ALLOWED DEPRECIATION @ 50%, AS THE ASSETS WERE USED FOR LESS THAN 180 DAYS DURING THE YEAR UNDER CONSIDERATION. IT IS ALSO A FACT THAT TWO OF THE LE SSEES ARE STATE ELECTRICITY BOARDS I.E. APSEB AND RSEB. BOTH OF THEM HAVE CONFIRMED THE LEASE TRANSACTION AND INSTALLATION OF MACHINERY ASSETS. THE FAA HAD OBSERVED THAT IT COULD NOT BE ALLEGED THAT GOVT. UNDERTAKINGS HAD COLLUDED WITH THE ASSESSEE TO MISL EAD AND DEFRAUD THE GOVT. OF ITS REVENUE BY GIVING WRONG CONFIRMATIONS. SO, WE DO NOT SEE ANY INFIRMITY IN THE ORDER OF THE FAA. CONFIRMING HIS ORDER, WE DECIDE THE GROUND NO. 11 AGAINST THE AO. 6. THUS, CONSIDERING THE DECISION OF TRIBUNAL IN ASSESSEES OWN CASE ON IDENTICAL GROUNDS OF APPEAL, WHICH WAS DECIDED ON THE IDENTICAL FACT, WE FIND THAT THIS GROUND OF APPEAL IS COVERED IN FAVOUR OF ASSESSEE AND AGAINST THE REVENUE. THE COORDINATE BENCH DECIDED THE IDENTICAL GROUND OF APPEAL ON THE BASIS OF DECIS ION OF APEX COURT IN CASE OF ICDS LTD. (SUPRA). THUS, RESPECTFULLY FOLLOWING THE DECISION OF TRIBUNAL THE GROUND NO. 1 OF APPEAL RAISED BY ASSESSEE IS ALLOWED. 7. WE FURTHER NOTICE THAT THIS GROUND OF APPEAL IS IDENTICAL TO GROUND NO. 5 OF APPEAL OF TH E ASSESSEE PERTAINING TO THE A.Y. 1997 - 98 BEFORE THE ITAT. THE COORDINATE BENCH AFTER HEARING THE ASSESSEE DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. WE FURTHER NOTICE THAT IN SEBA PROPERTIES LTD. (ASSESSEES WHOLLY OWNED SUBSIDIARY COMPANY) ITA NO. 1954 /MUM/2003 FOR THE A.Y. 1998 - 99 , T HE REVENUE CHALLENGED THE ACTION OF CIT (A) IN DELETING THE DISALLOWANCE OF RS. 65,19,510/ - MADE BY THE AO BEING THE CLAIM OF DEPRECIATION ON LEASE ASSETS. THE COORDINATE BENCH RELYING ON THE VARIOUS DECISIONS OF THE HONBL E HIGH ITA NO S . 3524/MUM/2013, 4463/MUM/2014, 1722 & 1488/MUM/2012 ASSESSMENT YEAR S : 1994 - 95, 1996 - 97, 1997 - 98 & 1998 - 99 9 COURTS AND THE HONBLE SUPREME COURT INCLUDING THE CASE OF ICDS (SUPRA) DECIDED THE IDENTICAL ISSUE IN FAVOUR OF THE ASSESSEE AND DISMISSED THIS GROUND OF APPEAL OF THE REVENUE. SIMILARLY, IN SEBA PROPERTIES LTD., ITA NO. 4913/MUM/2000 FOR THE A.Y. 1996 - 97 AND ITA NO. 6805/MUM/2002 A.Y. 1997 - 98, THE COORDINATE BENCH HAS DECIDED THE IDENTICAL ISSUE IN FAVOUR OF THE ASSESSEE. WE FURTHER NOTICE THAT THE COORDINATE BENCHES HAVE FOLLOWED THE PRINCIPLES OF LAW LAID DOWN BY THE HONBLE SUPREME COURT IN ICDS (SUPRA). 8. SINCE, THE IDENTICAL ISSUE HAS BEEN DECIDED BY THE COORDINATE BENCH IN FAVOUR OF THE ASSESSEE IN THE ASSESSEES OWN CASES AS WELL AS THE ASSESSEES WHOLLY OWNED SUBSIDIARIES COMPANY , WE R ESPECTFULLY FOLLOW ING THE DECISION OF THE CO - ORDINATE BENCH SET ASIDE THE FINDINGS OF THE LD. CIT (A) AND DECIDE THIS ISSUE IN FAVAOUR OF THE ASSESSEE. HENCE, WE ALLOW GROUND NO. 2 - 1, 2.2 AND 2.3 OF THE ASSESSEES APPEAL. ITA NO. 4462/MUM/2014 (ASSESS MENT YEAR: 1996 - 97 ) FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE FILED ITS RETURN OF INCOME FOR THE RELEVANT ASSESSMENT YEAR DECLARING THE TOTAL LOSS OF RS. 1,93,96,000/ - . HOWEVER, THE AO DETERMINED THE TOTAL INCOME OF THE ASSESSEE AT RS.14,53,78,180/ - . IN THE FIRST APPEAL, THE LD. CIT(A) GRANTED PARTIAL R ELIEF TO THE ASSESSEE. IN FURTHER APPEAL BEFORE THE TRIBUNAL, THE BENCH REMITTED THE MATTER BACK TO THE AO ON THE ISSUE OF DISALLOWANCE OF DEPRECIATION ON ASSETS PURCHASED LEASED BACK BY THE ASSESSEE. IN PURSUANCE THEREOF, THE AO PASSED ASSESSMENT ORDER U/ S 143(3) READ WITH SECTION 254 OF THE ACT AND DISALLOWED DEPRECIATION ON THE ASSETS GIVEN ON LEASE BY HOLDING THE LEASE AS NON GENUINE. THE ASSESSEE CHALLENGED THE SAID ORDER BEFORE THE CIT(A). THE LD. CIT(A) AFFIRMED THE ACTION OF THE AO. AGAINST THE SAID ORDER THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. ITA NO S . 3524/MUM/2013, 4463/MUM/2014, 1722 & 1488/MUM/2012 ASSESSMENT YEAR S : 1994 - 95, 1996 - 97, 1997 - 98 & 1998 - 99 10 2. THE ASSESSEE HAS RAISED THE FOLLOWING EFFECTIVE GROUNDS OF APPEAL AGAINST THE IMPUGNED ORDER PASSED BY THE LD. CIT (A): - 1. DISALLOWANCE OF DEPRECIATION ON LEASED ASSETS OF RS. 3,05,73,735 1.1 THE LEARNE D CIT (A) HAS ERRED IN LAW AND ON FACTS IN UPHOLDING THE DISALLOWANCE OF DEPRECIATION AGGREGATING TO RS. 3,05,73,735 ON ASSETS ACQUIRED AND LEASED DURING THE YEAR. 1.2 THE LEARNED CIT (A) HAS ERRED IN DISREGARDING SUBMISSIONS AND FACTS OF THE CASE AND HOLDING THAT THE TRANSACTION OF LEASE OF ASSETS ACQUIRED AND LEASED DURING THE YEAR WAS NOT A GENUINE LEASE TRANSACTION BUT MERELY A LOAN TRANSACTION AND CONSEQUENTLY NOT ELIGIBLE FOR DEPRECIATION UNDER SECTION 32 OF THE ACT. 1.3 THE LEARNED CIT (A) HAS ERRED IN LAW AND ON FACTS IN NOT FOLLOWING DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF M/S I.C.D.S. LTD. VS. CIT [350 ITR 527]. 1.4 THE LEARNED CIT (A) HAS ERRED IN LAW AND ON FACTS IN NOT FOLLOWING DECISION OF THE HONBLE JURISDICTIONAL SPECIAL BENCHS DECISION IN THE CASE OF INDUSIND BANK LTD. VS. ADDL. CIT [135 ITD 165 (MUMBAI) (SB)] WHEREIN HONBLE SPECIAL BENCH HAS OBSERVED THAT DEPRECIATION IS ALLOWABLE TO LESSOR IN SALE AND LEASE BACK TRANSACTION. 2. INTEREST U/S 220 (2) 2.1 THE LEARNED CIT (A) HAS ERRED IN LAW AND ON FACTS IN HOLDING THE LEVY OF INTEREST UNDER SECTION 220(2) OF THE ACT AS CONSEQUENTIAL IN NATURE. 2.2 THE LEARNED CIT (A) OUGHT TO HAVE APPRECIATED THAT INTEREST UNDER SECTION 220 (2) OF THE ACT SHOULD BE LEVIED ONLY FROM END OF 30 DAYS FROM SER VICE OF FRESH DEMAND NOTICE PURSUANT ITA NO S . 3524/MUM/2013, 4463/MUM/2014, 1722 & 1488/MUM/2012 ASSESSMENT YEAR S : 1994 - 95, 1996 - 97, 1997 - 98 & 1998 - 99 11 TO ORDER GIVING EFFECT TO HONBLE TRIBUNALS ORDER SETTING ASIDE THE MATTER FOR FRESH ADJUDICATION BY THE AO. 3. GROUND NO. 1 OF THIS APPEAL IS IDENTICAL TO GROUND NO. 2.2 OF THE ASSESSEES APPEAL ITA NO. 3524/MUM/20 13 FOR THE A.Y. 1994 - 95. SINCE, WE HAVE ALLOWED THIS GROUND OF APPEAL IN THE ASSESSEES APPEAL FOR THE A.Y. 1994 - 95, CONSISTENT WITH OUR OWN FINDINGS, WE ALLOW THIS GROUND OF APPEAL OF THE ASSESSEE IN THE PRESENT CASE FOR THE REASONS RECORDED IN THE ORDER PERTAINING TO THE ASSESSMENT YEAR 1994 - 95. 4. THE SECOND ISSUE PERTAINS TO INTEREST U/S 220 (2) OF THE ACT. THE LD. COUNSEL POINTED OUT THAT IN THE REVENUES APPEAL AGAINST THE ORDER OF THE LD. CIT (A) IN ASSESSEES CASE ITA NO. 6004/MUM/2013 FOR THE A.Y . 1997 - 98, THE ITAT HAS DECIDED THE IDENTICAL ISSUE IN FAVOUR OF THE ASSESSEE AND DISMISSED THE GROUND OF THE APPEAL OF THE ASSESSEE. THE LD. COUNSEL FOR THE ASSESSEE CONTENDED THAT THE INTEREST U/S 220 (20) SHOULD BE CALCULATED FROM THE DATE OF FRESH ASSE SSMENT WHEN THE ASSESSMENT IS DE NOVO SET ASIDE AND THE INTEREST COULD NOT BE CALCULATED FROM THE DATE OF ORIGINAL ASSESSMENT ORDER, WHICH IS VERY CLEAR FROM THE CBDT CIRCULAR NO. 334 DATED 3/04/1982. THE COORDINATE BENCH HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE HOLDING AS UNDER: - ON A CAREFUL CONSIDERATION OF THE ABOVE OBSERVATIONS AND FINDINGS OF THE CIT (A), WE DO NOT FIND ANY REASON TO REVERSE THE FINDINGS OF THE CIT (A) AS THE DECISION OF THE CIT (A) IS IN CONFORMITY WITH THE DECISION OF THE H ONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. CHI KA OVERSEES P. LTD. AND ALSO IN CONFORMITY WITH THE CIRCULAR OF THE CBDT. HENCE, WE AFFIRM THE ACTION OF ORDER OF THE CIT (A) IN DELETING INTEREST LEVIED U/S 220 (2) OF THE AC T. SINCE, WE HAVE DELETED THE INTEREST U/S 220 (2) AFFIRMING THE ORDERS OF THE CIT (A) THE CROSS OBJECTION WILL NOT SURVIVE . ITA NO S . 3524/MUM/2013, 4463/MUM/2014, 1722 & 1488/MUM/2012 ASSESSMENT YEAR S : 1994 - 95, 1996 - 97, 1997 - 98 & 1998 - 99 12 5. RESPECTFULLY FOLLOWING THE VIEW TAKEN BY THE COORDINATE BENCH, WE DIRECT THE AO TO RECOMPUTED INTEREST ACCORDINGLY. HENCE, WE ALLOW THIS GROUND OF APPEAL OF THE ASSESSEE. ITA NO. 1722/MUM/2012 (ASSESSMENT YEAR: 1997 - 98 ) BRIEF FACTS OF THE CASE ARE THAT THE LD. CIT (A) DISMISSED THE GROUND REGARDING DISALLOWANCE OF DEPRECIATION ON ASSETS GIVEN ON LEASE TREATING THE SAME AS LONG TRANSACTION HOLDING THAT THIS ISSUE HAS BEEN EXAMINED IN DETAIL IN THE CASE OF ASSESSES APPEAL FOR THE A.Y. 2000 - 01 AND GROUNDS RELATING TO CLAIM OF 100% DEPRECIATION DURING THE A.Y. 1994 - 95, 1995 - 96, 1996 - 97, 1997 - 98 AND 1998 - 99. SO FAR AS THE GROUND WITHOUT PREJUDICE THAT THE AO H AS ERRED IN FACTS AND LAW IN NOT GRANTING DEDUCTION OF CAPITAL RECOVERY OUT OF LEASE RENT WITH REGARD TO THE ASSETS ON WHICH DEPRECIATION HAD BEEN DENIED, THE LD.CIT (A) DIRECTED THE AO NOT TO CONSIDER PRINCIPLE AMOUNT OF CAPITAL RECOVERY AS INCOME IN THE PRESENT YEAR FOR THE REASON THAT THE AO HAS NOT CONSIDERED PRINCIPLE AMOUNT OF CAPITAL RECOVERY AS INCOME OF THE APPELLANT IN THE A.YS. 1994 - 95, 1995 - 96, 1996 - 97 AND 2001 - 02. 2. THE REVENUE HAS RAISED THE FOLLOWING EFFECTIVE GROUNDS OF APPEAL AGAINST TH E IMPUGNED ORDER PASSED BY THE LD. CIT (A): - 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) ERRED IN GIVING THE DIRECTION THAT NOT TO CONSIDER PRINCIPAL AMOUNT OF CAPITAL RECOVERY AS INCOME, WHEN THE ASSESSEE HAS NOT WITHDRAWN HIS CLAIM OF DEPRECIATION AND THE ISSUE HAS NOT REACHED FINALITY. 2. WITHOUT PREJUDICE TO ABOVE, ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) FAILED TO APPRECIATE THAT AS THE AMOUNT OF CAPITAL RECOVERY STANDS CREDITED TO ASSESSEES ACC OUNTS, THEREFORE REPRESENTS ASSESSEES INCOME TILL THE ACCOUNTING ENTRIES ARE REVERSED. ITA NO S . 3524/MUM/2013, 4463/MUM/2014, 1722 & 1488/MUM/2012 ASSESSMENT YEAR S : 1994 - 95, 1996 - 97, 1997 - 98 & 1998 - 99 13 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) ERRED IN DELETING THE DISALLOWANCE OF PROVISION FOR LEAVE ENCASHMENT OF RS. 5 LACS IGNORING THE FACT THAT THE METHOD ADOPTED BY THE ACTURIAL VALUER WAS NOT AS PER A SCIENTIFIC METHOD MANDATED BY HONBLE SUPREME COURT IN A CASE OF BHARAT EARTH MOVERS, 245 ITR 428 AS OBJECTED TO ASSESSING OFFICER. 3. BEFORE US , THE LD. DR REL IED ON THE ASSESSMENT ORD ER PASSED BY THE AO. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT GROUND NO. 1 & 2 DO NOT SURVIVE AS THE MUMBAI TRIBUNAL HAS ALREADY DECIDED THIS ISSUE IN FAVOUR OF THE ASSESSEE IN ASSESSEES OWN APPEAL, ITA NO. 1487/M/2012 FOR TH E A.Y. 1997 - 98. 4. WE NOTICE THAT THE CO - ORDINATE BENCH OF THE TRIBUNAL HAS ALLOWED THIS GROUND OF APPEAL IN ITA NO. 1487/M/2012 FOR THE A.Y. 1997 - 98 BY FOLLOWING ITS OWN ORDER IN ASSESSEES APPEAL FOR THE A.Y. 1994 - 95. HENCE, THIS GROUND OF APPEAL DOES NOT SURVIVE. WE, THEREFORE, DISMISS THIS GROUND OF APPEAL OF THE REVENUE BEING NOT MAINTAINABLE. 5. VIDE GROUND NO . 3 THE REVENUE HAS CHALLENGED THE ACTION OF THE LD. CIT (A) IN DELETING THE DISALLOWANCE OF PROVISION OF LEAVE ENCASHMENT OF RS. 5 LACS. T HE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE LD. CIT (A) HAS DECIDED THE ISSUE BY FOLLOWING THE LAW LAID DOWN BY THE HONBLE SUPREME COURT IN BHARAT EARTH MOVERS VS. COMMISSIONER OF INCOME TAX 245 ITR 428 . THEREFORE, THERE IS NO MERIT IN THE CONTENTI ON OF THE ASSESSEE . THE RELEVANT PORTION OF THE ORDER OF THE LD. CIT (A) IS REPRODUCED BELOW: - 3.2 I HAVE GONE THROUGH THE ORDER OF THE AO AND SUBMISSION OF THE APPELLANT. THE ITAT IN THEIR ORDER DATED 24.09.2008 AT PARA 6 PAGE 4 OBSERVED AS UNDER: ITA NO S . 3524/MUM/2013, 4463/MUM/2014, 1722 & 1488/MUM/2012 ASSESSMENT YEAR S : 1994 - 95, 1996 - 97, 1997 - 98 & 1998 - 99 14 . THIS ISSUE IS ALSO REMITTED TO THE FILE OF THE AO WITH A DIRECTION TO DECIDE IT AFRESH IN THE LIGHT OF THE ACTUARIAL VALUATION CERTIFICATE. WE FURTHER OBSERVE THAT THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF BHARAT EARTH MOVERS LTD. (SUPRA) H AS BEEN NULLIFIED BY INSERTION OF SECTION 43B(F). SINCE THE INSERTION HAS BEEN MADE BY THE FINANCE ACT, 2001 W.E.F. 1.4.2002, THE SAID AMENDMENT WOULD NOT AFFECTED THE DEDUCTION IN THE YEAR IN QUESTION. THUS, FOR A.Y. 1997 - 98, THE ITAT HAS DIRECTED THE AO TO DECIDE THE ISSUE AFRESH IN THE LIGHT OF THE ACTUARIAL VALUATION CERTIFICATE. 3.2.1 ON THE ISSUE OF LIABILITY BEING ASCERTAINED, THE SUPREME COURT IN THE CASE OF BHARAT EARTH MOVERS V. COMMISSIONER OF INCOME TAX 245 ITR 428. THE SUPREME COURT HAS LAID DOWN THE LAW ON THE SUBJECT AS FOLLOWS: THE LAW IS SETTLED IF A BUSINESS LIABILITY HAS DEFINITELY ARISEN IN ACCOUNTING YEAR, THE DEDUCTION SHOULD BE ALLOWED ALTHOUGH THE LIABILITY MAY HAVE TO BE QUANTIFIED AND DISCHARGED AT A FUTURE DATE. WHAT SHOULD BE CERTAIN IS THE INCURRING OF THE LIABILITY. IT SHOULD ALSO BE CAPABLE OF BEING ESTIMATED WITH REASONABLE CERTAINTY THOUGH THE ACTUAL QUANTIFICATION MAY NOT BE POSSIBLE. IF THESE REQUIREMENTS ARE SATISFIED THE LIABILITY IS NOT A CONTINGENT ONE. THE LIABILITY IS IN PRAESENTI THOUGH IT WILL BE DISCHARGED AT A FUTURE DATE. IT DOES NOT MAKE ANY DIFFERENCE IF THE FUTURE DATE ON WHICH THE LIABILITY SHALL HAVE TO BE DISCHARGED IS NOT CERTAIN. 3.2.2 THE ACTUARIAL VALUER IS AN EXPERT IN DETERMINING THE AMOUNT OF LEAV E ENCASHMENT WITH REASONABLE CERTAINTY AND THE AOS OBJECTION TO THE METHOD ADOPTED BY THE ACTUARIAL VALUER IS NOT WELL FOUND. THE PROVISION FOR LEAVE ENCASHMENT BASED ON ACTUARIAL VALUATION CERTIFICATE IS AN ASCERTAINED LIABILITY AND IS THEREFORE ALLOWABL E FOR A.Y. 1997 - 98 AND GROUND 3 IS, THEREFORE, ALLOWED. 6. SINCE, THE LD. CIT (A) HAS PASSED THE ORDER UNDER CHALLENGE IN ACCORDANCE WITH THE PRINCIPLES OF LAW LAID DOWN BY THE HONBLE SUPREME COURT ITA NO S . 3524/MUM/2013, 4463/MUM/2014, 1722 & 1488/MUM/2012 ASSESSMENT YEAR S : 1994 - 95, 1996 - 97, 1997 - 98 & 1998 - 99 15 IN BHARAT EARTH MOVERS VS. COMMISSIONER OF INCOME TAX (SUPRA), WE DO NOT FIND ANY REASON TO INTERFERE WITH THE FINDINGS OF THE LD.CIT (A). WE ACCORDINGLY UPHOLD THE FINDINGS OF THE LD. CIT (A) AND DISMISS THIS GROUND OF APPEAL OF THE REVENUE. ITA NO. 1488/MUM/2012 (ASSESSMENT YEAR: 1998 - 99 ) BRIEF FACTS OF THE CASE ARE THAT THE LD. CIT (A) CONFIRMED THE ACTION OF THE AO IN REJECTING THE CLAIM OF THE ASSESSEE OF DEPRECIATION ON ASSETS GIVEN ON LEASE TREATING IT AS LOAN TRANSACTION BY FOLLOWING THE SIMILAR ORDERS PASSED BY THE CIT (A) IN ASSESSEES OWN CASE IN THE EARLIER YEARS. 2. THE ASSESSEE HAS RAISED THE FOLLOWING EFFECTIVE GROUNDS OF APPEAL AGAINST THE IMPUGNED ORDER PASSED BY THE LD. CIT (A): - 1. (A) THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) [HEREINAFTER REFERRED TO AS THE CIT (A)] ERRED IN LAW AND ON FACTS IN UPHOLDING THAT THE TRANSACTIONS OF LEASE OF VARIOUS ASSETS WERE MERE FINANCING TRANSACTIONS AND THE APPELLANT WAS THEREFORE NOT ENTITLED TO DEPRECIATION ALLOWANCE OF RS. 30,58,92,422 UNDER SECTION 32 OF THE ACT. (B) THE LEARNED CIT (A) ER RED IN LAW AND ON FACTS IN NOT DISPOSING THE GROUND WHEREBY ASSESSING OFFICER (AO) DISALLOWED THE DEPRECIATION ON THE LEASED ASSETS WITHOUT FOLLOWING THE DIRECTIONS OF THE HONBLE ITAT WHERE UNDER IT REMITTED THE MATTER BACK TO THE FILES OF THE AO WITH C LEAR DIRECTION TO EXAMINE THE CLAIM OF DEPRECIATION DENOVO, IN THE LIGHT OF THE SIGNIFICANT DEVELOPMENTS AND SPECIFIC JUDICIAL PRECEDENTS ON THE SAID ISSUE AND THE CORRECT LEGAL POSITION AND BY WAY OF SPEAKING ORDER. (C) THE LEARNED CIT (A) ERRED IN LAW A ND ON FACTS IN NOT DISCUSSING THE DECISION OF HONBLE GUAHATI HIGH COURT IN THE CASE OF GEORGE WILLIAMSON ASSAM LIMITED 265 IT 626 AND ITA NO S . 3524/MUM/2013, 4463/MUM/2014, 1722 & 1488/MUM/2012 ASSESSMENT YEAR S : 1994 - 95, 1996 - 97, 1997 - 98 & 1998 - 99 16 HON. ORISSA HIGH COURT IN THE CASE OF INDUSTRIAL DEVELOPMENT CORPORATION OF ORISSA LIMITED OF 268 ITR 130 AS DIRECTED BY THE HONBLE ITAT. (D) THE LEARNED CIT (A) ERRED IN LAW AND ON FACTS IN APPLYING THE RATIO OF DECISION OF HON. SUPREME COURT IN THE CASE OF ASEA BROWN BOVERI LTD. 154 TAXMAN 512. (E) THE LEARNED CIT (A) HAS ERRED IN LAW AND ON FACTS IN NOT CONSIDERING AND DISTINGUISHING ON FACTS AND LAW THE DECISION OF HONBLE ITAT IN THE CASE OF SHEBA PROPERTIES LTD. IN ITA NO. 4913/MUM/2000 AND ITA NO. 6805/MUM/2002. 2. THE LEARNED CIT (A) ERRED IN LAW AND ON FACTS IN CONFIRMING LEVY OF INTEREST UNDER SECTION 234C OF TH E ACT AND CONSIDERING THE SAME AS CONSEQUENTIAL IN NATURE. 3. THE LEARNED CIT (A) ERRED IN LAW AND ON FACTS IN CONFIRMING LEVY OF INTEREST UNDER SECTION 201(1)(A) OF THE ACT. 3. THIS GROUND IS IDENTICAL TO THE GROUND NO. 2 OF THE ASSESSEES APPEAL FOR THE A.Y. 1995 - 96 AND GROUND NO. 1 OF THE ASSESSEES APPEAL FOR THE A.Y. 1996 - 97. SINCE, WE HAVE ALLOWED THIS GROUND OF APPEAL IN THE AFORESAID APPEALS OF THE ASSESSEE, WE ALLOW THIS GROUND OF APPEAL OF THE ASSESSEE FOR THE REASONS RECORDED IN OUR DECISION IN APPEAL PERTAINING TO THE A.Y. 1995 - 96. 4. SECOND GROUND PERTAINS TO INTEREST U/S 234C. SINCE, THIS GROUND IS CONSEQUENTIAL IN NATURE, HENCE NO NEED TO ADJUDICATE THE SAME. 5. GROUND NO. 3 PERTAINS TO INTEREST U/S 201 (IA). SINCE, THE ASSESSEE DOES NO T WANT TO PRESS THIS GROUND BEING SMALLNESS OF THE AMOUNT, WE DISMISS THIS GROUN D OF APPEAL AS NOT PRESSED. ITA NO S . 3524/MUM/2013, 4463/MUM/2014, 1722 & 1488/MUM/2012 ASSESSMENT YEAR S : 1994 - 95, 1996 - 97, 1997 - 98 & 1998 - 99 17 IN THE RESULT, APPEAL S FILED BY THE ASSESSEE FOR THE ASSESSMENT YEAR 1994 - 95 AND A.Y. 1998 - 99 ARE PARTLY A LLOWED AND APPEAL PERTAINING TO A.Y. 1 996 - 97 IS ALLOWED. THE REVENUES APPEAL FOR THE A.Y. 1997 - 98 IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 19TH DECEMBER , 2017 . SD/ - SD/ - ( G.S. PANNU ) ( RAM LAL NEG I ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; DATED: 19 / 1 2 / 2017 ALINDRA, PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / T HE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MU MBAI