Jayashree Contruction Company., Belgaum V. Asst. Commissioner of Income Tax, Circle-2, Belgaum

ITA 359/PAN/2014

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9484 (ITAT-PANAJI)
• Duration Of Justice: 2 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-01-2015
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Assessment Year: 2004-2005
• Appeal Filed On: 20-10-2014
• Court: TRIBUNAL
• Department Lawyers: S SUNDARESON LD
• Assessee Lawyers: PRAKASH N SUTAR LD
• Keywords: Depreciation; Period of limitation; Time period of passing order
• Section: 143(3); 263; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL ,PANAJI BENCH, PANAJI [BEFORE SHRI P. K. BANSAL, AM & SHRI D.T GARASIA, JM] I.T.A NO S . 3 59 - 361 /PNJ/2014 A.Y S 20 04 - 05, 0 5 - 06 & 07 - 08 M/S. JAYASHREE CONSTRUCTION VS. A.C.I.T,CIR - 2, BELGAU M COMPANY PAN: AA DFH7403D ( APPELLANT) ( RESPONDENT ) FOR THE APPELLANT: SH. PRAKASH N. SUTAR, LD.AR FOR THE RESPONDENT : SHRI S.SUNDARESON, LD.DR DATE OF HEARING: 1 5 - 01 - 2015 DATE OF PRONOUNCEMENT: 1 5 - 01 - 2015 ORDER PER SHRI P. K. BANSAL, AM: ALL THESE APPEAL S HAVE BEEN FILED BY THE ASSESSEE AGAINST THE SEPARATE ORDER OF CIT(A), BELGAUM DATED 18 - 08 - 2014 FOR THE ASSESSMENT YEARS 2004 - 05, 05 - 06 AND 07 - 08. SI NCE ALL THESE APPEALS RELATE TO THE SAME ASSESSEE AND COMMON GROUNDS OF APPEAL S ARE INVOLVED, FOR THE SAKE OF CONVENIENCE THEY ARE DISPOSED OF BY THIS COMMON ORDER. ITA NO.359/PNJ/2014 A.Y 2004 - 05 (BY THE ASSESSEE) IN THIS APPEAL THE ASSESSEE HAS TAKEN FO LLOWING EFFECTIVE GROUNDS OF APPEAL: - 1. ON FACTS OF CIRCUMSTANCES OF THE CASE, THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL) , BELGAUM OUGHT TO HAVE ACCEPTED THE EXPLANATION AND EVIDENCES FURNISHED AND DELETED THE ADDITION OF RS.6,17,364.00. 2. THE LEARN ED COMMISSIONER OF INCOME TAX (APPEAL) , BELGAUM OUGHT TO HAVE CONSIDERED THAT THE ORDER U/S 143(3) SERVED ON THE APPELLANT BEYOND THE TIME ALLOWED UNDER THE ACT IS BAD IN LAW AND THEREBY WOULD HAVE DELETED THE ADDITIONS MADE BY AO. ITA NO.3 60 /PNJ/2014 A. Y 200 5 - 06 (BY THE ASSESSEE) IN THIS APPEAL THE ASSESSEE HAS TAKEN FOLLOWING EFFECTIVE GROUNDS OF APPEAL: - 1. ON FACTS OF CIRCUMSTANCES OF THE CASE, THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL), BELGAUM OUGHT TO HAVE ACCEPTED THE EXPLANATION AND EVIDEN CES FURNISHED AND DELETED THE ADDITION OF RS.5,34,525/ - . 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL), BELGAUM OUGHT TO HAVE CONSIDERED THAT THE ORDER U/S 143(3) SERVED ON THE APPELLANT BEYOND THE TIME ALLOWED UNDER THE ACT IS BAD IN LAW AND THEREBY WOULD HAVE DELETED THE ADDITIONS MADE BY AO. 2 ITA NO S . 35 9 - 361 /PNJ/2014 - AM M/S JAYASHREE CONSTRUCTION CO ITA NO.3 61 /PNJ/2014 A.Y 200 7 - 08 (BY THE ASSESSEE) IN THIS APPEAL THE ASSESSEE HAS TAKEN FOLLOWING EFFECTIVE GROUNDS OF APPEAL: - 1. ON FACTS OF CIRCUMSTANCES OF THE CASE, THE LEARNED COMMISSIONER OF INCOME T AX (APPEAL), BELGAUM OUGHT TO HAVE ACCEPTED THE EXPLANATION AND EVIDENCES FURNISHED AND DELETED THE ADDITION OF RS.1,98,138/ - . 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL), BELGAUM OUGHT TO HAVE CONSIDERED THAT THE ORDER U/S 143(3) SERVED ON THE APPE LLANT BEYOND THE TIME ALLOWED UNDER THE ACT IS BAD IN LAW AND THEREBY WOULD HAVE DELETED THE ADDITIONS MADE BY AO. ITA NO.359/PNJ/2014 A.Y 2004 - 05 (BY THE ASSESSEE) 2. THE BRIEF FACTS ARE THAT THE AO COMPLETED THE ASSESSMENT U /S 143(3) R.W.S 147 OF THE ACT BY MAKING THE FOLLOWING ADDITIONS: - I) EXCESS DEPRECIATION CLAIMED RS.5,67,364/ - II) DISALLOWANCE OUT OF EXPENSES RS. 50,000/ 3. THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(A). THE CIT(A) HAS CONFIRMED THE ORDER OF THE AO. THE AO NOTED THAT THE ASSESSEE HAS CLAIMED DEPRECIATION ON BUILDING @20% AS AGAINST 10% , DUE TO WHICH EXCESS DEDUCTION OF DEPRECIATION OF RS.3,44,511/ - WAS ALLOWED. SUBSEQUENTLY, IN THE ASSESSMENT YEAR 2003 - 04 IN CONSEQUENCE TO THE ORDER PASSED U/S 263 THE AO ALLOWED DEPRECIA TION @10% IN THE HOTEL BUILDING. IT WAS ALSO NOTED BY HIM THAT THE ASSESSEE HAS ALSO CLAIMED DEPRECIATION ON THE COST OF THE LAND, WHICH WAS NOT PERMISSIBLE. ACCORDINGLY, THE AO EXCLUDED THE COST OF LAND AMOUNTING TO RS. 13,54,632/ - AND DISALLOWED THE E XCESS DEPRECIATION ON COST OF THE BUILDING ON THE BASIS OF DISCUSSION IN ASSESSMENT YEAR 2003 - 04. THE AO TOOK THE W.D.V AS ON 1 - 4 - 2004 AND SUM OF RS.1 , 2 1 , 6 5 8 / - A S DEP RECIATION AGAINST SUM OF RS.6,89,022/ - CLAIMED BY THE ASSESSEE. THUS , THE EXCESS DEPRECIATION OF RS.5,67,364 / - (RS.6,89,022 RS.1,21,658) WAS DISALLOWED. SIMILARLY, THE AO NOTED THAT THE ASSESSEE HAS MADE SELF MADE VOUCHERS TO THE EXTENT OF RS.6,45,905/ - AND JUST ON ESTIMATE BASIS HE DISALLOWED RS.50,000/ - OUT OF THESE EXPENSES. 4. BEFORE THE CIT(A), THE ASSESSEE CONTENDED THAT THE ASSESSEE HAS RECEIVED SUBSIDY AMOUNTING TO RS.16 .00 LAKHS FROM STATE GOVERNMENT FOR SETTING UP HOTEL. DURING THE ASSESSMENT YEAR 2003 - 04 THE AO REDUCE D THE SUBSIDY FROM COST OF HOTEL BUILDING AND DISALLOWED DEPRECIATION. THE I.T.A.T. REVERSED THE ORDER OF THE AO ALLOWING DEPRECIATION ON BUILDING. IN RESPECT OF COST OF COST OF LAND THE I.T.A.T. UPHELD THE ORDER OF THE AO. THE 3 ITA NO S . 35 9 - 361 /PNJ/2014 - AM M/S JAYASHREE CONSTRUCTION CO ASSESSEE RE - WORKED THE DEPRECIATION TO BE DISALLOWED AT RS.4,23,36 4/ - IN THE FOLLOWING MANNER: - WDV OF HOTEL BUILDING AS ON 01.04.2002 43,06,386.00 LESS COST OF LAND INCLUDED IN BUILDING 13,54,632.00 NET WDV 29,51,754.00 LESS ELIGIBLE DEPRECIATION @ 10% 2,51,175.00 WDV AS ON 31.03.2003 26,5 6,579.00 LESS DEPRECIATION AT 10% FOR AY 2004 - 05 2,65,658.00 WDV AS ON 31.03.2004 23,90,921.00 DEPRECIATION CLAIMED BY US IN THE RETURN OF INCOME 6,89,022.00 DEPRECIATION REQUIRED TO BE DISALLOWED 4,23,364.00 (689022 - 265658) 5. IN RESPECT OF DISALLOWANCE OUT OF EXPENSES OF RS.50,000/ - , IT WAS CONTEND THAT THIS DISALLOWANCE IS MADE MERELY ON ESTIMATE BASIS. THE CIT(A) HAS REDUCED THE DISALLOWANCE OF DEPRECIATION TO RS.4 ,23,364/ - FROM RS. 5,63,364/ - AS MENTIONED BY THE INCOME TAX OFFICER IN HIS REMAND REPORT ON THE BASIS OF SAID I.T.A.T. ORDER, BUT HE CONFIRMED THE ADDITION OF RS.50,000/ - TOWARDS EXPENDITURE. 6. AFTER HEARING THE RIVAL SUBMISSIONS AND CAREFULLY CONSIDE RING THE SAME ALONG WITH THE ORDERS OF THE TAX AUTHORITIES BELOW, IN OUR OPINION SO FAR AS DEPRECIATION IS CONCERNED THE ISSUE IS DULY COVERED BY THE SAID ORDER/DECISION OF THE I.T.A.T. FOR THE ASSESSMENT YEAR 2003 - 04 [ ASSESSEES OWN CASE] . IN THIS VIEW OF FACT IN OUR OPINION NO INTERFERENCE IS CALLED FOR. WE UPHO LD THE SAME. THIS ISSUE OF ASSESSEES APPEAL IS DISMISSED. 7. THE NEXT ISSUE RELATES TO DISALLOWANCE OF RS.50,000/ - , WE NOTED THAT THIS DISALLOWANCE WAS MADE BY THE AO ON ESTIMATE BASIS . NO SPECIFIC EXPENDITURE HAS BEEN POINTED OUT BY THE AO, WHICH HA S NOT BEEN INCURRED BY THE ASSESSEE FOR THE PURPOSE OF BUSINESS FOR WHICH THE ASSESSEE HAS FAILED TO PROVE THE GENU INENESS . WE, THEREFORE, DELETE THE DISALLOWANCE OF RS.50,000/ - ON THIS ISSUE . THIS ISSUE OF ASSESSEES APPEAL IS ALLOWED. THUS, GROUND NO.1 OF THIS APPEAL IS PARTLY ALLOWED. 8. SECOND GROUND, WHICH RELATES TO THE SERVICE OF ASSESSMENT ORDER ON THE ASSESSEE BEYOND THE TIME ALLOWED. AFTER HEARING THE RIVAL SUBMISSIONS, WE NOTED THAT THE CIT(A) HAS GIVEN A FINDING OF FACT AFTER BRINING ON RECORD THAT THE ASSE SSMENT ORDER HAS BEEN PASSED ON 0 8 - 12 - 09 AND HAS BEEN HANDED OVER TO THE DISPATCH SECTION 31 - 12 - 0 9 , BUT DELIVERY TO THE ASSESSEE ON 04 - 4 ITA NO S . 35 9 - 361 /PNJ/2014 - AM M/S JAYASHREE CONSTRUCTION CO 0 1 - 2010. THEREFORE, IT SEEMS THAT THE ASSESSMENT ORDER HAS BEEN PASSED WITHIN THE LIMITATION PERIOD AND THE SAME WAS SER VED ON THE ASSESSEE WITHIN THE REASONABLE PERIOD. THEREFORE, WE DO NOT FIND ANY MERIT IN THE GROUND TAKEN BY THE ASSESSEE. THIS GROUND OF THIS ASSESSEES APPEAL STANDS DISMISSED. ITA NO.360/PNJ/2014 A.Y 2005 - 06 (BY THE ASSESSEE) 9. GROUND NO.1 RELATE T O DISALLOWANCE OF RS.5,34,525/ - , WHICH CONSISTS OF DEPRECIATION OF RS.4,41,725/ - AND DISALLOWANCE OUT OF EXPENSES OF RS.92,800/ - . THE ISSUES AND FACTS INVOLVED IN THIS GROUND ARE SIMILAR TO A.Y 2004 - 05 IN ITA NO.359/PNJ/2014 . IN THIS ASSESSMENT YEAR ALSO I.E. A.Y 2005 - 06, WE NO TED THAT THE CIT(A) HAS ALREADY ALLOWED RELIEF TO THE ASSESSEE AND DISALLOWED THE D ISALLOWANCE ON ACCOUNT OF EXCESS DEPRECIATION OF RS. 3,12,125/ - FROM RS. 4,41,725/ - ON THE BASIS OF RE - WORKING OF DEPRECIATION AS SUBMITTED BEFORE THE CIT ( A) AND ON THE BASIS OF I.T.A.T. ORDER OF THE FOR THE ASSESSMENT YEAR 2003 - 04. IN OUR OPINION SO FAR AS THE ISS UE RELATING TO THE EXCESS DEPRECIATION IS CONCERNED , NO INTERFERENCE IS CALLED FOR ON THE BASIS OF OUR FINDING GIVEN IN A.Y 2004 - 05 IN ITA NO.359/PNJ/2014 . THUS, WE CONFIRM THE SAME IN THIS ASSESSMENT YEAR ALSO. THIS ISSUE OF ASSESSEE S APPEAL IS DISMISSED. 10. IN RESPECT OF DISALLOWANCE OF EXPENDITURE OF RS.92,800/ - , WE NO TED THAT THE EXPENSES HAS BEEN DISALLOWED OUT OF TOTAL EXPENSES OF RS.18,36,000 BY THE AO ON ADHOC BASIS WITHOUT SPECIFYING THE EXPENDITURE. THUS, WE DELETE THIS DISALLOWANCE ON THE BASIS OF OUR GIVING FINDINGS GIVEN IN A.Y 2004 - 05 IN ITA NO.359/PNJ/2014 . THIS GROUND OF ASSE SSEES APPEAL IS ALLOWED. 11. GROUND NO.2 IS SIMILAR TO GROUND NO.2 IN THE ASSESSMENT YEAR 2004 - 05. WE, THEREFORE, DISMISS THIS GROUND TAKEN BY THE ASSESSEE ON THE BASIS OF OUR GIVEN FINDINGS IN THE AY 2004 - 05 HEREINABOVE. THIS GROUND IS DISMISSED . ITA NO. 363/PNJ/2014 A .Y 2007 - 08 (BY THE ASSESSE) 12. GROUND NO.1 IS SIMILAR TO THE GROUND NO.1 IN THE ASSESSMENT YEARS 2004 - 05 AND 2005 - 06. IN THIS ASSESSMENT YEAR ALSO, WE NOTED THAT THE LD.CIT(A) REDUCED THE DISALLOWANCE ON ACCOUNT OF DEPRECIATION TO RS.4,774/ - FROM RS.1,09,725/ - AS PER WORKING GIVEN BY THE ASSESSEE BEFORE THE LD.CIT(A) AND ON THE BASIS OF THE I.T.A.T.S ORDER FOR THE ASSESSMENT YEAR 2003 - 04 IN ASSESSEE S OWN . THUS, O N THE BASIS OF OUR GIVEN FINDINGS IN THE ASSESSMENT YEAR 2004 - 05 AND 5 ITA NO S . 35 9 - 361 /PNJ/2014 - AM M/S JAYASHREE CONSTRUCTION CO 2005 - 06, WE UPHOLD THE O RDER OF THE CIT(A) ON THIS ISSUE. THIS IS S U E OF ASSESSEE S APPEAL IS DISMISSED. 13. SO FAR AS DISALLOWANCE OF RS.88,413/ - , WE NOTED THAT THE AO HAS DISALLOWED THE SAID EXPENDITURE. SINCE THE ISSUE AND FACTS ARE SIMILAR TO THE ASSESSMENT YEARS 2004 - 05 AND 2005 - 06, ON THE BASIS OF OUR GIV EN FINDINGS IN ASSESSMENT YEARS 2004 - 05 AND 2005 - 06 , THIS DISALLOWANCE OF RS.88,413/ - IS HEREBY DELETED. 14. GROUND NO.2 IS SIMILAR TO GROUND NO.2 TAKEN BY THE ASSESSEE IN THE ASSESSMENT YEARS 2004 - 05 AND 2005 - 06. SINCE THE FACTS INVOLVED IN THIS APPEAL ARE SIMILAR TO THE ASSESSMENT YEAR S 2004 - 05 AND 2005 - 06, ON THE BASIS OF OUR GIV EN FINDINGS IN ASSESSMENT YEARS 2004 - 05 AND 2005 - 06, THIS GROUND OF ASSESSEES APPEAL IS DISMISSED. 15. IN THE RESULT, ALL THE APPEAL S FILED BY THE ASSESSEE FOR THE ASSESSMENT YEARS 2004 - 05, 05 - 06 AND 2007 - 08 ARE PARTLY ALLOWED AS STATED ABOVE . ORDER IS PRONOUNCED IN THE OPEN COU RT ON 15 - 01 - 2015 SD/ - SD / - ( D.T GARASIA ) ( P. K. BANSAL ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 15 - 01 - 2015 **PRADIP (SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1. A PPELLANT 2 RESPONDENT 3. THE CIT(A) CONCERNED 4. 5. THE CIT CONCERNED THE D . R 6. GUARD FILE TRUE COPY, BY ORDER ASSTT. REGISTRAR