EOC TAILOR MADE POLYMERS INDIA P. LTD, MUMBAI V. DCIT CIR 3(1), MUMBAI

ITA 3630/MUM/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 2773 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-09-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Next Hearing Date: 25-06-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 08-05-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: KAILASH GAIKWAD
• Assessee Lawyers: BHAVESH SHAH
• Keywords: Depreciation; Additional evidence
• Section: 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL E B ENCH, MUMBAI BEFORE SHRI RAJENDRA, ACCOUNTANT MEMBER AND SHRI C.N. PRASAD, JUDICIAL MEMBER / I .TA NO.3630/MUM/2013 ( / ASSESSMENT YEAR: 2009-10 M/S. EOC TAILOR MADE POLYMERS INDIA PVT. LTD., THE PARAGON, 1 ST FLOOR, DHANRAJ MILLS COMPOUND, SITARAM JADHAV MARG, LOWER PAREL (W), MUMBAI-400 013 / VS. THE DCIT, CIRCLE - 3(1), MUMBAI ./ ./ PAN/GIR NO.AAACR 3508D ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY: SHRI BHAVESH SHAH / RESPONDENT BY: SHRI KAILASH GAIKWAD / DATE OF HEARING :11.07.2016 ! / DATE OF PRONOUNCEMENT :23 .09.2016 / O R D E R PER C.N. PRASAD, JM: THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A)-6, MUMBAI DATED 18.03.2013 PERTAINING TO ASS ESSMENT YEAR 2009-10. 2. THE ONLY GRIEVANCE OF THE ASSESSEE IN ITS APPEAL IS THAT THE LD. CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE OF DEPR ECIATION ON BUILDING. ITA NO. 3630/M/2013 2 3. BRIEFLY STATED FACTS ARE THAT ASSESSEE IS A PRIV ATE LIMITED COMPANY FILED ITS RETURN OF INCOME ON 12.9.2009 DE CLARING INCOME OF RS.67,16,610/-. THE ASSESSMENT WAS COMPLETED U/S. 143(3) ON 25.11.2011 DETERMINING THE INCOME OF THE ASSESSEE A T RS. 82,54,090/-. WHILE COMPLETING THE ASSESSMENT, THE ASSESSING OFFICER DISALLOWED DEPRECIATION ON BUILDING OBSERVING THAT THE DOCUMENT HAS NOT BEEN REGISTERED IN THE NAME OF THE COMPANY TILL THE DATE OF PASSING OF THE ASSESSMENT ORDER AND NO EVIDENCE WHA TSOEVER HAS BEEN PRODUCED BY THE ASSESSEE TO SHOW THAT THE COMP ANY ACTUALLY OWNS THE PROPERTY. HE FURTHER OBSERVED THAT THE PR OPERTY WAS UNDER DISPUTE AND THE PROPERTY WAS INFACT IN THE NAME OF ONE MR. RAJENDRA V. PATEL AND NOT IN THE NAME OF ASSESSEE COMPANY. THE ASSESSEE CONTENDED BEFORE THE ASSESSING OFFICER THAT THE PRO PERTY WAS ACQUIRED BY THE COMPANY THROUGH AUCTION BID FROM TH E OFFICE OF THE CUSTODIAN, APPOINTED UNDER THE SPECIAL COURT (TORTS ) ACT, 1992 AS THE SAID PROPERTY WAS PUT TO PUBLIC AUCTION IN THE NEWS PAPER DATED 16.7.2005. IT WAS CONTENDED BY THE ASSESSEE THAT THE COMPANY HAS AUTHORIZED MR. RAJENDRA V. PATEL, MANAGING DIRECTOR OF THE COMPANY TO TAKE PART IN THE AUCTION OFFER ON BEHALF OF THE COMPANY AS PER THE RESOLUTION PASSED BY THE BOARD OF DIRECTORS THEREFO RE IT WAS CONTENDED THAT THE COMPANY HAS ACQUIRED THE PROPER TY THROUGH ITS AUTHORIZED DIRECTOR AND OBTAINED THE POSSESSION AND STARTED USING OF THE SAID PROPERTY, THE CLAIM OF DEPRECIATION BE AL LOWED AS CLAIMED IN THE RETURN. HOWEVER THE ASSESSING OFFICER DID NOT A PPRECIATE THE SUBMISSIONS OF THE ASSESSEE AND DISALLOWED THE DEPR ECIATION. 4. ON APPEAL, THE LD. CIT(A) SUSTAINED THE DISALLOW ANCE BY AFFIRMING THE ORDER OF THE ASSESSING OFFICER. ITA NO. 3630/M/2013 3 5. THE LD. COUNSEL FOR THE ASSESSEE AT THE OUTSET S UBMITS THAT ADDITIONAL EVIDENCES IN THE FORM OF CONVEYANCE DEED IS FURNISHED ALONGWITH THE PETITION FOR ADMISSION OF ADDITIONAL EVIDENCE THEREFORE HE SUBMITS THAT THE ADDITIONAL EVIDENCE MAY BE ADMI TTED. HE FURTHER SUBMITS THAT THE ASSESSEE COULD NOT FURNISH THE CON VEYANCE DEED BEFORE THE LD. AO UP TO THE PASSING OF ASSESSMENT O RDER AS THE EXECUTION OF CONVEYANCE DEED WAS PENDING. DURING TH E COURSE OF HEARING BEFORE CIT (A) ON 18.02.2013, IT WAS REQUES TED THAT THE DRAFT CONVEYANCE DEED WAS SENT FOR ADJUDICATION FOR STAMP DUTY PURPOSE AND REQUESTED TO GIVE ADJOURNMENT FOR 15 DAYS, BUT THE SAME WAS NOT ALLOWED AND CIT (A) PASSED THE ORDER. HE SUBMITS TH AT THE CONVEYANCE DEED IS REGISTERED ON 22.03.2013 WHEREIN IT HAS BEEN MENTIONED IN PARA D THAT PHYSICAL POSSESSION OF THE SAID PROPERTY WAS GIVEN TO APPELLANT ON 18.09.2008. THE ADDITION MADE AND CONFIRMED ON ONE OF THE GROUNDS THAT THERE IS NO CO NVEYANCE DEED ON RECORD AND THERE WAS A GENUINE REASON AS THE CONVEY ANCE DEED WAS NOT EXECUTED AND HENCE IT COULD NOT BE PRODUCED BEF ORE THE AO AND CIT (A). 5.1. THE LD. COUNSEL FOR THE ASSESSEE FURTHER SUBMI TS THAT MARKETING OFFICE OF THE ASSESSEE WHICH WAS TAKEN ON LEASE AND SITUATED IN ANDHERI WAS SHIFTED TO NEW PREMISES. HE SUBMITS THAT ASSESSEE HAS PAID RENT UPTO NOVEMBER. HE SUBMITS T HAT THE MARKETING OFFICE HAS BEEN SHIFTED TO NEW BUILDING AND THE NEW BUILDING WAS PUT TO USE. THE LD. COUNSEL FOR THE A SSESSEE FURTHER REFERRING TO PAGE 71 TO 86 OF THE PAPER BOOK SUBMIT S THAT THE ASSESSEE HAS INCURRED VARIOUS OFFICE EXPENSES IN TH E NEW PREMISES ITA NO. 3630/M/2013 4 WHICH IS EVIDENCED FROM THE LEDGER ACCOUNT FURNISHE D. THEREFORE, HE SUBMITS THAT THE DEPRECIATION CLAIMED BY THE ASSESS EE BE ALLOWED. 6. THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITS THA T NONE OF THE EXPENSES SAID TO HAVE BEEN INCURRED FOR THE NEW OFF ICE WILL PROVE THAT THE OFFICE WAS USED FOR BUSINESS. HE FURTHER SUBMI TS THAT IT IS NOT KNOWN HOW THE OFFICE WAS SHIFTED AND WHEN IT WAS SH IFTED AND NOT SHOWN ANY SHIFTING RELATED EXPENSES. HE FURTHER SU BMITS THAT THE CONVEYANCE DEED IS NOW PRODUCED BEFORE THE BENCH IS NOT PRODUCED BEFORE THE ASSESSING OFFICER OR THE LD. CIT(A). TH EREFORE, HE SUBMITS THAT THE WHOLE ISSUE HAS TO BE RE-EXAMINED BY THE A SSESSING OFFICER AND IT MAY BE REMITTED TO THE FILE OF THE ASSESSING OFFICER. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE ORDERS OF THE AUTHORITIES BELOW AND THE EVIDENCES PRODUCED BEFORE US. ADMITTEDLY, THE CONVEYANCE DEED WHICH IS IN THE NAME OF THE ASS ESSEE COMPANY EXECUTED ON 22.3.2013 IS NOT BEFORE THE AUTHORITIES BELOW WHEN THE ASSESSMENT WAS COMPLETED. SINCE THE DOCUMENT FURNI SHED BY THE ASSESSEE BY WAY OF ADDITIONAL EVIDENCE WILL CERTAIN LY GO TO THE ROOT OF THE MATTER, IT IS REQUIRED TO BE ADMITTED AS ADDITI ONAL EVIDENCE. THUS, WE ADMIT THE ADDITIONAL EVIDENCE FURNISHED BY THE A SSESSEE. AT THE SAME TIME, AS THIS EVIDENCE IS NOT BEFORE THE ASSES SING OFFICER AND ON HEARING BOTH PARTIES, WE ARE OF THE CONSIDERED VIEW THAT THE WHOLE ISSUE HAS TO BE RE-EXAMINED BY THE ASSESSING OFFICE R AFRESH IN ACCORDANCE WITH LAW. THUS, WE SET ASIDE THE ISSUE TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO EXAMINE AFRES H IN ACCORDANCE ITA NO. 3630/M/2013 5 WITH LAW AFTER PROVIDING ADEQUATE OPPORTUNITY OF BE ING HEARD TO THE ASSESSEE. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 23 RD SEPTEMBER, 2016. SD/- SD/- (RAJENDRA) (C.N. PRASAD ) / ACCOUNTANT MEMBER $ % /JUDICIAL MEMBER MUMBAI; ( DATED 23 RD SEPTEMBER, 2016 . % . ./ RJ , SR. PS !'#$#! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ) ( ) / THE CIT(A)- 4. ) / CIT 5. *+ ,%%-. , -.! , / DR, ITAT, MUMBAI 6. , /01 / GUARD FILE. / BY ORDER, *% //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI