INDUSTRIAL INVESTMENT TRUST LTD, MUMBAI V. DCIT 2(2), MUMBAI

ITA 3946/MUM/2013

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 2617 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 5 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: I
• Next Hearing Date: 14-05-2015
• Assessment Year: 1996-1997
• Appeal Filed On: 17-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation; Question of law
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH I, MUMBAI BEFORE SHRI R.C.SHARMA, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO.3947/MUM/2013 ASSESSMENT YEAR: 1995-96 INDUSTRIAL INVESTMENT TRUST LTD., RAJ BAHADUR MANSION, 2 ND FLOOR, 28, MUMBAI SAMACHAR MARG, FORT, MUMBAI-400023 PAN: AAACI1262R VS. DC IT - 2(2) , AAYAKAR BHAVAN, M. K. ROAD, MUMBAI-400020 (APPELLANT) (RESPONDENT) ITA NO.3946/MUM/2013 ASSESSMENT YEAR: 1996-97 INDUSTRIAL INVESTMENT TRUST LTD., RAJ BAHADUR MANSION, 2 ND FLOOR, 28, MUMBAI SAMACHAR MARG, FORT, MUMBAI-400023 PAN: AAACI1262R VS. DC IT - 2(2) , AAYAKAR BHAVAN, M. K. ROAD, MUMBAI-400020 (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI DHARMESH SHAH REVENUE BY : SHRI MANOJ MISHRA (DR) DATE OF HEARING : 19.08.2015 DATE OF PRONOUNCEMENT : 30.10.2015 O R D E R 2 ITA NO. 3947 & 3946/M/2013 INDUSTRIAL INVESTMENT T RUST LTD. PER PAWAN SINGH, JM: 1. THESE TWO IDENTICAL APPEALS WERE FILED BY THE ASSES SEE AGAINST THE ORDER OF CIT(A)-5, MUMBAI DATED 31.03.2013 IN THE MATTER OF IMPOSITION OF PENALTY IN RESPECT OF ASSESSMENT YEAR (AY) 1995-96 AND AY 1996 -97. GROUND OF APPEAL FOR AY-1995-96 ARE AS UNDER: 1. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN LAW AND FACTS IN PASSING ORDER AND CONFIRMING THE P ENALTY LEVIED BY THE ASSESSING OFFICER U/S. 271(1)(C) OF THE ACT. 2. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN LAW AND FACTS IN NOT APPRECIATING THAT THE INITIATI ON OF PENALTY PROCEEDINGS WERE NOT IN ACCORDANCE WITH THE LAW. 3. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN LAW AND FACTS IN NOT APPRECIATING THAT THE PENALTY ORDER PASSED BY THE ASSESSING OFFICER IS WITHOUT JURISDICTION AND BAD I N LAW. 4. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN LAW AND FACTS IN CONFIRMING THE PENALTY ON THE DISA LLOWANCE OF DEPRECIATION OF RS 1,00,00,000/- IN RESPECT OF LEAS E TRANSACTION WITH M/S. RAJASTHAN STATE ELECTRICITY BOARD. 5. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN LAW AND FACTS IN CONFIRMING THE PENALTY ON THE DISA LLOWANCE OF DEPRECIATION OF RS 24,64,450/- IN RESPECT OF LEASE TRANSACTION WITH M/S. PRESTIGE FOODS LTD. 6. THE APPELLANT CRAVES LEAVE OF YOUR HONOUR TO ADD TO, ALTER, AMEND AND/ OR DELETE ALL OR ANY OF THE FOREGOING GROUNDS OF APPEAL. GROUND OF APPEAL FOR AY-1996-97 ARE AS UNDER: FOLLOWING GROUNDS OF APPEAL ARE WITHOUT PREJUDICE T O EACH OTHER: 1. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN LAW AND FACTS IN PASSING ORDER AND CONFIRMING THE P ENALTY LEVIED BY THE ASSESSING OFFICER U/S. 271(1)(C) OF THE ACT. 2. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN LAW AND FACTS IN NOT APPRECIATING THAT THE INITIATI ON OF PENALTY PROCEEDINGS WERE NOT IN ACCORDANCE WITH THE LAW. 3. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN LAW AND FACTS IN CONFIRMING THE PENALTY ON THE DISA LLOWANCE OF DEPRECIATION OF RS 24,64,450/- IN RESPECT OF LEASE TRANSACTION WITH M/S. PRESTIGE FOODS LTD. 4. THE APPELLANT CRAVES LEAVE OF YOUR HONOUR TO ADD TO, ALTER, AMEND AND/ OR DELETE ALL OR ANY OF THE FOREGOING GROUNDS OF APPEAL. 2. AT THE OUTSET OF THE HEARING, LD. AUTHORIZED REPRES ENTATIVE (AR) OF THE ASSESSEE PLACED ON RECORD HAS DRAWN OUR ATTENTION THAT INITI ALLY THE ASSESSEE FILED HIS RETURN OF INCOME ON 15.12.1995 IN RESPECT OF AY 199 5-96 AND THE ORDER OF 143(3) WAS PASSED ON 31.03.1998 WHEREIN AN ADDITION ON ACC OUNT OF STAFF WELFARE, 3 ITA NO. 3947 & 3946/M/2013 INDUSTRIAL INVESTMENT T RUST LTD. MOTOR CAR EXPENSES AND DEPRECIATION OF LEASE ASSETS IN RESPECT OF LEASE MADE INTO RAJASTHAN ELECTRICITY BOARD. IN RESPECT OF AY- 1996-97 AN ADDITION OF DEPRECIATION OF LEASE ASSETS TO M/S PRESTIGE FOOD L TD. WAS DISALLOWED BY THE AO. THE SAME WAS CHALLENGED BEFORE THE CIT(A) AND THE C IT(A) IN ITS ORDER DATED 18.02.2000 THE APPEAL WAS OF THE ASSESSEE WAS PARTL Y ALLOWED AGAINST WHICH FURTHER APPEAL WAS FILED BEFORE ITAT, MUMBAI WHICH WAS REGISTERED VIDE ITA NO. 2207/2000 AND WAS DISPOSED OFF VIDE ORDER DATED 09. 09.2004 WHEREIN THE MATTER WAS REMANDED TO THE FILE OF AO IN RESPECT OF ISSUE FOR TREATING THE LEASE TRANSACTION WITH PRESTIGE FOOD LTD. AND RAJASTHAN E LECTRICITY BOARD AND THE SAME WAS REMANDED TO THE FILE OF AO IN THE LIGHT OF DIRECTION AND GUIDELINES CONTAINED IN ITAT, MUMBAI SPECIAL BENCH CASE TITLED AS EAST PORTFOLIO MANAGEMENT LTD. VS. DCIT REPORTED AS 87 ITD 537 ALO NG WITH THE ADDITIONS/ISSUES IN RESPECT OF AY-1996-97. HOWEVER , AS PER THE PAPER BOOK FILED BY THE ASSESSEE, THE LD. CIT(A) IN ITS ORDER DATED 03.02.2010 UPHELD THE ADDITION MADE BY THE AO AND DISMISSED THE APPEAL BY COMMON O RDER. AGAINST WHICH FURTHER APPEAL WAS FILED BY THE ASSESSEE WHICH WAS REGISTERED VIDE ITA NO. 4013 & 4011/MUM/ 2010 AND OUR PREDECESSOR BENCH VIDE ORD ER DATED 10.12.2012 FURTHER REMANDED THE CASES/APPEALS TO THE RECORD OF CIT(A) TO RECONSIDER AND DECIDE THE SAME AFTER CONSIDERING ALL RELEVANT FACT IN THE LIGHT OF DECISION OF SPECIAL BENCH IN INDUS-IND BANK REPORTED VIDE 135 I TD 165. THE LD. CIT(A) WHILE DEALING WITH THE REMAND PROCEEDINGS, THE CIT(A) DIS MISSED BOTH THE APPEAL OF THE ASSESSEE AGAINST WHICH TO DIFFERENT APPEAL ARE FILED BEFORE JURISDICTIONAL HIGH COURT. 3. THE LD. AR OF THE ASSESSEE HAS SHOWN THE COPY OF OR DER-SHEET OF HONBLE JURISDICTIONAL HIGH COURT AT PAGE NO. 91 & 92 OF PA PER BOOK ABOUT THE FILING AN ADMISSION OF APPEAL OF THE ASSESSEE IN RESPECT OF A Y 1996-97 AND AT PAGE NO. 4 ITA NO. 3947 & 3946/M/2013 INDUSTRIAL INVESTMENT T RUST LTD. 93 & 94 ABOUT THE FILING OF APPEAL OF ASSESSEE IN R ESPECT OF AY-1995-96, WHICH HAS BEEN ACCEPTED BY THE HONBLE BOMBAY HIGH COURT VIDE ORDER DATED 23.09.2008 AND ITA NO. 640/MUM/2008 AND APPEAL FOR AY 1995-96 HAS BEEN ACCEPTED BY HONBLE HIGH COURT VIDE ORDER DATED 01. 08.2008. 4. LD. AR OF THE ASSESSEE FURTHER ARGUED THAT AS PER T HE DECISION OF NAYAN BUILDERS AND DEVELOPERS PVT. LTD. DATED 24.07.2014 REPORTED VIZ 368 ITR 722(BOM) WHEREIN IT HAS HELD THAT ONCE THE SUBSTANTIAL QUEST ION OF LAW IS ACCEPTED IN RESPECT OF THE ADDITION SO MADE IN THE ASSESSMENT, NO PENALTY SHOULD BE IMPOSED U/S 271(C) OF THE ACT, THE LD. 5. THE LD. AR OF THE ASSESSEE FURTHER RELIED UPON THE JUDGMENT OF CO-ORDINATE BENCH OF BOMBAY TRIBUNAL IN ITA NO. 942/MUM/12, TIT LED AS M/S N VENSIMAL SECURITIES LTD, IN ITA NO. 3864/MUM/13 TITLED AS IT O VS. H.B.WASWANI AND ITA NO. 8223/10 TITLED AS SCHRADAR DUNCAN LTD. VS. ACIT WHEREIN ALL THE DECISION RESPECTFULLY CONSISTENTLY FOLLOWING THE JUDGMENT OF JURISDICTIONAL HIGH COURT IN NAYAN BUILDERS AND DEVELOPERS PVT. LTD. HAS HELD TH AT WHERE HIGH COURT HAS ADMITTED THE SUBSTANTIAL QUESTION OF LAW ON THE ADD ITIONS, IT BECAME APPARENT THAT THE ADDITION SO MADE HAD BECAME DEBATABLE ,THE PENALTY SO IMPOSED ON THE BASIS OF ADMISSION HAD ALSO BECOME DEBATABLE, THERE FORE, PENALTY IMPOSED U/S 271(C) OF THE ACT CANNOT SURVIVE. HOWEVER, IT IS A MATTER OF FACT AND IS MADE CLEAR THAT IF AT ANY STAGE THE ORDER OF HONBLE HIGH COUR T CAME IN FAVOR OF THE REVENUE, THE DEPARTMENT IS FREE TO PROCEED IN ACCORDANCE WIT H LAW. 6. IN VIEW OF THE ABOVE, THE CASES OF THE ASSESSEE ARE SQUARELY COVERED BY THE JUDGMENTS MENTIONED ABOVE. THE LD. DR OF THE REVENU E HAS NOT SHOWN ANY CONTRARY LAW TO US, HENCE THE ORDER DATED 24.02.2 006 PASSED BY AO AGAINST THE ASSESSEE IN RESPECT OF AY 1995-96 AND 1996-97 AND WHICH WERE UPHELD BY THE 5 ITA NO. 3947 & 3946/M/2013 INDUSTRIAL INVESTMENT T RUST LTD. CIT(A) IN APPEAL ARE SET ASIDE AND THE APPEALS FILE D BY THE ASSESSEE ARE ACCEPTED. 7. IN THE RESULT, BOTH THE APPEALS FILED BY THE ASSESS EE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 30 TH OCTOBER 2015. SD/- SD/- (R.C.SHARMA) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED 30 /10/2015 S.K.PS COPY OF THE ORDER FORWARDED TO : BY ORDER, (ASSTT.REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY/