OWENS CORNING (INDIA) P.LTD, MUMBAI V. ITO WD 7(1)(2), MUMBAI

ITA 4114/MUM/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 3697 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 1 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-08-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2010-2011
• Appeal Filed On: 15-06-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SAURABH DESH
• Assessee Lawyers: HIRALHARIA
• Keywords: Depreciation; Question of law

Judgement Text

IN THE INC OME TAX APPELLATE TRIBUNAL K BENCH, MUMBAI BEFORE HON BLE SH. G. S. PANNU , AM & HONBLE SH. SANDEEP GOSAIN, JM ./ I.T.A. NO . 4114 / MUM/ 2016 ( / ASSESSMENT YEAR: 2010 - 11 ) OWENS CORNING (INDIA) PVT. LTD. FORMERLY KNOWN AS OWENS CORNING INDIA LTD. ALPHA BUILDING, 7 TH FLOOR, HIRANDANI GARDENS, POWAI, MUMBAI - 400 076 / VS. ITO WD 7(1 ) (2 ) AAYAKARBHAVAN, M. K. ROAD, MUMBAI - 400020 ./ ./ PAN NO. A A ACO 1739 M ( / APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : MS. HIRALHARIA , AR / RESPONDENTBY : SHRI SAURABH DESHPANDE , DR / DATE OF HEARING : 17 /07 /201 8 / DATE OF PRONOUNCEMENT : 0 8/08/2018 / O R D E R PER SANDEEP GOSAIN, J UDICIAL MEMBER : THE P RESENT APPE AL FILED BY THE ASSESSEE IS AGAINST THE ORDER OF LD. CIT(A) - 13, MUMBAI DATED 14.03.16 FOR AY 2010 - 11 ON THE GROUNDS MENTIONED HEREIN BELOW: - 2 I.T.A. NO. 4114 /MUM/201 6 OWENS CORNING (INDIA) PVT. LTD. 1: 0 RE.: DISALLOWANCE OF AMORTISATION OF THE PREMIUM PAID FOR THE LEASEHOLD LAND: 1 THE COMMISSIONER OF INCOME - TAX (APPEALS) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF RS. 20,14,932/ - BEING THE AMORTISED AMOUNT OF THE PREMIUM PAID FOR ACQUIRING LEASE RIGHTS OVER A PLOT OF LAND. 2 THE APPELLANT SUBMITS THAT CONSIDERING THE FACTS AND CIR CUMSTANCES OF ITS CASE AND THE LAW PREVAILING ON THE SUBJECT, THE SAID AMOUNT AMORTISED IS DEDUCTIBLE WHILE COMPUTING ITS TOTAL INCOME AND THE ACTION OF THE ASSESSING OFFICER IN THIS RESPECT IS NOT IN ACCORDANCE WITH LAW AND THE COMMISSIONER OF INCOME - TAX (APPEALS) OUGHT TO HAVE HELD AS SUCH. 3 THE APPELLANT SUBMITS THAT THE ASSESSING OFFICER BE DIRECTED TO DELETE THE DISALLOWANCE SO MADE BY HIM AND TO RE - COMPUTE ITS TOTAL INCOME ACCORDINGLY. 2 :0 RE.: DISALLOWANCE OF DEPRECIATION ON ADDITIONS TO THE FIXED A SSETS MADE DURING THE ASSESSMENT YEAR 2006 - 2007: 2: 1 THE COMMISSIONER OF INCOME - TAX (APPEALS) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF DEPRECIATION OF RS. 32,34,617/ - (PERTAINING TO THE ASSETS ACQUIRED DURING THE ASSESSMENT YEAR 2006 - 2007) OUT OF THE TO TAL 3 I.T.A. NO. 4114 /MUM/201 6 OWENS CORNING (INDIA) PVT. LTD. DEPRECIATION OF RS. 19,06,53,664/ - CLAIMED BY THE APPELLANT FOR THE YEAR UNDER CONSIDERATION. 2 : 2 THE APPELLANT SUBMITS THAT CONSIDERING THE FACTS AND CIRCUMSTANCES OF ITS CASE AND THE LAW PREVAILING ON THE SUBJECT IT IS ENTITLED TO CLAIM DEPRECIATION OF RS. 19,06,53,664/ - WHILE COMPUTING ITS TOTAL INCOME FOR THE YEAR AND THE ACTION OF THE ASSESSING OFFICER IN THIS RESPECT IS NOT IN ACCORDANCE WITH LAW AND THE COMMISSIONER OF INCOME - TAX (APPEALS) OUGHT TO HAVE HELD AS SUCH. 2 : 3 THE APPELLANT SUBMITS THAT THE ASSESSING OFFICER BE DIRECTED TO ALLOW DEPRECIATION AS CLAIMED BY IT AND TO RE - COMPUTE ITS TOTAL INCOME ACCORDINGLY. 3: 0 RE.: GENERAL: 3: 1 THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND, SUBSTITUTE AND / OR MODIFY IN ANY MANNER WHATSOEVER ALL OR ANY OF THE FOREGOING GROUNDS OF OBJECTIONS AT OR BEFORE THE HEARING OF THE APPEAL. 2. THE B RIEF FACTS OF THE CASE ARE THAT THE AO HAD MADE CERTAIN ADDITIONS IN THE CASE OF M/S OWENS CORNING (INDIA) PVT. LTD. 4 I.T.A. NO. 4114 /MUM/201 6 OWENS CORNING (INDIA) PVT. LTD. AGGRIEVED BY THE ORDER OF AO, ASSESSEE PREF ERRED APPEAL BEFORE LD. CIT(A) AND LD. CIT(A) AFTER CONSIDERING THE CASE OF BOTH THE PARTIES, PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. AGGRIEVED BY THE ORDER OF LD. CIT(A), ASSESSEE HAS PREFERRED THE PRESENT APPEAL BY RAISING THE ABOVE GROUNDS. GROUND NO. 1 . 3. THIS GROUND RAISED BY THE ASSESSEE RELATES TO CHA LLENGING THE ORDER OF LD. CIT(A) IN CONFIRMING THE DISALLOWANCE OF RS. 20,14,932/ - BEING THE AMORTISED AMOUNT OF THE PREMIUM PAID FOR ACQUIRING LEASE RIGHTS OVER A PLOT OF LAND. 4 . AT THE VE RY OUTSET LD. AR DRAWN OUR ATTENTION TO APPLICATION DATED 19.06.18 THEREBY MAKING DECLARATION U/S 158A(1) OF I.T. ACT, 1961 TO THE EFFECT THAT GROUND NO. 1 RAISED IN THE PRESENT APPEAL IS WITH REGARD TO CHALLENGING THE ORDER IN RESPECT OF DISALLOWANCE OF A MORTIZATION OF THE PREMIUM PAI D FOR THE LEASEHOLD LAND HAS ALREADY BEEN DECIDED BY THE COORDINATE BENCH OF HONBLE ITAT IN ASSESSEES OWN CASE FOR AY 2001 - 5 I.T.A. NO. 4114 /MUM/201 6 OWENS CORNING (INDIA) PVT. LTD. 02, 2004 - 05, 2005 - 06 AND 2013 - 14. IT WAS ALSO SUBMITTED THAT THE ASSESSEE HAS FILED AN APPEAL BEFORE HONBLE BOMBAY HIGH COURT AGAINST THE ORDER DATED 16.03.11 FOR AY 2004 - 05 AND THE SAME HAS BEEN ADMITTED BY THE HONBLE BOMBAY HIGH COURT. IN VIEW OF THESE FACTS, THE ASSESSEE HAS FILED AN APPLICATION IN ACCORDANCE WITH SECTION 158A OF THE I.T. ACT VIS - - VIS THE ISSUE AND HAS REQUESTED THAT APPROPRIATE DIRECTIONS BE GIVEN TO THE AO. AFTER HEARING THE PARTIES AT LENGTH AND AFTER HAVING GONE THROUGH THE MATERIAL PLACED ON RECORD AS WELL AS ORDERS PASSED BY REVENUE AUTHORITIES, WE ARE CONVINCED THAT ISSUE NO. 1 HAS ALREADY BEEN DECIDED BY THE COORDINATE BENCH OF HONBLE ITAT IN ITA NO. 5959/MUM/2017 FOR AY 2013 - 14 , WHEREIN IT WAS HELD THAT THE ASSESSEE HAS ALREADY FILED AN APPEAL BEFORE HO NBLE BOMBAY HIGH COURT AND THE HONBLE BOMBAY HIGH COURT HAD ADMITTED THE SAME. 6 I.T.A. NO. 4114 /MUM/201 6 OWENS CORNING (INDIA) PVT. LTD. THEREFORE, RESPECTFULLY FOLLOWING THE ORDER PASSED BY THE COORDINATE BENCH OF HONBLE ITAT IN ITA NO. 5959/MUM/17 FOR AY 2013 - 14, WE DISMISS THIS GROUND OF APPEAL RAISED BY THE ASSESSEE WITH A DIRECTION TO THE AO THAT AS AN WHEN DECISION ON THE QUESTION OF LAW BEFORE THE HONBLE BOMBAY HIGH COURT BECOMES FINAL, THEN IT SHALL BE APPLIED FOR THE YEAR UNDER CONSIDERATION AND IF NECESSARY, THE AO SHALL AMEND ORDER ACCORDINGLY. WITH THESE DIRECTIONS, THIS GROUND RAISED BY THE ASSESSEE IS DISPOSED OF ACCORDINGLY. GROUND NO. 2. 5. THIS GROUND RAISED BY ASSESSEE RELATES TO CHALLENGI NG THE ORDER OF LD. CIT(A) IN CONFIRMING THE DISALLOWANCE OF DEPRECIATION OF RS. 32,34,617/ - (PERTAINING TO THE ASSETS ACQUIRED DURING THE ASSESSMENT YEAR 2006 - 2007) OUT OF THE TOTAL DE PRECIATION OF RS. 19,06,5 3,664/ - CLAIMED BY THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION. 6. LD. AR APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED BEFORE U S THAT THE PRESENT CASE IS COVERED BY THE ORDER OF HON BLE 7 I.T.A. NO. 4114 /MUM/201 6 OWENS CORNING (INDIA) PVT. LTD. ITAT IN ITA NO. 5959/MUM/17 F OR AY 2013 - 14 IN ASSESSEES OWN CASE , WHEREIN THE IDENTICAL GROUNDS RAISED IN THE PRESENT APPEAL HAVE ALREADY BEEN DECIDED ON MERITS. 7 . ON THE OTHER HAND, LD. DR DID NOT DISPUTE THE LEGAL POSITION. 8 . WE HAVE HEARD BOTH THE PARTIES AND WE HAVE ALSO PERUSED THE MATERIAL PLACED ON RECORD AS WELL AS THE ORDERS PASSED BY REVENUE AUTHORITIES. WE FIND THAT THE IDENTICAL GROUND HAS ALREADY BEEN DECIDED BY THE COORDINATE BENCH OF HONBLE ITAT IN ITA NO. 5959/MUM/17 FOR AY 2013 - 14 IN ASSESSE ES OWN CASE. THE OPERATIVE PORTION OF THE ORDER OF HONBLE ITAT CONTAINED IN PARA NO. 17 , WHICH IS REPRODUCED BELOW: - 17. HAVING CONSIDERED THE RIVAL STANDS, IN OUR VIEW, THE LEAD YEAR OF DISPUTE IS ASSESSMENT YEAR 2006 - 07. IN ASSESSMENT YEAR 2006 - 07, THE DEPRECIATION IN RESPECT OF ADDITION TO FIXED ASSETS MADE IN THAT YEAR HAS NOT BEEN ALLOWED BY THE INCOME - TAX AUTHORITIES AND THE SAID POSITION CONTINUES TO PREVAIL TILL NOW. IN THIS VIEW 8 I.T.A. NO. 4114 /MUM/201 6 OWENS CORNING (INDIA) PVT. LTD. OF THE MATTER, IN OUR VIEW, THE ASSESSING OFFICER MADE NO MISTAKE IN GIVING CONSEQUENTIAL EFFECT AND SCALING DOWN ASSESSEES CLAIM FOR DEPRECIATION IN THIS YEAR. WE ARE INCLINED TO UPHOLD THE STAND OF THE ASSESSING OFFICER WITH A CAVEAT THAT IF THE POSITION OF ASSESSEES CLAIM OF DEPRECIATION FOR ASSESSMENT YEAR 2006 - 07 IS ALTERED BY ANY HIGHER AUTHORITY IN FAVOUR OF THE ASSESSEE, THE CONSEQUENTIAL RELIEF BE ALLOWED TO THE ASSESSEE IN THE INSTANT ASSESSMENT YEAR ALSO. WITH THESE REMARKS, WE HEREBY AFFIRM THE ULTIMATE DECISION OF THE ASSESSING OFFICER AND ACCORDINGLY, ASSE SSEE FAILS ON THIS ASPECT. AFTER HAVING GONE THROUGH THE FACTS OF THE PRESENT CASE AS WELL AS CONSIDERING THE ORDERS PASSED BY REVENUE AUTHORITIES AND HONBLE ITAT AS MENTIONED ABOVE IN ASSESSEES OWN CASE , WE FIND THAT THE IDENTICAL ISSUE S HAVE ALREADY BEEN DECIDED BY THE HONBLE ITAT IN ASSESSEES OWN CAS E FOR AY 2013 - 14 IN ITA NO. 5959/MUM/2017 . THEREFORE ,RESPECTFULLY FOLLOWING THE DECISION OF THE COORDINATE BENCH OF HONBLE ITAT AND IN ORDER TO MAINTAIN JUDICIAL CONSISTENCY , WE APPLY THE SAME FINDINGS IN 9 I.T.A. NO. 4114 /MUM/201 6 OWENS CORNING (INDIA) PVT. LTD. THE PRESENT CASE WHICH ARE APPLICABLE MUTATIS MUTANDIS IN THE PRESENT CASE . THEREFORE, WE ORDER ACCORDINGLY. 9 . IN THE NET RESU LT, THE APPEAL FILED BY THE ASSESSEE STANDS DISMISSED WITH NO ORDER AS TO COST. ORDER PRONOUNCED IN THE OPEN COURT ON 8 TH AUGUST 2018 SD/ - SD/ - ( G. S. PANNU ) (SANDEEP GOSAIN) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI ; DATED : 08 . 08 .201 8 SR.PS . DHANANJAY / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT - CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD F I LE / BY ORDER, . / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI