DCIT 13(3)(2), MUMBAI V. YOU BROADBAND & CABLE INDIA LTD, MUMBAI

ITA 4173/MUM/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 9833 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-03-2018
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 17-06-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Depreciation; Revised return

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH F, MU MBAI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO.4173/MUM/2016 (ASSESSMENT YEAR- 2011-12) ACIT-13(3)(2) R. NO. 229, 2 ND FLOOR, AAYAKAR BHAVAN, M. K. ROAD, MUMBAI-20. VS. M/S YOU BROADBAND & CABLE INDIA LTD., PLOT NO. 54, MAROL CO-OPERATIVE INDUSTRIAL ESTATE, MAKWANA ROAD, ANDHERI(E), MUMBAI-400103 PAN:AABCB6062F (APPELLANT) (RESPONDENT) REVENUE BY : SHRI S. PADMAJA CIT-DR WITH SHRI RAM TIWARI (SR DR) ASSESSEE BY : SH. NISHANT THAKKAR ADVOCATE DATE OF HEARING : 22.03.2018 DATE OF PRONOUNCEMENT : 22.03.2018 ORDER UNDER SECTION 254(1) OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER: 1. THIS APPEAL BY REVENUE UNDER SECTION 253 OF INCOME TAX ACT (THE ACT) IS DIRECTED AGAINST THE ORDER OF LD. COMMISSIONER OF I NCOME-TAX (APPEALS)-21, MUMBAI, [FOR SHORT THE LD. CIT(A)] DATED 04.04.2016 FOR ASSESSMENT YEAR 2011-2012. THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPEAL: L. WHETHER ON THE FACTS AND THE CIRCUMSTANCES OF TH E CASE AND IN LAW, THE LD. CIT (A) ERRED IN DELETING THE DISALLOWANCE OF LEASE REN TAL OF RS. 2,11,52,230/- EVEN THOUGH THE ASSESSEE'S CLAIM WHICH WAS MADE THROUGH A REVISED COMPUTATION, WAS NOT SUPPORTED BY ANY EVIDENCE TO SHOW THAT THE ASSE SSEE PERTAINED TO FINANCE LEASE TRANSACTION. 2. THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A) ON THE ABOVE GROUND BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED . 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE-COMPA NY IS IN THE BUSINESS OF PROVIDING INTERNET SERVICES TO ITS SUBSCRIBER AND I NFRASTRUCTURE SUPPORT OF LICENSED TELECOMMUNICATION SERVICES PROVIDERS. THE ASSESSEE FILED RETURN OF ITA NO. 4173/MUM/2016 - M /S YOU BROADBAND & CABLE INDIA LTD. 2 INCOME FOR RELEVANT ASSESSMENT YEAR ON 30 TH SEPTEMBER 2011 DECLARING LOSS OF RS. 6,84,88,645/-. SUBSEQUENTLY, REVISED RETURN WAS FILED ON 02.03.2013 DECLARING LOSS AT RS. 6,91,91,792/-. THE ASSESSMENT WAS COMPLETED ON 28.03.2014 UNDER SECTION 143(3). THE ASSESSING OFFI CER WHILE MAKING ASSESSMENT ORDER NOTED THAT THE ASSESSEE CLAIMED RS . 2,11,52,231/- ON ACCOUNT OF PRINCIPAL ELEMENT IN LEASE RENTAL AND RS . 68,10,046/- AS INTEREST PAID. THE ASSESSING OFFICER DISALLOWED PRINCIPAL LE ASE AMOUNT OF RS. 2,11,52,230/- HOLDING THAT IT IS CAPITAL IN NATURE. ON APPEAL BEFORE THE LD. CIT(A), THE ASSESSEE WAS ALLOWED THE SAID PRINCIPAL LEASE RENTAL RS. 2,11,52,230/-. THE LD. CIT(A) ALLOWED THE LEASE REN TAL ON THE BASIS OF ORDER IN EARLIER TWO ASSESSMENT YEARS I.E. ASSESSMENT YEA R 2009-10 & 2011-12. THUS, AGGRIEVED BY THE ORDER OF LD. CIT(A), THE REV ENUE HAS FILED THE PRESENT APPEAL BEFORE US. 3. WE HAVE HEARD THE LD. DEPARTMENTAL REPRESENTATIVE ( DR) FOR THE REVENUE AND LD. AUTHORIZED REPRESENTATIVE (AR) OF THE ASSES SEE AND GONE THROUGH THE ORDER OF AUTHORITIES BELOW. THE LD. DR FOR THE REVE NUE SUBMITS THAT THE LD. CIT(A) PASSED THE ORDER BY FOLLOWING THE ORDER IN EARLIER ASSESSMENT YEARS I.E. 2009-10 & 2010-11. THE REVENUE CHALLENGED THOS E EARLIER ORDER OF LD. CIT(A) BEFORE THE TRIBUNAL AND ORDER OF BOTH THE AS SESSMENT YEAR IS REMANDED TO THE FILE OF ASSESSING OFFICER VIDE ORDE R DATED 17.05.2017 IN ITA NO. 54/M/13 & 6973/M/13 FOR ASSESSMENT YEAR 2009-10 & 2010-11 RESPECTIVELY. THE LD. DR FOR THE REVENUE PRAYED THA T THIS ISSUE RAISED IN THE ITA NO. 4173/MUM/2016 - M /S YOU BROADBAND & CABLE INDIA LTD. 3 YEAR UNDER CONSIDERATION ARE IDENTICAL AND MAY BE R ESTORED TO THE FILE OF ASSESSING OFFICER TO DECIDE IN ACCORDANCE OF THE OR DER DATED 17.05.2017. 4. ON THE CONTRARY, THE LD. AR OF THE ASSESSEE SUBMITS THAT THE FACTS OF THE YEAR UNDER CONSIDERATION ARE AT VARIANCE. THIS YEAR, THE ASSESSING OFFICER AS HAS CLEARLY HELD THAT THE ASSESSEE IS NOT THE OWNER OF THE LEASED ASSET. IT WAS SUBMITTED THAT THE ORDER OF LD CIT(A) IS LIABLE TO BE SUSTAINED. IN SUPPORT OF HIS SUBMISSION, THE LD. AR OF THE ASSESSEE RELIED O N THE DECISION OF HON'BLE SUPREME COURT IN ICDS LTD. VS. CIT [2013] 350 ITR 5 27 AND DECISION OF HON'BLE RAJASTHAN HIGH COURT IN CIT VS. BANSWARA SY NTEX LTD. [2013] TAXMANN.COM 176 (RAJ.). 5. IN THE REJOINDER SUBMISSION, THE LD. DR FOR THE REV ENUE SUBMITS THAT THE ORDER OF LD. CIT(A) IS BASED ON ORDER OF EARLIER YE ARS, WHICH HAS ALREADY SET- ASIDE TO THE FILE OF ASSESSING OFFICER AND KEEPING IN VIEW THE IDENTICAL NATURE OF DISALLOWANCE, IT MAY BE REMANDED TO THE FILE OF ASSESSING OFFICER. ON MERIT THE LD. DR RELIED ON THE DECISION OF HON'BLE COURT IN ASEA BROWN BOVERI LTD. VS. INDUSTRIAL FINANCE CORPORATION OF I NDIA LTD. IN C.A. 3574 OF 1998 DATED 27.10.2014 AND DECISION OF DELHI TRIBUNA L IN MINDA CORPORATION LTD. VS. DCIT [2016] 42 ITR(T) 615 (DEL.TRIB.). 6. WE HAVE CONSIDERED THE RIVAL SUBMISSION OF THE LD. REPRESENTATIVES OF THE PARTIES AND PERUSED THE ORDER OF AUTHORITIES BELOW. WE HAVE ALSO GONE THROUGH THE ORDER OF CO-ORDINATE BENCH OF TRIBUNAL IN ASSES SEES CASE FOR ASSESSMENT ITA NO. 4173/MUM/2016 - M /S YOU BROADBAND & CABLE INDIA LTD. 4 YEAR 2009-10 & 2010-11. THE CO-ORDINATE BENCH OF TH E TRIBUNAL PASSED THE FOLLOWING ORDER: 11. WE HAVE HEARD LEARNED DEPARTMENTAL REPRESENTAT IVE AND PERUSED THE RECORD. WE NOTICED THAT THE TAX AUTHORITIES HAVE NO T EXAMINED THE LEASE AGREEMENT. THE ASSESSEE SUBMITS THAT THE LESSOR, VI Z., M/S CISCO SYSTEMS CAPITAL (INDIA) PVT. LTD. HAS BEEN ALLOWED DEPRECIATION AS OWNER OF THE ASSET AND HENCE LEASE RENTAL PAID BY THE ASSESSEE SHOULD BE ALLOWED AS DEDUCTION. SINCE THIS FACTUAL ASPECTS HAVE NOT BEEN EXAMINED BY THE TAX A UTHORITIES, WE ARE OF THE VIEW THAT THIS ISSUE REQUIRES FRESH EXAMINATION AT THE E ND OF THE ASSESSING OFFICER. ACCORDINGLY, WE SET ASIDE THE ORDER PASSED BY THE L EARNED CIT(A) ON THIS ISSUE AND RESTORE THE SAME TO THE FILE OF THE ASSESSING O FFICER WITH THE DIRECTION TO EXAMINE THE SAME AFRESH BY DULY CONSIDERING THE LEA SE AGREEMENT AND ALSO THE FACTS AVAILABLE IN THE CASE OF LESSOR. 12. WE SHALL NOW TAKE UP THE APPEALS FILED BY THE R EVENUE FOR A.Y. 2009-10 & 2010-11. IN BOTH THE YEARS THE ISSUE RELATES TO LEA SE RENTAL CLAIMED BY THE ASSESSEE AS DEDUCTION. IDENTICAL ISSUE WAS CONSIDER ED BY US IN A.Y. 2008-09 IN THE PRECEDING PARAGRAPH, WHEREIN WE HAVE RESTORED T HIS MATTER TO THE FILE OF THE ASSESSING OFFICER. CONSISTENT WITH THE VIEW TAKEN, WE SET ASIDE THE ORDER PASSED BY THE LEARNED CIT(A) ON THIS ISSUE IN BOTH YEARS A ND RESTORE THE SAME TO THE FILE OF THE ASSESSING OFFICER FOR EXAMINING THEM AFRESH. 7. WE HAVE GIVEN THOUGHTFUL CONSIDERATION ON THE FACTS AND THE SUBMISSIONS OF THE LE REPRESENTATIVES OF THE PARTIES. CONSIDERING THE FACTS THAT THE IDENTICAL ISSUE IS RESTORED TO THE FILE OF ASSESSING OFFICER IN ASSESSMENT YEAR 2009-10 & 2010-11, WE ARE OF THE VIEW THAT THE GROUNDS RAIS ED IN THE PRESENT APPEAL BE ALSO CONSIDERED AFRESH IN ACCORDANCE WITH THE DI RECTION IN ORDER DATED 17.05.2017 IN ITA NO. 54 & 6973/2013 IN ASSESSMENT YEAR 2009-10 & 2010-11. MOREOVER, THE ORDER OF LD. CIT(A) IS BASED ON ONE ORDER OF EARLIER YEARS I.E. ASSESSMENT YEAR 2009-10 & 2010-11. THUS, RESPECTFULLY FOLLOWING THE ORDER OF CO-ORDINATE BENCH, THE ISSUE IS REMAND ED TO THE FILE OF ASSESSING OFFICER TO DECIDE THE AFRESH AS PER DIRECTION IN OR DER DATED 17.05.2017 AND IN ITA NO. 4173/MUM/2016 - M /S YOU BROADBAND & CABLE INDIA LTD. 5 ACCORDANCE WITH LAW. IN THE RESULT, GROUND OF APPEA L RAISED BY REVENUE IS ALLOWED FOR STATISTICAL PURPOSE. 8. IN THE RESULT, APPEAL FILED BY REVENUE IS ALLOWED F OR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND DAY OF MARCH 2018. SD/- SD/- ( SHAMIM YAHYA ) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED 22/03/2018 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. C