SOHAM DATA PROCESSING & FINANCE P. LTD, MUMBAI V. DCIT 7(2), MUMBAI

ITA 4392/MUM/2012

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 8656 (ITAT-MUMBAI)
• Duration Of Justice: 8 year(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-07-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Assessment Year: 2003-2004
• Appeal Filed On: 28-06-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R MANJUNATHA SWAMI
• Keywords: Business income; Depreciation; Opportunity of being heard
• Section: 13; 119

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH E , MUMBAI BEFORE SHRI C.N. PRASAD, HON'BLE JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN , HON'BLE ACCOUNTANT MEMBER ITA NO. 4392 /MUM/201 2 (A.Y: 2003 - 04 ) M/S. SOHAM DATA PROCESSING & FINANCE PVT. LTD., MAHALAKSHMI INDUSTRIAL ESTATE GROUND FLOOR., L.J ROAD NO. 1 MAHIM (W), MUMBAI 400 016 PAN: AAECS7700A V. DY. CIT 7(2) MUMBAI (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI RUTUJA N. PAWA R DEPARTMENT BY : SHRI R. MANJUNATHA SWAMI DATE OF HEARING : 10 .01.2020 DATE OF PRONOUNCEMENT : 20 .07 .2020 O R D E R PER C.N. PRASAD (JM) 1. THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 13 , MUMBAI [HEREINAFTER IN SHORT LD.CIT(A)] DATED 19.01.2012 FOR THE A.Y. 2003 - 04. 2. ASSESSEE HAS RAISED FOLLOWING GROUNDS IN ITS APPEAL: - 2 ITA NO.4392/MUM/2012 (A.Y: 2003 - 04) M/S. SOHAM DATA PROCESSING & FINANCE PVT. LTD., 1. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED COMMISSIONER (APPEALS) - 13 [HEREINAFTER REFERRED TO AS LD. CIT - (A)] HAS ERRED IN UPHOLDING L EAVE AND LICENSE FEES AND MAINTE NANCE CHARGES RECEIVED BY THE APPELLANT COMPANY AS TAXABLE UNDER INCOME FROM OTHER SOURCE AS AGAINST BUSINESS INCOME AS TREATED BY THE ASSESSEE WITHOUT BRINGING ANY MATERIAL ON RECORD AND PURELY ON CONJECTURES AND SURMISES. 2 . UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT - (A) ERRED IN CONFIRMING DISALLOWANCE MADE BY THE LEARNED ASSESSING OFFICER [HEREINAFTER REFERRED TO AS LD. AO] ON ACCOUN T OF DEPRECIATION OF RS.949,205/ - SINCE THE APPELLANT COMPANY IS NOT DOING ANY 'BUSINESS ACTIVITY'. 3. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT - (A) ERRED IN CONFIRMING DISALLOWANCE MADE BY THE LD. AO OF RS.65, 000/ - OUT OF TOTA L SALARY & BONUS OF RS. 1,30,000 / - , AS BEING UNREASONABLE, WIT HOUT BRINGING ANY MATERIAL ON RECORD AND PURELY ON CONJECTURES AND SURMISES. 4. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT - (A) ERRED IN CONFIRMING DISALLOWANC E MADE BY LD. AO OF RS.1,98,559/ - OUT OF ADMINISTRATIVE EXPENSE OF RS.4 ,96,395 / - BEING 40% OF ADMINISTRATIVE EXPENSE, WITHOUT BRINGING ANY MATERIAL ON RECORD AND PURELY ON CONJUNCTIONS AND SURMISES. 5. THE APPELLANT COMPANY CRAVES LEAVE TO ADD, AMEND OR MODIFY ALL OR ANY OF THE ABOVE GROUNDS OF APPEAL . 3. AT THE OUTSET, LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ISSUE INVOLVED IN THE YEAR UNDER CONSIDERATION IS SIMILAR TO THE ISSUE INVOLVED IN SUBSEQUENT ASSESSMENT Y EARS AND THE APPEAL S FOR THE SUBSEQUENT ASSESSMENT Y EARS HAVE BEEN RESTORED TO THE FILE OF THE ASSESSING OFFICER BY THE TRIBUNAL IN ITA.NO S. 3393 TO 3395/MUM/2015 DATED 07.09.2016 AND IN ITA.NO S . 2313 & 2314/MUM/2014 DATED 12.06.2017 FOR FRESH ADJUDICATION WITH CERTAIN OBSERVATIONS . THEREFORE , 3 ITA NO.4392/MUM/2012 (A.Y: 2003 - 04) M/S. SOHAM DATA PROCESSING & FINANCE PVT. LTD., L D. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THIS APPEAL MAY ALSO BE RESTORED TO THE FILE OF THE ASSESSING OFFICER SINCE ISSUE IS IDENTICAL . 4. LD. DR HAS NO OBJECTION IN RESTORING THE APPEAL TO THE FILE OF THE ASSESSING OFFICER AS THE TRIBUNAL HAD ALREADY RESTORED THE APPEAL S FOR SUBSEQUENT YEARS TO THE F ILE OF THE ASSESSING OFFICER. 5. HEARD BOTH THE PARTIES , PERUSED THE ORDERS OF THE AUTHORITIES BELOW AND THE ORDERS OF THE TRIBUNAL . THE TRIBUNAL IN ITS ORDER IN ITA.NOS. 2313 & 2314/MUM/2014 DATED 12.06.2017 FOR A.Y.2007 - 08 AND 2009 - 10 , RESTORED THE APPEAL S TO THE FILE OF THE ASSESSING OFFICER OBSERVING AS UNDER: - 3. THE LEARNED A.R., AT THE OUTSET, VEHEMENTLY CONTENDED THAT THE ONLY ISSUE INVOLVED IN BOTH THE APPEALS RELATES TO UPHOLDING THE DECISION OF THE AO BY THE CIT(A) W ITH RESPECT TO LEAVE AND LICENSE FEES RECEIVED AND ASSESSED UNDER THE HEAD INCOME FROM BUSINESS OR PROFESSION. THE LEARNED A.R. CONTENDED THAT THE SAID INCOME HAD TO BE ASSESSED AS INCOME FROM OTHER SOURCES AND THE ISSUE INVOLVED IS SQUARELY COVERED BY THE DECISION OF THIS TRIBUNAL IN ITA NO. 3393 TO 3395/MUM/2015 IN THE CASE OF THE ASSESSEE VIDE ORDER DATED 07.09.2016. IN THIS REGARD OUR ATTENTIONS WAS DRAWN TOWARDS THE ORDER OF THIS TRIBUNAL IN PARAS 2 AND 2.1 AND THEREFORE IT WAS REQUESTED THAT BOTH THE APPEALS OF THE ASSESSEE SHOULD BE ALLOWED FOR STATISTICAL PURPOSES. 4. THE LEARNED D.R., ON THE OTHER HAND, RELIED ON THE ORDERS OF THE TAX AUTHORITIES BELOW. 5. WE HEARD THE RIVAL SUBMISSIONS AND GONE THROUGH THE ORDERS OF THE TAX AUTHORITIES BELOW. WE HAVE GONE THROUGH THE ORDERS OF THE 4 ITA NO.4392/MUM/2012 (A.Y: 2003 - 04) M/S. SOHAM DATA PROCESSING & FINANCE PVT. LTD., TRIBUNAL IN THE CASE OF THE ASSESSEE FOR ASSESSMENT YEARS 2005 - 06, 2006 - 07 AND 2008 - 09 IN WHICH WE NOTED THAT THIS TRIBUNAL VIDE ORDER DATED 07.09.2016, AFTER RECORDING THE SUBMISSIONS OF THE ASSESSEE UNDER PARAS 2 A ND 2.1 ALLOWED ALL THE THREE APPEALS FOR STATISTICAL PURPOSES BY OBSERVING AS UNDER: - 2. DURING HEARING, SHRI S.C. TIWARY ALONG WITH RUTUJA PAWAR, ID. COUNSEL FOR THE ASSESSEE, CONTENDED THAT IT HAS TO BE ASSESSEE AS INCOME FROM OTHER SOURCES. IT WAS ALSO POINTED OUT THAT THE DECISION OF THE TRIBUNAL IN ITA NO.774/MUM/2009 DATED 26/02/2010 HAS BEEN WRONGLY QUOTED. IT WAS ALS O CONTENDED THAT TH E ISSUE HAS BEEN SETTLED BY HON BLE APEX COURT IN CHENNAI PROPERTIES AND INVESTMENT LTD. (CIVIL APPEAL NO.4494 OF 2004), SHREENATHJI BALAJI COMPUTECH PVT. LTD. (1TA NOS.6251 & 6253/MUM/2012), ORDER DATED 17/06/2015, INCOME TAX OFFICER VS RASIK LAL & COMPANY (2009) 119 LTD 61 (BORN.) AND THE DECISION FROM HON'BLE JURISDICTIONAL HIGH COURT IN SOHAM DATA PROCESSING AND FINANCE PVT. LTD. (JTA NO.4643 OF 2010)(BOM.). ON THE OTHER HAND, THE ID. DR, THOUGH DEFENDED THE ADDITION BUT HAD NO OBJECT ION IF THE MATTER MAY BE SENT TO THE FILE OF THE ASSESSING OFFICER TO EXAMINE THE CLAIM OF THE ASSESSEE AND THE CASES RELIED UPON BY THE ASSESSEE. 2.1. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WITHOUT GOING INTO MUCH DELIBERATION AND THE FACTS AVAILABLE ON RECORD, I AM OF THE VIEW THAT FACTS HAS NOT BEEN PROPERLY APPRECIATED, THEREFORE, THESE THREE APPEALS ARE REMANDED BACK TO THE FILE OF THE ID. ASSESSING OFFICER TO EXAMINE THE FACTS, CASES RELIED UPON BY THE ASSESSEE AND THEN DECIDE IN ACCORDANCE WITH LAW, AS AGREED/SUGGESTED FROM BOTH SIDES, THEREFORE, THESE APPEALS (ALL GROUNDS) ARE ALLOWED FOR STATISTI CAL PURPOSES ONLY. NEEDLESS TO MENTION HERE THAT DUE OPPORTUNITY OF BEING HEARD, WITH FURTHER LIBERTY TO FURNISH THE FACTUAL MATRIX/CASE LAWS, BE PROVIDED TO THE ASSESSEE. RESPECTFULLY FOLLOWING THE ABOVE DECISION OF THIS TRIBUNAL, BOTH THE APPEALS OF TH E ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES . 5 ITA NO.4392/MUM/2012 (A.Y: 2003 - 04) M/S. SOHAM DATA PROCESSING & FINANCE PVT. LTD., 6. RESPECTFULLY FOLLOWING THE ABOVE SAID ORDER, WE RESTORE THIS APPEAL TO THE FILE OF THE ASSESSING OFFICER TO DECIDE THE ISSUES IN ACCORDANCE WITH THE DIRECTIONS OF THE TRIBUNAL IN THE ABOVE ORDER. 7. IN THE RES ULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STA TISTICAL PURPOSE. 8. BEFORE PARTING , WE NOTICED T HAT THIS APPEAL WAS HEARD ON 10 .01.2020 AND THE PRONOUNCEMENT IS DELAYED DUE TO LOCKDOWN IN VIEW OF COVID - 19 PANDEMIC. THE PRONOUNCEMENT IS AS PER RULE 34(5) OF IN COME TAX APPELLATE TRIBUNAL RULES, 1963 AND HON'BLE BOMBAY HIGH COURT DECISION VIDE ORDERS DATED 15.04.2020 AND 15.06.2020 EXTENDING THE TIME BOUND PERIODS SPECIFIED BY HON'BLE HIGH COURT BY REMOVING THE PERIOD UNDER LOCKDOWN. THIS ASPECT WAS ALSO DEALT W ITH IN DETAIL BY THE MUMBAI BENCH OF THE TRIBUNAL IN CASE OF DCIT V. JSW STEEL VIDE ORDER DATED 15.05.2020. ORDER PRONOUNCED ON 20 . 07.2020 AS PER RULE 34(4) OF ITAT RULES BY PLACING THE PRONOUNCEMENT LIST IN THE NOTICE BOARD. SD/ - SD/ - ( S. RIFAUR RAHMAN ) (C.N. PRASAD) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI / DATED 20 / 0 7 / 2020 GIRIDHAR , S R. PS 6 ITA NO.4392/MUM/2012 (A.Y: 2003 - 04) M/S. SOHAM DATA PROCESSING & FINANCE PVT. LTD., COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY// BY ORDER (ASSTT. REGISTRAR) ITAT, MUM