DCIT CC 7(2), MUMBAI V. GAMMON INDIA LTD, MUMBAI

ITA 4492/MUM/2016

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 7832 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-12-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 27-07-2017
• Assessment Year: 2005-2006
• Appeal Filed On: 29-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JASBIR CHA UHAN
• Assessee Lawyers: VIMAL MODI
• Keywords: Depreciation
• Section: 143(3); 80HHC; 153A; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH H MUMBAI BEFORE SHRI D.T. GARASIA (JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) ITA NO. 4492 /MUM/ 2016 ASSESSMENT YEAR: 2005 - 06 DCIT CC - 7(2) ROOM NO. 655, AAYAKAR BHAVAN, M.K. ROAD, NEW MARINE LINES, MUMBAI - 400020. VS. M/S GAMMON INDIA LTD. GAMMON HOUSE, VEER SAVARKAR MARG, PRABHADEVI, MUMBAI - 400025. PAN NO. AAACG3821A APPELLANT RESPONDENT REVENUE BY : MR. JASBIR CHAUHAN, DR ASSESSEE BY : MR. VIMAL MODI , AR DATE OF HEARING : 27/12 /2017 DATE OF PRONOUNCEMENT : 29/12/2017 ORDER PER N.K. PRADHAN, A.M. THIS IS AN APPEAL FILED BY THE REVENUE . THE RELEVANT ASSESSMENT YEAR IS 2005 - 06 . THE APPEAL IS DIRECTED AGAINST THE ORDER OF THE COMMISS IONER OF INCOME TAX (APPEALS) - 47 , MUMBAI AND ARISES OUT OF THE ASSESSMENT COMPLETED U/S 143(3) R.W.S. 153A OF THE INCOME TAX ACT 1961, (THE ACT). 2 . THE GROUND RAISED BY THE REVENUE IN THIS APPEAL IS AGAINST THE ORDER OF THE LD. CIT(A) DELETING THE ADDITION OF PRIOR PERIOD EXPENSES OF RS.57,86,270/ - . 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT IN PURSUANCE TO THE NOTICE U/S 153A ISSUED BY THE AS SESSING OFFICER (AO), THE ASSESSEE M/S GAMMON INDIA LTD. ITA NO. 4492/MUM/2016 2 INTIMATED HIM THAT THE RETURN OF INCOME FILED U/S 139 MAY BE TREATED AS RETURN U/S 153A. THE AO COMPLETED THE ASSESSMENT U/S 143(3) R.W.S. 153A VIDE ORDER DATED 28.03.2013 MAKING DISALLOWANCE OF PRIOR PERIOD EXPENSES OF R S.57,86,270/ - AND ALLOWING DEPRECIATION ON DUMPERS @ 25%. THE TOTAL INCOME THUS DETERMINED BY HIM WAS RS.56,83,63,110/ - . 4. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE FILED AN APPEAL BEFORE THE LD. CIT(A). IT IS OBSERVED BY T HE LD. CIT(A) THAT THE ITAT HAS HELD THE CLAIM OF PRIOR PERIOD EXPENSES OF THE ASSESSEE TO BE ALLOWABLE IN THE YEAR INCURRED, SUBJECT TO VERIFICATION BY THE AO. SHE FOUND FROM THE VERIFICATION OF THE ORIGINAL ASSESSMENT ORDER THAT THE AO HAD NOT BROUGHT ANY NEW FACT ON RECORD FOR MA KING THE DISALLOWANCE AGAIN. THE LD. CIT(A) FOLLOWED THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN CIT VS. MURLI AGRO PRODUCTS LTD . (ITA NO. 36 OF 2009 DATED 29.10.2010 ) AND ALLOWED THE APPEAL FILED BY THE ASSESSEE. 5. BEFORE US, THE LD. DR SUBMITS THAT THE LD. CIT(A) FAILED TO APPRECIATE THE ORDER OF THE ITAT THAT THE SAID EXPENDITURE BE ALLOWED IN AY 2004 - 05 SUBJECT TO VERIFICATION AND NOT IN AY 2005 - 06. ON THE OTHER HAND, THE LD. COUNSEL OF THE ASSESSEE RELIES ON THE ORDER PASSED BY THE LD. CIT(A). 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIALS ON RECORD. WE FIND THAT THE ITAT G BENCH MUMBAI IN THE CASE OF THE ASSESSEE FOR THE AY 2004 - 05 (ITA NO. 7430/MUM/2017) AT PARA 29 AND 30 HELD: 29. THE ASSESSEE HAS ALSO TAKEN AD DITIONAL GROUND WHICH IS AS UNDER: M/S GAMMON INDIA LTD. ITA NO. 4492/MUM/2016 3 THE APPELLANT PRAYS THAT, IN THE EVENT OF ITS CLAIM FOR THE ALLOWANCE OF EXPENDITURE OF RS.57,86,270/ - BEING DISALLOWED IN THE ASSESSMENT YEAR 2005 - 06, THE SAME SHOULD BE ALLOWED IN THE ASSESSMENT YEAR 2004 - 05. 30. AFTE R HEARING BOTH THE SIDES, WE FIND THE ABOVE ADDITIONAL GROUND RAISED BY THE ASSESSEE IS IDENTICAL TO THE ADDITIONAL GROUND RAISED IN ITA NO. 5149/MUM/2007. WE HAVE ALREADY DECIDED THIS ISSUE AND THE ADDITIONAL GROUND RAISED BY THE ASSESSEE HAS BEEN ALLOWED . FOLLOWING THE SAME RATIO, THIS ADDITIONAL GROUND BY THE ASSESSEE IS ALLOWED. ALSO FOR THE ASSESSMENT YEAR 2005 - 06 (ITA NO. 20/MUM/2009) THE ITAT HAS HELD THAT THE PRIOR PERIOD EXPENDITURE OF RS.57,86,270/ - HAS BEEN ALLOWED IN THE ASSESSMENT YEAR 2004 - 05 AS PER THE ADDITIONAL GROUND RAISED BY THE ASSESSEE. 6.1 THE LD. CIT(A) HAS RIGHTLY STATED THAT THE AO HAS NOT BROUGHT ON RECORD ANY NEW FACT TO MAKE THE DISALLOWANCE AGAIN. IN MURLI AGRO PRODUCTS LTD . (SUPRA) THE HONBLE BOMBAY HIGH COURT HELD: ON C E IT IS HELD THAT HE ASSESSMENT FINALIZED ON 29.12.2000 HAS ATTAINED FINALITY, THEN THE DEDUCTION ALLOWED U/S 80HHC OF THE INCOME - TAX ACT AS WELL AS THE LOSS COMPUTED UNDER THE ASSESSMENT DATED 29.12.2000 WOULD ATTAIN FINALITY. IN SUCH A CASE, THE AO WHILE PASSING THE INDEPENDENT ASSESSMENT ORDER U/S 153A R.W.S. 143(3) OF THE I.T. ACT COULD NOT HAVE DISTURBED THE ASSESSMENT/REASSESSMENT ORDER WHICH HAS ATTAINED FINALITY, UNLESS THE MATERIALS GATHERED IN THE COURSE OF THE PROCEEDINGS U/S 153A OF THE INCOME - T AX ACT ESTABLISH THAT THE RELIEFS GRANTED UNDER THE FINALISED ASSESSMENT/REASSESSMENT WERE CONTRARY TO THE FACTS UNEARTHED DURING THE COURSE OF 153A PROCEEDINGS. IN THE INSTANT CASE, NO INCRIMINATING MATERIAL HAS BEEN FOUND BY THE DEPARTMENT IN RESPECT OF PRIOR PERIOD EXPENSES FOR THE IMPUGNED ASSESSMENT YEAR. NO ADDITION COULD BE MADE ON THE BASIS OF THE M/S GAMMON INDIA LTD. ITA NO. 4492/MUM/2016 4 ACCOUNTS OF THE ASSESSEE AS HELD IN CIT VS. CONTINENTAL WAREHOUSING CORPN. LTD. (2015) 374 ITR 655 (BOM) AND CIT VS. KABUL CHAWLA (2016) 380 ITR 573 ( DEL). 7. RESPECTFULLY FOLLOWING THE ABOVE DECISIONS, WE UPHOLD THE ORDER OF THE LD. CIT(A). 8. IN THE RESULT, THE APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 29/12/2017. SD/ - SD/ - (D.T. GARASIA) (N.K. PRADHAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED: 29/12/2017 RAHUL SHARMA, SR. P.S. COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A) - 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE . BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI