DCIT 9(3), MUMBAI V. RUPRIT AGENCY P.LTD, MUMBAI

ITA 4540/MUM/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 92603 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-05-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 13-04-2015
• Assessment Year: 2004-2005
• Appeal Filed On: 07-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIJAY KUMAR BORA
• Assessee Lawyers: B V JHAVERI
• Keywords: Depreciation; Opportunity of being heard
• Section: 143(3); 32

Judgement Text

D IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE SHRI R.C. SHARMA, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER ./ I.T.A. NO.4540 & 4541 /MUM/2013 ( / ASSESSMENT YEAR 2004-05) DY. COMMISSIONER OF INCOME TAX 9(3), 2 ND FLOOR, ROOM NO. 229, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI 400 020. / VS. M/S RUPRIT AGENCY P. LTD., SAI RACHANA, GROUND FLOOR, CORNER OF TAGORE ROAD, SANTACRUZ (W), MUMBAI 54. ./ PAN : AABCR8148L ( / APPELLANT ) .. ( / RESPONDENT ) A PPELLANT BY SHRI VIJAY KUMAR BORA - DR R E SPONDENT BY : SHRI B.V. JHAVERI / DATE OF HEARING : 11-5-2015 / DATE OF PRONOUNCEMENT : 29-5-2015 [ !' / O R D E R PER R.C. SHARMA, AM : THESE ARE THE APPEALS FILED BY THE REVENUE ARE DIRE CTED AGAINST THE ORDERS DATED 26-3-2015 & 27-03-2015 PASSED BY THE L D. CIT(A) -20, MUMBAI FOR THE ASSESSMENT YEAR 2004-05 IN THE MATTER OF OR DER PASSED U/S 143(3) AND IMPOSITION OF PENALTY U/S 271(1)(C) OF THE INCOME T AX ACT, 1961. 2. THE GRIEVANCE OF THE REVENUE RELATES TO DELETING DISALLOWANCE OF DEPRECIATION IN RESPECT OF THE ASSESSEES ENTERTAIN MENT CENTRE SET UP AT PUNE. 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PER USED. FROM THE RECORD WE FOUND THAT AGAINST THE ORDER OF A.O. FOR DISALLO WANCE OF DEPRECIATION, THE ITA 4540 & 4541/M/13 2 MATTER WAS RESTORED TO THE FILE OF THE LD. CIT(A) B Y THE TRIBUNAL VIDE ITS ORDER DATED 13-07-2012. AFTER CONSIDERING THE DIRECTION OF THE TRIBUNAL, THE LD. CIT(A) HAS DELETED THE DISALLOWANCE OF DEPRECIATION AFTER HAVING FOLLOWING OBSERVATION:- 2.4 I HAVE CIRCUMSPECT THE ENTIRE SPECTRUM OF FACT S AND CIRCUMSTANCES OF THE CASE AND HAVE ALSO CONSIDERED THE FINDING OF THE ASSESSING OFFICER, FINDING OF THE CIT(A), DIRECTION OF HON'BL E ITAT AND RIVAL SUBMISSION OF THE APPELLANT. AS PER THE DIRECTIONS OF THE APPELLATE TRIBUNAL, TH E APPELLANT COMPANY IS REQUIRED TO ESTABLISH THAT IT HAS SET UP THE BUSINESS THOUGH NOT COMMENCED, BEFORE 30TH SEPTEMBER, 2003 SO AS TO ENTITLE FOR FULL DEPRECIATION FOR A.Y. 2004-05. THUS, AS PER THIS DI RECTION, SCOPE FOR DECIDING THIS APPEAL IS HAVING VERY LIMITED PREMISE TO SEE WHETHER APPELLANT HAS SET UP ITS BUSINESS THOUGH NOT COMMEN CED BEFORE 30.09.2003. IF APPELLANT ESTABLISHES WITH EVIDENCES THAT IT HAS SET UP BUSINESS BEFORE 30.09.2003, IT IS ENTITLED FOR FULL DEPRECIATION IN. THIS YEAR. WHILE REVIEWING THE FACTS BACKGROUND OF THE C ASE IT IS FOUND THAT THE APPELLANT COMPANY HAD ACQUIRED THE PREMISES ADM EASURING ABOUT 55,000 SQ.FT. FOR DEVELOPING AND RUNNING THE ENTERT AINMENT CENTRE CONSISTING OF VIDEO GAMES PARLOUR, GYMNASIUM, BOWLI NG ALLEY, RESTAURANT, BANQUET HALL AND PLAY AREA. THE APPELLA NT COMPANY HAS PRODUCED THE BILL OF THE CONTRACTOR, M/S. INTERDECO R DATED 10 TH SEPTEMBER, 2003 FOR RS.12,6L,295/-FOR DEVELOPING TH E BANQUET HALL ON THE SECOND FLOOR OF THE PREMISES WHICH WAS ACQUIRED BY THE APPELLANT COMPANY. IT WAS SUBMITTED THAT IN ORDER TO DEVELOP THE BANQUET HALL, THE APPELLANT COMPANY HAD TO LAY THE DECORATIVE FLO ORING TILES AND DECORATIVE FALSE CEILING WITH ELECTRIC FITTINGS AS IT DID NOT REQUIRE ANY OTHER EQUIPMENT AND THEREFORE, THE SAME WAS COMPLET ED BY M/S. INTERDECOR BEFORE 10 TH SEPTEMBER, 2003, FOR WHICH IT HAD RAISED THE BILL OF RS.12,61,295/-. THIS BILL REVEALS THE FACT THAT BANQUET HALL WAS COMPLETED WELL BEFORE SEPTEMBER, 2003 AND THAT IS W HY A BILL WAS RAISED AFTER COMPLETION OF WORK ON 10.09.2003. THE PAINTING WORK, CARPENTRY WORKS, POP WORKS, INTERIOR DECORATIONS AN D EXTRA WORKS LIKE DUMMY WOODEN COLUMN AT CORNER SIDE, WOODEN AND TOUG HENED GLASS PARTITION WITH SOLID WOODEN FRAME ETC. WERE COMPLET ED WELL BEFORE SEPTEMBER, 2003 THAT IS WHY A BILL DATED 10.09.2003 WAS RAISED BY THE INTERDECOR. SUCH IMPORTANT DOCUMENTARY EVIDENCE ON RECORD CANNOT BE IGNORED. THIS FACT WAS ALSO BEFORE THE HON'BLE ITAT AND THE ONLY REQUIREMENT WAS WHETHER APPELLANT WAS ABLE TO SHOW AS TO WHETHER ENTERTAINMENT CENTER WAS READY TO PROVIDE ANY OF TH E ENTERTAINMENT SERVICES. IT IS VERY EVIDENT FROM THE EVIDENCES ON RECORD THAT BANQUET HALL WAS READY FOR PROVIDING SERVICES. HENCE, THE D IRECTION OF THE HON'BLE ITAT IS FOUND TO BE MET OUT BY THE APPELLANT. THE A PPELLANT ALSO REFERRED TO THE BILL DATED 25.09.2003 OF M/S. AMAR ENTERPRISES FOR ITA 4540 & 4541/M/13 3 RS.53,7301-BEING THE REIMBURSEMENT OF THE AMOUNT PA ID TO MSEB FOR TEMPORARY CONNECTIONS IN THE PREMISES OF THE APPELL ANT COMPANY. THIS FACT PROVES THAT AFTER CONSUMPTION OF ELECTRICITY E ARLIER TO 25.09.2003, SUCH BILL HAS BEEN RAISED SUBSEQUENTLY. THIS ALSO P ROVES THAT ENTERTAINMENT CENTER WAS READY AND BUSINESS WAS COM MENCED. 2.5 THE APPELLANT COMPANY ALSO REFERRED TO THE BILL DATED 24.09.2003 OF M/S. TATA INDICOM FOR THE TELEPHONE CONNECTIONS IN THE PREMISES OF THE APPELLANT COMPANY IN THE MONTHS OF AUGUST AND SEPTE MBER, 2003. THE APPELLANT COMPANY ALSO REFERRED TO THE INVOICES RAI SED IN THE MONTHS OF JANUARY TO MARCH, 2004 FOR ALLOWING THE USE OF THE BANQUET HALL WHICH WAS NAMED AS 'C.Y. ZONE'. IT IS WORTHWHILE TO MENTI ON THAT HON'BLE TRIBUNAL HAS EXPLAINED THE DISTINCTION BETWEEN THE SETTING UP OF THE BUSINESS AND THE COMMENCEMENT OF THE BUSINESS. THE HON'BLE TRIBUNAL HAS HELD THAT IF A BUSINESS IS SET UP THOUGH NOT CO MMENCED AND THE APPELLANT IS IN A POSITION TO OFFER ANY OF SUCH SER VICES OF THE ENTERTAINMENT CENTRE. IN THAT CASE THE APPELLANT CO MPANY IS ENTITLED TO CLAIM DEPRECIATION FOR THE FULL YEAR. ON PERUSAL OF THE BILL OF M/S. INTERDECOR DATED 10 TH SEPTEMBER, 2003, BILL OF M/S. AMAR ENTERPRISES FOR ELECTRIC CONNECTIONS AND TELEPHONE BILLS FOR TH E MONTHS OF AUGUST AND SEPTEMBER, 2003, I FIND THAT ONE OF THE ACTIVIT IES OF THE ENTERTAINMENT CENTRE OF THE APPELLANT COMPANY VIZ. THE BANQUET HALL WAS READY FOR GIVING IT ON HIRE PRIOR TO 30TH SEPTE MBER, 2003. THEREFORE, AS HELD BY THE HON'BLE TRIBUNAL, THE APP ELLANT COMPANY HAD SET UP ITS BUSINESS OF ENTERTAINMENT CENTRE AND IT WAS IN A POSITION TO OFFER THE SERVICES OF THE BANQUET HALL PRIOR TO 30T H SEPTEMBER, 2003. I ALSO TAKE INTO CONSIDERATION THE FACT THAT THE POSS ESSION OF THE PREMISES WAS GIVEN BY THE DEVELOPER TO THE APPELLANT ON 1 ST JANUARY, 2003 FOR DEVELOPING THE ENTERTAINMENT CENTRE AND AS HELD BY THE ASSESSING OFFICER VARIOUS EQUIPMENTS FOR VIDEO GAMES, GYMNASI UM, BOWLING ALLEY, MUSIC SYSTEM WERE ACQUIRED SUBSEQUENT TO 30TH SEPTE MBER. 2003. THE BANQUET HALL WHICH WAS ONE OF THE SERVICES III THE ENTERTAINMENT CENTRE DID NOT ANY SUCH EQUIPMENTS AND THEREFORE, B USINESS WAS COMMENCED THOUGH THE SAID BANQUET HALL WAS GIVEN ON RENT IN THE MONTH OF JANUARY. 2004. SECTION 32 PROVIDES THAT IN RESPECT OF DEPRECIATION OF BUILDINGS, MACHINERY, PLANT OR FURN ITURE OWNED BY THE ASSESSEE AND USED FOR THE PURPOSES OF BUSINESS OR P ROFESSION, DEDUCTIONS PROVIDED THEREIN SHALL BE ALLOWED. THE W ORD 'USED' SHOULD BE UNDERSTOOD IN A WIDE SENSE, SO AS TO INCLUDE PASSIV E AS WELL AS ACTIVE USER VIDE CIT VS. VINDHYACHAL DISTILLARIES PVT. LTD . (2005) 272 ITR 583, 585 (MP). FURTHER, IN THE CASE OF CIT VS. REFRIGERA TION AND ALLIED INDUSTRIES LTD. (2001) 247 ITR 12 (DELHI) IT IS HEL D THAT EXPRESSION 'USED' FOR PURPOSE OF BUSINESS IN SECTION 32 INCLUD ES PASSIVE USER OF THE ASSETS IN BUSINESS HENCE ASSETS CAN BE SET TO BE US ED WHILE KEPT READY FOR USE AND BUSINESS IS COMMENCED ACCORDINGLY. I, T HEREFORE, ACCEPT THE AFORESAID GROUND OF APPEAL OF THE APPELLANT COMPANY AND DIRECT THE ASSESSING OFFICER TO ALLOW FULL DEPRECIATION AND AC CORDINGLY DELETE THE DISALLOWANCE OF DEPRECIATION OF RS.33,08,581/-. ITA 4540 & 4541/M/13 4 AGGRIEVED BY ABOVE ORDER OF LD. CIT(A), REVENUE IS IN FURTHER APPEAL BEFORE US. 4. THE A.O. HAS ALSO LEVIED PENALTY U/S 271(1)(C) OF T HE ACT FOR SUCH DISALLOWANCE OF DEPRECIATION WHICH HAS ALSO BEEN DE LETED BY THE LD. CIT(A) AFTER HAVING A DETAILED OBSERVATION AT PARA 3.3 OF HIS APPELLATE ORDER. AGGRIEVED BY THIS, THE REVENUE IS IN APPEAL BEFORE US. 5. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND FOU ND THAT THE ASSESSEE IS A PRIVATE LIMITED COMPANY COMMENCED ITS BUSINESS ON 18TH JANUARY, 1994. THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF RUNNING A MEDICAL DIAGNOSTIC CENTRE IN MUMBAI WHICH WAS STARTED IN TH E YEAR 1996 AND IN THE YEAR UNDER CONSIDERATION THE ASSESSEE COMPANY START ED AN ENTERTAINMENT CENTRE AT PUNE. THE ASSESSEE COMPANY HAD FILED ITS RETURN OF INCOME FOR THE YEAR ENDED 31ST MARCH, 2004 DECLARING LOSS OF RS.L, L5,L0,537/- ON 28TH OCTOBER, 2004. THE SAID RETURN OF INCOME WAS SCRUTI NIZED AND THE ASSESSMENT ORDER U/S. 143(3) OF THE I.T. ACT, 1961 WAS PASSED ON 11 TH OCTOBER, 2006 DETERMINING THE LOSS AT RS. 74,60,734/-. THE ASSESS ING OFFICER DISALLOWED DEPRECIATION OF RS.33,08,581/- IN RESPECT OF ENTERT AINMENT CENTRE AT PUNE. HOWEVER, THE LD. COMMISSIONER (APPEALS) HAD CONFIRM ED THE DISALLOWANCE OF DEPRECIATION OF RS.33,08,581/- ON THE GROUND THAT A SSESSEE HAD BEGAN ITS NEW BUSINESS OF ENTERTAINMENT CENTRE ONLY IN THE SE COND HALF OF THE YEAR BY MAKING FIRST SALE BILL ON 1.1.2004. AGGRIEVED BY T HE ORDER OF CIT(A), THE ASSESEE COMPANY HAD PREFERRED AN APPEAL TO THE ITAT . ITAT IN ITA NO. 4428.MUMBAI/2010 VIDE ORDER DATED 13.7.2012 HAS SET ASIDE THE ORDER OF THE CIT(A) WITH THE FOLLOWING DIRECTION:- 'WE HAVE PERUSED THE RECORDS AND CONSIDERED THE RIV AL CONTENTIONS CAREFULLY. THE DISPUTE IS REGARDING COMPUTATION OF DEPRECIATIO N IN RESPECT OF ENTERTAINMENT CENTRE SET UP BY THE ASSESSEE DURING THE YEAR AT PUNE. THE ASSESSEE HAD MADE TOTAL INVESTMENT OF RS.6,00,42,98 0/- IN THE ENTERTAINMENT CENTRE CONSISTING OF RS. 5,56,34,490/- ON ACCOUNT O F BUILDING PREMISES, RS.39,24,3741- ON ACCOUNT OF PLANT AND MACHINERY AN D RS.4,84, 116/- ON ACCOUNT OF FURNITURE AND FIXTURE. THE CASE OF THE A SSESSEE IS THAT THE ENTERTAINMENT CENTRE WAS READY FOR USE BEFORE THAT DATE AND, THEREFORE, ITA 4540 & 4541/M/13 5 DEPRECIATION AT FULL RATE SHOULD BE ALLOWED AND NOT 50% OF NORMAL RATE AS DONE BY THE AO. THE CASE OF THE REVENUE IS THAT THE ASSE SSEE HAD ACQUIRED PREMISES ONLY ON 2.9.2003 AND THEREAFTER FURNISHED THE SAME AND ALSO PURCHASED THE SOME FITNESS PRODUCTS ALONG WITH ACS PRIOR TO 30.9. 2003 AND ALL OTHER ASSETS OF THE ENTERTAINMENT CENTRE SUCH AS VIDEO GAMES, GY MNASIUM EQUIPMENT, MUSIC SYSTEM, ETC. HAD BEEN PURCHASED IN THE SECOND HALF OF THE YEAR AND THE FIRST BILL HAD BEEN RAISED ONLY IN JANUARY, 2004. I T HAS BEEN ACCORDINGLY HELD THAT THE ENTERTAINMENT CENTRE HAD BEEN SET UP AFTER 30.9.2003 AND DEPRECIATION WAS ALLOWABLE @ 50% OF NORMAL RATE. TH E DETAILS OF COMPUTATION OF DISALLOWANCE OF DEPRECIATION HAVE BEEN GIVEN IN PARA 2. 1 OF THIS ORDER. IN OUR VIEW ONLY ON THE GROUND THAT THE FIRST BILL HAD BEEN RAISED IN THE LATTER HALF OF THE YEAR, IT WILL NOT BE APPROPRIATE TO HOL D THAT THE BUSINESS HAD NOT BEEN SET UP BEFORE 30.9.2003. IT IS A SETTLED LEGAL POSITION THAT ONCE BUSINESS HAS BEEN SET UP AND READY TO COMMENCE BUSINESS, EXP ENSES HAVE TO BE ALLOWED IRRESPECTIVE OF THE FACT THAT ACTUAL COMMEN CEMENT OF THE BUSINESS WAS MUCH LATER. THEREFORE, THE ISSUE TO BE CONSIDERED I N THIS CASE IS WHETHER CENTRE WAS SET UP AND WAS READY FOR USE PRIOR TO 30 .9.2003. THE ID. AR FOR THE ASSESSEE HAS ARGUED THAT THE ASSESSEE HAD BEEN MAKI NG PAYMENT FOR ACQUISITION OF PREMISES SINCE 11.11.2002 AND POSSES SION OF THE BUILDING HAD BEEN TAKEN IN APRIL, 2003 AND PREMISES HAD BEEN REG ISTERED ON .2.9.2003 AFTER MAKING FULL PAYMENTS. THEREFORE, IT WAS NOT CORRECT TO SAY THAT BUILDING HAD BEEN ACQUIRED ONLY ON 2.9.2003. AFTER TAKING POSSES SION OF THE BUILDING IN APRIL, 2003, THE ASSESSEE HAD GOT THE INTERIOR WORK AND FLOORING ETC. DONE AND ALSO INSTALLED ACS AND OTHER EQUIPMENTS. THEREFORE, THE BUILDING WAS FULLY READY PRIOR TO 30.9.2003 AND DEPRECIATION SHOULD BE ALLOWED AT NORMAL RATE. WE ARE HOWEVER UNABLE TO ACCEPT THE ARGUMENTS THAT MERELY BECAUSE THE BUILDING WAS READY, THE BUSINESS HAD BEEN SET UP. THE ASSESSEE WAS SETTING UP ENTERTAINMENT CENTRE AND, THEREFORE, UNLESS ASSE SSEE WAS READY TO PROVIDE ANY OF THE ENTERTAINMENT SERVICES, IT CANNOT BE SAI D THAT ENTERTAINMENT CENTRE HAD BEEN SET UP AND THE BUILDING WAS USED FOR THE P URPOSE OF BUSINESS. THE ID. AR HAS PLACED RELIANCE ON THE JUDGMENT OF HON'B LE HIGH COURT OF PUNJAB & HARYANA IN CASE OF O.P. KHANNA & SONS (SUPRA) WHICH IS DISTINGUISHABLE. IN THAT CASE, THE ASSESSEE WHO WAS ALREADY DOING PRINT ING BUSINESS HAD SHIFTED THE BUSINESS TO THE NEW BUILDING. THE ISSUE WAS WHE THER THE NEW BUILDING COULD BE SAID TO HAVE USED FOR THE PURPOSE OF BUSIN ESS IN THE INTERVENING PERIOD WHEN ELECTRICAL FITTINGS ETC. WERE BEING INS TALLED AND IT WAS HELD THAT THE BUILDING HAD BEEN USED FOR THE PURPOSE OF BUSINESS. THE SAID CASE IS OBVIOUSLY DIFFERENT AS IN THE SAID CASE BUSINESS HAD ALREADY BEEN SET UP AND IT WAS ONLY A CASE OF SHIFTING AND; THEREFORE, NEW BUILDING WAS TREATED AS USED FOR THE PURPOSE OF BUSINESS. THE DECISION OF THE TRIBUNAL I N THE CASE OF CHAKRADHARI WHEELS (P.) LTD. VS. ITO (SUPRA), IS ALSO DISTINGUI SHABLE. IN THAT CASE IT WAS HELD BY THE TRIBUNAL THAT ONCE THE BUSINESS HAS BEE N SET UP, EXPENSES HAVE TO BE ALLOWED EVEN IF THE ACTUAL COMMENCEMENT HAS NOT TAKEN PLACE. IN THE PRESENT CASE, IN OUR VIEW, THE DATE WHEN THE BUSINESS HAD ACTUALLY BEEN SET UP HAS NOT BEEN EXAMINED PROPERLY. THE AUTHORIT IES BELOW HAVE DECIDED THE ISSUE BASED ON THE FIRST BILL RAISED BY THE ASS ESSEE WHICH AS POINTED OUT ITA 4540 & 4541/M/13 6 EARLIER IS NOT RELEVANT AS IT IS NOT THE ACTUAL COM MENCEMENT OF BUSINESS BUT THE SETTING UP OF THE BUSINESS WHICH IS RELEVANT AN D BUSINESS HAS TO BE TAKEN AS SET UP ONCE THE ASSESSEE IS IN A POSITION TO PRO VIDE THE SERVICES OF ENTERTAINMENT CENTRE. IN CASE, THERE ARE SEVERAL SE RVICES IN THE ENTERTAINMENT CENTRE, BUSINESS CAN BE CONSIDERED AS HAVING BEEN S ET UP IN CASE THE ASSESSEE IS IN A POSITION TO OFFER ANY OF SUCH SERVICES. THE ASSESSEE IN THIS CASE IN THE LETTER DATED 17.11.2008 ADDRESSED TO CIT(A) HAD GIV EN DETAILS OF VARIOUS PAYMENTS MADE FOR THE PROPERTY AS WELL AS EQUIPMENT S PRIOR TO 30.9.2003 WHICH ALSO INCLUDES PAYMENT OF RS.5.00 LACS FOR FIT NESS MACHINE ON 1.9.2003 AND RS. 2.50 LACS FOR ANOTHER FITNESS MACHINE ON 27 . 9. 2003. IT HAS NOT BEEN EXAMINED WHETHER THESE FITNESS MACHINES WERE READY FOR USE BEFORE 30.9.2003. CIT(A) HAS NOT MADE DETAILED EXAMINATION OF THE FACTUAL POSITION GIVEN BEFORE HIM AND HAD BEEN MAINLY INFLUENCED BY THE FACT THAT THE BUILDING HAD BEEN ON 2.9.2003 AND FIRST BILL RAISED JANUARY, 2004 FOR COMING TO THE CONCLUSION THAT THE ENTERTAINMENT CENTRE WAS NOT RE ADY FOR USE PRIOR TO 30.9.2003. NO SPECIFIC OPPORTUNITY HAD BEEN GIVEN TO THE ASSESSEE TO PROVE WHETHER ANY OF THE SERVICES IN THE ENTERTAINMENT CE NTRE WERE READY BEFORE 30.9.2003. WE THEREFORE, SET ASIDE THE ORDER OF THE CIT(A) AND RESTORE THE MATTER BACK TO HIM FOR PASSING A FRESH ORDER AFTER NECESSARY EXAMINATION AND AFTER ALLOWING OPPORTUNITY OF BEING HEARD TO THE AS SESSEE. 6. IN THE SET ASIDE PROCEEDING, THE LD. CIT(A) AFTE R RECORDING THE FINDING TO THE EFFECT THAT BILLS OF CONTRACTOR/EQUIPMENT ETC. WERE PERTAINING TO SEPTEMBER, 2003. THUS THE INVESTMENT WAS MADE PRIO R TO OCTOBER, 2003 AND THE ASSESSEE HAS TAKEN ELECTRICITY CONNECTION ALSO PRIOR TO OCTOBER, 2003. THUS THE ASSESSEE WAS IN A POSITION TO OCCUPY THE E NTERTAINMENT CENTRE PRIOR TO OCTOBER, 2003. AFTER RECORDING DETAILED FINDING IN TERMS OF DIRECTIONS GIVEN BY THE TRIBUNAL, THE LD. CIT(A) HAD DELETED DISALLO WANCE OF PART OF THE DEPRECIATION. THE FINDING RECORDED BY THE LD.CIT(A) HAS NOT BEEN CONTROVERTED BY BRINGING ANY POSITIVE MATERIAL ON RECORD BY THE REVENUE. ACCORDINGLY, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. C IT(A) DELETING THE DISALLOWANCE OF DEPRECIATION. 7. AS WE HAVE ALREADY CONFIRMED THE ORDER OF LD. CI T(A) DELETING THE PART DISALLOWANCE OF DEPRECIATION, THE PENALTY LEVIED BY THE A.O. HAS NO LEGS TO STAND. KEEPING IN VIEW THE FINDING RECORDED BY THE LD. CIT(A) DELETING THE PENALTY VIS--VIS OUR OBSERVATION UPHOLDING THE ORD ER OF LD. CIT(A) DELETING THE DISALLOWANCE OF DEPRECIATION, WE DO NOT FIND ANY IN FIRMITY IN THE ORDER OF THE ITA 4540 & 4541/M/13 7 LD. CIT(A) DELETING THE PENALTY IMPOSED BY THE A.O. WITH RESPECT TO PART DISALLOWANCE OF CLAIM OF DEPRECIATION. 8. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE A RE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH MAY, 2015. !' # $% &! ' 29-05-2015 ( ) SD/- SD/- (SANJAY GARG) (R.C. SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER $ 5 MUMBAI ; &! DATED 29-05-2015 .6../ RK , SR. PS ! '#$% &%# / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. 7 () / THE CIT(A) CONCERNED,, MUMBAI 4. 7 / CIT -CONCERNED, MUMBAI 5. :;( 66<= , <= , $ 5 / DR, ITAT, MUMBAI E BENCH 6. (?@ A / GUARD FILE. ' / BY ORDER, : 6 //TRUE COPY// (/') * ( DY./ASSTT. REGISTRAR) , $ 5 / ITAT, MUMBAI