MAHINDRA INFRASTRUCTURAL PROJECTS P. LTD ( NOW MERGED WITH ANDROMEDA IVNESTMENT & FINANCE P. LTD), MUMBAI V. ITO 6(3)-1, MUMBAI

ITA 4998/MUM/2010

• Counselvise Citation: 499819914 RSA 2010
• Duration Of Justice: 1 year(s) 2 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2004-2005
• Appeal Filed On: 16-06-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PARTHA SARATHI NAIK
• Assessee Lawyers: S R BHANDARI
• Keywords: Depreciation; Unabsorbed depreciation

Judgement Text

M IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI BEFORE SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER AN D SHRI VIJAY PAL RAO, JUDICIAL MEMBER ITA NO. 4998/MUM./2010 (ASSESSMENT YEAR : 2004-05 ) MAHINDRA INFRASTRUCTURAL PROJECTS P. LTD. (NOW MERGED WITH ANDROMEDA INVEST- MENT & FINANCE PVT. LTD) 5 TH FLOOR, MAHINDRA TOWERS WORLI, MUMBAI 400 018 PAN AAACM3575B .. APPELLANT V/S ASSTT. COMMISSIONER OF INCOME TAX CIRCLE-6(3), AAYAKAR BHAVAN 101, M.K. ROAD, MUMBAI 400 020 .... RESPONDENT ASSESSEE BY : MR. S.R. BHANDARI REVENUE BY : MR. PARTHASARATHI NAIK DATE OF HEARING 17.8.2011 DATE OF ORDER 26.08.2011 O R D E R PER J. SUDHAKAR REDDY, A.M. THIS APPEAL PREFERRED BY THE ASSESSEE, IS DIRECTED AGAINST THE IMPUGNED ORDER DATED 24 TH FEBRUARY 2010, PASSED BY THE COMMISSIONER (APPEALS)-XII, MUMBAI, FOR ASSESSMENT YEAR 2004-05. 2. BEFORE US, LEARNED COUNSEL, MR. S.R. BHANDARI, APPE ARED ON BEHALF OF THE ASSESSEE. HE SUBMITS THAT THE ASSESSEE COMPANY WAS A SUBSIDIARY OF MAHINDRA UGINE STEL CO. P. LTD. AS ON 1 ST APRIL 2003. HE FURTHER SUBMITS THAT MAHINDRA INFRASTRUCTURAL PROJECTS PVT. LTD. ITA NO.3781/M/2010 2 IT IS ALSO NOT IN DISPUTE THAT THE ASSESSEE COMPANY BECAME A SUBSIDIARY OF M/S. PENTAGRAM INVESTMENTS (I) PVT. LTD. DURING THE FINANCIAL YEAR 2003-04. IT IS ALSO NOT DISPUTED THAT MAHINDRA UGINE STEL CO . P. LTD. IS A COMPANY IN WHICH PUBLIC ARE SUBSTANTIALLY INTERESTED AND THAT M/S. PENTAGRAM INVESTMENTS (I) P. LTD. IS NOT A COMPANY IN WHICH P UBLIC ARE SUBSTANTIALLY INTEREST. HE RELIED ON THE WORDINGS OF SECTION 79 O F THE ACT AND SUBMITS THAT THE WORDINGS OF SECTION 79 INDICATES THAT SECTION A PPLIES ONLY IN CASE WHERE THERE IS A CHANGE IN SHARE HOLDING DURING THE PREVI OUS YEAR IN COMPANIES IN WHICH PUBLIC ARE NOT SUBSTANTIALLY INTERESTED. HE A RGUES THAT AS AT THE BEGINNING OF THE FINANCIAL YEAR, THE ASSESSEE COMPA NY IS A COMPANY IN WHICH PUBLIC ARE SUBSTANTIALLY INTERESTED FOR THE REASON THAT IT IS SUBSIDIARY OF A COMPANY IN WHICH PUBLIC ARE SUBSTANTIALLY INTERESTE D, THE CHANGE IN THE SHARE HOLDING PATTERN DOES NOT ATTRACT PROVISIONS OF SECT ION 79. 3. ON GROUND NO.2, LEARNED COUNSEL SUBMITS THAT THE BR OUGHT FORWARD UNABSORBED DEPRECIATION IS NOT EFFECTED BY SECTION 79, AS HELD BY THE HON'BLE SUPREME COURT IN CIT V/S SHUBHLAXMI MILLS LTD., 249 ITR 795 (SC). 4. ON A QUERY FROM THE BENCH, HE SUBMITS THAT, TO THE EXTENT THE ASSESSEE HAS FILED HIS RETURN OF INCOME AND MADE CL AIMS FOR DEPRECIATION IS RIGHT FOR CARRY FORWARD CANNOT BE DENIED. 5. LEARNED DEPARTMENTAL REPRESENTATIVE, MR. PARTHASARA THI NAIK, ON THE OTHER HAND, OPPOSED THE CONTENTION OF THE ASSESSEE AND SUBMITS THAT SECTION 2(18) DEFINES A COMPANY IN WHICH PUBLIC ARE SUBSTAN TIALLY INTERESTED AND SUB-SECTION (B) COVERS THE CASE ON HAND AND AS THE ASSESSEE COMPANY IS NOT A SUBSIDIARY OF A COMPANY, IN WHICH PUBLIC ARE SUBS TANTIALLY INTERESTED, THROUGHOUT THE RELEVANT PREVIOUS YEAR, THEN IT WOUL D NOT BE A COMPANY WHICH CAN BE CONSIDERED AS FALLING WITHIN THE DEFIN ITION OF SECTION 2(18) OF THE ACT. HE, THUS, SUBMITS THAT SECTION 79, CLEARLY APPLIES. 6. ON THE ISSUE OF CARRY FORWARD OF UNABSORBED DEPRECI ATION, THE LEARNED DEPARTMENTAL REPRESENTATIVE POINTED OUT THAT THE AS SESSEE HAS NOT FILED ITS MAHINDRA INFRASTRUCTURAL PROJECTS PVT. LTD. ITA NO.3781/M/2010 3 RETURN OF INCOME FOR THE SAME ASSESSMENT YEAR AND A LSO HAD FILED RETURN OF INCOME LATE FOR ASSESSMENT YEAR 1997-98. HE SUBMITS THAT IT WAS NOT POSSIBLE TO ASCERTAIN THE AMOUNT OF DEPRECIATION TH AT REMAINED UNABSORBED AND, HENCE, THE COMMISSIONER (APPEALS) RIGHTLY REJE CTED THE CLAIM. 7. RIVAL CONTENTIONS HEARD. ON A CAREFUL CONSIDERATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND ON PERUSAL OF THE PAP ERS ON RECORD, AS WELL AS THE CASE LAWS CITED BEFORE US, WE FIND THAT SECTION 2(18)(B)(B) OF THE ACT REQUIRES THAT THE ASSESSEE COMPANY SHOULD BE A SUBS IDIARY OF A COMPANY IN WHICH PUBLIC ARE SUBSTANTIALLY INTERESTED THROUGHOU T THE RELEVANT PREVIOUS YEAR. IN THIS CASE, THE ADMITTED POSITION IS THAT T HE ASSESSEE COMPANY IS NOT A SUBSIDIARY OF MAHINDRA UGINE STEL CO. P. LTD. THR OUGHOUT THE PREVIOUS YEAR. UNDER THESE CIRCUMSTANCES, WE UPHOLD THE ORDER OF T HE COMMISSIONER (APPEALS) AND DISMISS THIS GROUND OF THE ASSESSEE. 8. COMING TO GROUND NO.2, THE FIRST APPELLATE AUTHORIT Y HAS RECORDED THAT THE ASSESSEE DID NOT FILE A RETURN OF INCOME FOR CE RTAIN NUMBER OF YEARS. HE ALSO RECORDED A FINDING OF FACT THAT THE RETURN OF INCOME FOR ASSESSMENT YEAR 1987-88, WAS BELATEDLY FILED. UNDER THESE CIRCUMSTA NCES, WE DO NOT FIND ANY INFIRMITY IN THE CONCLUSION DRAWN BY THE COMMISSION ER (APPEALS) THAT IT WOULD NOT BE POSSIBLE TO ASCERTAIN THE UNABSORBED D EPRECIATION WHICH COULD BE CARRIED FORWARD. QUANTIFICATION IS NOT POSSIBLE IN THE ABSENCE OF MATERIAL. BEFORE US, THE ASSESSEE HAD NOT PRODUCED ANY EVIDEN CE TO DISPUTE THE FINDINGS OF THE COMMISSIONER (APPEALS). THIS GROUND IS, THUS, DISMISSED. 9. IN THE RESULT, ASSESSEES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 26.8.2011 SD/- VIJAY PAL RAO JUDICIAL MEMBER SD/- J. SUDHAKAR REDDY ACCOUNTANT MEMBER MUMBAI, DATED: 26 TH AUGUST 2011 MAHINDRA INFRASTRUCTURAL PROJECTS PVT. LTD. ITA NO.3781/M/2010 4 COPY TO : (1) THE ASSESSEE; (2) THE RESPONDENT; (3) THE CIT(A), MUMBAI, CONCERNED; (4) THE CIT, MUMBAI CITY CONCERNED; (5) THE DR, B BENCH, ITAT, MUMBAI. TRUE COPY BY ORDER PRADEEP J. CHOWDHURY ASSISTANT REGISTRAR SR. PRIVATE SECRETARY ITAT, MUMBAI BENCHES, MUMBAI DATE INITIAL 1. DRAFT DICTATED ON 17.8.2011 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 18-23.8.2011 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 24.8.2011 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER 24.8.2011 JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 24.8.2011 SR.PS/PS 6. DATE OF PRONOUNCEMENT 26.8.2011 SR.PS 7. FILE SENT TO THE BENCH CLERK 26.8.2011 SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER