ACIT, UDAIPUR V. M/s. Bohra Industries Ltd., UDAIPUR

ITA 537/JODH/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5309 (ITAT-JODHPUR)
• Duration Of Justice: 1 year(s) 4 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-03-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 29-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S L MOURYA
• Keywords: Depreciation; Capital expenditure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE SHRI N.S. SAINI , HONBLE ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, HONBLE JUDICIAL MEMBER ITA NO. 537 / JODH /201 4 (ASST. YEAR : 20 1 0 - 11 ) AC IT, CIRCLE - 2 , UDAIPUR . VS. M/S. BOHRA INDUSTRIES LTD., 301, ANAND PLAZA, UNIVERSITY ROAD, UDAIPUR. PAN NO. AACCB 3135 C (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI AMIT KOTHARI A R . DEPARTMENT BY : SHRI S.L. MOURYA - DR DATE OF HEARING : 09 / 0 3 /201 6 . DATE OF PRONOUNCEMENT : 09 / 03 /201 6 . O R D E R PER N.S. SAINI , ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) , UDAIPUR , DATED 06 /0 8 /201 4 . 2. IN GROUND NO.1 , THE GRIEVANCE OF THE REVENUE IS THAT THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN DELETING THE DISALLOWANCE OF DEPRECIATION OF RS. 13,32, 427/ - CLAIMED ON CAPITAL EXPENDITURE FOR CONSTR U CTION OF BUILDING IN THE EARLIER ASSESSMENT YEARS 2005 - 06 & 2006 - 07 . 3 . BRIEF FACTS OF THE CASE ARE THAT THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE CLAIMED DEPRECIATION AND INTEREST EXPENDITURE ON THE BUILDING AND THE LAND DEVELOPMENT COST, WHICH WAS HELD AS BOGUS CAPITAL EXPENDITURE IN EARLIER ASSESSMENT YEARS . THE DEPRECIATION ON 2 ITA NO. 537 / JODH /201 4 THE BUILDING WAS DISALLOWED IN THE EARLIER ASSESSMENT YEAR S 2005 - 06 TO 200 9 - 1 0 . HE THEREFORE, DISALLOWED THE CLAIM FOR DEPRECIATION IN THE YEAR UNDER APPEAL. 4 . ON APPEAL, COMMISSIONER OF INCOME TAX (APPEALS) HELD THAT THE ASSESSING OFFICER HAS MADE THE DISALLOWANCE OF DEPRECIATION AS DONE IN EARLIER ASSESSMENT YEARS ON THE GROUND TH A T THE DEPARTMENT WAS IN FURTHER APPEAL BEFORE THE HON'BLE RAJASTHAN HIGH COURT FOR THE ASSESSMENT YEAR 2005 - 06 AND ALSO TO MAINTA IN THE CONSISTENCY OF APPROACH AND TO KEEP THE ISSUE ALIVE . THE COMMISSIONER OF INCOME TAX (APPEALS) FURTHER OBSERVED THAT THE HON'BLE RAJASTHAN HIGH COURT , JODHPUR HAS DISMISSED THE APPEAL FILED BY THE DEPARTMENT VIDE ORDER DATED 14/01/2013 IN D.B. INCOME TAX APPEAL NO. 31/2012 THEREBY CONFIRMING THE DELETION OF DISALLOWANCE AND INTEREST MADE BY THE COMMISSIONER OF INCOME TAX (APPEALS) AS WELL AS THE TRIBUNAL . THUS, THE MATTER OF ALLOWABILITY OF DEPRECIATION AND INTEREST HAS BEEN SETTLED BY THE DECISION OF THE HON'BLE HIGH COURT AND THE ISSUE INVOLVED IS EXACTLY THE SAME, THE DISALLOWANCE OF DEPRECIATION OF RS. 13,32,427/ - DESER V ES TO BE DELETED AND ORDERED ACCORDINGLY. 5. DEPARTMENTAL REPRESENTATIVE COULD NOT POINT - OUT ANY SPECIFIC ERRED IN THE ABOVE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) , HENCE, WE FIND NO GOOD REASON TO INTERFERE WITH THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), WHICH IS CONFIRMED AND THE GROUND OF APPEAL OF THE REVENUE IS DISMISSED . 6 . IN GROUND NO.2 OF THE APPEAL, THE GRIEVANCE OF THE REVENUE IS THAT THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN DELETING THE DISALLOWANCE OF INTEREST OF RS. 27,34,509/ - CLAIMED ON LOAN FOR CAPITAL EXPENDITURE FOR CONSTRUCTION OF BUILDING DURING THE EARLIER ASSESSMENT YEAR S 2005 - 06 & 2006 - 07 . 3 ITA NO. 537 / JODH /201 4 7. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS CLAIMED EXPENDITURE OF RS. 27,34,509/ - ON INTEREST PAID TO BANKS FOR CONSTRUCTION OF BUILDING AND LAND DEVELOPMENT COST . THE ASSESSING OFFICER OBSERVED THAT IN THE ASSESSMENT YEAR S 2005 - 06 TO 2009 - 10 , THE CAPITAL EXPENDITURE INCURRED BY THE ASSESSEE WAS HELD TO BE BOGUS AND, THEREFORE, DEDUCTION FOR INTEREST EXPENDITURE WAS DISALLOWED . THEREFORE, FOLLOWING THE SAME, HE DISA LL OWED THE CLAIM OF INTEREST OF RS. 27,34,509/ - DURING THE YEAR UNDER CONSIDERATION . 8. ON APPEAL , COMMISSIONER OF INCOME TAX (APPEALS) OBSERVED THAT THE ASSESSING OFFICER HAS MADE DISALLOWANCE OF INTEREST AS DONE EARLIER ASSESSMENT YEARS PURELY ON THE GROUND THAT THE DEPARTMENT WAS IN FURTHER APPEAL BEFORE THE HON'BLE RAJASTHAN HIGH COURT FOR THE ASSESSMENT YEAR 2005 - 06 AND ALSO TO MAINTAIN THE CONSISTENCY OF APPROACH AND TO KEEP THE ISSUE ALIVE . HE FURTHER OBSERVED THAT THE HON'BLE RAJASTHAN HIGH COURT , JODHPUR BENC H HAS DISMISSED THE APPEAL FILED BY THE REVENUE VIDE THEIR ORDER DATED 14/01/2013 IN D.B. INCOME - TAX APPEAL NO. 31/2012 THEREBY CONFIRMING THE DELETION OF DISALLOWANCE AND INTEREST MADE BY THE COMMISSIONER OF INCOME TAX (APPEALS) AS WELL AS THE TRIBUNAL . THUS, THE MATTER OF ALLOWABILITY OF INTEREST HAS BEEN SETTLED BY THE DECISION OF THE HON'BLE HIGH COURT AND THE ISSUE INVOLVED IS EXACTLY THE SAME , THE DISALLOWANCE OF INTEREST OF RS.27,34,509/ - DESERVES TO BE DELETED AND ORDERED ACCORDINGLY. 9. DEPARTMENTAL REPRESENTATIVE COULD NOT POINT - OUT ANY SPECIFIC ERRED IN THE ABOVE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), HENCE, WE FIND NO GOOD REASON TO INTERFERE WITH THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), WHICH IS CONFIRMED AND THE GROUND OF APPEAL OF THE REVENUE IS DISMISSED. 4 ITA NO. 537 / JODH /201 4 1 0 . IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE COURT AT THE CLOSE OF THE HEARING ON WEDNESDAY , THE 0 9 TH DAY OF MARCH , 201 6 AT JODHPUR . S D / - S D / - (GEORGE MATHAN) (N.S.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER D ATED : 0 9 TH MARCH , 201 6 . VR/ - COPY TO: 1. THE ASSESS E E. 2. THE REVENUE. 3. THE CIT 4. THE CIT(A) 5. THE D.R . 6. GUARD FILE. BY ORDER SR. PRIVATE SECRETARY I.T.A.T., JODHPUR .