DCIT 10(1), MUMBAI V. LEIGHTON WELSPUN CONTRACTORS P.LTD, MUMBAI

ITA 5677/MUM/2013

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 5372 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 10 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-07-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 16-07-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 06-09-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJESH KUMAR YADAV
• Keywords: Depreciation; Tax effect
• Section: 143(3); 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A MUMBAI BEFORE SHRI PAWAN SINGH (JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) ITA NO. 5677/MUM/2013 ASSESSMENT YEAR: 2008 - 09 DCIT - 10(1), 455, AAYAKAR BHAVAN, 4 TH FLOOR, M.K. MARG, MUMBAI - 400020. VS. M/S LEIGHTON WELSPUN CONTRACTORS P. LTD. 302/303, WINDSOR BLDG. 3 RD FLR., CST ROAD, SANTACRUZ (E), MUMBAI - 400098. PAN NO. AAACL3338D APPELLANT RESPONDENT C.O NO. 150/MUM/2016 (ITA NO. 5677/MUM/2013) ASSESSMENT YEAR: 2008 - 09 M/S LEIGHTON WELSPUN CONTRACTORS P. LTD. (FORMELY KNOWN AS LEIGHTON WELSPUN CONTRACTOR PVT. LTD.) TOWER 3, 7 TH FLOOR, EQUINOX BUSINESS PARK, OFF BANDRA KURLA COMPLEX, L.B.S. MARG, KURLA (W), M UMBAI - 400070 VS. DCIT - CIRCLE 10(1), 455, AAYAKAR BHAVAN, 4 TH FLOOR, M.K. MARG, MUMBAI - 400020. PAN NO. AAACL3338D APPELLANT RESPONDENT REVENUE BY : MR. RAJESH KUMAR YADAV, DR ASSESSEE BY : M R . ARIJIT CHAKRAVARTY , AR DATE OF HEARING : 17 /07/2018 DATE OF PRONOUNCEMENT : 30/07/2018 M/S LEIGHTON WELSPUN ITA NO. 5677/MUM/2013 CO NO. 150/MUM/2016 2 ORDER PER N.K. PRADHAN, AM ITA NO. 5677/MUM/2013 ASSESSMENT YEAR: 2008 - 09 THIS IS AN APPEAL FILED BY THE REVENUE. THE RELEVANT ASSESSMENT YEAR IS 2008 - 09 . THE APPEAL IS DIRECTED AGAINST THE ORDER OF THE COMMISS IONER OF INCOME TAX (APPEALS) - 21 [IN SHORT CIT(A)], MUMBAI AND ARISES OUT OF THE ORDER U/S 143(3) OF THE INCOME TAX ACT 1961, (THE ACT). 2. AT THE BEGINNING OF THE HEARING, THE LD. COUNSEL OF THE A SSESSEE BROUGHT TO OUR NOTICE CIRCULAR NO. 3/2018 DATED 11.07.2018 ISSUED BY THE CENTRAL BOARD OF DIRECT TAXES (CBDT) AND SUBMITS THAT THE TAX EFFECT IS BELOW THE MONETARY LIMIT OF RS.20,00,000/ - AND HENCE THE APPEAL FILED BY THE REVENUE BE DISMISSED AS WI THDRAWN. THE BENCH ASKED THE LD. COUNSEL AND THE LD. DR TO FILE A COPY OF CALCULATION SHEET INDICATING TAX EFFECT IN THE INSTANT CASE. THERE WAS NO SUBMISSION BY BOTH THE SIDES. THUS WE ARRIVE AT THE TAX EFFECT FROM THE FOLLOWING DISCUSSION. 3. THE 1 ST GROUND RAISED BY THE REVENUE IN THIS APPEAL IS AGAINST THE ORDER OF THE LD. CIT(A) DIRECTING THE AO TO ALLOW DEPRECIATION @ 60% ON COMPUTER ACCESSORIES MAINLY UPS AND PERIPHERALS, PRINTERS, XEROX MACHINE, DATA CARD ETC. TO CAPTURE THE TAX EFFECT, W E MAY TURN TO THE FOLLOWING GROUNDS OF APPEAL FILED BY THE ASSESSEE BEFORE THE LD. CIT(A) : M/S LEIGHTON WELSPUN ITA NO. 5677/MUM/2013 CO NO. 150/MUM/2016 3 1. THE AO ERRED IN MAKING ADDITION OF DEPRECIATION OF RS.17,05,517/ - ON FIXED ASSETS BEING COMPUTER SOFTWARE BY RECLASSIFYING THE SAME AS INTANGIBLE ASSETS ELIGIBLE F OR DEPRECIATION AT THE RATE OF 25% INSTEAD OF TREATING THE SAME AS COMPUTERS ELIGIBLE FOR DEPRECIATION AT THE RATE OF 60%. 2. THE AO ERRED IN MAKING ADDITION OF DEPRECIATION OF RS.36,01,355/ - ON FIXED ASSETS BEING PRINTER, XEROX MACHINER, UPS, DATE CARD, ET C. BY RECLASSIFYING THE SAME AS PLANT & MACHINERY ELIGIBLE FOR DEPRECIATION AT THE RATE OF 15% INSTEAD OF TREATING THE SAME AS COMPUTERS ELIGIBLE FOR DEPRECIATION AT THE RATE OF 60%. 3.1 THE 2 ND GROUND IN THE APPEAL FILED BY THE REVENUE IS AGAINST THE ORDER OF THE LD. CIT(A) IN DELETING THE ADDITION OF RS.7,87,550/ - REPRESENTING INTEREST EXPENDITURE U/S 14A R.W. RULE 8D. 4. IN THE ABOVE CIRCULAR, IT HAS BEEN CLARIFIED THAT TAX EFFECT SHALL BE TAX INCLUDING APPLICABLE SURCHARGE AND CESS. HOWEVER, T HE TAX WILL NOT INCLUDE ANY INTEREST THEREON, EXCEPT WHERE CHARGEABILITY OF INTEREST ITSELF IS IN DISPUTE. AN EXAMINATION OF THE ORDER OF THE LD. CIT(A) AND THE GROUNDS OF APPEAL FILED BY THE REVENUE INDICATE S THAT THE TAX EFFECT HEREIN DOES NOT EXCEED T HE MONETARY LIMIT OF RS.20,00,000/ - FIXED FOR FILING APPEAL BEFORE THE TRIBUNAL. AT PARA 13 OF THE ABOVE CIRCULAR, IT HAS BEEN CLEARLY MENTIONED THAT: 13. THIS CIRCULAR WILL APPLY TO SLPS/APPEALS/CROSS OBJECTION/REFERENCES TO BE FILED HENCEFORTH IN SC/ HCS/TRIBUNAL AND IT SHALL ALSO APPLY RETROSPECTIVELY TO PENDING SLPS/APPEALS/CROSS OBJECTIONS/REFERENCES. PENDING APPEALS BELOW THE SPECIFIED TAX LIMITS IN PARA 3 ABOVE MAY BE WITHDRAWN/NOT PRESSED. M/S LEIGHTON WELSPUN ITA NO. 5677/MUM/2013 CO NO. 150/MUM/2016 4 5. CONSIDERING THE FACTUAL SCENARIO NARRATED AT PARA 3 & 3.1 HEREINBEFORE, THE APPEAL FILED BY THE REVENUE IS DISMISSED AS NOT PRESSED. C.O NO. 150/MUM/2016 6. AS THE APPEAL FILED BY THE REVENUE HAS BEEN DISMISSED, THE CROSS OBJECTION RAISED BY THE ASSSESSEE BECOMES INFRUCTUOUS. ORDER PRONOUNCED IN THE OPEN COURT ON 30/07/2018. SD/ - SD/ - (PAWAN SINGH) (N.K. PRADHAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED: 30/07/2018 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