M/s Haryana State Minor Irrigation & Tubewell Corporation Ltd., Panchkula V. ACIT, Panchkula

ITA 574/CHANDI/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 8929 (ITAT-CHANDIGARH)
• Duration Of Justice: 6 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-12-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 13-05-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RAVI SARANGA L
• Keywords: Depreciation

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES, CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO. 574/CHD/2016 ASSESSMENT YEAR: 2011-12 M/S HARYANA STATE MINOR IRRIGATION VS. THE ACIT, & TUBEWELL CORPORATION LIMITED, PANCHKULA CIRCLE , PANCHKULA PANCHKULA PAN NO. AABFH8314F (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. TEJ MOHAN SINGH DEPARTMENT BY : SH. RAVI SARANGAL DATE OF HEARING : 06.12.2016 DATE OF PRONOUNCEMENT : 08.12.2016 ORDER PER ANNAPURNA GUPTA, A.M. THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS), PANCHKULA DAT ED 11/03/16. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS:- 1. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AS WELL AS ON FACTS IN UPHOLDING T HE ACTION OF THE ASSESSING OFFICER WHEREBY HE HAS STAT ED THAT NO EXPENDITURE IS TO BE ALLOWED AS BUSINESS 2 EXPENDITURE AFTER THE CLOSURE OF THE BUSINESS AND THEREBY BRINGING TO TAX THE ENTIRE RECEIPTS OF RS. 2,92,24,707/- WHICH IS ARBITRARY AND UNJUSTIFIED. 2. THAT THE ENTIRE EXPENDITURE ON ACCOUNT OF ESTABLISHMENT EXPENSES, WAGES, SALARIES, RETRENCHMENT COMPENSATION, ETC. TOTALLING RS.2,66,53,819/- AS CLAIMED IS ALLOWABLE AS SUCH AN D NO DISALLOWANCE IS CALLED FOR. 3. THAT THE LD. COMMISSIONER OF INCOME TAX(APPEALS) HAS FURTHER ERRED IN UPHOLDING THE DISALLOWANCE O F INTEREST CLAIMED AT RS. L0,16,03,500/- WHICH IS ARBITRARY AND UNJUSTIFIED. 4. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS FURTHER ERRED IN UPHOLDING THE DISALLOWANCE O F DEPRECIATION CLAIMED AT RS.7,960/- WHICH IS ARBITRA RY AND UNJUSTIFIED. 5. THAT WITHOUT PREJUDICE TO THE ABOVE, EVEN IF IT IS HELD THAT NO EXPENDITURE IS TO BE ALLOWED AS ALLEGED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS), THE EXPENDITURE OUGHT TO HAVE BEEN HELD ALLOWABLE UNDER SECTION 57 OF THE ACT TO BE SET OFF AGAINST INTERES T INCOME. 6. THAT THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) IS ERRONEOUS, ARBITRARY, OPPOSED TO LAW AND FACTS OF THE CASE AND IS, THUS, UNTENABLE. 3. BRIEF FACTS RELATING TO THE CASE ARE THAT, DURIN G ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER DISALLOWED EXPENS ES AMOUNTING TO 3 RS. 12,82,65,279/- SINCE THE ASSESSEE HAD CLOSED IT S BUSINESS AND NO ACTIVITIES WERE CARRIED OUT DURING THE YEAR. THE DE TAILS OF EXPENSES DISALLOWED ARE AS FOLLOWS:- 1) SALARY AND WAGES RS. 2,66,53,8 19/- 2) INTEREST RS. 10,1 6,03,500/- 3) DEPRECIATION RS. 7 ,960/- TOTAL RS. 12,82,65,279/- 4. DURING APPELLATE PROCEEDINGS, BEFORE THE LD.CIT( A), THE ASSESSEE CONCEDED THAT THE ISSUE WAS COVERED AGAINST IT BY T HE ORDER OF THE ITAT IN ITS OWN CASE FOR ASSESSMENT YEAR 2009-10, FOLLOWING WHICH THE LD. CIT (A) UPHELD THE DISALLOWANCE MADE. AGGR IEVED BY THE SAME THE ASSESSEE FILED THE PRESENT APPEAL BEFORE U S. 5. BEFORE US LD. COUNSEL FOR THE ASSESSEE CONCEDED THAT THE ISSUE WAS COVERED AGAINST THE ASSESSEE BY THE ORDER OF TH E ITAT IN THE ASSESSEES OWN CASE FOR A.Y 200910 & A.Y 201213. 7. WE HAVE GONE THROUGH THE ORDER OF ITAT, CHANDIG ARH IN THE CASE OF THE ASSESSEE FOR THE ASSESSMENT YEAR 20091 0 IN ITA NO.740/CHD/2014 DATED 6.2.2015 AND FOR ASSESSMENT YEAR 201213 IN ITA NO. 431/CHD/2016, DATED 7.11.2016 AND FIND THAT IDENTICAL ISSUE HAD COME UP FOR CONSIDERATION BEFORE THE TRIB UNAL, WHICH WAS DECIDED AGAINST THE ASSESSEE. IN ITA NO. 431/CHD/2 016 THE TRIBUNAL 4 UPHELD THE DISALLOWANCE, FOLLOWING ITS DECISION IN A.Y 2009-10 AND HELD AS UNDER:- 5. WE HAVE GONE THROUGH THE ORDER IN THE CASE OF T HE ASSESSEE FOR ASSESSMENT YEAR 2009-10 IN ITA NO. 740/CHD/2014 AND FIND THAT IDENTICAL ISSUE HAD CAME UP FOR CONSIDERATION BEFORE THE TRIBUNAL WHICH WAS DECIDED AGAINST THE ASSESSEE FOL LOWING THE DECISION IN THE CASE OF M/S HARYANA STATE SMALL IND USTRIES & EXPORT CORPORATION LTD, CHANDIGARH VS. THE ADDL. CI T IN ITA NO. 898/CHD/2009 AS UNDER:- 8. FOLLOWING THE ABOVE WE DECIDE THE ISSUE REGARDING DISALLOWANCE OF EXPENDITURE AND INTEREST AGAINST THE ASSESSEE. HOWEVER WE FIND FORCE IN THE SUBMISSIONS OF LD. COUNSEL FOR THE ASSESSEE THAT AS FAR AS INCOME FROM HOUSE PROPERTY IS CONCERNED SAME SHOULD HAVE BEEN ASSESSED AS INCOME FROM HOUSE PROPERTY AND CORRESPONDING 30% STATUTORY DEDUCTION SHOULD HAVE BEEN ALLOWED. THEREFORE, WE SET ASIDE THE ORDER OF LD. CIT(A) AND DIRECT AO TO ASSESSED THE HOUSE PROPERTY INCOME UNDER THE HEAD INCOME FROM HOUSE PROPERTY AND CORRESPONDING DEDUCTION SHOULD HAVE BEEN GIVEN. 6. IN VIEW OF THE ABOVE, WE DECIDE THE ISSUE REGARD ING DISALLOWANCE OF EXPENDITURE, INTEREST AND DEPRECIAT ION AGAINST THE ASSESSEE. THE APPEAL OF THE ASSESSEE IS , THEREFORE, DISMISSED. 8 IN VIEW OF THE ABOVE, WE DECIDE THE ISSUE REGA RDING DISALLOWANCE OF EXPENDITURE, INTEREST AND DEPRECIATION AGAINST T HE ASSESSEE. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE, THERE FORE, DISMISSED. 5 9. IN EFFECT, THE APPEAL OF THE ASSESSEE IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (BHAVNESH SAINI) (ANNAPURNA GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 8 TH DECEMBER, 2016 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR