RIALTO EXIM, MUMBAI V. ITO WD 14(3)(4), MUMBAI

ITA 5764/MUM/2012

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 0366 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 9 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-06-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 07-12-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 14-09-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation; Opportunity of being heard; Question of law; Valuation report
• Section: 115JB; 32

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH D, MUMBAI BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA NO.6174/M/2014 ASSESSMENT YEAR: 2009-10 INCOME TAX OFFICER-14(3)-4, 6 TH FLOOR, EARNEST HOUSE, NARIMAN POINT, MUMBAI 400 021 VS. M/S. RIALTO EXIM, 9 TH FLOOR, JEWEL WORLD, KALBADEVI ROAD, KALBADEVI, MUMBAI 400 002 PAN: AAKFR3441G (APPELLANT) (RESPONDENT) ITA NO.5764/M/2012 ASSESSMENT YEAR: 2009-10 M/S. RIALTO EXIM, 907, JEWEL WORLD, KALBADEVI ROAD, MUMBAI 400 002 PAN: AAKFR3441G VS. INCOME TAX OFFICER-14(3)-4, 6 TH FLOOR, EARNEST HOUSE, NARIMAN POINT, MUMBAI 400 021 (APPELLANT) (RESPONDENT) ITA NO.5800/M/2012 ASSESSMENT YEAR: 2009-10 INCOME TAX OFFICER-14(3)-4, 6 TH FLOOR, EARNEST HOUSE, NARIMAN POINT, MUMBAI 400 021 VS. M/S. RIALTO EXIM, 105, PARIMAL PLAZA, 1 ST FLOOR, 9, BHULESHWAR ROAD, BHULESHWAR, MUMBAI 400 002 PAN: AAKFR3441G (APPELLANT) (RESPONDENT) ITA NO.1743/M/2013 ASSESSMENT YEAR: 2009-10 INCOME TAX OFFICER-3(3)(1), ROOM NO.672, 6 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI 20 VS. M/S. RISHIROOP RUBBER INTERNATIONAL LTD., 65, ATLANTA, NARIMAN POINT, MUMBAI 400 021 PAN: AABCR 1789B (APPELLANT) (RESPONDENT) ITA NO.6174/M/2014 & ORS. M/S. RIALTO EXIM M/S. RISHIROOP RUBBER INTERNATIONAL LTD. 2 ITA NO.4137/M/2016 ASSESSMENT YEAR: 2012-13 ITA NO.6906/M/2013 ASSESSMENT YEAR: 2010-11 DY. COMMISSIONER OF INCOME TAX-3(3)(1), ROOM NO.609, 6 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI 400 020 VS. M/S. RISHIROOP RUBBER (INTERNATIONAL) LTD., 65, ATLANTA BLDG., NARIMAN POINT, MUMBAI 400 021 PAN: AABCR 1789B (APPELLANT) (RESPONDENT) ITA NO.7016/M/2014 ASSESSMENT YEAR: 2011-12 M/S. RISHIROOP RUBBER INTERNATIONAL LTD., 65, ATLANTA, NARIMAN POINT, MUMBAI 400 021 PAN: AABCR 1789B VS. DY. COMMISSIONER OF INCOME TAX-3(3)(1), ROOM NO.609, 6 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI 400 020 (APPELLANT) (RESPONDENT) PRESENT FOR: ASSESSEE BY : SHRI JAYANT BHATT, A.R. SHRI JAYESH DETIA, A.R. REVENUE BY : SHRI B. PRUSETH, D.R. SHRI PURUSHOTTAM KUMAR, D.R. DATE OF HEARING : 25.04.2017 DATE OF PRONOUNCEMENT : 16.06.2017 O R D E R PER D.T. GARASIA, JUDICIAL MEMBER: THE ABOVE TITLED APPEALS BY THE REVENUE AND CROSS APPEAL BY ONE OF THE ASSESSEES HAVE BEEN PREFERRED AGAINST DIFFERENT ORD ERS OF THE COMMISSIONER OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS TH E CIT(A)]. SINCE THE FACTS AND ISSUES INVOLVED IN ALL THESE APPEALS ARE IDENTI CAL IN NATURE, HENCE THE SAME ARE HEARD TOGETHER AND ARE BEING DISPOSAL BY THIS C OMMON ORDER. ITA NO.6174/M/2014 & ORS. M/S. RIALTO EXIM M/S. RISHIROOP RUBBER INTERNATIONAL LTD. 3 2. THE SHORT FACTS IN ALL THESE APPEALS ARE AS UNDE R: FOR THE ASSESSMENT YEAR 2006-07, THE AO AND LD. CI T(A) HELD THAT PLANT & MACHINERY AND BUILDING ON WHICH THE DEPRECIATION WAS CLAIMED HAVE BEEN DEMOLISHED AND DISMANTLED AND NOT IN EXISTENCE. AC CORDINGLY, THE DEPRECIATION UNDER INCOME AS WELL AS MVAT WAS DISAL LOWED. THE TRIBUNAL HAS CONFIRMED THE ORDER OF THE REVENUE AUTHORITY ON THE GROUND THAT ASSETS WERE NOT ON THE BALANCE SHEET. THEREFORE, DEPRECIA TION UNDER THE NORMAL PROVISIONS OF THE INCOME TAX WAS NOT ALLOWED. IN T HE ASSESSMENT YEAR 2009- 10 ASSESSEE COMPANY HAS FILED SUBSTANTIAL EVIDENCE INCLUDING VALUATION REPORT OF CERTIFIED EXISTENCE OF BOTH THE ASSETS. THE ASS ESSING OFFICER (HEREINAFTER REFERRED TO AS THE AO) HAS ALLOWED THE DEPRECIATION ON BOTH THESE ASSETS UNDER THE INCOME TAX ACT BUT DISALLOWED THE BOOK DEPRECIA TION FOR THE PURPOSE OF MVAT IN VIEW OF EARLIER ORDERS. THE LD. CIT(A), CO NSIDERING THE FACT OF EXISTENCE OF BOTH THE ASSETS AND APPEARANCE IN THE BALANCE SHEET, HAS DELETED THE ADDITION OF ADJUSTMENT MADE TO BOOK PROFIT. TH E DEPARTMENT IS IN APPEAL AGAINST THE LD. CIT(A)S ORDER BEFORE THE TRIBUNAL. 3. THE LD. A.R. SUBMITTED THAT FOR ASSESSMENT YEAR 2006-07 & 2007-08 THE MATTER IS PENDING BEFORE THE HONBLE BOMBAY HIGH CO URT AND THE HONBLE BOMBAY HIGH COURT HAS ADMITTED THE APPEAL WHEREIN T HE FOLLOWING QUESTIONS WERE RAISED: 1) WHETHER THE APPELLATE TRIBUNAL IS CORRECT IN LA W IN DISALLOWING DEPRECIATION ON THE BLOCK OF ASSETS STILL IN EXISTENCE DISREGARD ING THE PROVISIONS OF SECTION 32 OF THE ACT? 2) WHETHER THE APPELLATE TRIBUNAL IS JUSTIFIED IN L AW IN CONFIRMING THE ORDER OF THE RESPONDENT NO.1 IN RECASTING THE AUDITED BOOK R ESULTS FOR THE PURPOSE OF COMPUTATION OF BOOK PROFIT UNDER SECTION 115JB O F THE ACT? 4. WE FIND THAT IN ALL ASSESSMENT YEARS SIMILAR QUE STIONS ARE PENDING, THEREFORE, ASSESSEE HAS REQUESTED UNDER SECTION 158 A OF THE INCOME TAX ACT TO RESTORE THIS MATTER BACK TO THE FILE OF AO AND DECI DE THE MATTER AS PER THE ITA NO.6174/M/2014 & ORS. M/S. RIALTO EXIM M/S. RISHIROOP RUBBER INTERNATIONAL LTD. 4 DECISION OF HONBLE BOMBAY HIGH COURT IN RESPECT OF ASSESSMENT YEAR 2010- 11, 2011-12 AND 2012-13. 5. HAVING HEARD BOTH THE PARTIES, WE ARE OF THE VIE W THAT SUBSTANTIAL LAW HAS BEEN FRAMED BY HONBLE BOMBAY HIGH COURT. THER EFORE SECTION 158A IS APPLIED IN THIS CASE. SECTION 158A IS REPRODUCED A S UNDER: 158A. PROCEDURE WHEN ASSESSEE CLAIMS IDENTICAL QUE STION OF LAW IS PENDING BEFORE HIGH COURT OR SUPREME COURT (1) NOTWITHSTANDING ANYTHING CONTAINED IN THIS ACT, WH ERE AN ASSESSEE CLAIMS THAT ANY QUESTION OF LAW ARISING IN HIS CASE FOR AN ASSE SSMENT YEAR WHICH IS PENDING BEFORE THE 3 ASSESSING] OFFICER OR ANY APPELLATE AUTHORITY (SUC H CASE BEING HEREAFTER IN THIS SECTION REFERRED TO AS THE RELEVANT CASE) I S IDENTICAL WITH A QUESTION OF LAW ARISING IN HIS CASE FOR ANOTHER ASSESSMENT YEAR WHI CH IS PENDING BEFORE THE HIGH COURT ON A REFERENCE UNDER SECTION 256 OR BEFORE TH E SUPREME COURT ON A REFERENCE UNDER SECTION 257 OR IN APPEAL UNDER SECTION 261 (S UCH CASE BEING HEREAFTER IN THIS SECTION REFERRED TO AS THE OTHER CASE), HE MAY FURN ISH TO THE 4 ASSESSING] OFFICER OR THE APPELLATE AUTHORITY, AS THE CASE MAY BE, A DECL ARATION IN THE PRESCRIBED FORM AND VERIFIED IN THE PRESCRIBED MANNER, THAT IF THE 5 [ ASSESSING] OFFICER OR THE APPELLATE AUTHORITY, AS THE CASE MAY BE, AGREES TO APPLY IN THE RELEVANT CASE THE FINAL DECISION ON THE QUESTION OF LAW IN THE OTHER CASE, HE SHALL NOT RAISE SUCH QUESTION OF LAW IN THE RELEVANT CASE IN APPEAL BEFO RE ANY APPELLATE AUTHORITY OR FOR A REFERENCE BEFORE THE HIGH COURT UNDER SECTION 256 OR THE SUPREME COURT UNDER SECTION 257 OR IN APPEAL BEFORE THE SUPREME COURT U NDER SECTION 261. (2) WHERE A DECLARATION UNDER SUB- SECTION (1) IS FURN ISHED TO ANY APPELLATE AUTHORITY, THE APPELLATE AUTHORITY SHALL CALL FOR A REPORT FROM THE 6 ASSESSING] OFFICER ON THE CORRECTNESS OF THE CLAIM MADE BY THE ASSESSE E AND, WHERE THE 7 ASSESSING] OFFICER MAKES A REQUEST TO THE APPELLATE AUTHORITY TO GIVE HIM AN OPPORTUNITY OF BEING HEARD IN THE MATTER, THE APPELLATE AUTHORITY SHALL ALLOW HIM SUCH OPPORTUNITY. (3) THE 8 ASSESSING] OFFICER OR THE APPELLATE AUTHORITY, AS THE CASE MAY BE, MAY, BY ORDER IN WRITING,- (I) ADMIT THE CLAIM OF THE ASSESSEE IF HE OR IT IS SAT ISFIED THAT THE QUESTION OF LAW ARISING IN THE RELEVANT CASE IS IDENTICAL WITH THE QUESTION OF LAW IN THE OTHER CASE; OR (II) REJECT THE CLAIM IF HE OR IT IS NOT SO SATISFIED. (4) WHERE A CLAIM IS ADMITTED UNDER SUB- SECTION (3),- (A) THE 1 ASSESSING] OFFICER OR, AS THE CASE MAY BE, THE APP ELLATE AUTHORITY MAY MAKE AN ORDER DISPOSING OF THE RELEVANT CASE WI THOUT AWAITING THE FINAL DECISION ON THE QUESTION OF LAW IN THE OTHER CASE; AND (B) THE ASSESSEE SHALL NOT BE ENTITLED TO RAISE, IN RE LATION TO THE RELEVANT CASE, SUCH QUESTION OF LAW IN APPEAL BEFORE ANY APP ELLATE AUTHORITY OR FOR A ITA NO.6174/M/2014 & ORS. M/S. RIALTO EXIM M/S. RISHIROOP RUBBER INTERNATIONAL LTD. 5 REFERENCE BEFORE THE HIGH COURT UNDER SECTION 256 O R- THE SUPREME COURT UNDER SECTION 257 OR IN APPEAL BEFORE THE SUPREME C OURT UNDER SECTION 261. (5) WHEN THE DECISION ON THE QUESTION OF LAW IN THE OT HER CASE BECOMES FINAL, IT SHALL BE APPLIED TO THE RELEVANT CASE AND THE 2 ASSESSING] OFFICER OR THE APPELLATE AUTHORITY, AS THE CASE MAY BE, SHALL, IF NECESSARY, AMEND THE ORDER REFERRED TO IN CLAUSE (A) OF SUB- SECTION (4) CONFORMABLY TO SUCH DECISION. (6) AN ORDER UNDER SUB- SECTION (3) SHALL BE FINAL AND SHALL NOT BE CALLED IN QUESTION IN ANY- PROCEEDING BY WAY OF APPEAL, REFERENCE OR R EVISION UNDER THIS ACT. EXPLANATION.- IN THIS SECTION,- (A) ' APPELLATE AUTHORITY' MEANS THE 3 DEPUTY COMMISSIONER (APPEALS)], THE COMMISSIONER (APPEALS) OR THE APPELLATE TRIBUNAL; (B) ' CASE', IN RELATION TO AN ASSESSEE, MEANS ANY PRO CEEDING UNDER THIS ACT FOR THE ASSESSMENT OF THE TOTAL INCOME OF THE ASSES SEE OR FOR THE IMPOSITION OF ANY PENALTY OR FINE ON HIM. 6. AS PER SECTION 158A OF THE ACT, ASSESSEE HAS FIL ED THE APPEAL FOR ASSESSMENT YEARS 2006-07 AND 2007-08 BEFORE THE HON BLE BOMBAY HIGH COURT. ASSESSEE HAS GIVEN UNDERTAKING IN FORM NO.8 , RULE 16. THEREFORE, ALL THESE MATTERS ARE RESTORED TO THE FILE OF AO AND TH E AO IS DIRECTED TO DECIDE THE APPEALS AS PER THE OUTCOME OF THE HONBLE BOMBAY HI GH COURT. 7. IN THE RESULT, ALL THE APPEALS ARE RESTORED TO T HE FILE OF THE AO AND AO IS DIRECTED TO DECIDE THE MATTERS AS PER THE DECISION STATED ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 16.06.2017. SD/- SD/- (RAJESH KUMAR) (D.T. GARASIA) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 16.06.2017. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// ITA NO.6174/M/2014 & ORS. M/S. RIALTO EXIM M/S. RISHIROOP RUBBER INTERNATIONAL LTD. 6 [ BY ORD ER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.