TIGER STEEL ENGINEERING (I) P. LTD, MUMBAI V. ASST CIT 10(3), MUMBAI

ITA 6234/MUM/2011

• Counselvise Citation: 623419914 RSA 2011
• Duration Of Justice: 2 year(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-09-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Next Hearing Date: 13-08-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 09-09-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: T ROUMUAN PAITE
• Keywords: Depreciation

Judgement Text

E IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI .. , !'# $ $ $ $ %&. !.'.. $( ) !'# !* BEFORE SHRI P.M. JAGTAP, AM AND DR. S.T.M. PAVALAN, JM !./ I.T.A. NO. 6234 /MUM/2011 ( )( , $-, )( , $-, )( , $-, )( , $-, / / / / ASSESSMENT YEAR : 2008-09) M/S TIGER STEEL ENGINEERING (I) PVT. LTD., 4 TH FL, BUILDING NO. 5, SECTOR III, MILLENNIUM BUSINESS PARK, MAHAPE, NAVI MUMBAI400 710. ( ( ( ( / VS. ASSTT. COMMISSIONER OF INCOME TAX- CIRCLE 10(3), 4 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 20. #. !./ PAN : AAACT2537 J ( ./ / // / APPELLANT ) .. ( 01./ / RESPONDENT ) ./ 2 3 ! / APPELLANT BY : SHRI PIYUSH CHATURVEDI 01./ 2 3 ! / RESPONDENT BY : SHRI T. ROUMUAN PAITE !($ 2 / // / DATE OF HEARING : 13-08-13 45- 2 / DATE OF PRONOUNCEMENT : 27-09-13 '6 / O R D E R PER P.M. JAGTAP, A.M. : .. , !'# THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF THE LD. CIT(A) - 22, MUMBAI DATED 21-06-2011 AND THE GROUND S RAISED THEREIN BY THE ASSESSEE READ AS UNDER:- 1) THE LD. CIT (A) HAS ERRED IN HOLDING THAT INCOM E FROM INTEREST AT RS. 10,09,973/- ON F.D. IS NOT DERIVED FROM INDUSTRIAL UNDERTAKING AND ITA 6234/M/11 2 THAT THE SAME IS INCOME FROM OTHER SOURCES NOT ELIG IBLE FOR DEDUCTION U/S 801C IGNORING THE RELEVANT JUDGMENT OF HIGH COU RT. 2) THE LD. CIT (A) HAS ERRED IN SUSTAINING THE FIND INGS OF LD. A.O. THAT EVEN IN THE INTEREST INCOME WAS TO BE TREATED AS BU SINESS INCOME THEN ALSO DOES NOT CONSTITUTE INCOME DERIVED FROM THE BU SINESS ACTIVITIES OF THE INDUSTRIAL UNDERTAKING AT HARIDWAR NOT ELIGIBLE FOR DEDUCTION U/S 801C. 3) THE LD. CIT (A) HAS ERRED IN HOLDING THAT THE ID . A.O. HAS RIGHTLY ALLOWED DEPRECIATION @15% ON UPS AS AGAINST 60% IGN ORING THE JUDGMENT OF MADRAS HIGH COURT AS WELL AS THE JUDGME NT OF SPECIAL BRANCH OF ITAT. 2. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. AS REGARDS T HE COMMON ISSUE INVOLVED IN GROUND NO. 1 & 2 OF THE ASSESSEES APPEAL RELATI NG TO THE DISALLOWANCE MADE BY THE A.O. AND CONFIRMED BY THE LD. CIT(A) ON ACCOUNT OF ASSESSEES CLAIM FOR DEDUCTION U/S 80IC OF THE INCOME TAX ACT, 1961 IN RESPECT OF INTEREST INCOME ON BANK FD, IT IS OBSERVED THAT THE SAME IS SQUARELY COVERED AGAINST THE ASSESSEE AND IN FAVOUR OF THE REVENUE, INTER ALIA, BY THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF LIBERTY INDIA VS. CIT (2009) 317 ITR 218 (SC) LTD. WHEREIN IT WAS HELD THAT THE DEDU CTION IN RESPECT OF INCOME DERIVED BY AN UNDERTAKING OR AN ENTERPRISE FROM ANY SPECIFIED BUSINESS IS ALLOWABLE ONLY WHEN THERE IS A FIRST DEGREE CONNECT ION BETWEEN SUCH INCOME AND SUCH UNDERTAKING OR ENTERPRISE. IT WAS ALSO HE LD THAT THE IMMEDIATE SOURCE OF SUCH INCOME SHOULD BE THE SPECIFIED BUSIN ESS OF SUCH UNDERTAKING OR ENTERPRISE IN ORDER TO CLAIM DEDUCTION. IN THE PRESENT CASE, THE INCOME FROM INTEREST WAS RECEIVED BY THE ASSESSEE ON THE F D KEPT WITH THE BANK AND THEREFORE THE IMMEDIATE SOURCE OF SUCH INCOME WAS T HE BANK FDS AND NOT THE BUSINESS OF AN UNDERTAKING OF THE ASSESSEE SO AS TO BE ELIGIBLE TO CLAIM DEDUCTION U/S 80IC OF THE ACT. RESPECTFULLY FOLLOW ING THE SAID DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF LIBERTY INDIA LTD. (SUPRA), WE UPHOLD THE IMPUGNED ORDER OF THE LD. CIT(A) CONFIRMING THE DISALLOWANCE MADE BY THE A.O. ON ACCOUNT OF ASSESSEES CLAIM FOR DEDUCTION U /S 80IC OF THE ACT IN ITA 6234/M/11 3 RESPECT OF INTEREST INCOME ON BANK FD AND DISMISS G ROUND NO. 1 & 2 OF ASSESSEES APPEAL. 3. AS REGARDS GROUND NO. 3, IT IS OBSERVED THAT THE ISSUE INVOLVED THEREIN RELATING TO THE ASSESSEES CLAIM FOR DEPRECIATION O N UPS AT HIGHER RATE OF 60% IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY TH E DECISION OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF MACAWBER ENGI NEERING SYSTEM (I) PVT. LTD. VS. ACIT RENDERED VIDE ITS ORDER DATED 18-09-2 012 PASSED IN ITA NO. 5312/MUM/2011 WHEREIN IT WAS HELD, FOLLOWING THE DE CISION OF THE MUMBAI SPECIAL BENCH OF ITAT IN THE CASE OF DATACRAFT INDI A LTD. (9 ITR 712) [TRIB.], THAT THE UPS BEING AN INTEGRAL PART OF THE COMPUTER SYSTEM IS ELIGIBLE FOR DEPRECIATION AT HIGHER RATE AS APPLICABLE TO THE CO MPUTERS. RESPECTFULLY FOLLOWING THE SAID DECISION OF THE TRIBUNAL, WE DIR ECT THE A.O. TO ALLOW DEPRECIATION @ 60% ON UPS AS CLAIMED BY THE ASSESSE E AND ALLOW GROUND NO. 3 OF ASSESSEES APPEAL. 4. AT THE TIME OF HEARING, THE ASSESSEE HAS RAISED AN ADDITIONAL GROUND RELATING TO ITS ALTERNATIVE CLAIM THAT IF THE INTER EST INCOME ON BANK DEPOSITS IS HELD TO BE CHARGEABLE TO TAX UNDER THE HEAD INCOME FROM OTHER SOURCES, THE DEDUCTION ON ACCOUNT OF INTEREST PAID BY THE ASSESS EE ON MONEY BORROWED FOR MAKING THE INVESTMENT IN BANK DEPOSITS SHOULD BE AL LOWED U/S 57(III) OF THE ACT. 5. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES ON THIS ISSUE AND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. AS THE ADDITIONAL GROUND RAISED BY THE ASSESSEE RAISES ITS ALTERNATIVE CLAIM AND THE LD. D.R. HAS NOT RAISED ANY OBJECTION FOR ADMISSION THEREOF, THE ADD ITIONAL GROUND RAISED BY THE ASSESSEE HAS BEEN ADMITTED BY US. AS CONTENDED BY THE LD. D.R., THIS ALTERNATIVE CLAIM IS BEING MADE BY THE ASSESSEE FOR THE FIRST TIME BEFORE THE TRIBUNAL AND THE A.O., THEREFORE, SHOULD BE GIVEN A N OPPORTUNITY TO EXAMINE THE SAME ON MERIT. SINCE THE LD. COUNSEL FOR THE AS SESSEE ALSO HAS NO ITA 6234/M/11 4 OBJECTION IN THIS REGARD, WE RESTORE THIS ISSUE TO THE FILE OF THE A.O. WITH A DIRECTION TO DECIDE THE ISSUE RELATING TO ALTERNATI VE CLAIM OF THE ASSESSEE FOR DEDUCTION U/S 57(III) OF THE ACT AFTER VERIFYING/EX AMINING THE RELEVANT ASPECTS IN ACCORDANCE WITH LAW. THE ADDITIONAL GROUND FILED BY THE ASSESSEE IS ACCORDINGLY TREATED AS ALLOWED FOR STATISTICAL PURP OSE. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. )( ,7 2 86 #$ 2 9: ; ORDER PRONOUNCED IN THE OPEN COURT ON 27 TH SEPTEMBER, 2013. . '6 2 45- <'(= 27-09-13 5 2 SD/- SD/- (DR. S.T.M. PAVALAN) (P.M. JAGTAP ) ) !'# JUDICIAL MEMBER !'# / ACCOUNTANT MEMBER MUMBAI ; <'( DATED 27-09-13 $.)(.!./ RK , SR. PS '6 2 0)8> ?>- '6 2 0)8> ?>- '6 2 0)8> ?>- '6 2 0)8> ?>-/ COPY OF THE ORDER FORWARDED TO : 1. ./ / THE APPELLANT 2. 01./ / THE RESPONDENT. 3. @ () / THE CIT(A)- 22, MUMBAI 4. @ / CIT CONCERNED, MUMBAI 5. >$C 0))( , , / DR, ITAT, MUMBAI E BENCH 6. %, D / GUARD FILE. '6(! '6(! '6(! '6(! / BY ORDER, !1> 0) //TRUE COPY// E E E E/ // /!9 !9 !9 !9 ( DY./ASSTT. REGISTRAR) , , , , / ITAT, MUMBAI