DCIT CC 39, MUMBAI V. BRINKS ARYA INDIA P.LTD, MUMBAI

ITA 6442/MUM/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3370 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-07-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 10-12-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 21-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: Y P TRIVEDI
• Keywords: Depreciation; Question of law
• Section: 43B

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B MUMBAI . . , / BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER /AND . , SHRI D.KARUNAKARA RAO, ACCOUNTANT MEMBER . / ITA NO.6442/MUM/2011 ! ! ! ! ' ' ' ' / ASSESSMENT YEAR 2008-09 THE DCIT, CC-39, ROOM NO.32(1), GROUND FLOOR, AAYKAR BHAVAN, MUMBAI - 400 020 ! ! ! ! / VS. M/S. BRINKS ARYA INDIA LTD., BALLARD HOUSE, GROUND FLOOR, ADI MARZAN PATH, BALLARD ESTATE, MUMBAI 400 001. # ./ $% ./ PAN/GIR NO. : AAACB 3302R ( #& / APPELLANT ) .. ( '(#& / RESPONDENT ) #& ) / APPELLANT BY: SHRI PARESH JOHRI '(#& * ) / RESPONDENT BY : SHRI Y.P.TRIVEDI & MS. USHA DALAL ! * + / DATE OF HEARING : 01/07/2013 ,-' * + / DATE OF PRONOUNCEMENT : 01/07/2013 . / O R D E R PER I.P.BANSAL, J.M: THIS IS AN APPEAL FILED BY THE REVENUE. IT IS DIR ECTED AGAINST THE ORDER DATED 22/07/2011 PASSED BY LD. CIT(A)-41, MUMBAI FO R THE ASSESSMENT YEAR 2008-09. THE GROUNDS OF APPEAL READ AS UNDER: 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD. CIT(A) WAS CORRECT IN DIRECTING THE ASSESSING OFFICER TO A LLOW HIGHER RATE OF DEPRECIATION AT 30% ON SECURITY VANS. . / ITA NO.6442/MUM/2011 ! ! ! ! ' ' ' ' / ASSESSMENT YEAR 2008-09 2 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD. CIT(A) WAS CORRECT IN DIRECTING THE ASSESSING OFFICER TO A LLOW HIGHER RATE OF DEPRECIATION AT 30% ON SECURITY VANS AS THE ASSESSEE WAS NOT ENGAGE D IN THE BUSINESS OF RUNNING MOTOR BUSES OR MOTOR LORRIES ON HIRE AND THE SECURI TY VANS WERE USED BY THE ASSESSEE FOR ITS OWN BUSINESS OF SAFE TRANSFER OF V ALUABLES, AND WERE NOT GIVEN TO OTHERS ON HIRE. 3. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD. CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION MADE U/S 36( 1)(VA) R.W. EXPLANATION THERETO ON ACCOUNT OF DELAYED PAYMENT OF EMPLOYEES CONTRIBUTI ON TO ESIC BY APPLYING THE RATIO OF DECISION OF THE HONBLE SUPREME COURT IN THE CAS E OF CIT VS. ALOM EXTRUSIONS LTD. 319 ITR 306 (SC) WHICH WAS IN THE CONTEXT OF PROVIS IONS OF SECTION 43B I.E. THE EMPLOYERS CONTRIBUTION TO SUCH FUNDS. THE APPELLANT PRAYS THAT THE ORDER OF COMMISSIONER OF INCOME-TAX (APPEAL) ON THE ABOVE GROUND BE SET ASIDE AND THAT OF THE ITO/AC/DC BE RESTORED. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GROUNDS OR ADD A NEW GROUND WHICH MAY BE NECESSARY. 2. SO FAR AS IT RELATE TO GROUND NO.1 & 2, AT THE O UTSET IT WAS SUBMITTED BY LD. SENIOR COUNSEL FOR THE ASSESSEE THAT THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE EARLIER ORDER OF THE TRIBUNAL DATED 15/02/2013 IN ITA NO.8455/ MUM/2010 FOR ASSESSMENT YEAR 2007-08. HE SUBMITTED THAT THE ISSUE HAS BEEN DECIDED BY THE LD. CIT(A) IN FAVOUR OF THE ASSESSEE NOT ONLY ON THE BASIS OF THE EARLIER DECISION RENDERED BY ITAT BUT ALSO ON THE BASIS THAT THE DECISION RENDERED BY TRIBUNAL IN RESPECT OF ASSESSMENT YEARS 2001-02 TO 2006-07 WAS , CONFIRMED BY THE HONBLE JURISDICTIONAL HIGH COURT VIDE JUDGMENT DATED 29/03/2011. HONBLE SUPREME COURT HAS ALSO DISMISS ED THE SPECIAL LEAVE PETITION FILED BY THE REVENUE VIDE JUDGMENT DATED 0 5/12/2011. THUS IT WAS PLEADED THAT THE ORDER OF LD. CIT(A) ON GROUND NO.1 & 2 SHOULD BE UPHELD. 3. ON GROUND NO.3, IT WAS SUBMITTED BY LD. SENIOR C OUNSEL THAT THIS ISSUE IS ALSO COVERED IN FAVOUR OF THE ASSESSEE BY THE DECIS ION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. ALLOM EXTRUSIONS LTD., (200 9) 319 ITR 306(SC) AND LD. CIT(A) HAS DECIDED THIS ISSUE IN FAVOUR OF THE ASS ESSEE FOLLOWING THE SAID DECISION AS THERE IS NO DISPUTE TO THE FACT THAT AL L THE PAYMENTS HAVE BEEN MADE BY THE ASSESSEE BEFORE THE DUE DATE OF FILING THE RETURN. . / ITA NO.6442/MUM/2011 ! ! ! ! ' ' ' ' / ASSESSMENT YEAR 2008-09 3 4. WE HAVE HEARD BOTH THE PARTIES AND THEIR CONTENT IONS HAVE CAREFULLY CONSIDERED. SO FAR AS IT RELATES TO ISSUE RAISED IN GROUND NO. 1 & 2, WE FIND THAT CONTENTION OF LD. SENIOR COUNSEL IS CORRECT AND FOR THE COMPLETENESS OF THE MATTER WE REFER TO THE FOLLOWING OBSERVATIONS OF TRIBUNAL IN AFOREMENTIONED ORDER DATED 15/02/2013 IN ITA NO.8455/MUM/2010, VIDE WHICH SIM ILAR ISSUE RAISED IN DEPARTMENTAL APPEAL FOR ASSESSMENT YEAR 2007-08 WAS DISMISSED. 6. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE RIVAL PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE ARE OF THE OPINION THAT THE ISSUE INVOLVED IN THE PRESENT CASE IS NO MORE RES INTEGRA AND IS COVERED BY THE FOLLOWING DECISIONS: - 7. IN DCIT VS. M/S BRINKS ARYA INDIA PVT. LTD. IN ITA NO. 5086, 5278 & 7175/MUM/2005 FOR ASSESSMENT YEARS 2001-02 TO 2003- 04 ORDER DTD. 30-3- 2009 IT HAS BEEN HELD VIDE PARA 14 OF THE ORDER AS UNDER:- 14. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS O F THE RIVAL PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FI ND THAT THERE IS NO DISPUTE THAT THE MAIN OBJECTS OF THE ASSESSEE COMPA NY ARE- [PAGE 7 OF CIT[A1S ORDER]: 1) TO ESTABLISH AND CARRY ON BUSINESS EITHER SOLELY OR IN PARTNERSHIP WITH OTHER FIRMS COMPANIES OR CORPORATIONS OF PROTE CTING AND TRANSPORTING VALUABLES INCLUDING JEWELLERY, PRECIOU S METALS AND STONES, NEGOTIABLE AND NON-NEGOTIABLE INSTRUMENTS A ND SECURITIES, STOCKS BONDS, VALUABLE DOCUMENTS AND OBJECTIONS AND OTHER COMMODITIES FOR CUSTOMERS BY ARMORED CAR AND OTHER VEHICLES AND TO RENDER RELATED SERVICES ON ALL INTERNATIONAL AIR CO URIER SHIPMENTS TO AND INDIA. 2) TO MANUFACTURE, REPAIR, BUY SELL, LEASE AND DEAL IN PROPERTY AND EQUIPMENT CONCERNING THE TRANSPORTATION OF VALUABLE S A DETAILED IN THE PRECEDING CLAUSE INCLUDING SAFES, CHEST AND CASH PR OTECTORS. 3) TO PROVIDE SECURITY AND HANDLING SERVICES INCLUD ING SERVICES RELATING TO CLEARING, FORWARDING, TRANSPORTATION, SAFE CUSTO DY, TRAVEL HANDLING AND COIN PROCESSING. WE FURTHER FIND THAT IT IS ALSO NOT IN DISPUTE THAT THE MAJORITY OF THE ASSETS ARE RELATING TO TRANSPORT AND THE MAIN INCOM E OF THE ASSESSEE COMPANY IS FROM FREIGHT AND RELATED CHARGES. UNDER ITEM [2][II] OF HEADING III PLANT AND MACHINERY OF APPENDIX I OF TA BLE OF RATE OF DEPRECIATION, THE HIGHER RATE OF DEPRECIATION IS AD MISSIBLE ON MOTOR BUSES, MOTOR LORRIES AND MOTOR TAXIS USED IN A BUSI NESS OF RUNNING THEM ON HIRE. IN CIT VS. GUPTA GLOBAL EXIM P. LTD [ S.C] [SUPRA], THERE IS A CATEGORICAL FINDING OF THE AO THAT THE ASSESSEE W AS OCCASIONALLY IN THE BUSINESS OF TRANSPORTATION AND MAINLY HE WAS IN THE BUSINESS OF . / ITA NO.6442/MUM/2011 ! ! ! ! ' ' ' ' / ASSESSMENT YEAR 2008-09 4 IMPORTING TIMBER LONGS AND SELLING THEM IN INDIA. T HEIR LORDSHIPS WHILE OBSERVING THAT THE USER OF THE SAME IN THE BUSINES S OF THE ASSESSEE OF TRANSPORTATION IS THE TEST. HELD THAT MERELY BECAU SE THE INCOME FROM LETTING OF THE TRUCKS ON HIRE WAS INCLUDED IN THE B USINESS INCOME, THE HIGHER RATE WOULD NOT APPLY. HOWEVER, THE MATTER WA S REMANDED FOR FRESH DECISION TO THE COMMISSIONER [APPEALS] AS TO WHETHER THE ASSESSEE WAS IN THE BUSINESS OF RUNNING THE MOTOR B USES ON HIRE. HOWEVER, IN THE CASE BEFORE US, THE ASSESSEE HAS PR OVED THAT IT HAS USED THE SECURITY VANS FOR TRANSPORTATION OF CASH V ALUABLES ETC. IT IS NOT THE CASE OF THE REVENUE THAT THE ASSESSEE HAS N OT USED THE SAID SECURITY VANS FOR ITS BUSINESS OF TRANSPORTATION OF CASH, VALUABLES ETC., OR THE SAME HAS NOT BEEN USED MAINLY FOR BUSINESS O F THE ASSESSEE OF TRANSPORTATION OF CASH, VALUABLES ETC. IN THE AFORE SAID CASE IN CIT VS. GUPTA GLOBAL EXIM P. LTD., WHICH HAS ALSO BEEN CONS IDERED AND DISTINGUISHED IN CIT VS. M/S PARIKH PETROCHEMICALS AGENCIES PVT. LTD. [SUPRA], THE ASSESSEES MAIN BUSINESS WAS IMPORTING TIMBER LONGS AND SELLING THEM. WHEREAS IN THE CASE BEFORE US, THE AS SESSEE HAS PROVED THAT THE TRANSPORTATION OF CASH AND VALUABLES WAS I TS MAIN BUSINESS. UNDER THE AFORESAID FACTS AND CIRCUMSTANCES, THE DE CISION RELIED ON BY THE LD.DR IN CIT VS. GUPTA GLOBAL EXIM P. LTD IS DI STINGUISHABLE AND NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. TH AT BEING SO AND KEEPING IN VIEW THAT THE REVENUE HAS FAILED TO CONT ROVERT THE FINDING OF THE LD. CIT[A], WE ARE OF THE VIEW THAT THE ASSESSE E IS ENTITLED TO CLAIM DEPRECIATION @ 40% AND ACCORDINGLY, WE ARE INCLINED TO UPHOLD THE FINDING OF THE LD. CIT[A] IN DIRECTING THE AC TO AL LOW DEPRECIATION ON SECURITY VANS @ 40%. THE GROUND TAKEN BY THE REVENU E IS, THEREFORE, REJECTED. 8. THE ABOVE ORDER OF THE TRIBUNAL HAS BEEN FOLLOWE D BY THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEARS 2004-05 TO 2006-0 7. 9. IN CIT VS. M/S BRINKS ARYA INDIA PVT. LTD. IN IN COME TAX APPEALS NO. 802 OF 2010 AND OTHERS VIDE JUDGMENT DTD. 29-03-201 1, THE HONBLE JURISDICTIONAL HIGH COURT HAS OBSERVED AND HELD AS UNDER: WHETHER THE TRIBUNAL WAS JUSTIFIED IN HOLDING THAT THE ASSESSEE IS ENTITLED TO HIGHER DEPRECIATION AT 40% WHEN THE ASSESSEE WAS NO T ENGAGED IN THE BUSINESS OF GIVING THE VEHICLES IN HIRE, IS THE QUE STION RAISED IN THESE APPEALS. THE TRIBUNAL HAS HELD THAT THE ASSESSEE HA S PROVED THAT THE SECURITY VANS HAVE BEEN USED FOR TRANSPORTATION OF CASH, VALUABLES BELONGING TO THE THIRD PARTIES AS THAT IS THE BUSIN ESS OF THE ASSESSEE. THIS FACT IS NOT DISPUTED. THUS, THE DECISION OF TH E TRIBUNAL IS BASED ON FINDING OF FACT AND NO SUBSTANTIAL QUESTION OF LAW ARISE IN THESE APPEALS. ALL THE APPEALS ARE DISMISSED WITH NO ORDE R TO COSTS. 10. IN CIT VS. M/S BRINKS ARYA INDIA PVT. LTD., THE HONBBLE SUPREME COURT VIDE ITS JUDGMENT DTD. 5-12-2011 HAS HELD AS UNDER :- DELAY CONDONED. THE SPECIAL LEAVE PETITIONS ARE DISMISSED. . / ITA NO.6442/MUM/2011 ! ! ! ! ' ' ' ' / ASSESSMENT YEAR 2008-09 5 11. RESPECTFULLY FOLLOWING THE ABOVE AUTHORITATIVE PRONOUNCEMENTS, THE ORDER PASSED BY THE LD. CIT(A) ACCEPTING THE CLAIM OF THE ASSESS EE IS UPHELD. 12. IN THE RESULT, REVENUES APPEAL STANDS DISMISSE D. ACCORDINGLY, FOLLOWING THE AFOREMENTIONED ORDER O F TRIBUNAL IN ASSESSEES OWN CASE WHICH HAS BEEN UPHELD BY HONBLE SUPREME COURT , AFTER HEARING BOTH THE PARTIES, WE DISMISS GROUND NO.1 & 2. GROUND NO.1 & 2 ARE DISMISSED. 5. SO FAR AS IT RELATES TO GROUND NO.3, WE FIND TH AT THERE IS NO DISPUTE TO THE FACT THAT ALL THE PAYMENTS HAVE BEEN MADE WITHIN TH E DUE DATE OF FILING THE RETURN. THE ISSUE HAS BEEN DECIDED BY LD. CIT(A) I N FAVOUR OF THE ASSESSEE FOLLOWING THE AFOREMENTIONED DECISION OF HONBLE SU PREME COURT IN THE CASE OF CIT VS. ALLOM EXTRUSIONS LTD. (SUPRA). THE GRIEV ANCE OF THE REVENUE IN THE PRESENT CASE IS THAT EMPLOYEES CONTRIBUTION TO ESIC IS NOT COVERED BY THE AFOREMENTIONED DECISION RENDERED BY HONBLE SUPREME COURT IN THE CASE OF ALLOM EXTRUSIONS. WE FIND THAT THE ISSUE RAISED BY THE R EVENUE IS NO MORE RES-INTEGRA AS ACCORDING TO LATEST DECISION RENDERED BY HONBL E HIMACHAL PRADESH HIGH COURT IN THE CASE OF CIT VS. NIPSO POLYFABRIKS LTD. , 350 ITR 327 (HP) FOLLOWING AFOREMENTIONED DECISION IN THE CASE OF CIT VS. ALLO M EXTRUSIONS LTD. (SUPRA), IT HAS BEEN HELD BY HONBLE HIGH COURT THAT THERE EXIS TS NO DIFFERENTIATION BETWEEN EMPLOYERS OR EMPLOYEES CONTRIBUTION. BOTH ARE TO B E ALLOWED AS DEDUCTION IF DEPOSITED BY THE DUE DATE AS DEFINED IN EXPLANATIO N BELOW CLAUSE (VA) OF SECTION 36(1) OF THE ACT. THEREFORE, ON THIS ISSUE ALSO TH ERE IS NO INFIRMITY IN THE ORDER OF LD. CIT(A). THIS GROUND OF THE REVENUE IS DISMIS SED. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 01/07/2013 . * ,-' / 0!1 01/07/2013 - * 2 3 SD/- SD/- ( . / D.KARUNAKARA RAO ) ( . . / I.P. BANSAL ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; 0! DATED 01/07/2013 . / ITA NO.6442/MUM/2011 ! ! ! ! ' ' ' ' / ASSESSMENT YEAR 2008-09 6 . . . . * ** * '+45 '+45 '+45 '+45 65'+ 65'+ 65'+ 65'+ / COPY OF THE ORDER FORWARDED TO : 1. #& / THE APPELLANT 2. '(#& / THE RESPONDENT. 3. 7 ( ) / THE CIT(A)- 4. 7 / CIT 5. 582 '+! , , / DR, ITAT, MUMBAI 6. 2 9 / GUARD FILE. .! .! .! .! / BY ORDER, (5+ '+ //TRUE COPY// : :: : / ; ; ; ; $ $ $ $ (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI . ! . ./ VM , SR. PS