KOTAK MAHINDRA BANK LTD, MUMBAI V. ACIT CEN CIR 5, MUMBAI

ITA 665/MUM/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 1178 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 2 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-04-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 07-01-2016
• Assessment Year: 1995-1996
• Appeal Filed On: 28-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJESH KUMAR YADAV
• Keywords: Depreciation
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A , MUMBAI BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI RAVISH SOOD , JUDICIAL MEMBER ITA NO. 665 /MUM/201 4 : (A.Y : 1995 - 96 ) KOTAK MAHINDRA BANK LTD., 36 - 38A, NARIMAN BHAVAN, 227 NARIMAN POINT, MUMBAI 400 021. PAN : AAACK4409J (APPELLANT) VS. ACIT, RANGE - 3(2), MUMBAI (RESPONDENT) APPELLANT BY : SHRI FARROKH IRANI RESPONDENT BY : SHRI RAJESH KUMAR YADAV DATE OF HEARING : 13 / 02 /201 7 DATE OF PRONOUNCEMENT : 1 2 /0 4 /201 7 O R D E R PER G.S. PANNU , AM : THE CAPTIONED APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE CIT(A) - 4 , MUMBAI DATED 19.11. 201 3 , PERTAINING TO THE ASSESSMENT YEAR 1995 - 96 , WHICH IN TURN HAS ARISEN FROM THE ORDER PASSED BY THE ASSESSING OFF ICER DATED 30.3.2006 UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). 2. IN THIS APPEAL, THE SOLITARY DISPUTE RAISED BY THE ASSESSEE IS WITH REGARD TO THE ACTION OF CIT(A) CONFIRMING THE LEVY OF PENALTY OF RS.2,39,028/ - U/S 271(1 )(C) OF THE ACT. 2 KOTAK MAHINDRA BANK LTD. ITA NO. 665/MUM/2014 3. AT THE TIME OF HEARING, THE LEARNED REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE CIT(A) HAS CONFIRMED THE PENALTY OF RS.2,39,028/ - U/S 271(1)(C) OF THE ACT ON THE GROUND THAT ASSESSEE HAD FURNISHED INACCURATE PARTICULARS OF INCOM E ON ACCOUNT OF DISALLOWANCE OF DEPRECIATION OF RS.5,19,625/ - IN RESPECT OF ASSETS GIVEN ON LEASE TO M/S. SHRI RANGA ALLOYS LTD. IN THIS CONTEXT, THE BRIEF FACTS ARE THAT IN THE ASSESSMENT FINALIZED U/S 143(3) OF THE ACT DATED 31.3.1998 , THE ASSESSING OFF ICER, INTER - ALIA , DISALLOWED DEPRECIATION ON ASSETS LEASED TO M/S. SHRI RANGA ALLOYS LTD. ON THE GROUND THAT THE ASSETS WERE NOT IN EXISTENCE. IT HAS BEEN CONTENDED BEFORE US THAT THE AFORESAID ACTION OF ASSESSING OFFICER CAME UP BEFORE THE TRIBUNAL IN ITA NO. 5234/MUM/2005 & ORS. AND VIDE ORDER DATED 28.11.2016, AND THE ACTION OF ASSESSING OFFICER HAS BEEN SET - ASIDE AND THE MATTER RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER WITH DIRECTION S TO EXAMINE THE ISSUE AFRESH. AT THE TIME OF HEARING, THE LEARNED REPRESENTATIVE SPECIFICALLY REFERRED TO THE FOLLOWIN G DISCUSSION IN THE ORDER OF TRIBUNAL DATED 28.11.2016 (SUPRA) : - 5. THE GROUND NO.4 URGED BY THE ASSESSEE RELATES TO DISALLOWANCE OF DEPRECIATION ON THE ASSETS LEASED OUT TO M/S SHRIRANGA ALLOYS ON THE GROUND THAT THE ASSETS WERE NOT IN EXISTENCE. THE LD A.R SUBMITTED THAT THE AO HAS TAKEN THE ABOVE SAID VIEW ON THE BASIS OF ENQUIRIES MADE FROM CERTAIN PERSONS. EVEN THOUGH THE ASSESSEE HAS SOUGHT OPPORTUNITY TO CROSS EXAMINE THE ABOVE SAID PERSONS, YET THE AO HAS DECIDED THIS ISSUE AGAINST THE ASSESSEE WITHOUT PROVIDING SUCH AN OPPORTUNITY. THE LD A.R SUBMITTED THAT THE DISALLOWANCE MADE BY THE AO WITHOUT PROVIDING OPPORTUNITY TO CROSS EXAMINE THE PERSONS WOULD VITIATE THE ASSESSMENT ORDER. ACCORDINGLY HE PRAYED THAT THE DISALLOWANCE BE DELETED. IN T HE ALTERNATIVE, THE LD A.R SUBMITTED THAT 3 KOTAK MAHINDRA BANK LTD. ITA NO. 665/MUM/2014 THE MATTER MAY BE RESTORED BACK TO THE FILE OF THE AO FOR AFFORDING OPPORTUNITY TO THE ASSESSEE. 5.1 ON THE CONTRARY, THE LD D.R SUPPORTED THE ORDER OF LD CIT(A) PASSED ON THIS ISSUE. HAVING HEARD RIVAL CONTENTIONS, WE ARE OF THE VIEW THAT THIS ISSUE NEEDS TO BE SET ASIDE TO THE FILE OF THE AO FOR DECIDING THE SAME AFRESH. ACCORDINGLY WE SET ASIDE THE O RDER PASSED BY LD CIT(A) ON THIS ISSUE AND RESTORE THE SAME TO THE FILE OF THE AO WITH THE DIRECTION TO EXAMINE THIS ISSUE AFRESH BY ALLOWING OPPORTUNITY TO CROSS EXAMINE THE PERSONS ON WHOSE STATEMENTS THE AO HAS PLACED RELIANCE. WE MAKE IT CLEAR THAT TH E AO SHOULD DELETE THE ADDITION, IF THE OPPORTUNITY TO CROSS EXAMINE COULD NOT BE PROVIDED TO THE ASSESSEE. AFTER PROVIDING CROSS EXAMINATION, THE AO MAY TAKE APPROPRIATE DECISION IN ACCORDANCE WITH THE LAW. ON THE BASIS OF THE AFORESAID, IT IS SOUGHT TO BE CANVASSED THAT THE ADDITION ON THE BASIS OF WHICH THE PENALTY HAS BEEN LEVIED DOES NOT SURVIVE AND, THEREFORE, THE PENALTY OF RS.2,39,028/ - OUGHT TO BE DELETED. 4. THE AFORESAID FACTUAL MATRIX BROUGHT OUT BY THE LEARNED REPRESENTATIVE HAS NOT BEEN D ISPUTED BY THE RESPONDENT - REVENUE. 5. THE AFORESAID DISCUSSION CLEARLY BRINGS OUT THAT THE IMPUGNED PENALTY IS UNSUSTAINABLE BECAUSE THE UNDERLYING ADDITION ON ACCOUNT OF DISALLOWANCE OF DEPRECIATION ON ASSETS LEASED TO M/S. SHRI RANGA ALLOYS LTD. HAS BEE N SET - ASIDE BY THE TRIBUNAL VIDE ORDER DATED 28.11.2016 (SUPRA). AS A CONSEQUENCE, THE IMPUGNED PENALTY IS HEREBY DIRECTED TO BE DELETED. 4 KOTAK MAHINDRA BANK LTD. ITA NO. 665/MUM/2014 6. RESULTANTLY, THE APPEAL OF ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 1 2 T H APRIL, 2017. SD/ - SD/ - (RA VISH SOOD ) JUDICIAL MEMBER ( G.S. PANNU ) ACCOUNTANT MEMBER MUMBAI, DATE : 1 2 T H APRIL, 2017 * SSL * COPY TO : 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT(A) CONCERNED 4) THE CIT CONCERNED 5) THE D.R, A BENCH, MUMBAI 6) GUARD FILE BY ORDER DY./ASSTT. REGISTRAR I.T.A.T, MUMBAI