SUBAHU INVESTMENTS LTD, MUMBAI V. ACIT (OSD) CITY-2, MUMBAI

ITA 6699/MUM/2010

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 9358 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 2 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-12-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Next Hearing Date: 03-12-2012
• Assessment Year: 1998-1999
• Appeal Filed On: 20-09-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: V KRISHNAMOORTHY
• Assessee Lawyers: G P MEHTA
• Keywords: Depreciation
• Section: 143(3); 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH E, MUMBAI BEFORE SHRI I.P.BANSAL,JUDICIAL MEMBER & SHRI SANJAY ARORA, ACCOUNTANT MEMBER ITA NO. 6698/MUM/2010(A.Y. 1997-98) ITA NO.6699/MUM/2010(A.Y.1998-99) M/S. SUBAHU INVESTMENTS LTD., C/O.G.P.MEHTA & CO., CAS, 807, TULSIANI CHAMBERS, 212, NARIMAN POINT, MUMBAI - 400 021. PAN:AAFCS 2862L (APPELLANT) VS. THE ACIT (OSD), CITY-2, MUMBAI. (RESPONDENT) APPELLANT BY : SHRI G.P>MEHTA RESPONDENT BY : SHRI V.KRISHNAMOORTHY DATE OF HEARING : 03/12/2012 DATE OF PRONOUNCEMENT : 0 3 /12/2012 ORDER PER I.P.BANSAL, J.M BOTH THESE APPEALS ARE FILED BY THE ASSESSEE. TH EY ARE DIRECTED AGAINST A CONSOLIDATED ORDER PASSED BY LD. CIT(A)-6, MUMBAI D ATED 13/07/2010 FOR ASSESSMENT YEARS 1997-98 AND 1998-99. GROUNDS OF APPEAL FOR BOTH APPEALS ARE IDENTICAL EXCEPT DIFFERENCE IN FIGURES. GROUNDS OF APPEAL FOR A.Y. 1997-98 READ AS UNDER:- 1. THE ORDERS PASSED BY THE LEARNED LOWER AUTHORI TIES ARE BAD IN LAW AND BAD IN FACTS. 2. THE LEARNED LOWER AUTHORITIES HAVE GROSSLY EARED IN DISALLOWING DEPRECIATION CLAIM AT RS.9,39,372/-. REASONS ASSIG NED FOR THE IMPUGNED DISALLOWANCE ARE WRONG AND CONTRARY TO THE EVIDENCE ON RECORD. 3. HAVING REGARDING TO THE FACTS OF THE CASE, PROV ISIONS OF LAW AND JUDICIAL PROPOSITIONS, THE DEPRECIATION CLAIMED OUGHT TO HAV E BEEN ALLOWED, AS THE SAME HAS BEEN ALLOWED IN THE PRECEDING ASSESSMENT Y EARS. ITA NO. 6698/MUM/2010(A.Y. 1997-98) ITA NO.6699/MUM/2010(A.Y.1998-99) 2 4. THE APPELLANT MAY PLEASE BE PERMITTED TO RAISE ANY ADDITIONAL OR ALTERNATIVE GROUND ON OR BEFORE THE HEARING OF APPE AL. THE FIGURE FOR A.Y 1998-99 IS A SUM OF RS.8,45,019/ -. 2. THE IMPUGNED ASSESSMENT IS FRAMED BY THE AO VIDE ORDER DATED 7/12/2007 PASSED UNDER SECTION 144 / 254 OF THE INCOME TAX AC T, 1961 (THE ACT). THE CLAIM FOR DEPRECIATION WAS REJECTED BY AO IN THE ORIGINAL ASSESSMENT ORDER DATED 30/03/2000 ON THE GROUND THAT VISIT BY THE DEPARTME NTAL AUTHORITY REVEALED THAT THE FURNITURE AND FITTINGS AVAILABLE AT THE SITE C OULD NOT BE TO THE TUNE OF RS. 1,68,36,824/-, UPON WHICH DEPRECIATION WAS CLAIMED. HENCE, DISALLOWANCE FOR BOTH THE ASSESSMENT YEARS WAS MADE. THE MATTER WAS RESTORED BACK TO THE FILE OF AO BY THE ITAT VIDE ORDER DATED 18/7/2006 AND IN PU RSUANCE OF SUCH ORDER OF ITAT THE IMPUGNED ASSESSMENT HAS BEEN FRAMED. IT I S WRITTEN IN THE ASSESSMENT ORDER THAT DURING THE COURSE OF IMPUGNED PROCEEDING S ALSO THE ASSESSEE COULD NOT FURNISH PROOF OF PURCHASE / COST OF THE FIXED ASSE TS DESPITE OPPORTUNITIES GIVEN TO THE ASSESSEE. IN THESE CIRCUMSTANCES THE AO AGREED WITH THE VIEW EARLIER TAKEN BY THE AO AND REPEATED THE ADDITION. THE ADDITION WAS AGITATED IN AN APPEAL FILED BEFORE LD. CIT(A). IT WAS SUBMITTED THAT DURING TH E YEARS UNDER CONSIDERATION NO ADDITION WHATSOEVER WAS MADE TO THE ASSETS. IT WAS SUBMITTED THAT IN FACT NO ADDITION HAS BEEN MADE TO THE FIXED ASSETS AFTER 31/3/1992 AND THUS DEPRECIATION WAS CHARGED ON YEAR TO YEAR BASIS. TH E ASSESSEE SUBMITTED THE COPIES OF ORDERS PASSED UNDER SECTION 143(3) R.W.S. 147 OF THE ACT IN RESPECT OF ASSESSMENT YEAR 1995-96 AND 96-97 TO SHOW THAT DEPR ECIATION WAS DULY ALLOWED FOR THOSE YEARS AND THERE WAS NO ADDITION TO FIXED ASSETS AFTER 1/4/1992 AND THUS IT WAS PLEADED THAT NO DISALLOWANCE COULD BE MADE. LD. CIT(A) REJECTED SUCH SUBMISSION OF THE ASSESSEE ON THE GROUND THAT DURI NG THE COURSE OF ASSESSMENT PROCEEDINGS FOR A.Y 1995-96 AND 1996-97 THE ISSUE R EGARDING THE ADDITION TO FIXED ASSETS OR DEPRECIATION WAS NOT CONSIDERED / ADJUDIC ATED UPON AND ONLY RETURNED LOSS WAS CONSIDERED FOR COMPUTATION OF INCOME BY TH E A.O. THERE BEING NO DISCUSSION IN THE ASSESSMENT ORDER OR APPLICATION O F MIND WITH REFERENCE TO ITA NO. 6698/MUM/2010(A.Y. 1997-98) ITA NO.6699/MUM/2010(A.Y.1998-99) 3 ADDITION TO FIXED ASSETS OR DEPRECIATION THE DISALL OWANCE COULD BE MADE. LD. CIT(A) HAS FURTHER NOTED THAT ASSESSEE DID NOT PRODUCE EV IDENCE REGARDING PURCHASE OF IMPUGNED FIXED ASSETS DESPITE OPPORTUNITY GIVEN BY THE AO AND THE VISIT OF THE AO TO THE PREMISES OF THE ASSESSEE ALSO SUPPORT SUCH C ONCLUSION AND IN THIS MANNER LD. CIT(A) HAS UPHELD THE DISALLOWANCE. THE ASSESS EE IS AGGRIEVED, HENCE, IN APPEAL. 3. AFTER NARRATING THE FACTS IT WAS SUBMITTED BY LD . AR THAT ALL DETAILS ARE AVAILABLE WITH THE ASSESSEE AND THESE ARE FILED IN THE PAPER BOOK. HE SUBMITTED THAT THE MAJOR PORTION OF FIXED ASSETS WAS IN FINAN CIAL YEAR 1989-90. HE IN THIS REGARD DREW OUR ATTENTION TOWARDS PAGE-4 OF THE P APER BOOK ON WHICH THE DETAILS OF FURNITURE AND FIXTURES AS WELL AS EXPENDITURE INCURRED BY THE ASSESSEE IN FINANCIAL YEAR 1989-90 IS ATTACHED WITH LETTER REFE RRED TO LD. CIT(A) DATED 13/7/2010. HE SUBMITTED THAT IN THE SAID DETAILS NAME OF ALL THE PARTIES ARE MENTIONED FROM WHOM THE ASSESSEE HAS PURCHASED FUR NITURE AND FIXTURES. HE SUBMITTED THAT SIMILAR DETAILS IS ALSO FILED IN RESPECT OF FINANCIAL YEAR 1990-91 AND 1991-92. HE SUBMITTED THAT ALL THE BILLS AND VOUCHERS ARE AVAILABLE WITH THE ASSESSEE AND THE CLAIM OF THE ASSESSEE HAS BEEN REJ ECTED WITHOUT APPRECIATING FULL FACTS OF THE CASE. HE SUBMITTED THAT FOR A.Y 1995- 96 AND 1996-97 THE ASSESSMENT ORDERS ARE PASSED UNDER SECTION 143(3) R.W.S. 147 OF THE ACT AND DEPRECIATION CLAIM OF THE ASSESSEE HAS BEEN ACCEPTED. THERE BEI NG NO ADDITION TO THE FIXED ASSETS, THE DEPRECIATION FOR THE IMPUGNED YEARS CAN NOT BE DISALLOWED. HE FURTHER SUBMITTED THAT SO FAR AS IT RELATES TO THE VERIFICA TION OF PURCHASE BILLS ETC. THE ASSESSEE HAS TRACED OUT ALL BILLS AND IS READY TO GO BEFORE AO FOR VERIFICATION THEREOF. THEREFORE, HE SUBMITTED THAT THE MATTER MAY BE RESTORED BACK TO THE FILE OF AO FOR VERIFICATION OF THE CLAIM OF THE ASSESSEE . 4. ON THE OTHER HAND, LD. DR RELIED UPON THE ORDERS PASSED BY AO AND LD. CIT(A). ITA NO. 6698/MUM/2010(A.Y. 1997-98) ITA NO.6699/MUM/2010(A.Y.1998-99) 4 5. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS IN THE LIGHT OF THE MATERIAL PLACED BEFORE US. WE HAVE ALSO CAREFU LLY GONE THROUGH THE ASSESSMENT ORDERS PASSED UNDER SECTION 143(3) OF THE ACT IN RE SPECT OF A.Y 1995-96 AND 1996- 97. THE CLAIM OF THE ASSESSEE REGARDING DEPRECIAT ION HAS NOT BEEN REJECTED IN THOSE YEARS. WE HAVE ALSO GONE THROUGH DETAILS FIL ED BY THE ASSESSEE IN RESPECT OF FIXED ASSETS STARTING FROM FINANCIAL YEAR 1989-90 A ND FOUND THAT NO ADDITION HAS BEEN MADE BY THE ASSESSEE IN THE FIXED ASSETS FROM 1993-94 ONWARDS. THE ASSESSEE IS ALSO READY TO PRODUCE BILLS OF FIXED A SSETS. LOOKING INTO THE ENTIRETY OF THESE FACTS, WE CONSIDER IT JUST AND PROPER TO RESTORE THIS ISSUE TO THE FILE OF AO WITH A DIRECTION TO VERIFY THE CLAIM OF THE ASSESSE E AS THE ASSESSEE IS READY TO PRODUCE PURCHASE BILLS OF THE FIXED ASSETS. WE ARE AWARE OF THE FACT THAT WE ARE RESTORING IT TO THE AO FOR SECOND TIME BUT KEEPING IN VIEW THE PECULIAR FACTS OF THE PRESENT CASE AND ALSO KEEPING IN VIEW THE INTERES T OF JUSTICE WE RESTORE THIS ISSUE TO THE FILE OF AO FOR DENOVO CONSIDERATION. WE DIR ECT ACCORDINGLY. THE APPEALS FILED BY THE ASSESSEE ARE CONSIDERED TO BE ALLOWED FOR ST ATISTICAL PURPOSES. 6. IN THE RESULT, APPEALS FILED BY THE ASSESSEE AR E ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THE 3 RD DAY OF DEC. 2012 SD/- SD/- (SANJAY ARORA ) (I.P.BANSAL) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED 3 RD DEC. 2012 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CITY CONCERNED 4. THE CIT(A)- CONCERNED 5. THE D.R E BENCH. (TRUE COPY) BY ORDER ASST. REGISTRAR, I TAT, MUMBAI BENCHES MUMBAI. VM.