Tarika Agrotech India Ltd., New Delhi V. ITO, New Delhi

ITA 6748/DEL/2015

• Counselvise Citation: [2018] 122 COUNSELVISE.COM (IT) 5395 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 9 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-10-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Assessment Year: 2012-2013
• Appeal Filed On: 22-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K HAUTHANG
• Assessee Lawyers: B L GUPTA ITPAR
• Keywords: Business income; Depreciation; Business expenditure
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH: C: NEW DELHI) BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI ANADEE NATH MISSHRA, ACCOUNTANT MEMBER ITA NO:- 6748/DEL/2015 ( ASSESSMENT YEAR: 2012-13) TARIKA AGROTECH INDIA LTD., LG-1 & 3, R-23 NEHRU ENCLAVE NEW DELHI-110019. VS. ITO, WARD 25(1), NEW DELHI. PAN NO: AAACT6013B APPELLANT RESPONDENT ASSESSEE BY : SH. B.L GUPTA, ITP/AR REVENUE BY : SH. K. HAUTHANG, SR. DR, ORDER PER: ANADEE NATH MISSHRA, AM THIS APPEAL BY THE ASSESSEE IS FILED AGAINST THE ORD ER OF LD. CIT(A)-9, NEW DELHI, DATED 23.10.2015 FOR ASSESSMENT YEAR 2012-13 . IN THE ASSESSMENT ORDER DATED 16.01.2015 U/S 143(3) OF INCOME TAX ACT, 1961 (FOR SHORT, THE I.T. ACT); THE ASSESSING OFFICER DISALLOWED THE CLAIM OF BUSINE SS EXPENSES AMOUNTING TO TOTAL OF RS. 22,47,363/- AND ALSO FURTHER DISALLOWED ASSESSEES CLAIM OF ITA NO.-6748/DEL/2015. M/S TARIKA AGROTECH INDIA LTD. PAGE 2 OF 8 DEPRECIATION AMOUNTING TO RS. 9,68,237/-. THE ASSES SEE FILED APPEAL BEFORE THE LD. CIT(A), WHO, VIDE ORDER DATED 23.10.2015, CONFIRM ED THE ABOVE DISALLOWANCES, UPHOLDING THE VIEW OF THE ASSESSING OF FICER THAT THE ASSESSEE HAS NOT CARRIED OUT BUSINESS ACTIVITIES. THE LD. CIT(A) ALSO REJECTED THE ASSESSEES ALTERNATE CLAIM THAT THE EXPENSES WERE ALLOWABLE U/S 57(III) OF I.T. ACT. AGGRIEVED, THE ASSESSEE FILED THIS PRESENT APPEAL B EFORE THE INCOME TAX APPELLATE TRIBUNAL (ITAT) WITH THE FOLLOWING GROUNDS OF APPEAL:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) WAS INCORRECT AND UNJUSTIFIED IN I. CONFIRMING THE ADDITION OF RS. 22,47,363/- INCORREC TLY MADE BY THE AO. II. DISALLOWING THE CLAIM OF EXPENSES OF RS. 22,47,363/ - III. CONFIRMING THE DISALLOWANCE OF DEPRECIATION OF RS. 9,68,237/- BY OLDING THAT THERE WAS NO BUSINESS CARRIED ON BY THE ASSESSEE. IV. HOLDING THAT THE EXPENSES AND DEPRECIATION CANNOT B E ALLOWED IN THIS YEAR ONLY BECAUSE THERE WAS NO BUSINESS ACTIVITY DU RING THIS YEAR EVEN WHEN THE BUSINESS ACTIVITY DURING THIS YEAR EV EN WHEN THE BUSINESS HAD NOT CLOSED OF THE COMPANY WIND UP WHIC H CONTINUED TO BE IN EXISTENCE AS ALSO IN THE EARLIER. (2 ) AT THE TIME OF HEARING BEFORE US, THE APPELLANT FILED FOLLOWING WRITTEN SUBMISSIONS: I. THE ASSESSEE HAD EARNED GENERATOR HIRE CHARGES OF R S 1,02,000/-. THE ASSESSING OFFICER HELD THAT SUCH CHARGES SHOULD BE TREATED AS INCOME FROM OTHER SOURCES. BESIDES THE AO DISALLOWED THE DEPRECATION AS CLAIME D AS PER THE DEPRECATION ITA NO.-6748/DEL/2015. M/S TARIKA AGROTECH INDIA LTD. PAGE 3 OF 8 CHART. EXPENSES AS PER THE PROFIT AND LOSS ACCOUNT WERE ALSO DISALLOWED. IN THE FIRST APPEAL THE CIT(A) HAD CONFIRMED THE ORDER OF THE AO IN RESPECT OF THESE DISALLOWANCES. WE ARE IN APPEAL NOW BEFORE THE HON' BLE ITAT. II. EXACTLY SIMILAR POINT WAS INVOLVED IN FOR THE ASSES SMENT YEAR 2013-14 BEFORE THE CIT(A) WHERE ALSO THE ASSESSEE HAS DECLARED THE SAM E AMOUNT OF INCOME FROM GENERATOR HIRE CHARGES. THE CIT(A) HELD THAT IT WAS A BUSINESS INCOME. CIT(A) ALSO HELD THAT EXPENSES AS PER THE PROFIT AND LOSS ACCOUNT CLAIMED BY THE ASSESSEE WERE ALSO ALLOWABLE. DEPRECATION CLAIMED W AS ALSO ALLOWED. THERE IS NO FURTHER APPEAL BY THE REVENUE AGAIN THIS CIT(A) ORD ER. III. IN THE ASSESSMENT ORDER FOR THE YEAR 2014-15 THE A SSESSING OFFICER ALLOWED THE DEPRECIATION AS CLAIMED AS PER THE DEPRECIATION CHA RT. THE ASSESSING OFFICER ALSO ALLOWED THE EXPENSES AS CLAIMED IN PROFIT AND LOSS ACCOUNT. REFERENCE TO THE ITAT ORDER FOR THE ASSESSMENT YEAR 2001-02 AND 2002 -03 HAVE BEEN MADE IN THE ORDER OF THE CIT(A) FOR THE ASSESSMENT YEAR 201 3-14. IN THESE APPEALS THE HON'BLE TRIBUNAL HELD THAT INCOME FROM VEHICLE CHAR GES WAS ASSESSABLE FOR DEDUCTION ON ACCOUNT OF EXPENSES AS CLAIMED IN PROF IT AND LOSS ACCOUNT. DEPRECATION WAS ALSO ALLOWED. IN THE CIRCUMSTANCES IT IS SUBMITTED THAT APPEAL OF THE ASSESSEE MAY KINDLY BE ALLOWED. THE APPELLANT ALSO FILED A PAPER BOOK OF 27 PAGES CONTAINING FOLLOWING PARTICULARS: A) COPY OF CIT(A) ORDER FOR THE ASSESSMENT YEAR 20 13-14 B) COPY OF THE AO ORDER FOR THE ASSESSMENT YEAR 20 14-15 C) COPY OF THE RETURN FOR ASSESSMENT YEAR 2014-15 D) COPY OF THE ITAT ORDER FOR THE ASSESSMENT YEAR 2001-02 AND 2002-03. (2.1 ) AT THE TIME OF HEARING BEFORE US, THE LD. COU NSEL FOR ASSESSEE SUBMITTED THAT THE LD. CIT(A) HAD DECIDED THE IDENTICAL ISSUE S REGARDING ALLOWABILITY OF ITA NO.-6748/DEL/2015. M/S TARIKA AGROTECH INDIA LTD. PAGE 4 OF 8 BUSINESS EXPENSES AND REGARDING ALLOWABILITY OF DEPR ECIATION IN FAVOUR OF THE ASSESSEE FOR ASSESSMENT YEAR 2013-14; WHICH WAS ACCEP TED BY REVENUE AND NO APPEAL WAS FILED BY REVENUE. THE LD. COUNSEL FOR AS SESSEE FURTHER SUBMITTED THAT IN ASSESSMENT YEAR 2014-15, THE ASSESSING OFFI CER HIMSELF ALLOWED THE BUSINESS EXPENSES AS WELL AS DEPRECIATION ON THE AFO RESAID ISSUES. IT WAS FURTHER SUBMITTED BY THE LD. COUNSEL FOR ASSESSEE THAT THE DISPUTED ISSUES IN THE PRESENT APPEAL BEFORE US, IN ITAT, ARE SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY VIRTUE OF ORDER OF ITAT, DELHI BENCHES, DELHI IN ASS ESSEES OWN CASE FOR ASSESSMENT YEARS 2001-02 & 2002-03 VIDE CONSOLIDATE D ORDER DATED 29.08.2008 OF ITAT IN ITA NOS. 1808 & 1809/DEL/2006. THE LD. CO UNSEL FOR ASSESSEE FURTHER SUBMITTED THAT THE LD. CIT(A) HAD REFERRED TO THE AF ORESAID ITAT ORDER DATED 29.08.2008 IN DECIDING THE ASSESSEES APPEAL FOR AS SESSMENT YEAR 2013-14. HOWEVER, THE LD. CIT(A) HAS NOT FOLLOWED THE AFORESAID ITAT ORDER DATED 29.08.2008 IN DECIDING THE ASSESSEES APPEAL FOR TH IS YEAR I.E. FOR ASSESSMENT YEAR 2013-14. IN VIEW OF THESE SUBMISSIONS, THE LD. COUNSEL FOR ASSESSEE CONTENDED THAT THE ASSESSEES APPEAL SHOULD BE ALLO WED, BEING SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY AFORESAID ORDER DATED 29.08.2008 OF ITAT IN ASSESSEES OWN CASE. THE LD. DEPARTMENTAL REPRESENTA TIVE (DR, FOR SHORT) ON WHOSE REQUEST THE HEARING WAS ADJOURNED TO 03/10/2018 TO ENABLE HIM TO PERUSE ITA NO.-6748/DEL/2015. M/S TARIKA AGROTECH INDIA LTD. PAGE 5 OF 8 THE WRITTEN SUBMISSIONS AND PAPER BOOK FILED BY THE APPELLANT; RELIED ON THE ORDERS OF THE LOWER AUTHORITIES NAMELY AFORESAID ASS ESSMENT ORDER DATED 16.01.2015 AND AFORESAID ORDER DATED 23.10.2015 OF LD. CIT(A). HOWEVER, THE LD. DR FAILED TO DISTINGUISH THE FACTS OF THIS YEAR WITH FACTS OF ASSESSMENT YEAR 2014-15 IN WHICH REVENUE HAD ALLOWED ASSESSEES CLAI M FOR BUSINESS EXPENSES AND DEPRECIATION AND NO ADDITION WAS MADE BY THE ASS ESSING OFFICER ON THESE ISSUES. THE LD. DR ALSO FAILED TO DISTINGUISH FACTS OF THIS YEAR WITH THE FACTS OF ASSESSMENT YEAR 2013-14 IN WHICH THE LD. CIT(A) DELET ED THE ADDITIONS MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DISALLOWANCE OF BUSINESS EXPENSES AND DEPRECIATION IN ASSESSMENT YEAR 2013-14; AND REVENU E HAD ACCEPTED THE ORDER OF LD. CIT(A) AND DID NOT FILE ANY APPEAL IN A.Y. 20 13-14. THE LD. DR FURTHER FAILED TO DISTINGUISH THE FACTS OF THIS YEAR WITH TH E FACTS OF ASSESSMENT YEARS 2001-02 AND A.Y. 2002-03, IN WHICH; ITAT DISMISSED RE VENUES APPEAL AND ALLOWED THE ASSESSEES CLAIM FOR DEDUCTION ON ACCOUN T OF BUSINESS EXPENSES AND DEPRECIATION. WE FIND THAT THE ISSUES REGARDING ALL OWABILITY OF BUSINESS EXPENSES AND DEPRECIATION WERE DECIDED IN FAVOUR OF THE APPEL LANT BY THE ORDER OF ITAT IN ASSESSEES OWN CASE FOR A.YS. 2001-02 & 2002-03, VID E CONSOLIDATED ORDER DATED 29.08.2008 IN ITA NOS. 1808/DEL/2006 & 1809/DEL/200 6. AS THE LD. DR FAILED TO DISTINGUISH THE FACTS OF THIS YEAR WITH THE FACTS OF A.Y. 2001-02 & 2002-03 AND ITA NO.-6748/DEL/2015. M/S TARIKA AGROTECH INDIA LTD. PAGE 6 OF 8 FURTHER, AS THE LD. DR FAILED TO DISTINGUISH THE FA CTS OF THIS YEAR WITH FACTS OF ASSESSMENT YEAR 2014-15 IN WHICH NO SUCH ADDITIONS WERE MADE AND FURTHERMORE, AS THE LD. DR FAILED TO DISTINGUISH TH E FACTS OF THIS YEAR WITH FACTS OF A.Y. 2013-14, IN WHICH ORDER OF LD. CIT(A) DELETING THE DISALLOWANCES OF BUSINESS EXPENSES AND DEPRECIATION WAS ACCEPTED BY REVENUE; WE DELETE THE AFORESAID ADDITION OF RS. 22,47,363/- (ON ACCOUNT OF DISALLO WANCE OF BUSINESS EXPENSES) AND THE AFORESAID ADDITION OF RS. 9,68,237/- (ON AC COUNT OF DISALLOWANCE OF DEPRECIATION); RESPECTFULLY FOLLOWING THE ORDER OF I TAT WHEREIN CLAIM FOR BUSINESS EXPENSES AND DEPRECIATION WAS ACCEPTED IN ASSESSEES OWN CASE FOR ASSESSMENT YEARS 2001-02 & 2002-03 BY CONSOLIDATED ORDER DATED 29.08.2008 IN APPELLANTS OWN CASE IN ITA NOS. 1808 & 1809/DEL/2006. (3) IN THE RESULT, APPEAL OF THE ASSESSEE IS AL LOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 09/10/2018- SD/- SD/- (H.S. SIDHU) (ANADEE NATH MISSHRA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 09.10.2018 POOJA/- ITA NO.-6748/DEL/2015. M/S TARIKA AGROTECH INDIA LTD. PAGE 7 OF 8 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI ITA NO.-6748/DEL/2015. M/S TARIKA AGROTECH INDIA LTD. PAGE 8 OF 8 DATE OF DICTATION 3-8/10/2018 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 8.10.2018 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT 8.10.18 DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS 9.10.18 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT 9.10.18 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER