DDIT (E)-(1), MUMBAI V. MUMBAI PORT TRUST, MUMBAI

ITA 6754/MUM/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 9021 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-09-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 07-10-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRAVIN VARMA
• Assessee Lawyers: BHUMIKA VORA
• Keywords: Capital asset; Depreciation; Earning of tax free income; Tax effect; Capital expenditure
• Section: 11

Judgement Text

PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH B MUMBAI BEFORE SHRI D. MANMOHAN, VICE PRESIDENT & SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER I.T.A.NO.6754/MUM/2011 ASSESSMENT YEAR : 2008-09 ADIT (E)-I(1), MUMBAI. VS. MUMBAI PORT TRUST, PORT BHAVAN, SHOORJI VALLABHDAS MARG, BALLARD PIER, MUMBAI 400001. PAN: AAATM 5001 D (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI PRAVIN VARMA. RESPONDENT BY : MS. BHUMIKA VORA. DATE OF HEARING: 06-09-2012. DATE OF PRONOUNCEMENT: 14-09-2012. O R D E R PER D.KARUNAKARA RAO, AM: THIS APPEAL IS BY THE REVENUE AGAINST THE ORDER OF THE LD.CIT[A] DATED 15-7-2011. THE GROUNDS READ AS UNDER : 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) WAS RIGHT IN DIRECTING THE AO TO ALLOW T HE CLAIM OF DEPRECIATION RELYING ON THE DECISION OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. INSTITUTE OF BANKING PERSONN EL SERVICES REPORTED IN 264 ITR 110 (BOM) IGNORING THE RATIO OF HON'BLE SUPREME COURT JUDGMENT IN THE CASE OF ESCORTS LTD. VS. UNION OF I NDIA (199 ITR 43) WHEREIN HON'BLE SUPREME COURT HAS HELD THAT DOUBLE DEDUCTION CANNOT BE PRESUMED IF THE SAME IS NOT SPECIFICALLY PROVIDED BY LAW, IN ADDITION TO NORMAL DEDUCTION. 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) WAS RIGHT IN DIRECTING THE AO TO ALLOW T HE SET OFF OF DEFICIT OF EARLIER YEAR RELYING ON THE DECISION OF THE HON' BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. INSTITUTE OF INSTITUTE OF BANKING PERSONNEL SERVICES REPORTED IN 264 ITR 110 (BOM) WHILE THE RE VENUE DID NOT FILED SLP AGAINST THE CASE OF CIT VS. INSTITUTE OF INSTITUTE OF BANKING PERSONNEL SERVICES REPORTED IN 264 ITR 110 (BOM) DU E TO LOW TAX EFFECT. 2. AT THE OUTSET, REGARDING GROUND NO.1, LD. COUNSE L FOR THE ASSESSEE MENTIONED THAT THE AO DID NOT ALLOW THE CL AIM OF DEPRECIATION PAGE 2 OF 3 ON THE ASSETS ACQUIRED BY WAY OF APPLICATION OF EXE MPT INCOME OF THE TRUST AND THE CIT[A] ALLOWED THE SAID CLAIM OF DEPR ECIATION RELYING ON THE DECISION OF THE JURISDICTIONAL HIGH COURT IN TH E CASE OF CIT VS INSTITUTE OF BANKING (264 ITR 110) WHEREIN THE HON' BLE HIGH COURT ALLOWED THE CLAIM OF DEPRECIATION. DURING THE PROC EEDINGS BEFORE US LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE SAI D JUDGMENT IS BINDING AS THE SAME HAS NOT BEEN REVERSED OR STAYED BY THE HIGHER COURT TILL DATE. IT WAS ALSO MENTIONED THAT THE SAI D DECISION WAS TAKEN IN THE CONTEXT OF EXEMPT INCOME U/S 11 OF THE ACT A ND DEPRECIATION WAS INITIALLY DENIED BY THE REVENUE ON THE CAPITAL ASSET BY REASON OF DOUBLE DEDUCTION. THE HON'BLE HIGH COURT DID NOT EN TERTAIN THE SAID LOGIC AND GRANTED DEPRECIATION. 3. ON THE OTHER HAND, LD. DR RELIED ON THE JUDGMENT OF HON'BLE SUPREME COURT IN THE CASE OF ESCORTS LTD. VS. UOI ( 199 ITR 143) AND ALSO THE ORDER OF THE AO. 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL ON RECORD. IT IS NOTICE THAT THE JUDGEMENT IN THE CASE OF ESCORTS LTD. VS. UOI [SUPRA], RELIED ON BY THE LD. DR WAS NOT IN THE CONTEXT OF EXEMPT INCOME BUT WAS IN THE CONTEXT OF PROVISIONS OF SEC. 35 OF THE ACT. FURTHER WE HAVE PERUSED HE IMPUGNED ORDER OF THE CI T(A) AND RELEVANT PORTION OF THE LD.CIT[A]S ORDER IS EXTRAC TED HEREUNDER: I HAVE DULY CONSIDERED THE SUBMISSION OF THE APPE LLANTS A.R. THAT THE ISSUE IS COVERED BY THE DECISION IN THE CA SE OF CIT VS. INSTITUTE OF INSTITUTE OF BANKING PERSONNEL SERVICE S REPORTED IN 264 ITR 110 (BOM), WHEREIN THE HON'BLE HIGH COURT HAS A LLOWED THE CLAIM OF THE APPELLANT THAT DEPRECIATION IS ALLOWABLE EVE N THOUGH THE CAPITAL EXPENDITURE WAS ALREADY ALLOWED. THE DEPARTMENT MIG HT HAVE FILED SLP AGAINST THIS JUDGMENT IN SUPREME COURT. RESPECT FULLY FOLLOWING THE DECISION OF BOMBAY HIGH COURT REFERRED ABOVE, I DIRECT THE AO TO ALLOW THE CLAIM OF DEPRECIATION AMOUNTING TO RS. 65 ,10,56,943/-. 5. THUS, THE JUDGMENT OF THE HONBLE HIGH COURT IN T HE CASE OF INSTITUTE OF INSTITUTE 264 ITR 110 (SUPRA) IS DIRECTLY APPLICABLE TO THE PAGE 3 OF 3 FACTS OF THE PRESENT CASE UNLIKE THE CITED APEX COU RTS JUDGMENT WHICH WAS DECIDED IN THE CONTEXT OF THE PROVISIONS OF SEC TION 35 OF THE ACT. CONSIDERING THE ABOVE FACTS AND THE PRINCIPLES OF J UDICIAL DISCIPLINE ON APPLICABILITY OF THE BINDING JURISDICTIONAL HIGH CO URTS JUDGMENT SUPRA, WE ARE OF THE OPINION, THE ORDER OF LD.CIT[A] DOES NOT CALL FOR INTERFERENCE. ACCORDINGLY, GROUNDS RAISED BY THE RE VENUE ARE DISMISSED. 6. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 14 TH SEPTEMBER 2012. SD/- SD/- (D.MANMOHAN) (D.KARUNAKARA RAO) VICE PRESIDENT ACCOUNTANT MEMBER MUMBAI: 14 TH SEPTEMBER 2012. P/-*