MANOJ KUMAR PAWANKUMAR KEDIA, MUMBAI V. DCIT- 4(1), MUMBAI

ITA 7100/MUM/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 3391 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 5 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-06-2016
• Appeal Filed By: Assessee
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 05-12-2013
• Court: TRIBUNAL
• Department Lawyers: BHARTI SINGH
• Keywords: Depreciation; Revised return; Revenue expenditure
• Section: 143(3); 37(1); 37

Judgement Text

, , B, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B, MUMBAI BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER, AND SHRI ASHWANI TANEJA, ACCOUNTANT MEMBER ITA NO.7100/MUM/2013 ASSESSMENT YEAR: 2010-11 MA NOJ KUMAR PAWAN KUMAR KEDIA, 2B, JAI HIND ESTATE, 4 TH FLOOR, BLOCK NO.4, DR. A.M. ROAD, BHULESWAR (W) MUMBAI-400002 / VS. D CIT - 4 ( 1 ), AAYAKAR BHAVAN, MUMBAI-400020 (ASSESSEE ) (REVENUE) P.A. NO. ACCPK5701C / ASSESSEE BY SHRI J.P. BAIRAGRA (AR) / REVENUE BY SMT. BHARTI SINGH ( DR) / DATE OF HEARING : 18/05/2016 / DATE OF ORDER: 03/06 /2016 / O R D E R PER ASHWANI TANEJA (ACCOUNTANT MEMBER): THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS), MUMBAI-8 {(IN SHORT CIT(A)}, DATED 03.10.2013 PASSED AGAIN ST ASSESSMENT ORDER U/S 143(3) DATED 19.12.2012 FOR TH E ASSESSMENT YEAR 2010-11 ON THE FOLLOWING GROUNDS: MANOJ KUMAR PAWAN KUMAR KEDIA 2 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE OF REVENUE EXPENSES OF RS. 12,00,000/- AS CLAIMED BY THE APPELLANT BEFORE THE A.O. WHICH WAS PAID TOWARDS THE GRANT OF SUBLEASE RIGHTS AND THE RIGHTS OF SUITABLE ACCESS OF SURROUNDINGS FOR WINDMILL WITHOUT APPRECIATING THE FACTS OF THE CASE AND FURTHER ERRED IN HOLDING THAT THE APPELLANT HAS CLAIMED THE DEPRECIATION ON SUCH PAYMENTS TOWARDS SUB-LEASE RIGHTS. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE CIT(A) FAILED TO APPRECIATE THAT THE CLAIM FOR DEDUCTION OF THE SAID AMOUNT PAID WAS AN ADMISS IBLE CLAIM AS REVENUE EXPENDITURE AND COULD BE CLAIMED BEFORE THE CIT(A) WITHOUT FILING THE REVISED RETURN OF INCOME BEFORE THE ASSESSING OFFICER. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE CIT(A) OUGHT TO HAVE APPRECIATED THA T IT IS A SETTLED PRINCIPAL THAT IF THE CLAIM OF EXPENSE S IS ALLOWABLE AS REVENUE EXPENDITURE AS PER INCOME TAX ACT THE SAME OUGHT TO BE ALLOWED TO THE APPELLANT I N SPITE OF THE FACT THAT THE SAME IS CAPITALIZED IN T HE BOOKS OF ACCOUNTS AND OUGHT TO HAVE ALLOWED THE CLAIM OF THE APPELLANT. 4. THE APPELLANT CRAVES LEAVE TO ADD/ALTER/MODIFY A NY/ALL GROUNDS OF APPEAL. 2. DURING THE COURSE OF HEARING, ARGUMENTS WERE MADE B Y SHRI J.P. BAIRAGRA, AUTHORISED REPRESENTATIVE (AR) ON BEHALF OF THE ASSESSEE AND BY SMT. BHARTI SINGH, DEPARTMENTAL REPRESENTATIVE (DR) ON BEHALF OF THE REVENUE. 3. THE SOLITARY ISSUE RAISED IN THIS APPEAL IS WITH R EGARD TO DEDUCTION OF CLAIM OF THE ASSESSEE TOWARDS THE PAYM ENT OF RS.12,00,000/- BEING THE PAYMENT TOWARDS SUB-LEASE RIGHTS AND RIGHTS OF SUITABLE ACCESS OF SURROUNDINGS FOR W INDMILL, MANOJ KUMAR PAWAN KUMAR KEDIA 3 U/S 37(1) OF THE ACT, ON THE GROUND THAT SAID AMOUN T WAS NOT CLAIMED IN THE RETURN FILED BY THE ASSESSEE. 3.1. THE FACTS OF THE CASE AS NOTED BY THE LOWER AUTHOR ITIES ARE THE DURING THE YEAR UNDER CONSIDERATION, A PAYM ENT OF RS.12 LAKHS WAS MADE TO ONE M/S SUZLON GUJARAT WIND PARK LTD. BY THE ASSESSEE TOWARDS THE GRANT OF SUB- LEASE RIGHTS AND THE RIGHTS OF SUITABLE ACCESS OF SURROUN DINGS FOR WINDMILL LOCATED IN THE STATE OF RAJASTHAN, AND THE SAME WAS CAPITALIZED IN ITS BOOKS OF ACCOUNTS BY THE ASS ESSEE. BUT, SAID AMOUNT OF RS.12 LACS WAS CLAIMED IN THE R ETURN OF INCOME IN AY 2010-11, AS ALLOWABLE U/S 37 OF THE ACT. THIS CONTENTION OF THE ASSESSEE WAS NOT ACCEPTED BY THE AO IN VIEW OF THE HONBLE SUPREME COURT OF INDIA IN THE CASE OF GOETZ (INDIA) LTD. VS. CIT REPORTED IN 284 ITR 323. THEREFORE, THE CLAIM OF THE ASSESSEE THAT PAYMENT O F RS.12 LAKHS BE ALLOWED U/S 37 OF THE ACT WAS NOT ACCEPTED AND REJECTED ON THE GROUND THAT THE ASSESSEE HAS NOT FI LED REVISED RETURN TO CLAIM THE SAME. 3.2. BEING AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFO RE THE LD. CIT(A) AND REITERATED ITS STAND THAT THE CLAIM OF THE ASSESSEE WAS VALID THEREFORE, OUGHT TO HAVE BEEN AL LOWED BY THE AO. THE ASSESSEE SUBMITTED DOCUMENTARY EVIDENCE S IN SUPPORT OF ITS CLAIM BUT LD. CIT(A) HAS REJECTED TH E CLAIM OF THE ASSESSEE ON THE PRELIMINARY GROUND ITSELF AS WAS A CCEPTED BY THE AO, BUT WITHOUT FINDINGS ANYTHING WRONG IN THE CLAIM OF THE ASSESSEE ON MERITS, WITH FOLLOWING OBSERVATIONS : MANOJ KUMAR PAWAN KUMAR KEDIA 4 I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE, OBSERVATION OF THE ASSESSING OFFICER AND THE CONTEN TION OF THE APPELLANT. I AM IN AGREEMENT WITH THE OBSERVATI ON OF THE ASSESSING OFFICER THAT THE APPELLANT HAD NOT FI LED ANY REVISED RETURN TO RECTIFY THE MISTAKES. THE CASE LA W RELIED UPON BY THE APPELLANT TO SHOW THAT NEW CLAIMS CAN BE ADMITTED DURING APPELLATE PROCEEDINGS ARE OF NO HEL P TO THE APPELLANT AS IT IS NOT A NEW CLAIM AND THE APPELLAN T HAS CAPITALISED THE SUB-LEASE EXPENSES AS CAPITAL IN IT S BOOKS OF ACCOUNT AND CLAIMED DEPRECIATION THEREON, THEREF ORE, THE SAME CANNOT BE ALLOW AS REVENUE EXPENDITURE AT THE APPELLATE STAGE. THIS GROUND OF APPEAL IS THUS DISM ISSED. 3.3. BEING AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFO RE THE TRIBUNAL. DURING THE COURSE OF HEARING, IT HAS BEEN DEMONSTRATED BY THE LD. COUNSEL THAT NO DEPRECIATIO N WAS CLAIMED ON THE SAID PAYMENT AS WAS CLEAR FROM THE P ERUSAL OF DEPRECIATION CHART FILED ALONG WITH THE BALANCE SHE ET IN THE RETURN OF INCOME. IT WAS SHOWN FROM THE PROFIT AND LOSS ACCOUNT THAT NO LEASE RENT WAS CLAIMED. IN FACTS, A MOUNT OF LEASE RENT WAS INCLUDED IN THE FIXED ASSET SCHEDULE BUT NEITHER THE DEPRECIATION WAS CLAIMED ON THIS AMOUNT NOR THI S AMOUNT WAS CLAIMED IN THE PROFIT AND LOSS ACCOUNT AS AN EX PENSE. IT WAS SUBMITTED THAT THE CLAIM OF THE ASSESSEE WAS AL LOWABLE ON MERITS, BUT ONLY FOR THE REASON THAT A CLAIM WAS NO T MADE IN THE RETURN, IT HAS BEEN REJECTED BY THE LOWER AUTHO RITIES. IN SUPPORT OF HIS CLAIM, LD. COUNSEL RELIED UPON THE J UDGMENT OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT V. PRU THVI BROKERS & SHAREHOLDERS 349 ITR 336 (BOM). 3.4. PER CONTRA, LD. DR RELIED UPON THE ORDER OF THE LO WER AUTHORITIES. MANOJ KUMAR PAWAN KUMAR KEDIA 5 3.5. WE HAVE GONE THROUGH THE FACTS OF THIS CASE AND JUDGMENTS RELIED UPON BY THE LD. COUNSEL. IN OUR CO NSIDERED VIEW, VALID CLAIM OF THE ASSESSEE SHOULD NOT BE DEN IED. THE AO IS OBLIGED TO MAKE FAIR ASSESSMENT AS PER LAW; NO T AX SHOULD BE COLLECTED EXCEPT WITH THE AUTHORITY OF LAW. THE JUDGMENT OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. PR UTHVI BROKERS & SHAREHOLDERS 349 ITR 336 (BOM) IS CLEAR O N THIS ISSUE. THUS, WE ADMIT THE CLAIM OF THE ASSESSEE AND SEND IT BACK TO THE FILE OF THE AO TO BE EXAMINED ON ITS ME RITS, SINCE NONE OF THE LOWER AUTHORITIES HAD EXAMINED THE CLAI M ON ITS MERITS. THE ASSESSEE IS FREE TO SUBMIT DETAILS AND DOCUMENTS AS MAY BE CONSIDERED APPROPRIATE BY HIM AS PER LAW FOR WHICH AO SHALL GIVE ADEQUATE OPPORTUNITY OF HEARING AND S HALL DECIDE THE THIS ISSUE AFTER OBJECTIVELY TAKING INTO ACCOUN T ALL DETAILS AND DOCUMENTARY EVIDENCES. 4. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 3 RD JUNE, 2016. SD/- (MAHAVIR SINGH) SD/- (ASHWANI TANEJA) ! / JUDICIAL MEMBER '! / ACCOUNTANT MEMBER MUMBAI; DATED: 03/06/2016 CTX? P.S/. .. MANOJ KUMAR PAWAN KUMAR KEDIA 6 # $%&'&($ / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. !'# / THE RESPONDENT. 3. $# $# % ( ) / THE CIT, MUMBAI. 4. $# $# % / CIT(A)- , MUMBAI 5. ()* # !+ , $# # +- , / DR, ITAT, MUMBAI 6. *. / / GUARD FILE. / BY ORDER, '#( ! //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI