The DCITGNR Circle, Gandhinagar V. Gujarat Road & Infrastructure Co.Ltd., Ahmedabad

ITA 723/AHD/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 72905 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 10 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-02-2014
• Appeal Filed By: Department
• Bench Allotted: B
• Next Hearing Date: 03-02-2014
• Assessment Year: 2004-2005
• Appeal Filed On: 07-03-2011
• Court: TRIBUNAL
• Department Lawyers: O P VAISHNAV
• Assessee Lawyers: DILIP V LAKHANI
• Keywords: Depreciation; Business expenditure; Search and seizure
• Section: 143(3); 263

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD BEFORE SHRI N. S. SAINI, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER ITA NO. 723/AHD/2011 ASSESSMENT YEAR 2004-05 DY. CIT, GANDHINAGAR CIRCLE, GANDHINAGAR. VS. GUJARAT ROAD & INFRASTRUCTURE CO. LTD., AHMEDABAD. PAN: AABCG9747N (APPELLANT) (RESPONDENT) ITA NO. 724/AHD/2011 ASSESSMENT YEAR 2007-08 GUJARAT ROAD & INFRASTRUCTURE CO. LTD., AHMEDABAD. PAN: AABCG9747N VS. DY. CIT, GANDHINAGAR CIRCLE, GANDHINAGAR. (APPELLANT) (RESPONDENT) REVENUE BY : SH. O.P. VAISHNAV, SR. D.R. ASSESSEE(S) BY : SH. DILIP V. LAKHANI, AR / // / DATE OF HEARING : 03/02/2014 !' / DATE OF PRONOUNCEMENT : 06/02/2014 #$ #$ #$ #$/ // / O R D E R PER SHRI N.S. SAINI, ACCOUNTANT MEMBER: THESE ARE THE APPEALS FILED BY THE REVENUE AGAINST SEPARATE ORDERS OF THE CIT(A), GANDHINAGAR, AHMEDABAD, BOTH DATED 0 6.12.2010 FOR ASSESSMENT YEARS 2004-05 AND 2007-08. ITA NOS 723 & 724 OF 2011 GUJARAT ROAD & INFRASTRUCTURE CO. LTD., AHD VS. DCIT, GANDHINAGAR CIRCLE FOR A.Y. 2004-05 & 2007-08 - 2 - 2. IN BOTH THE APPEALS OF THE REVENUE, THE COMMON G ROUND OF APPEAL INVOLVED IS THAT THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION AMOUNTING TO RS 20,59,42,943/ - IN ASSESSMENT YEAR 2004-05 AND RS 30,65,94,229/- IN AS SESSMENT YEAR 2007-08. 3. THE BRIEF FACTS OF THE CASE IN ASSESSMENT YEAR 2 004-05 ARE THAT THE ASSESSING OFFICER PURSUANT TO THE ORDER PASSED U/S 143(3) READ WITH SECTION 263(3) OF INCOME TAX ACT 1961 ON 18.12.200 9 MADE DISALLOWANCE OF DEPRECIATION OF RS 14,67,30,505/- O N AHMEDABAD MEHSANA TOLL ROAD AND RS 5,92,12,438/- ON VADODARA HALOL TOLL ROAD THEREBY MAKING TOTAL DISALLOWANCE OF DEPRECIAT ION OF RS 20,59,42,943/-. 4. ON APPEAL, THE LD. CIT(A) DELETED THE DISALLOWAN CE ON THE GROUND THAT THE ASSESSEE FILED APPEAL AGAINST THE ORDER OF LD. CIT(A)-I, AHMEDABAD DATED 17.02.2009 CHALLENGING THE ORDER PA SSED U/S 263 OF INCOME TAX ACT, 1961. THE TRIBUNAL VIDE ORDER D ATED 12.02.2010 PASSED IN ITA NO. 1453/AHD/2008 QUASHED THE ORDER PASSED U/S 263 OF THE INCOME TAX ACT. THEREFORE TH E ORDER OF THE ASSESSING OFFICER APPEALED AGAINST DOES NOT SURVIVE . 5. THE LD. DR VERY FAIRLY CONCEDED THAT AS THE ORDE R PASSED U/S 263 OF THE ACT PASSED BY LD. CIT WAS QUASHED BY THE TRI BUNAL IN APPEAL FILED BY THE ASSESSEE, THE ORDER PASSED BY T HE ASSESSING OFFICER IN PURSUANCE OF SUCH ORDER OF THE LD. CIT D OES NOT SURVIVE. THEREFORE, THE APPEAL OF THE REVENUE IS DISMISSED. ITA NOS 723 & 724 OF 2011 GUJARAT ROAD & INFRASTRUCTURE CO. LTD., AHD VS. DCIT, GANDHINAGAR CIRCLE FOR A.Y. 2004-05 & 2007-08 - 3 - 6. IN ASSESSMENT YEAR 2007-08, THE BRIEF FACTS OF T HE CASE ARE THAT THE ASSESSING OFFICER IN AN ASSESSMENT MADE U/S 143(3) OF THE ACT VIDE ORDER DATED 27.11.2009 DISALLOWED THE CLAIM FO R DEPRECIATION CLAIMED BY THE ASSESSEE ON VADODARA HALOL TOLL ROAD AND AHMEDABAD MEHSANA TOLL ROAD AMOUNTING TO RS 30,65,9 4,229/-. 7. ON APPEAL, THE LD. CIT(A) VACATED THE DISALLOWAN CE BY FOLLOWING THE ORDER OF THE TRIBUNAL IN ITA NO. 1453/AHD/2008 ORDER DATED 12.02.2010 IN ASSESSMENT YEAR 2004-05 WHEREIN THE T RIBUNAL HELD AS UNDER: COMING TO THE ISSUE IN ITA NO. 1453/AHD/2008 FOR A SSESSMENT YEAR 2004-05 IS AS REGARD TO THE ORDER OF CIT DEALT WITH THE ISSUE OF ALLOWANCES OF EXPENSES ON ROAD OVERLAY AND RENEW AL EXPENSES. FOR THIS, THE ASSESSEE HAS RAISED GROUND NO. 11- 11) THE LEARNED COMMISSIONER OF INCOME TAX HAS DIRECTED THAT THE EXPENDITURE ON ROAD OVERLAY AND R ENEWAL EXPENSES SHOULD BE THOROUGHLY EXAMINED BY THE ASSES SING OFFICER. THE APPELLANT SUBMITS THAT NO SUCH EXPEND ITURE IS INCURRED OR CLAIMED BY THE APPELLANT IN AY 2004-05. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE APPELLA NT PRAYS THAT THE ORDER PASSED BY THE LEARNED COMMISSI ONER OF INCOME TAX IS BAD IN LAW AND AGAINST THE PROVISI ON OF SECTION 263 OF INCOME TAX ACT, 1961. THE APPELLANT PRAYS THAT THE ORDER PASSED U/S 263 MAY BE CANCELLED. ITA NOS 723 & 724 OF 2011 GUJARAT ROAD & INFRASTRUCTURE CO. LTD., AHD VS. DCIT, GANDHINAGAR CIRCLE FOR A.Y. 2004-05 & 2007-08 - 4 - 16. WE HAVE HEARD THE RIVAL CONTENTIONS AND GOING T HROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND FR OM THE ORDERS OF THE LOWER AUTHORITIES THAT THE ASSESSEE HAS INCU RRED EXPENDITURE UNDER THE HEAD ROAD OVERLAY AND RENEWAB LE EXPENSES. THE ASSESSING OFFICER WHILE FRAMING THE ASSESSMENT HAS ALLOWED THE ASSESSEE BUT THE CIT JUST FOR MAKIN G ROWING INQUIRIES HAS ALSO INCLUDED FOR REVISION U/S 263 OF THE ACT, WHILE ISSUING NOTICE. THE RELEVANT TEXT OF THE NOTICE U/ S 263 OF THE ACT, READS AS UNDER- 7. IT IS FURTHER NOTICED THAT THE A.O. HAS FAILED TO TAKE INTO ACCOUNT THE SIGNIFICANT ACCOUNTING POLICY IN RESPECT OF ROAD OVERLAY AND RENEWAL EXPENSES AS LAID DOWN IN THE AGREEMENT BUILD-OWN-OPERATE- TRANSFER BASIS, WHEREBY THE EXPENSES CLAIMED UNDER THE ROAD OVERLAY HAS NOT BEEN SCRUTINIZED. IN RESPONSE TO THIS QUERY, THE ASSESSEE REPLIED THA T THE EXPENDITURE UNDER THE HEAD ROAD OVERLAY AND RENEWAB LE EXPENSES, THE SAME HAS NOT BEEN CLAIMED IN A.Y. 200 4-05, RELEVANT TO PREVIOUS YEAR 01.04.2003 TO 30.09.2003. BUT IN ANY CASE IN OTHER YEARS, THE SAME WAS CLAIMED AS BUSINE SS EXPENDITURE AND THE ASSESSING OFFICER AFTER VERIFYI NG THE SAME HAS ALLOWED THE CLAIM OF ROAD OVERLAY AND RENEWABLE EXPENSES AS BUSINESS EXPENSES. WE FIND FROM THE RECORD THAT THE CIT HAS ONLY REQUIRED THE ASSESSING OFFICER TO VERIFY THE E XPENSES, WE ARE AFRAID WHETHER THE CIT HAS SUCH POWER OF VERIFICATI ON U/S 263 OF THE ACT OR NOT. WE FEEL THAT THE REVISION ORDER IN SUCH ITA NOS 723 & 724 OF 2011 GUJARAT ROAD & INFRASTRUCTURE CO. LTD., AHD VS. DCIT, GANDHINAGAR CIRCLE FOR A.Y. 2004-05 & 2007-08 - 5 - CIRCUMSTANCES IS UNWARRANTED. ACCORDINGLY, ASSESSE E SUCCEEDS ON THIS ISSUE. 18. IN THE RESULT, ASSESSEES APPEALS ARE ALLOWED . 8. THE LD. DR COULD NOT POINT OUT ANY SPECIFIC ERRO R IN THE ORDER OF THE LD. CIT(A). THE LD. CIT(A) HAS VACATED THE DIS ALLOWANCE BY FOLLOWING THE ORDER OF THE TRIBUNAL FOR ASSESSMENT YEAR 2004-05. THE LD. AR OF THE ASSESSEE HAS SUBMITTED THAT THE A SSETS ARE THE VERY SAME ASSETS ON WHICH DEPRECIATION WAS DISALLOW ED IN THE ASSESSMENT YEAR 2004-05 WHICH FACT HAS NOT BEEN DIS PUTED BY THE LD. DR. FURTHER, THE LD. DR HAS NOT BROUGHT ANY MA TERIAL ON RECORD TO SHOW THAT THE ORDER OF THE TRIBUNAL IN AS SESSMENT YEAR 2004-05 PASSED IN ITA NO. 1453/AHD/2008 DATED 12.02 .2010 WAS VARIED IN APPEAL BY ANY HIGHER FORUM. HENCE, WE DO NOT FIND ANY MERIT IN THIS APPEAL OF THE REVENUE WHICH IS HEREBY DISMISSED. 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE COURT ON THURSDAY, THE 06 TH FEBRUARY, 2014 AT AHMEDABAD. SD/- SD/- (KUL BHARAT) JUDICIAL MEMBER ( N.S. SAINI) ACCOUNTANT MEMBER AHMEDABAD; DATED 06/02/2014 GHANSHYAM MAURYA GHANSHYAM MAURYA GHANSHYAM MAURYA GHANSHYAM MAURYA, SR. P , SR. P , SR. P , SR. P. .. .S SS S. .. .