M/S A T E PVT LTD., MUMBAI V. DY CIT CIRCLE- 2 (1)(1), MUMBAI

ITA 7859/MUM/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 6917 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-08-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 20-12-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BRAJENDRA KUMAR
• Keywords: Depreciation
• Section: 115JB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES A , MUMBAI BEFORE SHRI PRAMOD KUMAR , HONBLE VICE PRESIDENT AND SHRI SAKTIJIT DEY , HONBLE JUDICIAL MEMBER ITA NO. 7859/MUM/2019 ASSESSMENT Y EAR: 2008 - 09 M/S A.T.E. PRIVATE LIMI TED, 43, DR. V. B GANDHI MARG, FORT, MUMBAI - 400023 PAN: AAACA4481G VS. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 2 (1)(1), AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 400020 (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI HITESH JAIN (AR) REVENUE BY : SHRI BRAJENDRA KUMAR (DR ) DATE OF HEARING : 26 /07 /202 1 DATE OF PRONOUNCEMENT: 11 / 0 8 /202 1 O R D E R PER SAKTIJIT DEY , JM THIS IS AN AP PEAL BY THE ASSESSEE AGAINST ORDER DATED 09.10.2019 OF LEARNED COMMISSIO NER OF INCOME TAX (APPEALS) 4 , MUMBAI FO R THE ASSESSMENT YEAR 2008 - 09. 2. IN THE SOLITARY GROUND RAISED , THE ASSESSEE HAS CHALLENGED DISALLOWANCE OF DEDUCTION CLAIMED TOWARDS DEPRECIATION, REPAIRS, MAINTENANCE AND RATE S AND TAX AGGREGATING TO RS. 6,71,808/ - . 3. BRIEFLY THE FACTS ARE, THE ASSESSEE IS A RESIDENT COMPANY ENGAGED IN THE BUSINESS OF INVESTMENT AND FINANCING ACTIVITY. FOR THE ASSESSMENT YEAR UNDER DISPUTE, ASSESSEE FILED ITS RETURN OF INCOME ON 22.09.2008 DEC LARING TOTAL INCOME OF RS. 2,59,56,700/ - UNDER THE NORMAL PROVISION S AND BOOK PROFIT OF RS. 2,28,18,734/ - UNDER SECTION 115JB OF THE INCOME TAX ACT, 1961. FOR THE SAKE 2 IT A NO. 7859 / MUM/2019 ASSESSMENT YEAR: 2008 - 09 OF COMPLETENESS, WE MAY OBSERVE , ASSESSMENT IN CASE OF THE ASSES SEE WAS ORIGINALLY COMPL ETED UNDER SECTION 143 (3) OF THE ACT VIDE ORDER DATED 20.12.2010 DETERMINING TOTAL INCOME AT RS. 2,88,86,358/ - UNDER THE NORMAL PROVISIONS AND BOOK PROFIT OF RS. 3,19,84,501/ - UNDER SECTION 115JB OF THE ACT. AGAINST THE ASSESSMENT ORDER SO PASSED , THE ASS ESSEE WENT IN APPEAL BEFORE LEARNED COMMISSIONER (APPEALS) AND THEREAFTER BEFORE THE TRIBUNAL . V IDE ORDER 12.0 4.2017 IN ITA NO. 5959/MUM/2011 , THE TRIBUNAL GRANTED RELIEF ON SOME ISSUE S , WHEREAS , SOME OTHER ISSUES WERE RESTORED BACK TO THE AO FOR FRESH ADJ UDICATION. IN PURSUANCE TO THE DIRECTIONS OF THE TRIBUNAL, THE AO PASSED A FRESH ASSESSMENT ORDER MAKING CERTAIN ADDITIONS/DISALLOWANCES. A SSAILING THE ASSESSME NT ORDER, ASSESSEE PREFERRED APPEAL BEFORE LEARNED COMMISSIONER (APPEALS). LEARNED COMMISSIONER (APPEALS) GRANTED PARTIAL RELIEF TO THE ASSESSEE BY DELETING THE ADDITION OF RS. 1,51,075/ - , BEING UNDISCLOSED ROYALTY INCOME. W HEREAS , HE SUSTAINED THE DISALLOWANCE OF RS. 6,71,808/ - REPRESENTING EXPENSES RELATED TO RENTAL INCOME. 4. LEARNED AUTHORISED R EPRESENTATIVE OF THE ASSESSEE SUBMITTED , THE DEPRECIATION CLAIMED OF RS. 4,45,396/ - IS IN RELATION TO THE PROPERTY USED FOR THE PURPOSE OF BUSINESS. HE SUBMITTED , DEPRECIATION CLAIMED ON SUCH PROPERTY HAS BEEN ALLO WED IN THE EARLIER AS WELL AS SUBSEQUENT A SSESSMENT YEAR S . THUS, HE SUBMITTED, THERE IS NO REASON FOR DISALLOWING THE DEPRECIATION. AS REGARDS REPAIRS AND MAINTENAN CE EXPENSES OF RS. 1,51,125/ - . L EARNED COUNSEL SUBMITTED , THE ASSESSEE HAS ACTUALLY INCURRED SUCH EXPENDITURE FOR REPAIR AND MAINTENAN CE OF THE PREMISES USED FOR BUSINESS. HE SUBMITTED , ALL EVIDENCES RELATING TO SUCH EXPENDITURE WAS ALSO FURNISHED . T HEREFORE, THE DISALLOWANCE OF EXPENSES ALLEGING NON - FURNISHING OF EVIDENCES IS WITHOUT ANY BASIS. AS REGARDS RATES AND TAXES OF RS. 75,281/ - , HE SUBMITTED, THE ASSESSEE HAS INCURRED SUCH EXPENSES TOWARDS RATES AND TAXES ON PROPERTY USED FOR BUSINESS. HE SUBMITTED, SIMILAR EXPENDITURE INCURRED BY THE ASSESSEE IN SUBSEQUENT ASSESSMENT YEAR HAS BEEN ALLOWED. THUS, HE SUBMITTED, THERE IS NO REASON TO DISALLOW THE EXPENDITURE IN THE IMPUGNED ASSESSMENT YEAR. 3 IT A NO. 7859 / MUM/2019 ASSESSMENT YEAR: 2008 - 09 5. LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED , THE ASSESSEE HAS NOT FURNISHED ANY EVIDENCE IN SUPPORT OF THE EXPENDITURE CLAIMED EITHER BEFORE THE AO OR EVEN BEFORE THE LEARNED COMMISSIONER (APPEALS). THUS, HE SUBMITTED , THE DISALLOWANCE MADE SHOULD BE SUSTAIN ED . 6. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED THE MATERIALS ON RECORD. AS REGARDS THE CLAIM OF DEPRECIATION IS CONCERNED, THE DEPARTMENTAL AUTHORITIES HAVE DISALLOWED ASSESSEE S CLAIM ON THE GROUND THAT THE ASSESSEE CAN ONLY BE ALLOWED THE DEDUCTION S FROM RENTAL INCOME AS PROVIDED UNDER THE STATUTE. HOWEVER, ON PERUSAL OF MATERI ALS ON RECORD, WE FIND THAT THE PROPERTY ON WHICH THE ASSESSEE HAS CLAIMED DEPRECIATION IS DIFFERENT FROM THE PROPERTIES ON WHICH THE ASSESSEE HAS RECEIVED RENTAL INCOME. IT IS OBSERVED , THE PROPERTIES FROM WHICH THE ASSESSEE HAD DECLARED RENTAL INCOME ARE SITUA TED AT AHMEDABAD AND COIMBATORE. W HEREAS , DEPRECIATION HAS BEEN CLAIMED IN RESPECT OF A PROPER TY AT 3 RD AND 4 TH FLOOR V.V. GANDHI MARG, MUMBAI, WHICH ACCORDING TO THE ASSESSEE HAS EXCLUSIVELY BEEN USED FOR ITS BUSINESS. IT IS FURTHER OBSERVED , THE DEPRECI ATION CLAIMED BY THE ASSESSEE ON THE AFORESAID PROPERTY HAS BEEN ALLOWED IN EARLIER AS WELL AS SUBSEQUENT ASSESSMENT YEAR S. T HAT BEING THE CASE, WE ALLOW ASSESSEES CLAIM OF DEPRECIATION . 7. A S FAR AS EXPENDITURE O F RS. 1,51,125/ - IS CONCERNED, I T IS OBSERVED , THE SAID EXPENDITURE HAS BEEN INCURRED IN RESPECT OF THE PROPERTY AT DR. V.V. GANDHI MARG , MUMBAI USED FOR ASSESSEES BUSINESS. THUS, IT IS NOT IN RESPECT OF THE PROPERTIES FROM WHICH THE ASSESSEE HAS OFFERED RENTAL INCOME. EVEN , THE R ATES AND TAXES OF RS. 75,281/ - ARE IN RESPECT OF PROPERTY OTHER THAN THE PROPERTY FROM WHICH ASSESSEE HAS OFFE RED RENTAL INCOME. THUS, IN OUR VIEW, THE DEPARTMENTAL AUTHORITIES HAVE DISALLOWED THE ASSESSEES CL AIM OF DEDUCTION UNDER MISCONCEPTION OF FACTS. FURTHER, WE ARE ALSO OF THE VIEW THAT THE ALLEGATION OF THE DEPARTMENTAL AUTHORITIES THAT THE ASSESSEE HAS NO T FURNISHED DETAILS/EVIDENCES IN S UPPORT OF ITS CLAIM THAT SUCH EXPENDITURE RELATE TO PROPERTY WHICH HAVE BEEN RENTED OUT , IS INCORRECT . IN VIEW OF THE AFORESAID, WE ARE INCLINED TO DELETE THE DISALLOWANCE OF RS. 6,71,808/ - . GROUND IS ALLOWED. 8 . IN THE RESULT, APPEAL IS ALLOWED. 4 IT A NO. 7859 / MUM/2019 ASSESSMENT YEAR: 2008 - 09 ORDER PRONOUNCED IN THE OPEN COURT ON 11 TH AUGUST , 2021 . SD/ - SD/ - ( PRAMOD KUMAR ) VICE PRESIDENT (SAKTIJIT DEY) JUDICIAL MEMBER MUMBAI ; DATED: 11 / 08 /202 1 ALINDRA, PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI