M/s rungta Project Ltd., Kolkata V. DCIT, Ranchi

ITA 80/RAN/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 2174 (ITAT-RANCHI)
• Duration Of Justice: 9 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-03-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 14-05-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DEEPAK ROSHAN
• Assessee Lawyers: S K PODDAR
• Keywords: Depreciation
• Section: 143(3); 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, RANCHI BEFORE SHRI SHAMIM YAHYA (AM) & SHRI PARTHA SARATHI CHAUDHURY (JM) I.T.A. NO. 80/RAN/2015 ASSESSMENT YEAR : 2009-2010 M/S. RUNGTA PROJECT LTD.,301, MANGALAM BUILDING, 24, HEMANT BASU SARANI, KOLKATA V S DCIT, CENTRAL CIRCLE-1, RANCHI PAN/GIR NO. : AABCR 4632 B (APPELLANT ) .. RESPONDENT APPELLANT BY : SHRI S.K.PODDAR, ADV RESPONDENT BY : SHRI DEEPAK ROSHAN DATE OF HEARING : 10-03-2016 DATE OF PRONOUNCEMENT : 10 - 3-2016 O R D E R PER PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER: THIS IS AN APPEAL FILED BY THE ASSESSEE ARISING FR OM THE ORDER OF THE LD CIT(A), RANCHI, DATED 20.3..2015, IN THE MATTER OF ASSESSME NT U/S.143(3) OF THE I.T.ACT, 1961, FOR THE ASSESSMENT YEAR 2009-2010. 2. GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE AS UNDER: 1. FOR THAT LD. CTT(A) WAS NOT JUSTIFIED IN NOT FOLLOWING THE ORDER OF HON'BLE INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCH FOR EARLIER Y EARS VIDE WHICH DEPRECIATION AT HIGHER RATE WAS ALLOWED ON DUMPERS, LOADERS, TIPPER S, EXCAVATORS USED FOR EARNING HIRE CHARGES FROM M/S CENTRAL COALFIELDS LTD FOR EXECUTI ON OF CONTRACT FOR TRANSPORTATION OF COAL FROM MINES TO DIFFERENT DESTINATIONS. 2. FOR THAT HON'BLE KOLKATA HIGH COURT CONFIRMED THE ORDER PASSED BY HON'BLE I.T.A.T. HOWEVER, LD. CIT(A) REVERSED THE ORDER TO SUGGEST T HAT THE VEHICLES WERE NOT GIVEN ON HIRE RATHER THEY WERE USED FOR EXECUTION OF OWN CON TRACT UNDERTAKEN WITH M/S CENTRAL COALFIELDS LTD. DECISION OF LD. CIT(A) IS ILLEGAL, UNJUSTIFIED, ARBITRARY AND WITHOUT ANY BASIS. 3. FOR THAT LD. CTT(A) WAS NOT JUSTIFIED IN CONFI RMING THE DISALLOWANCE OF TELEPHONE EXPENSES TO THE EXTENT OF RS.30,000/- FOR PERSONAL USE OF TELEPHONES BY THE DIRECTORS. THERE WAS NO ELEMENT OF PERSONAL USE AND NO DISALLO WANCE WAS CALLED FOR. TELEPHONES WERE USED IN OFFICE BY STAFF AND BY THE DIRECTORS F OR THE PURPOSES OF BUSINESS. 2 I.T.A. NO. 80/RAN/2015 ASSESSMENT YEAR : 2009-2010 4. FOR THAT SUBSCRIPTION PAID WAS FULLY VERIFIABL E AND WAS FOR THE PURPOSES OF BUSINESS, AS SUCH, LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE DISALLOWANCE OF RS.2,00,000/-. 5. FOR THAT LD. CIT(A) WAS NOT JUSTIFIED IN CONFI RMING THE DISALLOWANCE OF RS 1,00,000,- MADE OUT OF TRAVELING & CONVEYANCE EXPENSES CLAIMED BY THE APPELLANT. 6. FOR THAT DISALLOWANCE OF INTEREST AMOUNTING TO RS.2,32,462 /- PAID TO THE BANK ON THE GROUND THAT FUNDS WERE ADVANCED INTEREST FREE T O SISTER CONCERNS. THERE WAS NC LINK BETWEEN THE BORROWED FUNDS AND THE OLD ADVANCES FOR WHICH PRESUMED INTERES HAS BEEN DISALLOWED. FUNDS WERE BORROWED FROM BANK AGAI NST THE BILLS RAISED BY TB APPELLANT ON THE EMPLOYERS OR AGAINST FINANCING OF VEHICLES, DUMPERS, EXCAVATOR.NO BORROWED FUNDS WERE DIVERTED IN PAST AS INTEREST FR EE CONTRIBUTION TO OTHER SISTER CONCERN. 7. FOR THAT TOTAL AUTHORIZED CAPITAL AND RESERVE OF THE APPELLANT WAS MANY TIMES MORE THAN THE FUNDS ADVANCED AS SUCH NO DISALLOWANCE WAS CALLED FOR. 8. FOR THAT THE DISALLOWANCE OF VEHICLE EXPENSES AMOUNTING TO RS. 1,00,000/- FOR PERSONAL USE OF VEHICLES BY THE DIRECTOR IS UNJUSTI FIED, ILLEGAL AND INCORRECT. THE VEHICLES WERE USED FOR THE PURPOSES OF BUSINESS. THE WORK OF THE APPELLANT WAS IN REMOTE AREAS WHERE THE COLLIERIES ARE AND THE EMPLOYEES, STAFF A ND DIRECTORS HAVE TO TRAVEL TO DIFFERENT PLACES FOR EXECUTION OF THE CONTRACT WORK UNDERTAKEN. THERE WAS NO ELEMENT OF PERSONAL USE OF VEHICLES BY THE DIRECTORS, AS SUCH, NO DISALLOWANCE WAS CALLED FOR. 9. FOR THAT LD. CIT(A) WAS NOT JUSTIFIED IN CONFI RMING THE DISALLOWANCE OUT OF FOODING AND LODGING AT RS 1,00,000/-. 10. FOR THAT THE BOOK RESULT DISCLOSED BY THE APPEL LANT WAS ACCEPTED AS REASONABLE AND THERE WAS NO OCCASION OR REASON FOR MAKING DISALLOW ANCE OF DEPRECIATION AND OTHER EXPENSES. 11. FOR THAT LD. CIT(A) WAS NOT JUSTIFIED IN NOT FO LLOWING THE DECISION OF HON'BLE JHARKHAND HIGH COURT FOR CHARGING OF INTEREST U/S 2 34A AND 234B. THE ORDER OF HON'BLE JHARKHAND HIGH COURT IS BINDING AND INTEREST CAN ON LY BE CHARGED ON THE RETURNED INCOME. 12. FOR THAT THE ENTIRE RECEIPT OF THE APPELLANT WA S SUBJECT TO TDS, AS SUCH, APPELLANT WAS NOT LIABLE TO PAY ADVANCE TAX. AS SUCH, NO INTE REST U/S 234B AND 234C CAN BE CHARGED. THE LD. CIT(A) WAS NOT JUSTIFIED IN NOT CO NSIDERING THE SUBMISSIONS MADE BY THE APPELLANT. 13. FOR THAT OTHER GROUNDS IN DETAIL WILL BE ARGUED AT THE TIME OF HEARING. 3. FACTS IN BRIEF AS EMERGED FROM THE CORRESPONDING ASSESSMENT ORDER U/S.143(3) OF THE I.T.ACT DATED 30.12.2011 WERE THA T THE ASSESSEE IS ENGAGED IN THE BUSINESS OF TRANSPORTATION, MINING TRADING & CIVIL WORK. THE RETURN OF INCOME WAS E- FILED ON 30.9.2009 SHOWING TOTAL INCOME OF RS.9,39, 63,017/-. SUBSEQUENTLY, ASSESSMENT U/S. 143(3) OF THE ACT WAS COMPLETED ON 30.12.2011 AT A TOTAL INCOME OF RS.12,04,35,559/-, INTER ALIA, MAKING VARIOUS ADDIT IONS/DISALLOWANCES. IN FIRST APPEAL, 3 I.T.A. NO. 80/RAN/2015 ASSESSMENT YEAR : 2009-2010 THE LD CIT(A) PARTLY ALLOWED THE APPEAL. HENCE, TH E ASSESSEE HAS FILED APPEAL BEFORE THE TRIBUNAL. 4. GROUND NOS.1 AND 2 PERTAIN TO DISALLOWANCE OF DE PRECIATION CLAIMED ON HIGHER RATE. 5. AT THE TIME OF HEARING, LD COUNSEL FOR THE ASSES SEE SUBMITTED BEFORE US AN ORDER OF THE ITAT, KOLKATA DATED 13.10.2006 IN ITA NO.425/KOL/2006 AND ITA NO.190/KOL/2006 FOR THE ASSESSMENT YEAR 2002-03 IN ASSESSEES OWN CASE, WHEREIN, THE DEPRECIATION AT HIGHER RATE WAS ALLOWED. HE SU BMITTED THAT AGAINST THE DECISION OF THE ITAT, KOLKATA, THE DEPARTMENT HAD FILED APPE AL BEFORE THE HON'BLE KOLKATA. THE HON'BLE HIGH COURT HAS UPHELD THE ORDER OF THE TRIBUNAL VIDE ORDER DATED 28.3.2007 IN ITA NO.127 OF 2007. THEREFORE, HE URG ED BEFORE US TO ALLOW HIGHER RATE OF DEPRECIATION. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD OF THE CASE. WE HAVE ALSO PERUSED THE ORDER OF THE CO-ORDINATE B ENCH OF KOLKATA TRIBUNAL IN ASSESSEES OWN CASE CITED (SUPRA). WE OBSERVE THAT THE DUMPERS, LOADERS, TIPPERS, EXCAVATORS WERE USED FOR EXECUTION OF CONTRACT FOR TRANSPORTATION OF COAL FROM MINES TO DIFFERENT DESTINATION FROM M/S. CENTRAL COALFIEL DS LTD., AND, THEREFORE, THE ASSESSEE EARNED HIRE CHARGES. WE FIND THAT IN THAT ASSESSMENT YEAR, THE ASSESSING OFFICER HAD RESTRICTED THE DEPRECIATION TO 25% ON A LL THE TRANSPORT VEHICLES I.E. EXCAVATORS, LOADERS, TIPPERS AND DUMPERS. THOUGH T HE LD CIT(A) CONSIDERED THE TIPPERS AND DUMPERS AS COMMERCIAL VEHICLES ENTITLED FOR HIGHER RATE OF DEPRECIATION, AT THE SAME TIME, HE UPHELD THE ORDER OF THE ASSESS ING OFFICER IN RESTRICTING THE 4 I.T.A. NO. 80/RAN/2015 ASSESSMENT YEAR : 2009-2010 DEPRECIATION TO 25% ON EXCAVATORS AND LOADERS HOLDI NG THAT THESE WERE NOT COMMERCIAL VEHICLES. HOWEVER, THE TRIBUNAL HAS DIR ECTED THE REVENUE TO ALLOW HIGHER RATE OF DEPRECIATION ON EXCAVATORS AND LOADE RS. WE NOTED THAT THE ORDER OF THE TRIBUNAL HAS BEEN AFFIRMED BY THE HON'BLE KOLKA TA HIGH COURT. SINCE THE ISSUE UNDER CONSIDERATION IS SIMILAR, WE RESPECTFULLY FOL LOWING THE DECISION OF THE CO- ORDINATE BENCH OF KOLKATA TRIBUNAL, WHICH HAS BEEN UPHELD BY HON'BLE KOLAKATA HIGH COURT, (SUPRA) DIRECT THE REVENUE TO ALLOW HIGHER R ATE OF DEPRECIATION ON DUMPERS, LOADERS, TIPPERS, EXCAVATORS. HENCE, BOTH THE GROUNDS ARE ALLOWED. 7. GROUND NOS.3 TO 9 RELATES TO DISALLOWANCE OF VAR IOUS EXPENSES. 8. WITH REGARD TO THE ABOVE DISALLOWANCES, WE DO NO T FIND ANY INFIRMITY IN THE ORDER OF THE LD CIT(A) TO INTERFERE BECAUSE LD CIT( A) HAS RESTRICTED THE DISALLOWANCE AFTER TAKING INTO CONSIDERATION ALL THE RELEVANT MA TERIALS PLACED BEFORE HIM AND ALSO CONSIDERING THAT IN EARLIER YEARS, THE TRIBUNAL HAS CONFIRMED PART OF DISALLOWANCES. HENCE, WE UPHOLD THE FINDINGS OF LD CIT(A) IN RESPE CT OF ABOVE GROUNDS. 9. WITH REGARD TO GROUND NO.11, WE ARE OF THE VIEW THAT IN VIEW OF THE JUDGMENT OF HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF AJAY PRAKASH VERMA IN TAX APPEAL NO.38 OF 2010 ORDER DATED 25.7.2010, THE INTEREST C AN BE CHARGED ON THE RETURNED INCOME AND NOT ON THE ASSESSED INCOME. HENCE, WE U PHOLD THE GRIEVANCE OF THE ASSESSEE . 10. GROUND NO.12 IS AGAINST INTEREST U/S.234B AND 2 34C, WHICH IS CONSEQUENTIAL . 5 I.T.A. NO. 80/RAN/2015 ASSESSMENT YEAR : 2009-2010 11. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 10/3/ 2016 . SD/- SD/- (SHAMIM YAHYA) (PARTHASARATHI CHAUDHURY) ACCOUNTANT MEMBER JUDICIAL MEMBER RANCHI , DATED 10 / 03/2016 PARIDA , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT : M/S. RUNGTA PROJECT LTD.,301, MANGALAM BUILDING, 24, HEMANT BASU SARANI, KOLKATA 2. THE RESPONDENT: DCIT, CENTRAL CIRCLE-1, RANCHI 3. THE CIT(A)-PATNA 4. CIT , CONCERNED. 5. DR, ITAT, RANCHI 6. GUARD FILE. BY ORDER, //TRUE COPY// SR.PRIVATE SECRETARY ITAT, RANCHI