DCIT CC-39, MUMBAI V. BRINKS ARYA INDIA P. LTD, MUMBAI

ITA 8455/MUM/2010

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1721 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 2 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-02-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 03-12-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: Y P TRIVEDI
• Keywords: Depreciation; Question of law
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI , ! '# $ $ $ $ '% &', ( '# ') BEFORE SHRI DINESH KUMAR AGARWAL, JM AND SHRI SANJAY ARORA, AM './ I.T.A. NO. 8455/MUM/2010 ( ! , -, ! , -, ! , -, ! , -, / / / / ASSESSMENT YEAR : 2007-08) DY. COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE - 39, ROOM NO. 32(1), GROUNDFLOOR, AAYAKAR BHAVAN M.K. ROAD, MUMBAI 400 020. / VS. M/S BRINKS ARYA INDIA PVT. LTD., INTERNATIONAL HOUSE, IST MARINE CROSS ROAD, CHURCHGATE, MUMBAI - 400020. #. ( './ PAN : AAACB3302R ( ./ / // / APPELLANT ) .. ( 01./ / RESPONDENT ) ./ 2 3 ' / APPELLANT BY : SHRI MOHIT JAIN 01./ 2 3 ' / RESPONDENT BY : SHRI Y.P. TRIVEDI & MS. USHA DALAL ' 2 4( / // / DATE OF HEARING : 07-02-2013 5&- 2 4( / DATE OF PRONOUNCEMENT : 15-02-2013 / O R D E R PER DINESH KUMAR AGARWAL, JM. : THIS APPEAL PREFERRED BY THE REVENUE IS DIRECTED AG AINST THE ORDER DTD. 18-10-2010 PASSED BY THE LD. CIT(A)- 41, MUMBAI FOR THE ASSESSMENT YEAR 2007-08. 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE AS SESSEE COMPANY IS ENGAGED IN THE BUSINESS OF SECURED TRANSPORTATION OF DIAMON D AND JEWELLERY, CASH, ITA NO.8455/MUM/2010 2 PRECIOUS METALS, ATM SERVICES AND SAFE DEPOSIT VAUL TS ETC. THE RETURN WAS FILED DECLARING TOTAL INCOME OF RS. 14,71,97,951/-. DURING THE COURSE OF ASSESSMENT PROCEEDING IT WAS OBSERVED BY THE A.O. T HAT THE ASSESSEE HAS CLAIMED DEPRECIATION ON MOTOR VEHICLES @ 30% WHEREA S AS PER NORMAL PROVISIONS, DEPRECIATION @ 15% IS ALLOWABLE TO THE ASSESSEE. ON BEING ASKED, IT WAS STATED THAT THE ASSESSEE HAS CLAIMED DEPREC IATION ON ARMOURED/SECURITY VANS @ 30% AMOUNTING TO RS. 67,22 ,156/- ON THE PLEA THAT IT IS ENGAGED IN THE BUSINESS OF SECURED TRANS PORTATION OF DIAMOND AND JEWELLERY, CASH, PRECIOUS METALS, ATM SERVICES AND SAFE DEPOSIT VAULTS ETC. FOR WHICH IT USES MOTOR LORRIES CUSTOMIZED AS ARMOURED/ SECURITY VANS AND FURTHER THAT THESE ARMOURED/SECURITY VANS ARE CUSTOMIZED MO TOR LORRIES WHICH ARE USED IN THE BUSINESS OF RUNNING THEM ON HIRE FOR TR ANSPORTATION OF VALUABLES; THUS DEPRECIATION THEREON IS ALLOWABLE @ 30% AS PER ITEM III (2) (II) OF APPENDIX 1 TO THE INCOME TAX RULES, 1962, BOTH ON THE OPENIN G WDV OF THE BLOCK AS WELL AS ADDITIONS MADE THERETO. THE ASSESSEE ALSO SUBMITTED A DETAILED REPLY VIDE LETTER DTD. 14/12/2009 WHICH IS ON SIMILAR LIN ES AS WAS DONE IN THE EARLIER ASSESSMENT YEARS. HOWEVER, THE A.O. AFTER RELYING O N CERTAIN DECISIONS ALLOWED THE DEPRECIATION ON SECURITY VAN AT 15% AS AGAINST THE CLAIM OF THE ASSESSEE AT 30% ON THE GROUND THAT THE ASSESSEE IS NOT ENGAGED IN THE BUSINESS OF RUNNING THE VEHICLES ON HIRE AND ACCORDINGLY DISALLOWED THE EXCESS CLAIM OF DEPRECIATION RS. 33,61,078/- AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE AND THEREBY COMPLETED THE ASSESSMENT AT AN INCOME OF RS. 15,05,59,030/- VIDE ASSESSMENT ORDER DTD. 24-12-200 9 PASSED U/S 143(3) OF ITA NO.8455/MUM/2010 3 THE ACT. ON APPEAL, THE LD. CIT(A) FOLLOWING THE T RIBUNAL ORDER IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEARS 2000-01 TO 2006-0 7, HOWEVER, ALLOWED THE CLAIM OF THE ASSESSEE. 3. BEING AGGRIEVED BY THE ORDER OF THE LD. CIT(A) T HE REVENUE IS IN APPEAL BEFORE US TAKING FOLLOWING GROUNDS OF APPEAL:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) WAS NOT CORRECT IN DIRECTING THE ASSESSING O FFICER TO ALLOW HIGHER RATE OF DEPRECIATION AT 30% ON SECURITY VANS. 2. THE APPELLANT PRAYS THAT THE ORDER OF COMMISSION ER OF INCOME-TAX (APPEAL) ON THE ABOVE GROUND BE SET ASIDE AND THAT THE ASSESSING OFFICER BE RESTORED. THE APPELLANT CRAVES LEAVE TO AMEND OR A LTER ANY GROUNDS OR ADD A NEW GROUND WHICH MAY BE NECESSARY. 4. AT THE TIME OF HEARING THE LEARNED D.R. SUPPORTS THE ORDER OF THE A.O. 5. ON THE OTHER HAND THE LD. COUNSEL FOR THE ASSESS EE, AT THE OUTSET, SUBMITS THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSM ENT YEARS 2001-02 TO 2006- 07. HE FURTHER SUBMITS THAT THE HONBLE JURISDICTI ONAL HIGH COURT IN CIT VS. M/S BRINKS ARYA INDIA PVT. LTD. VIDE JUDGMENT DTD. 29-3-2011 HAS UPHELD THE ORDER OF THE TRIBUNAL BY HOLDING THAT THE DECISION OF THE TRIBUNAL IS BASED ON THE FINDING OF FACT AND NO SUBSTANTIAL QUESTION OF LAW ARISE IN THESE APPEALS AND, HENCE, DISMISSED THE REVENUES APPEAL. HE FUR THER SUBMITS THAT THE HONBLE SUPREME COURT IN CIT VS. M/S BRINKS ARYA IN DIA PVT. LTD. VIDE JUDGMENT DTD. 5-12-2011 HAS ALSO DISMISSED THE SPEC IAL LEAVE PETITION FILED BY THE REVENUE. HE ALSO PLACED ON RECORD THE COPY OF THE SAID DECISIONS. HE, ITA NO.8455/MUM/2010 4 THEREFORE, SUBMITS THAT THE ORDER PASSED BY THE LD. CIT(A) ALLOWING THE RATE OF DEPRECIATION AT 30% AS AGAINST 15% ALLOWED BY THE A .O. BE UPHELD. 6. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE RIVAL PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE ARE OF THE OPINION THAT THE ISSUE INVOLVED IN THE PRESENT CASE IS NO MORE RES INTEGRA AND IS COVERED BY THE FOLLOWING DECISIONS:- 7. IN DCIT VS. M/S BRINKS ARYA INDIA PVT. LTD. IN ITA NO. 5086, 5278 & 7175/MUM/2005 FOR ASSESSMENT YEARS 2001-02 TO 2003- 04 ORDER DTD. 30-3- 2009 IT HAS BEEN HELD VIDE PARA 14 OF THE ORDER AS UNDER:- 14. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS O F THE RIVAL PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND T HAT THERE IS NO DISPUTE THAT THE MAIN OBJECTS OF THE ASSESSEE COMPANY ARE- [PAGE 7 OF CIT[A]S ORDER] : 1) TO ESTABLISH AND CARRY ON BUSINESS EITHER SOLELY OR IN PARTNERSHIP WITH OTHER FIRMS, COMPANIES OR CORPORATIONS OF PROT ECTING AND TRANSPORTING VALUABLES INCLUDING JEWELLERY, PRECIOU S METALS AND STONES, NEGOTIABLE AND NON-NEGOTIABLE INSTRUMENTS A ND SECURITIES, STOCKS BONDS, VALUABLE DOCUMENTS AND OBJECTIONS AND OTHER COMMODITIES FOR CUSTOMERS BY ARMORED CAR AND OTHER VEHICLES AND TO RENDER RELATED SERVICES ON ALL INTERNATIONAL AIR COURIER SHIPMENTS TO AND INDIA. 2) TO MANUFACTURE, REPAIR, BUY SELL, LEASE AND DEAL IN PROPERTY AND EQUIPMENT CONCERNING THE TRANSPORTATION OF VALUABLE S A DETAILED IN THE PRECEDING CLAUSE INCLUDING SAFES, CHEST AND CASH PROTECTORS. 3) TO PROVIDE SECURITY AND HANDLING SERVICES INCLUDIN G SERVICES RELATING TO CLEARING, FORWARDING, TRANSPORTATION, S AFE CUSTODY, TRAVEL HANDLING AND COIN PROCESSING. WE FURTHER FIND THAT IT IS ALSO NOT IN DISPUTE THAT THE MAJORITY OF THE ASSETS ARE RELATING TO TRANSPORT AND THE MAIN INCOME OF THE AS SESSEE COMPANY IS FROM FREIGHT AND RELATED CHARGES. UNDER ITEM [2][II] OF HEADING III PLANT AND MACHINERY OF APPENDIX I OF TABLE OF RATE OF DEPRECI ATION, THE HIGHER RATE OF DEPRECIATION IS ADMISSIBLE ON MOTOR BUSES, MOTOR LO RRIES AND MOTOR TAXIS USED IN A BUSINESS OF RUNNING THEM ON HIRE. IN CIT VS. G UPTA GLOBAL EXIM P. LTD [S.C] [SUPRA], THERE IS A CATEGORICAL FINDING OF TH E AO THAT THE ASSESSEE WAS ITA NO.8455/MUM/2010 5 OCCASIONALLY IN THE BUSINESS OF TRANSPORTATION AND MAINLY HE WAS IN THE BUSINESS OF IMPORTING TIMBER LONGS AND SELLING THEM IN INDIA. THEIR LORDSHIPS WHILE OBSERVING THAT THE USER OF THE SAME IN THE B USINESS OF THE ASSESSEE OF TRANSPORTATION IS THE TEST. HELD THAT MERELY BECAU SE THE INCOME FROM LETTING OF THE TRUCKS ON HIRE WAS INCLUDED IN THE BUSINESS INC OME, THE HIGHER RATE WOULD NOT APPLY. HOWEVER, THE MATTER WAS REMANDED FOR FRE SH DECISION TO THE COMMISSIONER [APPEALS] AS TO WHETHER THE ASSESSEE W AS IN THE BUSINESS OF RUNNING THE MOTOR BUSES ON HIRE. HOWEVER, IN THE CA SE BEFORE US, THE ASSESSEE HAS PROVED THAT IT HAS USED THE SECURITY VANS FOR T RANSPORTATION OF CASH VALUABLES ETC. IT IS NOT THE CASE OF THE REVENUE TH AT THE ASSESSEE HAS NOT USED THE SAID SECURITY VANS FOR ITS BUSINESS OF TRANSPOR TATION OF CASH, VALUABLES ETC., OR THE SAME HAS NOT BEEN USED MAINLY FOR BUSINESS O F THE ASSESSEE OF TRANSPORTATION OF CASH, VALUABLES ETC. IN THE AFORE SAID CASE IN CIT VS. GUPTA GLOBAL EXIM P. LTD., WHICH HAS ALSO BEEN CONSIDERED AND DISTINGUISHED IN CIT VS. M/S PARIKH PETROCHEMICALS AGENCIES PVT. LTD. [S UPRA], THE ASSESSEES MAIN BUSINESS WAS IMPORTING TIMBER LONGS AND SELLING THE M. WHEREAS IN THE CASE BEFORE US, THE ASSESSEE HAS PROVED THAT THE TRANSPO RTATION OF CASH AND VALUABLES WAS ITS MAIN BUSINESS. UNDER THE AFORESAI D FACTS AND CIRCUMSTANCES, THE DECISION RELIED ON BY THE LD.DR IN CIT VS. GUPT A GLOBAL EXIM P. LTD IS DISTINGUISHABLE AND NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. THAT BEING SO AND KEEPING IN VIEW THAT THE REVENUE HAS FAILED TO CONTROVERT THE FINDING OF THE LD. CIT[A], WE ARE OF THE VIEW THAT THE ASSESSE E IS ENTITLED TO CLAIM DEPRECIATION @ 40% AND ACCORDINGLY, WE ARE INCLINED TO UPHOLD THE FINDING OF THE LD. CIT[A] IN DIRECTING THE AO TO ALLOW DEPRECI ATION ON SECURITY VANS @ 40%. THE GROUND TAKEN BY THE REVENUE IS, THEREFORE, REJE CTED. 8. THE ABOVE ORDER OF THE TRIBUNAL HAS BEEN FOLLOWE D BY THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEARS 2004-0 5 TO 2006-07. 9. IN CIT VS. M/S BRINKS ARYA INDIA PVT. LTD. IN IN COME TAX APPEALS NO. 802 OF 2010 AND OTHERS VIDE JUDGMENT DTD. 29-03-201 1, THE HONBLE JURISDICTIONAL HIGH COURT HAS OBSERVED AND HELD AS UNDER:- WHETHER THE TRIBUNAL WAS JUSTIFIED IN HOLDING THAT THE ASSESSEE IS ENTITLED TO HIGHER DEPRECIATION AT 40% WHEN THE ASSESSEE WAS NO T ENGAGED IN THE BUSINESS OF GIVING THE VEHICLES IN HIRE, IS THE QUESTION RAI SED IN THESE APPEALS. THE TRIBUNAL HAS HELD THAT THE ASSESSEE HAS PROVED THAT THE SECURITY VANS HAVE BEEN USED FOR TRANSPORTATION OF CASH, VALUABLES BEL ONGING TO THE THIRD PARTIES AS THAT IS THE BUSINESS OF THE ASSESSEE. THIS FACT IS NOT DISPUTED. THUS, THE DECISION OF THE TRIBUNAL IS BASED ON FINDING OF FAC T AND NO SUBSTANTIAL QUESTION OF LAW ARISE IN THESE APPEALS. ALL THE APPEALS ARE DISMISSED WITH NO ORDER TO COSTS. ITA NO.8455/MUM/2010 6 10. IN CIT VS. M/S BRINKS ARYA INDIA PVT. LTD., THE HONBBLE SUPREME COURT VIDE ITS JUDGMENT DTD. 5-12-2011 HAS HELD AS UNDER :- DELAY CONDONED. THE SPECIAL LEAVE PETITIONS ARE DISMISSED. 11. R ESPECTFULLY FOLLOWING THE ABOVE AUTHORITATIVE PRONO UNCEMENTS, THE ORDER PASSED BY THE LD. CIT(A) ACCEPTING THE CLAIM OF THE ASSESSEE IS UPHELD. 12. IN THE RESULT, REVENUES APPEAL STANDS DISMISSE D. 6 47 %# 2 (6% 2 %4 89 ORDER PRONOUNCED IN THE OPEN COURT ON 15-02-2013. . 2 5&- ( 7 15-02-2013 & 2 @ SD/- SD/- (SANJAY ARORA) (DINE SH KUMAR AGARWAL) ( '# / ACCOUNTANT MEMBER ! '# / JUDICIAL MEMBER MUMBAI; DATED 15-02-2013. .!.'./ R.K. , SR. PS 2 0!4AB B-4 2 0!4AB B-4 2 0!4AB B-4 2 0!4AB B-4/ COPY OF THE ORDER FORWARDED TO : 1. ./ / THE APPELLANT 2. 01./ / THE RESPONDENT . 3. C () / THE CIT(A)- 41, MUMBAI 4. C / CIT - 4, MUMBAI 5. BF@ 0!4! , , / DR, ITAT, MUMBAI B BENCH 6. @G, H / GUARD FILE. '1B4 0!4 // TRUE COPY // ' ' ' ' / BY ORDER, I II I/ // /'8 % '8 % '8 % '8 % (DY./ASSTT. REGISTRAR) , , , , / ITAT, MUMBAI