WALLFORT FINANCIAL SERVICES LTD, MUMBAI V. ACIT 4(2), MUMBAI

ITA 8726/MUM/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 9148 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-12-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2000-2001
• Appeal Filed On: 26-12-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation; Revenue expenditure
• Section: 37

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH G , MUMBAI BEFORE SHRI RAJENDRA SINGH, ACCOUNTANT MEMBER AND SHRI VIVEK VARMA, JUDICIAL MEMBER ITA NO. 8725/MUM/2011 ASSESSMENT YEAR : 2001-02 ITA NO. 8726/MUM/2011 ASSESSMENT YEAR : 2000-01 WALLFORT FINANCIAL SERVICES LTD. 205, GUNDECHA CHAMBERS NAGINDAS MASTER ROAD FORT MUMBAI-400 001. PAN NO. AAACW 0617 L VS. INCOME TAX OFFICER WARD 4(2)(1) AAYAKAR BHAVAN MUMBAI. (APPELLANT) (RESPONDENT) APPELLANT BY : NONE RESPONDENT BY : SHRI MOHIT JAIN DATE OF HEARING : 13.12.2012 DATE OF PRONOUNCEMENT : 13.12.2012 O R D E R PER RAJENDRA SINGH, AM: THESE APPEALS BY THE ASSESSEE ARE DIRECTED AGAINST COMMON ORDER DATED 19.11.2011 OF CIT(A) FOR THE ASSESSMENT YEA RS 2000-01 AND 2001-02. AS DISPUTE RAISED IN THESE APPEALS IS IDENTI CAL, THESE APPEALS ARE BEING DISPOSED OF BY A SINGLE CONSOLIDATED OR DER FOR SALE OF CONVENIENCE. THE COMMON DISPUTE IS REGARDING ALLOWING DEPRECIATION ON BSE CARD. ITA NO.8725 & 26/M/11 A.Y. 00-01 & 01-02 2 2. FACTS IN BRIEF ARE THAT THE ASSESSEE HAD CLAIMED DEPRECI ATION OF RS.27,68,750/- AND RS.48,45,312/- ON BSE CARD IN ASSESSME NT YEAR 2000-01 AND 2001-02. THE AO DISALLOWED THE CLAIM OF D EPRECIATION ON THE GROUND THAT BSE CARD WAS NOT A DEPRECIABLE ASSET WHI CH WAS CONFIRMED BY CIT(A). IN FURTHER APPEAL, THE TRIBUNAL VIDE ORDER DATED 20.12.2005 IN ITA NO.2308/M/04 AND 8019/M/03 CONFIRM ED THE DISALLOWANCE OF DEPRECIATION BUT SET ASIDE THE MATTER TO THE FILE OF CIT(A) FOR CONSIDERING THE ALTERNATE PRAYER OF THE AS SESSEE THAT EXPENDITURE SHOULD BE ALLOWED AS REVENUE EXPENDITURE U/S. 37 OF THE ACT. IN THE MEANTIME, THE JUDGMENT OF THE HON'BLE SUP REME COURT IN THE CASE OF TECHNO SHARES AND STOCKS LTD. VS. CIT (SC) ( 327 ITR 323) HAD BEEN DELIVERED AS PER WHICH THE CLAIM OF DEPRECIAT ION WAS ALLOWABLE ON BSE CARD. THE ASSESSEE THEREFORE RAISED AN ADDITIONAL GROUND BEFORE CIT(A) THAT CLAIM SHOULD BE ALLOWED FO LLOWING THE JUDGMENT OF HON'BLE SUPREME COURT (SUPRA). CIT(A) HO WEVER HELD THAT HE COULD CONSIDER ONLY ALTERNATE CLAIM OF ALLOWABILITY UNDER SECTION 37 OF THE ACT FOR WHICH MATTER HAD BEEN RESTORED TO HIM . HE HELD THAT EXPENDITURE INCURRED ON ACQUISITION OF BSE CARD WAS NOT ALLOWABLE AS REVENUE EXPENDITURE UNDER SECTION 37 BUT DID NOT ALLO W THE ADDITIONAL GROUND REGARDING DEPRECIATION. AGGRIEVED BY THE SAID DECISION, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 3. AT THE TIME OF HEARING OF THE APPEAL, NO ONE APP EARED ON BEHALF OF THE ASSESSEE TO REPRESENT THE CLAIM. THE BENCH HOWEVER PROCEEDED TO DECIDE THE ISSUE AS THE SAME WAS COVERED BY THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF TECHNO SHARES AND STOCKS LT D.(SUPRA). THE TRIBUNAL IN THE FIRST ROUND HAD DECIDED THE ISSUE O F ALLOWABILITY OF DEPRECIATION AGAINST THE ASSESSEE AND RESTORED THE ISSUE OF EXPENDITURE UNDER SECTION 37 TO CIT(A). CIT(A), THERE FORE, HAD ITA NO.8725 & 26/M/11 A.Y. 00-01 & 01-02 3 LIMITED JURISDICTION TO CONSIDER ALLOWABILITY UNDER SE CTION 37. TECHNICALLY. CIT(A) WAS CORRECT IN NOT CONSIDERING THE DEPRECIATION ISSUE. HOWEVER, IN OUR VIEW, SINCE THE ISSUE IS NOW SETTLE D BY THE JUDGMENT OF APEX COURT AND, THEREFORE, WHEN PROCEEDI NGS ARE PENDING RELATING TO THE ALLOWABILITY OF DEDUCTION, THE CLAIM OF THE ASSESSEE CANNOT BE REJECTED ONLY ON TECHNICAL GROUND, BECAUSE EVEN OTHERWISE ASSESSEE COULD CLAIM DEDUCTION BY WAY OF MISCELLANEOUS APPLICA TION. WE, THEREFORE, FOLLOWING THE JUDGMENT OF HONBLE SUP REME COURT IN THE CASE OF TECHNO SHARES AND STOCKS LTD. (SUPRA), ALLOW THE CL AIM OF DEPRECIATION ON THE BSE CARD. 4. IN THE RESULT, APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 13.12.2012 SD/- ( VIVEK VARMA ) JUDICIAL MEMBER SD/- (RAJENDRA SINGH) ACCOUNTANT MEMBER MUMBAI, DATED: 13.12.2012. JV. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR BENCH TRUE COPY BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.