ADDL CIT RG 8(1), MUMBAI V. APTECH LTD, MUMBAI

ITA 8887/MUM/2010

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1644 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-01-2013
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 20-12-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SURINDER JIT SINGH
• Assessee Lawyers: NATASHA MARGAT
• Keywords: Depreciation

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI . !' # $%&' , ( )* ' BEFORE SHRI D. MANMOHAN, VP AND SHRI N.K. BILLA IYA, AM ./I.T.A. NO. 8887/MUM/2010 ( + + + + / ASSESSMENT YEAR : 2006-07 THE DCIT-8(1), AAYAKAR BHAVAN, MUMBAI-400 020 / VS. M/S. APTECH LTD., A-65 MIDC, MAROL ANDHERI(E), MUMBAI-400 093 *, ( ./ - . ./PAN/GIR NO.AADCA 0602L ( ,/ /APPELLANT ) .. ( 01,/ / RESPONDENT ) ,/ 2 / APPELLANT BY: SHRI SURINDERJIT SINGH 01,/ 3 2 / RESPONDENT BY MISS NATASHA MARGAT 3 4( / DATE OF HEARING : 8.01.2013 56+ 3 4( /DATE OF PRONOUNCEMENT :08.01.2013 )7 / O R D E R PER N.K. BILLAIYA, AM: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LD. CIT(A)-16, MUMBAI DT.22.10.2010 PERTAINING TO A.Y. 2006-07. 2. THE REVENUE HAS RAISED FOLLOWING 3 SUBSTANTIVE G ROUNDS OF APPEAL: 1. ON FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS. 3,35,605/- U/S. 35D BEING THE EXPENSES INCURRED TOWARDS INCREASE OF AUTHORIZED SHARE CAPITAL, WITHO UT APPRECIATING THE FACTS AND CIRCUMSTANCES OF THE CAS E AND IN LAW. 2. ON FACTS AND IN THE CIRCUMSTANCES OF THE CASE AN D IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF ITA NO. 8887/M/2010 2 RS.3,76,39,137/- U/S. 35DD ON ACCOUNT OF DEMERGER/TAKEOVER OF THE ASSESSEE COMPANY, WITHOUT APPRECIATING THE FACTS AND CIRCUMSTANCES OF THE CAS E AND IN LAW. 3. ON FACTS AND IN THE CIRCUMSTANCES OF THE CASE AN D IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS. 2,92,940/- ON ACCOUNT OF DEPRECIATION ON MOTOR CAR, WITHOUT APPRECIATING THE FACTS AND CIRCUMSTANC ES OF THE CASE IN LAW. 3. AT THE VERY OUTSET, THE LD. COUNSEL APPEARING FO R THE ASSESSEE POINTED OUT THAT ALL THE THREE GROUNDS TAKEN BY THE REVENUE HAVE BEEN DECIDED BY THE TRIBUNAL IN THE CASE OF THE VERY SAM E ASSESSEE FOR EARLIER ASSESSMENT YEARS. TO SUBSTANTIATE HER CLAIM, THE L D. COUNSEL FILED A CHART AND COPIES OF THE ORDER OF THE TRIBUNAL FOR A.Y. 20 04-05 IN ITA NOS. 7114 AND 7316/MUM/2007 SUPPORTED BY MISCELLANEOUS A PPLICATION NOS. 462 & 463/M/2011 (ARISING OUT OF ITA NOS. 7114 & 73 16/M/07) AND ORDER OF THE TRIBUNAL FOR A.Y. 2005-06 IN ITA NO. 5 434/M/2010. 4. THE LD. COUNSEL DREW OUR ATTENTION TO GROUND NO . 1 & 2 WHICH RELATES TO DEDUCTION U/S. 35D AND 35DD. THE LD. CO UNSEL POINTED OUT THAT THE ISSUE HAS BEEN DISCUSSED BY THE LD. CIT( A) IN HIS ORDER AT PARA 2.1 IN PAGE-3 AND THE FINDINGS OF THE LD. CIT(A) A RE GIVEN AT PARA 2.3.1 PAGE-4 OF HIS APPELLATE ORDER WHICH IS AS UNDER: I HAVE CAREFULLY CONSIDERED THE CONTENTION OF THE APPELLANT COMPANY AS WELL AS CAREFULLY GONE THROUGH THE AVAIL ABLE DOCUMENTS ON RECORD. I FIND THAT SIMILAR DISALLOWA NCE WAS MADE BY THE LD. AO FOR A.Y. 2004-05 AND 2005-06 AND MY L D. PREDECESSORS HAS ALLOWED RELIEF. I FIND THAT THERE IS NO CHANGE IN THE FACTS AND CIRCUMSTANCES OF THE CASE AS WERE PRE VAILING IN THE PREVIOUS YEARS. THE ADDITION MADE BY THE LD. AO, T HEREFORE, CANNOT BE SUSTAINED. FOLLOWING THE DECISION OF MY LD. PREDECESSORS, I DIRECT THE LD. AO TO DELETE THE ADD ITION. THIS GROUND OF APPEAL IS ACCORDINGLY ALLOWED ITA NO. 8887/M/2010 3 4.1. THE LD. COUNSEL FURTHER POINTED OUT THAT ISSUE RELATING TO THE DEDUCTION U/S. 35DD IS DISCUSSED BY THE LD. CIT(A) AT PARA-3 PAGE-4 OF HIS ORDER AND THE FINDING IS GIVEN AT PARA 3.3 PAGE -5 OF HIS ORDER WHICH IS AS UNDER: I FIND THAT MY LD. PREDECESSORS FOR A.Y. 2004-05 A ND 2005- 06 HAS DELETED THE SAID ADDITIONS STATING INTER-ALI A THAT THE SAID EXPENDITURE IS ALLOWABLE U/S. 35DD. I DO NOT FIND ANY CHANGE IN THE CIRCUMSTANCES OF THE CASE AS EXISTED IN THE A.Y . 2004-05 AND 2005-06. FOLLOWING THE DECISION OF MY PREDECESSORS , THE ADDITION MADE BY THE LD. AO IS DELETED AND THIS GROUND OF AP PEAL IS ALLOWED. 5. THE TRIBUNAL IN ITS ORDER IN ITA NOS. 7114 AND 7 316/M/07 HAS DECIDED THESE ISSUES VIDE PARA-23 IN PAGE-9. THE D ECISION OF THE TRIBUNAL IS AS UNDER: WE HEARD BOTH THE PARTIES. ALLOWABILITY OF RELIEF U/S. 35DD HAS BEEN MADE FOR THE FIRST TIME BEFORE THE CIT(A). THE AO HAS NOT BEEN GIVEN AN OPPORTUNITY TO EXAMINE THE MATTER. T HE ISSUE IS SET ASIDE TO THE FILES OF THE AO FOR CONSIDERING THE AL TERNATE GROUND OF THE ASSESSEE FOR DEDUCTION U/S. 35DD IN ACCORDANCE WITH LAW. THE APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PU RPOSES . 6. THIS FINDINGS OF THE TRIBUNAL WAS SUBJECTED TO M ISCELLANEOUS APPLICATION BEARING NO. 462 & 463/M/2011 AND WHILE DISPOSING THE MISCELLANEOUS APPLICATION, THE TRIBUNAL HAS THUS HE LD AS UNDER: WE THEREFORE, RESTORE THIS ISSUE TO THE FILE OF TH E AO WITH A DIRECTION TO VERIFY WHETHER THE CLAIM OF THE ASSESS EE FOR DEDUCTION U/S. 35DD WAS ALLOWED FOR ASSESSMENT YEAR 2002-03 I N THE ASSESSMENT MADE U/S. 143(3). IF IT IS FOUND ON SUC H VERIFICATION THAT THE CLAIM OF THE ASSESSEE FOR DEDUCTION U/S. 35DD W AS ALLOWED IN ASSESSMENT YEAR 2002-03 IN THE ASSESSMENT MADE U/S. 143(3), THE AO IS DIRECTED TO ALLOW THE SAME IN THE YEAR UNDER CONSIDERATION. 7. THE FACTS AND ISSUES BEING IDENTICAL FOR THE YEA R UNDER CONSIDERATION AND AS NO DISTINGUISHING FACTS HAVE B EEN BROUGHT ON RECORD ITA NO. 8887/M/2010 4 BY THE LD. DEPARTMENTAL REPRESENTATIVE, RESPECTFULL Y FOLLOWING THE PRECEDENTS, WE RESTORE THIS ISSUE BACK TO THE FILE OF THE AO. THE AO IS DIRECTED TO DECIDE THIS ISSUE IN THE LIGHT OF THE D ECISION TAKEN IN EARLIER ASSESSMENT YEARS. 8. THE LD. COUNSEL FOR THE ASSESSEE FURTHER SUBMITT ED THAT ISSUES INVOLVED IN GROUND NO. 3 WHICH HAS BEEN DISCUSSED B Y THE LD. CIT(A) AT PARA 4.1 AT PAGE-5 OF HIS ORDER HAVE BEEN DECIDED A S PER PARA 4.3.1 WHICH IS AS UNDER: I FIND THAT MY LD. PREDECESSORS FOR A.Y. 2004-05 A ND 2005- 06 HAS DELETED THE SAID ADDITIONS STATING INTER-ALI A THAT THE DEPRECIATION IS ALLOWABLE @ 50%. I DO NOT FIND ANY CHANGE IN THE CIRCUMSTANCES OF THE CASE AS EXISTED IN THE A.Y. 2004- 05 AND 2005-06. FOLLOWING THE DECISION OF MY PREDE CESSOR THE ADDITIONS MADE BY THE LD. AO IS DELETED AND THI S GROUND OF APPEAL IS ALLOWED. 9. THIS MATTER WENT UP TO THE TRIBUNAL AND THE TRI BUNAL IN ITS ORDER IN ITA NO. 7114 & 7316 (SUPRA) HAS DECIDED THIS ISS UE AT PAGE-14 VIDE PARA 33 AS UNDER: AGGRIEVED THE REVENUE IS ON APPEAL. THE PROVISION S OF THE I.T. RULES FOR GRANTING HIGHER DEPRECIATION IN RESP ECT OF VEHICLES ACQUIRED AFTER 1.4.2001 AND PUT TO USE BEFORE 1.4.2 002. EVEN THOUGH THE CLASSIFICATION READS AS NEW COMMERCIAL VEHICLES, UNDER NOTE 6 TO THE I.T. RULES, IT HAS BEEN CLARIFI ED THAT COMMERCIAL VEHICLES WILL INCLUDE LIGHT MOTOR VEHICLES BUT WILL NOT INCLUDE MOTOR CAB/MAXI CAB. THIS WOULD SHOW THAT IT IS NOT NECESSARY FOR THE VEHICLE TO BE USED FOR COMMERCIAL PURPOSES FOR CLAIMING HIGHER RATE OF DEPRECIATION. IN FACT CABS HAVE BEEN EXCLU DED FROM THE DEFINITION OF COMMERCIAL VEHICLE, AS THEY ARE DEALT WITH SEPARATELY. THE LD. CIT(A) WAS THEREFORE CORRECT IN UPHOLDING T HE CLAIM OF THE ASSESSEE FOR DEPRECIATION @ 50% IN RESPECT OF MOTOR VEHICLES ACQUIRED AFTER 1.4.2001 AND USED BEFORE 1.4.2002. THE REVENUES APPEAL ON THIS ISSUE IS DISMISSED. ITA NO. 8887/M/2010 5 10. FACTS AND ISSUES BEING IDENTICAL AND NO NEW DIS TINGUISHING FACTS HAVE BEEN BROUGHT ON RECORD BY THE LD. DR, WE DO N OT FIND ANY REASON TO DISTURB THE FINDINGS OF THE LD. CIT(A), FOLLOWING T HE PRECEDENTS, GROUND NO. 3 IS ALLOWED. 11. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 8 49 -* 3 : ;3 <= 7 *>4 3 -4 & ORDER PRONOUNCED IN THE OPEN COURT ON 08.01.2013 )7 3 6+ ( : ?)9 8.1.2013 6 3 @ SD/- SD/- (D.MANMOHAN) (N.K. BILLAIYA) !' VICE PRESIDENT ( )* / ACCOUNTANT MEMBER MUMBAI; ?) DATED 08.01.2013 . . ./ RJ , SR. PS )7 3 04$ A$+4 / COPY OF THE ORDER FORWARDED TO : 1. ,/ / THE APPELLANT 2. 01,/ / THE RESPONDENT. 3. B ( ) / THE CIT(A)- 4. B / CIT 5. $C@ 04 , , / DR, ITAT, MUMBAI 6. @ D / GUARD FILE. )7 / BY ORDER, 1$4 04 //TRUE COPY// / - DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI