The DCIT, Circle-1(1), Baroda V. M/s. Gujarat Electricity Board, Baroda

ITA 941/AHD/2011

• Counselvise Citation: 94120514 RSA 2011
• Duration Of Justice: 4 year(s) 2 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-06-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 04-06-2015
• Assessment Year: 1993-1994
• Appeal Filed On: 31-03-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: JP SHAHAR

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT AND SHRI KUL BHARAT, JUDICIAL MEMBER ./ ././ ./ ITA NOS. 941 & 942/AHD/2011 / ASSESSMENT YEAR: 1993-94 & 1998-99 RESPECTIVELY THE DCIT, CIRCLE-1(1) BARODA V/S. M/S. GUJARAT ELECTRICITY BOARD, SARDAR PATEL VIDHYUT BHAVAN, RACE COURSE CIRCLE, BARODA PAN : AAACG 8540 N / // / (APPELLANT) ! ! ! ! / // / (RESPONDENT) REVENUE BY : SHRI SUBHASH BAINS, CIT-DR ASSESSEE(S) BY : SHRI J.P. SHAH, AR '# $ %&'/ // / DATE OF HEARING : 04/06/2015 () $ %&' / // / DATE OF PRONOUNCEMENT: 19/06/2015 *+ *+ *+ *+/ // / O R D E R PER G.D. AGRAWAL, VICE PRESIDENT: THESE ARE THE APPEALS FILED BY THE REVENUE AGAINST TWO SEPARATE ORDERS OF THE COMMISSIONER OF INCOME TAX (APPEALS)- I, BARODA, BOTH DATED 17.01.2011 FOR ASSESSMENT YEARS 1993-94 AND 1998-99 . 2. THE ONLY GROUND RAISED IN THESE APPEALS BY THE R EVENUE READS AS UNDER:- AY 1993-94 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD. CIT(APPEALS) ERRED IN DELETING THE ADDITION OF RS.1 3,79,94,401/- MADE ON ACCOUNT OF DISALLOWANCE OF LEASE RENT PAYMENT WITHO UT APPRECIATING THE FACT THAT THE TRANSACTION, AS DISCUSSED IN THE ASSESSMEN T ORDER, WAS IN THE NATURE OF LOAN OBTAINED BY THE ASSESSEE FROM THE FINANCIAL INSTITUTIONS AGAINST SECURITY OF FIXED ASSETS INSTEAD OF ABSOLUTE SALE T HEREOF, BUT LATER RETAINED THEM FOR CONTINUED USE BY THE ASSESSEE. THE LD. CIT (APPEALS) ERRED IN NOT APPRECIATING THE FACT THAT THE TRANSACTION WAS MERE LY A BOOK ENTRY TO AVOID TAXES. ITA NOS. 941 & 942/AHD/2011 DCIT V. GUJARAT ELECTRICITY BOARD FOR AY 1993-94 & 1998-99 2 AY 1998-99 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD. CIT(APPEALS) ERRED IN DELETING THE ADDITION OF RS.9 8,50,16,566/- MADE ON ACCOUNT OF DISALLOWANCE OF LEASE RENT PAYMENT WITHO UT APPRECIATING THE FACT THAT THE TRANSACTION, AS DISCUSSED IN THE ASSESSMEN T ORDER, WAS IN THE NATURE OF LOAN OBTAINED BY THE ASSESSEE FROM THE FINANCIAL INSTITUTIONS AGAINST SECURITY OF FIXED ASSETS INSTEAD OF ABSOLUTE SALE T HEREOF, BUT LATER RETAINED THEM FOR CONTINUED USE BY THE ASSESSEE. THE LD. CIT (APPEALS) ERRED IN NOT APPRECIATING THE FACT THAT THE TRANSACTION WAS MERE LY A BOOK ENTRY TO AVOID TAXES. 3. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL PLACED BEFORE US. WE FIND THAT THIS ISSUE IS CONSIDERED B Y THE ITAT IN ASSESSEES OWN CASE IN ITA NOS. 1537 TO 1543/AHD/1999 VIDE ORD ER DATED 21.09.2005, WHEREBY THE ITAT HAS SET ASIDE THE ISSUE OF LEASE R ENTAL ON SALE AND LEASE BACK ASSETS WITH THE FOLLOWING OBSERVATIONS:- 31. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMIS SIONS IN THE LIGHT OF MATERIAL PLACED BEFORE US. IT IS SEEN FROM THE ASSE SSMENT ORDERS THAT DISALLOWANCE HAS BEEN MADE WITHOUT PROPERLY ENQUIRI NG INTO THE FACTS OF THE CASE. ACCORDING TO THE DECISION OF SPECIAL BENCH IN THE CASE OF MID EAST PORTFOLIO MANAGEMENT LTD VS. DCIT (SUPRA) THE REAL INTENTION OF THE PARTIES ENTERING IN THE TRANSACTION HAS TO BE DETERMINED AN D IF THE REAL INTENTION OF THE PARTIES IS DISCOVERED TO BE SOMETHING DIFFERENT FROM THE INTENTION PROFESSED IN THE DOCUMENT THEN THE IT AUTHORITIES H AD LIBERTY TO BRAND THE SAME AS A SUBTERFUGE OR A DUBIOUS DEVICE OR A COLOU RABLE TRANSACTION. HERE AGAIN THE CASE OF THE ASSESSEE IS THAT THE LEGAL PO SITION HAS BEEN CHANGED AFTER THE DECISION OF HON. SUPREME COURT IN THE CASE OF A ZADI BACHAO ANDOLAN (SUPRA). THE POSITION CAN ONLY BE APPLIED TO THE FA CTS OF THE CASE IF THE FACTS ARE CLEAR. NO INVESTIGATION HAS BEEN MADE BY AO WIT H REGARD TO THE TRANSACTION ENTERED INTO BY THE ASSESSEE FOR SALE A ND LEASE BACK. WE, THEREFORE, CONSIDER IT PROPER AND JUST TO RESTORE THIS ISSUE B ACK TO THE FILE OF THE AO WITH A DIRECTION TO FIRST DETERMINE THE FACTUAL ASPECT A ND THEN TO DECIDE THE ISSUE AS PER LAW ENUMERATED IN THE VARIOUS DECISIONS DESCRIB ED ABOVE AND ALSO THE LATEST POSITION AVAILABLE IN THIS RESPECT. NEEDLESS TO OBSERVE THAT AO WILL GIVE ASSESSEE A REASONABLE OPPORTUNITY AND HEARING BEFOR E DECIDING THIS ISSUE. WITH THESE DIRECTIONS WE RESTORE THIS ISSUE TO THE FILE OF AO. FOR STATISTICAL PURPOSES, THIS GROUND FOR BOTH THE YEARS IS ALLOWED . ITA NOS. 941 & 942/AHD/2011 DCIT V. GUJARAT ELECTRICITY BOARD FOR AY 1993-94 & 1998-99 3 4. THAT IN ASSESSMENT YEAR 1996-97, VIDE ITA NO.193 0/AHD/2001, THE ITAT, FOLLOWING THE AFORESAID DECISION IN ASSESSEE S OWN CASE, AGAIN SET ASIDE THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER. 5. AT THE TIME OF HEARING BEFORE US, BOTH THE PARTI ES FAIRLY AGREED THAT THIS ISSUE FOR THE YEARS UNDER APPEAL MAY ALSO BE S ENT BACK TO THE FILE OF THE ASSESSING OFFICER FOR RE-EXAMINATION IN THE LIGHT O F THE OBSERVATIONS OF THE ITAT IN ITA NOS. 1537 TO 1543/AHD/1999. IN VIEW OF THE ABOVE, WE SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW ON THIS P OINT AND RESTORE THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER. WE DIREC T THE ASSESSING OFFICER TO RE-EXAMINE THE ISSUE IN THE LIGHT OF THE DIRECTIONS OF ITAT IN ITA NOS. 1537 TO 1543/AHD/1999. 6. IN THE RESULT, THE REVENUES APPEALS ARE DEEMED TO BE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 19 TH JUNE, 2015 AT AHMEDABAD. SD/- SD/- (KUL BHARAT) JUDICIAL MEMBER (G.D. AGRAWAL) VICE-PRESIDENT AHMEDABAD; DATED 19/06/2015 BIJU T., PS *+ $ %, -*,% *+ $ %, -*,% *+ $ %, -*,% *+ $ %, -*,%/ COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. ! / THE RESPONDENT. 3. % '. / CONCERNED CIT 4. '. ( ) / THE CIT(A) 5. ,12 % , , / DR, ITAT, AHMEDABAD 6. 24 5# / GUARD FILE . *+' *+' *+' *+' / BY ORDER, TRUE COPY 6 66 6/ // / 7 7 7 7 ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD