M/S. NATIONAL DAIRY DEVELOPMENT BOARD,ANAND V. THE DEPUTY COMMISSIONER OF INCOME TAX, ANAND CIRCLE, ANAND

MA 129/AHD/2024

AI Insights

The case involves the National Dairy Development Board (NDDB) appealing to the ITAT regarding the characterization of lease transactions and the allowability of depreciation on leased assets for the Assessment Year 2011-12. The ITAT had previously restored the issue to the file of the Commissioner of Income Tax (Appeals) [CIT(A)] for fresh adjudication, which led to the NDDB filing a Miscellaneous Application (MA) pointing out that the CIT(A) had already addressed these issues in a previous assessment year (2006-07). The NDDB argued that the ITAT's observations were based on a mistake of fact, as the CIT(A) had provided a detailed examination and findings on the nature of the leases in the earlier year, which were not considered in the ITAT's original order.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 827135 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 3 month(s) 19 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 05-01-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 17-09-2024
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHIJIT
• Assessee Lawyers: APARNA PARELKAR
• Keywords: Set aside; Depreciation

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, AHMEDABAD BEFORE SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER & SHRI MAKARAND VASANT MAHADEOKAR, ACCOUNTANT MEMBER M.A. No.129/Ahd/2024 (in C.O. No.14/Ahd/2017) (Assessment Year: 2011-12) National Dairy Development Board, P.O. Box No. 40, Anand, Gujarat-388001 Vs. Assistant Commissioner of Income Tax, Anand Circle, Anand [PAN No.AABCN2029C] (Appellant) .. (Respondent) Appellant by : Ms. Aparna Parelkar, AR Respondent by: Shri Abhijit, Sr. D.R. Date of Hearing 28.11.2025 Date of Pronouncement 05.01.2026 O R D E R PER SIDDHARTHA NAUTIYAL - JUDICIAL MEMBER: The brief facts of the case are that the assessee, National Dairy Development Board, filed the present Miscellaneous Application before the Hon’ble Income Tax Appellate Tribunal, Ahmedabad Bench, arising out of the consolidated order dated 17 May 2024 passed in ITA No. 2954/Ahd/2016 for Assessment Year 2011–12, along with connected appeals and the Cross Objection No. 14/Ahd/2017. The Miscellaneous Application has been filed on the ground that there are mistakes apparent from the record in the order of the Tribunal insofar as it relates to adjudication of Ground Nos. 1, 2 and 3 raised by the assessee in its cross objections against the departmental appeal, which pertained to the characterization of lease transactions and the allowability of depreciation on leased assets. Printed from counselvise.com M.A No. 129/Ahd/2024 (in CO No. 14/Ahd/2017) National Dairy Development Board vs. ACIT Asst. Year –2011-12 - 2– 2. In the Miscellaneous Application, the assessee has pointed out that it had filed cross objections mainly to support the order of the learned CIT(A) on the issue of depreciation on leased assets other than buildings and the nature of lease transactions. According to the assessee, while adjudicating the departmental appeal, the Tribunal, in paragraphs 27 and 28 and again in paragraph 58 of its order, proceeded on the footing that the learned CIT(A) had not given any basis or reasoning for holding that the leases were operating leases and not finance leases, and on that premise restored the issue to the file of the CIT(A) for fresh adjudication. As a consequence, even the cross objections of the assessee, which were only supporting the order of the CIT(A), were also set aside for de novo consideration. 3. The assessee has contended that the above observations of the Tribunal suffer from a mistake of fact apparent from the record. It has been specifically pointed out that the learned CIT(A), while deciding the issue for Assessment Year 2011–12, had expressly relied upon and followed his own appellate order for Assessment Year 2006–07. In paragraph 10.1 of the CIT(A)’s order for A.Y. 2011–12, the CIT(A) had categorically stated that the issue was identical to that involved in A.Y. 2006–07 and had directed the Assessing Officer to follow the directions given in the appellate order for A.Y. 2006– 07. According to the assessee, this aspect was brought to the notice of the Tribunal during the course of hearing but has not been considered in the impugned order. 4. The assessee has further pointed out that in the appellate order for A.Y. 2006–07, the learned CIT(A) had undertaken a detailed examination of the Printed from counselvise.com M.A No. 129/Ahd/2024 (in CO No. 14/Ahd/2017) National Dairy Development Board vs. ACIT Asst. Year –2011-12 - 3– lease agreements. In paragraphs 6.2.2 and 6.2.3 of that order, the CIT(A) had analysed the terms of the lease agreements, examined the rights and obligations of the parties, and recorded a categorical finding that the leases relating to assets other than buildings were operating leases and not finance leases. It was also recorded that the Assessing Officer had treated the leases as finance leases without analysing the agreements, whereas the assessee had conclusively established that the leases were operating leases. These findings, according to the assessee, were part of the common paper book placed before the Tribunal and were specifically relied upon during the hearing. 5. The assessee has therefore submitted that the Tribunal’s observation that the learned CIT(A) had not given any basis or reasoning for holding the leases to be operating leases is factually incorrect and contrary to the material already on record. According to the assessee, once the CIT(A) for A.Y. 2011– 12 had followed the detailed and reasoned order passed for A.Y. 2006–07, it could not be said that there was no categorical finding or reasoning on the issue. The assessee has argued that the Tribunal overlooked these earlier findings and, on an erroneous premise, restored the issue to the file of the CIT(A), which has resulted in a mistake apparent from the record. 6. On the basis of the above, the assessee has submitted that the Tribunal committed mistakes apparent from the record in adjudicating Ground Nos. 1, 2 and 3 of the cross objections by overlooking the factual position emerging from the CIT(A)’s orders, particularly for A.Y. 2006–07, which were expressly followed for the year under consideration. The assessee has therefore prayed that the Tribunal may rectify or modify its order dated 17 Printed from counselvise.com M.A No. 129/Ahd/2024 (in CO No. 14/Ahd/2017) National Dairy Development Board vs. ACIT Asst. Year –2011-12 - 4– May 2024 by considering these aspects. Alternatively, the assessee has requested that the order may be recalled on this limited issue so that the matter relating to the characterization of lease transactions and the consequential allowability of depreciation can be properly analysed and adjudicated by the Tribunal in light of the material already on record. 7. We have heard the rival contentions and perused the material on record. On careful consideration of the submissions made in the present Miscellaneous Application and the contents of the original order dated 17.05.2024, we find that the grievance of the assessee is confined to a limited aspect relating to the characterization of lease transactions as operating lease or finance lease and the consequential allowability of depreciation on leased assets, which was the subject matter of Ground Nos. 1, 2 and 3 of the assessee’s cross objections as well as the corresponding grounds of the Departmental appeal. The assessee has specifically pointed out that while adjudicating this issue, certain factual aspects relating to the reliance placed by the learned CIT(A) on his detailed appellate order for A.Y. 2006–07, which contained an examination of the lease agreements and recorded findings on the nature of leases, were not expressly considered, even though detailed observations were made by the Tribunal in the original order while restoring the matter to the file of the CIT(A). 8. In view of the above facts and in the interest of justice, we are of the considered view that the ends of justice would be met if the order dated 17.05.2024 is partly recalled only for the limited purpose of re-examining and analysing the specific issue relating to the characterization of lease Printed from counselvise.com M.A No. 129/Ahd/2024 (in CO No. 14/Ahd/2017) National Dairy Development Board vs. ACIT Asst. Year –2011-12 - 5– transactions as operating lease or finance lease and the consequential allowability of depreciation, after duly taking into consideration the submissions of the assessee in the present Miscellaneous Application, the findings recorded by the learned CIT(A) in the earlier assessment years relied upon by the assessee, as well as the detailed observations already made by this Tribunal in the original order. 9. Accordingly, we recall our order dated 17.05.2024 to the aforesaid limited extent only, so as to enable fresh analysis and adjudication of this specific issue in accordance with law. The order dated 17.05.2024 shall remain intact, valid and undisturbed in respect of all other grounds and issues decided therein. 10. In the result, the Miscellaneous Application filed by the assessee is allowed. This Order pronounced in Open Court on 05/01/2026 Sd/- Sd/- (M. V. MAHADEOKAR) (SIDDHARTHA NAUTIYAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 05/01/2026 Tanmay, Sr. PS TRUE COPY आदेश की Ůितिलिप अŤेिषत/Copy of the Order forwarded to : 1. अपीलाथŎ / The Appellant 2. ŮȑथŎ / The Respondent. 3. संबंिधत आयकर आयुƅ / Concerned CIT 4. आयकर आयुƅ(अपील) / The CIT(A)- 5. िवभागीय Ůितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाडŊ फाईल / Guard file. आदेशानुसार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad Printed from counselvise.com "