PENINSULA FACILITY MANAGEMENT SERVICES PVT. LTD., V. ACIT 5(2),

MA 118/MUM/2011

• Counselvise Citation: [2011] 123 COUNSELVISE.COM (IT) 6995 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 18 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 10-08-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2005-2006
• Appeal Filed On: 21-02-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: D SONGATE
• Assessee Lawyers: M D INAMDAR
• Keywords: Depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH C : MUMBAI BEFORE SHRI D. MANMOHAN, (VICE PRESIDENT) AND SHRI RAJENDRA SINGH,(AM) MA NO.118/MUM/2011 ARISING OUT OF ITA NO.6463/M/2009 ASSESSMENT YEAR : 2005-06 PENINSULA FACILITY MANAGEMENT SERVICES PVT. LTD. PENINSULA SPENTA, 2 ND FLOOR MATHURDAS MILL COMPOUND SENAPATI BAPAT MARG, LOWER PAREL MUMBAI-400 013. ..( APPLICANT ) P.A. NO. (AAACJ 5680 L) VS. THE ASSTT. COMMISSIONER OF INCOME TAX -5(2) MUMBAI. ..( RESPONDENT ) APPLICANT BY : SHRI M.D. INAMDAR RESPONDENT BY : SHRI D. SONGATE DATE OF HEARING : 22.7.2011 DATE OF PRONOUNCEMENT : 10.8.2011 O R D E R PER RAJENDRA SINGH (AM). THIS MISCELLANEOUS APPLICATION HAS BEEN FILED BY THE ASSE SSEE REQUESTING FOR RECTIFICATION OF THE ORDER DATED 31.12. 2010 OF THE TRIBUNAL IN ITA NO.6463/M/2009 FOR ASSESSMENT YEAR 2005 -06 POINTING OUT CERTAIN MISTAKES. MA NO.118/M/11 A.Y:205-06 2 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSE SSEE WAS EARLIER CARRYING OUT RESTAURANT BUSINESS IN THE NAME OF M/S. JAMBOREE FOOD COURTS PVT. LTD. WHICH WAS CLOSED DURING ASSESSMENT YEA R 2002- 03. THEREAFTER THE SHARE HOLDING PATTERN OF THE COMP ANY WAS CHANGED AND NAME OF THE COMPANY WAS ALSO CHANGED TO M/S. PENINSUL A FACILITY MANAGEMENT SERVICES PVT. LTD. IN WHICH THE ASSESSEE STARTED NEW BUSINESS OF PROVIDING SERVICES SUCH AS SECURITY AND EQUIPMENT ON LEASE ETC. THE ASSESSEE HAD CLAIMED DEPRECIATION ON FURNITURE & FIXTURES AND KITCHEN EQUIPMENTS OF THE OLD BUSINESS. THE AO DISALLOWE D DEPRECIATION ON THESE ITEMS ON THE GROUND THAT THESE HA D NO UTILITY IN THE NEW BUSINESS AND THERE ARE NO EVIDENCES OF USER. TH E ORDER OF THE AO WAS CONFIRMED BY CIT(A). BEFORE THE TRIBUNAL THE ASSESSEE PLACED RELIANCE ON THE DECISION OF THE DELHI BENCH OF THE TRIB UNAL IN CASE OF ACIT VS. SRF LTD. (21 SOT 122). IN THE SAID CASE THE T RIBUNAL HAD HELD THAT USER CRITERIA HAD TO BE FULFILLED AT THE TI ME WHEN THE ASSETS WERE TO FORM BLOCK OF ASSETS. THE TRIBUNAL DISTINGUISHED THE SAID CASE ON THE GROUND THAT IN THAT CASE, THE ASSETS HAD BEEN USE D IN THE SAME BUSINESS AND THERE WAS NO DISPUTE THAT THE ASSETS HAD BEEN USED IN THE EARLIER AND IN THE SUBSEQUENT YEAR. THE TRIBUNAL OBSERVED THAT THE ASSESSEE IN THIS CASE HAD STARTED NEW BUSINESS AND, THEREFORE , IT HAD TO SHOW THE USER OF THOSE ASSETS IN THE NEW BUSINESS WHICH HA D NOT BEEN DONE. MOREOVER, THE TRIBUNAL FURTHER OBSERVED E VEN IF THE NEW MA NO.118/M/11 A.Y:205-06 3 BUSINESS WAS CONSIDERED AS AN INTEGRAL PART OF EXISTING B USINESS AND THERE WAS ONE SINGLE BLOCK FOR ALL THE ASSETS, IT WAS REQU IRED TO BE SHOWN THAT THE SAID ASSETS IF NOT USED THIS YEAR WERE USE D IN THE SUBSEQUENT YEAR AS WAS THE CASE IN THE CASE OF SRF LTD. TH E TRIBUNAL FURTHER OBSERVED THAT IT WAS ALL THE MORE NECESSARY IN T HE PRESENT CASE AS THERE WAS A FINDING BY THE AO THAT THE SAID ASSET HA D NO UTILITY IN THE NEW BUSINESS. IN CASE THE ASSETS WERE NOT USED IN THE 1 ST YEAR OF BUSINESS OR SUBSEQUENT YEARS, DEPRECIATION COULD NOT BE ALL OWED. THE TRIBUNAL, THEREFORE, RESTORED THE ISSUE TO THE FILE O F THE AO FOR PASSING A FRESH ORDER AFTER NECESSARY EXAMINATION AND AFTER ALL OWING OPPORTUNITY OF HEARING TO THE ASSESSEE. 2.1 WE HAVE HEARD BOTH THE PARTIES. THE LD. AR FOR THE ASSESSEE REITERATED THE EARLIER SUBMISSIONS STATING THAT THE CASE WAS COVERED BY THE DECISION OF THE TRIBUNAL IN THE CASE OF SRF LTD. (SU PRA). THE LD. DR ON THE OTHER HAND POINTED OUT THAT THE TRIBUNAL HAD PASSED A REASONED AND SPEAKING ORDER AND NO RECTIFICATION WAS REQUIRED. 3. WE HAVE CONSIDERED THE MATTER CAREFULLY. THE ISSUE WAS ALLOWABILITY OF DEPRECIATION ON THE ASSETS OF THE CLOSED BUSINESS WHILE COMPUTING INCOME FROM THE NEW BUSINESS. THERE WAS NO EV IDENCE PRODUCED REGARDING ACTUAL USER OF ASSETS IN THE NEW BUSINE SS. ASSESSEE RELIED ON THE DECISION OF THE TRIBUNAL IN THE CASE OF SRF LTD. MA NO.118/M/11 A.Y:205-06 4 (SUPRA), WHICH HAD BEEN DULY DISCUSSED BY THE TRIBUNAL A S POINTED IN PARA -2 EARLIER. THE TRIBUNAL PASSED A REASONED AND SPE AKING ORDER. THE TRIBUNAL POINTED OUT DISTINGUISHING FEATURES IN T HE PRESENT CASE. THE TRIBUNAL HAS NO POWER TO REVIEW ITS OWN DISCUSSION. WE, THEREFORE, SEE NO MERIT IN THE MISCELLANEOUS APPLICATIO N FILED BY THE ASSESSEE AND, THEREFORE, THE SAME IS REJECTED. 4. IN THE RESULT, THE MISCELLANEOUS APPLICATION STANDS REJ ECTED. ORDER PRONOUNCED IN THE OPEN COURT ON 10.8.2011 SD/- SD/- (D. MANMOHAN) ( RAJENDRA SINGH ) VICE PRESIDENT ACCOUNTANT MEMBER MUMBAI, DATED:10.8.2011. JV. COPY TO: THE APPLICANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR BENCH TRUE COPY BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.