ACIT., Circle-2(1), Hyderabad, Hyderabad V. M/s Steadfast Corporation Limited, Hyderabad

MA 168/HYD/2014

• Counselvise Citation: [2015] 124 COUNSELVISE.COM (IT) 3012 (ITAT-HYDERABAD)
• Duration Of Justice: 4 month(s) 27 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 17-04-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2002-2003
• Appeal Filed On: 20-11-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RAMAKRISHNA BANDI
• Assessee Lawyers: C P RAMASWAMY
• Keywords: Depreciation; Transfer pricing

Judgement Text

MA NO.168 OF 2014 STEADFAST CORPORATION LTD HYDERAB AD PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER & SMT.ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER M.A.NO.168/HYD/2014 (ARISING OUT OF ITA NO.1225/HYD/2013) (ASSESSMENT YEAR: 2002-03) ACIT, CIRCLE 2(1) HYDERABAD VS. STEADFAST CORPORATION LTD (FORMERLY KNOWN AS M/S INFOBAHN TECHNOLOGIES LTD), HYDERABAD (APPELLANT) (RESPONDENT) FOR REVENUE : SHRI RAMAKRISHNA BANDI, DR FOR ASSESSEE : SHRI C.P. RAMASWAMY DATE OF HEARING : 20.02.2015 DATE OF PRONOUNCEMENT : 17 .04.2015 O R D E R PER SMT. ASHA VIJAYARAGHAVAN, J.M. THIS MISCELLANEOUS APPLICATION PREFERRED BY THE RE VENUE IS AGAINST THE ORDER OF THE TRIBUNAL IN ITA NO.1225/H YD/2013 DATED 1.4.2014. THE AO FOR THE A.Y 2002-03 LEVIED A PENALTY OF RS.49,45,397 IN ADDITION OF RS.1,03,13,520 MADE UND ER THE TRANSFER PRICING REGULATIONS AND ADDITION ON ACCOUN T OF DISALLOWANCE OF DEPRECIATION OF RS.60,63,000 IN RES PECT OF SOLAR POWER PACKS. 2. IN RESPECT OF THE ADDITION MADE UNDER THE TRANSF ER PRICING REGULATIONS, PURSUANT TO THE ORDER OF THE TRIBUNAL ON THIS ISSUE IN ITA NO.962/HYD/2003 DATED 6.8.2012 IN THE QUANTU M APPEAL, THE AO WHILE GIVING EFFECT TO THE ORDER OF THE ITAT HAD DELETED MA NO.168 OF 2014 STEADFAST CORPORATION LTD HYDERAB AD PAGE 2 OF 3 THIS ADDITION. AS REGARDS ADDITION ON ACCOUNT OF DE PRECIATION, THE ISSUE WAS THAT THE ASSESSEE CLAIMED DEPRECIATION ON WDV METHOD ON THE SOLAR PACKS ON THE GROUND THAT THEY W ERE LEASED. HOWEVER, THE AO CONCLUDED THAT THE AMOUNT SHOWN BY THE ASSESSEE AS ADVANCE RENT RECEIVED WAS NOTHING BUT S ALE PRICE AND HENCE TREATED THE TRANSACTION AS SALE. HE MADE THE CONSEQUENTIAL ADJUSTMENT AND DISALLOWED THE DEPRECIATION CLAIMED ON SOLAR POWER PACKS. 3. ON APPEAL, THE CIT (A) HAD CONFIRMED THIS ADDITI ON. ASSESSEE IN THEIR APPEAL AGAINST THE ADDITION MADE BEFORE THE TRIBUNAL IN ITA NO.962/HYD/2003 HAD ARGUED ONLY ABO UT THE ADDITION ON ACCOUNT OF TRANSFER PRICING. THIS WOULD MEAN THAT IN SO FAR AS THE QUANTUM ADDITION IS CONCERNED, THE AD DITION ON ACCOUNT OF DEPRECIATION IN RESPECT OF SOLAR POWER P ACKS WOULD REMAIN SUSTAINED ON THE BASIS OF THE ORDER OF THE C IT (A), IN AS MUCH AS THE ORDER OF THE CIT (A) CONFIRMING THE ADD ITION ON ACCOUNT OF DEPRECIATION HAS NOT BEEN QUESTIONED BY THE ASSESSEE ON APPEAL. 4. THE CIT (A) IN HIS ORDER ON THE ASSESSEES APPEA L AGAINST THE LEVY OF PENALTY HAD CONFIRMED THE PENALTY LEVIE D ON ACCOUNT OF DISALLOWANCE ON DEPRECIATION. 5. IN THESE CIRCUMSTANCES, THE DEPARTMENT HAS RAISE D THIS MISCELLANEOUS APPLICATION THAT WHILE CONSIDERING TH E PENALTY LEVIED IN THE IMPUGNED ORDER, THE ISSUE REGARDING T HE PENALTY LEVIED ON ACCOUNT OF ADDITION TO DEPRECIATION WAS N OT CONSIDERED SEPARATELY AND THE ENTIRE PENALTY HAS BEEN DELETED ON THE BASIS MA NO.168 OF 2014 STEADFAST CORPORATION LTD HYDERAB AD PAGE 3 OF 3 OF THE AO DELETING THE ADJUSTMENT MADE ON TRANSFER PRICING. THERE IS A MISTAKE APPARENT ON RECORD AS THE LEVY O F PENALTY IN SO FAR AS IT IS RELATABLE TO THE DISALLOWANCE OF DEPRE CIATION ON SOLAR PACKS HAS NOT BEEN DECIDED. IN THIS VIEW OF THE MAT TER, WE RECALL THE ORDER OF THE ITAT IN ITA NO.1225/HYD/2013 ONLY FOR THE PURPOSE OF CONSIDERING THE PENALTY LEVIED BY THE AO AND CONFIRMED BY THE CIT (A) REGARDING THE DISALLOWANCE OF SOLAR PACKS. 6. IN THE RESULT, MISCELLANEOUS APPLICATION FILED B Y THE REVENUE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 17 TH APRIL, 2015. S D/ - S D/ - ( B. RAMAKOTAIAH ) ( ASHA VIJAYARAGHAVAN) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED 17 TH APRIL, 2015. VNODAN/SPS COPY TO: 1. ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE 2(1) HYDE RABAD 2. M/S. STEADFAST CORPORATION LTD C/O DR. C.P. RAMASWA MY, ADVOCATE, FLAT NO.303 GITANJALI APARTMENTS, PLOT NO .108 SRINAGAR COLONY, HYDERABAD 500072 3. THE CIT(A)-III HYDERABAD 4. THE CIT II HYDERABAD 5. THE DR, ITAT, HYDERABAD 6. GUARD FILE BY ORDER