OWENS CORNING INDIA PVT. LTD, MUMBAI V. ACIT 7(3) (1), MUMBAI

MA 254/MUM/2022

AI Insights

The case involves M/s. Owens Corning (India) Pvt. Ltd., which filed a Miscellaneous Application seeking recall of an earlier Tribunal order concerning two issues from the assessment year 2014-15. The first issue was the disallowance of amortization of the premium paid for acquiring leasehold rights, which the Tribunal initially dismissed by following earlier years' decisions. The second issue was the disallowance of depreciation on additions to fixed assets made during AY 2006-07, which also followed earlier decisions. The assessee argued that these issues were pending before the Bombay High Court and had been addressed under section 158A of the Income Tax Act, which should apply to the current assessment year as well. The Tribunal agreed to recall the order for the first issue but not for the second, citing the need for a clear finding on the assessee's failure to provide necessary documents.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 123281 (ITAT-MUMBAI)
• Duration Of Justice: 4 month(s) 12 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 02-02-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 24-11-2022
• Assessment Year: 2014-2015
• Appeal Filed On: 20-09-2022
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation; Question of law
• Section: 254(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “C”, MUMBAI BEFORE SHRI AMIT SHUKLA, HON'BLE JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, HON'BLE ACCOUNTANT MEMBER MA.No. 254/MUM/2022 [ARISING OUT OF ITA NO. 1932/MUM/2021 (A.Y: 2014-15)] M/s. Owens Corning (India) Pvt. Ltd., Alpha Building, 7 th Floor Hiranandani Gardens, Powai Mumbai – 400076 PAN: AAACO1739M v. ACIT -7(3)(1) Aayakar Bhavan, M.K. Road Mumbai - 400020 (Appellant) (Respondent) Assessee Represented by : Ms. Megha Shah Department Represented by : Ms. Richa Gulati Date of Hearing : 25.11.2022 Date of Pronouncement : 03.02.2023 O R D E R PER S. RIFAUR RAHMAN (AM) 1. Through this Miscellaneous Application assessee is seeking for recall of the order passed by the Tribunal in ITA.No. 1932/Mum/2021 dated 24.08.2022 for the A.Y. 2014-15. 2. In the Miscellaneous Application assessee submitted as under: - 2 MA.No. 254/MUM/2022 M/s. Owens Corning India Pvt. Ltd., “1. The above appeal relates to AY 2014-15 which was heard by the Tribunal on 05 July 2022 and the same was disposed off by an order dated 24 August 2022, a copy of which has been enclosed as Annexure 1. As there is a mistake apparent from the record, the Applicant is moving the present application under section 254(2) of the Act. 2. Issue no. 1 Disallowance of amortization of premium paid for acquiring leasehold right 2.1 One of the issues under consideration in the appeal was regarding the disallowance of amortization of the premium paid for acquiring lease hold rights over a plot of land by the Applicant. 2.2 The Tribunal dismissed the said ground by following the Tribunal order for earlier year ie. 2004-05 in the Applicant's own case. The Applicant has filed an appeal to the Bombay High Court for AY 2004-05. 2.3 Section 158A is a special provision for avoiding repetitive appeals. As per section 158A, when an identical question of law is pending before the High Court or the Hon'ble Supreme Court for any assessment year, the decision of the said court would apply to the assessment year for which the application under section 158A is made. 2.4 In the present case, the Applicant has filed an application dated 12 September 2018 under section 158A(1) of the Act on the aforesaid ground for AY 2014-15 since an identical question of law was already pending before the Bombay High Court for AY 2004- 05. Accordingly, if the application is admitted, the decision of the Bombay High Court would apply to AY 2014-15. (A copy of the said application under section 158A(1) has been enclosed herewith as Annexure 2) 2.5 As per section 158A(3) of the Act, the Tribunal has to admit or reject the claim of the Applicant by an order in writing. 2.6 The Tribunal order for AY 2014-15 has neither acknowledged nor admitted the fact that the application under section 158A has been made by the Applicant and it should be consequentially applied. 2.7 A similar application was made by the Applicant for AY 2010- 11 in respect of the same issue and was admitted by the Tribunal. Relevant extracts of the order evidencing the admission is reproduced below: 3 MA.No. 254/MUM/2022 M/s. Owens Corning India Pvt. Ltd., Therefore, respectfully following the order passed by the Coordinate Bench of Hon'ble ITAT in ITA No. 5959/Mum/17 for AY 2013-14, we dismiss this ground of appeal raised by the assessee with a direction to the AO that as an when decision on the question of law before the Hon'ble Bombay High Court becomes final, then it shall be applied for the year under consideration and if necessary, the AO shall amend order accordingly. With these directions, this ground raised by the assessee is disposed of accordingly. (Emphasis supplied) 2.8 Thus, we request Your Honours to either rectify the order or issue a separate order admitting the claim made by the Applicant under section 158A of the Act. 3. Issue no. 2 - Disallowance of depreciation on addition to fixed asset made during AY 2006-07 3.1 One of the issues under consideration in the appeal was regarding the disallowance of depreciation on addition to fixed asset made during AY 2006-07. 3.2 During the course of the assessment proceedings for AY 2006-07, the Assessing officer vide assessment order dated 31 December 2009 disallowed depreciation on addition to fixed asset in absence of submission of copies of invoices. The Applicant filed an appeal before the Commissioner of Income tax- (Appeal) (CIT- (A)) against the said disallowance of depreciation which was upheld by the CIT (A) vide order dated 28 January 2011. 3.3 The Applicant preferred an appeal before the Tribunal against the order passed by CIT- (A). The Tribunal vide order dated 08 May 2019 remanded the issue back to the file of Assessing Officer for verification of claim. 3.4 The remand assessment proceedings were completed vide assessment order dated 26 April 2021 allowing partial claim of depreciation and remaining claim of depreciation was again disallowed. The Applicant has filed an appeal before CIT (A) for full relief in respect of disallowance of depreciation for principal AY 2006-07. In this regard, a copy of Form 35, Grounds of Appeal and an acknowledgement of the CIT(A) filed for AY 2006-07 is enclosed herewith as Annexure 3. 3.5 The above disallowance of depreciation in AY 2006-07 is having consequential impact in AY 2014-15. 4 MA.No. 254/MUM/2022 M/s. Owens Corning India Pvt. Ltd., 3.6 The Tribunal order for AY 2014-15 has acknowledged the fact that the issue of disallowance of depreciation on addition made to fixed asset during AY 2006-07 was remanded back by the Tribunal and in remand proceeding the Assessing Officer allowed partial claim of depreciation on amount of addition to fixed asset in respect of which invoices were submitted. However, the Tribunal order did not acknowledge the fact that the Applicant has filed an appeal before CIT(A) against the Assessment order dated 26 April 2021 for full claim of depreciation and outcome of the said appeal is pending for AY 2006-07. 3.7. We request Your Honours to allow consequential application of the outcome of the appeal if altered by any higher authority in principal case of AY 2006-07. 3.8 A similar claim was made by the Applicant for AY 2013-14 in respect of the said issue and the same was admitted by the Tribunal. Relevant extracts of the order evidencing the admission is reproduced below. "17. Having considered the rival stands, in our view, the lead year of dispute is Assessment Year 2006-07. In Assessment Year 2006-07, the depreciation in respect of 'addition to fixed assets' made in that year has not been allowed by the income-tax authorities and the said position continues to prevail till now. In this view of the matter, in our view, the Assessing Officer made no mistake in giving consequential effect and scaling down assessee's claim for depreciation in this year. We are inclined to uphold the stand of the Assessing Officer with a caveat that if the position of assessee's claim of depreciation for Assessment Year 2006- 07 is altered by any higher authority in favour of the assessee, the consequential relief be allowed to the assessee in the instant assessment year also. With these remarks, we hereby affirm the ultimate decision of the Assessing Officer and accordingly, assessee fails on this aspect." 3.9 Thus, we request Your Honours to either rectify the order or issue a separate order admitting the claim made by the Applicant to consequentially apply the outcome of higher authority in principal case of AY 2006-07.” 5 MA.No. 254/MUM/2022 M/s. Owens Corning India Pvt. Ltd., 3. In this Miscellaneous Application assessee has submitted two issues which are mistakes apparent on record and sought to recall the order on these two issues. Ld. AR submitted that the Tribunal has dismissed the appeal of the assessee by following the order of earlier assessment years in which the issue is decided against the assessee and against that order assessee has filed an appeal before Hon'ble High Court for the similar issue under consideration in this assessment year. The assessee has also filed an application u/s. 158A of the Act which was duly approved by the Hon'ble High Court. Therefore, the identical issue decided by the Hon'ble High Court is binding on the Tribunal also. It was submitted that the copy of Form – 8 is filed in the form of Paper Book and due to oversight the counsel failed to brought to the notice of the Tribunal. Accordingly, it was prayed that this issue maybe recalled. 4. With regard to Issue No. 2 i.e., disallowance of depreciation on addition to fixed asset made during A.Y. 2006-07, it was brought to the notice of the Bench that Tribunal has dismissed the ground raised by the assessee with the observation that assessee has not filed any supporting evidences for additions to fixed assets and she prayed that in the earlier occasion also similar issue was raised and it was remanded back to the file of the Assessing Officer for verification and Assessing Officer has 6 MA.No. 254/MUM/2022 M/s. Owens Corning India Pvt. Ltd., rejected the contention of the assessee on reasonableness of claim made by the assessee. 5. On the other hand, Ld. DR objected to the above submissions made by the Ld. AR. However, he agreed that the first issue may be considered for recalling the matter. However, with regard to second issue the Tribunal has given a clear finding on the reasons of failure of the assessee to submit the relevant documents before any authority. In case this issue is recalled it certainly amount to review of the order, which is not permissible by the law. 6. Considered the rival submissions and material placed on record, we observe from the record that assessee has filed Form-8 in the Paper Book and due to oversight this issue of application filed u/s. 158A before the Hon'ble High Court was not brought to the notice of the Bench and considering the fact that the issue is pending before the Hon'ble High Court and assessee has filed the application u/s. 158A of the Act on the repetitive of the issue involved in this case. Therefore, for the limited purpose of adjudication this issue is recalled for fresh adjudication. With regard to Issue No. 2 the bench has clearly brought on record the failure on the part of the assessee in detail in Para No. 16 of the Tribunal order, 7 MA.No. 254/MUM/2022 M/s. Owens Corning India Pvt. Ltd., therefore this issue cannot be recalled at this stage. Accordingly, Issue No. 1 raised by the assessee is recalled and we direct the registry to fix the case for hearing in due course and inform the parties accordingly. Order pronounced in the open court on 03 rd February, 2023. Sd/- Sd/- (AMIT SHUKLA) (S. RIFAUR RAHMAN) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai / Dated 03/02/2023 Giridhar, Sr.PS Copy of the Order forwarded to: 1. The Appellant 2. The Respondent. 3. The CIT(A), Mumbai. 4. CIT 5. DR, ITAT, Mumbai 6. Guard file. //True Copy// BY ORDER (Asstt. Registrar) ITAT, Mum