SANJANA CRYOGENICS STORAGES LTD., MUMBAI V. DCIT - 3(3)(1), MUMBAI

MA 396/MUM/2022

AI Insights

The case involves Sanjana Cryogenics Storages Ltd., which filed Miscellaneous Applications against the orders of the Income Tax Appellate Tribunal's co-ordinate Bench, which had denied depreciation claims on intangible assets linked to the acquisition of shares in RRS Minerals Resources Pvt. Ltd. The Tribunal's earlier decision was challenged on grounds that it overlooked specific clauses in the acquisition agreement and failed to consider judicial precedents that supported the assessee's claim. The Departmental Representative argued that the application was an attempt to review the decision rather than rectify a mistake. However, the Tribunal found that the non-consideration of cited precedents constituted a mistake apparent from the record, leading to the recall of the previous order.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 299481 (ITAT-MUMBAI)
• Duration Of Justice: 7 month(s) 10 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 24-07-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 27-04-2023
• Assessment Year: 2013-2014
• Appeal Filed On: 14-12-2022
• Other Referred Cases: Shri Adhikari Brothers Television Network Limited Vs. ACIT, Shri Adhikari Brothers Television Network Limited vs. ITO
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation
• Section: 143(3); 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “G” BENCH, MUMBAI BEFORE SHRI PRASHANT MAHARISHI, AM AND SHRI PAVAN KUMAR GADALE, JM MA No. 396/MUM/2022 (Assessment Year 2013-14) Arising out of ITA 3632/Mum/2018 MA No. 397/MUM/2022 (Assessment Year 2014-15) Arising out of ITA 3633/Mum/2018 MA No. 398/MUM/2022 (Assessment Year 2016-17) Arising out of ITA 4769/Mum/2019 Sanjana C r yo geni c s Stora ges Ltd. 116, Bajaj Bha van, 11 th Floo r, Nar im an Point, Mum bai 400021 Vs. DCIT 3(3)(1) Room No. 609, 6 th Floor, Aayakar Bhavan, M.K. Road, Mumbai 400020 (Appellant) (Respondent) PAN No. AADCS5093D Assessee by : Shri Jitendra Jain, AR Revenue by : Shri Sonumendu Kumar, DR Date of hearing: 28.04.2023 Date of pronouncement : 25.07.2023 O R D E R PER PRASHANT MAHARISHI, AM: 01. MA nos. 396, 397 and 398/Mum/2022, is filed in ITA No.3632, 3633/Mum/2018 and ITA No.4769/Mum/2019 for A.Y. 2013-14, 2014-15 and 2016-17, wherein the Page | 2 MA No.396,397,398/MUM/2022 A.Y.2013-14, 14-15, 16-17 Sanajana Cryogenics Storages Ltd. order passed by the co-ordinate Bench on 20 th June, 2022, is stated to be suffering from mistake apparent. 02. The Miscellaneous Applications filed by the assessee states that; i. The co-ordinate Bench has held that assessee has acquired shares of RRS Minerals Resources Pvt. Ltd. vide agreement dated 14 th October, 2009 and since the shares do not appear in the definition of intangible assets, the learned Assessing Officer is justified in rejecting the claim of depreciation. It was contended that while holding so, the ITAT has not considered several clauses of agreement dated 14 th October, 2009, which clearly provides that the assessee has not acquired only the share but also the rights of buying and selling in respect of Iron Ore / fines extracted out of Garco mines. Therefore, there is no finding of the co-ordinate Bench on these clauses of the agreement. ii. The co-ordinate Bench has not given any finding on the fact of merger and its consequential treatment in the books of account, wherein the amount paid under agreement dated 14 th October, 2009 was capitalized by treating it as an intangible asset and therefore, depreciation is allowable on this sum. Absence of any finding of the co-ordinate Bench and non consideration of the same statute mistake apparent from the record. Page | 3 MA No.396,397,398/MUM/2022 A.Y.2013-14, 14-15, 16-17 Sanajana Cryogenics Storages Ltd. iii. In the earlier assessment year i.e. A.Y. 2010-11, the intangible assets have entered into the depreciable block of assets. This fact has been considered by the learned Assessing Officer while passing an order under Section 143(3) of the Act. Therefore, the co- ordinate Bench finding that the intangible assets do not exist but is merely a share, suffers from mistake apparent from record because such finding is given without any material on record and in ignorance of assessment proceedings of earlier years. iv. The co-ordinate Bench has filed to consider the argument of the consistency wherein in earlier years these assets has been considered by the learned Assessing Officer himself and in respect of second year, the co-ordinate Bench has held that there is no intangible asset. v. The co-ordinate bench did not consider the finding of judicial precedents in case of Shri Adhikari Brothers Television Network Limited Vs. ACIT (2011) 137 TTJ (Mumbai) 424 and 133 ITR 145 in case of Shri Adhikari Brothers Television Network Limited vs. ITO, wherein on identical facts and circumstances the co- ordinate Bench in paragraph no.23, wherein the purchases of shares were held to be depreciable assets and the Tribunal held that on the cost of purchase of shares the assessee is to be entitled for depreciation. Thereon as the shares are capable with of their right to occupy the property. In the present Page | 4 MA No.396,397,398/MUM/2022 A.Y.2013-14, 14-15, 16-17 Sanajana Cryogenics Storages Ltd. case, shares are coupled with the right of mining and extraction. Therefore, not considering the decision of the co-ordinate Bench makes the order suffering from above mistake. vi. The learned Authorized Representative vehemently supported all the above contentions raised in the Miscellaneous Application and further vehemently submitted that with a decision of the co-ordinate Bench is cited before us another co-ordinate Bench, in absence of any other contrary decision pointing out by the company, the co-ordinate bench is duty bound as a matter of judicial discipline to follow the same. It was stated that the above decisions was not at all discussed by the co-ordinate Bench despite cited by the learned Authorized Representative. vii. The learned Departmental Representative submitted that it is merely an attempt by the assessee for review of the decision and therefore, the Miscellaneous Application filed cannot be entertained. It was stated that the moment the mistake is pointed, if requires to be proved by showing many documents, it itself shows that there is no mistake apparent which can be rectified. It was also the checkmate of the revenue that merely because of the decision is against the assessee, it is a feeble attempt by the assessee for recalling of the order. Page | 5 MA No.396,397,398/MUM/2022 A.Y.2013-14, 14-15, 16-17 Sanajana Cryogenics Storages Ltd. 03. We have carefully considered the rival contentions and perused the orders of the co-ordinate Bench. We have also perused the Miscellaneous Application filed by the assessee. According to the Provisions of Section 254 of the Act if any error which is apparent can be rectified. If a mistake is shown by process of argument as well as referring to so many documents as enclosed all the agreements, it does not fall within the purview of rectification of mistake apparent from the record. It is also an established judicial precedents that in the garb of rectification of the mistake, the parties cannot ask for the review of the decision. 04. On carefully considering the decision of the co-ordinate Bench, we find that at paragraph no.11, the learned Authorized Representative has categorically argued that the agreement dated 14 th October, 2009, has been covered by the shares of RRS Minerals Resources Pvt. Ltd. were not acquired and such acquisition of shares has underlying asset of commercial rights over the extraction of Iron Ore / fines and therefore, by acquisition of the shares, the assessee has acquired intangible assets in the projects of right of extraction of Iron and Ore. After recording the argument of the learned Authorized Representative in paragraph no.11, the co-ordinate Bench has considered at paragraph no. 13 and 14 an agreement with Garco mines and RRS minerals reserves Pvt. Ltd. as well as agreement dated 14 th October, 2009, between ventures and RRS Minerals Resources Pvt. Ltd. The co- Page | 6 MA No.396,397,398/MUM/2022 A.Y.2013-14, 14-15, 16-17 Sanajana Cryogenics Storages Ltd. ordinate Bench is also recorded on the fact of amalgamation in paragraph no. 15. Vide paragraph no.16 it has also considered the agreement dated 24 th November, 2009. Based on all this decisions, the co- ordinate Bench has arrived at a conclusion that acquisition of the shares that having underlying assets of right over Iron ore extraction does not constitute intangible asset on which depreciation is allowable. Therefore, we do not find any reason to recall the order of the co-ordinate bench on the above count. 05. However, the assessee has raised an issue that the co- ordinate Bench in ITA No.3175/Mum/2004 for A.Y. 2000- 01 dated 22 nd September, 2010, in Shri Adhikari Brothers Television Networks Ltd. Vs. ACIT reported in (2011) 137 TTJ (Mum) 424 has categorically held that when the assessee purchase shares to obtain use and occupy the premises built by the builder company, the assessee’s right to use and occupy the property is embedded in the shares and therefore, assessee is entitled to depreciation on the amount paid for acquisition of shares. In the substance by acquisition of the shares, the assessee acquired the right to use the above property and therefore, such sum which was used for purchase of those shares, are entitled to depreciation. The above decision cited before us was not considered. 06. We find that non consideration of judicial precedents cited before the co-ordinate Bench makes the order of the co- ordinate Bench suffering from a mistake apparent from Page | 7 MA No.396,397,398/MUM/2022 A.Y.2013-14, 14-15, 16-17 Sanajana Cryogenics Storages Ltd. record. Accordingly, on this issue we recall the order passed by the co-ordinate Bench. Accordingly, on this ground, the Miscellaneous Application filed by the assessee succeeds. Accordingly, we recall the order passed by the co-ordinate Bench for all these three years and direct the registry to fix for hearing before regular bench. 07. In the result, Miscellaneous Applications filed by the assessee in all these three years are allowed to the extent stated above. Order pronounced in the open court on 25.07. 2023. Sd/- Sd/- (PAVAN KUMAR GADALE) (PRASHANT MAHARISHI) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Mumbai, Dated: 25.07. 2023 Sudip Sarkar, Sr.PS Copy of the Order forwarded to: 1. The Appellant 2. The Respondent. 3. The CIT(A) 4. CIT 5. DR, ITAT, Mumbai 6. Guard file. BY ORDER, True Copy// Sr. Private Secretary/ Asst. Registrar Income Tax Appellate Tribunal, Mumbai