NISHILAND PARK LTD, V. ITO 3(2)(3),

MA 450/MUM/2010

• Counselvise Citation: [2011] 123 COUNSELVISE.COM (IT) 6210 (ITAT-MUMBAI)
• Duration Of Justice: 7 month(s) 26 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 09-03-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2001-2002
• Appeal Filed On: 14-07-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: P N DEVADASAN
• Assessee Lawyers: M SUBRAMANIAN
• Keywords: Depreciation

Judgement Text

1 MA 450/M/2010 M/S NISHILAND PARK LIMITED IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES D BEFORE SHRI D.K. AGARWAL, J.M. AND SHRI B. RAMKOTAI AH, A.M. MISC. APPLICATION NO. 450/MUM/2010 ARISING OUT OF ITA NO. 1666/MUM/2004 ASSESSMENT YEAR 2001-02 M/S NISHILAND PARK LTD., C/O MODERN TEXTILE, GALA WOODWORK COMPOUND, OPP BDD CHAWL NO. 114, WORLI, MUMBAI -400 013. PAN AAACN 3974 E VS. ITO, 3(2)(3), AAYKAR BHAVAN, 6 TH FLOOR, MUMBAI- 400 020. APPLICANT RESPONDENT APPLICANT BY SHRI M. SUBRAMANIAN RESPONDENT BY SHRI P.N. DEVADASAN ORDER PER D.K. AGARWAL, J.M. THIS MISC. APPLICATION FILED BY THE ASSESSEE IS DIR ECTED AGAINST THE ORDER DATED 11.1.2008 PASSED BY THE TRIBUNAL IN ITA NO. 1 666/MUM/2004 FOR THE A.Y. 2001-02. 2. THE ASSESSEE APPLICANT VIDE HIS MISC. APPLICATIO N DATED 12.7.10 SUBMITTED THAT IN THE SAID ORDER OF THE TRIBUNAL, T HERE ARE CERTAIN MISTAKES APPARENT ON RECORD, THE APPLICANT REQUESTS THAT THE SAME BE RECTIFIED. THE MISTAKES POINTED OUT BY THE APPLICANT ARE THAT THE TRIBUNAL WHILE ADJUDICATING GROUND NO. 1 IN PARA 10 OF ITS ORDER OBSERVED THAT THE DEPRECIATION WAS CLAIMED IN THE EARLIER YEARS ON THE ASSET SOLD, IT IS PATEN TLY WRONG. IN SUPPORT, HE REFERS TO THE COPY OF THE NOTES ON ACCOUNTS ATTACHED TO TH E AUDITED ACCOUNTS TO SHOW 2 MA 450/M/2010 M/S NISHILAND PARK LIMITED THAT NO DEPRECIATION WAS CHARGED ON THESE ASSETS SI NCE ITS PURCHASE WHICH IS ALSO EVIDENT FROM THE CHART SHOWING LOSS ON SALE OF MOTOR CARS. IT WAS FURTHER POINTED THAT THE TRIBUNAL WHILE DECIDING GROUND NO. 2 PERTAINING TO THE INTEREST HAS OBSERVED THAT NO DETAILS OF INTEREST WAS FILED WHEREAS THE SAME WAS FILED. IT WAS, THEREFORE, SUBMITTED THAT THE ABOVE MISTAKES A RE APPARENT FROM THE RECORD AND THE SAME BE RECTIFIED. 3. AT THE TIME OF HEARING, THE LD. COUNSEL FOR THE ASSESSEE WHILE REITERATING THE SAME SUBMISSIONS AS MENTIONED IN THE MISC. APPL ICATION FURTHER SUBMITS THAT IT IS THE CASE OF THE ASSESSEE THAT NO DEPRECI ATION HAS BEEN CHARGED, THEREFORE, THE FINDING OF THE TRIBUNAL THAT THE LOW ER AUTHORITIES HAVE GIVEN A CATEGORICAL FINDING THAT THESE CARS WERE SHOWN AS P ART OF THE BLOCK OF THE ASSETS IN EARLIER YEARS, DEPRECIATION WAS CLAIMED THEREON NEEDS TO BE DELETED. IN SUPPORT, HE ALSO REFERS TO PARA 2.7 OF THE ORDER OF THE LD. CIT(A) WHEREIN IT IS MENTIONED THAT THE FACT THAT THE APPELLANT HAS CHO SEN NOT TO CLAIM DEPRECIATION ON THE MOTOR CARS . REFERRING TO POINT NO. 9 OF THE NOTES ON ACCOUNTS DATED 30.8.01 WHEREIN IT HAS BEEN MENTIONE D THAT NO DEPRECIATION IS CHARGED ON ASSETS PURCHASED FOR LAST 5 YEARS. DE PRECIATION ON ASSET ARE ` 9606324/- AS SUCH LOSS IS UNDERSTATED BY ` 9606324/- AND TO THE RECENT PAPER BOOK CONTAINING STATEMENT SHOWING DEPRECIATIO N ON MOTOR CARS CHARGED AND NOT CHARGED FOR THE A.YS. 1996-97 TO 2001-02 AP PEARING AT PAGE 1 TO 24 OF THE ASSESSEES PAPER BOOK FILED ON 27.1.11, HE SUBM ITS THAT THE FINDING OF THE TRIBUNAL THAT THE ASSESSEE HAD CLAIMED DEPRECIATION ON THESE MOTOR CARS NEEDS TO BE RECTIFIED AND CONSEQUENT EFFECT BE GIVEN. 4. ON THE OTHER HAND, THE LD. D.R. WHILE RELYING ON THE ORDER OF THE TRIBUNAL SUBMITS THAT THERE IS NO APPARENT MISTAKE IN THE OR DER OF THE TRIBUNAL WHICH MAY BE RECTIFIED U/S 254(2) OF THE ACT, THEREFORE, THE MISC. APPLICATION FILED BY THE ASSESSEE IS LIABLE TO BE REJECTED. 3 MA 450/M/2010 M/S NISHILAND PARK LIMITED 5. WE HAVE CAREFULLY HEARD THE SUBMISSIONS OF THE R IVAL PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE TRIBUNAL WITH REGARD TO GROUND NO. 1 THAT :- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE OF LOSS ON SALE OF MOTOR CAR OF RS. 12,38,469/- OR ALTERNATIVELY HE OUGHT TO HAVE A LLOWED THE CLAIM OF DEPRECIATION WHEN THE FACTS SHOWS THAT NO DEPRECIAT ION WAS ALLOWED. HAS HELD VIDE PARA NO. 10 OF ITS ORDER DATED 11.1.0 8 AS UNDER:- HAVING HEARD THE RIVAL SUBMISSIONS AND FROM CAREFU L PERUSAL OF THE RECORD, WE FIND THAT THE LOWER AUTHORITIES HAVE GIV EN A CATEGORICAL FINDING THAT THESE CARS WERE SHOWN AS PART OF THE BLOCK OF ASSET AND IN EARLIER YEARS, DEPRECIATION WAS CLAIMED THEREON. IN THIS Y EAR, THE WDV WAS SHOWN AT ` 71,39,050/-. UNDISPUTEDLY, THE ASSESSEE IS NOT A DEALER OR A TRADER IN CARS AND THESE CARS HAVE BEEN ACQUIRED AS AN ASSET FOR BEING USED FOR THE PURPOSE OF ASSESSEES BUSINESS OF AMUS EMENT PARK. SINCE THESE CARS WAS A BUSINESS ASSET, THE LOSS ON ITS SA LE CANNOT BE CALLED TO BE A REVENUE LOSS. WE, HOWEVER, CAREFULLY EXAMINED THE ORDER OF THE LOWER AUTHORITIES AND WE FIND THAT THE ISSUE WAS RI GHTLY ADJUDICATED BY THEM IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE CA SE AND WE FIND NO INFIRMITY IN THE ORDER OF THE CIT(A). WE, THEREFOR E, CONFIRM THE SAME. WE FURTHER FIND THAT IN THE NOTES ON ACCOUNT DATED 30.8.2001 IN POINT NO. 9 APPEARING AT PAGE NO. 3 AND IN POINT NO. (E) AT PAG E NO. 4 OF THE ASSESSEES PAPER BOOK IT HAS BEEN MENTIONED AS UNDER:- NO DEPRECIATION IS CHARGED ON ASSETS PURCHASED FOR LAST 5 YEARS. DEPRECIATION ON ASSET ARE ` 9606324 AS SUCH LOSS IS UNDERSTATED BY ` 9606324 E) DEPRECIATION DEPRECIATION OF FIXED ASSET HAS BEEN PROVIDED ON WR ITTEN DOWN VALUE METHOD AT THE RATES PROVIDED IN SCHEDULE XIV OF THE COMPANIES ACT, 1956 (AS AMENDED). NO DEPRECIATION IS CHARGED ON THE NE W ADDITION OF FIXED ASSETS FOR LAST FIVE YEARS. ON A COMBINED READING OF THE ABOVE, WE OBSERVE THAT NOWHERE IT HAS BEEN MENTIONED BY THE ASSESSEE THAT NO DEPRECIATION WAS CHARGED ON CARS FROM LAST 4 MA 450/M/2010 M/S NISHILAND PARK LIMITED 5 YEARS. WE FURTHER FIND THAT IN THE CHART OF THE D EPRECIATION APPEARING AT PAGE NO. 4 OF THE ASSESSEES PAPER BOOK, THE ASSESSEE HA S CHARGED DEPRECIATION ON THE MOTOR CARS AS UNDER: PARTICULARS RATE W.D.V. AS ON ADDITION DEDUCTION TOTAL DEP. LOSS/PROFIT W.D.V. AS ON MOTOR CAR 20% 7139056 - 500000 6639056 48007 (-) 23 8469 5352580 THUS, IN THE DEPRECIATION CHART, THE ASSESSEE HAS D ULY CHARGED DEPRECIATION ON MOTOR CARS ` 48007/-. AS REGARDS THE ASSESSEES PLEA THAT NO D EPRECIATION WAS CHARGED FOR LAST 5 YEARS AND IN SUPPORT, HE ALSO PL ACED ON RECORD THE NEW PAPER BOOK CONTAINING PAGE 1 TO 24 OF THE ASSESSEES PAPE R BOOK, WE FIND THAT SINCE IN THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAS DULY CHARGED DEPRECIATION ON MOTOR CARS AS ABOVE, THEREFORE, THE NEW PAPER BOOK FILED BY THE ASSESSEE MENTIONING DEPRECIATION ON MOTOR CARS CHARGED AND N OT CHARGED IS OF NO HELP TO THE ASSESSEE SINCE THE APPEAL IS FOR THE A.Y. 20 01-02 WHEREIN THE ASSESSEE HAS CHARGED DEPRECIATION ON MOTOR CAR AS ABOVE. IN THIS VIEW OF THE MATTER, WE ARE OF THE VIEW THAT THERE IS NO MISTAKE IN THE ORD ER OF THE TRIBUNAL. THE ASSESSEE WANTS REVIEW, WHICH IS NOT PERMISSIBLE UND ER SCHEME OF SECTION 254(2) OF THE ACT AND ACCORDINGLY ISSUE NO. 1 RAISE D BY THE ASSESSEE IS REJECTED. 6. AS REGARDS THE ISSUE NO. 2 IN RESPECT OF INTERES T, THE LD. COUNSEL FOR THE ASSESSE AT THE TIME OF HEARING DID NOT PRESS THE AB OVE ISSUE, THEREFORE, THE SAME IS REJECTED BEING NOT PRESSED. 5 MA 450/M/2010 M/S NISHILAND PARK LIMITED 7. IN THE RESULT, ASSESSEES MISC. APPLICATION STAN DS DISMISSED. ORDER PRONOUNCED ON 9 TH MARCH, 2011. SD/- S D/- (B. RAMAKOTAIAH) (D.K. AGARWAL) ACCOUNTANT MEMBER JUDICIAL M EMBER MUMBAI, DATED 9 TH MARCH, 2011. RK OPY TO 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT(A) -CONCERNED, MUMBAI 4. THE CIT- CONCERNED, MUMBAI 5. THE DR BENCH, D 6. MASTER FILE // TUE COPY// BY ORDER DY/ASSTT. REGISTRAR ITAT, MUMBAI 6 MA 450/M/2010 M/S NISHILAND PARK LIMITED DATE INITIALS 1 DRAFT DICTATED ON 28.2.11, 1.3.11 SR. PS 2 DRAFT PLACED BEFORE THE AUTHOR 28.2.11, 1.3.11 SR. PS 3 DRAFT PLACED BEFORE THE SECOND MEMBER 4 APPROVED DRAFT COMES TO THE SR. PS SR. PS 5 KEPT FOR PRONOUNCEMENT ON SR. PS 6 FILE SENT TO THE BENCH CLERK SR. PS 7 DATE ON WHICH FILE GOES TO THE HEAD CLERK 8 DATE ON WHICH FILE GOES TO THE AR 9 DATE OF DISPATCH OF ORDER