SAIDAESHAN BUSINESS CENTRES P. LTD, V. ITO WD 7(2)(2),

MA 582/MUM/2011

• Counselvise Citation: [2012] 123 COUNSELVISE.COM (IT) 8208 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 4 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 18-05-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 18-05-2012
• Assessment Year: 2000-2001
• Appeal Filed On: 14-12-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: P C MAURYA
• Keywords: Business income; Depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH E,MUMBAI BEFORE SHRI R.S. SYAL (AM) SHRI VIJAY PAL RAO (JM ) M.A. NOS. 581 TO 587/MUM/2011 (ARISING OUT OF I.T.A. NOS. 4213 TO 4217, 4391 & 5 062/MUM/2009) (A.YS. 1999-2000, 2000-01, 2002-03, 2004-05 TO 20 07-08) M/S. SAIDARSHAN BUSINESS CENTRES PVT. LTD., 405-408, NAVBHARAT ESTATE, B-WING, ZAKARIA BUNDER ROAD, SEWRI (W), MUMBAI-400 015. PAN: AAACS5801J. VS. INCOME-TAX OFFICER, WARD 7(2)(2), MUMBAI. APPLICANT RESPONDENT APPLICANT BY SHRI VIJAY MEHTA. RESPONDENT BY SHRI P.C. MAURYA. DATE OF HEARING 18-05-2012 DATE OF PRONOUNCEMENT 18-05-2012 O R D E R PER R.S. SYAL, AM : BY THE PRESENT MISC. APPLICATIONS, THE ASSESSEE IS REQUESTING THE TRIBUNAL TO AMEND ITS CAPTIONED ORDER ON THE ISSUE OF GRANTING DEPRECIATION @ 50% ON PAREL PROPERTY. 2. THE LD. COUNSEL FOR THE ASSESSEE CONTENDED THAT THE ASSESSEE RECEIVED CERTAIN RENTAL INCOME WHICH WAS CLAIMED AS BUSINESS INCOME. THE AO CLASSIFIED SUCH INCOME UNDER THE HEAD INCOME FROM HOUSE PROPE RTY, WHICH VIEW WAS MA NOS.581 TO 587/MUM/2 011 SAIDARSHAN BUSINESS CENTRES P. LTD. 2 UPHELD BY THE TRIBUNAL. IT WAS SUBMITTED THAT THAT THE ASSESSEE WAS ALSO ENGAGED IN THE BUSINESS OF PURCHASE & SALE OF SHARES. THE LD. COUNSEL CONTENDED THAT THE ASSESSEE WAS HAVING RENTAL INCOME NOT ONLY FROM PAR EL PROPERTY BUT ALSO SEWRI PROPERTY AND THE BUSINESS OF PURCHASE AND SALE OF S HARES WAS CARRIED FROM SUCH PROPERTIES. IT WAS CLAIMED BEFORE THE TRIBUNAL THAT , APART FROM ALLOWING EXPENSES AGAINST INCOME FROM SHARES, THE ASSESSEE B E ALSO ALLOWED DEPRECIATION ON THESE BUILDINGS AGAINST SUCH INCOME, WHICH WERE USED FOR SUCH BUSINESS PURPOSE. THE TRIBUNAL, VIDE ITS ORDER DATED 31-10- 2011, PARTLY ACCEPTED THE ASSESSEES CONTENTION BY HOLDING THAT PREMISES AT P AREL WERE PARTLY UTILIZED FOR CARRYING OUT THE BUSINESS OF SUCH PURCHASE & SALE O F SHARES. 50% OF DEPRECIATION ON SUCH PROPERTY AT PAREL WAS DIRECTED TO BE GRANTE D IN RESPECT OF ALL THE ASSESSMENT YEARS UNDER CONSIDERATION. THE LD. COUN SEL SUBMITTED BEFORE US THAT THE PAREL PROPERTY WAS SOLD ON 07-08-2003 BUT THE S EWRI PROPERTY CONTINUED WITH THE ASSESSEE. IT WAS, THEREFORE, PRAYED THAT SINCE THE PAREL PROPERTY WAS NOT AVAILABLE WITH THE ASSESSEE FOR BUSINESS PURPOSES A FTER 07-08-2003, THE DIRECTION OF THE TRIBUNAL FOR GRANTING DEPRECIATION @ 50% ON PAREL PROPERTY SHOULD BE MODIFIED TO SEWRI PROPERTY AB INITIO. THE LD. DR OPPOSED THE MISC. APPLICATIONS. 3. HAVING HEARD THE RIVAL SUBMISSIONS AND PERUSED T HE RELEVANT MATERIAL ON RECORD, IT IS OBSERVED AS AN ADMITTED POSITION THAT THE TRIBUNAL ACCEPTED THAT THE ASSESSEE WAS DOING BUSINESS IN PURCHASE & SALE OF S HARES DURING THE ASSESSMENT YEARS 1999-2000 UP TO 2007-08. IT IS FURTHER BORNE OUT FROM THE IMPUGNED ORDER MA NOS.581 TO 587/MUM/2 011 SAIDARSHAN BUSINESS CENTRES P. LTD. 3 THAT THE TRIBUNAL HAS ACCEPTED THE ASSESSEES CONTE NTION THAT THE PREMISES AT PAREL WAS PARTLY USED FOR SUCH BUSINESS PURPOSE, ON WHICH IT ALLOWED DEPRECIATION AT 50%. THE FINDING GIVEN BY THE TRIB UNAL FOR ALLOWING 50% DEPRECIATION ON PAREL PROPERTY AGAINST THE INCOME F ROM SHARES EXTENDS TO ALL THE YEARS IN QUESTION. IT HAS BEEN BROUGHT TO OUR NOTI CE THAT THE PAREL PROPERTY WAS SOLD ON 07-08-2003. THE PRAYER OF THE ASSESSEE FOR ALLOWING DEPRECIATION @ 50% ON SEWREE PROPERTY FROM THE A.Y. 1999-2000 CANNOT BE ACCEPTED BECAUSE THE TRIBUNAL HAS CATEGORICALLY HELD THE ASSESSEE TO BE ELIGIBLE FOR DEPRECIATION IN RESPECT OF PAREL PROPERTY. NOW THE POSITION WHICH STANDS IS THAT THE CARRYING ON OF BUSINESS OF SALE AND PURCHASE OF SHARES FROM A P ROPERTY OCCUPIED BY THE ASSESSEE HAS BEEN ACCEPTED BY THE TRIBUNAL IN ALL T HE YEARS UNDER CONSIDERATION. IN ADDITION TO DEPRECATION, THE TRIBUNAL HAS ALSO D IRECTED TO ALLOW EXPENSES AGAINST THE BUSINESS INCOME FROM SHARES IN ALL THE YEARS IN QUESTION. SINCE THE DIRECTION OF THE TRIBUNAL CAN BE FULLY IMPLEMENTED BY GRANTING DEPRECIATION @ 50% ON PAREL PROPERTY IN RESPECT OF ASSESSMENT YEAR S 1999-2000, 2000-01 & 2002-03, WE DO NOT INTEND TO INTERFERE WITH THE SAM E. BUT THE PROBLEM WHICH HAS ARISEN IS THAT THERE IS A DIRECTION OF THE TRI BUNAL FOR ALLOWING DEPRECIATION @ 50% AGAINST THE BUSINESS INCOME OF SHARES BUT THE PROPERTY WHICH WAS MADE ELIGIBLE, IS NO MORE AVAILABLE WITH THE ASSESSEE A FTER ITS TRANSFER ON 07.08.2003. UNDER SUCH CIRCUMSTANCES, THE ONLY POSSIBLE WAY FOR GIVING EFFECT TO THE DIRECTION OF THE TRIBUNAL IS TO ALLOW DEPRECIATION @ 50% ON THE SEWRI PROPERTY INSTEAD OF PAREL PROPERTY FROM THE DATE OF SALE OF PAREL PROPERTY, BEING 07-08- MA NOS.581 TO 587/MUM/2 011 SAIDARSHAN BUSINESS CENTRES P. LTD. 4 2003. ACCORDINGLY, THE TRIBUNAL ORDER FOR ASSESSMEN T YEAR 2004-05 IS AMENDED TO THE EFFECT THAT 50% DEPRECIATION ON PAREL PROPER TY BE GRANTED UP TO 07-08- 2003, AND FOR THE PERIOD POSTERIOR TO 07-08-2003, D EPRECIATION BE ALLOWED @ 50% ON SEWRI PROPERTY. IN SO FAR AS THE ASSESSMENT YEARS 2005-06, 2006-07 AND 2007-08 ARE CONCERNED, THE DIRECTION OF THE TRIBUNA L IS MODIFIED BY HOLDING THAT 50% DEPRECIATION ON SEWRI PROPERTY BE ALLOWED AGAIN ST BUSINESS INCOME. 4. IN THE RESULT, MISC. APPLICATIONS FOR ASSESSMENT YEARS 1999-2000, 2000-01 & 2002-03 ARE DISMISSED, FOR ASSESSMENT YEAR 2004- 05 IS PARTLY ALLOWED AND FOR ASSESSMENT YEARS 2005-06 TO 2007-08 ARE ALLOWED IN ABOVE TERMS. ORDER PRONOUNCED IN OPEN COURT ON THE 18TH DAY OF MAY, 2012. SD/- SD/- (VIJAY PAL RAO) (R.S. SYAL) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI: 18TH MAY , 2012. NG: COPY TO : 1. ASSESSEE. 2. DEPARTMENT. MA NOS.581 TO 587/MUM/2 011 SAIDARSHAN BUSINESS CENTRES P. LTD. 5 3 CIT(A) CONCERNED. 4 CIT CONCERNED. 5.DR,E BENCH, MUMBAI. 6.MASTER FILE. (TRUE COPY) BY ORDER, ASST. REGISTRAR, ITAT, MUMBAI. MA NOS.581 TO 587/MUM/2 011 SAIDARSHAN BUSINESS CENTRES P. LTD. 6 DETAILS DATE INITIALS DESIGN ATION 1. DRAFT DICTATED ON 18-05-12 SR.PS/ 2. DRAFT PLACED BEFORE AUTHOR 18-05-12 SR.PS/ 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/A M 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/A M 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/ 6. KEPT FOR PRONOUNCEMENT ON SR.PS/ 7. FILE SENT TO THE BENCH CLERK SR.PS/ 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9. DATE ON WHICH FILE GOES TO THE AR 10. DATE OF DISPATCH OF ORDER *