ACIT, CHENNAI v. M/s. L & T Transportation Infrastructure Ltd., CHENNAI

ITA 2106/CHNY/2011 | 2008-2009
Pronouncement Date: 20-02-2012 | Result: Dismissed

Appeal Details

RSA Number 210621714 RSA 2011
Assessee PAN AAACL1912F
Bench Chennai
Appeal Number ITA 2106/CHNY/2011
Duration Of Justice 1 month(s) 28 day(s)
Appellant ACIT, CHENNAI
Respondent M/s. L & T Transportation Infrastructure Ltd., CHENNAI
Appeal Type Income Tax Appeal
Pronouncement Date 20-02-2012
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 20-02-2012
Assessment Year 2008-2009
Appeal Filed On 23-12-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH CHENNAI BEFORE SHRI ABRAHAM P. GEORGE ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN JUDICIAL MEMBER I.T.A. NO. 2106/MDS/2011 (ASSESSMENT YEAR : 2008-09) THE ASSISTANT COMMISSIONER OF INCOME TAX COMPANY CIRCLE II(4) CHENNAI - 600 034 . (APPELLANT) V. M/S L&T TRANSPORTATION INFRASTRUCTURE LTD. MOUNT POONAMALLEE ROAD MANAPAKKAM P.B. NO.979 CHENNAI - 600 089. PAN : AAACL1912F (RESPONDENT) APPELLANT BY : SHRI R.B. NAIK CIT-DR II RESPONDENT BY : SHRI VIKRAM VIJAYARAGHA VAN ADVOCATE DATE OF HEARING : 20.02.2012 DATE OF PRONOUNCEMENT : 20.02.2012 O R D E R PER ABRAHAM P. GEORGE ACCOUNTANT MEMBER : IN THIS APPEAL FILED BY THE REVENUE ITS GRIEVANC E IS THAT CIT(APPEALS) ALLOWED ASSESSEES CLAIM OF DEPRECIATI ON ON PROJECT ASSETS AT THE RATE OF 10% WHICH WAS APPLICABLE TO BUILDING. ACCORDING TO REVENUE THIS TRIBUNAL IN ASSESSEES O WN CASE FOR ASSESSMENT YEARS 2002-03 2003-04 2004-05 AND 2006 -07 IN I.T.A. I.T.A. NO. 2106/MDS/11 2 NOS. 1692 TO 1695/MDS/2010 THOUGH IT ALLOWED THE IS SUE IN FAVOUR OF ASSESSEE THIS HAD NOT BECOME FINAL SINCE IT HAD P REFERRED AN APPEAL BEFORE HONBLE JURISDICTIONAL HIGH COURT. 2. WHEN THE MATTER CAME UP BEFORE US LEARNED D.R. SUBMITTED THAT THOUGH THE REVENUE HAD PREFERRED APPEAL BEFORE HONBLE JURISDICTIONAL HIGH COURT IT HAD NOT RECEIVED ANY DECISION IN FAVOUR OF IT SO FAR. 3. WE HAVE PERUSED THE ORDERS AND HEARD THE RIVAL SUBMISSIONS. AS ON DATE THE DECISION OF THIS TRIBUNAL IN ASSESS EE'S OWN CASE FOR ASSESSMENT YEARS 2002-03 2003-04 2004-05 AND 2006 -07 IN I.T.A. NOS. 1692 TO 1695/MDS/2010 WOULD APPLY SINCE THE FA CT SITUATION REMAINS THE SAME. IN PARA 4 OF THE SAID ORDER DATE D 30.11.2010 IT WAS HELD AS UNDER:- 4. THE ISSUE PERTAINS TO DISALLOWANCE OF DEPRECIATI ON ON PROJECT ASSETS BEING ROAD AND BRIDGE IN THE ASSESSMENT YEARS 2002-03 03- 04 AND 04-05 THE ASSESSING OFFICER HAS DISALLOWED THE CLAIM OF DEPRE CIATION ON THE BASIS OF ELABORATE DISCUSSION MADE BY HIM IN THE ORDER FOR T HE ASSESSMENT YEAR 2006-07. DURING THE COURSE OF ASSESSMENT PROCEEDINGS IN THE ASSESSMENT YEAR 2006-07 AFTER ANALYZING VARIOUS FACTORS AND ALSO TAKING INT O ACCOUNT ALL THE OBJECTIONS RAISED BY THE ASSESSEE IT WAS HELD BY THE ASSESSIN G OFFICER THAT THE ASSESSEE IS NOT THE OWNER OF THE PROJECT ASSETS AS SUCH IS NOT ELIGIBLE FOR CLAIMING DEPRECIATION OF SUCH ASSETS. HOWEVER TAKING INTO A CCOUNT THE FACT THAT THE ENTIRE I.T.A. NO. 2106/MDS/11 3 COST OF THE PROJECT HAS TO BE BORNE BY THE ASSESSEE AND SUCH COST HAS TO BE RECOVERED FROM THE USERS OF THE PROJECT BY WAY OF T OLL FEES PRESCRIBED BY THE GOVERNMENT THE ENTIRE COST WAS AMORTIZED OVER THE PERIOD OF CONCESSION. SO AS THE ASSESSEE HAS CLAIMED HUGE DEPRECIATION MORE THA N THE AMORTIZATION VALUE FOR THE ASSESSMENT YEARS 2002-03 03-04 AND 04-05 NOTICES UNDER SECTION 148 WERE ISSUED FOR THE REASONS THAT DEPRECIATION CLAIM WAS FAR IN EXCESS THAN THE AMORTIZATION TO BE ALLOWED AS PER THE DECISION TAKE N IN THE ASSESSMENT YEAR 2006-07. ACCORDINGLY RETURNS FOR THESE THREE YEARS WERE FILED AND AFTER HEARING THE ASSESSEE ASSESSMENTS WERE FINALIZED WHICH WER E CHALLENGED IN APPEALS AND THE LD. CIT(A) CONCLUDED TO ALLOW THE APPEALS O F THE ASSESSEE AS PER PARA 5.4 AND 6 OF HIS ORDER WHICH READ AS UNDER: 5.4 I HAVE CAREFULLY CONSIDERED THE FACTS OF THE C ASE AND THE SUBMISSIONS OF THE LD. AR. I HAVE ALSO GONE THROUGH THE DECISIO NS RELIED ON BY THE AO AND AR. THE APPELLANT COMPANY HAS BEEN INCORPORATED TO UNDERTAKE DEVELOPMENT OF INFRASTRUCTURAL FACILITIES AND HAS D EVELOPED A BY-PASS ROAD AND A BRIDGE ON NH 47 NEAR COIMBATORE. THE APPELLAN T HAS ENTERED INTO A CONCESSION AGREEMENT WITH THE GOVERNMENT OF INDIA A ND GOVERNMENT OF TAMIL NADU TO DEVELOP THE PROJECT ON BUILD-OPERATE- TRANSFER (BOT) BASIS. I HAVE PERUSED THE CONCESSION AGREEMENT AND THE REL EVANT CLAUSES CONTAINED THEREIN. I FIND THAT THE FACTS OF THE APP ELLANT ARE SIMILAR TO THE CASE OF TAMIL NADU ROAD DEVELOPMENT COMPANY LTD. (S UPRA) FOR A.YS. 2003-04 AND 2004-05. THE LD. AR HAS RELIED ON THE D ECISION OF THE JURISDICTIONAL ITAT CHENNAI IN THE ABOVE CASE. THE AO IN HIS REMAND REPORT FOR A.Y. 2006-07 HAS NOT ACCEPTED THE CONTEN TION OF THE LD. AR BY STATING THAT THE ASSESSEE HAS ALSO OBJECTED STATIN G THAT THE TRIBUNAL IN THE CASE OF TAMIL NADU ROAD DEVELOPMENT COMPANY LTD. HA S ALLOWED THE ASSESSEES CLAIM OF DEPRECIATION. HOWEVER AN APPEA L HAS BEEN FILED IN THE HIGH COURT AGAINST THE TRIBUNAL ORDER. IT IS CLEAR FROM THE ABOVE THAT THE ONLY REASON FOR NON-ACCEPTANCE OF THE DECISION IS T HAT THE DEPARTMENT HAS NOT ACCEPTED THE ABOVE DECISION AND APPEAL HAS BEEN FILED AGAINST THE ORDER IN THE HIGH COURT. THE HONBLE ITAT IN THE AB OVE CASE IN I.T.A. NO. 2082/MDS/2008 & 817/MDS/2007 FOR A.YS. 2003-04 AND 2004-05 RESPECTIVELY HAS HELD AS UNDER: AFTER THE ASST. YEAR 1988-89 ALL THE APPENDICES HA VE THE NOTE THAT BUILDING WOULD INCLUDE ROADS. THEREFORE IN OUR VIE W THE ASSESSEE WOULD BECOME ENTITLED TO DEPRECIATION ON THE ROAD I N THE CATEGORY OF BUILDING. IN THESE CIRCUMSTANCES WE SET ASIDE THE ORDER OF THE CIT(APPEALS) ON THIS ISSUE AND DIRECT THE AO TO ALL OW DEPRECIATION I.T.A. NO. 2106/MDS/11 4 ON THE ROAD AT THE RATE APPLICABLE TO THE BUILDING . SINCE THE FACTS ARE SIMILAR RESPECTFULLY FOLLOWING THE ABOVE DECISION OF THE HONBLE JURISDICTIONAL ITAT THE AO IS DIRECTED TO ALLOW DEPRECIATION ON THE ROAD AT THE RATE APPLICABLE TO BUILDING. THE AP PELLANT SUCCEEDS ON THIS GROUND. 6. THE NEXT ISSUE PERTAINS TO AMORTIZATION OF PROJE CT COST. AS THE EARLIER ISSUE ON DEPRECIATION HAS BEEN DECIDED IN FAVOUR OF THE APPELLANT THIS ISSUE BECOMES INFRUCTUOUS AND DOES NOT REQUIRE ADJU DICATION. THE GROUND ISACCORDINGLY DISMISSED FOR STATISTICAL PURPOSE. 5. AGGRIEVED BY THE ORDERS OF THE LD. CIT(A) THE D EPARTMENT HAS COME UP IN APPEAL AND AT THE VERY OUTSET THE LD. COUNSEL FOR THE ASSESSEE WHILE FILING COPY OF THE ORDER OF THE TRIBUNAL C BENCH IN THE CASE OF M/S. TAMIL NADU ROAD DEVELOPMENT COMPANY LTD IN I.T.A. NO. 2082/MDS/2008 & 817/MDS/2007 FOR THE ASSESSMENT YEAR 2003-04 AND 04-05 DATED 24.10.2008 HAS PLEADED THAT THE LD. CIT(A) HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSES SEE BY FOLLOWING THE ABOVE NOTED DECISION AND SUCH ORDER OF THE TRIBUNAL HAS N OT BEEN REVERSED BY ANY HIGHER COURT. SIMPLY BY FILING APPEAL IN THE HIGH C OURT AGAINST THE ORDER OF THE TRIBUNAL THE PLEA OF THE DEPARTMENT FOR REVERSAL O F THE ORDER CANNOT BE ACCEPTED IT WAS THUS PLEADED THAT SINCE THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE THEREFORE ALL THE APPEALS FILED BY THE DEPARTMENT SHOULD BE DISMISSED AND TO THIS MOVE OF THE LD. COUNSEL FOR THE ASSESSEE THE LD. D R COULD NOT CONTROVERT THIS FACTUAL ASPECT THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY EARLIER DECISION OF THE TRIBUNAL VIDE ORDER DATED 24.10.200 8 BUT HE RELIED UPON THE ORDERS OF THE ASSESSING OFFICER AND PLEADED FOR DEC IDING THE APPEALS ACCORDINGLY. 6. WE HAVE HEARD BOTH THE SIDES CONSIDERED THE MAT ERIAL ON RECORD AS WELL AS PRECEDENT RELIED UPON BY THE LD. COUNSEL FOR THE ASSESSEE AND FIND THAT THE MAIN CONTENTION RAISED IN ALL APPEALS OF THE DEPART MENT IS THAT THE LD. CIT(A) HAS ERRED IN ALLOWING DEPRECIATION ON PROJECT ASSETS AT THE RATE OF 10% APPLICABLE TO THE BUILDING BY PLACING RELIANCE ON THE PRECEDENT O F ITAT CHENNAI C; BENCH DECISION AGAINST WHICH THE REVENUE HAS PREFERRED FU RTHER APPEAL IN THE HIGH COURT OF MADRAS BUT COULD NOT BE ABLE TO PLACE ON RECORD ANY EVIDENCE OR MATERIAL TO SHOW THAT THE ORDER OF THE TRIBUNAL ON THE BASIS OF WHICH THE LD. CIT(A) HAS PASSED THE ORDER HAS BEEN REVERSED OR S ET ASIDE BY THE HONBLE JURISDICTIONAL HIGH COURT. THEREFORE IN VIEW OF TH E FACTS CIRCUMSTANCES AND MATERIAL ON RECORD WE DO NOT FIND ANY VALID REASON TO INTERFERE IN THE ORDERS PASSED BY THE LD. CIT(A) FOR ALL THE FOUR YEARS IN THIS CASE AND WHILE CONFIRMING THE IMPUGNED ORDERS WE DISMISS THE APPEALS OF THE REVENUE BEING DEVOID OF ANY MERITS. I.T.A. NO. 2106/MDS/11 5 IN VIEW OF THE ABOVE DECISION OF THIS TRIBUNAL WE ARE OF OPINION THAT REVENUE HAS NO CASE FOR OVER RULING THE ORDER OF LD . CIT(APPEALS). 4. IN THE RESULT APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT AFTER CONCLUSION OF HEARING ON 20 TH FEBRUARY 2012. SD/- SD/- (GEORGE MATHAN) (ABRAHAM P. GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI DATED THE 20 TH FEBRUARY 2012. KRI. COPY TO: (1) APPELLANT (2) RESPONDENT (3) CIT(A)-IV CHENNAI-34 (4) CIT-I CHENNAI (5) D.R. (6) GUARD FILE