Dimension Construction P. Ltd., v. DCIT Cir.2, Kolhapur,

ITA 223/PUN/2009 | 2004-2005
Pronouncement Date: 18-03-2011 | Result: Partly Allowed

Appeal Details

RSA Number 22324514 RSA 2009
Assessee PAN AABCD2744C
Bench Pune
Appeal Number ITA 223/PUN/2009
Duration Of Justice 2 year(s) 1 month(s) 4 day(s)
Appellant Dimension Construction P. Ltd.,
Respondent DCIT Cir.2, Kolhapur,
Appeal Type Income Tax Appeal
Pronouncement Date 18-03-2011
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted B
Tribunal Order Date 18-03-2011
Date Of Final Hearing 09-03-2011
Next Hearing Date 09-03-2011
Assessment Year 2004-2005
Appeal Filed On 13-02-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV JUDICIAL MEMBER AND SHRI G.S. PANNU ACCOUNTANT MEMBER I.T.A. NO. 222 223 233 & 857/PN/2009 A.Y. 2002-03 2004-05 2003-04 & 2006-07 DIMENSION CONSTRUCTION PVT. LTD. 1148/E SKYES EXTENSION KOLHAPUR PAN AABCD 2744 C APPELLANT VS. DY. CIT CIR. 2 KOLHAPUR RESPONDENT APPELLANT BY: SHRI M.K. KULKARNI RESPONDENT BY: SHRI H.C. LEUVA ORDER PER SHAILENDRA KUMAR YADAV JM ALL THESE FOUR APPEALS PERTAIN TO THE SAME ASSESSEE . SO THEY ARE BEING DISPOSED OFF BY A COMMON ORDER FOR THE SA KE OF CONVENIENCE. FIRST THREE APPEALS VIZ. ITA NO. 222 223 AND 233/P/2009 ARISE AGAINST THE CONSOLIDATED ORDER OF THE CIT(A) KOLHAPUR DATED 17-9-2008 FOR A.Y. 2002-03 2004-05 AND 2003-04 RESPECTIVELY WHILE APPEAL IN ITA NO. 857/PN/2009 IS DIRECTED AGAINST THE ORDER OF THE CIT(A) KOLHAPUR DATED 11-5 -2009 FOR A.Y. 2006-07. ITA NO. 222/PN/2009 FOR A.Y. 2003-04 2. IN THIS APPEAL THE GROUNDS RAISED BY THE ASSESS EE ARE AS UNDER: PAGE 2 OF 6 ITA NO. 222 223 233 & 857/PN/2009 DIMENSION CONSTRUCTION A.Y. 2002-03 2004-05 2003-04 & 2006-07 1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE EXPARTE ASSESSMENT COMPLETED UNDER SECTION 144 OF THE ACT IS NOT JUSTIFIED AND IT BE S ET ASIDE. 2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LD. C.LT. (A) ERRED IN UPHOLDING THE ACTION OF THE A.O. OF INITIATING THE ACTION UNDER SECTION 147 OF THE ACT WHEN VALID REVISED RETURN FI LED WAS PENDING FOR ASSESSMENT AS ON THE DATE OF ISSUE OF NOTICE U/S 148 OF THE ACT. IN VIEW OF THIS THE ASSESSMENT BEING WITHOUT JURISDICTION BE ANNULLED. 3) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW WHETHER THE LD. C.LT. (A) WAS JUSTIFIED IN CONFIRMING THE REJECTION OF THE CLAIM OF DEPRECIATI ON ON INTANGIBLE ASSET NAMELY RIGHT TO COLLECTION OF T OLL FROM THE ROAD OVER BRIDGE ON THE PARITY OF REASO NING THAT THE APPELL ANT WAS NOT THE OWNER IN SPITE OF THE FACT THAT THE 'COLLECTION' WAS TREATED AS INCOME OF THE APPELLANT COMPANY AND WAS ALSO APPROVED BY THE STATE GOVERNMENT. 4) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW WHETHER THE PRECEDENT OF JUDICIAL VERDIC TS WHERE EXPENDITURE WAS ON LEASEHOLD/RENTAL ASSETS RELIED UPON BY LD. C.IT. (A) ARE APPLICABLE TO THE FACTS OF THE CASE OF THE APPELLANT COMPANY TO HOLD THAT THE EXPENDITURE OF RS. 2 79 95 870/- WAS REVENUE EXPENDITURE AND WAS ALLOWABLE DEDUCTION AS SUCH TO DENY THE CLAIM OF DEPRECIATION? 5) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW AND ON THE SAME PARITY OF REASONING THE LD. C.LT. (A) OUGHT -TO HAVE ALLOWED THE EXPENDITUR E OF RS. 3 18 76 733/- IN A.Y. 2002-03 INCURRED IN A.Y. 2001-02 WHICH WAS CARRIED FORWARD IN THE ASSESSMENT YEAR UNDER APPEAL WITHOUT ANY INCOME AGAINST IT AS ACCORDING TO LD. CIT(A) THERE WAS NO CAPITAL EXPENDITURE AT ALL. IN VIEW OF THIS THE SAID EXPENDITURE CARRIED FORWARD BE ALLOWED AS REVENUE EXPENDITURE IN THE YEAR UNDER APPEAL. 6) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW WHETHER THE APPELLANT-ASSESSEE COMPANY WAS ELIGIBLE FOR THE CLAIM OF DEDUCTION UNDER SECTI ON 80-IA OF THE ACT IN THE CIRCUMSTANCES WHEN THE ASSESSEE ITSELF MAKES THE INVESTMENT AND ITSELF EXECUTES THE DEVELOPMENT WORK AS HAS BEEN DONE BY THIS ASSESSEE AND THE AMENDMENT INTRODUCED BY INSERTING AN EXPLANATION RETROSPECTIVELY WEF. A.Y. PAGE 3 OF 6 ITA NO. 222 223 233 & 857/PN/2009 DIMENSION CONSTRUCTION A.Y. 2002-03 2004-05 2003-04 & 2006-07 2000-01 BY FINANCE ACT 2007 AND RELEVANT C.B.D.T. CIRCULAR NO.3 OF 2008 BECOMES APPLICABLE TO IT? 7) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LD. A.O. WAS NOT JUSTIFIED IN LEVYIN G INTEREST U/S. 234-B/234-C OF THE ACT AND THE SAME BE DELETED. 8) THE APPELLANT CRAVES TO LEAVE ADD/AMEND OR ALTE R ANY OF THE ABOVE GROUNDS OF APPEAL. 3. THE LEARNED AR DID NOT PRESS GROUNDS NO. 1 & 2. THEY ARE THEREFORE DISMISSED AS NOT PRESSED. 4. THE NEXT ISSUE IS REGARDING DEPRECIATION ON INTA NGIBLE ASSET NAMELY RIGHT TO COLLECTION OF TOLL FROM THE R OAD OVER BRIDGE ON THE PARITY OF REASONING THAT THE ASSESSEE WAS NOT THE OWNER. IN THIS REGARD THE LEARNED AR POINTED OUT THAT THIS ISSUE IS COVERED BY THE ORDER OF THE TRIBUNAL PUNE BENCH PUNE IN THE CASE OF ASHOKA INFO (P) LTD. VS. ASSTT. CIT (2009) 123 TTJ (PUNE) 77 WHEREIN WITH REGARDS T O INTANGIBLE ASSETS AND TOLL COLLECTION RIGHTS THE TR IBUNAL OBSERVED THAT THE INVESTMENT MADE BY THE ASSESSEE T OWARDS CONSTRUCTION OF A ROAD ON BUILT OPERATE AND TRANSF ER (BOT) BASIS IN TERMS OF AN AGREEMENT WITH THE STATE GOVER NMENT AND THEREAFTER AN INDEPENDENT RIGHT IN THE FORM OF A LICENCE OF TOLL COLLECTION WAS GRANTED TO THE ASSESSEE FOR A FIXED PERIOD OF 16 YEARS AND 9 MONTHS. APPLYING THE DOCT RINE OF EJUSDEM GENERIC FOR THE PURPOSE OF INTERPRETATION O F SEC. 32(1)(II) THE WORD LICENCE COULD BE READ ALONG W ITH THE PAGE 4 OF 6 ITA NO. 222 223 233 & 857/PN/2009 DIMENSION CONSTRUCTION A.Y. 2002-03 2004-05 2003-04 & 2006-07 WORDS COMMERCIAL RIGHTS OF SIMILAR NATURE. THERE FORE THE LICENCE GRANTED BY THE STATE GOVERNMENT FOR COLLECT ION OF TOLL WAS HELD AS AN INTANGIBLE ASSET AND DEPRECIATI ON WAS HELD TO BE ALLOWABLE THEREON. NOTHING CONTRARY WAS BROUGHT TO OUR KNOWLEDGE. FACTS BEING SIMILAR SO F OLLOWING THE SAME REASONING WE HOLD THAT THE ASSESSEE WAS E NTITLED TO CLAIM OF DEPRECIATION ON INTANGIBLE ASSET VIZ. R IGHT TO COLLECT TOLL FROM THE ROAD OVER THE BRIDGE ON THE P ARITY OF REASONING THAT THE ASSESSEE WAS NOT THE OWNER INSPI TE OF THE FACT THAT THE COLLECTION WAS TREATED AS INCOME OF THE ASSESSEE COMPANY AND WAS ALSO APPROVED BY THE STATE GOVERNMENT. 5. IN VIEW OF OUR FINDING ON GROUND NO. 3 THE ISSU E RAISED IN GROUNDS NO. 4 AND 5 GOES ACADEMIC AND THE REFORE THEY WERE NOT ADDRESSED BY THE LEARNED AR. SO THEY ARE DISMISSED BEING ACADEMIC IN NATURE. 6. THE NEXT ISSUE IS WITH REGARDS TO ALLOWABILITY O F CLAIM OF DEDUCTION U/S 80-IA OF THE ACT. IN THIS REGARD LEARNED AR DREW OUR ATTENTION TO THE DECISION OF HONBLE BO MBAY HIGH COURT IN THE CASE OF CIT VS ABG HEAVY INDUSTRY LTD. & OTHERS (2010) 37 DTR (BOM) 233 WHEREIN IN SIMILAR SET OF FACTS HONBLE BOMBAY HIGH COURT HELD AS UNDER : ASSESSEE HAVING ENTERED INTO A CONTRACT FOR SUPPLY INSTALLATION TESTING COMMISSIONING AND MAINTENANC E OF CONTAINER HANDLING CRANES AT JNPT FOR A TERM OF TEN PAGE 5 OF 6 ITA NO. 222 223 233 & 857/PN/2009 DIMENSION CONSTRUCTION A.Y. 2002-03 2004-05 2003-04 & 2006-07 YEARS WHEREAFTER THE SAME WOULD VEST IN THE LATTER IT WAS ENTITLED TO DEDUCTION U/S 80-IA. AMENDMENT OF SEC. 80-IA(4A) BY FINANCE ACT 2001 HAS SET THE MAT TER BEYOND ANY CONTROVERSY THAT THE THREE CONDITIONS VI Z. DEVELOPMENT OPERATION AND MAINTENANCE WERE NOT INTENDED TO BE CUMULATIVE IN NATURE. 7. FURTHER IT WAS SUBMITTED THAT IT IS A LEGAL GRO UND WHICH CAN BE RAISED AT ANY TIME. ACCORDING TO THE ARGUMENTS OF LEARNED AR THE ISSUE HAS BEEN DECIDED BY THE HONBLE BOMBAY HIGH COURT SUBSEQUENT TO THE DEC ISION BY THE CIT(A) AND HENCE THERE WAS NO OCCASION FOR T HE ASSESSEE TO RAISE THIS ISSUE IN THIS MANNER BEFORE THE AUTHORITIES BELOW. THE ISSUE BEING LEGAL IN NATURE AND CAN BE RAISED AT ANY STAGE AS RIGHTLY SUBMITTED BY THE LEARNED AR. SINCE THIS ISSUE HAS NOT BEEN DISCUSSED AND DE CIDED BY THE LOWER AUTHORITIES BECAUSE THEY WERE NMOT HA VING ADVANTAGE OF DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF ABG HEAVY INDUSTRY LTD & OTHERS (SUPRA) AT THE RELEVANT POINT OF TIME. IN THE INTEREST OF JUSTICE WE RESTORE THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER TO DECIDE THE SAME AS PER FACT AND LAW AFTER PROVIDING ADEQUATE OPPORTUNITY OF HEARING TO THE ASSESSEE. 8. SIMILAR ISSUES HAVE BEEN RAISED BY THE ASSESSEE IN OTHER YEARS. FACTS BEING SIMILAR SO FOLLOWING THE SAME REASONS THE ISSUES RAISED IN OTHER YEARS ARE DECIDE D IN SIMILAR WAY FOR OTHER YEARS AS WELL. PAGE 6 OF 6 ITA NO. 222 223 233 & 857/PN/2009 DIMENSION CONSTRUCTION A.Y. 2002-03 2004-05 2003-04 & 2006-07 9. IN THE RESULT ALL THE APPEALS ARE PARTLY ALLOWE D AS INDICATED ABOVE. DECISION PRONOUNCED IN THE OPEN COURT ON 18 TH MARCH 201. SD/- SD/- (G.S. PANNU) ACCOUNTANT MEMBER (SHAILENDRA KUMAR YADAV) JUDICIAL MEMBER PUNE DATED THE 18 TH MARCH 2011 ANKAM COPY OF THE ORDER IS FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT- (A) KOLHAPUR 4. THE CIT- KOLHAPUR 5. THE D.R A BENCH PUNE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL PUNE