ACIT, New Delhi v. M/s. VLS Finance Ltd, New Delhi

ITA 3288/DEL/2009 | 2005-2006
Pronouncement Date: 12-02-2010 | Result: Dismissed

Appeal Details

RSA Number 328820114 RSA 2009
Assessee PAN AAACV4183G
Bench Delhi
Appeal Number ITA 3288/DEL/2009
Duration Of Justice 6 month(s) 22 day(s)
Appellant ACIT, New Delhi
Respondent M/s. VLS Finance Ltd, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 12-02-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted H
Tribunal Order Date 12-02-2010
Date Of Final Hearing 09-02-2010
Next Hearing Date 09-02-2010
Assessment Year 2005-2006
Appeal Filed On 21-07-2009
Judgment Text
I.T.A. NO. 3288/DEL/2009 1/4 IN THE INCOME TAX APPELLATE TRIBUNAL NEW DELHI BENCH H BEFORE SHRI K. G. BANSAL ACCOUTANT MEMBER AND SHRI GEORGE MATHAN JUDICIAL MEMBER ITA NO. 3288 /DEL/2009 (ASSESSMENT YEAR 2005-06) ACIT CC-8 VS. M/S. VLS FINANCE LTD. NEW DELHI 489 DEFENCE COLONY NEW DELHI. (APPELLANTS) (RESPONDENTS) PAN / GIR NO. AAACV4183G APPELLANT BY: SHRI N K CHAND SR. DR RESPONDENT BY: SHRI M. P. MEHROTRA & SHRI RAJESH JHALANI CA ORDER PER GEORGE MATHAN JM: 1. THIS APPEAL BY THE REVENUE HAS BEEN PREFERRED AG AINST THE ORDER OF LD. CIT(A)-II NEW DELHI IN APPEAL NO. DEL/CIT(A)-II/2007-08/329/50 DATED 06.05.2009 FOR THE ASSESSMENT YEAR 2005-06. SHRI N K CHAND SR. D R REPRESENTED FOR THE REVENUE AND SHRI M P MEHROTRA A ND SHRI RAJESH JHALANI CA REPRESENTED FOR THE ASSESSEE . IN THE REVENUES APPEAL THE REVENUES HAS RAISED THE FOLLOWING TWO GROUNDS: I.T.A. NO. 3288/DEL/2009 2/4 1. THE LD. CIT(A) HAS ERRED ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE TO DIRECT THE A.O. TO ALL OW DEPRECIATION ON FIXED ASSETS GIVEN ON HIRE UNDER HI RE PURCHASE AGREEMENT BY RELYING ON THE DECISION OF APEX COURT IN THE CASE OF M/S. SHAAN FINANCE WHICH IS DISTINGUISHABLE ON FACTS. 2) THE LD. CIT(A) HAS NOT CONSIDERED THE RELEVANT DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF GENERAL INDUSTRIES CORPORATION AND NAGPUR GOLDEN TRANSPORT CO. REPORTED IN 155 ITR 430 AND 233 ITR 389. 2. AT THE TIME OF HEARING IT WAS FAIRLY AGREED BY B OTH THE SIDES THAT THE ISSUE IN THE APPEAL IS SQUARELY COVE RED BY THE DECISION OF COORDINATE BENCH OF THIS TRIBUNAL I N THE ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 1995-96 1996-97 & 1997-98 IN I.T.A. NO. NOS. 1754 1755 & 1958/DEL/2001 DATED 30.01.2009 WHEREIN THE COORDINATE BENCH OF THIS TRIBUNAL HAS HELD AS FOLLO WS: WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. AT THE OUTSET THE DECISION IN THE CASE OF SPL. BENCH AS REFERRED TO BY THE LD. D R WOULD NOT APPLY AS THE DECISION OF THE SPL. BENCH WAS IN THE CASE OF VARIO US STATE ELECTRICITY BOARDS WHO HAD DONE SALE AND LEAS E BACK OF THE ASSETS BY BOOK ENTRIES WHEREAS THE ASSE T CONTINUED TO BE SHOWN IN THE ACCOUNT OF THE BOARD A S THE OWNER OF THE ASSET AND THE ASSESSEE DID NOT HAV E ANY RIGHT TO SELL THOSE ASSETS AND THERE WAS NO INTENTION TO TRANSFER OWNERSHIP IN THE ASSET TO THE ASSESSEE THEREIN. IT WAS UNDER THOSE CIRCUMSTANCES I.T.A. NO. 3288/DEL/2009 3/4 THAT THE SPL. BENCH OF THE TRIBUNAL THEREIN HAD HEL D THAT THE TRANSACTIONS THEREIN WERE ONE OF FINANCIAL TRANSACTIONS AND DEPRECATION WAS NOT AVAILABLE ON SUCH ASSET. THE DECISION AS REFERRED TO BY THE REVENUE IN THE CASE OF NAGPUR GOLDEN TRANSPORT CO. AS ALSO THE DECISION IN THE CASE OF GENERAL INDUSTR IES CORPORATION ALSO DOES NOT APPLY TO THE ASSESSEES CASE INSOFAR AS IN THE LATER DECISION THE HONBLE SUPREME COURT AS IN THE CASE OF SHAAN FINANCE CO. PVT. LTD. REFERRED TO SUPRA CATEGORICALLY HELD THA T FOR INTERPRETING A TAXING STATUTE ESPECIALLY IN THE CASE OF EXEMPTION PROVISION FULL EFFECT IS TO BE GIVEN A ND IN THE CASE OF AN ASSESSEE WHO WAS HIRING DIFFERENT MACHINERY AND WHERE THE INCOME DERIVED BY THE ASSESSEE FROM HIRING OF SUCH MACHINERY IS TREATED A S BUSINESS INCOME THE ASSESSEE MUST BE CONSIDERED AS HAVING USED SUCH MACHINERIES FOR THE PURPOSE OF ITS BUSINESS AND BY THE TRANSACTION THE HIRER WOULD NOT ACQUIRE ANY NEW ASSET BUT IT IS ONLY ONE OF BAILME NT. IN THE CIRCUMSTANCES IN VIEW OF THE LAW AS LAID DO WN BY THE HONBLE SUPREME COURT IN THE CASE OF SHAAN FINANCE PVT. LTD. WE ARE OF THE VIEW THAT THE ASSE T AS OWNED BY THE ASSESSEE AND WHICH IS USED IN THE BUSINESS OF HIRING AS DONE BY THE ASSESSEE IS ENTIT LED TO DEPRECIATION IN THE HANDS OF THE ASSESSEE. IN T HE CIRCUMSTANCES THE FINDINGS OF THE CIT(A) FOR THE A YS 1995-96 & 96-97 STANDS REVERSED AND THAT OF THE AY 1997-98 STANDS CONFIRMED. 3. WE HAVE CONSIDERED THE SUBMISSIONS. AS IT IS NOT ICED THAT THE FACTS IN THE PRESENT APPEAL ARE IDENTICAL TO THE FACTS IN I.T.A. NOS.1754 1755 & 1948/DEL/2001 DATE D I.T.A. NO. 3288/DEL/2009 4/4 30.01.2009 IN THE ASSESSEES OWN CASE RESPECTFULLY FOLLOWING THE DECISION OF COORDINATE BENCH OF THIS TRIBUNAL THE FINDINGS OF LD. CIT(A) ON THE ISSUE I S UPHELD AND THE APPEAL OF THE REVENUE IS DISMISSED. 4. IN THE RESULT THE APPEAL OF THE REVENUE STANDS DISMISSED. 5. THIS DECISION WAS PRONOUNCED IN THE OPEN COURT O N 12 TH FEB. 2010. SD./- SD./- (K.G. BANSAL) (GEORGE MATHAN) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED:12 TH FEB. 2010 SP. COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT TRUE COPY: BY ORDER 4. CIT(A) 5. DR DY. REGISTRAR ITAT NEW DELHI