JT. CIT (OSD) Rg. - 3(3), MUMBAI v. M/s. SILVASSA INDUSTRIES P. LTD., MUMBAI

ITA 3598/MUM/2008 | 2005-2006
Pronouncement Date: 23-03-2011 | Result: Dismissed

Appeal Details

RSA Number 359819914 RSA 2008
Assessee PAN YEARS2003S
Bench Mumbai
Appeal Number ITA 3598/MUM/2008
Duration Of Justice 2 year(s) 10 month(s)
Appellant JT. CIT (OSD) Rg. - 3(3), MUMBAI
Respondent M/s. SILVASSA INDUSTRIES P. LTD., MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 23-03-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted J
Tribunal Order Date 23-03-2011
Date Of Final Hearing 14-03-2011
Next Hearing Date 14-03-2011
Assessment Year 2005-2006
Appeal Filed On 23-05-2008
Judgment Text
1 ITA NO.3596 TO 3598/MUM/2008 IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI MUMBAI MUMBAI MUMBAI J JJ J BENCH BENCH BENCH BENCH MUMBAI BENCHES MUMBAI MUMBAI BENCHES MUMBAI MUMBAI BENCHES MUMBAI MUMBAI BENCHES MUMBAI BEFORE BEFORE BEFORE BEFORE SHRI D MANMOHAN VP & SHRI D MANMOHAN VP & SHRI D MANMOHAN VP & SHRI D MANMOHAN VP & SHRI R K PANDA AM SHRI R K PANDA AM SHRI R K PANDA AM SHRI R K PANDA AM ITA NO ITA NO ITA NO ITA NOS SS S. . . . 3596 TO 3598/MUM/2008 3596 TO 3598/MUM/2008 3596 TO 3598/MUM/2008 3596 TO 3598/MUM/2008 (ASST YEAR (ASST YEAR (ASST YEAR (ASST YEARS 2003 S 2003 S 2003 S 2003- -- -04 TO 2005 04 TO 2005 04 TO 2005 04 TO 2005- -- -06) 06) 06) 06) ) )) ) JT COMMR OF INCOME TAX (OSD) RANGE 3(3) MUMBAI VS SILVASSA INDUSTRIES P LTD SRI RAM MILLS COMPOUND 3 RD FLOOR GANPAT RAO KADAM MARG WORLI MUMBAI 5 ( (( (APPELLANT APPELLANT APPELLANT APPELLANT) )) ) (RESPONDENT) (RESPONDENT) (RESPONDENT) (RESPONDENT) PAN NO. PAN NO. PAN NO. PAN NO.AAACR3892A AAACR3892A AAACR3892A AAACR3892A A SSESSEE BY MRS AMISHA GANDHI REVENUE BY MRS KUSUM INGLE/CIR/DR PER R K PANDA AM PER R K PANDA AM PER R K PANDA AM PER R K PANDA AM THE ABOVE 3 APPEALS FILED BY THE REVENUE ARE DIREC TED AGAINST THE SEPARATE ORDERS DATED 17.3.2008 OF THE CIT(A)III M UMBAI RELATING TO ASSESSMENT YEARS 2003-04 TO 2005-06 RESPECTIVELY. SINCE COMMO N ISSUES ARE INVOLVED IN ALL THESE APPEALS; THEREFORE THESE WERE HEARD TOGETH ER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER. ITA NO. 3596/MUM/2008 (ASSESSMENT YEAR 2003 ITA NO. 3596/MUM/2008 (ASSESSMENT YEAR 2003 ITA NO. 3596/MUM/2008 (ASSESSMENT YEAR 2003 ITA NO. 3596/MUM/2008 (ASSESSMENT YEAR 2003- -- -04) 04) 04) 04) 2 GROUNDS OF APPEAL NO. 1 BY THE REVENUE READS AS U NDER: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD CIT(A) ERRED IN ALLOWING THE DEPRECIATION OF RS. 22 44 19 418/- AS AGAINST THE DEPRECIATION OF RS. 12 73 63 551/- ALLOWED BY THE A SSESSING OFFICER. 2.1 FACTS OF THE CASE IN BRIEF ARE THAT THE ASSE SSING OFFICER NOTED FROM THE RETURN OF INCOME FILED FOR EARLIER YEARS THAT THE ASSESSEE COMPANY FOR THE 2 ITA NO.3596 TO 3598/MUM/2008 REASONS RECORDED IN THOSE YEARS WAS GRANTED DEPRE CIATION ALTHOUGH IT HAS NOT CLAIMED DEPRECIATION ON THE UNITS Y01 AND Y02. HE NOTED THAT ALTHOUGH THE COMMISSIONER OF INCOME TAX (APPEAL) HAS DELETED THE DISALLOWANCE OF DEPRECATION THE DEPARTMENT HAS PREFERRED APPEAL BE FORE THE TRIBUNAL. IN VIEW OF THE CONSISTENT STAND TAKEN BY THE DEPARTMENT THE A SSESSING OFFICER REWORKED THE DEPRECIATION OF THE ASSESSEE COMPANY AND CALCUL ATED SUCH DEPRECIATION AT RS. 12 73 63 551/- ON THE BASIS OF SUCH WDV AS AGA INST THE CLAIM OF RS. 22 44 19 418/- BY THE ASSESSEE. HE ACCORDINGLY DI SALLOWED AN AMOUNT OF RS. 9 70 55 867/-. 2.3 IN APPEAL THE CIT(A) FOLLOWING THE ORDER OF TH E TRIBUNAL IN ASSESSEES OWN CASE HELD THAT THE ASSESSEE IS ENTITLED TO DE PRECIATION ON THE HIGHER WDV WITHOUT CONSIDERING THE DEPRECIATION THRUST UPON TH E ASSESSEE IN EARLIER YEARS. 3 AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE REVE NUE IS IN APPEAL HERE BEFORE US. 4 WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BO TH THE PARTIES PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A) AND THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR EARLIER YE ARS. BOTH THE PARTIES FAIRLY AGREED THAT THIS ISSUE STANDS COVERED IN FAVOUR OF THE ASSESSEE BY THE CONSISTENT DECISIONS OF THE COORDINATE BENCHES OF THE TRIBUNAL IN ASSESSES OWN CASE DETAILS OF WHICH ARE AS UNDER: 3 ITA NO.3596 TO 3598/MUM/2008 S.NO APPEAL NO ASSESSMENT YEAR BENCH ORDER DATE 1 ITA NO.462/MUM/02 1997-98 F 10.05.2002 2 ITANO.4785/MUM/03 1998-89 H 06.12.2007 3 ITA NO.4786/MUM/03 1999-00 H 06.12.2007 4 ITA NO.3491/MUM/04 2001-02 B 03.08.2006 5 ITA NO.1644/MUM/ 06 2002 - 03 D 19.08.2008 5 IN VIEW OF THE CONSISTENT DECISIONS OF THE CO-ORD INATE BENCHES OF THE TRIBUNAL AND IN ABSENCE OF ANY CONTRARY DECISION B ROUGHT TO OUR NOTICE WE UPHOLD THE ORDER OF THE CIT(A) IN GRANTING DEPRECIA TION AS CLAIMED BY THE ASSESSEE ON HIGHER WDV. THE GROUND RAISED BY THE R EVENUE IS ACCORDINGLY DISMISSED. 6 GROUNDS OF APPEAL NO.2 READS AS UNDER: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD CIT(A) ERRED IN DELETING THE DISALLOWANCE OF INTERE ST OF RS.11 52 901/- WITHOUT APPRECIATING THAT THE ASSESSEE COMPANY FAIL ED TO PROVE ISSUE OF BUSINESS EXPEDIENCY IN RESPECT OF LOANS ADVANCED TO SUBSIDIARY COMPANY. 6.1 FACTS OF THE CASE IN BRIEF ARE THAT THE ASSES SING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS NOTED FROM THE BALANCE SH EET OF THE ASSESSEE THAT IT HAS ADVANCED LOANS TO ITS SUBSIDIARY COMPANIES/GROU P CONCERNS. ON PERUSAL OF THE DETAILS SUBMITTED BY THE ASSESSEE HE NOTED THA T THE ASSESSEE HAS NOT CHARGED ANY INTEREST ON THE ADVANCES GIVEN TO ITS S UBSIDIARIES/GROUP CONCERNS. HE ASKED THE ASSESSEE TO PROVE THE NEXUS BETWEEN TH E SOURCE OF FUNDS OUT OF WHICH ADVANCES WERE GIVEN. REJECTING THE VARIOUS EXPLANATIONS GIVEN BY THE ASSESSEE AND RELYING ON A COUPLE OF DECISIONS AND O BSERVING THAT THE ASSESSEE HAS ADVANCED INTEREST FREE LOANS OUT OF INTEREST BE ARING FUNDS THE ASSESSING OFFICER DISALLOWED AN AMOUNT OF RS.11 53 901/- U/S 36(1(III) OF THE I T ACT. 4 ITA NO.3596 TO 3598/MUM/2008 6.2 IN APPEAL THE CIT(A) DELETED THE ADDITION ON T HE GROUND THAT AMOUNTS WERE ADVANCED FOR COMMERCIAL EXPEDIENCY. 6.3 AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE RE VENUE IS IN APPEAL HERE BEFORE US. 7 AFTER HEARING BOTH THE PARTIES WE ARE OF THE CON SIDERED OPINION THAT WHETHER COMMERCIAL EXPEDIENCY AS PROPOUNDED BY THE HONBLE SUPREME COURT IN THE CASE OF SA BUILDERS REPORTED IN 206 CTR 31 WAS NOT AN ISSUE BEFORE THE ASSESSING OFFICER. THEREFORE HE HAD NO OCCASION TO EXAMINE THE SAME. THE LD CIT(A) HAS NEITHER CALLED FOR ANY REMAND REPORT NOR GAVE ANY OPPORTUNITY TO THE ASSESSING OFFICER TO EXAMINE THE SAME. WE THEREF ORE DEEM IT PROPER TO RESTORE THIS ISSUE TO THE FILE OF THE ASSESSING OFF ICER FOR FRESH ADJUDICATION IN THE LIGHT OF THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF SA BUILDERS (SUPRA) AND IN ACCORDANCE WITH LAW. THE ASSESSING OFFICER SHALL GIVE DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. WE HOL D AND DIRECT ACCORDINGLY. THIS GROUND BY THE REVENUE IS ACCORDINGLY ALLOWED FOR ST ATISTICAL PURPOSE. ITA NO ITA NO ITA NO ITA NOS SS S. 359 . 359 . 359 . 3597 & 3598/ 7 & 3598/ 7 & 3598/ 7 & 3598/MUM/2008 (ASSESSMENT YEAR 2004 MUM/2008 (ASSESSMENT YEAR 2004 MUM/2008 (ASSESSMENT YEAR 2004 MUM/2008 (ASSESSMENT YEAR 2004- -- -05 & 05 05 & 05 05 & 05 05 & 05- -- -06 0606 06) )) ) 8 THE ONLY EFFECTIVE GROUND TAKEN BY THE REVENUE IN BOTH THE APPEALS IS AS UNDER: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD CIT(A) ERRED IN ALLOWING THE DEPRECATION OF RS. 19 76 50 909 (FOR AY 2004- 05) AND RS 19 89 19 383/0 (FOR AY 2005-06) AS AGAIN ST THE DEPRECATION OF RS. 12 40 01 823/-(AY 2004-05) AND RS. 14 21 71 286 /-( AY 2005-06) ALLOWED BY THE ASSESSING OFFICER. 9 AFTER HEARING BOTH THE SIDES WE FIND THE GROUNDS RAISED BY THE REVENUE IN THESE APPEALS ARE IDENTICAL TO THE GROUND TAKEN BY THE REVENUE IN ITA NO. 5 ITA NO.3596 TO 3598/MUM/2008 3596/MUM/2008 FOR ASSESSMENT YEAR 2003-04. WE HAVE ALREADY DECIDED THE ISSUE AND THE GROUND RAISED BY THE REVENUE HAS BEEN DISMISSED. FOLLOWING THE SAME RATIO THE GROUND TAKEN BY THE REVENUE IN THE ABOVE APPEALS ARE DISMISSED. 10 IN THE RESULT APPEAL IN ITA NO.3596/MUM/2008 BY THE REVENUE IS PARTLY ALLOWED FOR STATISTICAL PURPOSE WHEREAS APPEALS IN ITA NOS.3597 & 3598/MUM/2008 ARE DISMISSED. ORDER PRONOUNCED ON THE 23 RD DAY OF MAR 2011. SD/- SD/- ( (( ( D MANMOHAN D MANMOHAN D MANMOHAN D MANMOHAN ) )) ) VICE PRESIDENT ( (( ( R K PANDA R K PANDA R K PANDA R K PANDA ) )) ) ACCOUNTANT MEMBER PLACE: MUMBAI : DATED: 23 MAR 2011 RAJ* COPY FORWARDED TO: 1 APPELLANT 2 RESPONDENT 3 CIT 4 CIT(A) 5 DR /TRUE COPY/ BY ORDER DY /AR ITAT MUMBAI