DY. CIT CC 6(4), Mumbai v. INDIABULLS HOUSING FINANCE LTD, DELHI

ITA 4849/MUM/2019 | 2013-2014
Pronouncement Date: 08-03-2021 | Result: Dismissed

Appeal Details

RSA Number 484919914 RSA 2019
Assessee PAN AABCI3612A
Bench Mumbai
Appeal Number ITA 4849/MUM/2019
Duration Of Justice 1 year(s) 7 month(s) 18 day(s)
Appellant DY. CIT CC 6(4), Mumbai
Respondent INDIABULLS HOUSING FINANCE LTD, DELHI
Appeal Type Income Tax Appeal
Pronouncement Date 08-03-2021
Appeal Filed By Department
Order Result Dismissed
Bench Allotted C
Tribunal Order Date 08-03-2021
Last Hearing Date 20-01-2021
First Hearing Date 20-01-2021
Assessment Year 2013-2014
Appeal Filed On 19-07-2019
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH MUMBAI BEFORE SHRI S. RIFA UR RAHMAN ACCOUNTANT MEMBER AND SHRI PAVAN KUMAR GADALE JUDICIAL MEMBER IT A NO. 4849/MUM./2019 ( ASSESSMENT YEAR : 20 13 14 ) DY. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 6(4) MUMBAI . APPELLANT V/S INDIABULLS HOUSING FINANCE LTD. M 62 & 63 FIRST FLOOR CONNAUGHT PLACE NEW DELHI 100 001 PAN AABCI3612A . RESPONDENT REVENUE BY : MS. SHREEKALA PARDESHI ASSESSEE BY : SHRI CHETAN KARIA DATE OF HEARING 2 7 .0 1 .202 1 DATE OF ORDER 8.03.2021 O R D E R PER S. RIFAUR RAHMAN A.M. T HE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE CHALLENGING THE ORDER DATED 30 TH APRIL 2019 PASSED BY THE LEARNED COMMISSIONER (APPEALS) 22 MUMBAI FOR THE ASSESSMENT YEAR 2013 14. 2. THE ISSUE ARISING OUT OF THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE IS WHETHER OR NOT THE LEARNED COMMISSIONER (APPEALS) WAS JUSTIFIED IN DELETING THE DISALLOWANCE OF ` 14 17 240 MADE BY THE ASSESSING OFFICER BEING EXCESS CLAIM OF DEPRECIATION ON SOFTWARE EXPENSES. 2 INDIABULLS HOUSING FINANCE LTD. 3. AS I T TRANSPIRES FROM THE FACTS ON RECORD THAT DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE WAS ENGAGED IN THE BUSINESS OF HOUSING FINANCE AND FILED ITS RETURN OF INCOME ON 29 TH NOVEMBER 20 13 DECLARING TOTAL INCOME AT ` 861 28 40 140 . THE RETURN OF INCOME WAS PROCESSED UNDER SECTION 143(1) OF TH E INCOME TAX ACT 1961 (FOR SHORT 'THE ACT' ) AND THE SAME WAS SELECTED FOR SCRUTINY UNDER CASS AND THE STATUTORY NOTICES UNDER SECTION 143(2) AND 142(1) OF THE ACT WERE ISSUED AND SERVED ON THE ASSESSEE. SUBSEQUENTLY THE RETURN OF INCOME WAS REVISED BY TH E ASSESSEE ON 31 ST MARCH 2015 DECLARING TOTAL INCOME AT ` 850 24 44 390. NOTICE DATED 20 TH OCTOBER 2015 UNDER SECTION 142(1) OF THE ACT ALONG WITH A QUESTIONNAIRE WAS ISSUED AND SERVED UPON THE ASSESSEE. IN RESPONSE THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE ATTENDED AND FILED THE RELEVANT INFORMATION AS CALLED FOR BY THE ASSESSING OFFICER. THE ASSESSING OFFICER D URING THE COURSE OF ASSESSMENT PROCEEDINGS OBSERVED THAT THE ASSESSEE IN THE IMMEDIATE PRECEDING ASSESSMENT YEAR 2012 13 WAS ASSESSED UNDER SCRUTINY WHEN THE THEN ASSESSING OFFICER HAD FOUND THAT THE ASSESSEE HAD MADE ADDITION IN SOFTWARE DURING THAT YEAR AND CLAIMED DEPRECIATION THEREON @ 60% WHEREAS IT WAS ALLOWABLE @ 25% BEING INTANGIBLE ASSET. THE ASSESSEE IN RESPONSE THE CONFRONTATION OF THE ASSESSING OFFICER TO EXPLAIN AS TO WHY DEPRECIATION BE NOT RESTRICTED TO 25% THE ASSESSEE STATED THAT THE DEPRECIATION ON 3 INDIABULLS HOUSING FINANCE LTD. SOFTWARE IS ALLOWABLE @ 60%. ACCORDING TO THE ASSESSING O FFICER THERE WAS NO FORCE IN THE SUBMISSIONS MADE BY THE ASSESSEE AND OBSERVED THAT THE ADDITION IN SOFTWARE WAS MADE DURING THE YEAR AT ` 40 49 255 WAS MADE IN THE FIRST HALF OF THE YEAR. SINCE THE ASSESSEE HAS CLAIMED DEPRECIATION ON SUCH ADDITION OF SO FTWARE ASSETS @ 60% ( ` 24 29 553) WHEREAS IT WAS ALLOWABLE @ 25% ( ` 10 12 553 ) THE EXCESS DEPRECIATION CLAIMED BEING INTANGIBLE ASSET WAS RESTRICTED TO ` 14 17 240 ( ` 24 29 553 ` 10 12 313) AND THE DISALLOW ANCE SO MADE BY THE ASSESSING OFFICER WAS ADDE D BACK TO THE INCOME OF THE ASSESSEE. 4. NOT BEING SATISFIED BY THE STAND OF THE ASSESSING OFFICER THE ASSESSEE CONTESTED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER BEFORE THE FIRST APPELLATE AUTHORITY WHEREIN BEFORE THE LEARNED COMMISSIONER (APPEALS) THE LEARNED AUTHORISED REPRESENTATIVE PLACED RELIANCE UPON THE DECISION OF THE CO ORDINATE BENCH OF THE TRIBUNAL DELHI BENCH IN M/S. GLOBE CAPITAL MARKET LTD. V/S DEPTT. OF INCOME TAX ITA NO.2926/DEL./2012 AND ARGUED FOR DELETING THE ADDITION. THE LEA RNED COMMISSIONER (APPEALS) OBSERVED THAT IDENTICAL ISSUE WAS ALLOWED BY HIS PREDECESSOR IN OFFICE I.E. LEARNED CIT(A) 4 WHO AFTER CONSIDERING THE FACTS OF THE CASE AND RELYING UPON THE DECISION OF THE TRIBUNAL DELHI SPECIAL BENCH IN AMWAY INDIA ENTERPRISES V/S DCIT [2008] 111 ITD 112 (DEL.)(SB) ALLOWED DEPRECIATION @ 60%. SINCE THE 4 INDIABULLS HOUSING FINANCE LTD. FACTS OF THE CASE BEFORE THE LEARNED COMMISSIONER (APPEALS) WERE IDENTICAL TO THE FACTS OF THE CASE DECIDED BY HIS PREDECESSOR IN OFFICE I.E. LEARNED CIT(A) 4 FOLLO WING THE SAME THE LEARNED COMMISSIONER (APPEALS) ALLOWED THE APPEAL OF THE ASSESSEE. BEING AGGRIEVED THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 5. BEFORE US THE LEARNED DEPARTMENTAL REPRESENTATIVE ASSAILING THE ORDER OF THE LEARNED COMMISSIONER (APPEAL S) SUBMITTED THAT THE ASSESSEE IS ELIGIBLE FOR DEPRECIATION @ 25% AND HENCE PRAYED FOR UPHOLDING THE ORDER OF THE ASSESSING OFFICER. 6. THE LEANED COUNSEL FOR THE ASSESSEE SUBMITTED BEFORE US THAT TWO ISSUES I.E. (I) RATE OF DEPRECIATION ON SOFTWARE AND ( II) CLAIM FOR DEDUCTION ON ACCOUNT OF ESOP RAISED IN THE PRESENT APPEAL DUE TO TRANSACTIONS OF THE SAID ERSTWHILE ENTITY. HE SUBMITTED THAT THE LEARNED COMMISSIONER (APPEALS) WHILE ALLOWING TH E CLAIM ON THE SAID TWO ISSUES AS REFERRED TO AND RELIED ON THE ORDER PASSED BY HIS PREDECESSOR IN OFFICE I.E. LEARNED CIT(A) 4 FOR A.Y. 2012 13. THE ASSESSEE IN THE SAID CASE IN INDIABULLS FINANCIAL SERVICES LTD. WHICH HAS MERGED INTO THE ASSESSEE COMPANY W.E.F. 1 ST APRIL 2012. HE SUBMITTED THAT THE APPEAL FOR THE ASSESSMENT YEAR 2012 13 IN CASE OF INDIABULLS FINANCIAL SERVICES LTD. IDENTICAL ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY THE CO ORDINATE BENCH OF THE TRIBUNAL DELHI 5 INDIABULLS HOUSING FINANCE LTD. BENCH IN ITA NO.6602/DEL./2016 ORDER DATED 11 TH MARCH 2020 AND PRAYED FOR AL LOWING DEPRECIATION @ 60%. 7. CONSIDERING THE RIVAL SUBMISSIONS AND ON A PERUSAL OF THE MATERIAL ON RECORD IN THE LIGHT OF THE DECISIONS RELIED UPON WE FIND THAT THE ISSUE BEFORE US IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE CO ORDINATE BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE IN ITA NO.6602/DEL./2016 ORDER DATED 11 TH MARCH 2020 FOR THE IMMEDIATE PRECEDING ASSESSMENT YEAR 2012 13 WHEREIN THE BENCH DECLINED TO INTERFERE WITH THE ORDER OF THE FIRST APPELLATE AUTHORITY . WE MAY IN THIS REGARD REFER TO THE OBSERVATIONS MADE BY A C O - ORDINATE BENCH WHEREIN THE TRIBUNAL HAS DECLINED TO INTERFERE WITH THE ORDER OF THE LEARNED COMMISSIONER (APPEALS) BY OBSERVING AS FOLLOWS: - 14 HAVING GONE THROUGH THE RECORD WE FIND THAT THE NATURE OF THE SOFTWARE ACQUIRED WERE LICENSES WHICH DO NOT CONFER ANY ENDURING RIGHT AND COULD BE USED FOR THE DURATION AS ACQUIRED FOR BY THE LICENSOR. THE TAXPAYER'S OBJECTIVE WAS TO USE COMPUTER SOFT WARE TO MAXIMIZE ITS PERFORMANCE AND STREAMLINE EFFICIENCY. THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF M/S I - FLEX SOLUTIONS LTD. REPORTED IN 225 TAXMANN 37 HELD THAT THERE IS NO REASON TO DIFFERENTIATE THE COMPUTER AND THE SOFTWARE AS THE LATTER IS AN IN TEGRAL PART OF THE FORMER. THE SOFTWARE CANNOT BE SEEN IN ISOLATION DELINKED FROM THE COMPUTERS. SIMILAR VIEW HAS BEEN TAKEN BY THE CO - ORDINATE BENCH OF ITAT IN THE CASE OF MAKE MY TRIP (INDIA) PVT. LTD. VS DCIT IN ITA NO 6055/DEL/2010 AND GLOBE CAPITAL M ARKET LTD. VS CIT IN ITA NO 2926/DEL/2012. THE ISSUE OF DEPRECIATION 60% ON THE SOFTWARE IS NOW A SETTLED ISSUE BEYOND ANY PERPLEXITY. HENCE WE DECLINE TO INTERFERE WITH THE ORDER OF THE ID. CIT (A). 6 INDIABULLS HOUSING FINANCE LTD. 8. SINCE THE ISSUE BEFORE US IS MUTATIS MUTANDIS IDENTICAL TO THE ISSUE DECIDED BY A CO - ORDINATE BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE CITED SUPRA RESPECTFULLY FOLLOWING THE SAME WE FIND NO INFIRMITY IN THE ORDER OF THE LEARNED COMMISSIONER (APPEALS) WARRANTING INTERFERENCE AT THE INSTANCE OF TH E REVENUE. 9. I N THE RESULT REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 8.3.2021 SD/ - PAVAN KUMAR GADALE JUDICIAL MEMBER SD/ - S. RIFAUR RAHMAN ACCOUNTANT MEMBER MUMBAI DATED: 8.3.2021 COPY OF THE ORDER FORWARDED TO : (1) THE ASSESSEE; (2) THE REVENUE; (3) THE CIT(A); (4) THE CIT MUMBAI CITY CONCERNED; (5) THE DR ITAT MUMBAI; (6) GUARD FILE . TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY ASSISTANT REGISTRAR ITAT MUMBAI