TaxTMI 
TaxTMI 
2014 (8) TMI 838
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....9 and the total taxable income was determined at Rs. 447,06,15,430/-. Aggrieved by the order of A.O, Assessee carried the matter before CIT(A). CIT(A) vide order dated 25.02.2010 granted partial relief to the Assessee. Aggrieved by the order of CIT(A), Assessee and Revenue both are now in appeal before us. We first take up Assessee's appeal in ITA No. 1416/AHD/2010 4. The effective ground raised by the Assessee reads as under:- "In law and in the facts and circumstances of the appellant's case, the ld. CIT(A) has erred in confirming disallowance of depreciation amounting to Rs. 5,97,218/- on the assets leased by the appellant to Western Railways. It is submitted that on the facts and circumstances of the case, the CIT(A) ought to have allowed depreciation as claimed by the appellant. It is submitted that it be so held now." 5. Assessee vide letter dated 19.04.2011 has subsequently raised the following the additional ground:- 1. Rs. 4,22,24,655 being 25% of Goodwill amounting to Rs. 16,88,98,620/- ought to have been allowed as Depreciation on goodwill u/s. 32(1)(iii). 1st ground is with respect to depreciation of wagons:- 6. During the course of assessme....
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.... order dated 05.07.2013 has decided the issue in favour of the Assessee by holding as under:- 4. We have heard the rival submissions and perused the material on record. We find that for earlier assessment years one of the issue before the Co-ordinate bench of Tribunal was with respect to railway wagons. The issue in ITA No. 1463,1464,4007/A/2007 and 2400/A/2008 for assessment years 2000-01, 2003-04, 2004-05 and 2005-06 is as under:- 33. It was submitted before the Assessing Officer as under:- "The company has acquired the following assets as per details given below and the same has been given on lease; Assets particulars F.Y. Amount Rs. 1 Wagons 1995-96 93937200 2 Captive Power Plant 1999-00 312990556 3 Plant and machinery incinerator 1998-99 26333260 4 Plantand Machinery- SAT & NOX unit 1998-99 54679889 During the year, the company earned the lease rent of Rs. 12,51,30,606/-, which has been credited to the Profit and loss account and shown as income. Further, as per accounting guidance note, an amount of Rs. 1,21,41,524/- being lease equalization amount has been debited to the profit and loss account. T....
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....use 2(iii). The lease charges will not be payable for a number of days the wagons remained unutilized. The lessee on behalf of the lessor will ensure the equipments. It was further argued by the learned counsel for the assessee that the assets so leased will return back to the lessor assessee and the lessee will not have any right. The assets so leased thereafter will be used by the assessee for its own purpose. The allegations made by the A.O. at pages 43 and 44 of his order are without any basis and had been written in the order of conjectures and surmises. Though the assets had been duly acquired on the specification of the lessee. It cannot be said that it will not be used for the purpose and use of the assessee i.e. the lessor. The insurance has been taken by the lessee on behalf of the lessor. It is not a finance lease since the period of lease does not start from the date of finance of the assets but at a later date. 34 On the other hand, the learned D.R. relied upon the order of the A.O. as pages 43 and 44 and in specific relied upon the decision of the Hon. Supreme Court in the case of Asea Brown Boveri Ltd. vs. Industrial Finance Corporation, dated 27.10.2004 which has....
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....in the case of Area Brown boveri Ltd. (supra) by the learned D.R. the arguments of the learned D.R. that the assessee had purchased the equipments for the economic life of the plant itself and not more than that. As a matter of fact, it is not a case, as is appearing from different clause of the lease deed that the equipments leased will be returned back to the lessor after the expiry of the lease. Nothing has been brought to disapprove the said clause of the lease deed by any of the authorities below or by the learned D.R. The learned DR could not prove that in fact the assessee is only a financier and is not interested in the assets and therefore, it cannot be said as full payout lease. Therefore, in the circumstances and facts of the case, the arguments made by the learned DR cannot be accepted and following the rule of consistency, the assessee deserves to be allowed the claim and we direct the Assessing Officer accordingly to allow the claim of the assessee. The order of the learned CIT(A) is reversed. Thus, Ground No. 12 of the assessee's appeal is allowed. 7.1 From the above, we noticed that one of the prime factors which weighed with the Tribunal was the rule of cons....
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....cord. We find that the additional ground raised by the Assessee is purely a legal ground and we therefore admit it for adjudication. 13. We find that ground of depreciation on goodwill was not raised before A.O or CIT(A) but is raised before us for the first time. We therefore feel that in the interest of justice, the matter needs to be decided at the end of CIT(A). We therefore remit the issue to the file of CIT(A) to decide the issue as per law. Needless to state that CIT(A) shall grant adequate opportunity of hearing to both the parties. In the result, this ground of Assessee is allowed for statistical purposes. 14. In the result, the appeal of Assessee is allowed for statistical purposes. We now take up Revenue's appeal in ITA No. 1696/AHD/2010 15. The grounds raised the Revenue reads as under:- 1(a). On the facts and in the circumstances of the case, the learned CIT(A) erred in deleting the addition of Rs. 42,15,333/- made out of the interest claimed u/s. 36(1)(iii) on account of diversion of borrowed funds to subsidiary and associate concerns, by merely relying on the appellate orders for earlier years (which has been contested by the Department), without a....
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....dia) Ltd. treated as expenses deriving benefit of enduring nature. 1st ground is with respect to deletion of disallowance of interest:- 16. During the course of assessment proceedings, and on verification of the Profit and Loss account and Balance sheet, A.O noticed that Assessee had granted interest free advances to its subsidiaries and associate concern. He also noticed that on the other hand Assessee was paying huge interest on secured and unsecured loan. A.O after considering the submissions of the Assessee and the balance sheet concluded that the borrowed funds were utilized by the Assessee for making intererest free advances and thus Assessee had diverted its interest bearing funds for non business purposes and therefore the interest expenditure claimed u/s. 36(1(iii) on the borrowing made to the extent utilized for non business purposes cannot be allowed. He accordingly worked out the disallowance at Rs. 42,15,333/-. Aggrieved by the order of A.O, Assessee carried the matter before CIT(A). CIT(A) deleted the addition made by the A.O by holding as under:- 5.3. I have considered the submission of the ld. AR and facts of the case. The claim of the appellant company tha....
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...., the claim of Assessee be allowed. 19. We have heard the rival submissions and perused the material on record. We find that disallowance on account of interest was made by A.O in A.Y. 03-04. The Co-ordinate Bench of Tribunal while deciding the appeal in ITA No. 1373/AHD/2007 order dated 30.12.2011 for A.Y. 03- 04 decided the issue in favour of the Assessee by holding as under:- 39. Now, we take up the Departmental appeal in ITA no.1373/Ahd/2007 for AY 2003-04. In Ground no.1, the brief facts are that the AO disallowed the interest of Rs. 8,00,14,405/-claimed u/s 36(1)(iii) of the Act on the ground that the borrowings were utilized for non-business purpose. 40. The learned CIT(a) vide para 5.3 of his order allowed the claim of the assessee since the assessee had been allowed in earlier years the claim on identical matters and therefore it is a covered matter. 41. We have heard the rival contentions and perused the facts of the case. We concur with the views of the ld CIT(A) and the decision of the Tribunal Ahmedabad Bench in assessee's own case for A.Y. 95-96 as referred to in the order of the ld. CIT(A) vide para 5.2.3 and therefore we find no infirmity in the orde....
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....ion on the issue in appellant's case for A. Y. 1996-97, I hold that this addition is also not justified and the same stands deleted. I have also allowed the claim of the appellant while disposing of appeal on this ground in A.Y. 1996-97." It being a covered issue the assessing officer is directed to allow the claim of appellant company for A.Y. 2007-08. The ground No. 3 is therefore allowed. 22. Aggrieved by the order of CIT(A), Revenue is now in appeal before us. 23. Before us, ld. D.R. relied on the order of A.O. On the other hand ld. A.R. submitted that on identical facts for A.Y. 03-04, A.O had made similar disallowances and in the Revenue's appeal before Hon'ble ITAT In ITA No. 3993/A/2007 for A.Y. 04-05, the issue was decided in favour of the Assessee. He therefore submitted that since the issue in the year under appeal are identical to that of 04-05, the order of CIT(A) needs to be upheld. 24. We have heard the rival submissions and perused the material on record. We find that similar issue arose for A.Y. 04-05 in ITA No. 3993/A/07 for A.Y. 04-05 and the issue was decided in favour of the Assessee by the Hon'ble Tribunal vide order dated 30.12.201....
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....sidering the submissions of the Assessee and relying on the decision of Hon'ble Apex Court deleted the addition by holding as under:- 8.3 I have considered the submission of the Id. AR and facts of the case. From the name itself as well as the description provided by the assessee, it is quite clear that by no stretch of imagination the items can be described as independent plant and machinery. The nature is clearly part of machine and replace parts cannot function thereon. Therefore applying the test laid down by Hon'ble Supreme Court in the case of Savrana Spinning Mills Ltd., it has to be held that there is no justification for disallowance. I direct the AO to delete the disallowance. 27. Aggrieved by the order of CIT(A), Revenue is now in appeal before us. 28. Before us, ld. D.R. relied on the order of A.O. The ld. A.R. on the other hand submitted that on identical facts in A.Y.06-07 in ITA NO. 827/A/10 order dated 14.09.2012 on similar facts the Hon'ble Tribunal had remitted the issue to the file of A.O. He therefore fairly submitted that the issue may be remitted back to the file of A.O with similar directions. 29. We have heard the rival submissions an....
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....ount not recovered from Infinium India was considered to be not allowable. Aggrieved by the order of A.O, Assessee carried the matter before CIT(A). CIT(A) following the decision of his predecessor for A.Y. 03-04 to 05-06 deleted the addition by holding as under:- 9.2 The appellant submitted that the expenses incurred wholly and exclusively for the purpose of business and that it is in accordance with mutual understanding between the parties. The AO should not have proceeded on the basis of assumption and substituted his own judgment in place of judgment of business man. The appellant also drew my attention to CIT(A)'s order in his own case for A.Y. 2003-04 to 2006-07. 32. Aggrieved by the order of CIT(A), Revenue is now in appeal before us. 33. Before us, ld. D.R. relied on the order of A.O. On the other hand ld. A.R. submitted that on identical facts in the Assessee's own case in A.Y. 03- 04 to 06-07 the issue has been decided by Hon'ble Tribunal in favour of the Assessee. He therefore submitted that since the facts of the year under appeal are identical to that of earlier years, the issue be decided in its favour. 34. We have heard the rival submissions a....