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TMI Blog2014 (7) TMI 464X X X X Extracts X X X X X X X X Extracts X X X X ..... ondition is satisfied, all the transactions should also be accepted as finance lease transactions – thus, the matter is remitted back to the AO – Decided in favour of Revenue. Bond issue expenses – Held that:- The decision in M/s. Indian Railway Finance Corpn. Ltd. Versus Addl. Commissioner of Income-tax, Range – 11, New Delhi [2011 (1) TMI 1272 - ITAT DELHI] followed - the expenditure would qualify only for amortization u/s 35D of the Act - the expenditure was a permissible deduction and accordingly deleted the addition made by the AO – thus, bond issue expenses will be allowable as deduction as revenue expenditure – Decided against Revenue. Prior paid expenses – Held that:- The decision in M/s. Indian Railway Finance Corpn. Ltd. Versus Addl. Commissioner of Income-tax, Range-11, New Delhi [2009 (8) TMI 1114 - ITAT DELHI] followed - If the AO is of the view that the expenses are pertaining to the prior period, it is required to be considered for the prior and allowed in that year - If it is found that the expenses are allowable in this year on the basis of crystallization of liability, it may be considered in the year – the assessee is directed to place necessary evidence in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... low the Bond Servicing Expenses of ₹ 1,20,11,000/ (A.Y. 2003-04) ₹ 1,09,10,876/- (A.Y. 2006-07)-. 3.1. In A.Y. 2003-04 the CIT(A) allowed the claim of the assessee by following observations: The ground no. 1 of appeal is against the disallowance of Bonds Servicing expenses amounting to ₹ 1,20,11,000/- as the AO treated them as an item of capital expenditure. The Assessing officer has disallowed this amount by observing that the bonds servicing expenses were capital in nature and relied on the decision of the Supreme Court in the case of Brooke Bond India Ltd. 225 ITR 798. The appellant on the other hand has stated that bonds services expenses were incurred on account of payments made to Rate Agencies like ICRA, CRISIL etc. thus, the same should be allowed. The details of Bond Servicing Expenses along with their nature and purposes were given as under: Expense Amount Listing fees ₹ 1,24,813 Bond holder trusteeship fees 12,13,125 Bond Servicing Surveillance 48,66,500 Registrar F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the facts and the circumstance of the case and in law, the Ld. CIT(Appeals) has erred in allowing appeal of the assessee in respect of addition of ₹ 1446.73 crores (A.Y. 2006-07); 1576.89 crores (A.Y. 2007-08); ₹ 1554.40 crores (A.Y. 2008- 09) ₹ 1629.19 crores (A.Y. 2009-10) made by the Assessing officer on account of capital recovery on leased assets. 8. Ld. DR relied on the order of assessing officer. 9. Ld. Counsel for the assessee contends that the issue in question has been restored back to the file of assessing officer by the ITAT Delhi C in ITA no. 5860/Del/2012 vide order dated 11-10-2013 for A.Y. 2004-05 by following observations: 6. We have heard the rival contentions of both the parties and have gone through the material placed on record. We find that first ground of appeal is covered in favour of assessee by Tribunal s order in ITA Nos. 699,359, 3357 and 2109 for assessment year 1997-1998 to 2000 -2001 vide order of Tribunal dated 08.08.2008. The relevant findings of Hon ble Tribunal in these appeals are as under: The chart for 30 years of opening balance in the present year i.e. A. Y. 1997-98 is submitted by the Ld. AR of the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Ld. Counsel for the assessee at the out set contends that the issue in question is covered in favour of the assessee by various orders of the ITAT. For A.Y. 2001-02 rendered in ITA no. 2594/Del/2005 the ITAT Delhi Bench B vide order dated 31-1-2011, considering earlier year s orders of the ITAT on the same issue from A.Y. 1997-98 to 2000-01 allowed the claim in favour of the assessee by following observations: 15. We have heard both the parties and gone through the material available on record. We find that the issue is covered by the decision of the ITAT for assessment year 1997-98 to 2000-01 wherein it has been held as under:- We have heard the submissions of both the parties and perused the material on record and have gone through the orders of the authorities below and the judgments cited by the ld. AR of the assessee. We find that in the case of M/s Khirani Chemicals Ltd. (supra) the issue before Hon ble Delhi High Court was regarding expenses incurred on issue of debentures. In that case also, the assessee claimed deduction of the entire expenses in the year of issue of debentures whereas the assessing officer came to the conclusion that the expenditure would qualif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de by Assessing officer on account of disallowance of prior period expenses. 16. On this ground also ld. Counsel for the assessee at the out set contends that revenue s ground is misconceived in as much as ld. CIT(A) has actually restored back the issue in question to the file of assessing officer following earlier ITAT order as under: 5.3.2. From the facts available on record it is seen that the similar issue has been decided by the Hon ble ITAT in ITA no. 1735/del/2006 for assessment year 2002-03 vide their order dated 28-08-2009 wherein the Hon ble ITAT has observed as under: We have considered the rival submissions. There is no dispute about the allowability of expenses. Only dispute is regarding the year of allowability. If the Assessing officer is of the view that the expenses are pertaining to the prior period, the same are required to be considered for the prior and allowed in that year. If it is found that the expenses are allowable in this year on the basis of crystallization of liability, the same may be considered in the year under appeal. The assessee is therefore, directed to place necessary evidence in support of claim of expenses. The Assessing officer on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ip vests with the assessee and its is entitled to claim of depreciation. Both the transfer and transferee are Govt. of India undertaking. In this regard we would like to invite your attention the following judgments. CIT v Podar Cement Pvt. Ltd. (1997) 226 ITR 625 CIT v. Fazilka Dabwali Tpt. Company Pvt. Ltd. (2004) 270 398 Where it has been held that if the assessee is in occupation of the premises and is using the same for his business purposes, the claim of depreciation cannot be denied. In view of the above the assessee's claim of depreciation on office building is allowable. 5.4.2 I have carefully considered the facts of the case in the light of the submission made by the appellant. I find that the decision of the Hon'ble Supreme Court in the case of Mysore Minerals Ltd. supra) is squarely applicable in the case of the appellant. In their decision, the Hon'ble Supreme Court in that case has held as under: The term owned as occurring in Section 32(1) of the Income Tax Act must be assigned a wider meaning. Anyone in possession of property in his own title exercising such dominion over the property as would enable others being excluded therefrom an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cial space is handed over to Indian Railway Finance Corporation Ltd. New Delhi. (i) Commercial space measuring 625.0104 sq. m (approx.). Upper Ground Floor East Tower of NBCC Place, Pragati Vihar, New Delhi. (Ref. NBCC's allotment letter No. REM D:98:854 dt. 28.04.98 and letter No. REM D:99:836 dated. 5.11.1999) (ii) Commercial space measuring 284.9241 sq.m. (Purchased by MMTC and sold to IRFC; by MMTC. Ref:IRFC's letter No. IRFC/O. Acco,/NBCC dt/ 14.01.2000 to CE/REM D/ NBCC) Toilet: Complete Fire fighting points = 49. Possession with regard to 30 car parking and 20 scooter parking slots will be handed over shortly. Drawings for the same are being obtained from the NBCC Possession with regard to 30 car parking and 20 scooter parking slots will be handed over shortly. Drawings for the same are being obtained from the NBCC HQ Officer. Fire-fighting layout drawing will also be supplied shortly as desired by IRFC. In respect of property referred in Para No.2 of the above referred possession letter the assessee is held to be the owner and was also held to be entitled for depreciation even for A. Y. 2001-02. Therefore/ there cannot be any dispute about the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or assessment year 2002-03. They have quoted the possession letter dated 29th March, 2000 and reached a conclusion that possession was in fat or actually was handed over to the assessee before the end of financial year ending 31st March, 2000. The respondentassessee, therefore, became entitled to benefit under Section 53A of Transfer of Property At and accordingly decision of the Supreme Court in Mysore Minerals Vs. CIT (2009) 239 ITR 775 (SC) was applicable. 20. The aforesaid findings are findings of fact. The tribunal has taken into account and relied upon the possession letter dated 28th April, 1998 in which NBCC had accepted that the possession of the space measuring 625 square meters and 285 square meters was handed over to the respondent assessee on 23rd September, 2000. NBCC was/ is a Government of India undertaking and it is difficult to accept the contention of the Revenue that they would have fudged or manipulated the date of possession. The factual finding is not perverse. 20.2. Since the consideration for purchase of property was paid and the possession thereof was achieved, the assessee became constructive owner of the property. In view of the ITAT and Hon ble ..... 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