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TMI Blog2014 (9) TMI 198X X X X Extracts X X X X X X X X Extracts X X X X ..... ts is allowable to the assessee - The basis of disallowance by the AO may be different but still such disallowance can be upheld by the Tribunal on the basis that since the AO has allowed depreciation on the total assets acquired by the assessee company post acquisition, no more depreciation is allowable to the assessee over and above the depreciation already allowed by the AO - there is no apparent mistake in the decision of the Tribunal – the order of the Tribunal is upheld – Decided against assessee. - M.A. No.24/LKW/2014 (Arising out of I.T.A.No.497/Lkw/2010) & M.A. No.25/LKW/2014 (Arising out of I.T.A.No.498/Lkw/2010) - - - Dated:- 7-8-2014 - SHRI SUNIL KUMAR YADAV AND SHRI. A. K. GARODIA, JJ. For the Appellant : Shri S. K. Garg, Advocate, Shri P. K. Kapoor, C.A. For the Respondent : Shri Manoj Kumar Gupta, CIT, D.R. ORDER Per: A K Garodia: Both these Misc. Applications have been filed by the assessee alleging certain apparent mistakes in the combined Tribunal order dated 28/02/2014 for assessment year 2005-06 2006-07. The contents of these Misc. Applications are identical and the arguments were also identical from both the sides because the issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erefore, rectification is called for in this respect. PRAYER 11. As the mistakes as referred to above are apparent from records and are in the ambit of section 254 (2) of the Act, it is respectfully prayed that your honours be pleased to pass an appropriate order recalling and/or modifying the order dated 28.02.2014 passed in ITA No.497/LKW/2010 so that assessee's claim for depreciation of ₹ 94,27,541/- on the enhanced cost of fixed assets (by a sum of ₹ 7,42,69,500/-), as had been allowed by the ld. CIT(A), Kanpur vide his order dated 07.05.2010, be upheld and the revenue's appeal be dismissed. 2. Learned A.R. of the assessee made elaborate submissions before us in course of hearing but these contentions were same as have been raised by the assessee in the Misc. Application, as per Para 7 to 11 reproduced above. 3. In addition to those contentions, it was also submitted by Learned A.R. of the assessee before us that on page No. 58 59 of the paper book is depreciation chart (original and revised). He also submitted that Schedule-4 to the balance sheet regarding fixed assets is appearing on page No. 43 of the paper book. He also submitted tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this can be seen from the depreciation chart available on page No. 58 59 of the paper book. He placed reliance on the judgment of Hon'ble Calcutta High Court rendered in the case of Steel Containers Ltd. Vs Commissioner of Incometax [1978] 112 ITR 995 (Cal). 6. We have considered the rival submissions and perused the Misc. Applications filed by the assessee. We find that the issue in dispute was decided by the Tribunal as per Para 7 of its order, which is reproduced below: 7. We have considered the rival submissions. As required by the bench in the course of hearing, the learned AR of the assessee has submitted a copy of Balance Sheet as on 04.11.2004 with figures of assets and liabilities on that date being pre acquisition and post acquisition. As per the same, pre acquisition Fixed assets were nil and post acquisition fixed assets are shown at ₹ 56762.41 lacs and capital work in progress at ₹ 1423.60 lacs. Depreciation is not allowable on capital work in progress. So, maximum depreciation allowable is on assets of ₹ 56762.41 lacs. As per original chart of depreciation available on page 58 of the paper book, depreciation is calculated on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt of depreciation of ₹ 72,32,58,987. Thereafter, it is noted that on page 59 of the paper book in the revised depreciation chart, the assessee has taken the value of assets at ₹ 575,05,10,044.63 with amount of depreciation of ₹ 73,26,86,528.73. After noting these figures, it is observed by the Tribunal that we fail to understand that when as per the balance sheet, the value of post acquisition assets is shown at ₹ 56762.41 lacs, how it can go up for depreciation purpose. This is also noted by the Tribunal that maximum depreciation allowable is on assets of ₹ 56762.41 lacs, which is already allowed by the A.O. also and extra depreciation allowed by the learned CIT (A) is not sustainable in view of the facts of the present case. We do not find any mistake in this finding of the Tribunal in Para 7 of the impugned order because we have examined again from the depreciation charts available on page No. 58 59 of the paper book and in the same, we find that in the original depreciation chart available on page No. 58, the assessee has claimed depreciation of ₹ 72,32,58,987/- and in the revised depreciation chart available on page No. 59 of the paper b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contains the liability also for such unpaid asset and hence, if an asset is not appearing in a balance sheet, it means, it was not acquired. When the finding of the tribunal in the impugned order is in line with this balance sheet, how it can be said that there is any apparent mistake in the tribunal order. 6.3 Regarding clause No. XX of Annexure to auditor s report appearing on page No. 39 of the paper book, we find that as per this clause, this fact is coming out that the assessee company has issued 74,26,950 equity shares of ₹ 10/- each to the equity shareholders of J.K. Synthetics Limited by debit to goodwill account in compliance of stipulation of the scheme approved by AAIFR in the matter of J.K. Synthetics Limited but when such goodwill is not included in the list of fixed assets as per depreciation chart (revised) available on page No. 59 of the paper book, and also in the Post Acquisition Balance Sheet as on 4.11.2004, how depreciation can be allowed on such goodwill because it is the duty of the assessee to bring evidence on record to show as to how the depreciation is allowable on the assets on which the assessee is claiming depreciation. When the assessee has n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore, it is seen that on total assets acquired by the assessee from J.K. Synthetics Limited, depreciation has been allowed by the Assessing Officer and as per the assessee itself, these shares of ₹ 7.43 crores issued by the assessee company to the shareholders of J.K. Synthetics Limited were nothing but a part of consideration of assets. When the Assessing Officer has allowed depreciation on the total assets excluding work in progress acquired by the assessee company from J.K. Synthetics Limited and the shares issued by the assessee company is nothing but part of consideration paid by the assessee company for acquiring the assets, how depreciation is allowable in respect of the same shares separately also. 7. As per the above discussion, we find that there is no apparent mistake in the impugned Tribunal order as alleged by the assessee. 8. Now in the light of above discussion, we examine the applicability of various judgments cited by Learned A.R. of the assessee. 8.1 The first judgment cited by Learned A.R. of the assessee is the judgment of Hon'ble Apex Court rendered in the case of Assistant Commissioner of Income-tax Vs Saurashtra Kutch Stock Exchange L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that case. In the present case, there is no such allegation that any judgment cited before the Tribunal was not considered by it. Hence, this judgment of Hon'ble Apex Court is not rendering any help to the assessee. 8.4 The fourth judgment cited by Learned A.R. of the assessee is the judgment of Hon'ble Allahabad High Court rendered in the case of Omega Sports and Radio Works Vs Commissioner of Income-tax (supra). In that case, it was held by Hon'ble Allahabad High Court that if any issue is covered by the judgment of Jurisdictional High Court then only because some other High Court has taken a different view, it cannot be said by the authorities within the jurisdiction of jurisdictional High Court that the issue is debatable and therefore, it cannot be rectified u/s 254 (2) of the Act. In the present case, this is not the case of the assessee that the issue in dispute is covered in favour of the assessee by any judgment of Hon ble jurisdictional High Court and the Tribunal has decided it otherwise on the basis of judgment of other High Court and therefore, this judgment of Hon'ble Allahabad High Court is not rendering any help to the assessee. 8.5 The fifth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... intainability of the appeal on the ground of limitation amount to an error apparent on the face of the record. In the present case, there is no such allegation and hence, this judgment of Hon'ble Allahabad High Court is not rendering any help to the assessee. 8.8 The eighth judgment cited by Learned A.R. of the assessee is the judgment of Hon'ble Bombay High Court rendered in the case of CIT vs. I.T.A.T. (supra). In that case, it was noted by Hon'ble Bombay High Court that the question before the Tribunal was not regarding the taxability of ₹ 92,09,480/- and therefore, there was no question of assessing the said amount as lease rental or otherwise in the assessment year 1998-99. It was also noted that the question before the Tribunal was whether the amount of ₹ 92,09,480/- which was already taxed on accrual basis in the earlier assessment year could be allowed as deduction u/s 36(1)(vii) of the Act on the ground that the said amount had become bad and the assessee has written off the said amount in its accounts as not recoverable. Under these facts, it was held by Hon'ble Bombay High Court that the Tribunal was justified in rectifying the apparent err ..... X X X X Extracts X X X X X X X X Extracts X X X X
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