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TMI Blog2016 (7) TMI 1082X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant by: Shri P.J. Pardiwalla and Shri Madhur Agarwal For The Respondent : Shri J. Chauhan ORDER Per Jason P. Boaz, A.M. This Cross Objection (CO) is filed by the assessee against the order of the CIT(A)-10, Mumbai dated 05.10.2010 for A.Y. 1995-96. Revenue s appeal in ITA 434/Mum/2011 was dismissed vide order dated 15.02.2006 on account of low tax effect (i.e. since the tax effect in its appeal was below `10 lakhs), in view of the CBDT s circular No. 21 dated 10.12.2015. 2. Order on the petition for condonation of delay in filing the Cross Objection for A.Y. 1995-96 2.1 Alongwith the CO, the assessee has filed a petition for condonation of delay in filing the CO for A.Y. 1995-96 accompanied by an affidavit dated 22.08.2013 sworn to by the assessee s authorised signatory. From the petition it is seen that the assessee had admittedly received notice of the Department s appeal in ITA No. 434/Mum/2011 on 11.10.2012. As per section 253(4) of the Income Tax Act, 1961 (in short 'the Act') the assessee was to have filed its CO within 30 days thereof, but filed the same on 26.08.2013 thereby leading to a delay of 285 days. 2.2.1 In the petition fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... donation of delay. 2.2.3 We have heard the rival contentions of both the parties and perused and carefully considered the material on record. Admittedly, there was a delay of 285 days in filing the CO before the Tribunal. The Hon'ble Apex Court in the case of Collector, Land Acquisition vs. MST Katiji (167 ITR 471) (SC) while laying down the principles for considering matters of condonation of delay in filing appeals has stated that substantial justice should prevail over technical considerations. The Hon'ble Court also explained that everyday s delay must of explained does not mean that a pedantic approach should be taken. The doctrine must be applied in a natural, common sense and pragmatic manner. Considering the aforesaid principles, it is seen from the details submitted in the affidavit that while having a conference with the Sr. Counsel in preparation for Revenue s appeal, it was realized that the assessee as per the order of the ITAT in ITA No. 5272 to 5274/Mum/2001 dated 18.04.2007, the assessee was entitled to claim expenditure from the date of setting up of the business which precedes the date of commencement; whereas as per the impugned order, the learned CI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iling of COs. Rule 22 of the IT(AT) Rules, 1963 also lays down the procedure to be adopted for treatment of COs. The provisions of section 253(4) and Rule 22 are extracted hereunder: - Section 253(4) - The Assessing Officer or the assessee, as the case may be, on receipt of notice that an appeal against the order of the Deputy Commissioner (Appeals) or, as the case may be, the Commissioner (Appeals) or the Assessing Officer in pursuance of the directions of the Dispute Resolution Panel has been preferred under sub-section (1) or sub-section (2) or sub-section (2A) by the other party, may, notwithstanding that he may not have appealed against such order or any part thereof; within thirty days of the receipt of the notice, file a memorandum of cross-objections, verified in the prescribed manner, against any part of the order of the Assessing Officer (in pursuance of the directions of the Dispute Resolution Panel) or Deputy Commissioner (Appeals) or, as the case may be, the Commissioner (Appeals), and such memorandum shall be disposed of by the Appellate Tribunal as if it were an appeal presented within the time specified in sub-section (3) or sub-section (3A). Rule 22 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions of the Tribunal vide order dated 18 April 2007, thereby not determining the date of set up of the banking business in India. 4) The CIT(A) ought to have held that the expenditure incurred after date of set up of the appellants banking business should be allowed as a deduction, while computing the total taxable income. The appellants pray that the CIT(A) be directed suitably in the matter. 5) The CIT(A) ought to have held that the business of banking in India was set up on 8 November 1994, being the date of banking licence obtained from Reserve Bank of India. 6) Without prejudice to the above, the CIT(A) ought to have directed the AO to allow deduction for depreciation on fixed assets while computing the total taxable income. 4.2 At the outset, the learned A.R. for the assessee, in support of the grounds raised (supra), submitted that the impugned orders of the authorities below were in gross violation of the directions of the Coordinate Bench of this Tribunal in the assessee s own case in ITA No. 5272 to 5274/Mum/2001 dated 18.04.2007 which held that the assessee is entitled to be allowed as a deduction, the expenses incurred after the dare of set ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess and commencement of business. When a business is ready to perform its task it can be said to be set up. There may be an interregnum or interval between the setting up of the business and the commencement of the business [refer Western India Vegetable Products Ltd vs CIT 26 ITR 151 (Bom); CWT vs Rarnaraju Surgical Cotton Mills Ltd. 63 ITR 478 (SC)]. We therefore do not see any substance in the contention of the assessing officer that the assessee's business could be said to have been commenced only after it was notified as a Scheduled Bank. The learned assessing officer erred in not discussing the issue with the assessee and drawing his conclusions without allowing the assessee an opportunity to make its submissions. However, the fact remains that during the course of hearing before the learned CIT(A) as well as before us no material in particular has been relied upon by the assessee so as to establish the date of setting up of business by the assessee in India. The assessee has relied upon only two bare facts as viz, date of grant of licence to do banking business i.e. 08-11-1994; secondly the date of acquisition of building premises that is set to be on 18-07-1994. We are ..... X X X X Extracts X X X X X X X X Extracts X X X X
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