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TMI Blog2018 (3) TMI 1027X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 3/04/1982. Thus we direct the AO to recomputed interest accordingly. Hence, we allow this ground of appeal of the assessee. Disallowance of provision of leave encashment - Held that:- CIT-A has decided the issue by following the law laid down by the Hon’ble Supreme Court in Bharat Earth Movers vs. Commissioner of Income Tax [2000 (8) TMI 4 - SUPREME Court] wherein held provision for meeting the liability for encashment of earned leave by the employee is an admissible deduction - ITA No. 3524/Mum/2013, ITA No. 4462/Mum/2014, ITA No. 1722/Mum/2012 And ITA No. 1488/Mum/2012 - - - Dated:- 19-12-2017 - SHRI G.S. PANNU (AM) AND SHRI RAM LAL NEGI (JM) For The Assessee : Sh. Dinesh Vyas and Sh. Srihari M Iyer (AR) For The Revenue : Sh. A Mohan Sh. V. Justin (CIT DR) ORDER PER RAM LAL NEGI, JM These are the appeals filed by the assessee and the revenue pertaining to the Assessment Years 1994-95, 1996-97, 1997-98 and 1998-99. Vide ITA No. 3524/Mum/2013, the assessee has challenged the impugned order passed by the Ld. CIT (A) - 6, Mumbai, whereby the Ld. CIT (A) has partly allowed the appeal filed by the assessee against assessment order passed u/s 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the case and in law that the reassessment proceedings under section 147 is bad in law, illegal and without and/or in excess of jurisdiction. 1.2 The learned CIT (A) has erred in law and on facts in confirming the validity of the proceeding under section 147 of the Act disregarding the facts that the information regarding claim of depreciation on assets given on lease was already available on records and hence the reassessment proceeding under section 1147 is invalid and bad in law being based on same set of facts and material already on records. 2. Without prejudice to Ground No. 1 above: 2.1 The learned CIT (A) has erred in law and on facts in confirming the disallowance of depreciation simply based on the earlier order dated 30/11/2004 passed by the then CIT (A). The CIT (A) ought to have examined the facts and considered the submissions of the appellant and decided the issue afresh on merits. 2.2 Disallowance of depreciation on assets given on lease to Sahney Krikwood Pvt Ltd.: 2.2.1 The learned CIT (A) has erred in law and on facts of the case in confirming the disallowance of depreciation of ₹ 20,00,000 on assets acquired from M/s Sahney K ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2008 passed by the ITAT in the case of Sheba Properties for the assessment years 1996-97 and 1997-98. The Ld. counsel further submitted that apart from the decisions of the ITAT, this issue is covered by the judgment of the Hon ble Supreme Court passed in ICDS Ltd. Vs. CIT (350 ITR 527 SC) and the Hon ble High Court of Bombay passed in CIT vs. Apollo Finvest Investment Ltd. ITA No. 2298 of 2013 Bom. Therefore, this ground of the appeal is liable to be dismissed being devoid of any merit. 5. On the other hand, the Ld. Departmental Representative (DR) did not controvert the submissions of the Ld. counsel, however, relied on the order passed by the Ld. CIT (A). 6. We have heard the rival submissions and also carefully gone through the material on record including the cases relied upon by the Ld. Counsel for the assessee. We notice that the assessee had raised the identical issue in ITA No. 1484/Mum/2012 for the A.Y. 1994-95. In the said year, the return of the assessee was completed u/s 143 (3) of the Act. The Assessing Officer disallowed depreciation on lease assets. The Ld. CIT (A) confirmed the action of the AO. In second appeal, the ITAT restored the matter back to the file ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lease rentals earned by the assessee was offered to tax and same was assets by the AO.s in the year under consideration as well as in the subsequent AY.s. Here, we would like to discuss the matter of I.C.D.S. Ltd. (supra). In that case the Hon ble Apex Court has held as under:- The provision on depreciation in the Income-tax Act, 1961, reads that the asset must be owned, wholly or partly, by the assessee and used for the purposes of the business. Therefore, it imposes a twin requirement of ownership and usage for business for a successful claim under section 32 of the Act. The section requires that the assessee must use the asset for the purpose of business . It does not mandate usage of the asset by the assessee itself. As long as the asset is utilized for the purpose of business of the assessee, the requirement of section 32 will stand satisfied, notwithstanding non-usage of the asset itself by the assessee. The definitions of ownership essentially make ownership of function of legal right or title against the rest of th world. However, it is nomen generalissimum , and its meaning is to be gathered from the connection in which it is used, and from the sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee and dismissed this ground of appeal of the revenue. Similarly, in Seba Properties Ltd., ITA No. 4913/Mum/2000 for the A.Y. 1996-97 and ITA No. 6805/Mum/2002 A.Y. 1997-98, the coordinate Bench has decided the identical issue in favour of the assessee. We further notice that the coordinate Benches have followed the principles of law laid down by the Hon ble Supreme Court in ICDS (supra). 8. Since, the identical issue has been decided by the coordinate Bench in favour of the assessee in the assessee s own cases as well as the assessee s wholly owned Subsidiaries Company, we respectfully following the decision of the co-ordinate Bench set aside the findings of the Ld. CIT (A) and decide this issue in favaour of the assessee. Hence, we allow ground No. 2-1, 2.2 and 2.3 of the assessee s appeal. ITA No. 4462/MUM/2014 (Assessment Year: 1996-97) Facts of the case in brief are that the assessee filed its return of income for the relevant assessment year declaring the total loss of ₹ 1,93,96,000/-. However, the AO determined the total income of the assessee at ₹ 14,53,78,180/-. In the first appeal, the Ld. CIT(A) granted partial relief to the assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allowed this ground of appeal in the assessee s appeal for the A.Y. 1994-95, consistent with our own findings, we allow this ground of appeal of the assessee in the present case for the reasons recorded in the order pertaining to the assessment year 1994-95. 4. The second issue pertains to interest u/s 220 (2) of the Act. The Ld. counsel pointed out that in the revenue s appeal against the order of the Ld. CIT (A) in assessee s case ITA No. 6004/Mum/2013 for the A.Y. 1997-98, the ITAT has decided the identical issue in favour of the assessee and dismissed the ground of the appeal of the assessee. The Ld. counsel for the assessee contended that the interest u/s 220 (20) should be calculated from the date of fresh assessment when the assessment is de novo set aside and the interest could not be calculated from the date of original assessment order, which is very clear from the CBDT Circular No. 334 dated 3/04/1982. The coordinate Bench has decided the issue in favour of the assessee holding as under:- On a careful consideration of the above observations and findings of the CIT (A), we do not find any reason to reverse the findings of the CIT (A) as the decision of the CIT (A) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ethod adopted by the acturial valuer was not as per a scientific method mandated by Hon ble Supreme Court in a case of Bharat Earth Movers, 245 ITR 428 as objected to Assessing Officer. 3. Before us, the Ld. DR relied on the assessment order passed by the AO. On the other hand, the Ld. counsel for the assessee submitted that ground No. 1 2 do not survive as the Mumbai Tribunal has already decided this issue in favour of the assessee in assessee s own appeal, ITA No. 1487/M/2012 for the A.Y. 1997-98. 4. We notice that the Co-ordinate Bench of the Tribunal has allowed this ground of appeal in ITA No. 1487/M/2012 for the A.Y. 1997-98 by following its own order in assessee s appeal for the A.Y. 1994-95. Hence, this ground of appeal does not survive. We, therefore, dismiss this ground of appeal of the revenue being not maintainable. 5. Vide ground No. 3 the revenue has challenged the action of the Ld. CIT (A) in deleting the disallowance of provision of leave encashment of ₹ 5 lacs. The Ld. counsel for the assessee submitted that the Ld. CIT (A) has decided the issue by following the law laid down by the Hon ble Supreme Court in Bharat Earth Movers vs. Commissioner o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax (supra), we do not find any reason to interfere with the findings of the Ld.CIT (A). We accordingly uphold the findings of the Ld. CIT (A) and dismiss this ground of appeal of the revenue. ITA No. 1488/MUM/2012 (Assessment Year: 1998-99) Brief facts of the case are that the Ld. CIT (A) confirmed the action of the AO in rejecting the claim of the assessee of depreciation on assets given on lease treating it as loan transaction by following the similar orders passed by the CIT (A) in assessee s own case in the earlier years. 2. The assessee has raised the following effective grounds of appeal against the impugned order passed by the Ld. CIT (A):- 1. (a) The Learned Commissioner of Income-tax (Appeals) [hereinafter referred to as the CIT (A) ] erred in law and on facts in upholding that the transactions of lease of various assets were mere financing transactions and the Appellant was therefore not entitled to depreciation allowance of ₹ 30,58,92,422 under section 32 of the Act. (b) The Learned CIT (A) erred in law and on facts in not disposing the ground whereby Assessing Officer ( AO ) disallowed the depreciation on the leased assets without follo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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