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Income Tax Appellate Tribunal, DELHI ‘B’ BENCH,
Before: SHRI R.K. PANDA, & MS SUCHITRA KAMBLE,
PER SUCHITRA KAMBLE, JUDICIAL MEMBER
The Revenue as well as the assessee are in appeal against the order dated 27/01/2017 passed by the CIT(A)-2, New Delhi, for Assessment Year 2013-14
Grounds of appeal are as under:-
1. Ld. CIT (A) erred on facts and in law in confirming the disallowance of Rs. 45,12,19,128/- being claim u/s 80IA of the Act on ICDs/CFS which are Inland ports, ignoring the decision of the Hon’ble Delhi High Court in the Appellant’s own case in assessment year 2003-04 to 2005-06.
2. Ld. CIT(A) erred, on fact and in law in confirming the disallowance of Rs. 2,92,28,553/- being the claim of deduction on account of advance lease rent paid for the land taken on long terms lease for business purposes on pro rata basis, ignoring the fact that similar claim had been allowed in earlier years. 3. The Appellant pleads of the grounds to be allowed. A.Y. 2013-14 (Revenue’s appeal)
1. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs.282,63,60,260/- made on account of disallowance of deduction u/s 80IA on Rail System (Rolling Stock).
2. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has /erred in deleting the addition of Rs.2,78,347/- made on account of disallowance of depreciation on the assets retired from active use.
3. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has red in deleting the addition of Rs.2,78,130/- made on account of disallowance of depreciation on the assets which were not registered in the name of the assessee.
The assessee is a government company under the Ministry of Railways, which is engaged in the business of handling and transportation of containerized cargo. Its operating activities are mainly carried out at its Inland Container Depots (ICDs), Container Freight Stations (CFS) and Port Side Container Terminals (PSCT) spread all over the country. Its wagons are running for Indian Railways System for carriage of container traffic.
Thus, the assessee is engaged in developing, operating and maintaining infrastructure facilities. The assessee claimed deduction of 1551/DEL/2017 Rs.45,12,19,128/- u/s 80IA of the Act in respect of income from ICDs/CFS.
The Assessing Officer disallowed the claim on the ground that ICDs/CFS are not Inland Ports and as such they are not infrastructure facilities eligible for deduction u/s 80IA of the Act. The Assessing Officer also disallowed income from Rail system (Rolling stocks) amounting to Rs. 282,63,60,260/-. The Assessing Officer further made addition in respect of depreciation on assets retired from Active use at Rs. 2,78,347/, disallowance on depreciation on assets not registered at Rs. 2,78,130/- and also depreciation on land at Rs.2,92,28,553/-. Thus, the Assessing Officer assessed income at Rs. 11,45,60,05,368/-.
Being aggrieved by the Assessment Order, the assessee filed appeal before the CIT(A). The CIT(A) partly allowed the appeal of the assessee.
As regards to assessee’s appeal, Ground No. 1, the Ld. AR submitted that the same is covered in favour of the assessee in assessee’s own case by the decision of the Hon’ble Supreme Court (2018) 404 ITR 397 (SC).
The Ld. DR could not controvert the same.
We have heard both the parties and perused all the relevant material available on record. The Hon’ble Supreme Court held as under:
It is pertinent to note that the issue is already covered in favour of the 1551/DEL/2017 assessee in assessee’s own case by the Hon’ble Apex Court and the facts are identical in the present assessment year. Thus, Ground No. 1 of assessee’s appeal is allowed.
8. As regards to Ground No. 2 of the Assessee’s appeal, the Ld. AR requested that the same may be remanded back as in earlier assessment years, this issue has been allowed by the revenue authorities.
The Ld. DR relied upon the Assessment Order and the order of the CIT(A).
We have heard both the parties and perused all the relevant material available on record. It is pertinent to note here that the Revenue has allowed this claim of deduction on account of advance lease rent paid for the land taken on long term lease for business purposes on pro rata basis in the earlier assessment years i.e. 2009-10 and 2007-08 where the tribunal has remanded back the matter on this issue. The Ld. AR also requested to remand back this issue for verification by the Assessing Officer. From the perusal of the Assessment Order, it can be seen that the Assessing Officer has followed the principle of consistency in respect of earlier years assessment orders which now stands allowed in favour of assessee as per the directions of the Tribunal for A.Y. 2009-10 and 2007-
Therefore, it will be appropriate to remand back this issue to the file of 1551/DEL/2017 the Assessing Officer for proper adjudication. Needless to say, the assessee be given opportunity of hearing by following principles of natural justice.
Ground No. 2 of the assessee’s appeal is partly allowed for statistical purpose.
As regards to Revenue’s appeal, the Ld. AR submitted that in respect of Ground No. 1, the order of the Tribunal has been confirmed by the Hon’ble Supreme Court in assessee’s own case in favour of the assessee by dismissing the SLP filed by the Revenue. The Ld. AR further pointed out the findings of the CIT(A).
The Ld. DR could not controvert the same.
We have heard both the parties and perused all the relevant material available on record. It is pertinent to note that the CIT(A) has correctly noted that the issue in respect of disallowance of the claim of deduction of Rs. 2,82,63,60,260/- u/s 80IA of the Act on rail system (rolling stock) is decided in favour of the assessee by the Tribunal in A.Y. 2003-04, 2004-05 and 2005-06 which is now confirmed by the Hon’ble Apex Court vide order dated 7.05.2018 and 02.07.2018 thereby dismissing the SLP filed by the Revenue [SLP (Civil) Diary No. 13966/2018 and 14875/2018]. The facts are identical in the present assessment year as well and no distinguishing facts were pointed out by the Ld. DR. Therefore, Ground No. 1 of Revenue’s
1551/DEL/2017 appeal is dismissed.
As regards to Ground No. 2 of the Revenue’s appeal, the Ld. AR submitted that the depreciation is allowed by the Tribunal in Assessee’s own case for A.Y. 2010-11 (ITA Nos. 77 & 186/DEL/2015 order dated 23.08.2018) in favour of assessee.
The Ld. DR relied upon the Assessment order.
We have heard both the parties and perused all the relevant material available on record. It is pertinent to note that the Tribunal for A.Y. 2010- 11 has followed the order for A.Y. 2008-09 which is approved by the Hon’ble Delhi High Court being vide order dated 31.10.2017 which is now confirmed by the Hon’ble Apex Court vide orders dated 7.05.2018 and 02.07.2018 thereby dismissing the SLP filed by the Revenue [SLP (Civil) Diary No. 13966/2018 and 14875/2018]. Therefore, this issue is also covered in favour of the assessee. Ground No. 2 of the Revenue’s appeal is dismissed.
As regards to Ground No. 3, the Ld. AR submitted that the assessee claimed deduction of Rs.2,78,130/- on account of depreciation on assets not registered in assessee's name. The Assessing Officer disallowed the claim on the ground that the depreciation is allowable on assets owned by the assessee and as the assessee did not own the building, the depreciation
1551/DEL/2017 was not allowable. The Assessing Officer did not correctly appreciate the facts and relevant law in disallowing the claim. The building was allotted to the assessee, consideration was paid, possession was taken and it was used by assessee for business purposes. The Ld. AR further submitted that disallowance of the claims is not justified as similar claim disallowed by the Assessing Officer in earlier year was allowed in appeal by the CIT (A).
The Ld. AR relied upon the order of the CIT(A).
The Ld. DR relied upon the Assessment Order.
We have heard both the parties and perused all the relevant material available on record. It is pertinent to note that the issue is already decided in favour of the assessee in earlier Assessment years by the Revenue authorities. The CIT(A) rightly allowed the claim as there is no distinguishing facts in the present assessment year. Therefore, Ground No. 3 of the Revenue’s appeal is dismissed.
In result, appeal of the assessee is partly allowed for statistical purpose and appeal of the Revenue is dismissed.
Order pronounced in the open court on 30/10/2019.