APEEJAY SURRENDRA PARK HOTELS LTD.,KOLKATA vs. D.C.I.T.-CC-III, KOLKATA

The only ground that has been raised by the assessee is against the action of Ld. CIT(A) in confirming the disallowance of Rs.56,28,718/- claimed by the assessee as amortization expenditure of leasehold land.

At the outset, the Ld. AR of the assessee Shri Manish Tiwari drew our attention to the fact that this issue is squarely covered in assessee’s own case by the decision of the Tribunal in earlier assessment years i.e. AYs 2009-10 and 2012-13. According to Ld. AR , the assessee had made a payment of Rs.13.94 cr. for gaining control over the property which was necessary to their smooth running of its hotel business. Therefore, the expenses claimed was amortized and expenditure was claimed from AY 2003-04 onwards which was allowed throughout by the AO u/s. 143(3) of the Income tax Act, 1961 (hereinafter referred to as the “Act”) from AY 2004-05 to 2008-09 by passing scrutiny assessment orders u/s. 143(3) of the Act. The Ld. AR drew our attention to the respective assessment orders passed by AO u/s. 143(3) of the Act placed in the paper book which relates to AY 2004-05

And according to the Ld. AR this view has been reiterated by the Tribunal in assessee’s own case for AY 2012-13 by order dated 29.01.2020 a copy of which is placed at pages 5 to 8 of the paper book. In the aforesaid facts and circumstances, he pleads that since there is no change in facts or law, the view of the Tribunal in assessee’s own case on identical facts and circumstances should be followed and allow the assessee’s appeal.

Per contra, the Ld. DR supported the action of the Ld. CIT(A) and does not want me to interfere. However, on a pointed question from the bench to the Ld. DR as to whether there was any change in facts or law which could have allowed me to take a different view, the Ld. DR fairly conceded that there is no change in facts or law in this assessment year vis a vis previous assessment years. 6. Heard rival submissions and gone through the facts and circumstances of the case. The aforesaid stated facts are not repeated for the sake of brevity. It is an admitted fact that Apeejay Surrendra Park Hotels Ltd., AY 2011-12 assessee had incurred an expenditure of Rs.13.94 cr. for gaining control over the property which was necessary to their smooth running of its hotel business, which expenditure was amortized and claimed as revenue expenditure; and which was allowed by AO from AYs 2003-04 to AY 2008-09; and thereafter in AY 2009-10 the AO took a view that the amount was capital in nature and disallowed the same which view was reversed by the Ld. CIT(A) and the revenue’s appeal against the action of the Ld. CIT(A) got dismissed and the Tribunal was pleased to uphold the action of the Ld. CIT(A) thereby allowing the claim of the assessee (supra). This view of the Tribunal has been followed in assessee’s own case by the coordinate bench for AY 2012-13 also. Even though res judicata is not applicable for income tax proceeding, however, rule of consistency as a principle has been upheld by the Hon’ble Supreme Court in the case of Radhasoami Satsang Vs CIT (193 ITR 321), wherein the Hon’ble Supreme Court has held that if the facts permeating in the earlier years are the same and there is no change in facts and law, then the view taken earlier should not be disturbed by applying the principle of rule of consistency. This view has also been endorsed by the Hon’ble jurisdictional High court in the case of CIT Vs. Hindusthan Motors Ltd. 192 ITR 619. Therefore, following the judicial discipline the Division Bench order of this Tribunal in assessee’s own case for AYs 2009-10 and 2012-13 are binding on me and need to be followed and, therefore, I am inclined to allow the appeal of the assessee and reverse the impugned order of Ld. CIT(A) and allow the amortization expenditure of Rs.56,28,718/- claimed by the assessee.

In the result, the appeal of assessee is allowed. Order is pronounced in the open court on 5th February, 2021.