DCIT 13(3)(2), MUMBAI vs. YOU BROADBAND & CABLE INDIA LTD, MUMBAI

l. Whether on the facts and the circumstances of the case and in law, the Ld. CIT (A) erred in deleting the disallowance of lease rental of Rs. 2,11,52,230/- even though the assessee's claim which was made through a revised computation, was not supported by any evidence to show that the assessee pertained to finance lease transaction. 2. The appellant prays that the order of the CIT(A) on the above ground be set aside and that of the Assessing Officer be restored.

Brief facts of the case are that the assessee-company is in the business of providing internet services to its subscriber and infrastructure support of licensed telecommunication services providers. The assessee filed return of M/s You Broadband & Cable India Ltd. income for relevant Assessment Year on 30th September 2011 declaring loss of Rs. 6,84,88,645/-. Subsequently, revised return was filed on 02.03.2013 declaring loss at Rs. 6,91,91,792/-. The assessment was completed on 28.03.2014 under section 143(3). The Assessing Officer while making assessment order noted that the assessee claimed Rs. 2,11,52,231/- on account of principal element in lease rental and Rs. 68,10,046/- as interest paid. The Assessing Officer disallowed principal lease amount of Rs. 2,11,52,230/- holding that it is capital in nature. On appeal before the Ld. CIT(A), the assessee was allowed the said principal lease rental Rs. 2,11,52,230/-. The Ld. CIT(A) allowed the lease rental on the basis of order in earlier two assessment years i.e. Assessment Year 2009-10 & 2011-12. Thus, aggrieved by the order of Ld. CIT(A), the Revenue has filed the present appeal before us.

We have heard the Ld. Departmental Representative (DR) for the Revenue and Ld. Authorized Representative (AR) of the assessee and gone through the order of authorities below. The Ld. DR for the Revenue submits that the Ld. CIT(A) passed the order by following the order in earlier Assessment Years i.e. 2009-10 & 2010-11. The Revenue challenged those earlier order of Ld. CIT(A) before the Tribunal and order of both the Assessment Year is remanded to the file of Assessing Officer vide order dated 17.05.2017 in & 6973/M/13 for Assessment Year 2009-10 & 2010-11 respectively. The Ld. DR for the Revenue prayed that this issue raised in the 2 M/s You Broadband & Cable India Ltd.

On the contrary, the Ld. AR of the assessee submits that the facts of the year under consideration are at variance. This year, the Assessing Officer as has clearly held that the assessee is not the owner of the leased asset. It was submitted that the order of ld CIT(A) is liable to be sustained. In support of his submission, the Ld. AR of the assessee relied on the decision of Hon'ble Supreme Court in ICDS Ltd. Vs. CIT [2013] 350 ITR 527 and decision of Hon'ble Rajasthan High Court in CIT Vs. Banswara Syntex Ltd. [2013] taxmann.com 176 (Raj.).

In the rejoinder submission, the Ld. DR for the Revenue submits that the order of Ld. CIT(A) is based on order of earlier years, which has already set- aside to the file of Assessing Officer and keeping in view the identical nature of disallowance, it may be remanded to the file of Assessing Officer. On merit the Ld. DR relied on the decision of Hon'ble Court in Asea Brown Boveri Ltd. Vs. Industrial Finance Corporation of India Ltd. in C.A. 3574 of 1998 dated 27.10.2014 and decision of Delhi Tribunal in Minda Corporation Ltd. Vs. DCIT [2016] 42 ITR(T) 615 (Del.Trib.).

We have considered the rival submission of the Ld. Representatives of the parties and perused the order of authorities below. We have also gone through the order of Co-ordinate Bench of Tribunal in assessee’s case for Assessment M/s You Broadband & Cable India Ltd. Year 2009-10 & 2010-11. The Co-ordinate Bench of the Tribunal passed the following order:

We shall now take up the appeals filed by the Revenue for A.Y. 2009-10 & 2010-11. In both the years the issue relates to lease rental claimed by the assessee as deduction. Identical issue was considered by us in A.Y. 2008-09 in the preceding paragraph, wherein we have restored this matter to the file of the Assessing Officer. Consistent with the view taken, we set aside the order passed by the learned CIT(A) on this issue in both years and restore the same to the file of the Assessing Officer for examining them afresh.”

We have given thoughtful consideration on the facts and the submissions of the le representatives of the parties. Considering the facts that the identical issue is restored to the file of Assessing Officer in Assessment Year 2009-10 & 2010-11, we are of the view that the grounds raised in the present appeal be also considered afresh in accordance with the direction in order dated 17.05.2017 in & 6973/2013 in Assessment Year 2009-10 & 2010-11. Moreover, the order of Ld. CIT(A) is based on one order of earlier years i.e. Assessment Year 2009-10 & 2010-11. Thus, respectfully following the order of Co-ordinate Bench, the issue is remanded to the file of Assessing Officer to decide the afresh as per direction in order dated 17.05.2017 and in M/s You Broadband & Cable India Ltd. accordance with law. In the result, ground of appeal raised by Revenue is allowed for statistical purpose.

In the result, appeal filed by Revenue is allowed for statistical purpose.