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Income Tax Appellate Tribunal, “B”, BENCH KOLKATA
Before: SHRI N.V. VASUDEVAN, JM &DR. A.L.SAINI, AM
O R D E R
Per Dr. Arjun Lal Saini, AM:
The captioned two appeals filed by the Revenue, pertaining to A.Y. 2008-09, are directed against the orders passed by the ld. Commissioner of Income Tax(Appeals),which in turn arise out of assessment orders passed by the Assessing Officer under section 263/251/143(3) and U/s115 WG/115WE(3) of the Income Tax Act, 1961 (hereinafter referred to as the ‘Act’).
With reference to Revenue`s appeal in for A.Y. 2008-09, the ld. Counsel for the assessee, at the outset, has pointed out that the assessment order under section 263/251/143(3) of the I.T. Act, had been passed by the assessing officer on dated 10.03.2014, as per the direction and order of the Commissioner of Income tax under section 263 of the Act. Since, the order passed by the Commissioner of Income Tax, under section 263 of the Income Tax Act, 1961, has been quashed by the Hon’ble Tribunal, in ITA No.529/Kol/2013, A.Y 2008-09, wherein the Hon’ble ITAT observed that Assessing Officer took one of the possible views, therefore, M/s EIH Ltd. & 1709/Kol/2016 Assessment Years: 2008-09 order passed by the assessing officer cannot be termed erroneous and prejudicial to the interest of the revenue. Therefore, Tribunal in ITA No.529/Kol/2013 has quashed the order passed by the Commissioner of Income Tax u/s 263 of the Act. Since, the order passed by the Commissioner of Income Tax, u/s 263 of the Act, has been quashed by the ITAT, therefore, consequential assessment order passed by the Assessing Officer does not have any leg to stand, that is, it would be cancelled. Therefore, the present appeal,(in ITA No.1709/Kol/2016) filed by the Revenue become infractuous and does not require any adjudication.
Now, we shall take A.Y 2008-09, wherein the Revenue has raised the following grounds of appeal: “1.That on the facts and circumstances of the case and in law, the ld. CIT(A) erred in deleting the disallowance made by AO u/s 115WC(2)(f) and 115WB(2)(I) of the Act. 2.That the appellant reserves the right to amend, alter or add to any grounds of appeal before or at the time of hearing of the appeal.”
4. At the outset, the ld. Counsel for the assessee has pointed out that this issue is fully covered by the judgment of the ITAT in assessee’s own case in ITA No.353/Kol/2013, A.Y 2009-10, wherein the ITAT observed as follows: “7. We have heard the rival submissions and perused the materials available on record. It is not in dispute that the assessee in the instant case assessee had earned substantial revenue by operating the aircrafts as a separate organized activity. The ld CIT(A) had observed that the assessee has a separate Aviation Department to carry out the said operations which fact has not been controverted by the revenue before us. Hence it could be safely concluded that the same is carried out as a separate and distinct activity in an organized manner. Now the next question that arises is whether the same could be construed as business activity of the assessee. In this regard, we find that the ld AO himself had accepted that the assessee is engaged in air chartering business in income tax proceedings u/s 143(3) of the Act. It is not in dispute that the ld AO had assessed the chartering income as ‘income from business’ of the assessee. With regard to the disallowance made on account of personal element of expenses thereon, we find that this tribunal had deleted the same in ITA No. 352/Kol/2013 for Asst Year 2009- 10 (i.e the year under appeal before us for FBT proceedings), dated 5.4.2017. Hence it could be safely concluded that the aircrafts were used only for commercial purposes and wholly and exclusively only for the purpose of its air chartering business. We are also in agreement with the findings of the ld CIT(A) that what is relevant is whether the assessee had earned substantial revenue by providing aircrafts on charter / hire. Once that is proved, that alone should be the criteria for determining whether the assessee is in the aircraft business or not, rather than considering the issue from the perspective of having permit to operate scheduled vs non-scheduled transport services. With regard to the reliance placed by the ld DR on the decision of Delhi Tribunal in the case of Punj Lloyd Ltd supra, the facts Page | 2