M/S CENTURY GALAXY DEVELOPERS LTD.,BANGALORE vs. DCIT, BANGALORE

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ITA 1306/BANG/2015Status: DisposedITAT Bangalore03 June 2016AY 2011-124 pages

In favour of the Revenue: the assessee's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that unless the earlier order of the Tribunal is stayed or reversed by the High Court, it must be followed. Therefore, the issue was decided against the assessee, confirming the CIT(Appeals)'s order.

What were the facts?

The assessee claimed depreciation on buildings legally owned by them, but the CIT(Appeals) disallowed it, stating the assessee was not the owner due to assignment of user rights. The assessee argued for depreciation on common areas as well.

What were the issues?

The primary issue was whether depreciation is allowable on buildings legally owned by the assessee when user rights have been assigned to shareholders. The secondary issue concerned depreciation on common areas.

Which sections of the Income-tax Act were involved?

Section 32

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “C” BENCH : BANGALORE

Before: SHRI SUNIL KUMAR YADAV & SHRI A.K. GARODIA

For Appellant: Shri S. Ramasubramanian, CA
For Respondent: Shri K.R. Narayanan, Jt. CIT(DR)
Hearing: 31.05.2016Pronounced: 03.06.2016

Per Sunil Kumar Yadav, Judicial Member

1.

This appeal is preferred by the assessee against the order of CIT(Appeals) inter alia on the following grounds:-

“1 That the order of the learned Commissioner of Income Tax (Appeals) in so far it is prejudicial to the interests of the appellant is bad and erroneous in law and against the facts and circumstances of the case.

2. That the learned Commissioner of Income Tax (Appeals) erred in law and on facts in holding that the depreciation is not allowable on the building which is legally owned by the appellant.

3. That the learned Commissioner of Income Tax (Appeals) erred in law and on facts in holding that the appellant is not the owner just because the user rights have been assigned to the shareholder-allottees. 4. Without prejudice to the Grounds No. 2 & 3 above, the learned Commissioner of Income Tax (Appeals) ought to have allowed the depreciation on the common areas which are owned by the appellant. Each of the above grounds is without prejudice to one another and the appellant craves leave of the learned Hon’ble Income Tax Appellate Tribunal. Bangalore to add, delete, amend or otherwise modify one or more of the above grounds either before or at the tune of hearing of this appeal.”

2.

Though various grounds are raised in this appeal, but they all relate to disallowance of depreciation on the buildings.

3.

During the course of hearing, the ld. counsel for the assessee has candidly admitted that the impugned issue is squarely covered against the assessee by the Tribunal’s order dated 08.10.2008 in assessee’s own case for the assessment year 2003-04 in ITA No.999/Bang/2013. Copy of the order is placed on record. The ld. counsel for the assessee, however, submitted that the assessee has filed an appeal before the Hon’ble High Court of Karnataka and the same is pending for disposal. In light of the pendency of the appeal before the Hon’ble High Court, he submitted that the appeal before the Tribunal be kept in abeyance. This submissions of the assessee was strongly objected to by the Revenue with the submission that unless and until the order of the Tribunal is reversed or its operation is stayed by the Hon’ble High Court, it holds the field and the Tribunal is supposed to follow the same while adjudicating the same issue.

4.

Having heard the rival submissions in this regard, we are of the view that unless and until operation of the order of the Tribunal is stayed or is reversed by the Hon’ble High Court of Karnataka, it holds the field and the Tribunal is supposed to follow the same. We, therefore, following the order of the Tribunal for A.Y. 2003-04 in assessee’s own case of which copy is placed on record, decide the issue against the assessee. We, therefore, confirm the order of the CIT(Appeals) in this regard.

5.

In the result, the appeal of the assessee is dismissed.

Pronounced in the open court on this 3rd day of June, 2016.

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