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Income Tax Appellate Tribunal, COCHIN BENCH: COCHIN
Before: SHRI CHANDRA POOJARI & SHRI SOUNDARARAJAN K.
Date of Hearing : 11.07.2024 Date of Pronouncement : 16.08.2024 O R D E R PER SOUNDARARAJAN K., JUDICIAL MEMBER:
These are appeals filed by the assessee challenging the orders of NFAC dated 22.11.2022 for the assessment years 2011-12, 2013- 14, 2014-15 & 2015-16. Since the issue in all these appeals is common, these are clubbed together, heard together and disposed of by this common order for the sake of convenience.
2. First, we will take up for adjudication. 2.1 Facts of the case are that the assessee has filed his return of income for A Y 201 1-12 on 14/10/2011 admitting a total income of Rs.12,29,649/-. The original assessment u/s 143(3) was completed on 28.03.2014 with assessed income of Rs.15,29,650/-. Subsequently, it was seen from the records that the assessee wrongly e-filed the return for A Y 2011-12 instead of A.Y 2010-11 to 77/Coch/2024 Thanseer Kaja, Kerala Page 2 of 15 on 14/10/2011. Thereafter, on 23/04/2013, as the return of income for A.Y. 2011-12 could not be rectified electronically, the assessee filed a revised return for the A.Y. 2011-12 manually declaring a total income of Rs.39,44,140/-belatedly. The assessment was completed u/s. 143(3), but the revised return filed manually on 23/04/2013 was not considered. The manual revised return of income was treated as invalid as there was no provision for manual filing. Therefore, the original return was selected for scrutiny under CASS' and assessment completed accordingly. Hence, the case was reopened u/s.147 of the Act after recording the reason to believe that income chargeable to tax has escaped assessment and notice u/s. 148 of the Act was issued on 31/03/2016 and served upon the assessee 2.2 Thereafter, the ld. AO based on the accounts of the assessee had disallowed the charges paid towards hoardings for the reason that the assessee has not deducted the TDS while making payments. Similarly, ld. AO disallowed the payments made to the various parties in cash on a single day exceeding Rs.20,000/- since the same is not in accordance with section 40A(3) of the Act. The assessee challenged the said disallowances before the ld. CIT(A) and the ld. CIT(A) has not accepted the case of the assessee and dismissed the appeal. Therefore, the assessee filed the present appeal before this Tribunal on the following grounds:
3. At the time of hearing, the ld. A.R. submitted that the assessee had paid the hoarding charges to four of the advertising companies during the assessment year 2010-11 and deducted TDS amount and also paid to the department. Therefore, the ld. A.R. contended that the disallowance of the payments made to the hoarding charges is not correct. The ld. A.R. further produced the statement showing the payments made to the four advertising agents and the challan for the payment of the TDS amount with the department and prayed to allow the appeal. to 77/Coch/2024 Thanseer Kaja, Kerala Page 6 of 15 4. The ld. D.R. relied on the order of the lower authorities and prayed to dismiss the appeal.
We have heard the rival submissions and perused the materials available on record. As seen from the statement given by the assessee, the assessee had deducted the TDS amount while making the payments to the hoarding charges and also deposited the TDS amount with the department by raising challans. As seen from the statement, the assessee had paid the TDS amount in respect of the expenses amounting to Rs.12,86,080/- whereas the ld. AO had disallowed the same for not deducting the TDS amount. We also find that even though the expenses were incurred in the assessment year 2011-12, the TDS amounts were paid during the assessment year 2012-13 and therefore, the contention of the assessee requires detailed verification of the same with the regular books of accounts maintained by the assessee. Infact the ld CIT(A) had given the following finding;- to 77/Coch/2024 Thanseer Kaja, Kerala Page 7 of 15 5.1 As seen from the findings of the ld CIT(A) it is clear that the TDS was deducted and paid during the A.Y 2012-13 but declined to grant the relief for the reason that no documents were filed in support of the claim. We are of the opinion that the CIT(A) after giving a finding based on the remand report of the AO need not disallow the claim. We, therefore, remit this issue to the file of ld. AO to verify the accounts and if the assessee’s claim is correct, then the ld. AO is directed to grant the relief as claimed by the ld. A.R. Otherwise, the ld. AO can confirm the order. We also made it clear that for the late payment of TDS, if necessary, interest at the appropriate rate may also be collected from the assesse. We further direct the assesse to cooperate with the AO to complete the assessment at the earliest by producing the required documents in support of his claim.
In the result, appeal of the assessee in is partly allowed for statistical purposes. to 77/Coch/2023: 7. Now we will adjudicate ITA Nos.75 to 77/Coch/2023. In these appeals, the assessee had disputed the restriction of depreciation in respect of the hoardings at 15% instead of 100%. The case of the assessee is that the hoardings are only temporary in nature and therefore, the same was entitled for 100% depreciation before amendment. The ld. AO had not accepted the claim of the assessee and restricted the depreciation to 15% by treating the hoardings as plant and machinery. Against the said order, the assessee filed an appeal before NFAC, which was also dismissed on the ground that the ld. AO had correctly made the assessment. As against the said orders, the assessee is in appeal before the Tribunal with the following common grounds of appeal except change in figures. We extract the ground of appeal in as follows:
We have heard the rival submissions and perused the materials available on record. The assessee is erecting hoardings on the third party lands by taking the lands for lease for a period of less than 1 year. After the lease period, the hoardings were removed. Therefore, the hoardings are of only a temporary nature and it cannot be treated as plant and machinery embedded on the earth. On that basis only, the assessee claimed the depreciation on the hoardings at 100%. We have also gone through the order of the Kolkata Bench of Tribunal in the case of M/s. One Ad Display Pvt. Ltd. in for the AY 2009-10 dated 1.12.2017, wherein it was held that the hoardings are temporary in nature and to 77/Coch/2024 Thanseer Kaja, Kerala Page 14 of 15 therefore, the depreciation is allowable at 100%. The findings of the said decision of Kolkata bench of Tribunal are as follows:
8.1 In view of the above order of the Kolkata Bench of Tribunal, which is in similar nature, we are also following the said order to the facts and circumstances of the present case and allow the appeals filed by the assessee by setting aside the order of the lower authorities. 8.2 In fine, we held that the hoardings are temporary structures eligible for depreciation at 100%. to 77/Coch/2024 Thanseer Kaja, Kerala Page 15 of 15 9. In the result, all the appeals in to 77/Coch/2023 filed by the assessee are allowed.