JUST DIAL P. LTD,MUMBAI vs. ADDL CIT RGT -1, MUMBAI

O R D E R

Per ASHWANI TANEJA, AM:

2. On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in dismissing the appeal that too without giving full and proper opportunity of being heard in the matter.

3. On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in dismissing the appeal that too without appreciating the facts and circumstances of the case fully and properly.

4. On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in upholding the action of the A.O. in making an addition of Rs.13,83,621/- being deferred revenue receipts.

5. On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in upholding the action of the AO in making an addition of Rs.6,61,880/- being gratuity payment.

6. On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in upholding the action of the A.O. in adding an amount of Rs. 1,68,750/- being depreciation claimed on goodwill.

7. On the facts and in the circumstances of the case and in law, the learned 011(A) erred in upholding the action of the A.O. in adding an amount of Rs.27,180/- as disallowance of expenditure estimated © 10% of Dividend income..

8. On the facts and in the circumstances of the case and in law, the learned AO erred in dismissing the g:ound of appeal relating to interest charged uis.234B and 2340.” 2. During the course of hearing arguments were made by Shri Nimesh Jambusaria on behalf of the assessee and by Shri Premanand J on behalf of the revenue.

3. Grounds 1,2,3 & 8 are general and do not need any specific adjudication and, therefore, they are dismissed.

4. Ground 4: In this ground, the assessee has challenged action of Ld. CIT(A) in upholding the action of AO in making addition of Rs.13,83,621/- being deferred revenue receipts. It is noted from the perusal of the order of the Ld. CIT(A) that while upholding this addition, he has relied upon his order for A.Y. 2003-04. During the course of hearing, it was jointly stated by both the parties that the issue in A.Y. 2003-04 reached before the Tribunal wherein it has been sent back to the file of the AO for fresh adjudication in terms of the directions given by the Tribunal in terms of the directions given by the Tribunal vide order dated 14-06-2016 in ITA |No.123/Del/2008.

5. We have gone through the order of the Tribunal for A.Y. 2003-04 and also the orders passed by the lower authorities for the year before us. It is noted that the issue of treatment of deferred revenue income has been discussed in detail by the Tribunal for A.Y. 2003-04 and thereafter the same was sent back to the file of AO for fresh adjudication with certain directions. Both the parties unanimously agreed before us that the facts are identical and, in this year also, the issue needs to be sent back to the file of the AO. Thus, the issue in this year also is sent back to the file of the AO for fresh adjudication. The AO is directed to follow the directions given by the Tribunal for A.Y. 2003-04. This ground may be treated as allowed for statistical purpose.

6. Ground 5: In this ground, the assessee has challenged the action of Ld. CIT(A) in upholding the action of AO in making an addition of Rs.6,61,880 being gratuity payment.

“14. The learned counsel of the assessee company submitted that this issue is also covered in favour covered in favour of the assessee company as the approval of the gratuity fund has already been accepted by the concerned Commissioner of Income Tax vide approval No CIT- 9/Gratuity approval/2010- 11 dated 28-10-2010 which is placed at paper book filed with-the Tribunal at page No.66 which approval is effective from 0.6-0.9-2002 to M/s Just Dial Private Limited, Employees Group Gratuity Scheme. The learned Counsel for the assessee company also submitted that the issue came up before the Tribunal in assessee’s own case in for the assessment year 2006-07 whereby the Tribunal vide orders dated 28th February 2014 allowed this ground of appeal raised by the assessee company. The relevant findings are as under: -

14. The learned Counsel for the assessee company submitted that this issue is also covered in favour of the assessee company as the approval of the gratuity fund has already been accorded by the concerned Commissioner of Income Tax vide approval No.CIT- 9/Gratuity approval/2010-11 dated 28-1-2010 which is placed at paper book filed with the Tribunal at page No.66, which approval is effective from 06-09-2002 to M/s Just Dial Private Limited, Employees Group Gratyuity Scheme. The learned Counsel for the assessee company also submitted that the issue came up before the Tribunal in assessee’s own case in ITA No. 3200/Mum./2010 for the assessment year 2006-07 whereby the Tribunal vide orders date 28th

February 2014 allowed this ground of appeal raised by the assessee company. The relevant findings of the Tribunal are as under:- "8. Ground No. 5 pertains to disallowance of gratuity paid at Rs.13,80,005/-

9. The AR submitted that the issue is since covered as the approval for the same has been accorded by the concerned CIT. vide appeal no. C1T9/Granting Approval/2010-11 dated 28.10.2010. This letter of approval was obviously not available at the time when the impugned order was passed and the CIT(A) had correctly disallowed because the assessee could not produce any evidence to this effect at the time of hearing.

10. The AR. submitted that since the ISSLIC is now approved by the CIT as per the letter of approval appended in the APB, the issue, be now held in favour of the assessee. 11.The DR accepted the factum of approval.

12. In these circumstances, the assessee's prayer for allowance of the gratuity payment is allowed. The order of the CIT(A)(A) is thus set aside on this issue and the A.O is, directed to allow the expense." Respectfully following the decision of the co-ordinate bench of this Tribunal in assessee's own. case in vide orders dated 28-02-2014 for assessment year 2006 07, we set aside the orders of the learned CIT(A) , and the AO is directed the allow the expenses effective from the date of approval of gratuity scheme of the assessee company i.e. 06-09-2002 by the learned CIT(A)-9,, subject to the directions to AO to verify the contribution having been made by the assessee company to the above stated approved gratuity scheme as approved by learned CIT-9 and accordingly we allow the grounds No. 7 & 8 as indicated above. The assessee company is directed to appear before the AO and provide evidences and explanation to comply with regard to directions issued by us for verification as indicated above. The AO shall provide proper and adequate opportunity of being heard to the assessee company in accordance with principles of natural justice in accordance with law. We order accordingly.”

“12. The learned Counsel for the assessee company submitted that this issue is covered in favour of the assessee company by Hon’ble Supreme Court in the case of CIT v. Smifs Securities Ltd., (2012) 348 ITR 302 (SC). The learned counsel for the assessee company also submitted that the issue came before the Tribunal in assessee company’s own case in for the assessment year 2006-07 and following the decision of Hon’ble Apex Court in the case of Smifs Securities Ltd.(supra), the Tribunal allowed the ground raised by the assessee company vide orders dated 28-02-2010 for the assessment year 2006-07 vide orders dated 28-02-2014 held as under:- “4. Ground no.4 pertains to depreciation on goodwill. The A.R. submitted that the issue is covered by the decision of Hon’ble Supreme Court in the case of CIT(A) vs Smifs Securities Ltd., reported in 348 ITR 302, therefore, the decision on the Hon’ble Supreme Court of India on this issue has to be followed, and as a consequence of which, the issue has to be allowed in favour of the assessee.

5. The Ld. Departmental Representative accepted that the issue is squarely covered by the decision of Hon’ble Supreme Court.

6. Since the issue is covered by the Hon’ble Supreme Court in the case of Smifs Securities Ltd.(supra), as accepted by either parties, the ground is allowed. Hence, the order of the CIT(A)(A) is set aside on this issue and the AO is directed to allow the claim of depreciation. Ground No.4 is therefore, allowed.” Respectfully following the decision of Hon’ble Apex Court in the case of Smifs Securities Ltd (supra) and also the decision of co- ordinate bench of this Tribunal in assessee company’s own case in ITA No.3200/Mum/2010 for assessment year 2006-07, we set aside the appellate orders of the learned CIT(A) and direct the Assessing Officer to allow the claim of depreciation on goodwill as per law in accordance with the provisions of the Act. The ground No.5 & 6 are allowed as indicated above. We order accordingly.”