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Income Tax Appellate Tribunal, MUMBAI BENCHES, ‘I’ MUMBAI
Before: Shri G.S. Pannu, & Shri Joginder Singh
आदेश / O R D E R
Per Joginder Singh (Judicial Member) The Revenue is aggrieved by the impugned order dated 05/08/2010 of Ld. Commissioner of Income Tax, Mumbai. The only ground agitated by the Revenue, before this Tribunal, is with respect to directing the Assessing Officer to allow foreseen losses of Rs.3,79,69,663/-.
M/s. ITD Cementation India Ltd.
During hearing, the learned D.R. Shri A.K. Kardam defended the addition made by the Assessing Officer. However, the learned counsel for the assessee Shri Vijay Mehta contended that the impugned issue is covered in favour of the assessee by the decision of the Tribunal for assessment year 2008-09 (vide order dated 08.12.2015) (ITA No. 6476/Mum/2013). This factual matrix was not controverted by the leanred D.R.
3. We have considered the rival submissions and perused the material available on record. In view of the above we are reproducing hereunder the relevant portion from the order of the Tribunal dated 08.12.2015 for ready reference and analysis: - “This appeal filed by the Revenue on 1.11.2013 is against the order of the CIT (A)-21, Mumbai dated 14.8.2013 for the assessment year 2008-2009. In this appeal, Revenue raised the following grounds which read as under: “1. On the facts and in the circumstances of the case and in law, the Ld CIT (A) erred in deleting the additions of Rs. 7,14,92,402/- on account of non-reconciliation of AIR data without appreciating the fact that the transactions were carried out on PAN of the assessee.
2. On the facts and in the circumstances of the case and in law, the Ld CIT (A) erred in allowing the assessee’s claim of unforeseen losses of Rs. 4,82,62,449/- which is contingent loss and are not allowable as per the provision of the section 37 of the Act.
3. On the facts and in the circumstances of the case and in law, the Ld CIT (A) erred in deleting the addition of Rs. 13.85 lakhs made in accordance with Rule 8D r.w.s 14A of the Act.”
2. Briefly stated relevant facts of the case are that the assessee is a civil contractor and filed the return of income for the AY 2008-09 declaring the total income of Rs. 52,48,377/- after set-off of unabsorbed depreciation of Rs.9,14,38,861/-. Assessment was completed u/s 143(3)(ii) of the Act and the assessed income was M/s. ITD Cementation India Ltd. determined at Rs. 20,19,52,818/- under the normal provisions and book profits u/s 115JB was determined at Rs. 17,13,70,000/-. In the assessment, AO made certain additions viz (i) Rs. 7,44,01,605/- on account of non- reconciliation of AIR entries with that of the books of accounts of the assessee; (ii) Rs. 4,82,62,449/- on account of future losses; (iii) disallowance of Rs. 15.29 lakhs u/s 14A r.w. Rule 8D of the Act are some of the additions made by the AO. Aggrieved with the said decision of the AO, assessee carried the matter in appeal before the first appellate authority.
During the proceedings before the first appellate authority, after considering the submissions of the assessee and on perusal of the relevant material placed before him, CIT (A) granted part relief to the assessee. Aggrieved with the said decision of the CIT (A), Revenue is in appeal before the Tribunal by raising the above mentioned grounds.
Ground no.1 relates to the deletion of addition by the CIT (A) for assessee’s denial of alleged transaction and AO’s failure to establish that the impugned transactions belong to the assessee’s only. CIT (A) deleted the addition considering the AO’s failure to discharge his onus. On this issue, CIT (A) passed a speaking order as evident from para 2.3 of his order. Relevant lines from the said para 2.3 of the CIT (A)’s order are extracted as under: “2.3........ ............. In view of the above decisions, it is clear that appellant had denied the above transactions from the beginning and AO also could not prove positively that above transactions belong to appellant, hence, addition cannot be sustained. This ground of appeal
is allowed.”
5. After hearing the Ld Representatives of both the parties, we find that AO expects an impossibility to meet. How will assessee reconcile the transaction, which does not pertain to him at all? Therefore, on perusal of the relevant material on this issue placed before us as well as the orders of the Revenue Authorities, we are of the considered opinion that the decision taken by the CIT (A) on this issue is fair and reasonable and it does not call for any interference. Accordingly, Ground no.1 raised by the Revenue is dismissed.
M/s. ITD Cementation India Ltd.
Ground no.2 relates to the deletion of addition of Rs. 4.83 Crs (rounded of). Before us, on this issue, Ld Counsel for the assessee brought our attention to para 3 of the order of the CIT (A) and submitted that similar addition was made in earlier years in assessee’s own case and the matter travelled to the ITAT vide dated 17.5.2013. Para 3.3 of the CIT (A)’s order is relevant in this regard. While adjudicating this issue, CIT (A) extracted para 18 and 19 of the said Tribunal’s order (supra) dated 17.5.2013 in para 3.3 of his order and decided the issue in favour of the assessee. For the sake of completeness of this order, relevant lines from the CIT (A)’s conclusion on the issue under consideration are extracted as under: “3.3........... In the appellant’s own case, Hon’ble ITAT decided the case in favour of the appellant hence, following the above decision; the addition made by the AO is deleted. This ground of appeal
is allowed.”
7. Considering the above, we are of the opinion that while deciding the issue in favour of the assessee, CIT (A) relied on the decision of the ITAT and rightly followed the principle of consistency. Therefore, in our view, the decision taken by the CIT (A) is fair and reasonable and it does not call for any interference. Accordingly, Ground no.2 raised by the Revenue is dismissed.”
4. We find that on identical facts/issue the Tribunal vide aforesaid order dated 08.12.2015, while disposing of ground No. 2 with respect to unforeseen losses, by following the order of the Tribunal for Assessment year 2004-05 (ITA No. 3699 & 2991/Mum/2011 order dated 17.05.2013) dismissed the appeal of the Revenue. Following the principle of consistency and in the absence of any contrary facts, we find no infirmity in the order of the learned CIT(A). His stand is affirmed, consequently, appeal of the Revenue is dismissed.
M/s. ITD Cementation India Ltd.