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Income Tax Appellate Tribunal, “I” BENCH, MUMBAI
Before: SHRI D. KARUNAKARA RAO & SHRI SANDEEP GOSAIN
PER D. KARUNAKARA RAO, AM:
This appeal filed by the assessee on 8.4.2014 is against the order of the CIT (A)-30, Mumbai dated 20.2.2014 for the assessment year 2010-2011. In this appeal, assessee raised the following grounds which read as under:
“1. The Hon‟ble CIT (A) has erred in law and facts in passing the order u/s 250 of the Act in gross violation of principles of natural justice.
On the facts and in the circumstances of the case, the Ld CIT (A) has erred in facts and in law in upholding the action of the AO in disallowing reimbursement of salary and related expenses to the tune of Rs. 4,33,33,687/- u/s 40(a)(ia) of the Act.
On the facts and in the circumstances of the case, the Ld CIT (A) has erred n facts and in law in upholding the action of the AO in disallowing expenses on account of shuttering material of Rs. 54,76,488/- as Revenue Expenditure.
On the facts and in the circumstances of the case, the Ld CIT (A) has erred in facts and in law in rejecting the claim of the assessee for grant of depreciation on entire shuttering material of Rs. 5,61,57,021/- instead of limiting depreciation on Rs. 54,76,488/-.”
At the outset, Ld Counsel for the assessee brought our attention to the above grounds and mentioned that Ground no.1 is not pressed. Accordingly, the said Ground no.1 is dismissed as not pressed.
Ground no.2 relates to the disallowance of Rs. 4,33,33,687/- on account of reimbursement of salary and related expenses made u/s 40(a)(ia) of the Act. Briefly stated relevant facts of the case are that the assessee is an Association Of Persons (AOP) having a Joint Venture (JV) agreement with ITD Cementation India Limited, an Indian company, and Italian-Thai Development Public Company Limited, a foreign enterprise. Assessee is engaged in the business of „highway construction‟filed the return of income declaring the total income of Rs. NIL after setting off of current year loss of Rs. 60,47,156/-. The case was selected for scrutiny through CASS. AO completed the assessment u/s 143(3) of the Act and the assessed income was determined at Rs. 4,83,75,711/-. In the assessment, AO made certain disallowances and the disallowance of Rs. 4,33,33,687/- made u/s 40(a)(ia) of the Act on accoiunt of salary related to employees of ITD Cementation India Limited is one of them, which is the subject matter of Ground no.2 of the instant appeal. Aggrieved with the said decision, assessee carried the matter in appeal before the first appellate authority. After considering the submissions of the assessee, CIT (A) following his own order on identical ground for the AY 2009-2010, dismissed the assessee‟s appeal. Again aggrieved with the said order of the CIT (A), assessee is in further appeal before the Tribunal by raising the instant Ground no.2. 4. Before us, Ld Counsel for the assessee narrated the above mentioned facts and submitted that an identical issue was came up for adjudication before the Tribunal in assessee‟s own case for the AY 2009-2010 and the Tribunal decided the issue in favour of the assessee by following the ITAT‟s order for the AY 2009-10. Para 7 of the said Tribunal‟s order dated 4.11.2015 is relevant in this regard. After hearing both the parties and on perusal of the orders of the Revenue Authorities as well as the cited decision of the Tribunal in assessee‟s own case for the AY 2009- 2010 (supra) in assessee‟s own case, we find para 7 is relevant in this regard. Considering the significance of the said para 7 of the Tribunal‟s order dated 4.11.2015 (supra) and for the sake of completeness of this order the said para 7 is extracted as under:-
“7. The Ld AR of the assessee further relied upon the judgment of assessee own case in respect of AY 2008-2009 being ITA No.4335/Mum/2012, wherein the identical issues were raised and the same was decided in favour of the assessee vide judgment dated 9.4.2014, the issues / grounds raised in the present appeal and the assessee‟s appeal in respect of the AY 2008-2009 are identical and respectfully following the judgment of coordinate Bench in respect of the assessee, the Ground no.2 of the present appeal is identical to the Ground no.2 of the earlier year of appeal...............”
Considering the above, we are of the opinion that the identical issue has consistently been decided by the Tribunal in favour of the assessee. Therefore, respectfully following the earlier orders of the Tribunal on the similar issue as well as following the „principles of consistency‟, we decide the issue involved in Ground no.2 in favour of the assessee. Accordingly, Ground no.2 raised by the assessee is allowed.
Ground no.3 and 4 relate the disallowance of expenses of Rs. 54,76,488/- on account of shuttering material and depreciation thereon. In this regard, Ld Counsel for the assessee brought our attention to the said order of the Tribunal (supra) in assessee‟s own case for the AY 2009-2010, dated 4.11.2015 and mentioned that vide para 7, the Tribunal adjudicated the similar issue and remanded the matter to the AO‟s file. After hearing both the parties and on perusal of the contents of the said para 7 of the Tribunal‟s order (supra), we find the same is relevant and for the sake of completeness of this order, relevant lines from the said para 7 are extracted as under:- “7......... Ground no.3 and 4 are identical to the ground no.6 of the appeal of the assessee for the AY 2008-2009. The ground no.6 of appeal ITA No.4335/Mum/12 of the assessee was remanded to the file of the AO vide order dated 9.4.2014, hence the present ground pertaining to the shuttering material is also remanded to the file of the AO, with the direction to decide the same in accordance with the direction contained in the appeal ITA No.4335/Mum/2012.”
Considering the above, we are of the opinion that the identical issue has consistently been adjudicated by the Tribunal and the matter was remanded in the earlier years. Therefore, respectfully following the earlier orders of the Tribunal on the similar issue as well as following the „principles of consistency‟, we remand the issue involved in Ground Nos.3 & 4 of the present appeal. Accordingly, Ground nos.3 and4 raised by the assessee are allowed for statistical purposes.
In the result, appeal of the assessee is partly allowed for statistical purposes.
4 Order pronounced in the open court on 14th January, 2016. (SANDEEP GOSAIN) ACCOUNTANT MEMBER भुंफई Mumbai; ददनांक 14.1.2016 व.नन.स./ OKK , Sr. PS आदेश की प्रतिलऱपि अग्रेपिि/Copy of the Order forwarded to : अऩीराथी / The Appellant 1. 2. प्रत्मथी / The Respondent. 3. आमकय आमुक्त(अऩीर) / The CIT(A)- आमकय आमुक्त / CIT 4. ववबागीम प्रनतननधध, आमकय अऩीरीम अधधकयण, भुंफई / DR,
ITAT, Mumbai गार्ड पाईर / Guard file. 6. सत्मावऩत प्रनत ////
आदेशानुसार/ BY ORDER, उि/सहायक िंजीकार (Dy./Asstt.