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30-12-2019, Infrastructure Leasing & Financial, Section 32, 14A, Tribunal Mumbai

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8 months 3 weeks ago #11905 by amit
Section - 32, 14A, 36(l)(viii), 51, 10, 234B, 24(a)
Order Date - 30-12-2019
Favouring - Revenue Partly
Court - Tribunal Mumbai
Appellant - Infrastructure Leasing & Financial Services Ltd.
Respondent - DCIT
Justice - C.N. PRASAD JM & G. MANJUNATHA AM
Citation - 120Taxpundit26
Appeal No. - ITA.NOs. 7092 & 7091/MUM/2014
Asstt. Year - 2010-11 & 2011-12

Order

PER : C.N. PRASAD (JM)

1. These cross appeals are filed by the assessee and revenue against different orders of the Learned Commissioner of Income Tax (Appeals) – 21, Mumbai [hereinafter in short “Ld.CIT(A)”] dated 25.09.2014 and 05.08.2014 for the A.Y. 2010-11 and A Y. 2011-12 respectively.

2. First we take up the appeal of the assessee in ITA.No.7092/Mum/2014 for the A.Y. 2010-11.

3. The assessee in its appeal raised the following grounds: -

“1. On the facts & circumstances of the case the Learned Commr. of Income Tax (Appeals) has erred in confirming the disallowance of the claim of the depreciation of Rs. 13,70,093/- in respect of residential properties. On the facts and circumstances of the case the appellant prays that the disallowance of depreciation of Rs. 13,70,093/- is not justified and the said disallowance may be deleted.

2. The Learned Commr. of Income Tax (Appeals) has erred in disallowing the sum of Rs.22,32,084/- being the amortization of the premium paid on leasehold land on which the commercial complex has been constructed by the appellant. On the facts & circumstances of the case the appellant prays that the disallowance of the claim of amortization of land premium amounting to Rs.22,32,084/- is not justified.

3. The Learned Commr. of Income Tax (Appeals) has erred in confirming the disallowance of depreciation of Rs.2,28,820/- on toll road. Based on the facts & circumstances of the case the appellant prays that the claim of depreciation of Rs.2,28,820/- be allowed.

4. On the facts and circumstances of the case the appellant submits that they have not received any income in respect of the Toll Road and the matter is in dispute. The Learned Commr. of Income Tax (Appeals) has erred in directing the Learned Assessing Officer to estimate the interest income due from MPSIDC. The appellant prays that they are not entitled to and have not received any interest income from MPSIDC and hence the direction of the Learned Commr. of Income Tax (Appeals) to tax the estimated interest income may be set aside.

5. The Learned A.O. has erred in disallowing the sum of Rs 6.28 crores being the administrative / establishment expenses attributable to earning exempt income u/s 10 of Income Tax Act, 1961. On the facts & circumstances of the case the appellant submit that the disallowance of Rs. 6.28 crores being the administrative / establishment expenses is not justified and the said disallowance may be deleted.

6. On the facts & circumstances of the case the Learned Commr. of Income Tax (Appeals) has erred in confirming the disallowance of interest of Rs. 11,54,00, 000/-in respect of the loans given to IL&FS Employees Welfare Trust. The appellant prays that the addition made is not justified and the said addition may be deleted.

7. On the facts & circumstances of the case the appellant prays that the Learned Commr. of Income tax (Appeals) has erred in rejecting the claim of the appellant that the total income be reduced by Rs. 13.75 crores as there is double addition of the income to the extent of Rs. 13.75 crores. The learned Commr. of Income Tax has erred in concluding the appellant has not submitted any credible evidences to show that the appellant has offered the income twice. The conclusion reached by the Learned Commr. of Income Tax (Appeals) is contrary to the facts.

8. On the facts & circumstances of the case the Learned Commr. of Income tax (Appeals) has erred in rejecting the claim of the appellant of Rs. 2.09 crores for deduction u/s. 36(1)(vii) of Income Tax Act, 1961. The appellant prays that the claim of deduction of Rs. 2.09 crores may be accepted.

9. On the facts & circumstances of the case the appellant denies the liability of payment of interest u/s 234B. On the facts & circumstances of the case the appellant submit that levy of interest u/s 234B is not justified and may be deleted.”

4. At the outset, Ld. Counsel for the assessee submits that ground No.1 of grounds of appeal relating to disallowance of depreciation on residential properties was held in favour of the assessee by the Tribunal for the A.Y. 2004-05 to A.Y. 2007-08. It is further submitted that consequential order was passed by the Assessing Officer for the A.Y. 2004-05 vide order dated 31.12.2018 allowing depreciation. It is also submitted that identical issue which arose for the A.Ys. 2008-09 and 2009-10 and the appeals were heard by the Tribunal on 19.11.2019.

5. On the other hand, Ld. DR strongly supported the orders of the authorities below.

6. We have perused the order of the Tribunal for the A.Y. 2004-05 in ITA No. 3203/Mum/2008 and ITA.No. 3156/Mum/2008 dated 28.06.2017 wherein the Tribunal decided this issue in favour of the assessee at page No. 4 Para No. 3.2 observing as under: -

“3.2 We have heard the rival contentions and perused the cited case laws. We find that Hon'ble Delhi High Court in the cited case laws has observed that under the new scheme of depreciation prescribed in amended Section 32, the depreciation is to be allowed on WDV of each 'block of assets' at such percentage as may be prescribed and therefore, with the introduction of concept of 'block of assets', an individual asset loses its identity and there was no requirement to compute depreciation for each and individual asset separately. Making these observations, the assessee was allowed depreciation on assets held by assessee with respect to his closed units. Similar view has been taken in the cited decision of Mumbai Tribunal. We also find that no mechanism has been provided in the statute to bifurcate the WDV in such a situation. Therefore, after perusal of statutory provisions and cited judgments, we also conclude that each asset has lost its identity, in the concept of block

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