×Latest Case Laws on Income Tax by various Income Tax Appellate Tribunals in India
These are the latest case laws decided by various Income Tax Appellate Tribunals (ITAT) of India on Income Tax which have been published recently. The case laws are open for discussion and we invite expert comments from our members on its applicability and effect on relevant issues.
1. Aforesaid appeals by assessee for assessment years (AY) 2012-13 and 2013-14 contest final assessment order on certain common grounds of appeal. Since common issues are involved, we dispose-off the appeals by way of this common order for the sake of convenience and brevity.
IT(TP)A No.2287/Mum/2017 (2012-13):
2. This appeal contest final assessment order dated 27/01/2017 passed by Ld. Ld. Assistant Commissioner of Income Tax-LTU-1 Mumbai [AO] u/s. 143(3) r.w.s.144C (13) pursuant to directions of Ld. Dispute Resolution Panel-I, Mumbai (DRP) u/s. 144C (5) dated 13/12/2016. The income of the assessee has been determined at Rs.2320.41 Lacs after certain additions, disallowances & TP adjustments as against returned income of Rs.190.29 Lacs e-filed by the assessee on 28/11/2011.
3. The Ld. Authorised Representative for the assessee [AR], Shri M.P.Lohia, at the outset, submitted that all the issues under appeal are covered by the earlier orders of the Tribunal in assessee’s own case which is evident from the fact that early hearing was granted to the assessee vide order sheet entry dated 27/07/2018. The said facts were confronted to Ld. CIT-DR who could not rebut the same. The details for Tribunal’s order, for ease of reference, could be tabulated in the following manner: -
In the above background, our ground wise adjudication is as follows.
4.1 Ground No.1 is general in nature.
Ground No.1.1 and 1.2 read as under: -
Part I-Corporate Tax Adjustments
On the facts and in the circumstances of the case and in law the learned AO on fact and in law has:
Disallowance of amortised expense of loaner set amounting to Rs 8,15,92,059/-
1.1. erred in disallowing the amortised expense of loaner set (deferred write off of cost of equipment and instruments given on returnable basis) amounting to Rs.8,15,92,059/- treating the same to be capital in nature and allowing only depreciation on the same;
1.2. erred in disregarding the principle of consistency, more particularly since identical claim of deduction had been allowed from assessment years 2002-03 to 2006-07 in assessments framed u/s 143(3) of the Act.”
During assessment proceedings it transpired that the assessee loaned certain medical instruments, equipment which were needed for surgical fixation, correction and regeneration of human skeleton. These were supplied to hospitals / doctors on returnable basis. It was submitted that it was necessary to provide such equipment on loan basis to facilitate sale of the assessee’s products. The useful life was estimated to be 3 years and accordingly, the expenditure was amortized over a period of 3 years. It was submitted that separate accounts for such inventory was maintained since 1993 and consistent accounting methodology was being followed by the assessee, in this regard. During impugned AY, the assessee claimed proportionate deduction u/s 37(1). However, Ld. AO rejecting the accounting methodology adopted by the assessee, disallowed amortization of Rs.15.27 Crores as claimed by the assessee u/s 37(1). Consequentially, treating the same as capital expenditure, depreciation of Rs.7.11 Crores was allowed and net addition of Rs.8.15 Crores was worked out and added to the income of the assessee. The Ld. DRP, following directions in AYs 2007-08 to 2011-12, upheld the same.
4.2 We find that this issue is covered by the cited order of Tribunal for AYs 2007-08 & 2008-09, wherein the matter has been concluded in the following manner: -
4.3.5 In such circumstances, we are of considered opinion that the amount of Rs.50,33,418/- treating loaner sets expenditure as capital expenditure was not in