Income Tax Appellate Tribunal - Mumbai
Trent Hypermarket Ltd, Mumbai vs Dcit 1(3), Mumbai on 16 November, 2018
IN THE INCOME TAX APPELLATE TRIBUNAL "H" BENCH, MUMBAI
BEFORE SHRI B. R. BASKARAN, AM AND SHRI AMARJIT SINGH, JM
आयकर अपील सं / I.T.A. No. 5492/Mum/2015
(निर्धारण वर्ा / Assessment Year: 2011-12)
Trent Hypermarket Ltd. बिधम/ DCIT 1(3)
Taj Building, 2nd Floor, 210, Vs. Aayakar Bhavan, Mumbai.
DN Road, Fort, Mumbai-
400001.
स्थायी लेखा सं ./जीआइआर सं ./PAN/GIR No. : AACCT9803D
(अपीलाथी /Appellant) .. (प्रत्यथी / Respondent)
Revenue by: Shri Manoj Kumar Singh (DR)
Assessee by: Shri Nitesh Joshi (AR)
सुनवाई की तारीख / Date of Hearing: 29.10.2018
घोषणा की तारीख /Date of Pronouncement: 16.11.2018
आदे श / O R D E R
PER AMARJIT SINGH, JM:
The assessee has filed the present appeal against the order dated 24.09.2015 passed by the Commissioner of Income Tax (Appeals) - 3, Mumbai [hereinafter referred to as the "CIT(A)"] relevant to the A.Y.2011-
12.
2. The assessee has raised the following grounds: -
"(i) Disallowance of claim of Depreciation of Rs.132,196/-
(a) The Ld. CIT(A) erred in confirming AO order in classifying printers, scanners & other computer accessories under block of plant & machinery eligible for depreciation @ 15% and not under the block of computers eligible for depreciation @ 60% thereby disallowing the differential depreciation of Rs.1,32,196/-
.
ITA. No. 5492/M/2015 A.Y. 2011-12
(ii) Disallowance u/s 14A- Rs.23.40,134/-
The Ld. CIT(A) erred in confirming AO's order, without giving any reasons & having any discussion, the disallowance of Rs.23,17,078/- towards interest expenses & Rs.23,056/- towards administrative expenses u/s 14A of the Act."
3. The brief facts of the case are that the assessee filed its return of income on 27.09.2011 declaring loss to the tune of Rs.55,86,20,192/-. The case was selected for scrutiny. Notices u/s 143(2) & 142(1) of the Act were issued and served upon the assessee. The assessee company was engaged in the retailing and Hypermarket business. The assessee claimed depreciation upon the printers, scanners and other gadgets @ 60% treating the same as computer. The AO restricted the claim to the extent of the 15% and accordingly disallowed an amount of Rs.1,32,196/-. The Assessing Officer also applied the provision of Section 14A r.w. Rule 8D of the Act and assessed the expenditure to incurred to earn the exempt income @ 23,40,134/-. The total income of the assessee was assessed at loss to the tune of Rs.55,61,47,860/-. Feeling aggrieved, the assessee filed an appeal before the CIT(A) who confirmed the addition, therefore, the assessee has filed the present appeal before us.
ISSUE NO. 14. Under this issue the assessee has challenged the claim of the depreciation which was restricted @ 15% upon the printers, scanners and other computer accessories instead of 60%. At the very outset, the Ld. Representative of the assessee has argued that this issue has duly been covered by the decision of the Hon'ble ITAT in the assessee's own case in ITA. No.5493/M/2015 for the A.Y. 2012-13 dated 13.09.2017. However, 2 ITA. No. 5492/M/2015 A.Y. 2011-12 on the other hand, the Ld. Representative of the Department has strongly relied upon the order passed by the CIT(A) in question. Before going further, we deemed it necessary to advert the finding of the Hon'ble ITAT in the assessee's own case for the A.Y. 2012-13 in ITA. No. 5493/M/2015. The relevant finding has been given in para no. 5 & 6 which are reproduced below: -
"5. We have gone through the orders of the authorities below and found that issue is squarely covered by the decision of Delhi High Court in the case of BSES Yamuna Powers Ltd., wherein it was held that computer accessories and peripherals such as printers, scanners and cables etc., form an integral part of the computer system. It was further observed that the computer accessories and peripherals cannot be used without the computer, consequently they are part of the computer system and eligible for depreciation at a high rate of 60%.
6. We have considered rival contentions and found that AO has allowed depreciation at 15% on the computer peripherals on the plea that these peripherals cannot be classified under computer. The AO did not accept the submissions and held that printer, scanners and other gadgets falls under the block of office equipment and not under the block of computers. AO added back depreciation amounting to Rs.67,29,610/- to the returned income. As per our considered view when "computer accessories" is used as an input output device in the computer it can be considered as a part of the computer system and hence, would fall under the block "computer". The output devices such as printers, scanners and other gadgets are computer peripherals and form essential parts of PC. These output devices cannot work in isolation and computer system cannot work without an output device. The issue is squarely covered by the decision of Delhi High Court. Respectfully following the order of the Delhi High Court, we direct the AO to allow depreciation at 60% of computer peripherals. We direct accordingly."
5. On appraisal of the above said finding, we noticed that the Hon'ble ITAT has passed the order on the basis of the decision in the case of BSES Yamuna Powers Ltd 358 ITR 47 in which it has specifically held that the computer accessories and peripherals such as printers, scanners and cables 3 ITA. No. 5492/M/2015 A.Y. 2011-12 etc., form an integral part of the computer system. It was further, observed that the computer cannot be used without accessories and peripherals, they are the part of the computer system and eligible for depreciation at a high rate of 60%. Since the matter of controversy has duly been covered by decision of the Hon'ble ITAT in the assessee's own case in ITA. No.5493/M/2015 for the A.Y. 2012-13 dated 13.09.2017, therefore, in the said circumstances, by honoring the same, we allowed the claim of the depreciation of the assessee @ 60%. Accordingly, this issue is decided in favour of the assessee against the revenue.
ISSUE NO. 25. Under this issue the assessee has challenged the disallowance u/s 14A r.w. Rule 8D of the Act to the tune of Rs.23,40,134/-. It is not in dispute that the assessee did not earn any dividend income in the relevant assessment year and interest bearing funds were not diverted for the investment. It is contended that in the said circumstances, when the assessee did not receive any dividend income, therefore, no disallowance is required in view of the decision in the case of Cheminvest Ltd. 281 CTR
447. It is specifically argued that this issue has also been covered by the decision of the Hon'ble ITAT in the assessee's own case in ITA. No.5493/M/2015 for the A.Y. 2012-13 dated 13.09.2017. At the time of argument, the assessee has also placed reliance upon the decision of the Bombay High Court in the case of appeal no. 51 of 2016 titled as CIT-3 Vs. M/s. Ballarpur Industries Ltd. dated 13.10.2016. The factual position is not in dispute. The relevant finding of the Hon'ble ITAT in the assessee's own case has been given in para no. 8 which is hereby reproduced below:-
4ITA. No. 5492/M/2015 A.Y. 2011-12 "8. We have considered rival contentions and found that assessee has made long term investment in joint venture. The investment was made with the intention to have substantial control in the group concern. In the course of assessment, AO disallowed Rs.2.01 crores by applying provisions of section 14A r.w.r. 8D. It was brought to our notice by learned AR that during the year assessee had not received any exempt income. Hon'ble Delhi High Court in the case of Cheminvest Ltd., 281 CTR 447 held that no disallowance u/s.14A can be made in the year in which exempt income has been earned or received by the assessee. It is not in dispute by any of the lower authorities that assessee was not in respect of any exempt income during the year. Respectfully following the decision of the Delhi High Court, we do not find any merit in the disallowance so made by the AO u/s.14A.
8. In view of the said circumstances, when the assessee did not receive any exempt income. No doubt, no disallowance is required.
Moreover, this issue has duly been covered by the decision of the Hon'ble ITAT in the assessee's own case in ITA. No.5493/M/2015 for the A.Y. 2012-13 dated 13.09.2017. The said decision has been passed on the basis of the decision of Delhi High Court in the case of Cheminvest Ltd. 281 CTR 447. No doubt, the jurisdictional High Court has also given the finding in this regard in appeal no. 51 of 2016 titled as CIT-3 Vs. M/s. Ballarpur Industries Ltd. dated 13.10.2016. Taking into account, all the facts and circumstances, mentioned above and in view of the law relied upon the Ld. Representative of the assessee, we are of the view that the no disallowance is required in view of the provision u/s 14A r.w. Rule 8D of the Act. Accordingly, this issue is being decided in favour of the assessee against the revenue.
5ITA. No. 5492/M/2015 A.Y. 2011-12
6. In the result, the appeal filed by the assessee is hereby ordered to be allowed.
Order pronounced in the open court on 16.11.2018.
Sd/- Sd/-
(B. R.BASKARAN) (AMARJIT SINGH)
ले खध सदस्य / ACCOUNTANT MEMBER न्यधनिक सदस्य/JUDICIAL MEMBER
मुंबई Mumbai; दिनां क Dated : 16.11.2018
Vijay
आदे श की प्रनिनलनि अग्रेनर्ि/Copy of the Order forwarded to :
1. अपीलाथी / The Appellant
2. प्रत्यथी / The Respondent.
3. आयकर आयु क्त(अपील) / The CIT(A)-
4. आयकर आयु क्त / CIT
5. दवभागीय प्रदतदनदि, आयकर अपीलीय अदिकरण, मुंबई / DR, ITAT, Mumbai
6. गार्ड फाईल / Guard file.
आदे शधिुसधर/ BY ORDER, सत्यादपत प्रदत //True Copy// उि/सहधिक िंजीकधर /(Dy./Asstt. Registrar) आिकर अिीलीि अनर्करण, मुंबई / ITAT, Mumbai 6