Income Tax Appellate Tribunal - Chandigarh
Haryana State Minor Irrigation & ... vs Acit, Panchkula on 8 December, 2016
1
IN THE INCOME TAX APPELLATE TRIBUNAL
CHANDIGARH BENCHES, CHANDIGARH
BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER
AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER
ITA No. 574/CHD/2016
Assessment year: 2011-12
M/s Haryana State Minor Irrigation Vs. The ACIT,
& Tubewell Corporation Limited, Panchkula Circle,
Panchkula Panchkula
PAN No. AABFH8314F
(Appellant) (Respondent)
Assessee By : Sh. Tej Mohan Singh
Department By : Sh. Ravi Sarangal
Date of hearing : 06.12.2016
Date of Pronouncement : 08.12.2016
ORDER
PER ANNAPURNA GUPTA, A.M.
This appeal has been filed by the assessee against the order of Commissioner of Income Tax (Appeals), Panchkula dated 11/03/16.
2. The assessee has raised the following grounds:-
1. That the Ld. Commissioner of Income Tax (Appeals) has erred in law as well as on facts in upholding the action of the Assessing Officer whereby he has stated that no expenditure is to be allowed as business 2 expenditure after the closure of the business and thereby bringing to tax the entire receipts of Rs.
2,92,24,707/- which is arbitrary and unjustified.
2. That the entire expenditure on account of establishment expenses, wages, salaries, retrenchment compensation, etc. totalling Rs.2,66,53,819/- as claimed is allowable as such and no disallowance is called for.
3. That the Ld. Commissioner of Income Tax(Appeals) has further erred in upholding the disallowance of interest claimed at Rs. l0,16,03,500/- which is arbitrary and unjustified.
4. That the Ld. Commissioner of Income Tax (Appeals) has further erred in upholding the disallowance of depreciation claimed at Rs.7,960/- which is arbitrary and unjustified.
5. That without prejudice to the above, even if it is held that no expenditure is to be allowed as alleged by the Ld. Commissioner of Income Tax (Appeals), the expenditure ought to have been held allowable under section 57 of the Act to be set off against interest income.
6. That the order of the Ld. Commissioner of Income Tax (Appeals) is erroneous, arbitrary, opposed to law and facts of the case and is, thus, untenable.
3. Brief facts relating to the case are that, during assessment proceedings the Assessing Officer disallowed expenses amounting to 3 Rs. 12,82,65,279/- since the assessee had closed its business and no activities were carried out during the year. The details of expenses disallowed are as follows:-
1) Salary and wages Rs. 2,66,53,819/-
2) Interest Rs. 10,16,03,500/-
3) Depreciation Rs. 7,960/-
Total Rs. 12,82,65,279/-
4. During appellate proceedings, before the Ld.CIT(A), the assessee conceded that the issue was covered against it by the order of the ITAT in its own case for assessment year 2009-10, following which the Ld. CIT (A) upheld the disallowance made. Aggrieved by the same the assessee filed the present appeal before us.
5. Before us Ld. Counsel for the assessee conceded that the issue was covered against the assessee by the order of the ITAT in the assessee's own case for A.Y 2009-10 & A.Y 2012-13.
7. We have gone through the order of ITAT, Chandigarh in the case of the assessee for the assessment year 2009-10 in ITA No.740/CHD/2014 dated 6.2.2015 and for assessment year 2012-13 in ITA No. 431/CHD/2016, dated 7.11.2016 and find that identical issue had come up for consideration before the Tribunal, which was decided against the assessee. In ITA No. 431/CHD/2016 the Tribunal 4 upheld the disallowance, following its decision in A.Y 2009-10 and held as under:-
"5. We have gone through the order in the case of the assessee for assessment year 2009-10 in ITA No. 740/Chd/2014 and find that identical issue had came up for consideration before the Tribunal which was decided against the assessee following the decision in the case of M/s Haryana State Small Industries & Export Corporation Ltd, Chandigarh Vs. The Addl. CIT in ITA No. 898/Chd/2009 as under:-
8. "Following the above we decide the issue regarding disallowance of expenditure and interest against the assessee. However we find force in the submissions of Ld. Counsel for the assessee that as far as income from house property is concerned same should have been assessed as income from house property and corresponding 30% statutory deduction should have been allowed. Therefore, we set aside the order of Ld. CIT(A) and direct AO to assessed the house property income under the head income from house property and corresponding deduction should have been given."
6. In view of the above, we decide the issue regarding disallowance of expenditure, interest and depreciation against the assessee. The appeal of the assessee is, therefore, dismissed."
8 In view of the above, we decide the issue regarding disallowance of expenditure, interest and depreciation against the assessee. The grounds of appeal raised by the assessee are, therefore, dismissed.
59. In effect, the appeal of the assessee is dismissed.
Order pronounced in the Open Court.
Sd/- Sd/-
(BHAVNESH SAINI) (ANNAPURNA GUPTA)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Dated : 8 t h December, 2016
Rkk
Copy to:
1. The Appellant
2. The Respondent
3. The CIT
4. The CIT(A)
5. The DR