Income Tax Appellate Tribunal - Mumbai
Chirag Design, Mumbai vs Department Of Income Tax on 31 October, 2012
Chirag Design
3494/2011
3541/2011
IN THE INCOME TAX APPELLATE TRIBUNAL
MUMBAI BENCH "C", MUMBAI
BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER
AND SHRI VIVEK VARMA, JUDICIAL MEMBER
ITA No. 3494/Mum/2011
(Assessment year: 2007-08)
M/s. Chirag Design, Vs Addl Commissioner of
1001, Kheni Tower, Income-tax -20(1),
Jogani Complex, CTS Road, 4th Floor, Piramal
Opp Rehaja Centre Point, Chambers,
Kalina, Santacruz (East), Lalbaugh,
Mumbai - 400 098 Mumbai -400 012
(Appellant) (Respondent)
ITA No. 3541/Mum/2011
(Assessment year: 2007-08)
Addl Commissioner of Income- Vs M/s. Chirag Design,
tax -20(1), Mumbai -400 098
Mumbai -400 012 PAN AACFD 0948 C
(Appellant) (Respondent)
Appellant-assessee by : Shri B V Jhaveri
Respondent-revenue by : Shri A B Koli
Date of Hearing: 31.10.2012
Date of Pronouncement: 07.12.2012
ORDER
PER VIVEK VARMA, JM:
The cross appeals have been filed by the assessee and the department against the order of CIT(A) 31, Mumbai, dated, 28.02.2011. Since both the appeals emanate from the same order, we, therefore, for the sake of convenience and brevity, dispose off the two appeal vide common and consolidated order.
ITA No. 3494 of 2011 - Assessee's appeal 1 Chirag Design 3494/2011 3541/2011
2. The following grounds have been raised by the assessee :
"1. The Commissioner (Appeals) erred in holding that deposits to MIDC, BSES, BMC and Gas Authority aggregating to Rs. 2,17,668/-, license fees paid of Rs. 1,13,320/-, prepaid expenses of Rs. 31,250/- and properly tax paid in advance of Rs.69,07,946/- (all aggregating to Rs. 72,60,184/-) do not form part of the cost of the industrial galas for the purpose of determining the short-term capital gains u/s. 50 of the Act on sale of industrial galas.
2. The Commissioner (Appeals) failed to appreciate that MIDC deposit of Rs. 57,557/-, BSES deposit of Rs. 81,191/-, BMC Security deposit of Rs. 65,800/-, deposit with Gas Authority of Rs. 13,100/-, license fees of Rs. 1,13,320/-, prepaid expenses of Rs. 31,250/- and the property tax paid in advance of Rs. 69,07,946/- were inextricably connected with the industrial galas and thereafter these deposits and expenses have gone along with the said galas and hence these deposits and expenses need to be considered while determining the short-term capital gains on sale of the industrial galas.
3. The Commissioner (Appeals) failed to appreciate that if the deposits and expenses are not treated as a part of the cost of the industrial galas, in such circumstances these deposits and expenses will have to be allowed as business loss as these deposits and expenses paid in advance are required to be allowed as revenue expenses on closure of the unit in Seepz.
4. The Commissioner (Appeals) erred in not allowing write off of the written down value of the safes of Rs. 23,790/-, of computer CPU for jewellery manufacturing programme of Rs. 1,39,379/- and of office equipments i.e., networking of telephone connections of system, video monitoring system and networking system of computers of Rs. 14,70,913/- in four galas admeasuring 26,161 sq. ft. of the galas.
5. The Commissioner (Appeals) failed to appreciate that on sale of all the industrial galas and closure of the business in Seepz the WDV of safe, Computer CPU and networking systems had become useless and therefore, the assessee firm did nor remove the same but transferred them to the purchasers along with the galas and hence the WDV of these items need to be taken into consideration while computing short-term capital gains on sale of the galas.
6. The Commissioner (Appeals) erred in treating 50% of the written down value of the furniture and fixtures i.e., Rs. 44,36,456/- (being 50% of Rs. 88,72,912/-) as not forming part of the industrial galas while computing the short-term capital gains on sale of the galas.
7. The Commissioner (Appeals) failed to appreciate that all the furniture and fixtures including cabins, partitions, glass partitions, cabinets, tables, chairs, etc. were made as per the requirements and to suit the premises in which they were used and therefore, they were intrinsically attached to the premises and hence the same were lying in the industrial galas which have been sold by the assessee firm and hence the same ought to have been considered while computing short- term capital gains.
8. The Commissioner (Appeals) failed to appreciate that these is no evidence on record that the assessee firm has sold any part of the furniture and fixtures separately and therefore, the same is discarded on closure of the unit in Seepz 2 Chirag Design 3494/2011 3541/2011 and therefore, the said write off of the WDV of the furniture and fixtures is required to be allowed as short-term capital loss."
3. The facts as emanating from the orders of the revenue authorities are that the assessee firm is in the business of manufacture and export of studded gold, platinum jewellery, palladium, silver and gold jewellery. In the current year, the assessee sold the entire manufacturing facility belonging to it, located at SEEPZ, Mumbai, bearing Galas no. 601 & 602 and 603 & 604 to Dania Oro Jewellery Pvt. Ltd. (Dania) and Yash Jewellery Pvt. Ltd. (Yash) for a total consideration of Rs. 8,93,32,286. In the return of income, the assessee decalred net capital gains at Rs. 2,06,67,083. This was the residue of sale consideration at Rs. 8,93,32,286 minus WDV at Rs. 6,14,05,018 on all assets and deposits with various government departments at Rs. 72,60,184.
4. In the course of assessment proceedings, the AO called for the detailed break up of the claim of capital gains at Rs. 2,06,67,083. In the reply to this query from the AO, the assessee vide letter dated 27.11.2009, submitted (extracted) :
"The assessee is a partnership firm which was carrying on the busines of manufacturing and exporting jewellery from its factory at Seepz. The assessee firm had taken on lease from SEEPZ Authorities, four industrial gàlas bearing gala nos. 601 602 603 and 604 in Seepz at Andheri (East), Mumbai. The assessee firm furnished the said premises and various equipments and fittings and fixtures including the office equipments were installed. The assessee firm also got installed the gas pipeline for the purpose of manufacturing jewellery. The written down value of the said industrial gals, furniture and fixtures therein and machinery and office equipments as on 1.4.2006 was as under:
Sr. No. Item Amount (Rs)
1 Factory Galas 4,83,42,827
2 Furniture &Fixtures 88,72,912
3 Computers 1,39,379
4 Safes 23,290
5 Electric fittings 25,06,696
6 Office equipments 1,47,913
7 Gas pipelines 49,001
Total 6,14,05,018
3
Chirag Design
3494/2011
3541/2011
2. The said industrial galas along with the aforesaid furniture, fixtures, office equipments, eleectric fittings, etc. which are attached to the premises and which could not be removed and taken away, were transferred under two Sub Leases dated 19th October, 2007 to M/s Dania Oro Jewellery Pvt. Ltd. and M/s Yash Jewellery Pvt. Ltd. for the consideration of Rs. 4,38,40,522/- and Rs. 4,51,57,934/-.
3. On sale of the aforesaid industrial gaIa with furniture, fixtures, office equipments, electric fittings, etc., the assessee firm has computed the short term capital gains as under:
WDV of premises, furniture, Rs. 6,14,05,018
equipment, electric fittings, etc.
Add: Deposits &expenses in
respect of premises as under:-
a) MIDC Deposits Rs.57,577
b) BSES Deposits Rs.81,191
c) BMC Security Deposits Rs.65,800
d) Gas Deposits Rs.13,100
e) Licence fees Rs.1,13,320
f) Prepaid expenses Rs.31,250
g) Property tax advances Rs.69,07,94 Rs.72,60,184
6
Rs. 6,86,65,202
Less: Consideration received from M/s Dania Rs. 8,93,32,286
Oro Jewellery P. Ltd. &M/s Yash Jewellery
Pvt.ltd.
(4,38,40,522 + 45,15,793 +3,33,830)
Short Term capital gains Rs. 2,06,67,084
4. In this respect it is submitted that furniture, fixtures, office equipments, electric fittings, gas pipeline, etc., which were attached to the premises and which, if removed, would lose its value, were transferred along with the premises and therefore, the WDV of the premises, along with these assets were taken together for the purpose of ascertaining the short term capital gains.
Secondly, in the alternative. furniture, fixtures, fittings, equipments, gas pipeline which were attached to the aforesaid industrial galas are required to be allowed as short term capital loss as' they were forming part of the block of assets which have been wiped out on sale of the industrial galas. Therefore, the said short term capital loss is required to be allowed against the short term capital gains earned by the assessee on sale of the industrial galas.
Thirdly, various deposits given in respect of the business being carried on from the said premises are also added to the written down value of the premises with these assets white ascertaining the short term capital gains. It is submitted that the assessee firm had transferred its MIDC deposits, BMC security deposits, Gas deposit, prepaid expenses, license fee and advance payment of property tax along with the premises because they cannot be separated or received back by the assessee firm. in this respect 4 Chirag Design 3494/2011 3541/2011 your kind attention is invited to the confirmations of both the purchasers of galas wherein they have confirmed that they purchase the gals from the assessee firm along with furniture, fixtures, electric fittings, office equipments, gas pipeline, etc. and also with the deposits given to various authorities as listed hereinabove Exhibit "B-1 and B-2 Fourthly, property tax advances amounting to Rs. 69,07,946/- had not been claimed as revenue expenditure by the assessee firm. Therefore, if the aforesaid properly tax advances are not treated as part of the cost of the industrial galas sold by the assessee, in such circumstances the said expenditure incurred in the course of the business should be allowed as revenue expenditure of the year under consideration This instance proves that the market value determined by the Stamp Duty Authorities is incorrect in as much as even after a period of one year i.e in the month of October, 2008, the Stamp Duty Authority has valued the galas in the same building at a lesser figure per sq. fl. in comparison to the market value adopted by the Stamp Duty Authority in the month of October, 2007 (Even Ready Reckoner is not followed). It is, therefore, submitted that the valuation made by the Stamp Duty Authorities should not be considered for the purpose of computing capital gains in the hands of the assessee firm. Instead of that the Ready Reckoner of the respective year should be considered and adopted for the purpose of determining the market value."
5. The sum and substance of the submissions made by the assessee before the AO, were, (i) the cost of Galas at Rs. 6,80,65,202 and sale consideration of galas at Rs. 8,93,32,268 should be adopted, (ii) the WDV on the other block of assets should be included in the cost of the galas and (iii) deposits of Rs. 72,60,184, made by the assessee to the various government departments should be included in costs of the galas, or, alternatively, these deposits be allowed as business loss.
6. The AO considered the submissions made by the assessee, wherein the assessee had taken its assets in the chart showing WDV on assets as :
Electric fittings 25,06,695
Factory sheds 4,83,42,826
Furniture &fixtures 88,96,206
Gas pipe lines 49,001
7. The AO concluded that since the assessee itself has gone on the WDV on different assets separately and sequentially, there was no reason why the 5 Chirag Design 3494/2011 3541/2011 values of the other assets to not to be excluded. He, therefore, excluded the values of other assets and arrived at the capital gains at :
Market value as per Revenue authorities 11,20,81,000 Less : consideration received by the assesses 4,83,42,826 Gain on sale 6,37,38,174
8. The AO thus, based on the above working, did not agree with the submissions made by the assessee and examined the two sales, with reference to section 50C and arrived at the figures of Rs. 5,37,64,000 for Galas no. 601 & 602, and Rs. 5,83,17,000 for Galas no. 603 & 604, aggregating to Rs. 11,20,81,000. He, reduced from the amount so arrived at by the assessee, the WDV on Galas (factory shed) at Rs. 4,83,42,826 and computed the capital gains at Rs. 6,37,38,174 and treated the same as STCG. The AO, finally taxed not only the STCG already declared by the assessee at Rs. 2,06,67,083 but also brought to tax Rs. 4,30,71,091 additionally. In the process, he also did not allow the deposits at Rs. 72,60,184 and WDV on other blocks to be included to the cost, for the purposes of arriving at the short term capital gains of Rs. 6,37,38,174.
9. Aggrieved, the assessee approached the CIT(A), before whom the assessee made various submissions. The assessee contested the decisions of the AO in not granting relief to the assessee with respect to (i) WDV on other assets and
(ii) deposits of Rs. 72,60,184. On considering the assessee's submissions, the CIT(A) granted full relief with respect to the WDV on electric fittings and gas fittings and part relief at 50% on the WDV on furniture and fixtures. Regarding WDV on the rest of the other blocks and deposits, the CIT(A) confirmed the decision of the AO. Contents of paras 3.3.6, 3.3.7, 3.3.8 and 3.3.9 of the impugned order are relevant and are extracted as under :
"3.3.6 Regarding, the contention of the appellant that the deposits made the State/Central Government, prepaid expenses and advance property tax paid may be considered as part of the WDV on transfer of industrial 6 Chirag Design 3494/2011 3541/2011 units, to my considered opinion is misplaced and out of context. On perusal of the sub lease deeds executed by the appellant as a confirming party, I find no such clause or terms and conditions mentioned therein, as contested by the AR. The payment received by the appellant as sales consideration is only towards sale of the industrial units in its physical form without including the amount of deposits, prepaid expenses and advance property tax paid. No annexures are found prepared specifying the claim of the appellant and no such terms and conditions that these deposits, prepaid expenses and advance property tax paid are part of the total sales consideration, is found recorded in these sub lease deeds executed by the appellant. Therefore, the submission of the appellant on bare facts of the case is found unreasonable and unjustified. Therefore, the same is out rightly rejected. Accordingly, the AO is directed not to consider the book value of these deposits, prepaid expenses, and advance property tax paid aggregating to Rs. 72,60,1841- for the purpose of computation of deemed short term capital gain on sale of industrial units u/s 50 of the Act. The entire addition made on this account is therefore confirmed. 3.3.7. Regarding the deduction of WDV pertaining to furniture and fixture, computers, safe, electric fittings, office equipments and gas pipeline, undoubtedly the appellant has sold its industrial units on as is where is basis without removing the fixed furnitures and fittings in the nature of false ceilings, wooden and glass partitions, electrical fittings, gas pipeline etc which are intrinsically attached to these industrial units. Therefore, on account of these facts, I find that the AO is not justified in completely rejecting the claim of the appellant. From the facts brought on record as discussed above I find that the electric fittings and gas pipelines are part and parcel of the industrial sheds sold by the appellant. As these items are intrinsically attached to the industrial units, therefore, to my considered opinion the AO is not justified in not allowing the deduction to the extent of the WDV pertaining to these block of assets amounting to Rs. 25,55,697/- i.e. Rs. 25,06,696/- on account of electric fittings and further Rs. 49,001/-on account of gas pipelines. Therefore, in view of the same the AO is directed to allow deduction of Rs 25,55,697/- on this account out of the market value on sale of industrial units determined by the DVO for the purpose of computation of deemed short-term capital gain u/s 50 of the Act. Therefore, the addition made on account of the short term capital gain to this extent is directed to be deleted.
3.3.8. However, at the same time I also find that a part of furniture and fixture consist of movable furnitures in the nature of tables, chairs etc, computers, safes and office equipments are not intrinsically attached to these industrial sheds sold by the appellant, therefore, the AO is fully justified disallowing the claim of the appellant. No specific terms and conditions on this account are found recorded in the sublease deeds executed by the appellant. Therefore, to my considered opinion the appellant cannot be given the benefit of deduction out of the market value determined by the appellant on account of WDV of Rs.23,290/- pertaining to safes, Rs.1,39,379/-pertaining to computers and Rs.14,70,913/- pertaining to office equipments. These items cannot be held as part and parcel of the industrial sheds transferred or sold by the appellant. Therefore, the disallowance of deduction claimed on this account for the computation of deemed short term capital gain by the AO stands. 3.3.9. Further, in view of the above discussion as well as duly taking into 7 Chirag Design 3494/2011 3541/2011 consideration the overall facts and circumstances of the case, to my considered opinion a part of furniture and fixture is intrinsically attached to the industrial units and a part thereof being movable and separate furniture and fixture in the nature of tables, chairs etc cannot be considered as intrinsically attached to the industrial units. However, the AR could not furnish the complete item wise details of the furniture and fixture except submitting that most of the items included therein are part and parcel of the industrial units. The AO has also not worked out the item wise particulars of furniture and fixture included in the WDV as on 01.04.2007. Therefore, considering to the overall facts and circumstances of the case to my considered opinion it would meet the ends of justice in case it is held that 50% of the WDV pertaining to furniture and fixture is on account of movable items not intrinsically attached to the industrial units and balance 50% of the WDV pertaining to furniture and feature is inseparable and intrinsically attached to the industrial units. Accordingly, in view of the same, the AU is directed to allow 50% of the WDV of furniture and fixture as on 01.04.2007 to be deducted against the market value on sale of industrial units determined by the DVO for the purpose of computation of deemed short- term capital gains u/s 50 of the Act. The addition made on this account on account of being short term capital gain, as discussed above, is partly allowed."
10. Aggrieved the assessee is before the ITAT.
11. Before us, the AR reiterated the basic submissions made before the revenue authorities and also submitted that because of the differences between the partners, the entire manufacturing facility had to be sold. The business was shut down overnight and the assessee transferred the galas to new entrants, i.e. Dania and Yash on as is where basis and who moved in within a period of less then one month, i.e. in June 2007, though, the galas were transferred to the new entrants vide three way agreement, which were executed in October, 2007. During the course of hearing, the AR produced photographs of the furniture and fixtures as done up in the galas, which included glass partitions, conference tables, etc., which could not have been removed within the shortest duration of time, i.e. between May 20, 2007 when the business was shut down and June 20, 2007, when the buyers actually moved into occupy the galas.
12. Therefore, according to the AR, the assessee did not make any itematized 8 Chirag Design 3494/2011 3541/2011 sale of either the fixtures or of any other fixed asset when it sold the galas to Dania and Yash.
13. The AR, therefore, pleaded that the valuation given by the assessee has to be taken to be correct from another point of view, i.e. the owner of the galas was the Govt. of India, and under no circumstance, the assessee could have negotiated two rates, i.e. between themselves on the one hand and another agreement, interse between themselves and the Government of India, in a three way agreement, which had to be entered into by the entrant, into SEEPZ. He submitted that in any case the valuation adopted by the AO, taking into consideration the municipal ready reckoner has been rendered defective after the receipt of the report from DVO as the valuation done by the registered valuer, which was at Rs. 8,50,46,000. The AR also objected to the disallowance on account of the payments made as advances towards statutory bodies of Rs. 72,60,184, out of which Rs. 69,07,946 pertained to property tax advance. On a query by the Bench that this should have been recovered from the buyer, the AR replied that nothing was recovered.
14. The AR, therefore submitted that the entire consideration which has been received is all inclusive and the buyers occupied the galas in less then one month of the closure of business and therefore the value taken by the AO of the galas and profit computed thereon was in complete error.
15. The DR, on the other hand strongly refuted the arguments of the AR and submitted that the sale consideration, on the face, depicts sale of each item separately. The DR submitted that since the sale consideration is giving an exact figure and not rounded off figures, this itself, is a presumption that the sale of the galas was not lock stock and barrel, but carefully valued each item to conduct the sale. The DR then submitted that the tripartite agreement entered by the buyer, assessee and the MIDC is silent on any furniture and 9 Chirag Design 3494/2011 3541/2011 fixtures, the sale is not slump sale and normally the sale is affected as peaceful & vacant possession, all these indicate that there is something more, which has not come out from the papers and the AO was correct to base his calculation on valuation done through ready reckoner rates for the purpose of section 50C. The DR further submitted that the CIT(A) was more then reasonable to allow appropriate credit on account of furniture and fixtures and non removable items of electric fittings and gas pie lines.
16. We have heard the arguments and have perused the material placed in the paper book. From the material, as examined by us, we find that none of the grounds, as agitated by the assessee is/are particularly and specifically against the valuation difference of Rs. 2,27,48,713 (Rs. 11,20,81,000 - Rs. 8,93,32,286). Therefore, there in no issue relating to the valuation of sale consideration of the Galas. However, the AR, maintains that the sale consideration includes the value relating to other blocks and deposits. However, assesse/AR did not file any evidence to substantiate the same. Therefore, in these circumstances, the arguments advanced by the assessee, primarily based on the valuation of the galas are non maintainable, hence we are not going into the valuation aspect. Nevertheless, there is not one clue, which points towards lump sum sale, as has been reiterated by the AR at every stage, including, before us. In our considered opinion lump sum sale would, under all circumstance give one single comprehensive figure, not exact figure, going down to rupees and paise, like for example, the value of machinery taken, is shown at Rs. 1,61,43,858. Under no circumstance, even a presumption can be made that it was a lump sum sale. Adverting our attention towards grounds no. 1, 2 & 3, we find that the assessee had pleaded that advances to the tune of Rs. 72,60,184 should be included in the cost of the industrial galas or alternatively to be allowed as business as loss. It is an admitted fact that the deposits in question are not referred to valuation.
10Chirag Design 3494/2011 3541/2011 Assessee has also not filed any evidence to suggest that the deposits are part of the cost of the assets in various blocks, therefore, in our considered opinion, we have to reject both the pleas of the AR. As such, neither there is any clarity as to what is the nature of the advances, as to when and in what head these advances were paid or whether these were principal amounts or were in the nature of penalties/fee/fines, nothing had been brought on record, neither before the revenue authorities and nor before us. Even in the alternative, all these advances are supposed to be Balance Sheet items, which, under no circumstance could be allowed as business loss. We, therefore, reject the arguments of the AR on both the alternative grounds.
17. Grounds no. 1, 2 and 3, concerning the advances, are therefore, rejected.
18. Ground no 4 pertains to non allowance of the write off of WDV on safes at Rs. 23,290, on computer programme on jewellery, on CPU at Rs. 1,39,379, office equipments connecting TV monitoring etc. at Rs. 1,47,913. In our considered opinion, the assessee has not at any stage, discharged its onus to prove the correctness and justification for write off. Even before us, the AR, simply produces some photographs, showing the interiors done somewhere, i.e. no authentication, that those photographs pertained to the demised galas. Even if those were presumed and accepted to be of the demised galas, even then, those photographs does not prove anything with regard to the impugned items. In these circumstances, we can only sustain the views taken by the revenue authorities. Therefore, order of the CIT(A) does not call for any interference.
19. Ground no. 4, is therefore, rejected.
Grounds no. 5, 6, 7 & 8.
11Chirag Design 3494/2011 3541/2011
20. Apropos grounds no. 5, 6, 7 & 8, we find that the AO rejected the claim of the assessee to add the values of office equipments and fixtures, whereas, the CIT(A) allowed 50% of the WDV to be added to the cost as determined by the AO on furniture & fixtures and allowed the whole of WDV to be added for electric fittings and gas pipe lines to the cost of the galas.
21. The AR reiterated the arguments, whereas, the DR submitted that the CIT(A) was more then reasonable to allow the WDV of the items mentioned in the grounds to be added to the cost, which had been reduced by the AO. The DR further submitted that these items should not be allowed to be added as per the normal principles of sale of galas, which, even as per clause (t) of the agreement, the demised gala(s) had to be handed over as vacant premises.
22. After perusing the grounds, the orders of the revenue authorities and the relevant clause in the tripartite agreement, we find that the CIT(A) had been reasonable. As seen from the photographs, produced before us, which we are only presuming to be taken of the demised galas, we find that the fittings and glass facade/partitions were intricately fixed and a fair presumption can be made that, if the assessee vacated the premises and new entrants took over the possessions of the galas immediately, these fittings would have gone with the possession as well. In these circumstances, we fairly think that the values adopted by the CIT(A) are very reasonable. We, therefore, do not find any reason to disturb the findings of the CIT(A), which we sustain. These grounds are therefore, rejected.
23. In the result, grounds no. 5, 6, 7 and 8 are rejected.
24. Ground no. 9 is on jurisdiction. The ground is rejected, since this issue was not agitated by the AR at the time of hearing. We, therefore, refrain from 12 Chirag Design 3494/2011 3541/2011 giving any findings in the ground of appeal.
25. Ground no. 10 is general.
26. In the result, the appeal filed by the assessee is dismissed ITA No. 3541 of 2011 - Revenue's appeal The following grounds have been raised by the department :
1. The learned CIT(A) has erred on facts and in law and in the circumstances of the case in allowing the deduction of Rs 25,55,697/- (i.e. deduction to the extent of WDV of Rs 25,06,696/- on a/c of electric fitting and Rs. 49,001/- on a/c of gas pipe line) and also allowing the deduction to the extent of 50% of WDV of furniture and fixture of Rs 44,36,456/- (i.e. 50% of WDV of furniture and fixture) on account of market value on sale of industrial units determined by the DVO for the purpose of computation of deemed short term Capital gain u/s 50 of the I.T. Act, 1961.
Since the matter of valuation refers to DVO of Industrial Gala only not including all equipments and with furniture and fixture but CIT(A) erred on facts and in law and decided the issue on the basis of valuation given by the DVO.
2. The appellant prays that the order of the CIT(Appeals) on the above grounds to be set aside and that of the AO be restored.
3. The appellant craves to leave to amend or alter any ground or to submit additional new ground which may be necessary.
27. Ground no. 1 is against concessions given by the CIT(A) on electric fittings, gas pipe line, furniture & fixtures. In the impugned order, the CIT(A) granted relief fully in respect of the WDV claim relating to electric fittings and gas pipelines. CIT(A) granted part relief at 50% of the WDV on the block relating to furniture and fixture. Revenue is aggrieved with the said decision of the CIT(A) and raised the above ground in the appeal. The CIT(A) mentioned relevant fact and discussion in para 3.3.7 of the impugned order before granting reliefs to the assessee. On perusal of the same, it is noticed that the CIT(A) granted relief considering the fact that the electric fittings and gas pipelines are concealed ones and they cannot be easily separated and sold for consideration. Regarding the furniture and fixture the photographs filed 13 Chirag Design 3494/2011 3541/2011 before us indicate the inseparability of these items from the galas.
28. Therefore, in our opinion, the observation of the CIT(A) is proper and it does not call for any interference. Accordingly the ground no. 1 is rejected.
29. Grounds no. 2 & 3 are general.
30. The appeal filed by the department is, therefore, dismissed.
31. In the result:
Appeal filed by the assessee is dismissed.
Appeal filed by the department is dismissed.
Order pronounced in the open Court on this day of 07/12/1012 Sd/- Sd/-
(D. KARUNAKARA RAO) (VIVEK VARMA)
ACCOUTANT MEMBER JUDICIAL MEMBER
Mumbai, Date: 07/12/2012
Copy to:-
1) The Appellant.
2) The Respondent.
3) The CIT (A)- 22, Mumbai.
4) The CIT -10, Mumbai,
5) The D.R. "C" Bench, Mumbai.
6) Copy to Guard File.
By Order
/ / True Copy / /
Asstt. Registrar
I.T.A.T., Mumbai
*Chavan
14