Income Tax Appellate Tribunal - Delhi
Airport Authority Of India, New Delhi vs Department Of Income Tax on 24 June, 2011
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH 'A'
'A' : NEW DELHI
BEFORE SHRI G.D.AGRAWAL,
G.D.AGRAWAL, VICE PRESIDENT AND
SHRI A.D.JAIN,
A.D.JAIN, JUDICIAL MEMBER
ITA Nos
Nos.3841/Del/2011 & 3842/Del/2011
Assessment Years
Years : 2007-
2007-08 & 2006-
2006-07
Dy.Commissioner of Vs. M/s Airports
Airports Authority of India,
Income Tax, A-Wing, Rajiv Gandhi Bhawan,
Circle
Circle-
rcle-1(1), Safdarjung Airport,
New Delhi. New Delhi - 110 003.
PAN : AAACA6412D.
(Appellant) (Respondent)
Appellant by : Shri Dev Jyoti Das, CIT-DR.
Respondent by : Shri Ved Jain & Shri Venkatesh
Mohan, CAs.
ORDER
PER G.D.AGRAWAL, G.D.AGRAWAL, VP :
These appeals by the Revenue are directed against the order of learned CIT(A), New Delhi dated 24th June, 2011 for the AY 2007-08 and 2006-07.ITA No.3841/Del/2011 :-
:-
2. Ground No.1 of the Revenue's appeal reads as under:-
"In the facts and circumstances of the case, the ld.CIT(A) has erred in law and on facts in deleting addition of Rs.5,10,00,000/- on account of income accrued to the assessee ignoring that :
a) the assessee is following mercantile system of accounting and this income due from Cochin International Airport Ltd. has already accrued to the assessee.
2 ITA-3841 & 3842/Del/2011
b) reliance placed by ld.CIT(A) in Godhra Electricity Company vs. CIT 225 ITR 746 (SC) is misplaced as in the present case as per note 7 of Notes to Accounts, a draft CNS/ATM agreement between the assessee and Cochin International Airport Ltd. was under re-negotiation and Ministry of Civil Aviation has issued guidelines to the assessee that charges on providing CNS/ATM facilities shall accrue to the assessee."
3. At the time of hearing before us, it is stated by the learned DR that as per MoU between the assessee and Cochin International Airport Ltd. (in short 'CIAL'), the assessee i.e. Airport Authority of India Ltd. is entitled to receive the payment for providing ATM/CNS facility. The assessee itself has made the provision for the same in the books of account at `5.10 crores but did not offer the same in its income. He, therefore, submitted that the Assessing Officer rightly included the sum of `5.10 as income accrued to the assessee.
4. The learned counsel for the assessee, on the other hand, stated that CIAL since beginning i.e. 1999 did not accept the assessee's claim for separate payment for the use of ATM/CNS facility. In fact, the draft agreement in which this provision was made for separate payment for use of ATM/CNS facility was not signed by CIAL. Therefore, the assessee's claim of the charges for use of CNS/ATM facilities is only one sided. The assessee is making this provision in the books of account as per the direction of Civil Aviation Ministry and to keep alive its claim. However, since inception, CIAL has not accepted the assessee's claim and has not made any payment therefore. That the identical issue arose in AY 2002-03 wherein the similar addition was made. However, the learned CIT(A), vide its order in appeal No.87/04- 05, deleted the addition. The Revenue accepted the above order of the CIT(A) and did not file any appeal before the Tribunal. Thereafter, in AY 2003-04, 2004-05 & 2005-06, no addition was made by the 3 ITA-3841 & 3842/Del/2011 Revenue. Thus, even as per rule of consistency, this issue is settled in favour of the assessee. Moreover, on merits also, the order of the learned CIT(A) is correct because unless the payer accepts the assessee's claim, no right is accrued to the assessee by making suo motu entry in its books of account. He, therefore, submitted that the order of the learned CIT(A) should be sustained.
5. We have carefully considered the arguments of both the sides and have perused the material placed before us. We find that the learned CIT(A) relied upon the decision of his predecessor for AY 2002- 03 and has also observed that as per judicial discipline, he should follow the order of his predecessor unless there is change in facts or in law. The Revenue is unable to point out that there was any change in the facts or in law as compared to AY 2002-03. The learned CIT(A) has also relied upon the decision of Hon'ble Jurisdictional High Court in the case of CIT Vs. Dinesh Kumar Goel - (2011) 239 CTR 46 (Del) in which their Lordships of Jurisdictional High Court considered the meaning of the words "income" and "accrual of income" and, held as under:-
"To the same effect at the observations of Satyanarayana Rao J. in CIT vs. Anamallais Timber Trust Ltd. (1950) 18 ITR 333 (Mad) and Mukherjea J. in CIT vs. Ahmedbhai Umarbhai & Co. (1950) 18 ITR 472 (SC) where this passage from the judgment of Mukerji J. in Rogers Pyatt Shellac & Co. vs. Secretary of State for India 1 ITC 363, is approved and adopted. It is clear therefore that income may accrue to an assessee without the actual receipt of the same. If the assessee acquires a right to receive the income, the income can be said to have accrued to him though it may be received later on its being ascertained. The basic conception is that he must have acquired a right to receive the income. There must be a debt owned to him by somebody. There must be as in otherwise expresses
4 ITA-3841 & 3842/Del/2011 debitum in praesenti, solvendum in future. See W.S. Try Ltd. vs. Johnson (Inspector of Taxes) (1946) 1 All ER 532 and Webb vs. Stenton & Ors. Garnishees 11 QBD 518. Unless and until there is created in favour of the assessee a debt due by somebody it cannot be said that he has acquired a right to receive the income or that income had accrued to him."
(emphasis by underlining supplied by us)
6. The ratio of the above decision would be squarely applicable to the facts of the assessee's case. When CIAL has not accepted the liability to pay the assessee for the use of CNS/ATM facility, it cannot be said that any right has accrued in favour of the assessee to receive such amount. When no such right is accrued to the assessee, it cannot be assessed as income in the hands of the assessee merely because the assessee had made the provision in its books of account. The Revenue itself has accepted the assessee's claim for AY 2002-03 [by accepting the order of the CIT(A)] and in AY 2003-04, 2004-05 & 2005- 06 (by not making any addition) in this regard. In view of the totality of above facts and legal position, we do not find any infirmity in the order of the learned CIT(A). The same is sustained and ground No.1 of the Revenue's appeal is rejected.
7. Ground No.2 of the Revenue's appeal reads as under:-
"On the facts and circumstances of the case, ld.CIT(A) erred in deleting prior period expenses of Rs.9,24,20,455/- the ld.CIT has failed to appreciate that in Mercantile system followed by the assessee there is no provision to allow prior period expenses. Reliance is placed on the decision of Hon'ble Supreme Court in Haji Lal Mohd. Biri Words Vs. CIT 224 ITR 591 (1997)."
5 ITA-3841 & 3842/Del/2011
8. We have heard both the parties and perused the material placed before us. We find that with regard to prior period expenses also, the learned CIT(A) has recorded the finding that similar issue was decided by him for AY 2005-06 in favour of the assessee which was accepted by the Department. The facts of the year under consideration are admittedly identical. Moreover, it was pointed out by the learned counsel for the assessee that though the prior period expenses were to the tune of `9.24 crores but, the assessee has disclosed much more income of the prior period and, in fact, if the assessee's profit & loss account is looked into, there is net credit of the prior period income amounting to `71.55 crores. Thus, the prior period income offered by the assessee was more by `71.55 crores than the prior period expenses claimed in the year under consideration. The Assessing Officer has assessed the prior period income and disallowed prior period expenses. He cannot adopt different yardstick for assessing the income and allowing the expenditure. Considering the totality of the above facts, we do not find any justification to interfere with the order of the learned CIT(A) in this regard. The same is sustained and ground No.2 of the Revenue's appeal is rejected.
9. Ground No.3 of the Revenue's appeal reads as under:-
"In the facts and circumstances of the case, ld.CIT(A) has erred in law and on facts in deleting addition of Rs.8,30,391/- on account of disallowance of extra depreciation @60% on typewriters ignoring that as per the IT Rules 60% depreciation is allowable only on computer and computer software."
10. In this regard, the learned counsel for the assessee fairly admitted that in the earlier assessment year i.e. AY 2004-05 in the case of the assessee, the CIT(A), vide his order dated 24.3.2008, has set aside this issue back to the file of the Assessing Officer for 6 ITA-3841 & 3842/Del/2011 verification. In assessment year 2005-06 also, the learned CIT(A) has followed the order of his predecessor and, vide his order dated 3.10.2008, remanded the issue back to the Assessing Officer for verification. The learned counsel placed on record the copies of both the orders of learned CIT(A) for AY 2004-05 & 2005-06. It was, therefore, submitted by the learned counsel that for the sake of consistency, in the year under consideration also, he should have set aside this matter back to the file of the Assessing Officer to be readjudicated in the light of directions in the earlier years, instead of allowing the relief.
11. The learned DR also fairly stated that it would be appropriate if the matter is set aside to the file of the Assessing Officer for readjudication as per the directions of the learned CIT(A) in the preceding years.
12. In view of the above submissions of both the sides, the order of the learned CIT(A) on this issue is set aside and the matter is restored back to the file of the Assessing Officer for readjudication as per the directions of the CIT(A) in the preceding year. Ground No.3 raised by the Revenue is, therefore, treated as allowed.
ITA No.3842/Del/2011 :-:-
13. The only ground raised by the Revenue in this appeal reads as under:-
"The ld.CIT(A) has erred on facts and in law by allowing the claim of the assessee of Rs.3,16,8,999/- on account of fringe benefits, ignoring the legal position that for claiming any deduction from the return already filed, the assessee must revise its return and the same cannot be claimed by simply filing a letter before the AO as has been held by the 7 ITA-3841 & 3842/Del/2011 Hon'ble Supreme Court in the case of Goetze (India) Ltd. Vs. CIT (2006) 284 ITR 323 (SC)."
14. We have heard the rival contentions and perused the material placed before us. We find that the learned CIT(A) has discussed this issue in paragraph 10 of his order and he has accepted the legal position that for claiming a deduction from the return already filed, the assessee must revise the return and the same cannot be claimed by simply filing a letter before the Assessing Officer. However, after accepting the legal position as raised by the Revenue in this appeal, the learned CIT(A) has discussed the power of the appellate authority and, relying upon the decision of Hon'ble Jurisdictional High Court in the case of CIT Vs. Jai Parabolic Springs Ltd. - (2008) 306 ITR 42 (Delhi) and also the decision of Hon'ble Bombay High Court in the case of Balmukund Acharya Vs. DCIT - (2009) 221 CTR 440 (Bom), held that the decision of Hon'ble Apex Court in the case of Goetze (India) Limited Vs. CIT - (2006) 284 ITR 323 (SC) does not bind the appellate authorities. The Revenue has not challenged the above finding of the learned CIT(A) in its ground of appeal. Moreover, at the time of hearing of the appeal before us also, the learned DR did not point out any decision which says that appellate authorities do not have the power of admitting fresh claim. In fact, in the decision of Hon'ble Apex Court in the case of Goetze (India) Limited (supra), it has been clarified that the decision is limited to the power of the assessing authority and does not impinge on the power of the ITAT. The above observation of the Hon'ble Apex Court would be squarely applicable with regard to the power of the CIT(A). Moreover, the Hon'ble Jurisdictional High Court has also clarified this position in the case of Jai Parabolic Springs Ltd. (supra).
15. With regard to the merit of the levy of fringe benefit tax on the calibration expenditure, the Additional Commissioner in the remand report before the CIT(A) admitted as under:-
8 ITA-3841 & 3842/Del/2011 "However, considering the merits of the submission with regard to claim for non inclusion of calibration expenditure incurred on Air Craft owned by AAI included in the levy of FBT; it is seen that FBT is not attracted on the expenditure under reference."
16. Thus, the Additional Commissioner himself has admitted that FBT is not attracted on the calibration expenditure incurred on aircrafts owned by the AAI. In view of the above, there is no merit in the Revenue's appeal. The same is dismissed.
17. In the result, the Revenue's appeal in ITA No.3841/Del/2011 is partly allowed while in ITA No.3842/Del/2011 is dismissed.
Decision pronounced in the open Court on 16th March, 2012.
Sd/- Sd/-
(A.D.JAIN)
A.D.JAIN) (G.D.AGRAWAL)
JUDICIAL MEMBER VICE PRESIDENT
Dated : 16.03.2012
VK.
Copy forwarded to: -
1. Appellant
2. Respondent
3. CIT
4. CIT(A)
5. DR, ITAT
Assistant Registrar