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2017 (6) TMI 294 - ITAT KOLKATA

2017 (6) TMI 294 - ITAT KOLKATA - TMI - Revision u/s 263 - deduction permissible u/s 35(1)(iii), u/s 35(I)(ii) & u/s 35AC - Held that:- Along with the details of payments made to qualifying institutions the Assessee had also disclosed copies of the Receipts & certificates issued in the prescribed form by the respective entities, wherein the particulars prescribed for claiming deduction u/s. 35AC were provided by the Payee institutions. The ld. DR in his submissions has pointed out that in col.29 .....

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nion, this explanation of the assessee is a plausible explanation and in any even the AO before completing the assessment was fully conscious of the fact that the assessee had made a claim of deduction u/s 35AC and 35(1)(iii) of the Act and therefore it cannot be said that order of the AO was erroneous on this count. - Disallowance of interest u/s 14A - Interest expenses debited in the profit and loss account - Held that:- Disallowance of interest u/s 14A of the Act was the subject matter o .....

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th the order of the CIT(A) and therefore jurisdiction u/s.263 of the Act cannot be invoked by the AO in view of Explanation (c ) to Sec.263(1) of the Act, the CIT has taken the plea of lack of full enquiry on applicability of Sec.14A of the Act. In this regard it is seen that the show cause notice u/s.263 of the Act issued by the CIT was dated 20.9.2016. The Assessee had filed his reply to the said show cause notice on 12.1.2017 and on the very same date, the CIT had passed the impugned order. I .....

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In the proceedings before the AO vide record of proceedings (order-sheet entry) dated 04.09.2014, the AO directed the Assessee to submit details of LTCG appearing in the computation of income. The Order-sheet entry dated 08.09.2014 further shows that in the hearing conducted on that date, the Assessee had filed details of LTCG and also furnished related valuation report. The supporting documents with reference to long term capital gain are available at page 128 to 135 of the assesseeís paper boo .....

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r of handing over the possession to the assessee by Godrej Waterside Properties Pvt. Ltd., the person who carried out the development. Pages 136 to 155 is the report of the valuer in support of the long term capital gain in the light of the documentary evidence filed by the assessee it cannot be said that there was no failure on the part of AO to make proper and adequate enquiries with regard to the computation of long term capital gain. The exercise of jurisdiction by CIT on this ground is ther .....

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he paper book. In the light of the evidence filed as above it cannot be said that there is any failure on the part of the AO to make adequate and proper enquiries before completing the assessment on the aforesaid issue. Exercise of jurisdiction on this issue is therefore held to be not sustainable and the order u/s.263 of the Act to this extent is quashed. - Depreciation on unsold building wrongly allowed by the AO - Held that:- Since the initial year of operation of IT Parks, the cost of de .....

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to 164 of PB]. As such the CIT's notice proceed on incorrect assumption with regard to the character and nature of the IT Park building which he erroneously considered to be "Trading Stock". The CIT therefore could not proceed u/s 263 by assuming incorrect facts which are not borne out from records. It is also noticed that on same incorrect assumption of facts, the CIT for AYs 2007-08 & 20. 11 had similarly revised the assessment orders u/s 263 which was cancelled by the ITAT - When CITís sp .....

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rroneous and prejudicial to the interest of the revenue. - Appeal decided in favour of assessee. - I.T.A No. 329/Kol/2017 - Dated:- 2-6-2017 - Sri N. V. Vasudevan, JM And Shri Waseem Ahmed, AM For the Appellant : Shri Dilip S.Damle, FCA & Shri Akkal Dudhwewala, ACA For the Respondent : Shri Niraj Kumar, CIT(DR) ORDER Per N. V. Vasudevan, JM This is an appeal by the Assessee against the order dated 12.01.2017 of Commissioner of Income Tax-I (CIT), Kolkata passed u/s 263 of the Income Tax Act, .....

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3. The CIT in exercise of his powers u/s 263 of the Act was of the view that the aforesaid order of the AO was erroneous and prejudicial to the interest of the revenue for the following reasons :- 1.In Form No. 3 CD of Tax Audit Report (TAR), the Assessee had claimed exemption of ₹ 76,00,000/- u/s 35 AC of the I.T. Act, 1961 apart from claim of exemption u/s 35(1)(iii) of ₹ 1,04,50,000/-. However, there was no mention of claim of exemption u/s 35AC of the Act in point no 29 of " .....

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es, the closing balances of which as on 31.03.12 and 31.03.11 were ₹ 173.40 Crs and ₹ 58.30 Crs respectively. The Assessee had not charged any interest for such huge advances made to the related parties. However while computing the disallowance u/s.14A of the Act in respect of expenses incurred to earn exempt income, ₹ 75,24,000/- only was disallowed. The fact that the Assessee had utilized major part of the long term borrowings and short term borrowing for giving advances to t .....

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evidences in this regard is on record. The A.O had examined nothing. 5. The Assessee had debited a sum of ₹ 1,16,10,615/- under the head 'Commission & Brokerage'. The Assessee had added back Commission paid ₹ 67,97,440/- in the computation stating such expenses were incurred in connection with long term lease. It is not clear under what basis you had made bifurcation of commission Expenses and added a certain sum stating that it was incurred in connection with long term l .....

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he purpose of business. For the above reasons, the CIT considered the order of the AO erroneous and prejudicial to the interest of the revenue and he accordingly issued a show cause notice to the Assessee dated 20.9.2013 to the Assessee calling upon the Assessee to show cause why the order of the AO should not be revised in exercise of the powers of the CIT u/s.263 of the Act. 4. The assessee by reply dated 11.01.2017 pointed out that there was no error in the order of AO and that all the above .....

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esponse to the said notice the assessee submitted written reply on 12.01.2017. The assessee has sought to justify its claim. However, he could not disagree that the necessary inquiries which were called for and expedient on the set of facts and circumstances were not carried out by the assessing officer. Nevertheless, the assessee's Ld A/R has made a valid point on the issue of disallowance of interest paid by the Assessee because the Ld. CIT(A) - 1, Kolkata in appeal no.828/CIT(A)-1/C-2(1)/ .....

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g other issues, during assessment proceedings all details were not furnished before the AO. The AO passed the impugned assessment orders dated 23.09.2014 without making inquiries or verification which should have been made by the AO. He has failed to apply provisions of section 14A of I TAct, 1961 read with Rule 8D of IT Rules, 1962 correctly and faithfully. 5. The CIT thereafter referred to several judicial pronouncements particularly that of the decision of the Hon ble Delhi High Court in the .....

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nity of being heard to the Assessee. The CIT in this regard gave the following directions to the AO :- 12. Having regard to the facts and circumstances of the case and in the light of the aforesaid decisions of Hon'ble Supreme Court and Hon'ble High Court and in accordance with the amendment made in Section-263 of the Act with effect from 01.06.2015, I hold that the impugned assessment order dated 23.09.2014 passed by the A.O. is erroneous so far as it is prejudicial to the interests of .....

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an opportunity of being heard to the assessee. 13. In the result, the assessment order 143(3) dated 23.09.2014 for A.Y. 2012-13 is set-aside to the file of the Assessing Officer with a direction to pass a fresh assessment order after conducting inquiries and verification which are called for and discussed in this order and as per law and after giving an opportunity of being heard to the assessee. 6. Aggrieved by the order of CIT the assessee has preferred the present appeal before the Tribunal. .....

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hat extent would merge with the order of CIT(A) and therefore jurisdiction u/s 263 of the Act cannot be exercised by CIT in view of clause-C of Explanation to section 263 of the Act. The CIT, however, has still thought it fit to come to the conclusion that the provisions of section 14A of the Act were not fully and properly applied by the AO while concluding the assessment. 8. The ld. Counsel for the assessee firstly pointed out that in the show cause notice u/.s 263 of the Act dated 20.09.2016 .....

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es was not erroneous and prejudicial to the interest of the revenue. The CIT without dealing with those objections, has proceeded to pass the impugned order on the ground of lack of enquiry by the AO. It was submitted by him that even in respect of computation of long term capital gain and expenditure on account of commission and brokerage even proper enquiries were made by the AO while completing the assessment. It was therefore submitted by him that the impugned order should be quashed for the .....

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cial to the interest of the revenue. It was his submission that the assessee was not put to notice at any stage of the proceedings u/s.263 of the Act, with regard to the other issues set out in the show cause notice u/s 263 of the Act, on the aspect of lack of enquiry by the AO before completing the assessment and therefore order of CIT should be quashed. In this regard it was also pointed out that the Hon ble Supreme Court in the recent decision rendered in the case of CIT Vs. Amitabh Bhachan 3 .....

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CIT 54 SOT 172 (ITAT Kol) c) B.S.Sangwan vs ITO 67 SOT 447 (ITAT Delhi) (c ) That the AO had in fact made proper and due enquiries of all the aspects set out by the CIT in the show cause notice u/s 263 of the Act. In this regard he drew our attention to the various pages of the paper book which would throw light on the fact as proper and due enquiries were made by the AO, to which we will make reference in the latter part of this order. 9. The next submission of the ld. Counsel for the assessee .....

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ITR 166) (Del HC) - C.S.E. Ltd Vs CIT (ITA No. 268/K/15) (ITAT Kol) - Crisil Ltd Vs Addl.CIT (142 TIK 62) (ITAT Mum) 10. The Ld. DR, on the other hand, submitted that the AO in the notice issued u/s 142(1) of the Act did not call for the books of accounts of the assessee. However in the order of assessment, he has made reference to the fact that books of accounts were produced by the assessee. He drew our attention to para-8 of the impugned order of CIT wherein the CIT has observed that the AO f .....

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ed in (2015) 375 ITR 123 (Cal) wherein it was held that if the extent of enquiry conducted by the AO, being as good as no enquiry, then that would be sufficient ground to empower the CIT to invoke his jurisdiction u/s 263. Under such circumstances, one cannot cast an impossible burden on the CIT to show positive leakage of income in concrete terms, when he has simply set aside the assessment order and restored certain aspect of the assessment to the file of AO for making a proper enquiry and the .....

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. However, there was no mention of claim of exemption u/s 35AC of the Act in point no 29 of the form of return of income "Computation of income from business and profession". Exemption of ₹ 76,00,000/- u/s 35AC of the IT Act has been allowed in assessment but the same has not been claimed in the IT Return, as found from the records. 13. It is seen from the paper book filed by the Assessee that tax audit report filed before the AO by the Assessee in Para - 15 specifically states t .....

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ounts for which deduction was permissible u/s 35(1)(iii), u/s 35(I)(ii) & u/s 35AC were all debited to the Profit & Loss A/c for the F.Y. 2011-12. The Net Profit of ₹ 15,04,56, 915/- as per the profit and loss account was the starting point for the purpose of computation of total income and this was arrived at after taking into account the aforesaid sums debited in the Profit & Loss A/c. As far as column No.29 of the form of return of income in respect of claim of deduction u/s .....

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rt of the return. Since in the Assessee's case the amount debited to the Profit & Loss A/c and the deduction permissible u/s 35AC was one and the same i.e. ₹ 76 Lacs the same was not separately disclosed in the return form. However, this fact in itself does not lead to conclusion that the deduction u/s. 35AC was not permissible or not allowable nor claimed by the Assessee. It is also seen that in the course of assessment, the AO had issued a detailed questionnaire u/s 142(1) of the .....

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e made payments to following approved institutions for claiming deduction u/s 35AC of the Act. S. No. Name of the Institution Amounts paid 1. The Akshay Patra Foundation Rs.12,00,000.00 2. Bharat Sevashram Sangha ₹ 3,00,000.00 3. Nana Palkar Smriti Samity Rs.1 l,00,000.00 4. Shrec BhagwanMahavir Viklang Sahayatu Samity Rs.50,00,000.00 Rs.76,00,000.00 Along with the details of payments made to qualifying institutions the Assessee had also disclosed copies of the Receipts & certificates .....

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AC of the Act was more than the sum debited in the profit and loss account that the assessee was required to mention the excess figure in that column and therefore had shown the figure as nil in the return of income. In our opinion, this explanation of the assessee is a plausible explanation and in any even the AO before completing the assessment was fully conscious of the fact that the assessee had made a claim of deduction u/s 35AC and 35(1)(iii) of the Act and therefore it cannot be said that .....

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sessee had also furnished before the AO full particulars or the short term & long term borrowings made and which were outstanding as on 31.01.2012. The Assessee had also furnished before the AO full particulars of the investments which the Assessee made in its Group, Associate & Subsidiary Companies to promote its core business of development of Civil Infrastructure in various formats. The Assessee had also furnished full particulars of the advances which the Assessee had made to its ass .....

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e order of ₹ 154.19 Crores and the Assessee had incurred finance cost of ₹ 22.51 crores . The AO had also noted the fact that the Assessee had made investment in shares amounting to ₹ 12.43 crores. Both these investments had not produced any taxable income during F.Y.2011-12. Having taken into account these facts & after taking into account the Assessee's submissions the AO had disallowed ₹ 75.24 Lacs out of interest paid as disallowance u/s.14A of the Act. 15. In .....

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ve investment and has recorded the fact in the hearing conducted on 04.09.2014 that the Assessee had furnished his explanation. 16. It is material to submit that against the disallowance made by the AO out of interest paid the Assessee had filed appeal before the CIT (A). The CIT (A)-1Kolkata vide his order dated 10.03.2016 in Appeal No. 828/CIT(A)-1/C-2(1)/2014-15 after considering the AO's finding, deleted the interest disallowance made by the AO. Therefore the issue with regard to allowab .....

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of the Act. The disallowance u/s.14A of the Act in terms of other direct expenses contemplated under rule 8D(2)(i) and other expenses contemplated under rule 8D(2)(iii) has neither been considered by the AO nor explained by the Assessee. To this extent there was lack of enquiry on the part of the AO. As we have already seen in the show cause notice u/s.263 of the Act dated 20.9.2016, the CIT was of the view that the disallowance u/s.14A of the Act ought to have been 66% of the interest expenses .....

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plea of lack of full enquiry on applicability of Sec.14A of the Act. In this regard it is seen that the show cause notice u/s.263 of the Act issued by the CIT was dated 20.9.2016. The Assessee had filed his reply to the said show cause notice on 12.1.2017 and on the very same date, the CIT had passed the impugned order. It is thus clear that the Assessee was not put on notice that the CIT intends to invoke jurisdiction u/s.263 of the Act on the ground of lack of enquiry by the AO. It has been h .....

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the absence of such opportunity being given, the exercise of jurisdiction u/s.263 of the Act on a ground different from the ground set out in the show cause notice was bad in law and such order u/s.263 of the Act deserved to be quashed. 18. In our opinion, the issue with regard to the disallowance of interest u/s 14A of the Act was the subject matter of the appeal by the assessee before CIT(A) against the order of assessment and the CIT had already decided the said issue prior to the impugned or .....

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that the disallowance u/s.14A of the Act ought to have been 66% of the interest expenses claimed by the Assessee as against a sum of ₹ 75,24,000/- disallowed by the AO. However in the order passed u/s.14A of the Act when the Assessee pointed out that interest disallowance u/s.14A of the Act was already subject matter of appeal filed by the Assessee before CIT(A) and that the order of the AO had merged with the order of the CIT(A) and therefore jurisdiction u/s.263 of the Act cannot be invo .....

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jurisdiction u/s.263 of the Act on the ground of lack of enquiry by the AO. Therefore exercise of jurisdiction u/s 263 of the Act on the issue of disallowance u/s.14A of the Act cannot be sustained and the impugned order to this extent is quashed. 19. The next issue considered by CIT in the show cause notice u/s 263 of the Act dated 20.09.2016 is with regard to computation of long term capital gain of ₹ 60.05 crores. On this issue the allegation of the CIT in the show cause notice is that .....

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the AO vide record of proceedings (order-sheet entry) dated 04.09.2014, the AO directed the Assessee to submit details of LTCG appearing in the computation of income. The Order-sheet entry dated 08.09.2014 further shows that in the hearing conducted on that date, the Assessee had filed details of LTCG and also furnished related valuation report. The supporting documents with reference to long term capital gain are available at page 128 to 135 of the assessee s paper book. At pages 128 to 130 of .....

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session to the assessee by Godrej Waterside Properties Pvt. Ltd., the person who carried out the development. Pages 136 to 155 is the report of the valuer in support of the long term capital gain in the light of the documentary evidence filed by the assessee it cannot be said that there was no failure on the part of AO to make proper and adequate enquiries with regard to the computation of long term capital gain. The exercise of jurisdiction by CIT on this ground is therefore held to be unsustai .....

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er a/ c of revenue expenses amounting to ₹ 52,40,44,462/ - debited to the Profit & Loss A/c. This amount inter-alia included commission and brokerage of ₹ 1,16,l0,615/-. While explaining the income disclosed under the head LTCG the Assessee had explained that it had developed LT. Parks which were also operated & maintained by the Assessee. The spaces contained in the I T Parks were commercially exploited in 2 ways. The developed spaces in the IT Park were leased by the Assess .....

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therefore was claimed in the computation of income. However, in cases where the lessees acquired long lease of the constructed spaces for period of 99 years against lump sum lease premium, such transactions were considered as transfer of the property in terms of Sec. 269UA read with Sec. 27 of the Act. Accordingly transfer of the leasehold rights in the building against receipt of lease premiums was considered as transaction in capital field. In such cases lease premium was reduced from the ope .....

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ock. It is pertinent to submit that this method of bifurcating expenses has been consistently followed by the Assessee for the past several years and the same has been accepted by the Revenue Authorities in all the past assessments. In the course of assessment for the A.Y. 2012-13, the Assessee had furnished full particulars of such brokerage & commission paid before the AO. In the details furnished the Assessee had clearly bifurcated the commission & brokerage which was paid for transfe .....

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A.Y. 2012-13 cannot be considered to be erroneous. 21. The evidence filed by the Assessee in the course of assessment proceedings the assessee were details with regard to brokerage and commission namely copy of ledger of revenue expenditure at page 156 of the paper book, details of brokerage and commission paid during the year ended 31.03.2012 at page 157 of the paper book, details of legal fees paid for the year ended 31.03.2012 at page 158 of the paper book. In the light of the evidence filed .....

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ticed from perusal of the record. We have already seen that the Assessee is in the business of developing IT park and either selling the space so developed or giving it on lease with all amenities for operating a software development business. The "IT Park buildings" constructed and developed by the Assessee is always held and accordingly disclosed in the Assessee's books as "Fixed Assets" and not as "stock-in-trade" as alleged in the show cause notice. 23. It i .....

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d infrastructure facilities for IT, ITES, Electronics etc". For the purposes of carrying on this business the Assessee had obtained on long term lease basis plots of land in Sector V, Salt Lake City from WEBEL a Govt. of West Bengal Undertaking, After the Assessee obtained the lease hold rights in the lands the Assessee developed its first Information Technology Park building known as Infinity Think Tank at Plot No, A3, Block GP, Sector V, Salt Lake City, Kolkata. The development and constr .....

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was approved by the CBDT as an Industrial Park for the purpose of Sec 80IA(4) of the Act. 24. The Assessee similarly developed another IT Park Building known as Infinity Benchmark situated at Plot G 1, Block- EP&GP, Sector V, Salt Lake City, Kolkata. The development and construction of this IT Park got completed in FY 2008-09 relevant to AY 2009-10. The said IT Park building was also approved by the CBDT u/s 80IA(4) of the Act. The said I T Park was also .being operated and maintained by th .....

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ay monthly lease rent for use of office space. Besides paying monthly lease rent, service charges are also paid by all the occupants for use of the facilities as also for operation and maintenance of the IT Park. The lease rent, maintenance/ service charges recovered from the lessees and occupants are assessed in our assessment under the head "business". The IT Parks developed and constructed by the Assessee not only contain civil structure of the building but substantial costs are inc .....

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stock-in-trade" as alleged in show cause notice dated 20.9.2016 u/s.263 of the Act. By using these fixed assets the Assessee regularly earns Income in the form of lease rent and service charges. Since commencement of operations of the IT Parks in AY 2002-03 and onwards the income so derived from commercial exploitation of IT Parks has been assessed by the AOs under the head 'profits & gains of business". Since such business income is earned by the Assessee by use of the "I .....

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u/s 143(3) of the Act, the AOs have consistently allowed deduction for depreciation u/s 32 on the WDV of the block of fixed assets comprised in the IT· Park -including WDV of the buildings. Deduction for depreciation was allowed in the orders for AY s 2004-05 & 2005-06 after discussion. In these years there were disputes with regard to the manner of calculation of the depreciation allowable but the AO never disputed the fact that the IT Park building and plant & machineries insta .....

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04-05 & 2005- 06 respectively. 26. The dispute with regard to the character of the IT Park building was again raised by the AO while faming the assessment order for the AY 2007 -08. In the return filed for AY 2007-08 the Assessee had claimed depreciation of ₹ 4,17,62,205/- respect of Assessee's. IT Park being Infinity Think Tank, Towers I & 11. The AO noted that during FY 2006-07 Assessee granted long term lease of 6872 sq. ft of the developed space against lump sum lease premi .....

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preciation was claimed. In AO's opinion however the assessee should have offered "short term capital gain" on grant of long term lease of 6972 sq.ft of office space after deducting proportionate WDV of the office space. The AO computed the prorate WDV of the building attributable to 6972 sq.ft. at Re.l, 77,42,577 / -. Deducting such prorata WDV of the building block from the gross lump sum premium of ₹ 3,27,69,200 / - (24095000 + 8674200) the AO assessed Rs.l,50,26,623/- as A .....

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s taken in appeal. The CIT(A) deleted both the additions made in the assessment order. The CIT(A) in the first instance held that refundable deposit of ₹ 86,74,200/ - represented assessee's liability and could not be taken into account for determination of the income of the Assessee. As regards the assessment of short term capital gain computed on prorata basis, the CIT(A) upheld Assessee's plea that the provisions of Sec 50 were applicable only when sale proceeds exceeded WDV of t .....

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icable) there will be no amount of capital gain chargeable to tax as computed by the Assessing Officer. " 28. Thus in the appellate order for AY 2007-08 the CIT(A) specifically dealt with the nature and character of the IT Park building and held it to be "depreciable asset" whose WDV had to be dealt with in accordance with provisions of Sec 43(6) and Sec 50 of the I T Act. Since the CIT(A) found that only a part of the depreciable block was transferred by the Assessee and the proc .....

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ts "depreciable asset. The CIT however recommended the appeal against the relief allowed by the CIT(A) in respect of refundable deposit of ₹ 86,74,200/ - which the CIT(A) held to be Assessee's liability. While deciding the Revenue's appeal the ITAT considered the Assessee's transactions with the lessee in its entirety and recorded the following finding. We agree with the Ld. A/ R that if the D/ Rs contention is accepted in that case the WDV attributable to the portions sub .....

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ent years". 29. Thus in AY 2007-08 the CIT(A) and the ITAT concurrently considered the nature and character of the IT Park building and held the same depreciable asset on which depreciation was allowed. The orders of the and ITAT for the AY 2007-08 became final. 30. The IT Park buildings in respect of which depreciation was claimed and allowed in the order for AYs 2012-13 were brought forward from earlier years. In the regular assessments u/s 143(3) passed for all the earlier years deprecia .....

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ve always been shown under the head Fixed Assets". At no point in time in the past, any of the IT Park buildings were shown in the Assessee's books as forming part of the circulating capital or trading stock or as current assets, In all the past assessments beginning from Ays 2002-03 and onwards the AOs have always considered and treated the IT Park buildings, plant & machineries, fixtures situated therein to be part of the block of depreciable assets and accordingly the depreciatio .....

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Parks were also approved by the CBDT under Section 80IA(4) under Industrial Parks Scheme. The IT Parks which are operated & maintained by the assessee are substantially leased on short-term basis. However some of the spaces a transferred on long term basis and the premium charged is recognized as "Sale". Since the initial year of operation of IT Parks, the cost of developing IT Parks has always been disclosed in the books as "Fixed Assets" and is never considered or rega .....

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o the character and nature of the IT Park building which he erroneously considered to be "Trading Stock". The CIT therefore could not proceed u/s 263 by assuming incorrect facts which are not borne out from records. It is also noticed that on same incorrect assumption of facts, the CIT for AYs 2007-08 & 20. 11 had similarly revised the assessment orders u/s 263 which was cancelled by the ITAT by its order dated 9.6.2015 in ITA No. 413 & 414/Kol/2015 for AY 2007-08 & 2010- 1 .....

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was no allegation that there was failure on the part of the AO to make and proper enquiries before completing the assessment, the CIT in the impugned order has held that the order of the AO on those items were also liable to be set aside on that ground holding that order of the AO was erroneous and prejudicial to the interest of the revenue. In this regard it is seen that the show cause notice u/s.263 of the Act issued by the CIT was dated 20.9.2016. The Assessee had filed his reply to the said .....

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ven his explanation as to how on those issues the order of the AO was not erroneous. The CIT before exercising jurisdiction u/s.263 of the Act by setting aside the order of the AO, ought to have given his own specific finding on those objections and without doing so, the CIT cannot exercise jurisdiction u/s 263 of the Act. The Hon ble Delhi High Court in the case of ITO Vs. D.G.Housing Projects Ltd. (supra) has taken the view that while the AO is both an investigator and an adjudicator, a distin .....

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ces have to be seen. A case of lack of enquiry would by itself render the order being erroneous and prejudicial to the interest of the Revenue. In a case where there is inquiry by the AO, even if inadequate, the CIT would not be entitled to revise u/s 263 on the ground that he has a different opinion in the matter. Also, in a case where the AO has formed a wrong opinion or finding on merits, the CIT has to come to the conclusion and himself decide that the order is erroneous, by conducting neces .....

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