M/s. Integrid Media Pvt. Ltd. v. Income Tax Officer Ward–8(2)(1), Mumbai
[Citation -2016-LL-0930-261]

Citation 2016-LL-0930-261
Appellant Name M/s. Integrid Media Pvt. Ltd.
Respondent Name Income Tax Officer Ward–8(2)(1), Mumbai
Court ITAT-Mumbai
Relevant Act Income-tax
Date of Order 30/09/2016
Assessment Year 2007-08
Judgment View Judgment
Keyword Tags reassessment proceedings • preliminary expenditure • reopening of assessment • revenue expenditure • capital expenditure • consultancy charges • change of opinion • reason to believe • audit objection • fresh claim • wrong claim
Bot Summary: During the re-assessment proceeding when the Assessing Officer called upon the assessee to justify its claim of deduction u/s.35D(2), it was submitted by the assessee that it had inadvertently claimed deduction u/s.35D(2) as preliminary expenses instead of claiming the entire amount of Rs.1.47 crore as Revenue expenditure of the impugned assessment year. As 5 M/s. Integrid Media Pvt. Ltd. far as the alternative claim of the assessee that the entire expenditure is otherwise allowable as Revenue expenditure u/s.37 of the Act, the Assessing Officer referring to the decision of the Hon ble Supreme Court in case of Sun Engineering Works Ltd. Vs. CIT, 198 ITR 297 and some other decisions observed, as the proceedings u/s.147 is for the benefit of the Revenue, assessee cannot make a fresh claim in such proceeding which even has the effect of reducing the income declared in the original return of income. Insofar as the alternative claim of the assessee to allow the expenditure u/s.37(1), 6 M/s. Integrid Media Pvt. Ltd. learned CIT(A) also rejected such claim by holding that the proceedings u/s.147 since for the purpose assessing the escaped income a new claim made by the assessee cannot be entertained. After perusing the material on record, we are of the opinion that at the time of original assessment, the Assessing Officer has neither made any inquiry nor examined admissibility of assessee s claim of deduction u/s.35D so called inquiry claimed to have been made by the Assessing 10 M/s. Integrid Media Pvt. Ltd. Officer is purely of general nature and does not specifically relate to assessee s claim of deduction u/s.35D. As far as the allegation of the assessee that reopening of assessment is at the behest of the CIT and the audit party without proper application of mind by the Assessing Officer we are unable to accept the same. Only because the Commissioner while disposing of assessee s application u/s.264 has made a general observation that assessee s case is considered for reopening that will not lead to the conclusion that the reopening is at the behest of the CIT, unless, the assessee establishes such fact with supporting evidence. The Assessing Officer rejected assessee s claim on the reasoning that re opening of assessment under section 147 of the Act being for the benefit of the Department, the assessee cannot make a fresh claim. As far as the contention of the learned Authorised Representative that at least the expenditure to the extent of deduction claimed under section 35D, should be allowed under section 37(1), we are unable to accept such contention simply for the reason that the assessee had all along claimed the deduction under section 35D(2) as preliminary expenses and it has been accepted by the assessee that such expenditure is not admissible under section 35D(2).


IN INCOME TAX APPELLATE TRIBUNAL I BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY, JUDICIAL MEMBER AND SHRI MANOJ KUMAR AGGARWAL, ACCOUNTANT MEMBER ITA no.7737/Mum./2014 (Assessment Year : 2007 08) M/s. Integrid Media Pvt. Ltd. C/o Anil Kumar Mishra 501 & 502, View . Appellant Adi Shankaracharya Marg Powai, Mumbai 400 076 PAN AABCI5702K v/s Income Tax Officer . Respondent Ward 8(2)(1), Mumbai ITA no.7738/Mum./2014 (Assessment Year : 2009 10) M/s. Integrid Media Pvt. Ltd. C/o Anil Kumar Mishra 501 & 502, View . Appellant Adi Shankaracharya Marg Powai, Mumbai 400 076 PAN AABCI5702K v/s Income Tax Officer . Respondent Ward 8(2)(1), Mumbai 2 M/s. Integrid Media Pvt. Ltd. ITA no.7739/Mum./2014 (Assessment Year : 2010 11) M/s. Integrid Media Pvt. Ltd. C/o Anil Kumar Mishra 501 & 502, View . Appellant Adi Shankaracharya Marg Powai, Mumbai 400 076 PAN AABCI5702K v/s Income Tax Officer . Respondent Ward 8(2)(1), Mumbai Assessee by : Shri Ajay P. Singh Revenue by : Shri Shridhar Date of Hearing 14.09.2016 Date of Order 30.09.2016 ORDER PER SAKTIJIT DEY, J.M. aforesaid appeals filed by assessee are directed against separate orders of learned Commissioner (Appeals) 17 Mumbai, for assessment year 2007-08, 2009-10 and 2010-11. ITA No.7737/Mum/2014 A.Y. 2007 08 grounds raised by assessee in this appeal are as under: I. Notice u/s. 148 dt. 29/2/2012 bad in law. learned CIT(A) erred in upholding reopening of completed assessment u/s. 143(3) dt. 16/12/2009 by issuing notice u/s. 148 dt. 29/12/2012 merely on change of opinion. 3 M/s. Integrid Media Pvt. Ltd. 2. learned CIT(A) failed to appreciate that reopening of assessment was done on direction of CIT-IT Hyderabad in Sec. 264 proceeding and audit objection, therefore department cannot take contrary as regard issuance of notice and allowability of claim. II. Preliminary Expenses: 3. learned CIT(A) erred in not allowing preliminary expenses claimed of Rs.23,66,319/- being 115th of total expenses on ground that conditions of sec. 35D are not satisfied. 4. Alternatively and without prejudice to above id. A.O. erred in not allowing entire expenditure of Rs.1.47 crores (being preoperative expenses) in A.Y. 2007-08, moreso while disposing of revision petition u/s. 264 it was assured by Dept. that claim would be considered in reopened assessment. 5. learned CIT(A) failed to appreciate that at least original claim is to be allowed u/s. 37 as revenue expenditure. 6. learned CIT(A) failed to appreciate that claim of Rs.1.47 crores is not new claim but modified claim in view of change in stand by Dept., therefore Sun Engineering vs. CIT 198 ITR 297 (SC) is not applicable as only items unconnected with escapement of income cannot be considered, whereas in facts of present case claim is directly connected with issue of reopened assessment. 2. As could be seen grounds no.1 and 2 are on legal and jurisdictional issue of reopening of assessment u/s.147 of Act. 3. Briefly facts are, assessee-company is engaged in business of media advertising. For assessment year under consideration, assessee filed its return of income on 30.10.2007 declaring Nil income under normal provision and book profit of Rs.1,16,892/- u/s.115JB of Act. Assessment in case of assessee was completed u/s.143(3) of Act vide order dated 4 M/s. Integrid Media Pvt. Ltd. 16.12.2009 accepting income returned by assessee. Subsequently, Assessing Officer having reason to believe that income chargeable to tax as per impugned assessment year has escaped assessment on account of assessee s claim of deduction u/s.35D(2) reopened assessment u/s.147 of Act by issuing notice u/s.148 on 29.02.2012. In response to said notice, assessee filed return of income on 20.03.2012 offering same income as was declared in original return of income. During re-assessment proceeding when Assessing Officer called upon assessee to justify its claim of deduction u/s.35D(2), it was submitted by assessee that it had inadvertently claimed deduction u/s.35D(2) as preliminary expenses instead of claiming entire amount of Rs.1.47 crore as Revenue expenditure of impugned assessment year. Assessing Officer after considering submission of assessee found that assessee had incurred total expenditure of Rs.1.47 crore towards preliminary expenses and has claimed 1/5th of same as deduction in terms of Section 35D(2) in impugned assessment year. Assessing Officer after verifying details of expenditure claimed as preliminary expenses found that they are not in nature of preliminary expenses as envisaged u/s.35D(2). Accordingly, he disallowed assessee s claim of deduction under said provision after allowing amount to extent expenditure admissible u/s.35D(2). As 5 M/s. Integrid Media Pvt. Ltd. far as alternative claim of assessee that entire expenditure is otherwise allowable as Revenue expenditure u/s.37 of Act, Assessing Officer referring to decision of Hon ble Supreme Court in case of Sun Engineering Works (P.) Ltd. Vs. CIT, 198 ITR 297 (SC) and some other decisions observed, as proceedings u/s.147 is for benefit of Revenue, assessee cannot make fresh claim in such proceeding which even has effect of reducing income declared in original return of income. Accordingly, he disallowed assessee s claim of Revenue expenditure. Of course, Assessing Officer made one more addition with which we are not concerned in present appeal, therefore, there is no need to discuss same. 4. Being aggrieved of assessment order so passed, assessee preferred appeal before CIT(A) both on legal issue of reopening of assessment u/s.147 as well as merits of additions made. As far as legal issue of reopening of assessment is concerned, learned CIT(A) rejected assessee s contention on validity of reassessment proceedings. As far as merits of disallowance made on deduction claimed u/s.35D, learned CIT(A) agreeing with Assessing Officer held, as expenses claimed by assessee is not in nature of preliminary expenses as provided u/s.35D of Act, it cannot be allowed. Insofar as alternative claim of assessee to allow expenditure u/s.37(1), 6 M/s. Integrid Media Pvt. Ltd. learned CIT(A) also rejected such claim by holding that proceedings u/s.147 since for purpose assessing escaped income new claim made by assessee cannot be entertained. 5. Being aggrieved, assessee is before us. As far as legal issue is concerned, learned AR submitted, assessment in assessee s case was completed u/s.143(3) of Act. He submitted, in profit and loss account assessee has debited preliminary expenses of Rs.29,57,899/- and in notes to account it is stated that preliminary and pre-operative expenses has been written off over period of five years in equal installments. Learned AR submitted, apart from disclosure made in financial statements as well as in return of income, during assessment proceedings, Assessing Officer has also specifically inquired into this particular issue. In this context, learned AR drew our attention to notice issued u/s.142(1) of Act. At time of original assessment proceedings, he submitted, in response to query raised by Assessing Officer, assessee had furnished all necessary and relevant details of expenses claimed including preliminary and pre-operative expenses with supporting evidence. Learned AR submitted, Assessing Officer after making proper inquiry and examining details submitted by assessee had completed assessment u/s.143(3) of Act. Therefore, reopening of assessment on basis of facts and materials 7 M/s. Integrid Media Pvt. Ltd. on mere change of opinion is not permissible. He submitted, Assessing Officer has reopened assessment at direction of CIT(A) u/s.264 of Act and merely on basis of audit objection. He submitted, for aforesaid reasons, reopening of assessment is invalid. 6. Learned DR, on other hand, submitted assessee had made wrong and illegal claim u/s.35D(2) knowing fully well that such claim is not permissible as expenditure is not in nature of preliminary expenses as provided u/s.35D(2). He submitted, this fact is evident from submissions made by assessee not only in assessment proceedings for assessment year 2008-09 but in impugned reassessment proceedings also. Learned DR submitted, as there is escapement of income due to deduction allowed in original assessment on basis of wrong claim made by assessee u/s.35D(2) reopening of assessment is valid. 7. We have considered submissions of parties and perused material on record. As per reasons recorded, reopening of assessment is on account of wrong deduction claimed u/s.35D(2) by assessee which was allowed in original assessment. As it transpires from material on record, after completion of original assessment of impugned assessment year, audit party while 8 M/s. Integrid Media Pvt. Ltd. examining records of assessee observed that preliminary expenses claimed by assessee u/s.35D(2) are not in nature of preliminary expenses but towards purchase of assets. They also observed that as assessee has claimed depreciation on such assets, expenditure of Rs.98,56,584/- has to be reduced from preliminary expenses and on balance amount allowable preliminary expenses for impugned assessment year is Rs.3,95,002/- as against amount of Rs.29,57,899/- claimed by assessee. As it appears, aforesaid audit report dated 6.7.2010 was available before Assessing Officer in course of assessment proceedings for assessment year 2008-09. When Assessing Officer called upon assessee to furnish details of expenditure claimed by assessee as preliminary expenses u/s.35D(2), he noted that out of total expenditure claimed as preliminary expenses only amount of Rs.32,423/- can be classified as preliminary expenses as envisaged u/s.35D(2) of Act. It further appears assessee in course of assessment proceedings for A.Y. 2008-09 also accepted aforesaid factual position and submitted that it had inadvertently claimed expenditure as preliminary expenses. Thus, on basis of facts on record, Assessing Officer completed assessment for A.Y. 2008-09 disallowing assessee s claim of preliminary expenditure of Rs.29,57,899/- by restricting claim to Rs.6485/-. While doing 9 M/s. Integrid Media Pvt. Ltd. so, he observed that amount of Rs.1,47,89,499/- claimed as preliminary expenses cannot be allowed to be amortized as per Section 35D(2). It is further relevant to observe, aforesaid disallowance made by Assessing Officer in Assessment Year 2008- 09 was accepted by assessee as assessee did not prefer any appeal against such disallowance. Even, in course of re- assessment proceeding, as could be seen from submission made by assessee which has been reproduced in paragraph 5.2 of assessment order, assessee had admitted that deduction u/s.35D was claimed inadvertently. Thus, aforesaid facts clearly establish that claim of deduction u/s.35D was not admissible, which assessee itself also admitted not only in assessment proceedings for A.Y.2008-09 but also in re-assessment proceedings for impugned assessment year. That being case, we do not find merit in submission of assessee that reopening of assessment is on mere change of opinion. As far as contention of assessee that at time of original assessment Assessing Officer has examined assessee s claim, we are not convinced with same. After perusing material on record, we are of opinion that at time of original assessment, Assessing Officer has neither made any inquiry nor examined admissibility of assessee s claim of deduction u/s.35D so called inquiry claimed to have been made by Assessing 10 M/s. Integrid Media Pvt. Ltd. Officer is purely of general nature and does not specifically relate to assessee s claim of deduction u/s.35D. As far as allegation of assessee that reopening of assessment is at behest of CIT and audit party without proper application of mind by Assessing Officer we are unable to accept same. as discussed earlier audit objection is on completely different footing. It is clear from audit report that they have objected to assessee s claim of deduction of preliminary expenses only for reason that part of expenses relate to purchases on which assessee had claimed depreciation. On contrary, during assessment proceedings for Assessment Year 2008-09 Assessing Officer after verifying details has found that expenditure claimed by assessee as preliminary expenses do not fall within category of expenses enumerated u/s.35D(2). This finding of Assessing Officer in Assessment Year 2008-09 has been accepted by assessee. Similar is also case in re-assessment proceeding as assessee has admitted that it has inadvertently claimed preliminary expenses u/s.35D. In view of such facts on record demonstrating escapement of income on account of assessee s inadmissible claim of deduction u/s.35D(2), reopening of assessment u/s.147, in our view, is justified and cannot be assailed. As far as allegation of assessee that reopening was at behest of Commissioner, in our view, such allegation is 11 M/s. Integrid Media Pvt. Ltd. not correct. Only because Commissioner while disposing of assessee s application u/s.264 has made general observation that assessee s case is considered for reopening that will not lead to conclusion that reopening is at behest of CIT, unless, assessee establishes such fact with supporting evidence. observation by CIT may be on basis of audit report and assessment order for Assessment Year 2008-09 available on record. Be that as it may, when assessee himself admits that claim of deduction u/s.35D was inadvertently made, it clearly proves escapement of income justifying reopening of assessment u/s.147. Therefore, we are unable to accept assessee s contention. ground raised is, therefore, dismissed. 8. Grounds no.3 to 6, are on merits of disallowance made of deduction claimed under section 35D of Act. 9. As we have dealt with facts in detail relating to assessee s claim of deduction under section 35D, in earlier part of order, there is no necessity to discuss facts again. Suffice to say, in return of income filed originally, assessee had claimed deduction under section 35D towards preliminary expenses, amount of ` 29,57,899, being 1/5th of total preliminary expenses of ` 1,47,57,071. While completing assessment under section 143(3) of Act originally, 12 M/s. Integrid Media Pvt. Ltd. Assessing Officer had allowed deduction claimed. However, subsequently, Assessing Officer re opened assessment under section 147 of Act being of view that expenditure claimed not being in nature of preliminary expenses as provided under section 35D(2), is not allowable. In course of re assessment proceedings, assessee, though, agreed that it is not in nature of preliminary expenses and deduction was inadvertently claimed under section 35D, however, it put forward alternative claim to effect that entire pre operative expenditure of ` 1,47,57,071, is allowable as revenue expenditure in impugned assessment year. Assessing Officer rejected assessee s claim on reasoning that re opening of assessment under section 147 of Act being for benefit of Department, assessee cannot make fresh claim. In this context, Assessing Officer relied upon principle laid down in case of Sun Engineering v/s CIT, 198 ITR 297 (SC). 10. learned Commissioner (Appeals) also concurred with view expressed by Assessing Officer. 11. learned Authorised Representative submitted before us that at time of completion of assessment for assessment year 2008 09, Assessing Officer while rejecting assessee s claim of deduction under section 35D(2), had observed that expenditure of 13 M/s. Integrid Media Pvt. Ltd. ` 1,47,57,071 is in nature of pre operative expenses. That being case, expenditure incurred being of revenue nature is allowable in its entirety in assessment year in which it accrued i.e., assessment year 2007 08. learned Authorised Representative submitted, though, in case of Sun Engineering (supra), it has been held that re assessment proceedings is for benefit of revenue, however, Hon'ble Supreme Court had also observed that while bringing to tax escaped of income in re assessment proceedings, it is open to assessee to put forward claims for deduction in any expenditure of respect of that income or non taxability of items at all. Therefore, assessee can alternatively claim deduction under section 37(1) of Act at least to extent of amount claimed as deduction under section 35D. 12. Learned Departmental Representative on other hand strongly relying upon observations of Assessing Officer and learned Commissioner (Appeals) as well as ratio laid down by Hon'ble Supreme Court in Sun Engineering (supra) submitted that assessee s claim either under section 35D or under section 37 cannot be accepted. 13. We have considered submissions of parties and perused material available on record in light of ratio laid down in 14 M/s. Integrid Media Pvt. Ltd. case of Sun Engineering (supra). Undisputedly, in original return of income, assessee had treated amount of ` 1,47,57,071, as preliminary expenditure under section 35D(2) of Act and claimed 1/5th of same as deduction. However, in course of assessment proceedings for assessment year 2008 09, assessee itself accepted that deduction under section 35D was inadvertently claimed as expenditures are not in nature of preliminary expenditure. Thus, Assessing Officer completed assessment in A.Y. 2008 09 rejecting assessee s claim of deduction under section 35D, while observing that only amount of ` 32,000 is in nature of preliminary expenditure and accordingly allowed 1/5th of same. There is no dispute that assessee had accepted aforesaid decision of Assessing Officer in assessment year 2008 09 as no appeal was preferred against assessment order. assessee on other hand filed petition under section 264 of Act for asst. year 2007 08 before Commissioner claiming amount of ` 1,47,57,071, as revenue expenditure. aforesaid revision application filed under section 264 was dismissed by learned Commissioner. Against such dismissal order, though, assessee preferred Writ Petition before Hon'ble Andhra Pradesh High Court, however, ultimately it was withdrawn by assessee. In other words, assessee did not pursue its claim of deduction under 15 M/s. Integrid Media Pvt. Ltd. section 37(1) of Act in proper forum. Instead in re assessment proceedings, assessee put forward fresh claim that expenditure claimed is otherwise allowable under section 37(1). It is evident on record that re opening of assessment is for reason that there is escapement of income due to inadmissible claim under section 35D. As far as admissibility of assessee s claim of deduction under section 35D is concerned, there cannot be any dispute that assessee itself accepts that such expenditure is not allowable not only in assessment proceedings for assessment year 2008 09, but also in course of impugned re assessment proceedings. Therefore, as far as assessee s claim of deduction under section 35D is concerned, same has to be rejected. 14. With regard to alternate claim of deduction under section 37(1), it is worth mentioning, assessee neither in original return of income nor in original assessment proceedings has claimed it as revenue expenditure under section 37(1). Though, assessee filed revision application, under section 264, seeking redressal of its grievance relating to claim of revenue expenditure, such petition was dismissed by learned Commissioner. Though, assessee preferred writ petition before Hon'ble Andhra Pradesh High Court challenging order under section 264, but in its own wisdom, assessee decided to withdraw Writ Petition. Thus, assessee did 16 M/s. Integrid Media Pvt. Ltd. not wish to pursue its claim of deduction 37(1). Having decided not to pursue its claim before proper forum it chose to claim it in re assessment proceedings. In our view, as re assessment proceedings is for benefit of revenue since it relates to assessment of escaped income, assessee cannot make fresh claim which has effect of reducing even returned income. As far as contention of learned Authorised Representative that at least expenditure to extent of deduction claimed under section 35D, should be allowed under section 37(1), we are unable to accept such contention simply for reason that assessee had all along claimed deduction under section 35D(2) as preliminary expenses and it has been accepted by assessee that such expenditure is not admissible under section 35D(2). That being case, in re assessment proceedings, fresh claim made by assessee for allowing expenditure under section 37(1) cannot be entertained in view of ratio laid down by Hon'ble Supreme Court in Sun Engineering (supra). Though, learned Authorised Representative relying upon ratio of decision in Sun Engineering (supra) submitted, assessee can claim deduction of expenditure in relation to escaped income, however, we are not convinced with same. Undisputedly, re assessment proceeding is for purpose of bringing to tax escaped income on account of deduction claimed 17 M/s. Integrid Media Pvt. Ltd. under section 35D which is not admissible under provisions of Act. Therefore, what is to be examined in re assessment proceedings, is assessee s claim of deduction under section 35D(2) and its admissibility. Once it is decided that assessee s claim under section 35D(2) is inadmissible, then such deduction has to be disallowed. Under scheme of Act, in proceeding under section 147 Assessing Officer is empowered to assess income which has escaped assessment as per reasons recorded and while assessing such income, Assessing Officer is also empowered to assess any other escaped income which comes to his notice in course of proceeding. Therefore, in re assessment proceedings, Assessing Officer cannot examine fresh claim of deduction by assessee. For aforesaid reasons, we are unable to accept assessee s claim. Grounds are dismissed. 15. In result, assessee s appeal for A.Y. 2007 08 stands dismissed. ITA no.7738/Mum./2014 A.Y. 2009 10 16. Ground no.1, relates disallowance of preliminary expenses of ` 29,54,524, claimed as deduction under section 35D of Act. 18 M/s. Integrid Media Pvt. Ltd. 17. This issue is identical to issue raised by assessee in ITA no.7737/Mum./2014, wherein we have upheld disallowance of deduction claimed under section 35D for detailed reason recorded therein. Following said reasoning, we uphold disallowance in impugned assessment year also. Ground no.1 is dismissed. 18. In ground no.2, assessee has sought direction for allowance of entire expenditure of ` 1,47,57,071 in assessment year 2007 08. 19. In our view, this ground raised by assessee is totally misconceived as allowance of particular expenditure is to be considered in appeal relating to that year. Therefore, in appeal relating to assessment year 2009 10, no direction can be issued for allowance of deduction in another assessment year. In any case of matter, while deciding appeal of assessee for assessment year 2007 08, we have rejected assessee s claim of deduction of ` 1,47,57,071. That being case, ground no.2, deserves to be dismissed. We direct accordingly. 20. In result, assessee s appeal for A.Y. 2009 10 is dismissed. ITA no.7739/Mum./2014 A.Y. 2010 11 21. Before us, learned Counsels appearing for both parties admitted that facts and circumstances of issue arising out of 19 M/s. Integrid Media Pvt. Ltd. grounds no.1 and 2, in present appeal are identical to facts and circumstances of ground no.2 raised by assessee in its appeal being ITA no.7737/Mum./2014, for assessment year 2007 08, wherein said issue is decided against assessee and in favour of Revenue vide Para 13 and 14 of this order. Consistent with view taken therein, we dismiss grounds no.1 and 2 raised by assessee. 22. In grounds no.3 and 4, assessee has challenged disallowance of consultancy charges paid of ` 10,59,700 and in alternative has sought allowance of depreciation on said amount. 23. Brief facts are, in course of assessment proceedings, Assessing Officer noticed that assessee had paid consultancy charges of ` 10,59,700 in connection with new site development. He further noticed, all other expenses relating to new site development except consultancy charges were shown under WIP. Assessing Officer, therefore, called upon assessee to explain why expenditure should not be treated as capital expenditure. In response to query raised by Assessing Officer, assessee agreed that consultancy charges claimed is to be treated as capital expenditure and added to work in progress. On basis of submissions made by 20 M/s. Integrid Media Pvt. Ltd. assessee, Assessing Officer disallowed consultancy charges of ` 10,59,700 by treating it as capital expenditure. 24. Though, assessee challenged disallowance before first appellate authority, however, learned Commissioner (Appeals) also sustained disallowance by observing that assessee did not press ground raised on this issue. 25. Learned Authorised Representative assailing observations of learned Commissioner (Appeals) submitted, assessee did not withdraw its grounds of appeal on issue before learned Commissioner (Appeals). However, learned Authorised Representative submitted, as Assessing Officer has treated consultancy charges as capital expenditure, it should be added to work in progress and depreciation should be allowed on it. 26. Learned Departmental Representative on other hand supported decision of authorities below. 27. We have considered submissions of parties and perused material available on record. claim of assessee before us is even if consultancy charges is treated as capital expenditure and added to work in progress, depreciation on said amount should be allowed. As could be seen, assessee before 21 M/s. Integrid Media Pvt. Ltd. Assessing Officer had agreed for disallowance of consultancy charges by treating it as capital expenditure. Prima facie, it appears assessee did not claim depreciation on said amount. Learned Authorised Representative is also not able to clarify whether any depreciation otherwise was claimed on work in progress by assessee and allowed by Assessing Officer. As relevant facts are not fully established on record, we deem it appropriate to restore issue back to file of Assessing Officer for deciding afresh in accordance with law and only after providing adequate opportunity of being heard to assessee. Ground raised by assessee is allowed for statistical purposes. 28. In result, assessee s appeal for A.Y. 2010 11 is partly allowed for statistical purposes. 29. To sum up, assessee s appeals being ITA no.7737/Mum./2014 and 7738/Mum./2014 are dismissed and ITA no.7738/Mum./2014 is partly allowed for statistical purposes. Order pronounced in open Court on 30.09.2016 Sd/- Sd/- MANOJ KUMAR AGGARWAL SAKTIJIT DEY ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 30.09.2016 22 M/s. Integrid Media Pvt. Ltd. Copy of order forwarded to: (1) Assessee; (2) Revenue; (3) CIT(A); (4) CIT, Mumbai City concerned; (5) DR, ITAT, Mumbai; (6) Guard file. True Copy By Order Pradeep J. Chowdhury Sr. Private Secretary (Dy./Asstt. Registrar) ITAT, Mumbai M/s. Integrid Media Pvt. Ltd. v. Income Tax Officer Ward8(2)(1), Mumbai
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