Impugned Order, Does Not Suffer From Any Error Of Law. Hence, The Substantialquestion Of Law No.(I) Is Answered Against The Revenue And In Favour Of Theassessee v. The Afore-Quoted Question Law Was Answered By The Co-Ordinate Benchof This Court By Judgement And Order Dated 16.12.2021 In The Aforesaid Itatno.34 Of 2020 As U

ORDER OD – 19 IN THE HIGH COURT AT CALCUTTASPECIAL JURISDICTION (INCOME TAX)ORIGINAL SIDE ITA/62/2018 PRINCIPAL COMMISSIONER OF INCOME TAX-3, KOLKATAVERSUSM/s. EIH LIMITED BEFORE: The Hon'ble Justice SURYA PRAKASH KESARWANI The Hon'ble Justice RAJARSHI BHARADWAJ Date : 20[th] December 2023. Appearance: Mr. Prithu Dudheria, Advocate… for appellant.Mr. Akhilesh Kr. Gupta, AdvocateMr. Sohan Sen, Advocate… for respondent. 1.Heard Sri Prithu Dudheria, learned counsel for the appellant / IncomeTax Department and Sri Akhilesh Kumar Gupta, learned counsel for therespondent/assessee. 2.This appeal was admitted by order dated 08.06.2018, on the followingsubstantial questions of law:- “[i]Whether the decision of the Tribunal in confirming the order ofthe Assessing Officer passed under Section 143(3) of theIncome Tax Act, 1961 and in setting aside revisional order ofthe Commissioner on the question of disallowabilitymaintenance expenses and depreciation was contrary to lawor not?the Assessing Officer passed under Section 143(3) of theIncome Tax Act, 1961 and in setting aside revisional order ofthe Commissioner on the question of disallowabilitymaintenance expenses and depreciation was contrary to lawor not?(ii)Whether the finding of the Tribunal in permitting deduction oflease rent for vehicle obtained on lease by the Assessee wasperverse or not?”lease rent for vehicle obtained on lease by the Assessee wasperverse or not?” 3.Requirement of filing paper book was dispensed with by the aforesaidorder. 4.We have heard learned counsel for the parties and carefully perused therecord of the appeal. 5.The finding of the Income Tax Appellate Tribunal recorded in theimpugned order dated 19.02.2016 in ITA No.529/Kol/2013(Assessment Year2008-09) that the respondent/assessee is engaged in business of charteringflights and had derived chartering income to the tune of Rs.1,69,85,132/-which evidences the business nexus of use of aircrafts owned by therespondent/assessee. This being the finding of fact and not disputed by therevenue even before us, it can be safely concluded that the aircrafts wereutilised for business purpose. Even if officers of the respondent/assessee i.e.directors have used the aircrafts for business meetings in different locations, itcannot be said to be a personal use. The respondent/assessee is a companyand thus an artificial juristic person. Therefore, even if directors on someoccasion have been allowed to use the aircrafts for their personal use, neitherthe expenses incurred in maintenance of the aircrafts nor the depreciation ofthe aircrafts can be disallowed, inasmuch as then, at the best, the value of useof the aircrafts on such occasion is perquisite in the hands of the user. Onthat account, neither depreciation nor maintenance can be disallowed, evenpartially. The Tribunal has found that the aircrafts have been used forchartering business. Substantial receipts from chartering business has beenshown by the assessee. Therefore, the view taken by the Tribunal in the impugned order, does not suffer from any error of law. Hence, the substantialquestion of law No.(i) is answered against the revenue and in favour of theassessee. 6.Apart from the above, learned counsel for the respondent/assessee hasalso placed before us a judgement and order dated 27.06.2018 in ITAT No.298of 2016 (Principal Commissioner of Income Tax, Kol-3, Kolkata v. EIH Limited)relating to assessment year 2002-03, which is inter parties; by which theappeal of the revenue raising objection to the admissibility of depreciation andmaintenance was dismissed by this Court. Similarly, in an appeal being ITATNo.34 of 2020 (Principal Commissioner of Income Tax, Kol-3, Kolkata v. M/s.EIH Limited) filed by the revenue against the present assessee relating toassessment year 2008-09, substantial question of law No.(i) was framed by aco-ordinate Bench of this Court as under:- 6.Apart from the above, learned counsel for the respondent/assessee hasalso placed before us a judgement and order dated 27.06.2018 in ITAT No.298of 2016 (Principal Commissioner of Income Tax, Kol-3, Kolkata v. EIH Limited)relating to assessment year 2002-03, which is inter parties; by which theappeal of the revenue raising objection to the admissibility of depreciation andmaintenance was dismissed by this Court. Similarly, in an appeal being ITATNo.34 of 2020 (Principal Commissioner of Income Tax, Kol-3, Kolkata v. M/s.EIH Limited) filed by the revenue against the present assessee relating toassessment year 2008-09, substantial question of law No.(i) was framed by aco-ordinate Bench of this Court as under:- “Whether on the facts and in the circumstances of the case, theLearned Tribunal erred in law in deleting the disallowance ofRs.1,99,56,281/- being 60% of the aggregate expenditure incurredon running and maintenance of aircrafts without considering thatthe aircrafts were also used for personal purposes of thedirectors?” 7.The afore-quoted question law was answered by the co-ordinate Benchof this Court by judgement and order dated 16.12.2021 in the aforesaid ITATNo.34 of 2020 as under: “Substantial question of law no.1 was question no.4 therein andwe find from the judgment dated 23[rd] July, 2018 passed inITAT/53/2017 that the said question was not pressed by the revenue and consequently rejected. Therefore, the substantialquestion of law no.1 raised before us stands rejected.” 8.Thus, since the revenue/appellant themselves have conceded on the question of admissibility of the maintenance expenses and depreciation of theaircrafts, in full, in the matter of the present assessee in other assessmentyears, therefore, the revenue cannot be allowed to take a contrary stand in thepresent appeal. Therefore, for this reason also, the afore-quoted substantialquestion of law is answered in the manner as afore-stated i.e. against therevenue and in favour of the assessee. 9.So far as the substantial question of law no.(ii) is concerned, we findthat in the impugned order, the Tribunal has dealt with the question of leaserent in paragraphs 4.1 to 4.4.1, wherein it maticulously considered the factsand evidences and thereafter recorded a finding of fact that therespondent/assessee has taken certain vehicles on lease from Orix AutoInfrastructure Services Limited and paid total lease rent of Rs.393.52 lakh.Depreciation on vehicles was claimed by the lessor i.e. the owner namely M/s.Orix Auto Infrastructure Services Limited. The respondent/assessee has notclaimed any depreciation as per provisions of the Act 1961 and instead hadclaimed the entire lease rental as revenue expenditure. 10. Relying upon the judgment of the Hon’ble Supreme Court in the case ofI.C.D.S. Ltd. & Anr. v. CIT reported in (2013) 350 ITR 527 (SC) and a judgmentof Rajasthan High Court (Jaipur Bench) in Rajshree Roadways v. Union of India& Ors. reported in (2003) 263 ITR 206 (Raj.), the Tribunal held that the issue of lease rent is covered by the aforesaid judgment of the Hon’ble Supreme Courtand hence the order passed by the Assessing Officer by taking one possibleview, cannot be termed as ‘erroneous’ warranting initiation of revisionproceedings under Section 263 of the ACt, 1961. The Tribunal also found thatin own case of the respondent/assessee for the assessment year 2011-12, theissue was accepted by the revenue, pursuant to the directions of the DRP. 11.In view of the facts and legal position, as briefly noted above, theimpugned order of the Tribunal on the point of lease rent cannot be said tosuffer from any illegality. Hence, the substantial question of law no.(ii), onfacts of the present case, is answered against the revenue and in favour of theassessee. 12.In the result, the appeal (ITA/62/2018) is dismissed. (SURYA PRAKASH KESARWANI, J.) S. Kumar (RAJARSHI BHARADWAJ, J.)