Chowgule & Co. Pvt. Ltd., Goa V. Asst. Commissioner of Income tax Cir. 2., Margao

CO 1/PAN/2014

• Counselvise Citation: [2014] 122 COUNSELVISE.COM (IT) 9764 (ITAT-PANAJI)
• Duration Of Justice: 6 month(s) 15 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 18-07-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 12-06-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 03-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHRIPRADIP P S KAKODKAR
• Assessee Lawyers: B BARTHAKUR LD
• Keywords: Difference of opinion; Change of opinion

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH, PANAJI BEFORE SHRI P. K. BANSAL, HONBLE ACCOUNTANT MEMBER AND SHRI D.T. GARASIA, HONBLE JUDICIAL MEMBER ITA NO.336 /PNJ/2013 (ASSESSMENT YEAR - 2005 - 06) THE ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE - 2, MARGAO , GOA (APPELLANT) VS. M/S CHOWGULE& COMPANY PVT. LTD. CHOWGULE HOUSE, MORMUGAOHARBOUR, VASCO - DA - GAMA, GOA. PAN: AAACC5479J (RESPONDENT) CROSS OBJECTION NO. 01/PNJ/2014 ARISING OUT OF ITA NO.336 /PNJ/2013 (ASSESSMENT YEAR - 2005 - 06) M/S CHOWGULE& COMPANY PVT. LTD. CHOWGULE HOUSE, MORMUGAOHARBOUR, VASCO - DA - GAMA, GOA. PAN: AAACC5479J (OBJECTOR) VS. THE ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE - 2, MARGAO, GOA (RESPONDENT) APP ELLANT BY : SHRI B. BARTHAKUR, LD. DR. RESPO NDENT BY : SHRIPRADIP P.S. KAKODKAR, CA . DATE OF HEARING : 12/06 /2014 DATE OF PRONOUNCEMENT : 18 /07 /2014 O R D E R PER: D.T. GARASIA THIS APPEAL HAS BEEN FILED BY THE DEPARTMENT AGAINS T THE ORDER OF CIT(A) - PANAJI , ORDER DATED 06.09. 2013 FOR THE ASSESSMENT YEAR 2005 - 06 . 2. THE GROUNDS ARE RAISED BY THE DEPARTMENT WHICH READ AS UNDER: 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IS OPPOSED TO LAW AND FACTS OF THE CASE. 2 . ITA NO. 336/PNJ/2013 (A.Y.2005 - 06) ACIT VS. M/S. CHOWGULE& COMPANY PVT. LTD. 2. THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 3,05,10,000/ - ON ACCOUNT OF INVESTMENT ALLOWANCE RESERVE EVEN WHEN THE SCHEME HAS BEEN WITHDRAWN WITH EFFECT FROM 01.04.1990. 3. THE SHORT FACTS OF THE CASE ARE THAT THE ASSESSEE IS REVEALED THA T THE ASSESSEE HAS CREATED AN INVESTMENT ALLOWANCE RESERVE FOR AN AMOUNT OF RS.3,05,10,000/ - , UNDER THE HEAD OF RESERVES & SURPLUS AND THE SAME IS CONTINUED TO BE CARRIED FORWARD. SINCE THE SCHEME WAS WITHDRAWN WITH EFFECT FROM 01.04.1990, THE SAME SH OULD HAVE BEEN ADDED BACK TO THE INCOME OF THE ASSESSEE AND BROUGHT TO TAX. THIS HAS RESULTED INTO UN DER ASSESSMENT OF INCOME OF RS. 3,05,10,000/ - . ACCORDINGLY, THE ASSESSEE VIDE THE OFFICE LETTER DATED 09.07.2012 WAS ASKED TO SUBMIT THEIR OBJECTION, IF ANY , FOR MAKING THE ADDITIONS IN RESPECT OF INVESTMENT ALLOWANCE RESERVE FOR AN AMOUNT OF RS., 3,05,10,000/ - 4. THE MATTER CARRIED TO CIT (A) AND CIT (A) HAS ALLOWED THE CLAIM BY OBSERVING AS UNDER: 7. I HAVE GONE THROUGH THE ASSESSMENT ORDER AND SUBMISSION OF THE APPELLANT. SINCE AMOUNT HAS NOT BEEN CHARGED TO P&L ACCOUNT AND NO DEDUCTION HAS BEEN CLAIMED IN COMPUTATION OF INCOME, IN MY OPINION, NO ADDITION CAN BE MADE DURING THE YEAR UNDER CONSIDERATIO N THE SUBMISSION OF THE AR IS SELF EXPLANATORY. THE A.O. IS HEREBY DIRECTED TO DELETE THE ADDITIO N AMOUNTING TO RS.3,05,10,000/ - . 5. TH E DEPARTMENT HAS FILED THE APPEAL AGAINST THE DELETION OFRS. 3,05,10,000/ - . DURING THE COURSE OF HEARING THE ASSESSEE HAS FILED THE C.O . IN WHICH HE HAS TAKEN THE FOLLOWING GROUNDS . 1. THE COMMISSIONER(APPEALS) ERRED IN NOT DEALING WITH THE GROUND RELATING TO THE VALIDITY OF THE RE - OPENING OF THE ASSESSMENT UNDER APPEAL. 2. THE COMMISSIONER (APPEALS) OUGHT TO HAVE DECID E ON THE JURISDICTION ISSUE AS WELL TO PREVENT PROLIFERATION OF LITIGATION. 3. THE COMMISSIONER(APPEALS) OUGHT TO HAVE FOUND THAT ON FACT THE REASONS RECORDED HAS NO BEARING ON THE ASSESSMENT YEAR UNDER APPEAL AND THEREFORE THE ASSESSMENT ITSELF OUGHT TO HAVE BEEN QUASHED. 6 . WE HAVE HEARD THE RIVAL CONTENTION OF BOTH THE PARTIES. LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND THAT THE ASSESSEE HAS SUBMITTED THE 3 . ITA NO. 336/PNJ/2013 (A.Y.2005 - 06) ACIT VS. M/S. CHOWGULE& COMPANY PVT. LTD. GROUNDS OF APPEAL BEFORE CIT(A). THE ASSESSEE HAS TAKEN GROUNDS BEFORE CIT( A) WHICH READ AS UNDER: 1. THE REASSESSMENT IS BAD IN LAW AND OUGHT TO BE QUASHED. THERE IS NO FRESH MATERIAL WHICH HAS COME TO THE NOTICE OF THE LEARNED ASSESSING OFFICER NECESSITATING REASSESSMENT. 2. THE REASSESSMENT IS TIME - BARRED ON THE REASONS FOR RE - OPENING SINCE THE SCHEME OF INVESTMENT ALLOWANCE WAS WITHDRAW IN 1990 - 91 AND ANY ACTION OUGHT TO HAVE BEEN INITIATED WITHIN 6 YEARS FROM THAT YEAR. 3. THE LEARNED ASSESSING OFFICER HAS FAILED TO APPRECIATE THAT, WHEN THE ORIGINAL ASSESSMENT ORDER WAS SUBJECT TO SCRUTINY AT VARIOUS LEVELS, NO ONE HAS INFERRED THAT THERE IS A LOSS OF REVENUE, AND HENCE THE REOPENIN G IS ONLY IS CHANGE OF OPINION. DURING THE COURSE OF HEARING, LD. AR SUBMITTED THAT THE ASSESSEE HAS FILED GROUNDS OF APPEAL BEFORE CIT(A). THE COMMISSIONER OF INCOME TAX HAS NOT DISPOSED GROUND NO. 1 WHICH IS CHALLENGING THE RE - ASSESSMENT ORDER. THE LD. AR OF THE ASSESSEE, WHO HAS COME BY C.O, AGITATED BEFORE US THAT BEFORE DECIDING THE APPEAL, THE COMMISSIONER OF INCOME TAX HAS NOT DISPOS ED GROUND NO. 1 RELATING TO VALIDITY OF RE - OPENING OF THE ASSESSMENT ORDER UNDER APPEAL. DURING THE COURSE OF HEARING, THE LD.AR PRESSED THIS GROUND AND SUBMITTED THAT AS THE CIT(A) HAS NOT DISPOSED OFF THIS GROUND, THIS MATTER MAY BE RESTORED TO THE FILE OF CIT(A) FOR AFRESH ADJUDICATION ON THIS ISSUE. WE FIND THAT IF THE ASSESSEE RAISED ADDITIONAL GROUND IN APPEAL FOR THE FIRST TIME, THE ORDER OF THE COMMISSIONER HAS TO BE SET ASIDE AND IT HAS TO BE REMANDED TO THE CIT(A) FOR DECIDING THE APPEAL AFRESH ON ALL ISSUES INCLUDING ON THOSE ISSUES WHICH WERE RAISED BY THE ASSESSEE IN APPEAL BEFORE THE TRIBUNAL RATHER THAN TO DECIDE THE ADDITIONAL GROUNDS ON MERIT FOR THE FIRST TIME ITSELF. WE FIND THAT THIS VIEW IS SUPPORTED BY THE DECISION OF THE HON'BLE MAD HYA PRADESH HIGH COURT IN THE CASE OF CIT VS. TOLLARAMHASSOMAL 298 ITR 22 (MP) WHEREIN IT IS HELD AS UNDER: THAT THE TRIBUNAL HAVING PERMITTED THE ASSESSEE TO RAISE FOUR ADDITIONAL GROUNDS TREATING THEM TO BE LEGAL GROUNDS IN APPEAL FOR THE FIRST TIME, SHOULD HAVE SET ASIDE THE ORDER OF THE COMMISSIONER OF INCOME - TAX (APPEALS) AND REMANDED THE CASE TO THE COMMISSIONER OF INCOME - TAX (APPEALS) FOR DECIDING THE APPEAL AFRESH ON ALL THE ISSUES INCLUDING ON THOSE FOUR GROUNDS RAISED BY THE ASSESSEE IN THE APPEAL BEFORE THE 4 . ITA NO. 336/PNJ/2013 (A.Y.2005 - 06) ACIT VS. M/S. CHOWGULE& COMPANY PVT. LTD. TRIBUNAL RATHER THAN TO DECIDE THE ADDITIONAL GROUNDS ON THE MERITS FOR THE FIRST TIME BY ITSELF. WE RESPECTFULLY FOLLOWING THE ABOVE DECISI ON OF HONBLE M .P . HIGH COURT REVERSE THE ORDER OF CIT(A) AND REMAND THE MATTER BACK TO THE FILE OF THE CIT(A) AND CIT(A) IS DIRECTED TO DECIDE THE APPEAL AFRESH O N MERIT INCLUDING THE C.O FILED BY THE ASSESSEE. 6. IN THE RESULT, THE APPEAL FILED BY THE DEPARTMENT AS WELL AS THE C.O FILED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNC E D I N THE OPEN COURT ON 18 .07.2014. SD/ - SD/ - ( P.K. BANSAL) (D.T. GARASIA) ACCOUNTANT MEMBER JUDICIAL MEMBER PLACE : PANAJI / GOA DATED : 18 .07 .2014 P.S. - *PK* COPY TO : ( 1 ) APPELLANT ( 2 ) RESPONDENT ( 3 ) CIT CONCERNED ( 4 ) CIT(A) CONCERNED ( 5 ) D.R ( 6 ) GUARD FILE TRUE COPY, BY ORDER