M/s. Tata Tea Limited, Kolkata V. DCIT, C ircle- 4, Kolkata, Kolkata

CO 51/KOL/2010

• Counselvise Citation: [2012] 122 COUNSELVISE.COM (IT) 7220 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 10 month(s) 2 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 04-04-2012
• Appeal Filed By: Assessee
• Bench Allotted: C
• Assessment Year: 1993-1994
• Appeal Filed On: 02-06-2010
• Court: TRIBUNAL
• Department Lawyers: L K S DEHIYA
• Assessee Lawyers: R N BAJORIA SHRI S KEDIA
• Keywords: Business income; Depreciation; Opportunity of being heard; Additional depreciation; Question of law; Revised return
• Section: 154

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH- C , KOLKATA [ . .. . , ,, , . .. . ! ! ! !. .. . , , , , '# ] [BEFORE SHRI N.VIJAYAKUMARAN , JUDICIAL MEMBER & SRI C.D.RAO , ACCOUNTANT MEMBER] $ $ $ $ / ITA NOS . 865/KOL/2010 TO 873/KOL/2010 %& '(/ ASSESSMENT YEARS : 1993-94 TO 1996-97 AND 1998-99 TO 2003-2004. (+, / APPELLANT ) D.C.I.T., CIRCLE-4, KOLKATA (./+,/ RESPONDENT ) M/S.TATA TEA LTD., KOLKATA (PAN:AABCT 0602 K)_ 0 1 0 1 0 1 0 1 /C.O.NOS.51/KOL/2010 TO 59/KOL/2010 $ $ $ $ / A/O ITA NOS . 865/KOL/2010 TO 873/KOL/2010 %& '(/ ASSESSMENT YEARS : 1993-94 TO 1996-97 AND 1998-99 TO 2003-2004. (+, / APPELLANT ) M/S.TATA TEA LTD., KOLKATA (PAN:AABCT 0602 K)_ (./+,/ RESPONDENT ) D.C.I.T., CIRCLE-4, KOLKATA +, 2 3 '/ FOR THE DEPARTMENT: SHRI L.K.S.DEHIYA ./+, 2 3 '/ FOR THE ASSESSEE: / SHRI R.N.BAJORIA, SHRI S.KEDIA 4 2 !# /DATE OF HEARING : 26.03.2012. 5' 2 !# /DATE OF PRONOUNCEMENT : 04.04.2012. '6 / ORDER ' ' ' ' 789 789789 789 PER BENCH THE ABOVE NINE APPEALS FILED BY THE REVENUE AND NIN E CROSS OBJECTIONS FILED BY THE ASSESSEE ARE AGAINST ORDERS OF THE LD. CIT(A)-I V, KOLKATA DATED 29.09.2009 PERTAINING TO A.YRS.1993-94, 1994-95,1995-96, 1996- 97, 1998-99, 1999-2000,2000- 2001, 2001-2002 AND 2003-2004 RESPECTIVELY. 2 2. IN ALL THESE APPEALS THE COMMON GROUND TAKEN BY THE REVENUE IS AS UNDER :- 1. THAT LD. CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS, IN ALLOWING THE ADDITIONAL DEPRECIATION CLAIMED BY THE ASSESSEE WITHOUT CONSID ERING THAT SUCH CLAIM WAS NOT MADE BY WAY OF AN ORIGINAL OR REVISED RETURN. AND AGAIN IN CROSS OBJECTION ALSO THE COMMON GROUND RAISED BY THE ASSESSEE ARE AS UNDER :- 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE ASSESSING OFFICER ERRED IN NOT APPRECIATING THE FACT THAT THE CLAIM IN QUES TION MADE BY THE ASSESSEE WAS AS PER LAW AND DID NOT REQUIRE FILING OF ANY REVISED RETUR N OF INCOME. 3. AT THE TIME OF HEARING THE LD. DR APPEARING ON B EHALF OF REVENUE BY REFERRING TO ORDER U/S 154 OF THE IT ACT PASSED BY AO CONTEND ED THAT 1)THE ASSESSEE HAS NEVER COMPUTED AND CLAIMED THE D EPRECIATION AND WHEN THERE HAS BEEN NO COMPUTATION THE QUESTION OF RECOMPUTATION D OES NOT ARISE AT ALL. 2) THE DECISION OF SUMAN TEA & PLYWOOD INDUSTRIES P VT. LTD. IS APPLICABLE ONLY IN A SCENARIO WHEN THERE HAS BEEN NO CHANGE IN THE NATUR E OF THE BUSINESS OR WHEN THE BUSINESS HAS NOT BEEN RECONSTRUCTED. THUS FOR EACH AND EVERY YEAR THE FACTS VARY AS A RESULT OF WHICH THE SAME NO LONGER REMAINS A MISTAK E APPARENT FROM RECORD. 3) THE CONTENTION THAT THE ITAT HAS ALLOWED THE SAM E FOR A/Y 1997-98 CANNOT BE A GROUND FOR SIMILAR RECTIFICATION SINCE AS STATED AB OVE THE FACTS OF EACH AND EVER YEAR ARE DIFFERENT. FURTHER THE GROUND FOR DISMISSING TH E RECTIFICATION PETITION IS THAT FURTHER DEDUCTION IS NOT ALLOWABLE. WHEN THE SAME HAS NOT B EEN CLAIMED BY WAY OF AN ORIGINAL OR A REVISED RETURN. 3.1. HE FURTHER CONTENDED THAT THE LD. CIT(A) BASED ON TECHNICAL REASONS AND VARIOUS JUDICIAL PRONOUNCEMENTS HAS ALLOWED THE APP EAL OF ASSESSEE WITHOUT OBSERVING THE FACTS NARRATED BY AO WHILE PASSING THE ORDER U/ S 154 OF THE IT ACT. THEREFORE, HE REQUESTED TO SET ASIDE THE ORDERS OF THE LD. CIT(A) AND RESTORE THAT OF AO. 4. ON THE OTHER HAND, THE LD. COUNSEL APPEARING ON BEHALF OF ASSESSEE BY REFERRING TO PAGE NOS. 15 TO 18 WHICH IS THE COPY OF LETTER D ATED 22 ND DECEMBER, 1993 FILED ALONG WITH THE RETURN OF INCOME CONTENDED THAT THE LD. AO IS NOT JUSTIFIED TO STATE THAT ASSESSEE HAS NEVER COMPUTED AND CLAIMED THE DEPRECI ATION IN FACT IN THE SAID LETTER DT. 3 22 ND DECEMBER, 1993 WHEREIN THE ASSESSEE HAS FILED THE RETURN OF INCOME FOR A.YR. 1993-94 TO THE AO TOGETHER WITH COMPUTATION AT SL. NO.17 WHICH CONTAINS STATEMENTS (10) OF STATUTORY DEPRECIATION FOR ASSAM, WEST BENG AL, KERALA, TAMIL NADU (TEA), INSTANT TEA, PACKET TEA, COCHIN, BOMBAY, DELHI AND CALCUTTA. AGAIN HE REFERRED TO THE LAST PAGE OF THE SAID LETTER WHEREIN THE ASSESSEE H AS CONTENDED AS UNDER :- WE UNDERSTAND THAT THE CALCUTTA HIGH COURT HAS REC ENTLY HELD IN THE CASE SUMAN TEA AND PLYWOOD INDUSTRIES (PRIVATE) LTD. THAT ONLY 40% .OF THE DEPRECIATION CALCULATED ON THE COST OF THE ASSETS IS TO BE TAKEN INTO ACCOUNT TO DETERMINE THE WRITTENDOWN VALUE FOR CALCULATING THE DEPRECIATION FOR THE FOLLOWING YEAR. THE WRITTEN-DOWN VALUES SHOWN IN THE ENCLOSED STATEMENTS AS CARRIED FORWARD TO 1994-95 HAVE NOT BEEN ASCERTAINED IN THE LIGHT OF THIS DECISION. WE SHAL L RE-COMPUTE THE W.D.VS IN DUE COURSE AFTER WE HAVE HAD AN OPPORTUNITY TO STUDY TH IS DECISION. WE HAVE BEFORE US EXCERPTS FROM THE JUDGEMENT OF TH E CALCUTTA A BENCH OF THE INCOME TAX APPELATE TRIBUNAL RELATING TO THE 1983-8 4 AND 1984-85 ASSESSMENTS ON THE GENERAL FIBER DEALERS (PRIVATE) LID. THE TRIBUN AL HAS HELD THAT TEA BUSHES COULD BE BROUGHT WITHIN THE MEANING OF PLANT UNDER SECT ION 43(3) AND SINCE THERE IS NO SPECIFIC DENIAL OF DEPRECIATION ON TEA BUSHES, THE ASSESSEE IS ENTITLED TO THAT RELIEF OF DEPRECIATION. WE SHALL SUBMIT RELEVANT DETAILS IN T HIS REGARD IN DUE COURSE AND WOULD REQUEST YOU TO GRANT. THIS ALLOWANCE WHILE COMPUTIN G THE ASSESMENT. WE SHALL BE GLAD TO FURNISH ANY FURTHER DETAILS WHI CH YOU MAY REQUIRE TO. COMPLETE THE ASSESSMENT. 4.1. UNDER THESE SET OF FACTS IT IS NOT FAIR ON THE PART OF THE REVENUE TO SAY THAT THE ASSESSEE HAS NEVER COMPUTED AND CLAIMED THE DEPRECI ATION AND HE FURTHER DREW THE ATTENTION OF THE ITAT ORDER FOR A.YR. 1997-98 WHICH WAS PLACED AT PAGES 379-389. HE CONTENDED THAT THE ACTION OF THE LD. CIT(A) IS FAIR AND JUST AND HE REQUESTED TO UPHELD THE SAME BY DISMISSING THE REVENUES APPEAL. 5. AFTER HEARING THE RIVAL SUBMISSIONS AND ON CAREF UL PERUSAL OF MATERIALS AVAILABLE ON RECORD, WE CONSIDER IT FIT TO ABSTRACT THE ORDER OF AO PASSED U/S 154 OF THE IT ACT AS WELL AS FINDINGS OF THE LD. CIT(A) WHILE ALLOWING THE APPEAL OF ASSESSEE AS WELL AS THE FINDINGS OF TRIBUNAL AT PARAS 6 AND 7 F OR A.YR. 1997-98 WHICH ARE AS UNDER :- ORDER U/S 154 OF THE INCOME TAX ACT THE ASSESSEE FILED A RECTIFICATION PETITION ON 13/1 2/2004 STATING THAT THE EARLIER ORDER PASSED NEEDS TO BE RECTIFIED IN THAT THERE HAS BEEN AN APPARENT MISTAKE IN NOT ALLOWING DEPRECIATION AS PER THE DECISION OF KOLKATA HIGH CO URT IN THE CASE OF M/S SUMAN TEA & PLYWOOD INDUSTRIES PVT LTD. REPORTED IN 204 1TR 7 19. THE ASSESSEE ALSO SUBMITTED A REVISED DEPRECIATION SCHEDULE RECOMPUTING THE ALL OWABLE DEPRECIATION AND THE 4 WRITTEN DOWN VALUE OF THE ASSETS. THE ASSESSEES PE TITION HAS BEEN DULY CONSIDERED BUT THE SAME IS FOUND TO BE NOT ACCEPTABLE IN VIEW OF T HE FACT THAT THE ASSESSEE DID NOT CLAIM THIS DEPRECIATION IN THE ORIGINAL RETURN OF I NCOME AND HENCE FURTHUR DEDUCTION IS SOUGHT TO BE CLAIMED BY THE ASSESSEE VIDE THIS PETI TION AFTER THE DUE DATE FOR FILING OF REVISED RETURN IS OVER. IN VIEW OF THE SAME THE ASS ESSEE WAS ALLOWED AN OPPORTUNITY OF BEING HEARD AND HEARING FIXED ON 13/05/2005. IN RES PONSE THE ASSESSEE FILED A WRITTEN SUBMISSION AND MADE THE FOLLOWING SUBMISSION: 1) VIDE COVERING LETTER SUBMITTED ALONG WITH THE RE TURN OF INCOME IT WAS SUBMITTED THAT ADDITIONAL DEPRECIATION IS ALLOWABLE IN TERMS OF THE DECISION REPORTED IN 204 ITR 719. 2) SINCE THE SAID DECISION HAS BEEN REPORTED, THE E FFECT OF THE SAME QUALIFIES U/S 154. 3) IN A/Y 1997-98 THE 1TAT HAS DIRECTED TO ALLOW DE PRECIATION AS PER THIS DECISION. THE CONTENTION OF THE ASSESSEE HAS BEEN DULY CONSID ERED HUT THE SAME IS NOT FOUND TO BE ACCEPTABLE: 1) THE ASSESSEE HAS NEVER COMPUTED AND CLAIMED THE DEPRECIATION AND WHEN THERE HAS BEEN NO COMPUTATION THE QUESTION OF RECOMPUTATION D OES NOT ARISE AT ALL. 2) THE DECISION OF SUMAN TEA & PLYWOOD INDUSTRIES P VT LTD IS APPLICABLE ONLY IN A SCENARIO WHEN THERE HAS BEEN NO CHANGE IN THE NATUR E OF THE BUSINESS OR WHEN THE BUSINESS HAS NOT BEEN RECONSTRUCTED. THUS FOR EACH AND EVERY YEAR THE FACTS VARY AS A RESULT OF WHICH THE SAME NO LONGER REMAINS A MISTAK E APPARENT FROM RECORD. 3) THE CONTENTION THAT THE 1TAT HAS ALLOWED THE SAM E FOR A/Y 1997-98 CANNOT BE A GROUND FOR SIMILAR RECTIFICATION SINCE AS STATED AB OVE THE FACTS OF EACH AND EVERY YEAR ARE DIFFERENT. FURTHUR THE GROUND FOR DISMISSING TH E RECTIFICATION PETITION IS THAT FURTHUR DEDUCTION IS NOT ALLOWABLE WHEN THE SAME HAS NOT BE EN CLAIMED BY WAY OF AN ORIGINAL OR A REVISED RETURN. THUS THE RECTIFICATION PETITION OF THE ASSESSEE IS REJECTED. CIT(A)S FINDINGS : 7. IT IS WELL SETTLED PRINCIPAL OF JUDICIALLY DISCI PLINE THAT DECISIONS OF HIGHER AUTHORITY ARE BINDING ON LOWER AUTHORITIES. IT IS SUPPORTED B Y FOLLOWING DECISION :- 1) UNION OF INDIA VS KAMALAKSHMI FINANCE LTD., - AI R 1992 SC-71 2) CIT VS RALSON INDUSTRIES LTD., (2007) 288 ITR 32 4 (SC) 3) BHOPAL SUGAR INDUSTRIES LTD. VS ITO (1960) 40 IT R 618 (SC) 4) DHARAM CHAND JAIN VS STATE OF BIHAR AIR 1976 SC 1433 5) MORGAN SECURITIES AND CREDIT P.LTD. VS MODI RUBB ER LTD., (2006) 14 SCALE 267. 7.1. FURTHER IT IS WELL SETTLED PRINCIPAL OF LAW THAT DECISION OF JURISDICTIONAL HIGH COURT IS BINDING ON LOWER AUTHORITIES. THIS VIEW IS SUPPORTED BY FOLLOWING CASE LAWS: 1) CIT VS. JOSHI (PC) & JOSHI (BC) (1993) 202 ITR 1 017 (BORN) 2) STANDARD RADIATORS VS. CIT (1987) 165 ITR 178 (G UJ.) 8. IN VIEW OF ABOVE DISCUSSION IT IS CLEAR THAT PR INCIPAL LAID DOWN BY SUMAN TEA & PLYWOOD INDUSTRIES LTD. WAS APPLICABLE AND HENCE THE CLAIM OF DEPRECIATION WAS ALLOWABLE. RATIO LAID DOWN IS FURTHER ENDORSED BY S UPREME COURT AND HENCE THERE IS NO DOUBT ABOUT ACCEPTABILITY. THE CLAIM OF DEPRECIA TION IS MADE BY APPELLANT IN RETURN OF INCOME FILED AND THEREFORE, DOES NOT REQUIRE TO FILE REVISED RETURN. IN MY OPINION A.O. WAS NOT JUSTIFIED IN NOT RECTIFYING THE ORDER U/S. 154 AND ALLOWING THE CLAIM OF APPELLANT. A.O. IS DIRECTED TO ALLOW THE CLAIM OF A PPELLANT AS CLAIMED IN VIEW OF SUMAN TEA & PLYWOOD INDUSTRIES LTD.(1993) 71 TAXMAN 622(CAL) & DOOM DOOMA LNDIA LIMITED (2009) 310 1TR 392 (SC). 5 9. APPELLANT HAS FILED APPEAL NOS. 85 TO 91/CIT(A)- IV/2005-06 FOR ASSSSMENT YEARS 1994-95 TO 1996-97 & 1998-99 TO 200 1-02 & 01/CIT(A )-IV/07-08 FOR THE ASSESSMENT YEAR 2003-04 WITH SIMILAR GROUND OF APPEAL IN VIEW OF MY DISCUSSION AND FINDING ABOVE ALL THE ABOVE APPEALS ARE ALLOWED. TRIBUNALS FINDINGS : 6. THE ASSESSEE HAD ORIGINALLY RAISED FIVE EFFECTI VE GROUNDS IN ITS APPEAL. THEREAFTER, THE ASSESSEE FILED AN ADDITIONAL GROUND STATING THA T THIS GROUND DOES NOT INVOLVE ANY INVESTIGATION INTO FRESH FACTS AND FIGURES BUT IS P URELY A QUESTION OF LAW, WHICH CAN BE DECIDED ON THE BASIS OF FACTS AND FIGURES ALREADY A VAILABLE ON RECORD. IT WAS, THEREFORE, PRAYED THAT THE ADDITIONAL GROUND MAY BE ENTERTAINED IN THE INTEREST OF JUSTICE. THE LD. DEPARTMENTAL REPRESENTATIVE HAS NO THING TO SAY IN REBUTTAL. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THIS CAS E AND ALSO TAKING INTO CONSIDERATION THE HONBLE SUPREME COURTS DECISION IN THE CASE OF NATIONAL THERMAL POWER CO. LTD., REPORTED IN 229 LTR. 383(SC), WE EN TERTAIN THE ADDITIONAL GROUND RAISED BY THE ASSESSEE WHICH, TO QUOTE, IS AS UNDER :- THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE T HE ASSESSING OFFICER MAY BE DIRECTED TO RE-COMPUTE THE WRITTEN DOWN VALUE OF DE PRECIABLE ASSETS OF THE APPELLANT WHICH IS A COMPANY ENGAGED IN THE BUSINES S OF GROWING AND MANUFACTURING OF TEA AS PER THE PRINCIPLE LAID DOWN BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CI.T. VS. SUMAN TEA & PLY WOOD INDUSTRIES (P) LTD 204 ITR 719 (CALCUTTA) WHEREIN IT WAS HELD THAT THE WRITTEN DOWN VALUE SHOULD BE REDUCED WITH ONLY 40% OF THE DEPRECIATION ALLOWED W HILE DETERMINING THE TOTAL INCOME IN THE CASE OF ASSESSEE ENGAGED IN THE BUSIN ESS OF GROWING AND MANUFACTURING TEA. 7. WE HAVE HEARD THE RIVAL PARTIES AND PERUSED THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THIS ISSUE IS SQUARELY COVERED BY THE DECISION OF HONBLE HIGH COURT IN THE CASE OF SUMAN TEA & PLYWOOD INDUSTRIES (P)LTD., REPORTED IN 204 ITR 719 WHEREIN IT HAS BEEN HELD THAT IN THE CASE OF CO MPANIES ENGAGED IN THE BUSINESS OF CULTIVATION MANUFACTURE AND SALE OF TEA, ONLY 40% O F ITS BUSINESS INCOME IS CHARGEABLE TO INCOME TAX IN TERMS OF RULE 8 OF THE RULES, READ WITH SEC.10(1) OF THE I.T.ACT, 1961 AND HENCE ONLY 40% OF THE DEPRECIATIO N IS ACTUALLY ALLOWED U/S 32 READ WITH SEC.43(6)(B) OF THE ACT. THE ASSESSEE BEFORE U S IS ENGAGED IN THE BUSINESS OF GROWING AND MANUFACTURING OF TEA. IN THIS VIEW OF T HE MATTER, THE RATIO OF THE AFORESAID DECISION OF HONBLE CALCUTTA HIGH COURT S HALL BE APPLIED TO THE ASSESSEES CASE IN SO FAR AS WDV OF DEPRECIABLE ASSETS USED IN TEA BUSINESS IS CONCERNED. WE HOLD ACCORDINGLY AND DIRECT THE AO TO DEDUCT ONLY 4 0% OF THE DEPRECIATION WHILE DETERMINING THE WRITTEN DOWN VALUE. 5.1. ON CAREFUL PERUSAL OF THE ORDER PASSED BY AO U /S 154 OF THE IT ACT AND ALSO ORDER OF THE LD. CIT(A) AND CONTENTS OF THE LETTER OF ASSESSEE ADDRESSED TO AO WHICH WAS REFERRED BY THE LD. COUNSEL OF ASSESSEE WHICH A RE INCORPORATED IN PARA 4 OF THIS ORDER WE FIND NO JUSTIFICATION ON THE PART OF AO TO STATE THAT ASSESSEE HAS NEVER COMPUTED AND CLAIMED THE DEPRECATION AND THE DECISI ON OF SUMAN TEA & PLYWOOD INDUSTRIES PVT. LTD. IS NOT APPLICABLE TO THE FACTS OF ASSESSEES CASE AND FURTHER IGNORING THE ITATS ORDER IN ASSESSEES OWN CASE. T HEREFORE WE FIND THAT THE LD. CIT(A)S ACTION IS IN ACCORDANCE WITH LAW AND RIGHT LY DIRECTED THE AO TO ALLOW THE 6 CLAIM OF ASSESSEE. THEREFORE, WE CONFIRM THE SAME AND DISMISS THE APPEALS OF THE REVENUE. 6. THE CROSS OBJECTION RAISED BY ASSESSEE IN ALL T HESE APPEALS IS IN SUPPORT OF THE ORDER OF LD. CIT(A). SINCE WE CONFIRM THE ORDER OF LD. CIT(A) THE CROSS OBJECTION RAISED BY ASSESSEE IN ALL THE APPEALS BECOMES INFRA CTUOUS AND THE SAME ARE DISMISSED AS BEING INFRACTUOUS. 7. IN THE RESULT THE APPEALS OF THE REVENUE AS WELL AS THE CROSS OBJECTIONS OF ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE COURT ON 04.04.2012. SD/- SD/- , , , , % % % % N.VIJAYAKUMARAN, JUDICIAL MEMBER . .. . ! ! ! !. .. . , ,, , '# '# '# '# , C.D.RAO, ACCOUNTANT MEMBER. ( (( (!# !# !# !#) )) ) DATE:.04.04.2012. ORDER PRONOUNCED BY SD/- SD/- MS CDR (JM) (AM) '6 2 .%% :'';- COPY OF THE ORDER FORWARDED TO: 1. M/S.TATA TEA LIMITED, 1, BISHOP LEFROY ROAD, KOL KATA-700020. 2. D.C.I.T., CIRCLE-4, KOLKATA 3. CIT. 4. CIT(A)-IV, KOLKATA 11. DR, KOLKATA BENCHES, KOLKATA / .%/ TRUE COPY, '6/ BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES R.G.(.P.S.)