DCIT,CC-2(2), Kolkata, Kolkata V. M/s. IRC Natural Resources Pvt. Ltd, Kolkata

ITA 1037/KOL/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1497 (ITAT-KOLKATA)
• Duration Of Justice: 3 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2017
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 12-05-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SALLONG YADDEN
• Keywords: Business income; Depreciation; Opportunity of being heard; Revised return
• Section: 139(5)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH SMC, KOLKATA [BEFORE HONBLE SHRI P.M. JAGTAP, AM] I.T.A. NO. 1037/KOL/2017 ASSESSMENT YEAR: 2010-11 DCIT CEN, CIR 2 (2), KOLKATA................................APPELLANT AAYAKAR BHAWAN, POORVA 110, SHANTIPALLY KOLKATA - 700107 M/S. IRC NATURAL RESOURCES PVT. LTD. ...RESPONDENT IRC HOUSE, 1, SUNYAT SEN STREET KOLKATA - 700001 [PAN: AADCA9364K] APPEARANCES BY: SHRI SALLONG YADDEN, ADDL. CIT APPEARING ON BEHALF OF THE REVENUE. SHRI RAVI TULSIYAN, FCA APPEARING ON BEHALF OF THE ASSESSEE. DATE OF CONCLUDING THE HEARING : AUGUST 17, 2017 DATE OF PRONOUNCING THE ORDER : AUGUST 31, 2017 ORDER THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST THE ORDER OF LEARNED CIT (APPEALS) 18, KOLKATA DATED 31.01.2017. 2. IN GROUND NO 1 AND 2, THE REVENUE HAS CHALLENGED THE ACTION OF THE LD. CIT (A) IN ALLOWING THE CLAIM OF THE ASSESSEE FOR REDUCTION IN BUSINESS INCOME FROM RS. 1,32,59,755/- TO RS. 94,69,502/- ON THE BASIS OF RECOMPUTATION OF INCOME FURNISHED IN THE COURSE OF ASSESSMENT PROCEEDINGS. 3. THE ASSESSEE IN THE PRESENT CASE IS A COMPANY WHICH IS ENGAGED IN THE BUSINESS OF MINING AND EXCAVATION AND PURCHASE AND SALE OF 2 I.T.A. NO. 1037/KOL/2017 ASSESSMENT YEAR: 2010-11 M/S. IRC NATURAL RESOURCES PVT. LTD. RAW RUBBER. THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS FILED BY IT ON 25.09.2010 DECLARING A TOTAL INCOME OF RS. 6,59,958/-. IN THE SAID RETURN, THE BUSINESS PROFITS FOR THE YEAR UNDER CONSIDERATION WAS SHOWN AT RS. 1,32,59,755/- AND THE SAME WAS FULLY SET OFF AGAINST BROUGHT FORWARD LOSS OF THE EARLIER YEARS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE REVISED COMPUTATION OF INCOME WAS FILED BY THE ASSESSEE SHOWING ITS BUSINESS INCOME AT RS. 94,69,502/- AS AGAINST RS. 1,32,59,755/- SHOWN IN THE RETURN OF INCOME. SINCE NO REVISED RETURN OF INCOME WAS FILED BY THE ASSESSEE AS PER THE PROVISION OF SECTION 139(5), ITS CLAIM FOR REDUCTION IN BUSINESS INCOME AS SHOWN IN THE REVISED COMPUTATION OF INCOME WAS DISALLOWED BY THE AO BY RELYING ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF GOETZE INDIA LTD. VS CIT. ON APPEAL, THE LD. CIT (A), HOWEVER, ALLOWED THE SAID CLAIM OF THE ASSESSEE AFTER VERIFYING THE RELEVANT FACTS AND FIGURES. HE HELD THAT THE RESTRICTIONS CAST BY GOETZE INDIA LTD. WAS LIMITED ONLY TO THE ACTION OF THE AO AND THE APPELLATE AUTHORITIES WERE PERMITTED TO TAKE ALL THE FACTORS INTO ACCOUNT WHILE ARRIVING AT THE CORRECT INCOME OF THE ASSESSEE. AGGRIEVED BY THIS RELIEF ALLOWED BY THE LD. CIT (A) TO THE ASSESSEE, THE REVENUE HAS RAISED THIS ISSUE IN GROUND NO 1 AND 2 OF ITS APPEAL. 4. I HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS OBSERVED THAT THE CLAIM OF THE ASSESSEE FOR REDUCTION IN BUSINESS INCOME AS MADE BY FILING THE REVISED COMPUTATION DURING THE COURSE OF ASSESSMENT PROCEEDINGS WAS DULY SUPPORTED BY THE RELEVANT FACTS AND FIGURES PLACED ON 3 I.T.A. NO. 1037/KOL/2017 ASSESSMENT YEAR: 2010-11 M/S. IRC NATURAL RESOURCES PVT. LTD. RECORD. THE ASSESSING OFFICER HOWEVER DID NOT DECIDE THIS ISSUE ON MERIT AND DECLINED TO ENTERTAIN THE SAME IN THE ABSENCE OF ANY REVISED RETURN FILED BY THE ASSESSEE AS PER THE PROVISION OF SECTION 139(5) BY RELYING ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF GOETZE INDIA LTD (SUPRA). AS RIGHTLY HELD BY THE LD. CIT (A) IN THIS REGARD, THE RESTRICTION CAST BY THE HONBLE SUPREME COURT IN THE CASE OF GOETZE INDIA LTD. IS APPLICABLE ONLY AT THE ASSESSMENT STAGE AND THE SAME IS NOT APPLICABLE TO THE APPELLATE AUTHORITIES WHO CAN STILL ENTERTAIN THE FRESH CLAIM MADE BY THE ASSESSEE WITHOUT EVEN FILING THE REVISED RETURN AND DECIDE THE SAME ON MERIT IN ACCORDANCE WITH LAW. I, THEREFORE, FIND NO INFIRMITY IN THE IMPUGNED ORDER OF THE LD. CIT (A) ALLOWING THE CLAIM OF THE ASSESSEE FOR REDUCTION IN INCOME WHICH WAS DULY SUPPORTED BY THE RELEVANT FACTS AND FIGURES AND UPHOLDING THE SAME ON THIS ISSUE. I DISMISS GROUND NO 1 AND 2 OF THE REVENUES APPEAL. 5. IN GROUND NO 3 AND 4, THE REVENUE HAS CHALLENGED THE ACTION OF THE LD. CIT (A) IN ALLOWING THE CLAIM OF THE ASSESSEE FOR DEPRECIATION AT HIGHER RATE IN CONTRAVENTION OF RULE 46A. 6. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS NOTICED BY THE AO THAT THE ASSESSEE HAS CLAIMED DEPRECIATION @ 40% ON HEAVY VEHICLES. SINCE THE HIGHER RATE OF DEPRECIATION OF 40% WAS ALLOWABLE FOR HEAVY VEHICLES UTILISED FOR TRANSPORTATION OF GOODS ON HIRE AND THE ASSESSEE FAILED TO ESTABLISH SUCH USE, THE AO ALLOWED THE DEPRECIATION ON HEAVY VEHICLES ONLY @ 30% INSTEAD OF 40% CLAIMED BY THE 4 I.T.A. NO. 1037/KOL/2017 ASSESSMENT YEAR: 2010-11 M/S. IRC NATURAL RESOURCES PVT. LTD. ASSESSEE WHICH RESULTED IN DISALLOWANCE OF RS. 73,34,014/-. ON APPEAL, THE LD. CIT (A) ALLOWED DEPRECIATION AT HIGHER RATE OF 50% ON THE COMMERCIAL VEHICLES SINCE THE SAME WERE PURCHASED BY THE ASSESSEE BETWEEN 01.01.2009 TO 30.09.2009. IN THIS REGARD, HE RELIED ON THE LIST PROVIDED BY THE ASSESSEE SHOWING PURCHASE OF HEAVY EARTH MOVING MACHINERIES BETWEEN 01.04.2009 TO 30.09.2009. 7. I HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. AS POINTED OUT BY THE LEARNED DR, THE LIST FURNISHED BY THE ASSESSEE SHOWING PURCHASE OF HEAVY EARTH MOVING MACHINERIES BETWEEN 01.04.2009 TO 30.09.2009 AND RELIED UPON BY THE LD. CIT (A) TO GIVE RELIEF TO THE ASSESSEE ON THIS ISSUE WAS NOT FILED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER. HE HAS CONTENDED THAT THE LD. CIT (A) HOWEVER HAS NOT GIVEN AN OPPORTUNITY TO THE AO TO VERIFY THE SAID LIST AND THERE IS A CLEAR VIOLATION OF RULE 46A OF INCOME TAX RULES, 1962. EVEN THE LEARNED COUNSEL FOR THE ASSESSEE HAS NOT ABLE TO REBUT OR CONTROVERT THIS POSITION WHICH IS CLEARLY EVIDENT FROM THE IMPUGNED ORDER OF THE LD. CIT (A). I, THEREFORE, SET ASIDE THE IMPUGNED ORDER OF THE LD. CIT (A) ON THIS ISSUE AND RESTORE THE MATTER TO THE FILE OF THE AO FOR DECIDING THE SAME AFRESH AFTER VERIFYING THE LIST OF HEAVY EARTH MOVING MACHINERIES CLAIMED TO BE PURCHASED BY THE ASSESSEE BETWEEN 01.04.2009 TO 30.09.2009. THE AO SHALL AFFORD PROPER AND SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE WHILE DECIDING THIS ISSUE AFRESH. GROUND NO 3 AND 4 OF THE REVENUES APPEAL ARE ACCORDINGLY TREATED AS ALLOWED FOR STATISTICAL PURPOSES. 5 I.T.A. NO. 1037/KOL/2017 ASSESSMENT YEAR: 2010-11 M/S. IRC NATURAL RESOURCES PVT. LTD. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS TREATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST AUGUST, 2017. SD/- (P.M. JAGTAP) ACCOUNTANT MEMBER DATED: 31/08/2017 BISWAJIT, SR. P.S. COPY OF ORDER FORWARDED TO: 1. M/S. IRC NATURAL RESOURCES PVT. LTD., IRC HOUSE, 1, SUNYAT SEN STREET, KOLKATA 700001. 2. DCIT CEN, CIR 2(2), KOLKATA 3. THE CIT(A) 4. THE CIT 5. DR TRUE COPY, BY ORDER, SR. P.S. / H.O.O. ITAT, KOLKATA