M/s J. J. Exporters Ltd., Kolkata V. CIT, -IV, KOLKATA, Kolkata

ITA 1114/KOL/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 83214 (ITAT-KOLKATA)
• Duration Of Justice: 6 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-12-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 21-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RANJ E DRA PRASAD
• Assessee Lawyers: SIDHARTH JHAJHARIA
• Keywords: Depreciation; Additional depreciation
• Section: 143(3); 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH B KOLKATA BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER ITA NO. 1114 /KOL/ 2014 ASSESSMENT YEAR: 2008 - 09 M/S J.J. EXPORTERS LTD. C/O SALARPURIA, JAJODIA & CO. 7, C.R AVENUE, KOLKATA 700 072 [ PAN NO.AAACJ 6722 H ] / V/S . CIT, KOLKATA - IV P - 7, CHOWRINGHEE SQUARE, KOLKATA 700 069 /APPELLANT .. /RESPONDENT / / BY APPELLANT SHRI SIDHARTH JHAJHARIA, FCA / BY RESPONDENT SHRI RANJ E DRA PRASAD, JCIT / DATE OF HEARING 01 - 12 - 2014 / DATE OF PRONOUNCEMENT 01 - 12 - 2014 /O R D E R PER MAHAVIR SINGH, JUDICIAL MEMBER: - THIS AP PEAL BY ASSESSEE IS ARISING OUT OF REVISION ORDER PASSED U/S 263 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT ) BY COMMISSIONER OF INCOME TAX, KOLKATA - IV, (CIT FOR SHORT) DATED 28 - 03 - 2014. ASSESSMENT WAS FRAMED BY JCIT(OSD) U/S 143(3) R .W.S 144C OF THE ACT FOR ASSESSMENT YEAR 2008 - 09 VIDE HIS ORDER DATED 20 - 01 - 2012. 2. THE ONLY ISSUE IN THIS APPEAL OF THE ASSESSEE IS AGAINST THE REVISION ORDER OF CIT U/S 263 OF THE ACT. FOR THIS, ASSESSEE HAS RAISED FOLLOWING FOUR GROUNDS: - 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE ORDER U/S. 263 DT. 28.3.2014 IS WHOLLY BAD, ILLEGAL, UNJUSTIFIED, UNCALLED FOR AND VOID ABNITO BOTH ON POINTS OF LAW AS WELL AS FACTS AND IN VIEW OF THE FACTS AN D IN THE ITA NO. 1114/KOL/2014 A.Y. 2008 - 09 M/S JJ EXPORTERS LTD. V. CIT, KOL - IV, KOL. PAGE 2 CIRCUMSTANCES SUCH ORDER U/S 263 I S LIABLE TO BE CANCELLED / QUASHED AND IN VIEW OF THE FACTS AND IN THE CIRCUMSTANCES THE ORDER OF THE AO BEING NEITHER ERRONEOUS NOR PREJUDICIAL TO THE INTEREST OF REVENUE THE ORDER OF THE LD. CIT U/S 263 MAY KINDLY BE CANCELLED / QUASHED. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE ORDER U/S. 263 DT. 28.3.2014 IS WHOLLY BAD, ILLEGAL, UNJUSTIFIED , UNCALLED FOR AND VOID ABINITIO FOR THE REASON THAT SUCH PROCEEDINGS HAVING BEEN INITIATED MECHANICALLY AND ARBITRARILY AND ON MERE SURMISE, CONJECTURE, ASSUMPTIONS & PRESUMPTIONS AND WITHOUT SPECIFIED FINDING AS TO HOW THE ASSESSMENT FRAMED U/S. 143(3) OF THE ACT DT. 20.1.2012 WAS ERRO NEOUS AND PREJUDICE TO THE INTEREST OF REVENUE AND IN VIEW OF THE FACTS AND IN THE CIRCUMSTANCES IT MAY KINDLY BE CANCELLED / QUASHED. 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE ORDER U/S. 263 DT. 28.3.2014 IS WHOLLY UNJUSTIFIED IN SET TING ASIDE THE ENTIRE ASSESSMENT U/S. 263 AND DIRECTING THE AO TO MAKE A DE NOVO ASSESSMENT WITH A DIRECTION TO EXAMINE THE ENTIRE CASE SINCE PROCEEDINGS U/S 263 HAVING BEEN SPECIFICALLY INITIATED TO VERIFY THE AMOUNT OF DEPRECIATION ALLOWED BY THE AO AND IN VIEW OF THE FACTS AND IN THE CIRCUMSTANCES SUCH DIRECTION OF LD. CIT U/S 263 IS COMPLETELY BAD, ILLEGAL, UNJUSTIFIED AND IN VIEW OF THE FACTS AND IN THE CIRCUMSTANCES AN IN THE CIRCUMSTANCES IT MAY KINDLY BE HELD ACCORDINGLY. 4. THAT ON THE FACTS AND I N THE CIRCUMSTANCES OF THE CASE, THE ORDER U/S. 263 DT. 28.3.2014 IS WHOLLY UNJUSTIFIED IN TREATING THE CLAIM OF DEPRECIATION AS EXCESSIVE WITHOUT APPRECIATING THE FACT THAT SUCH CLAIM OF DEPRECIATION WAS CORRECTLY MADE BY THE APPELLANT AND ACCORDINGLY COR RECTLY ALLOWED BY THE AO AND HAVING BEEN FULLY EXPLAINED BY THE APPELLANT IN REPLY TO NOTICE U/S 263 AND LD CIT NOT HAVING RECORDED ANY FINDING IN SUCH RESPECT THE ORDER PASSED BY LD CIT IS WHOLLY BAD AND ILLEGAL AND IT MAY KINDLY BE HELD ACCORDINGLY. 3. BRIEFLY STATED FACTS ARE THAT THE ASSESSING OFFICER FOR THE RELEVANT AY 2008 - 09 FRAMED THE ASSESSMENT U/S 143(3) R.W.S. 144C OF THE ACT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, ASSESSEE FILED COMPLETE DETAILS OF DEPRECIATION CHART AS ANNEXURE - B IN RE SPECT TO JJ EXPORTERS LTD. (EXCL EOU - I & II), JJ EXPORTERS LTD. (EOU - I), JJ EXPORTERS LTD (EOU - II), JJ EXPORTERS LTD (UNIT: JJ SPECTRUM SILK). T HE AO ALLOWED THE DEPRECIATION AFTER CONSIDERING THE DEPRECIATION IN RESPECT TO ALL SEVEN UNITS AT RS.5,45,95,40 4/ - . 4. THE CIT ON PERUSAL OF RECORDS NOTICED THAT ASSESSEE HAS CLAIMED EXCESS DEPRECIATION AT RS.15,26,462/ - AND FOR THIS CIT RELIED ON THE DEPRECIATION CHART OF THESE SIX UNITS ONLY. THE RELEVANT DETAIL IN RESPECT TO DEPRECIATION OF THESE SIX UNITS IS ITA NO. 1114/KOL/2014 A.Y. 2008 - 09 M/S JJ EXPORTERS LTD. V. CIT, KOL - IV, KOL. PAGE 3 M ENTIONED IN CHART PRODUCED IN THE ORDER OF CIT I.E., THE REVISION ORDER. LD. COUNSEL OF THE ASSESSEE, SHRI SIDHARTHA JHAJHARIA POINTED OUT THAT CIT WHILE PASSING THE REVISION ORDER U/S 263 OF THE ACT HAS CONSIDERED SIX MANUFACTURING UNITS OF ASSESSEE AS IS NOTED IN THE REVISION ORDER BUT HE FAILED TO CONSIDER THE DEPRECIATION CLAIM OF 7 TH UNIT WHEREIN THE DEPRECIATION COMPUTED AT RS.14,14,173/ - AND ADDITIONAL DEPRECIATION AT RS.1,12,287/ - I.E., THE TOTAL COMES TO RS.15,26,463/ - . WHEN THIS WAS POINTED OUT TO LD. CIT - DR THAT CIT HAS WRONGLY ASSUMED THAT THERE IS DIFFERENCE IN THE DEPRECIATION CLAIMED IN THE INCOME TAX RETURN AND DEPRECIATION AS PER TAX AUDIT REPORT, WITHOUT GOING INTO THE RECORDS O F THE ASSESSEE . LD. CIT - DR FAIRLY CONCEDED THE POSITION. 5. EVEN OTHERWISE ON JURISDICTIONAL ISSUE THE CIT HAS NOWHERE MENTIONED IN HIS REVISION ORDER THAT ASSESSMENT ORDER FRAMED BY THE AO U/S 143(3) R.W.S 144C OF THE ACT IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. A BARE READING OF THE ORDER OF CIT CLEARLY REVEALS THAT THE CIT WAS UNDER BONA FIDE BELIEVE THAT THERE UNDER ASSESSMENT OF INCOME . THE RELEVANT PORTION OF CIT S REVISION ORDER READS AS UNDER: - THUS, AN AMOUNT OF RS.1526462 (RS.54 595404 RS.53068942) WAS EXPRESS ALLOWED ON DEPRECIATION. THIS RESULTED IN UNDERASSESSMENT OF INCOME OF RS.1526463. 3. NOTICE U/S 263 WAS ISSUED AND SERVED UPON THOSE ASSESSEE TO EXPLAIN THE UNDER ASSESSMENT. IN RESPONSE TO THE NOTICE, MR. SIDDHARTH JAJO RIA, APPEARED AND SERVED A WRITTEN REPLY ALONG WITH A UNIT - WISE CHART OF DEPRECIATION. IN THE SUBMISSION THE ASSESSEE CLAIMED THAT THE DEPRECIATION OF J.J. EXPORTS LTD. (EOU - I I ) WAS NOT CONSIDERED WHILE CALCULATING THE DEPRECIATION. 4. AFTER GOING THROUGH THE FACTS AND SUBMISSION OF THE ASSESSEE I AM OF THE VIEW THAT ASSESSMENTS REQUIRED RECONSIDERATION. THE ASSESSMENT ORDER MADE BY THE ASSESSING OFFICER IS BEING SET ASIDE DENOVO TO ENABLE THE ASSESSING OFFICER WITH A DIRECTION TO EXA MINE THE ENTIRE CASE AND WORK OUT TAXABLE INCOME AS PER LAW. THE CASE IS BEING SET ASIDE TO THE TABLE OF THE ASSESSING OFFICER. FROM THE ABOVE, IT IS CLEAR THAT THE CIT WAS OF THE VIEW THAT THERE IS UNDER ASSESSMENT OF INCOME BUT THERE IS NO FINDING THAT THE ASSESSMENT ORDER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. IN THE ABSENCE OF SUCH FINDING, THE CIT CANNOT ASSUME JURISDICTION U/S 263 OF THE ACT FOR REVISING THE ASSESSMENT FRAMED BY THE AO. IN THE FIRST PLACE, THE CIT HAS TO CALL FOR A ND EXAMINE THE RECORDS OF ANY PROCEEDING UNDER ITA NO. 1114/KOL/2014 A.Y. 2008 - 09 M/S JJ EXPORTERS LTD. V. CIT, KOL - IV, KOL. PAGE 4 THE ACT AND THIS IS A PART OF HIS ADMINISTRATIVE CONTROL TO CALL FOR RECORDS AND EXAMINE THEM. THE SECOND FEATURE IS THAT HE MAY CONSIDER THAT ANY ORDER PASSED UNDER THE ACT BY THE AO AND IF IT IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE, HAVING REGARD TO THE LANGUAGE OF SECTION 263 OF THE ACT, APPARENTLY IS A CONSIDERATION WHICH HE EXERCISES BY CALLING FOR AND EXAMINING THE RECORDS AS INDICATED ABOVE, HE CAN HOLD SO. BUT IN THE PRESENT CASE BEFORE US, THE CIT HAS NOT HELD THE ORDER PASSED BY AO AS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF REVENUE. ACCORDINGLY, THE REVISION ORDER PASSED BY CIT(A) IS WITHOUT JURISDICTION. ON MERITS ALSO, THE ASSESSEE HAS PROVED BEYOND DOUBT THAT THE DEPRECIATION CLAIMED IN RESPECT TO 7 TH UNIT WAS NOT CONSIDERED BY CIT WHILE PASSING REVISION ORDER WHEREAS THE AO HAS CONS IDERED THE SAME AND ALLOWED. IN TERM OF THE ABOVE, THE APPEAL OF ASSESSEE IS ALLOWED. 6. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 01 / 1 2 /2014 SD/ - SD/ - ( SHAMIM YAHYA ) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEM BER KOLKATA, *DKP - 01 / 1 2 /2014 ITA NO. 1114/KOL/2014 A.Y. 2008 - 09 M/S JJ EXPORTERS LTD. V. CIT, KOL - IV, KOL. PAGE 5 / COPY OF ORDER FORWARDED TO: - 1 . / APPELLANT M/S JJ EXPORTERS LTD. C/O SALARPURIA JAJODIA & CO. 7, CR, AVENUE, KOLKATA - 72 2 . / RESPONDENT CIT KOLKATA - IV, P - 7, CHOWRINGHEE SQUARE, KOL - 69 3 . / CONCERNED CIT 4 . - / CIT (A) 5 . , / DR, ITAT, KOLKATA 6 . / GUARD FILE. BY ORDER/ , /TRUE COPY/ / ,