ACIT (LTU), New Delhi V. M/s. Rites Ltd., New Delhi

ITA 1186/DEL/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 65227 (ITAT-DELHI)
• Duration Of Justice: 4 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-08-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 08-05-2012
• Assessment Year: 2004-2005
• Appeal Filed On: 07-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation; Reassessment proceedings
• Section: 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH `F : NEW DELHI) BEFORE SHRI U.B.S. BEDI, JUDICIAL MEMBER AND SHRI A.N. PAHUJA, ACCOUNTANT MEMBER ITA NO.1186/DEL /2012 (ASSESSMENT YEAR : 2004-05) ACIT(LTU), VS. RITES LTD., NEW DELHI. SCOPE MINAR, LAXMI NAGAR, NEW DELHI. (PAN/GIR NO.AAACR0830Q) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI R.S. SINGHVI, CA REVENUE BY : SMT. SUDESH GARG, CIT(DR) ORDER PER U.B.S. BEDI, JM THIS APPEAL OF THE DEPARTMENT IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A)- LTU, NEW DELHI, DATED 24.01.20012, RELEVANT TO ASS ESSMENT YEAR 2004-05, WHEREBY FOLLOWING GROUNDS HAVE BEEN RAISED: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE CIT(A) HAS ERRED IN HOLDING THAT THERE HAS BEEN NO ESCAPEM ENT OF INCOME ON ACCOUNT OF FAILURE ON THE PART OF THE ASSESSEE TO F ULLY AND TRULY DISCLOSE ALL MATERIAL FACTS NECESSARY FOR ASSESSMENT AND THAT TH E REASSESSMENT PROCEEDINGS ARE WITHOUT JURISDICTION. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.5,00,00,000/- ON ACCOUNT OF PROVISION FOR PRODUCTIVITY LINKED INCENT IVE SCHEME, WHEN THE ASSESSEE HAD NOT FURNISHED ANY EVIDENCE TO THE EFFE CT THAT THE SAME WAS AN ASCERTAINED LIABILITY. I.T.A. NO.1186/DEL./2012 (A.Y. : 2004-05) 2 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE CIT(A) HAS ERRED IN ALLOWING RELIEF TO THE ASSESSEE TO THE TUN E OF RS.7,77,331/- ON ACCOUNT OF AMORTIZATION OF LEASE MONEY. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.77,02,000/- BE ING PAYMENTS CLAIMED TO HAVE BEEN MADE TO SBI, BAHARAIN AND EXIM BANK OF IN DIA, WHEN THE ASSESSEE HAD FAILED TO PRODUCE ANY DOCUMENTARY EVIDENCE OF T HE ABOVE PAYMENTS DURING THE COURSE OF ASSESSMENT PROCEEDINGS. 2. THE FACTS INDICATE THAT AS PER PREVIOUS ORDER U/ S 143(3)/254 DATED 18.02.2009, VIDE WHICH THE ASSESSEES INCOME WAS EARLIER DETERM INED AT RS.52,92,68,899/-, THE ASSESSING OFFICER COMPUTED THE INCOME OF THE ASSESS EE VIDE ORDER U/S 147/143(3) DATED 22.12.2010 AT RS.58,77,48,230/- BY MAKING THE FOLL OWING DISALLOWANCES: S.NO. PARTICULARS AMOUNT IN (RS.) (I) PROVISION OF PRODUCTIVITY LINKED INCENTIVE SCHEME 5,00,00,000 (II) DEPRECIATION ON LAND 7,77,331/- (III) UNDER SECTION 40(A)(I) 77,02,000/- 3. AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER, ASSESSEE FILED APPEAL AND BESIDES CHALLENGING ASSUMPTION OF JURISDICTION U/S 147 BEIN G BARRED BY LIMITATION AND WITHOUT JURISDICTION, THE ASSESSEE HAS ALSO CHALLENGED DISA LLOWANCE OF RS.5 CRORES AS PRODUCTIVITY LINKED INCENTIVE SCHEME, AMORTIZATION OF LEASE MONE Y TO THE EXTENT OF RS.7,77,331/- AND DISALLOWANCE OF RS.77,02,000/- U/S 40(A)(I), EVEN I F THERE IS NO DEFAULT IN RESPECT OF ISSUE OF TDS. 4. THE CIT(A) WHILE CONSIDERING AND ACCEPTING THE APPEAL OF THE ASSESSEE HAS NOT ONLY HELD THAT INITIATION OF RE-ASSESSMENT PROCEEDI NGS TO BE BAD IN LAW BEING WITHOUT I.T.A. NO.1186/DEL./2012 (A.Y. : 2004-05) 3 JURISDICTION, HAS ALSO ACCEPTED THE APPEAL ON MERI TS BY DELETING THE IMPUGNED ADDITIONS MADE BY THE ASSESSING OFFICER. 5. AGGRIEVED BY THE ORDER OF CIT(A), DEPARTMENT HAS COME UP IN APPEAL AND IT WAS SUBMITTED BY LD.DR THAT INITIATION OF RE-ASSESSMENT PROCEEDINGS WAS VALID IN LAW AND ADDITIONS HAVE BEEN DELETED BY CIT(A) WITHOUT APP ROPRIATELY APPRECIATING THE FACTS AND CIRCUMSTANCES OF THE CASE WHEN THESE HAS BEEN CORRE CTLY MADE BY ASSESSING OFFICER, IN THE LIGHT OF RELEVANT PROVISIONS OF LAW. THEREFORE , ORDER OF ASSESSING OFFICER SHOULD BE RESTORED BY SETTING ASIDE THE IMPUGNED ORDER. 6. LD.COUNSEL FOR THE ASSESSEE, WHILE RELYING UPON THE ORDER OF CIT(A), HAS PLEADED FOR CONFIRMATION OF IMPUGNED ORDER ON THE POINT OF INITIATION OF RE-ASSESSMENT PROCEEDINGS AS WELL AS ON DELETION OF ADDITIONS MAD E BY THE ASSESSING OFFICER BEING A COVERED ISSUE, AND BEING IN ACCORDANCE WITH RELEVAN T PROVISIONS OF LAW. IT WAS THUS PLEADED FOR CONFIRMATION OF THE IMPUGNED ORDER. 7. SO FAR AS INITIATION OF REASSESSMENT PROCEEDINGS ARE CONCERNED, WE HAVE GONE THROUGH THE FACTS, CIRCUMSTANCES AND MATERIAL ON RE CORD IN THE LIGHT OF PLEAS RAISED BY RIVAL SIDES AND FIND THAT THERE WAS NO FAILURE ON T HE PART OF THE ASSESSEE TO DISCLOSE MATERIAL FACTS FOR COMPLETION OF THE ASSESSMENT AND RE-ASSESSMENT PROCEEDINGS HAVE BEEN INITIATED BEYOND FOUR YEARS. THEREFORE, CIT(A)S A CTION IN THIS REGARD IS JUSTIFIED, WHICH IS UPHELD AND APPEAL OF THE DEPARTMENT IN THIS REGA RD IS DISMISSED. I.T.A. NO.1186/DEL./2012 (A.Y. : 2004-05) 4 8. SINCE THE ACTION OF THE CIT(A) WITH REGARD TO H OLDING THE INITIATION OF RE- ASSESSMENT PROCEEDINGS TO BE BAD IN LAW HAS BEEN UP HELD BY US, THEREFORE, ISSUES RAISED ON MERITS ARE NOT BEING ADJUDICATED UPON. 9. AS SUCH, THIS APPEAL OF THE DEPARTMENT GETS DISM ISSED. ORDER PRONOUNCED IN OPEN COURT ON SD/- SD/- (A.N. PAHUJA) (U.B.S. BEDI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 01.08.2012 SKB COPY OF THE ORDER FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A)-LTU, NEW DELHI. 5. CIT(ITAT) DEPUTY REGISTRAR, ITAT