ACIt, Ernakulam V. The Thirumbadi Rubber Co. Ltd, Coimbatore

ITA 1203/COCH/2004

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 58366 (ITAT-COCHIN)
• Duration Of Justice: 7 year(s) 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-03-2012
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 22-03-2012
• Assessment Year: 1996-1997
• Appeal Filed On: 29-11-2004
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: VIJAYAPRABHA
• Assessee Lawyers: R KRISHNA IYER
• Section: 143(3); 154

Judgement Text

1 ITA NO.1203/COCH/2004 CO 41/COCH/2005 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI N.R.S. GANESAN (JM) AND SHRI B.R. BASKARA N(AM) I.T.A NO. 1203/COCH/2004 (ASSESSMENT YEAR 1997-98) A.C.I.T., CIR.1(1) VS THE THIRUMBADI RUBBER CO LTD ERNAKULAM 234A, RACE COURSE ROAD COIMBATORE-641 016 PAN : NOT AVAILABLE (APPELLANT) (RESPONDENT) C.O. 41/COCH/2005 (ARISING OUT OF I.T.A NO. 1203/COCH/2004) (ASSESSMENT YEAR 1997-98) THE THIRUMBADI RUBBER CO LTD VS THE A.C.I.T., CI R.1(1) COIMBATORE ERNAKULAM (CROSS OBJECTOR) (RESPONDENT) REVENUE BY : SMT. VIJAYAPRABHA ASSESSEE BY : SHRI R KRISHNA IYER DATE OF HEARING : 22-03-2012 DATE OF PRONOUNCEMENT : 29-03-2012 O R D E R PER N.R.S. GANESAN (JM) 2 ITA NO.1203/COCH/2004 CO 41/COCH/2005 THE REVENUE FILED THE PRESENT APPEAL AGAINST THE O RDER OF THE COMMISSIONER OF INCOME-TAX(A)-III, KOCHI DATED 09-08-20 04 AND PERTAINS TO ASSESSMENT YEAR 1997-98. THE ASSESSEE FILED THE CR OSS OBJECTION AGAINST THE VERY SAME ORDER OF THE COMMISSIONER OF INCOME-TAX(A). TH EREFORE, WE HEARD THE APPEAL OF THE REVENUE AND THE CROSS OBJECTION OF TH E ASSESSEE TOGETHER AND DISPOSE OF THE SAME BY THIS COMMON ORDER. 2. THE APPEAL OF THE ASSESSEE AND THE CROSS OBJECTI ON WERE DISPOSED OF EARLIER BY THIS TRIBUNAL BY AN ORDER DATED 19-01-200 7. ON FURTHER APPEAL BY THE REVENUE BEFORE THE HIGH COURT, THE HIGH COURT SET A SIDE THE ORDER OF THE TRIBUNAL AND REMANDED BACK THE MATTER TO THE FILE OF THE TRIB UNAL FOR RE-HEARING ON THE QUANTUM RELIEF SOUGHT BY THE ASSESSEE. THE HIGH CO URT HAS ALSO DIRECTED THE TRIBUNAL TO DISPOSE OF THE APPEAL AFTER HEARING BOT H PARTIES WITHIN A PERIOD OF THREE MONTHS FROM THE DATE OF RECEIPT OF COPY OF JU DGMENT. ACCORDINGLY, THE APPEAL OF THE REVENUE AS WELL AS THE CROSS OBJECTIO N WERE REFIXED AND NOTICE WAS SERVED ON THE REVENUE AS WELL AS ON THE ASSESSEE. 3. IN RESPONSE TO THE NOTICE ISSUED BY THE TRIBUNAL FIXING THE APPEAL FOR HEARING, SHRI KRISHNA IYER, THE LD.REPRESENTATIVE FO R THE ASSESSEE APPEARED BEFORE THIS TRIBUNAL. SHRI KRISHNA IYER SUBMITTED THAT ALL THE APPEAL PAPERS WERE FORWARDED TO CALCUTTA. THEREFORE, HE IS UNABLE TO ARGUE THE APPEAL. WHEN THE TRIBUNAL BROUGHT TO HIS NOTICE THE DIRECTION OF THE HIGH COURT TO DISPOSE OF THE APPEAL WITHIN THREE MONTHS FROM THE DATE OF RECEIPT OF COPY OF THE JUDGMENT AND THREE MONTHS PERIOD HAS ALREADY BEEN EXPIRED, THE LD.REPRESENTATIVE SUBMITTED THAT HE CAN NOT ARGUE THE APPEAL UNLESS HE GOT THE PAPERS FROM CALCUTTA. WHEN THE TRIBUNAL SUGGESTED THAT AT THE BEST, THE APPEAL CAN BE ADJOURNED FOR A WEEK 3 ITA NO.1203/COCH/2004 CO 41/COCH/2005 THE LD.REPRESENTATIVE FOR THE ASSESSEE INSISTED THA T THE APPEAL SHOULD BE ADJOURNED FOR A MONTH. IN VIEW OF THE SPECIFIC DIR ECTION OF THE HIGH COURT TO DISPOSE OF THE APPEAL WITHIN A PERIOD OF THREE MONT HS FROM THE DATE OF RECEIPT OF COPY OF THE JUDGMENT OF THE HIGH COURT, THIS TRIBUN AL IS NOT IN A POSITION TO ADJOURN THE APPEAL FOR A MONTH AS HAS BEEN REQUESTE D BY THE ASSESSEE. WHEN THIS WAS BROUGHT TO THE NOTICE OF THE LD.REPRESENTA TIVE FOR THE ASSESSEE, THE LD.REPRESENTATIVE, SHRI KRISHNA IYER VERY FAIRLY SUB MITTED THAT THE ORDERS MAY BE PASSED ON MERIT AFTER HEARING THE LD.DR. THEREFORE , IN COMPLIANCE TO THE DIRECTION OF THE HIGH COURT TO DISPOSE OF THE APPEA L WITHIN THREE MONTHS FROM THE DATE OF RECEIPT OF COPY OF THE JUDGMENT, WE HEARD S MT. VIJAYAPRABHA, THE LD.DR AND THE APPEAL IS BEING DECIDED ON MERIT ON THE BAS IS OF THE MATERIAL AVAILABLE ON RECORD. 4. SMT. VIJAYAPRABHA, THE LD.DR SUBMITTED THAT THE RETURN FILED BY THE ASSESSEE WAS PROCESSED U/S 143(1)(A) AND INTIMATION WAS ISSUED. SUBSEQUENTLY, THE ASSESSING OFFICER FOUND THAT THE ASSESSEE REDUC ED THE SALE PROCEEDS OF RUBBER TREES FROM THE BOOK PROFIT COMPUTED U/S 115JA OF TH E ACT. REFERRING TO PROVISIONS OF SECTION 115JA, THE LD.DR ARGUED THAT THERE IS NO CLAUSE IN SECTION 115JA TO REDUCE THE SALE PROCEEDS OF RUBBER TREE FR OM THE PROFIT COMPUTED. THEREFORE, THE ASSESSING OFFICER RECTIFIED THE ORDE R U/S 154 BY ADDING BACK THE PROFIT ON SALE OF TREES TO THE EXTENT OF RS.51,93,7 15. ON APPEAL BY THE ASSESSEE, THE COMMISSIONER OF INCOME-TAX(A) SET ASIDE THE ORDE R OF THE ASSESSING OFFICER ON THE GROUND THAT IT IS A DEBATABLE ISSUE WHICH WAS C ONFIRMED BY THE TRIBUNAL. HOWEVER, ON FURTHER APPEAL BY THE REVENUE BEFORE TH E HIGH COURT, THE HIGH COURT FOUND THAT THE INCOME DETERMINED U/S 115JA IN THE R ECTIFICATION PROCEEDINGS WAS ALSO ADOPTED AND INCORPORATED IN THE REGULAR ASSESS MENT PROCEEDINGS COMPLETED 4 ITA NO.1203/COCH/2004 CO 41/COCH/2005 U/S 143(3) OF THE ACT. THE HIGH COURT FURTHER FOUN D THAT THE ASSESSING OFFICER HAS NOT CONSIDERED THE APPLICATION OF SECTION 115JA OF THE ACT. THEREFORE, THE ASSESSMENT COMPLETED WITHOUT REFERRING TO SECTION 1 15JA IS BLATANT MISTAKE IN THE ORDER WHICH CALLS FOR CORRECTION IN A PROCEEDIN GS U/S 154 OF THE ACT. ACCORDINGLY THE HIGH COURT DIRECTED THE TRIBUNAL TO DISPOSE OF THE APPEAL ON MERIT. THE ONLY CONTENTION OF THE LD.DR IS THAT SI NCE THE PROFIT ON SALE OF RUBBER TREE IS NOT AN ITEM WHICH HAS TO BE REDUCED FROM TH E BOOK PROFIT, THE ASSESSEE CANNOT REDUCE THE SAME FROM THE BOOK PROFIT. 5. WE HAVE CONSIDERED THE SUBMISSIONS OF THE LD.DR AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. WE HAVE ALSO CAREFUL LY GONE THROUGH THE PROVISIONS OF SECTION 115JA OF THE ACT. ONCE THE BOOK PROFIT I S COMPUTED UNDER THE PROVISIONS OF THE COMPANIES ACT, THE ITEMS WHICH W ERE SHOWN IN EXPLANATION TO SECTION 115JA HAVE TO BE INCREASED / REDUCED. AS R IGHTLY POINTED OUT BY THE LD.DR, PROFIT ON SALE OF RUBBER TREE IS NOT AN ITEM MENTIONED IN EXPLANATION TO SECTION 115JA WHICH COULD BE REDUCED FROM THE BOOK P ROFIT. ONCE IT IS NOT MENTIONED IN THE EXPLANATION AS AN ITEM WHICH IS TO BE REDUCED FROM THE BOOK PROFIT, THE ASSESSEE IS NOT JUSTIFIED IN MAKING ANY REDUCTION FROM THE BOOK PROFIT COMPUTED AS PER THE PROVISIONS OF COMPANIES ACT. THEREFORE, THIS TRIBUNAL IS OF THE OPINION THAT THE ASSESSING OFFICER HAS RIGHTLY ADDED THE PROFIT ON SALE OF RUBBER TREES FOR THE PURPOSE OF COMPUTING BOOK PROFI T U/S 115JA OF THE ACT. IN VIEW OF THE ABOVE, WE ARE UNABLE TO UPHOLD THE ORDE R OF THE COMMISSIONER OF INCOME-TAX(A). ACCORDINGLY, THE ORDER OF THE COMMIS SIONER OF INCOME-TAX(A) IS SET ASIDE AND THAT OF THE ASSESSING OFFICER IS REST ORED. 5 ITA NO.1203/COCH/2004 CO 41/COCH/2005 6. THE CROSS OBJECTION IS ONLY TO SUPPORT THE ORDER OF THE COMMISSIONER OF INCOME-TAX(A) AND NO INDEPENDENT GROUND IS RAISED. THEREFORE, THE CROSS OBJECTION BECOMES INFRUCTUOUS. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLO WED AND THE CROSS OBJECTION OF THE ASSESSEE IS ALSO DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 29 TH DAY OF MARCH, 2012. SD/- SD/- (B.R. BASKARAN) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN, DT : 29 TH MARCH, 2012 PK/- COPY TO: 1. A.C.I.T., CIR.1(1), ERNAKULAM 2. THE THIRUMBADI RUBBER CO LTD, 234A, RACE COURSE ROA D, COIMBATORE-641 016 3. THE COMMISSIONER OF INCOME-TAX(A)-III, KOCHI 4. THE COMMISSIONER OF INCOME-TAX, KOCHI 5. THE DR (TRUE COPY) BY ORDER ASSTT. REGISTRAR, INCOME-TAX APPELLATE TRIBUNAL, COCHIN BENCH