MEERA COTTON & SYNTHETICS MILLS P.LTD, MUMBAI V. DCIT 9(2), MUMBAI

ITA 1220/MUM/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 83534 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-08-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 25-08-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 10-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PARMINDER
• Keywords: Depreciation
• Section: 143(3); 115JB; 80IB; 148; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH G, MUMBAI BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER AND DR. S.T.M. PAVALAN, JUDICIAL MEMBER ITA NO. 1220/MUM/2011 ASSESSMENT YEAR: 2005-06 MEERA COTTON & SYNTHETICS MILLS P. LTD. 301 DWARKESH, SUBHASH CROSS LANE, KANDIVALI (W) MUMBAI 400 067 PAN: AABCM 8385 J VS. DCIT 9(2) MUMBAI (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI VIJAY MEHTA & GOVIND JAVERI REVENUE BY : SMT. PARMINDER DATE OF HEARING : 25.08.2014 DATE OF PRONOUNCEMENT : 25.08.2014 O R D E R PER DR. S.T.M. PAVALAN, JM: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF THE LD.CIT(A) -20, MUMBAI DATED 27.12.2010 FOR THE ASSE SSMENT YEAR 2005-06. 2. IN THIS APPEAL, THE ASSESSEE, AMONG OTHER THINGS , HAS AGITATED THE DECISION OF THE LD.CIT(A) CONFIRMING THE ASSESSMENT MADE BY THE AO U/S 143(3) R.W.S 147 OF THE INCOME TAX ACT. 3. BRIEFLY STATED, THE ASSESSEE, A PRIVATE COMPANY ENGAGED IN THE BUSINESS OF PRODUCTION OF TEXTURISED YAWN, KNITTED FABRICS AND WOVEN FABRICS, IN ITS RETURN OF INCOME HAD DECLARED A TOTAL INCOME OF RS.81,04,562/ - U/S 115JB OF THE INCOME TAX ACT. THEREAFTER, THE ASSESSEE RECEIVED A NOTICE DAT ED 01.05.2008, BEARING NO. DCIT- 9(2) RECTIFICATION/07-08, INFORMING THE ASSESSEE TH AT THE DEDUCTION U/S 80IB OF RS.66,67,566/- WILL BE DISALLOWED BECAUSE THE QUANT UM OF DEDUCTION WAS NOT STATED IN FORM 10CCB AS SUBMITTED WITH THE COPY OF THE RET URN. THE SAID NOTICE FURTHER STATED THAT THE ASSESSEE HAD REDUCED ITS BOOK PROFI T BY RS.47,03,675/- BY CHARGING ITA NO. 1220/MUM/2011 MEERA COTTON & SYNTHETICS MILLS P. LTD. ASSESSMENT YEAR: 2004-05 2 THE SAME TO THE BOOK PROFIT OF THE COMPANY AS DEFIC IT IN DEPRECIATION ON CHANGE OF THE METHOD OF PROVIDING DEPRECIATION. THE ASSESSEE, VIDE ITS LETTER DATED 06.05.2008, SUBMITTED ITS CONTENTIONS AS TO WHY THE PROPOSALS O F THE AO WERE NOT VALID AND HAD CONTENDED THAT THE PROPOSED ACTION OF THE AO WAS NO T IN CONSONANCE WITH PROVISIONS OF SECTIONS 115JB AND 80IB OF THE ACT. FURTHER, THE AO ISSUED A NOTICE U/S 148 REOPENING THE SAID ASSESSMENT ON THE SAME GROUNDS A S STATED IN THE NOTICE FOR RECTIFICATION. CONSEQUENTLY, THE AO FINALIZED THE A SSESSMENT U/S 147 BY DISALLOWING A SUM OF RS.66,67,566/- U/S 80IB OF THE ACT AND ALSO INCREASED THE BOOK PROFIT OF THE ASSESSEE BY DISALLOWING A SUM OF RS.47,03,675/- AS DEFICIT IN DEPRECIATION DUE TO CHANGE IN THE METHOD OF PROVIDING DEPRECIATION. IN THE PROCESS, THE ASSESSEE WAS ASSESSED TO A TOTAL INCOME OF RS.66,77,566/- UNDER THE NORMAL PROVISIONS AND A SUM OF RS. 21,89,336/- WAS RAISED AS TAX PAYABLE BY THE ASSESSEE. ON APPEAL, THE LD.CIT(A) CONFIRMED THE REOPENED ASSESSMENT AND AGG RIEVED BY THE IMPUGNED ORDER, THE ASSESSEE IS IN APPEAL BEFORE US. 4. HAVING HEARD BOTH THE SIDES AND PERUSED THE MATE RIAL ON RECORD, IT IS NOT DISPUTED THAT THE NOTICE OF RECTIFICATION U/S 154 A ND THE NOTICE FOR REOPENING U/S 148 HAVE BEEN ISSUED ON THE SAME GROUND. WHEN THE ACTIO N INITIATED FOR RECTIFICATION HAS BEEN PENDING, BY AO SENT THE NOTICE FOR REOPENING O F THE ASSESSMENT ALSO. IN THIS CONNECTION, IT IS PERTINENT TO MENTION THAT THE TRI BUNAL, IN THE CASE OF M/S. JET SPEED AUDIO PVT. LTD. IN ITA NO. 8424/MUM/2011 , VIDE ITS ORDER DATED 22.06.2012, TO WHICH THE PRESENT ACCOUNTANT MEMBER IS ALSO A PARTY , HAS HELD THAT AFTER INITIATING THE PROCEEDINGS U/S 154, THE ACTION OF AO TO SUBSEQ UENTLY ISSUE NOTICE U/S 148 IS BAD IN LAW AS THERE IS NO EVIDENCE THAT PROCEEDINGS INITIATED U/S 154 ARE CONCLUDED OR COMMUNICATION TO THAT EFFECT HAS BEEN SENT TO TH E ASSESSEE. FOR THE SAID DECISION, THE TRIBUNAL HAS RELIED ON THE EARLIER DECISION OF THE TRIBUNAL IN THE CASE OF MAHINDER FREIGHT CARRIERS VS. CIT, 129 ITD 278 . IN VIEW OF THE FACT THAT THE SAID DECISIONS ARE SQUARELY APPLICABLE TO THE CASE OF THE ASSESSEE WHE REIN SIMILAR FACTS ARE INVOLVED, FOLLOWING THE SAID ORDER, WE OVER TURN THE ORDER OF THE LD.CIT(A) AND QUASH THE ASSESSMENT ORDER PASSED BY THE AO U/S 143 R.W.S.147 OF THE ACT. SINCE, WE HAVE QUASHED THE RE-ASSESSMENT ORDER PASSED U/S 147, WE DO NOT FIND IT NECESSARY TO ITA NO. 1220/MUM/2011 MEERA COTTON & SYNTHETICS MILLS P. LTD. ASSESSMENT YEAR: 2004-05 3 DEAL WITH THE OTHER ISSUES PERTAINING TO THE VALIDI TY OF ADDITIONS RAISED BY THE ASSESSEE. 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 25 TH DAY OF AUGUST, 2014. SD/- SD/- (N.K. BILLAIYA) (DR. S.T.M. PAVALAN) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 25.08.2014 *SRIVASTAVA COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR G BENCH //TRUE COPY// BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.