Jt. CIT, R-10, Pune, Pune V. Pimpri Chinchwad New Town Devlopment Authoriy, Pune

ITA 1229/PUN/2009

• Counselvise Citation: 122924514 RSA 2009
• Duration Of Justice: 2 year(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-10-2011
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 20-10-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 14-10-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S K SINGH
• Keywords: Business income; Depreciation; Opportunity of being heard; Retrospective amendment
• Section: 143(3); 12A; 12AA; 6; 12; 10; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI I.C. SUDHIR, JUDICIAL MEMBER AND SHRI G.S. PANNU, ACCOUNTANT MEMBER SL. NO ITA NO./CO NO ASSTT. YEAR APPELLANT/CROSS OBJECTOR RESPONDENT 1. 1229/PN/09 04-05 JT. COMMISSIONER OF INCOME-TAX, R- 10, PUNE PIMPRI CHINCHWAD NEW TOWN DEVELOPMENT AUTHORITY, PUNE 2. CO 05/PN/11 04-05 PIMPRI CHINCHWAD NEW TOWN DEV. AUTHORITY, PUNE DY. COMMISSIONER OF I.T. CIR. 10, PUNE ASSESSEE BY : SHRI S N PURANIK DEPARTMENT BY : SHRI S K SINGH DATE OF HEARING : 20.10.2011 DATE OF PRONOUNCEMENT : 21.10.2011 ORDER PER G. S. PANNU, A.M : THE APPEAL BY THE REVENUE AND THE CROSS OBJECTION BY THE ASSESSEE ARISE OUT OF THE ORDER OF THE COMMISSIONER OF INCOME-T AX (APPEALS)-III, PUNE DATED 31.7.2009, WHICH IN TURN, HAS ARISEN FROM THE OR DER OF THE ASSESSING OFFICER DATED 12.12.2008 PASSED UNDER SECTION 143(3) OF THE IN COME-TAX ACT, 1961 (IN SHORT THE ACT), PERTAINING TO THE ASSESSMENT YEAR 2004 -05. 2. THE GROUNDS OF APPEAL RAISED BY THE REVENUE READ AS FOLLOWS: 1.(I) WHETHER ON THE FACTS AND CIRCUMSTANCES OF TH E CASE AND IN LAW, THE LD CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION MADE ON ACCO UNT OF EXCESS DEPRECIATION CLAIMED STATING THAT THE EXPLANATION 6 TO SECTION 4 3(6) APPLIES TO THE CASE OF THE ASSESSEE, WHEREAS ON A COMBINED READING OF SECTION 2(45), 5(1) AND SECTION 10 OF THE I.T. ACT IT IS SEEN THAT IN THE CASE OF ASSE SSEE WHOSE INCOME IS EXEMPT U/S 10, IT CANNOT BE SAID TO BE NOT REQUIRED TO COMPUTE ITS TOTAL INCOME AS STATED IN AMENDED EXPLANATION 6 TO SEC. 43(6)? (II). WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, AND IN LAW, THE LD CIT (A) WAS JUSTIFIED IN DELETING THE DISALLOWANCE OF DEPRE CIATION OF RS 2,19,36,873/- BY HOLDING THAT EXPLANATION 6 TO SEC 43(6) SQUARELY AP PLIES TO THE CASE OF THE ASSESSEE MEANING THEREBY THAT ONLY DEPRECIATION PRO VIDED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE IN RESPECT OF THE YEAR FOR WHICH THE INCOME OF THE 2 ASSESSEE WAS EXEMPT HAS TO BE CONSIDERED TO BE THE DEPRECIATION ACTUALLY ALLOWABLE UNDER THE I. T. ACT? (III) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, AND IN LAW, HE LD CIT (A) WAS JUSTIFIED IN DELETING THE ADDITION OF RS 3,57,8 8,168/- WHEN THE ASSESSEES INCOME IS LIABLE FOR TAXATION UNDER THE IT ACT, AFT ER THE PROVISION OF SEC. 10(20A) OF THE I.T ACT PROVIDING FOR SUCH EXEMPTION WERE OM ITTED BY FINANCE ACT, 2002? (IV) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, AND IN LAW, THE LD CIT (A) WAS JUSTIFIED IN DELETING THE ADDITION OF RS 3,57,8 8,168/- WHEN THE ASSESSEE IS NOT REGISTERED U/S 12A OF THE I T ACT AND HENCE INC OME OF THE ASSESSEE IS NOT EXEMPT U/S 11 OF THE I T ACT? 3. AT THE OUTSET, THE PARTIES WERE OF THE COMMON VIEW THAT CONSEQUENT TO THE ORDER OF THE TRIBUNAL IN THE ASSESSEES OWN CASE IN ITA NO 969/PN/09 DATED 29.4.2009, THE IMPUGNED ASSESSMENT ORDER DENYING ASSESSEE S CLAIM FOR EXEMPTION UNDER SECTIONS 11 AND 12 IS REQUIRED TO BE REVISITED. THE TRIBUNAL, VIDE ITS ORDER DATED 29.4.2009 (SUPRA) DIRECTED THE C OMMISSIONER TO GRANT REGISTRATION TO THE ASSESSEE UNDER SECTION 12A OF THE ACT, WHICH WAS HITHERTO NOT AVAILABLE WHEN THE ASSESSING OFFICER FRAMED THE IMPUGN ED ASSESSMENT ORDER ON 12.12.2008. THE LEARNED COUNSEL FOR THE ASSESSEE POINTE D OUT THAT THE TRIBUNAL IN A SUBSEQUENT DECISION VIDE ITA NO 1432/PN/09 DATED 1 9.5.2010 HAS FURTHER DIRECTED THE COMMISSIONER TO GRANT REGISTRATION UNDER SE CTION 12AA WITH EFFECT FROM 1.4.2002 AND NOT WITH EFFECT FROM 30.11.2006 AS GRANTED BY THE COMMISSIONER VIDE HIS ORDER DATED 29.9.2009. 4. CONSIDERING THE AFORESAID FACTUAL MATRIX, WE, THERE FORE, FIND NO REASON TO INTERFERE WITH THE DIRECTIONS OF THE COMMISSIONER OF IN COME-TAX (APPEALS) CONTAINED IN PARA 3.3 OF THE IMPUGNED ORDER, WHEREIN THE ASSESSING OFFICER HAS BEEN DIRECTED TO EXAMINE AND SATISFY HIMSELF THE CONDI TIONS ENVISAGED IN THE ACT FOR THE GRANT OF EXEMPTION UNDER SECTION 11 AND 12 OF THE ACT AS PER LAW AFTER NOTICING THE ORDER OF THE TRIBUNAL DATED 29.04.2009( SUPRA). THE AFORESAID DIRECTIONS OF THE COMMISSIONER OF INCOME-TAX (APPEALS) AR E HEREBY AFFIRMED AND IN TERMS THEREOF GROUND NO. 1(IV) RAISED BY THE REVE NUE IS DISMISSED. 5. IN SO FAR AS GROUND NO. 1(III) IS CONCERNED, DEALING WITH ASSESSEES CLAIM OF EXEMPTION UNDER SECTION 10(20A) OF THE ACT, THE SA ME IN OUR VIEW IS MISCONCEIVED AS THE SAME DOES NOT ARISE OUT OF THE IMPUGN ED ORDER OF THE 3 COMMISSIONER OF INCOME-TAX(APPEALS),INASMUCH AS THERE IS N O FINDING BY THE COMMISSIONER OF INCOME-TAX (APPEALS) ON THIS ASPECT, MUCH LESS A FINDING PREJUDICIAL TO THE INTERESTS OF THE REVENUE. THEREFORE , GROUND NO. 1(III) IS DISMISSED AS MISCONCEIVED. 6. IN SO FAR AS GROUND NOS. 1(I & II) ARE CONCERNED, THE SAME RELATE TO THE COMPUTATION OF DEPRECIATION BY APPLYING EXPLANATION 6 TO SECTION 43(6) OF THE ACT INTRODUCED BY THE FINANCE ACT, 2008 WITH RETROSPECTIVE EFFECT FROM 1.4.2003. THE COMMISSIONER OF INCOME-TAX (APPEALS) HAS OBSERVED IN PARA 4.1 OF THE ORDER THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY HIS EARLIE R DECISION IN THE ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2003-04. IT WAS A COMMON POINT BETWEEN THE PARTIES THAT THE REFERENCE TO THE ASSESSMENT YEAR 2003-04 BY THE COMMISSIONER OF INCOME-TAX (APPEALS) IS AN INADVERTENT M ISTAKE, WHEREAS THE CORRECT YEAR IS ASSESSMENT YEAR 2005-06 WHEREIN THE COMMISSI ONER OF INCOME- TAX (APPEALS) VIDE HIS ORDER DATED 5.8.2008 HAD ADJUD ICATED THIS ISSUE, A COPY OF THE SAID ORDER HAS BEEN PLACED ON RECORD. IN PARA 6.9 OF THE SAID ORDER, THE COMMISSIONER OF INCOME-TAX (APPEALS) AGREED IN PRINCIPLE WITH THE ASSESSEE AND DIRECTED THE ASSESSING OFFICER TO RE-COMPUTE THE DEPRECIATI ON ACCORDINGLY. THE SAID DECISION OF THE COMMISSIONER OF INCOME-TAX (APPEALS) WAS SUBJECT-MATTER OF CONSIDERATION BY OUR CO-ORDINATE BENCH IN THE APPEAL OF THE REVENUE AND CORRESPONDING CROSS OBJECTION BY THE ASSESSEE, VIDE ITA NO 1 499/PN/08 AND CO NO 10/PN/09 RESPECTIVELY AND VIDE ORDER DATED 31.8. 2009, THE TRIBUNAL REMANDED THE ENTIRE ASSESSMENT BACK TO THE FILE OF THE ASSE SSING OFFICER ON THE GROUND THAT SUBSEQUENT TO FRAMING OF ASSESSMENT BY THE ASSESSING OFFICER, THE ENTIRE GAMUT OF THE ISSUE HAS UNDERGONE A CHANGE, INASM UCH AS THE COMMISSIONER WAS DIRECTED TO GRANT REGISTRATION TO THE A SSESSEE UNDER SECTION 12A OF THE ACT, VIDE ORDER OF THE TRIBUNAL DATED 29. 4.2009 (SUPRA). 7. IN THIS BACKGROUND, RIVAL PARTIES HAVE ADVANCED THEIR ARGUMENTS WITH REGARD TO GROUND NOS. 1(I&II) RELATING TO THE CLAIM O F DEPRECIATION ON ACCOUNT OF 4 EXPLANATION 6 TO SECTION 43(6) OF THE ACT. AS PER THE ASSESSEE, SIMILAR ISSUE CAME UP BEFORE THE TRIBUNAL IN ITA NO 382/PN/07 FOR THE ASSESSMENT YEAR 2003- 04 IN THE CASE OF MAHARASHTRA STATE WAREHOUSING CORPOR ATION, PUNE, AND VIDE ORDER DATED 23.8.2011, THE ISSUE HAS BEEN REMITTED TO THE FILE OF THE ASSESSING OFFICER TO BE DECIDED AFRESH IN ACCORDANCE WITH LAW. T HE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT IN VIEW OF THE PRECEDENT IN THE ASSESSEES OWN CASE, IN THIS YEAR ALSO THE ISSUE BE REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER TO BE DECIDED IN ACCORDANCE WITH LAW. 8. HAVING CONSIDERED THE RIVAL SUBMISSIONS, IN OUR VIEW, AS SIMILAR MATTER HAS BEEN REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER B Y OUR CO-ORDINATE BENCH FOR THE ASSESSMENT YEAR 2005-06 (SUPRA), WE THEREFORE D EEM IT FIT AND PROPER TO SET ASIDE THE ORDER OF THE COMMISSIONER OF INCOME-TAX (A PPEALS) AND REMIT THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER WITH DIR ECTION TO ADJUDICATE AFRESH THE AFORESAID ISSUE IN ACCORDANCE WITH LAW. 9. NEEDLESS TO MENTION, THE ASSESSING OFFICER SHALL ALLOW T HE ASSESSEE A REASONABLE OPPORTUNITY OF BEING HEARD IN SUPPORT OF A LL ITS CLAIMS AND THE ASSESSING OFFICER SHALL CONSIDER IT AND ADJUDICATE AFRESH A S PER LAW. 10. IN THE RESULT, APPEAL OF THE REVENUE IS PARTLY AL LOWED. 11. NOW COMING TO THE CROSS-OBJECTION RAISED BY THE ASSESSE E, THE FOLLOWING GROUNDS HAVE BEEN RAISED : 1. LOWER AUTHORITIES HAVE ERRED IN COMPUTING INCOME UNDER GENERAL PROVISIONS AS BUSINESS INCOME ETC. AS AGAINST COMPUTING INCOME U/ S 11 TO 13 OF THE ACT 1961. 2. CROSS OBJECTOR PRAYS FOR COMPUTATION OF INCOME U /S 11 TO 13 OF THE ACT, 1961, AS REGISTRATION U/S 12A HAS BEEN GRANTED WITH EFFECT F ROM 1.4.2002. 3. ORDERS OF HONBLE CIT(A) MAY PLEASE BE UPHELD ON BOTH THE ISSUES, DEPRECIATION & COMPUTATION OF INCOME U/S 11 TO 13 OF THE ACT. 4. LOWER AUTHORITIES HAVE ERRED IN CHARGING INTERES T U/S 234A, B, C SAME MAY PLEASE BE DELETED. 5. CROSS OBJECTOR DENIES LIABILITY TO INTEREST U/S 234A, B, C. 12. QUITE CLEARLY THE ISSUES RAISED IN THE CROSS-OBJECTION DO NOT REQUIRE ANY SEPARATE DETERMINATION AS THE ISSUES HAVE ALREADY BEEN R EMANDED BACK TO THE 5 FILE OF THE ASSESSING OFFICER WHILE DEALING WITH THE A PPEAL OF THE REVENUE IN THE EARLIER PARAS. 13. AS A RESULT, THE CROSS OBJECTION IS PARTLY ALLOWED. 14. RESULTANTLY THE APPEAL OF THE REVENUE AND THE CROSS-OBJECTION OF THE ASSESSEE ARE PARTLY ALLOWED. PRONOUNCED IN THE OPEN COURT ON THIS 21 ST DAY OF OCTOBER,2011. SD/- SD/- (I.C. SUDHIR) (G.S. PAN NU) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE, DATED: 21 ST OCTOBER, 2011 B COPY TO:- 1) THE ASSESSEES 2) JT. CIT R 10 PUNE 3) THE CIT-(A)-III, PUNE 4) THE CIT-V PUNE 5) THE D R, B BENCH, ITAT, PUNE 6) GUARD FILE BY ORDER TRUE COPY ASST. REGISTRAR, I.T.A.T., PUNE