Siliguri Regulated Market Committee, Siliguri V. ACIT, Circle - 2, Siliguri

ITA 1345/KOL/2009

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3152 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 10 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-06-2013
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 14-02-2011
• Assessment Year: 2003-2004
• Appeal Filed On: 04-08-2009
• Court: TRIBUNAL
• Department Lawyers: L K S DEHIYA
• Keywords: Depreciation
• Section: 12A; 154

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH A , KOLKATA [ () . .. . . .. . , ,, , , !' ##$ %& ##$ %& ##$ %& ##$ %& ] ]] ] [BEFORE HONBLE SRI K.K.GUPTA, AM & HONBLE SRI GEORGE MATHAN, JM] '( '( '( '( /ITA NO.1345/KOL/2009 )&* !+,/ ASSESSMENT YEAR : 2003-04 (%. / APPELLANT ) - !& - ( 01%. /RESPONDENT) SILIGURI REGULATED MARKET COMMITTEE A.C.I.T., CIR CLE-2, SILIGURI SILIGURI (PAN:AAAJS 1938 F) %. 2 3 / FOR THE APPELLANT: SHRI RAVI TULSIYAN, FCA 01%. 2 3 / FOR THE RESPONDENT: SHRI L.K.S.DEHIYA, CIT(DR) &!4 2 5 /DATE OF HEARING : 23.05.2013 6+ 2 5 /DATE OF PRONOUNCEMENT : 19.06.2013 7 / ORDER PER SHRI GEORGE MATHAN, JM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. C.I.T.(A)-SILIGURI IN APPEAL NO.03/CIT(A)/SLG/08-09 DATED 26.05.2009 F OR ASSESSMENT YEAR 2003-04. 2. SHRI RAVI TULSIYAN, FCA REPRESENTED ON BEHALF O F THE ASSESSEE AND SHRI L.K.S.DEHIYA, CIT(DR) REPRESENTED ON BEHALF OF THE REVENUE. 3. IN THE ASSESSEES APPEAL THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS :- 1. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) WAS NOT JUSTIFIED IN NOT ALLOWING DEDUCTION TOWARDS DEP RECIATION TO THE TUNE OF RS.49,66,765/-. 2. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, THE LD. CIT(A) ERRED IN NOT ALLOWING RS.65,82,382/ WHICH WAS ACTUALLY PA ID DURING THE YEAR UNDER APPEAL TO WBSM BOARD ON THE GROUND THAT THE SAME DI D NOT PERTAIN TO THE RELEVANT YEAR. 3. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, THE LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ADDITION OF RS.79,3 9,073/- MADE BY THE AO ON ACCOUNT OF ALLEGED INTEREST INCOME. I TA NO.1345/KOL/2009 SILIGURI REGULATED MARKET COMMITTED VS A.C.I.T., CIRCLE-2, SILIGURI A.YR.2003-04 2 4. THAT THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR DELETE ALL OR ANY OF THE GROUNDS OF THE APPEAL. 4. IN REGARD TO GROUND NO.1 OF THE ASSESSEES APPEA L WHICH IS AGAINST THE ACTION OF THE LD. CIT(A) IN NOT ALLOWING DEPRECIATION, IT WAS SUBMITTED BY THE LD. AR THAT THE ASSESSEE WAS A LOCAL AUTHORITY WHICH CAME INTO EXIS TENCE AS PER THE NOTIFICATION NO.9062MW&C DATED 13.09.1973 ISSUED BY THE GOVERNME NT OF WEST BENGAL. IT WAS THE SUBMISSION THAT CONSEQUENT TO THE INSERTION OF EXPLANATION BELOW SECTION 10(20) OF THE ACT THE AO HAD INITIATED RE-ASSESSMENT PROCEEDI NGS. THE ASSESSEE HAD APPLIED FOR REGISTRATION U/S 12A OF THE ACT. IT WAS THE SUBMISS ION THAT THE ASSESEE WAS GRANTED REGISTRATION U/S 12A OF THE ACT WHEN THE APPEAL WAS PENDING BEFORE THE LD. CIT(A). IT WAS THE SUBMISSION THAT CONSEQUENTLY THE LD. CIT(A) HAD DIRECTED THE AO TO AMEND THE ASSESSMENT IN THE LIGHT OF REGISTRATION GRANTED TO IT U/S 12A OF THE ACT WITHOUT MAKING ANY INTERFERENCE TO THE ASSESSMENT ORDER. CO NSEQUENT TO THE ORDER OF THE LD. CIT(A) A FRESH ASSESSMENT WAS DONE ON 26.06.2007. T HE ASSESSEE FILED A PETITION U/S 154 AGAINST THE SAID ASSESSMENT ORDER WHICH WAS REJ ECTED. AGAINST THE SAID REJECTION OF 154, THE ASSESEE HAD FILED THE APPEAL BEFORE THE LD . CIT(A). IT WAS THE SUBMISSION THAT THE ASSESEE WAS ENTITLED TO THE DEPRECIATION ON THE FIXED ASSETS TREATED AS APPLICATION. IT WAS THE SUBMISSION THAT THIS ISSUE WAS NOW SQUARELY COVERED BY THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS BHORUKA PUBLIC WELFARE TRUST 240 ITR 513. THE AO MAY BE DIRECTED TO GRANT THE DEPRECIATI ON AS CLAIMED. 5. IN REPLY THE LD. DR SUBMITTED THAT THE ASSESSEE HAD NOT FILED ANY APPEAL AGAINST THE ORIGINAL ASSESSMENT PASSED GIVING EFFECT TO TH E ORDER OF THE LD. CIT(A) AND CONSEQUENTLY THE ISSUES IN APPEAL CANNOT BE RAISED IN 154 APPLICATION. IT WAS THE SUBMISSION THAT THE ISSUE OF DEPRECIATION ON THE FI XED ASSETS WHICH WAS TREATED AS APPLICATION FUNDS WAS A DEBATABLE ISSUE IN VIEW OF THE DECISION OF THE HONBLE KERALA HIGH COURT IN THE CASE OF LISSIE MEDICAL INSTITUTIO NS VS CIT, KOCHI REPORTED IN 348 ITR 344 (KER.). 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PERU SAL OF THE FACTS IN THE PRESENT CASE CLEARLY SHOWS THAT THE ASSESSEE HAS BEEN GRANT ED REGISTRATION U/S 12A OF THE ACT. I TA NO.1345/KOL/2009 SILIGURI REGULATED MARKET COMMITTED VS A.C.I.T., CIRCLE-2, SILIGURI A.YR.2003-04 3 THE LD. CIT(A) HAS DIRECTED THE AO TO AMEND THE ASS ESSMENT IN THE LIGHT OF THE REGISTRATION GRANTED TO IT U/S 12A OF THE ACT WITHO UT MAKING ANY INTERFERENCE TO THE ASSESSMENT ORDER. ADMITTEDLY AN ASSESSMENT CANNOT B E AMENDED IN THE LIGHT OF THE REGISTRATION GRANTED U/S 12A OF THE ACT WITHOUT MAK ING CORRESPONDING MODIFICATIONS IN THE ASSESSMENT ORDER. AN ASSESSING AUTHORITY IS NOT A TAX COLLECTOR. HE HAS THE DUTY TO BE FAIR AND COLLECT THE FAIR AMOUNT OF TAX. IF A NY BENEFIT IS DUE TO THE ASSESSEE IT IS SUPPOSED TO BE GIVEN TO THE ASSESSEE JUST AS IF ANY INCOME IS TO BE ASSESSED THE SAME SHOULD BE ASSESSED. A PERUSAL OF THE PRAYER OF THE ASSESSEE CLEARLY SHOWS THAT THE ASSESSEE IS ASKED FOR THE DEPRECATION ON THE INVEST MENTS IN THE FIXED ASSETS WHICH ADMITTEDLY HAS BEEN TREATED AS APPLICATION. THIS FI GURE OF THE VALUE OF THE INVESTMENT IN THE FIXED ASSETS IS AVAILABLE BEFORE THE AO. THE HONBLE JURIDICTIONAL HIGH COURT OF KOLKATA AS IN THE CASE OF BORUKHA PUBLIC WELFARE TR UST CATEGORICALLY HELD THAT THE DEPRECIATION CLAIMED IN THE ACCOUNTS BY THE ASSESS EE WAS AN OUTGOING FOR THE PURPOSE OF DETERMINATION OF INCOME IN TERMS OF SECTION 11(1 ) OF THE ACT. WHEN THE LD. CIT(A) DIRECTED THE AO TO AMEND THE ASSESSMENT IN THE LIGH T OF THE REGISTRATION GRANTED TO IT U/S 12A OF THE ACT IT IS AN AUTOMATIC DIRECTION THA T SUCH DEDUCTIONS OF DEPRECIATION IS AVAILABLE TO THE ASSESSEE MUST BE GIVEN. THE NON GR ANTING OF THE DEPRECIATION IS A MISTAKE APPARENT FROM RECORD. IN THE CIRCUMSTANCES, RESPECTFULLY FOLLOWING THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CA SE OF BHORUKA PUBLIC WELFARE TRUST REFERRED TO SUPRA THE AO IS DIRECTED TO GRANT THE A SSESSEE THE BENEFIT OF DEPRECIATION IN RESPECT OF THE INVESTMENT IN THE FIXED ASSETS. 7. IN THE RESULT GROUND NO.1 OF THE ASSESSEES APPE AL STAND ALLOWED. 8. IN RESPECT OF GROUND NO.2 IT WAS SUBMITTED BY T HE LD. AR THAT THE ASSESSEE HAS MADE STATUTORY PAYMENTS TO WEST BENGAL STATE MARKET ING BOARD. IT WAS THE SUBMISSION THAT THE LD. CIT(A) HAD NOT GRANTED THE DEDUCTION ON THE GROUND THAT THE PAYMENTS MADE DURING THE YEAR PERTAIN TO THE LIABIL ITY OF THE EARLIER ASSESSMENT YEARS. IT WAS THE SUBMISSION THAT IN VIEW OF THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS SHRI PLOT SWETAMBAR MURTI PUJ AK JAIN MANDAL 211 ITR 293 AS ALSO THE DECISION OF THE HONBLE RAJASTHAN HIGH COU RT IN THE CASE OF CIT VS MAHARANA I TA NO.1345/KOL/2009 SILIGURI REGULATED MARKET COMMITTED VS A.C.I.T., CIRCLE-2, SILIGURI A.YR.2003-04 4 OF MEWAR CHARITABLE FOUNDATION 164 ITR 439 AS THE A SSESSEE WAS FOLLOWING CASH SYSTEM OF ACCOUNTING, THE LIABILITY HAVING BEEN PAI D DURING THIS YEAR. THE SAME WAS LIABLE TO BE ALLOWED. 9. IN REPLY THE LD. DR SUBMITTED THAT THE ASSESSEE HAD DURING THE CURRENT YEAR PAID THE LIABILITY OF THE EARLIER ASSESSMENT YEARS ALSO. IT WAS THE SUBMISSION THAT THIS ISSUE MAY BE RESTORED TO THE FILE OF THE AO FOR VERIFICAT ION. 10. WE HAVE HEARD THE RIVAL SUBMISSIONS. ADMITTEDLY THE AMOUNT PAID DURING THE CURRENT ASSESSMENT YEAR RELATES TO THE EARLIER ASSE SSMENT YEARS. ADMITTEDLY THE ASSESSEE IS FOLLOWING CASH SYSTEM OF ACCOUNTING AS ALSO IT IS ALSO EVIDENT FROM THE SPECIAL AUDIT REPORT U/S 142(2A) IN THE CASE OF THE ASSESSEE. THERE IS NO EVIDENCE ON RECORD TO SHOW THAT THE AMOUNT CLAIMED TO HAVE BEEN PAID RELATES TO WHICH ASSESSMENT YEAR. IN THE CIRCUMSTANCES THIS ISSUE IS RESTORED T O THE FILE OF THE AO FOR VERIFICATION AS TO WHETHER THE AMOUNT HAS BEEN PAID DURING THE YEAR , WHETHER THE AMOUNT HAS BEEN CLAIMED AS AN EXPENDITURE IN ANY OF THE EARLIER ASS ESSMENT YEARS. IF IT IS FOUND THAT THE ASSESSEE HAS NOT CLAIMED THE SAID EXPENDITURE DURIN G ANY OF THE EARLIER ASSESSMENT YEARS AND THE ASSESSEE HAS PAID THE SAME DURING TH E RELEVANT ASSESSMENT YEAR THE AO SHALL GRANT THE ASSESSEE THE BENEFIT OF THE EXPENDI TURE BEING STATUTORY PAYMENT MADE TO WEST BENGAL STATE MARKETING BOARD FOR THE RELEVANT ASSESSMENT YEAR. 11. IN REGARD TO GROUND NO.3 IT WAS SUBMITTED BY TH E LD. AR THAT THE ISSUE WAS IN RESPECT TO ALLEGED INTEREST INCOME. IT WAS THE SUBM ISSION THAT THE ASSESSEE HAD RECEIVED INTEREST OF RS.1,41,88,414/- DURING THE YEAR. THE A O HAS ADOPTED THE FIGURE OF RS.2,21,27,487/-. FROM WHERE THE AO HAS GOT THIS F IGURE OF RS.2,21,27,487/- WAS UNKNOWN. IT WAS THE SUBMISSION THAT HE HAD NO OBJEC TION IF THIS ISSUE IS RESTORED TO THE FILE OF THE AO FOR VERIFICATION. 12. IN REPLY THE LD. DR SUBMITTED THAT HE HAD NO OB JECTION IF THIS ISSUE WAS RESTORED TO THE FILE OF THE AO FOR VERIFICATION AS TO WHAT I S THE ACTUAL INTEREST RECEIVED BY THE ASSESSEE. I TA NO.1345/KOL/2009 SILIGURI REGULATED MARKET COMMITTED VS A.C.I.T., CIRCLE-2, SILIGURI A.YR.2003-04 5 13. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PER USAL OF THE ORDER OF THE LD. CIT(A) SHOWS THAT THE AO HAS HELD THAT THE ASSESSEE HAS RECEIVED INTEREST AMOUNTING TO RS.2,21,27,487/- IN AGGREGATE FROM DIFFERENT BAN KS AS AGAINST RS.1,41,88,414/- AS SHOWN IN THE INCOME AND EXPENDITURE ACCOUNT. FOR TH IS THE ASSESSEE AND THE REVENUE HAS BEEN UNABLE TO EXPLAIN THE FIGURE OF RS,.2,21,2 7,487/-. IN THIS CIRCUMSTANCES WE ARE OF THE VIEW THAT THIS ISSUE NEEDS TO BE RESTORE D TO THE FILE OF THE AO FOR RE- VERIFICATION. THE AO SHALL VERIFY THE ACTUAL INTERE ST RECEIVED BY THE ASSESSEE DURING THE RELEVANT ASSESSMENT YEAR. IT IS MENTIONED THAT THE INTEREST RECEIVED DURING THE YEAR THAT CAN BE BROUGHT TO TAX. IN THE CIRCUMSTANCES THIS IS SUE IS RESTORED TO THE FILE OF THE AO FOR VERIFICATION AFTER GRANTING THE ASSESSEE ADEQUA TE OPPORTUNITY. 14. IN THE RESULT THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 19.06.2013 SD/- SD/- [ ., ,, , ] [ .##$ %& , ] [K.K.GUPTA] [ GEO RGE MATHAN ] ACCOUNTANT MEMBER JUDICIAL MEMBER ( (( (5 5 5 5) )) ) DATE: 19.06.2013. R.G.(.P.S.) 7 2 0))8 98+:- COPY OF THE ORDER FORWARDED TO: 1. SILIGURI REGULATED MARKET COMMITTEE, CHAMPASARI, SI LIGURI-734003. 2 A.C.I.T., CIRCLE-2, SILIGURI 3 . CIT KOLKATA 4. CIT(A)- SILIGURI. 5. DR, KOLKATA BENCHES, KOLKATA 18 0)/ TRUE COPY, 7&/ BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES ORDER PRONOUNCED BY SD/- SD/- AM(NSSAINI) JM(GEORGE MAT HAN)