Industrial Promotion and Investment Corporation of Orissa Ltd., Bhubaneswar V. ACIT, Circle-1(1), Bhubaneswar

ITA 141/CTK/2016

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 7697 (ITAT-CUTTACK)
• Duration Of Justice: 3 year(s) 9 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-01-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 19-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M K GAUTAM
• Assessee Lawyers: A K SABAT B K MOHAPATRA ARS
• Keywords: Depreciation; Principle of natural justice
• Section: 143(3); 263

Judgement Text

P A G E 1 | 4 IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE SHRI CHANDRA MOHAN GARG , JUDICIAL MEMBER AND LAXMI PRASAD SAHU, ACCOUNTANT MEMBER ITA NO . 141 /CTK/201 6 ASSESSMENT YEAR : 20 07 - 2008 INDUSTRIAL PROMOTION AND INVESTMENT CORPN. OF ORISSA LTD., IPICOL HOUSE, JANAPATH, BHUBANESWAR. VS. ACIT, CIRCLE 1(1), BHUBANESWAR. PAN/GIR NO. AAACI 4814 J (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI A.K.SABAT/B.K.MOHAPATRA , AR S REVENUE BY : SHRI M.K.GAUTAM, CIT DR DATE OF HEARING : 28 / 01 / 20 20 DATE OF PRONOUNCEMENT : 28 / 01 /20 20 O R D E R PER C.M.GARG,JM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 6.1.2016 OF THE CIT(A),1, BHUBANESWAR FOR THE ASSESSMENT YEAR 2007 - 08 . 2. GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE AS UNDER: 1. THAT THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 1, BHUBANESWAR ['CIT(APPEALS)'], ('CITA') DATED 06.01.2016 IN DISMISSING THE APPEAL IS AGAINST PRINCIPLES OF NATURAL JUSTICE, CONTRARY TO FACTS, ARBITRARY AND ERRONEOUS AND BAD, BOTH IN THE EYE OF LAW AND ON FACTS. 2. ADDITION/ DISALLOWANCE UNDER 'AMOUNT UNREALIZABLE, IRRECOVERABLE, WRITTEN OFF & LOSS ON INVESTMENT' - RS.2,37,80,513/ - A. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE SUSTAINING OF THE ADDITION OF RS.2,37,80,513/ - UNDER 'AMOUNT UNREALIZABLE, IRRECOVERABLE, WRITTEN OFF & LOSS ON INVESTMENT' BY THE LEARNED CIT(APPEALS) IS AGAINST THE PRINCIPLES OF NATURAL JUSTI CE, CONTRARY TO FACTS, UNJUSTIFIED, ERRONEOUS, ARBITRARY, AND BAD, BOTH IN THE EYE OF LAW AND ON FACTS. ITA NO.141/CTK/2016 ASSESSMENT YEAR : 2007 - 2008 P A G E 2 | 4 B. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE ADDITION/ DISALLOWANCE OF RS.2,37,80,513/ - UNDER 'AMOUNT UNREALIZABLE, IRRECOVERABLE, W RITTEN OFF & LOSS ON INVESTMENT' MADE BY THE LEARNED AO BY TREATING AS CAPITAL IN NATURE AND THE SUSTAINING OF THE SAME BY THE LEARNED CIT(APPEALS) IS CONTRARY TO FACTS, ARBITRARY, UNWARRANTED, UNJUSTIFIED, ERRONEOUS, BAD IN LAW AND LEGALLY NOT TENABLE. C. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE AMOUNT OF RS.2,37,80,513/ - WRITTEN OFF IS FULLY ALLOWABLE AS DEDUCTION AND OUGHT TO BE FULLY DELETED. 3. ADDITION UNDER 'INTEREST INCLUDED UNDER ON TIME SETTLEMENT(OTS) - RS.65,53,000/ - A. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE DISMISSAL OF THE GROUNDS FOR THE ADDITION OF RS.65,53,000/ - UNDER 'INTEREST INCLUDED UNDER ONE TIME SETTLEMENT(OTS) BY THE LEARNED CIT(APPEALS) IS ARBITRARY, UNJUSTIFIED, ERRONEOUS AND BAD. BOTH I N THE EYE OF LAW AND ON FACTS AND LEGALLY NOT TENABLE. B. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(APPEALS) HOLDING THAT THE AO WAS WELL WITHIN HIS POWERS TO DISALLOW THE AFORESAID RS.65,53,000/ - UNDER 'INTEREST INCLUDED U NDER ONE TIME SETTLEMENT(OTS) IS ARBITRARY, UNJUSTIFIED, ERRONEOUS AND BAD, BOTH IN THE EYE OF LAW AND ON FACTS AND LEGALLY NOT TENABLE. C. THAT BOTH THE ASSESSING OFFICER AS WELL AS THE LEARNED CIT(APPEALS) HAVE MIS - APPRECIATED THE FACTS AND THE AFORES AID ADDITION OF RS.65,53,000/ - UNDER 'INTEREST INCLUDED UNDER ONE TIME SETTLEMENT(OTS) IS ARBITRARY, UNJUSTIFIED, ERRONEOUS AND BAD, BOTH IN THE EYE OF LAW AND ON FACTS AND LEGALLY NOT TENABLE. D. THAT THE AFORESAID ADDITION OF RS.65,53,000/ - IS NOT BY A SPEAKING ORDER BY THE LEARNED ASSESSING OFFICER, AND THE NON DELETION OF THE SAME BY THE LEARNED CIT(APPEALS) IS ERRONEOUS, BAD IN LAW AND LEGALLY NOT TENABLE AND DESERVES TO BE FULLY DELETED ON THIS GROUND ALONE. 4. THAT THE LEARNED CIT(APPEALS) HOLD ING THAT THE GROUNDS OF APPEAL BEFORE HIM ARE DEFECTIVE IS INCORRECT, WRONG, ERRONEOUS AND BAD IN LAW. 5. THAT WITHOUT PREJUDICE TO GROUNDS 1 TO 4 ABOVE, THE ORDER DATED 28.03.2013 PASSED BY THE LEARNED ASSESSING OFFICER (NEITHER DETERMINING THE ASSESSE D TOTAL INCOME UNDER THE NORMAL PROVISIONS OF THE INCOME TAX ACT NOR U/S.H5JB OF THE I.T.ACT), IS ERRONEOUS, BAD IN LAW AND LEGALLY NOT TENABLE AND THE LEARNED CIT(APPEALS) OUGHT TO HAVE QUASHED THE SAID ORDER DT.28.03.2013. 3. FACTS IN BRIEF ARE THAT T HE ASSESSEE COMPANY, IS A WHOLLY OWNED GOVERNMENT OF ODISHA ENTERPRISE AND IS ENGAGED IN THE BUSINESS OF PROMOTION OF INDUSTRIES IN THE STATE OF ODISHA. THE ASSESSEE FILED THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2007 - 08 ON 29.10.2007 AT A LOSS OF RS .20,35,103/ - INCLUDING DEPRECIATION OF RS.5,63,768/ - UNDER THE NORMAL PROVISIONS OF THE INCOME TAX ACT ITA NO.141/CTK/2016 ASSESSMENT YEAR : 2007 - 2008 P A G E 3 | 4 AND TAXABLE BOOK PROFIT AT RS.2,64,44,612/ - U/S.115JB OF THE ACT. THE ASSESSING OFFICER COMPLETED THE ASSESSMENT UNDER SECTION 143(3) OF THE ACT ON 29. 10.2009 ACCEPTING THE INCOME/LOSS DETERMINED BY THE ASSESSEE. 4. THEREAFTER, THE LD CIT, BHUBANESWAR BY INVOKING THE REVISIONARY POWER UNDER SECTION 263 OF THE ACT RESTORED THE MATTER TO THE FILE OF THE AO TO EXAMINE THE ISSUE OF ALLOWABILITY OF RS.2,37 ,80,513/ - UNDER AMOUNT UNREALIZABLE, IRRECOVERABLE, WRITTEN OFF & LOSS ON INVESTMENT AS PER THE PROVISIONS OF LAW AND TO PASS ASSESSMENT DENOVO. THE ASSESSEE WENT IN APPEAL BEFORE THE TRIBUNAL AGAINST THE ORDER U/S.263 OF THE ACT. 5. ON APPEAL, THE ITAT WHILE UPHOLDING THE ORDER U/S.263 OF THE ACT CLARIFIED THAT THE AO WILL EXAMINE ONLY THE ISSUE OF ALLOWABILITY OF RS.2,37,80,513/ - UNDER AMOUNT UNREALIZABLE, IRRECOVERABLE, WRITTEN OFF & LOSS ON INVESTMENT. 6. IN PURSUANCE TO THE DI RECTION OF THE CIT, BHUBANESWAR, THE AO COMPLETED THE ASSESSMENT U/S.L43(3)/26 3, INTER ALIA, DISALLOWING RS.2,37,80,513/ - ON ACCOUNT OF AMOUNT UNREALIZABLE/IRRECOVERABLE 'WRITTEN OFF' & 'LOSS ON INVESTMENT' AND RS.65,53,000/ - IN RESPECT OF UNDERSTATEMENT OF INCOME. 7. BEING AGGRIEVED WITH THE SAID TWO DISALLOWANCES IN THE ASSESSMENT, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD CIT(A) BUT WITHOUT ANY SUCCESS. IT IS NOTED FROM THE ORDER OF THE LD CIT(A) THAT THE ASSESSEE DID NOT APPEAR BEFORE HIM DESPITE GI VEN VARIOUS OPPORTUNITIES, THEREFORE, THE ORDER WAS PASSED EXPARTE. 8. AT THE TIME OF HEARING, LD COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE LD CIT(A) PASSED EXPARTE ORDER WITHOUT HEARING THE ASSESSEE. THEREFORE, HE PRAYED THAT ONE MORE OPPORTUNITY BE PR OVIDED TO THE ASSESSEE TO PUTFORTH ITS GRIEVANCE ITA NO.141/CTK/2016 ASSESSMENT YEAR : 2007 - 2008 P A G E 4 | 4 BEFORE THE LD CIT(A). HE ALSO UNDERTAKES AT BAR THAT IF OPPORTUNITY IS GIVEN, THE ASSESSEE WILL APPEAR BEFORE THE LD CIT(A) WITHOUT ANY FAIL. LD D.R. DID NOT HAVE ANY SERIOUS OBJECTION TO RESTORING THE MAT TER TO THE FILE OF THE LD CIT(A) FOR FRESH ADJUDICATION AFTER HEARING THE ASSESSEE. 9. IN VIEW OF ABOVE SUBMISSIONS OF BOTH THE SIDES, WE ARE OF THE OPINION THAT IT WILL SERVE THE INTEREST OF JUSTICE IF THE PRESENT APPEAL IS RESTORED BACK TO THE FILE OF C IT (A) WITH A DIRECTION TO DISPOSE OF THE APPEAL FILED BY THE ASSESSEE ON MERITS AFTER GIVING THE ASSESSEE A REASONABLE OPPORTUNITY OF HEARING . THE ASSESSEE IS ALSO DIRECTED TO CO - OPERATE WITH THE LD CIT(A) FOR DISPOSAL OF THE APPEAL. WITH THESE DIRECTION S , THE APPEAL IS REMITTED TO THE FILE OF THE LD CIT(A). 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 28 / 01 /20 20 . S D/ - SD/ - (LAXMI PRASAD SAHU) ( CHANDRA MOHAN GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER CUTTACK; DATED 28 / 01 /20 20 B.K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : BY ORDER SR . PVT. S ECRETARY ITAT, CUTTACK 1. THE APPELLANT : INDUSTRIAL PROMOTION AND INVESTMENT CORPN. OF ORISSA LTD., IPICOL HOUSE, JANAPATH, BHUBANESWAR. 2. THE RESPONDENT. ACIT, CIRCLE 1(1), BHUBANESWAR 3. THE CIT(A) - , 1 BHUBANESWAR 4. PR.CIT - 1 , BHUBANESWAR 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//