DCIT CC - XXVIII,Kolkata., Kolkata V. M/s Binani Cement Ltd., Kolkata

ITA 142/KOL/2013

• Counselvise Citation: 14223514 RSA 2013
• Duration Of Justice: 2 year(s) 9 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-10-2015
• Appeal Filed By: Department
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 18-01-2013
• Court: TRIBUNAL
• Keywords: Depreciation
• Section: 147; 143(3); 260A; 115JB

Judgement Text

ITA NOS, 142,143 & CO NO.33/KOL/13-AM M/ S. BINANI CEMENT LTD 1 IN THE INCOME TAX APPELLATE TRIBUNAL, A BENCH, K OLKATA BEFORE : SHRI N.V. VASUDEVAN, JUDICIAL MEMBER, A ND SHRI M. BALAGANESH, ACCOUNTANT MEMBER I.T.A NOS. 142 & 143/KOL/ 2013 A.YS : 2006-07 & 09-10 D.C.I.T, CC-XXVIII, KOLKATA VS. M/S. B INANI CEMENT LTD PAN:AABCB3 087C (APPELLANT/DEPARTMENT) (RESPONDENT/ASSESSE E) C.O NO. 33/KOL/ 2013( A/O ITA NO.142/KOL/2013 A.Y : 2006-07 M/S. BINANI CEMENT LTD VS. D.C.I.T, CC -XXVIII, KOLKATA (CROSS OBJECTOR) (RESPONDENT/DEP ARTMENT) FOR THE APPELLANT/ DEPARTMENT : S/SH RAJAT SU BHRA BISWAS, CIT/DR SH. DEBASISH ROY, JCIT, LD.SR. DR FOR THE RESPONDENT/ASSESSEE: NONE APPE ARED DATE OF HEARING: 15-10-2015 DATE OF PRONOUNCEMENT: 28-10-201 5 ORDER SHRI M.BALAGANESH, AM THESE APPEALS OF THE REVENUE AND CROSS OBJECTION O F THE ASSESSEE ARISE OUT OF THE ORDER OF THE LEARNED CITA IN APPEAL NO. 156/CIT (A)C-I/CC-XXVIII/11-12 DATED 23.11.2012 FOR ASST YEAR 2006-07 AND APPEAL NO. 157 /CIT(A)C-I/CC-XXVIII/11-12 DATED 23.11.2012 FOR ASST YEAR 2009-10 AGAINST THE ORDERS OF ASSESSMENT FRAMED U/S 143(3) / 147 / 263 OF THE INCOME TAX ACT, 1961 (HER EINAFTER REFERRED TO AS THE ACT). 2. SHRI. RAJAT SUBHRA BISWAS, THE LEARNED CIT DR A RGUED ON BEHALF OF THE REVENUE AND NONE APPEARED ON BEHALF OF THE ASSESSEE . ITA NOS, 142,143 & CO NO.33/KOL/13-AM M/ S. BINANI CEMENT LTD 2 3. THE REVENUE HAD RAISED THE FOLLOWING GROUNDS F OR BOTH THE YEARS UNDER APPEAL :- GROUNDS OF APPEAL FOR A.Y 2006-07 (I) THAT THE LD.CIT(A) HAS ERRED IN LAW AS WELL AS IN F ACTS AND CIRCUMSTANCES OF THE CASE IN DELETING THE DISALLOWA NCE OF DEPRECIATION AMOUNTING TO RS.2,06,64,525/- ON CAPIT AL EQUIPMENT PURCHASED FROM M/S. SHRIMAL CONSTRUCTION (P) LTD. (II) THAT THE LD.CIT(A) HAS ERRED IN LAW AS WELL AS IN F ACTS AND CIRCUMSTANCES OF THE CASE IN DELETING THE ADDITION OF RS.9,19,52,000/- MADE TO BOOK PROFIT U/S.115JB ON T HE GROUND THAT THE ORDER U/S. 263 DATED 20.01.2011 OF THE LD. CIT( CENTRAL)-I, KOLKATA HAS BEEN QUASHED BY THE HONBLE ITAT, WHILE AN APPEAL U/S. 260A IS PENDING BEFORE THE HONBLE HIGH COURT AT CALCUTTA, AGAINST THE ORDER OF THE HONBLE ITAT. (III)THAT THE DEPARTMENT CRAVES TO ADD, MODIFY OR A LTER THE GROUNDS OF APPEAL DURING THE COURSE OF HEARING OF THE CA SE. GROUNDS OF APPEAL FOR A.Y 2009-10 (I) THAT THE LD.CIT(A) HAS ERRED IN LAW AS WELL AS IN F ACTS AND CIRCUMSTANCES OF THE CASE IN DELETING THE DISALLOWA NCE OF DEPRECIATION AMOUNTING TO RS.1,14,42,291/- ON CAPIT AL EQUIPMENT PURCHASED FROM M/S. SHRIMAL CONSTRUCTION (P) LTD. (II) THAT THE LD.CIT(A) HAS ERRED IN LAW AS WELL AS IN F ACTS AND CIRCUMSTANCES OF THE CASE IN DELETING THE ADDITION AMOUNTING TO RS.3,53,74,000/- ON ACCOUNT OF PAYMENTS MADE TO M/S . SHRIMAL CONSTRUCTION (P) LTD. (III)THAT THE DEPARTMENT CRAVES TO ADD, MODIFY OR A LTER THE GROUNDS OF APPEAL DURING THE COURSE OF HEARING OF THE CA SE. 4. AS THE ISSUES INVOLVED IN BOTH THE YEARS ARE I DENTICAL IN NATURE, THEY ARE TAKEN UP TOGETHER AND DISPOSED OFF BY THIS COMMON ORDER F OR THE SAKE OF CONVENIENCE AND BREVITY. 5. THE LEARNED DR VEHEMENTLY SUPPORTED THE ORDERS OF THE LEARNED AO. ITA NOS, 142,143 & CO NO.33/KOL/13-AM M/ S. BINANI CEMENT LTD 3 6. WE HAVE HEARD THE LEARNED DR AND PERUSED THE MA TERIALS AVAILABLE ON RECORD. THE LEARNED CITA HAD DELETED THE ADDITIONS BY MAKIN G THE FOLLOWING OBSERVATIONS :- PARA 4 TO 6 OF THE LD.CIT(A)S ORDER : 4. GROUND NO.2 RELATES TO DISALLOWANCE OF DEPREC IATION OF RS.2,06,64,525/- ON CAPITAL EQUIPMENT PURCHASED FRO M M/S. SHRIMAL CONSTRUCTION (P) LTD (SCPL) IN THE PRECEDING YEAR A S WELL AS IN THE RELEVANT YEAR. IN COURSE OF THE APPELLATE PROCEEDIN GS, THE LD ARS MADE THE FOLLOWING SUBMISSIONS: IN THE ASSESSMENT ORDER, THE DEPRECIATION HAS BE EN ALLOWED AT RS.2,06,64,525/- VIDE PARA 9 OF THE ASSESSMENT ORDE R. THE FINDINGS ARE IN PARA-9. HOWEVER, AT THE OUTSET, IT IS SUBMITTED THA T THE APPELLANT HAD FILED THE COMPLETE INFORMATION ABOUT THE PAYMENT MADE TO SCPL FOR THE PURCHASE OF PLANT AND MACHINERY WHICH ARE PLACED ON THE RECORD BEFORE YOUR HONOUR. HOWEVER, THE ISSUE OF BOGUS CAPITAL PU RCHASE WAS BEFORE THE ITAT KOLKATA IN APPELLANTS OWN CASE AND ON AN IDEN TICAL FACT THE TRIBUNAL CONFIRMED THE ORDER OF CIT(A) FOR AY 05-06 , AY 07-08 AND AY 08-09. IT MAY BE WORTHWHILE TO NOTE THAT THE AO HAS DISA LLOWED THE DEPRECIATION FOR AY 07-08 AT RS.81,93,596 WHICH WER E DELETED BY THE CIT(A) AND THE ITAT KOLKATA. THEREFORE, RESPECTFULL Y FOLLOWING THE ORDER OF THE CIT(A) FOR AY 05-06, 06-07 AND 08-09 AND THE TRIBUNAL ORDERS FOR IDENTICAL ISSUE THE IMPUGNED DISALLOWANCE IN RESPEC T OF DEPRECIATION CANNOT BE SUSTAINED, MORE SO WHEN THE DISALLOWANCE CONSIST OF THE WDV OF THE EARLIER ASSET INCLUDING PURCHASE OF ASSET WHIC H THE AO HAS NOT DISPUTED AND THE FACTS ARE IDENTICAL. THE GROUND MA Y BE ALLOWED ACCORDINGLY. 5. THE LD ARS HAVE SUBMITTED THAT THE ISSUE IS DIRE CTLY COVERED BY THE ORDERS OF THE CIT(A) AS WELL AS THOSE OF THE HONBL E ITAT IN APPELLANTS OWN CASE FOR THE ASSESSMENT YEARS 2005-06, 2007-08 AND 2008-09. COPY OF THE APPELLATE ORDERS WAS FILED IN COURSE OF THE APPELLATE PROCEEDINGS. I HAVE PERUSED THE RELEVANT ORDERS AND CONSIDERED THE SUBMISSIONS MADE ON BEHALF OF THE APPELLANT. I FIND THAT SIMILAR DISALL OWANCES ON ACCOUNT OF DEPRECIATION WAS MADE BY THE AO IN THE CASE OF THE APPELLANT FOR THE ASSESSMENT YEARS 2005-06, 2007-08 AND 2008-09 WHICH HAS BEEN SUBJECT MATTER OF APPEAL BEFORE THE LD CIT(A) AS WELL AS BE FORE THE HONBLE ITAT. THESE DISALLOWANCES MADE FOR THE ASSESSMENT YEARS 2 005-06, 2007-08 AND 2008-09 WERE DELETED BY THE LD CIT(A) C-I, KOLKATA IN APPEAL NO.100/CC-XXVIII/CIT(A) C-I/09-10; APPEAL NO.96/CC- XXVIII/CIT(A) C-I/09-10 AND APPEAL NO.137/CC-XXVIII/CIT(A) C-I/10 -11. THE ORDERS OF THE CIT(A) FOR THE ASSESSMENT YEARS 2005-06 AND 200 7-08 WAS UPHELD BY ITA NOS, 142,143 & CO NO.33/KOL/13-AM M/ S. BINANI CEMENT LTD 4 THE HONBLE ITAT A BENCH, KOLKATA VIDE ITS ORDER DATED 27-01-2012 IN ITA NOS. 990,991 & 7502/KOL/2011. ALSO, THE ORDER O F THE CIT(A) FOR THE ASSESSMENT YEARS 2008-09 WAS UPHELD BY THE HONBLE ITAT B BENCH, KOLKATA VIDE ITS ORDER DATED 20-04-2012 IN ITA NO.1 716/KOL/2011. THUS, THE HONBLE JURISDICTIONAL ITAT HAS ALSO CONCURRED WITH THE ORDERS OF MY LEARNED PREDECESSOR IN ALLOWING THE CLAIM OF THE APPELLANT BY DISMISSING THE APPEAL OF THE REVENUE. RESPECTFULLY FOLLOWING T HE ABOVE DECISIONS OF MY LEARNED PREDECESSOR AND THE JURISDICTIONAL ITAT, THE DISALLOWANCE OF RS.2,06,64,525/- ON ACCOUNT OF DEPRECIATION IS DIRE CTED TO BE DELETED. GROUND NO.2 IS ALLOWED. 6. GROUND NO.3 IS RELATED TO THE ADDITION OF RS.919 .52 LAKHS AS MADE TO THE BOOK PROFIT U/S. 115JB BEING THE LOSS INCURR ED BY THE APPELLANT ON ACCOUNT OF TRANSFER OF INVESTMENT DIVISION AS PER SCHEME OF ARRANGEMENT, AS DIRECTED BY THE CIT, CENTRAL-1, KOLKATA VIDE HI S ORDER DATED 20-01- 2011 PASSED U/S. 263. THE LD ARS HAVE SUBMITTED TH AT THE SAID ORDER PASSED BY THE CIT U/S. 263 HAS ALREADY BEEN QUASHED BY THE HONBLE ITAT B BENCH, KOLKATA VIDE ITS ORDER DATED 30-03-2012 IN ITA NO.239/KOL/2011; AND CONSEQUENTLY, THE ADDITION MAD E BY THE AO IN PURSUANT TO THE DIRECTIONS CONTAINED IN THE ORDER U /S. 263 CANNOT SURVIVE. COPY OF THE ITAT ORDER WAS FILED IN COURSE OF THE A PPELLATE PROCEEDINGS. I AGREE WITH THE LD ARS THAT SINCE THE ORDER U/S. 263 HAS BEEN QUASHED BY THE HONBLE ITAT, THE CONSEQUENTIAL ADDITION AS MAD E BY THE AO CANNOT SURVIVE. GROUND NO.3 IS ALLOWED. 7. SIMILARLY FOR ASST YEAR 2009-10 , THE LEARNED CITA HAD REPRODUCED THE SAME FINDINGS GIVEN BY HIM FOR ASST YEAR 2006-07 EXCEPT THE FOLLOWING DIFFERENCE IN FIGURES :- RESPECTFULLY FOLLOWING THE ABOVE DECISIONS OF MY L EARNED PREDECESSOR AND THE JURISDICTIONAL ITAT, THE DISALLOWANCE OF RS . 1,14,42,291/- ON ACCOUNT OF DEPRECIATION AND THAT OF RS. 3,53,74,000 /- BEING PAYMENT MADE TO SCPL IS DIRECTED TO BE DELETED. GROUND NO. 1.1, 2 AND 2.1 IS ALLOWED. 8. IN VIEW OF THE AFORESAID CLEAR FINDINGS OF THE LEARNED CITA AND RESPECTFULLY FOLLOWING THE CO-ORDINATE BENCH DECISION OF THIS TR IBUNAL IN ASSESSEES OWN CASE FOR THE ASST YEARS 2005-06 ; 2007-08 & 2008-09 ON THE SIMIL AR ISSUES, WE ARE NOT INCLINED TO INTERFERE WITH THE ORDER OF THE LEARNED CITA AND AC CORDINGLY, THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. SINCE THE ISSUES ARE ADJUDICATED ON MERITS IN FAVOUR OF THE ITA NOS, 142,143 & CO NO.33/KOL/13-AM M/ S. BINANI CEMENT LTD 5 ASSESSEE, THE CROSS OBJECTIONS FILED BY THE ASSESSE E BECOMES INFRUCTUOUS AND ACCORDINGLY THE SAME IS DISMISSED AS INFRUCTUOUS. 9. IN THE RESULT, THE APPEALS OF THE REVENUE IN I TA NOS. 142 / KOL /2013 AND 143 / KOL /2013 FOR ASST YEARS 2006-07 & 2009-10 RESPECTI VELY ARE DISMISSED AND CROSS OBJECTION OF THE ASSESSEE IN CO NO. 33 / KOL / 2013 IS DISMISSED. THIS ORDER IS PRONOUNCED IN OPEN COURT ON 28 / 10 /2015 COPY OF THE ORDER FORWARDED TO: 1.. THE APPELLANT/DEPARTMENT: DCIT,CC-XXVIII 110 S HANTI PALLY, AAYKAR POORVA,EM-BYE PASS,4 TH FL., KOL-107. 2 THE RESPONDENT- M/S. BINANI CEMENT LTD 37/2 CHIN AR PARK, NEW TOWN, RAJARHAT MAIN ROAD, P.O HATIARA, KOL-157. 3 4.. /THE CIT, / THE CIT(A) 5. DR, KOLKATA BENCH 6. GUARD FILE. TRUE COPY, BY ORDER, ASSTT REGISTRAR SD/- ( N.V. VASUDEVAN, JUDICIAL MEMBER ) SD/- (M. BALAGANESH, ACCOUNTANT MEMBER) DATE 28/10/2015 **PRADIP/SPS