ITO,Ward-3(1), Kolkata, Kolkata V. M/s Castron Technoligies Ltd., Kolkata

ITA 1436/KOL/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 78387 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 9 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-07-2014
• Appeal Filed By: Department
• Bench Allotted: C
• Assessment Year: 2005-2006
• Appeal Filed On: 08-10-2012
• Court: TRIBUNAL
• Department Lawyers: RANU BISWAL JCITSR
• Assessee Lawyers: SIDDARTH JHAJHARIA CA LD
• Keywords: Reopening of assessment; Depreciation
• Section: 143(3); 32; 147

Judgement Text

, C , IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH- C KOLKATA ( ) BEFORE . . , SHRI P.K.BANSAL , ACCOUNTANT MEMBER /AND % 1 , SHRI GEORGE MATHAN, JUDICIAL MEMBER ( / ITA NO. 1436/KOL/2012 A.Y 2005-06 I.T.O WARD 3(1), KOLKATA ) ) - VERSUS -. M/S. CASTRON TECHNOLOGIES LTD PAN: AABCC0646G ( * / APPELLANT ) ( +,* / RESPONDENT ) * / FOR THE APPELLANT SMT. RANU BISWAL, JCIT/SR.DR +,* / FOR THE RESPONDENT: / SHRI SIDDARTH JHAJHARIA, CA, LD.AR 1 2 /DATE OF HEARING : 24-07-2014 1 2 /DATE OF PRONOUNCEMENT:24 -07-2014 / ORDER % 1 , SHRI GEORGE MATHAN, JUDICIAL MEMBER THIS IS AN APPEAL FILED BY THE REVENUE AGAINST TH E ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS)-1, KOLKATA IN APPEAL NO. 274/CIT(A)- 1/WD-3(1)/10-11 DATED 05.07. 2012 FOR THE ASSESSME NT YEAR 2005-06. 2. SMT. RANU BISWAL, LEARNED JCIT/SR.DR REPRESENT ED ON BEHALF OF THE REVENUE AND SHRI SIDDARTH JHAJHARIA, CA, LEARNED A R REPRESENTED ON BEHALF OF THE ASSESSEE. 3. IN THE REVENUES APPEAL IN ITA NO. 1436/KOL/2012 FOR THE ASSESSMENT YEAR 2005-06, THE REVENUE HAS RAISED THE FOLLOWING GROUN DS OF APPEAL :- 1. THAT THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS BY ALLOWING THE APPEAL OF THE ASSESSEE COMPANY THAT TH E ORDER SO PASSED U/S. 143(3) AND PROCEEDINGS U/S. 147 CANN OT BE UPHELD. 2. THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FACT S BY ALLOWING THE APPEAL OF THE ASSESSEE COMPANY THAT ITA NO. 1436/KOL/2012-C-JM ITO W 3(1) KOL VS. M/S. CASTRON TECHNOLOGIES LTD.. 2 RS.24,62,937/- IS NOT LIABLE TO INCOME U/S. 41(2) O F THE I T ACT 61. 4. AT THE TIME OF HEARING BEFORE US, IT WAS SUBMITT ED BY THE LEARNED JCIT/SR.DR THAT THERE ARE TWO ISSUES IN THE REVENUE S APPEAL. ONE WAS AGAINST THE ACTION OF LEARNED COMMISSIONER OF INCOME-TAX (A PPEALS) IN ANNULLING THE ASSESSMENT BY HOLDING THAT REOPENING OF ASSESSMENT U/S. 147 OF THE ACT WAS INVALID. IT WAS THE SUBMISSION BY HER THAT EVEN ON MERITS THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS HELD THAT PROVISIONS OF SECTION 41(2) OF THE ACT WAS NOT APPLICABLE IN THE CASE OF THE AS SESSEE IN SO FAR AS ASSESSEE HAS ALREADY OFFERED DIFFERENCE BETWEEN SALE VALUE AND THE WRITTEN DOWN VALUE [WDV] AS SORT TERM CAPITAL GAINS. SHE HAS VEHEMENTL Y SUPPORTED THE ORDER OF THE AO. 5. IN REPLY, SHRI SIDDARTH JHAJHARIA, CA, LEARNE D AR FOR THE ASSESSEE HAS SUBMITTED THAT THE ASSETS UNDER DISPUTE BEING THE OLD FACTORY SHED AND BUILDING IN BLOCK 2 HAD BEEN SOLD AND INCOME THEREFROM WAS T AXABLE U/S. 50 OF THE ACT, WHICH HAD BEEN RIGHTLY DONE BY THE AO IN THE ORIGI NAL ASSESSMENT ORDER. IT WAS THE FURTHER SUBMISSION BY HIM THAT THE PROVISIONS O F SECTION 41(2) WAS ALSO APPLICABLE TO ASSESSEE, WHO IS ENGAGED IN THE BUS INESS OF GENERATION AND DISTRIBUTION OF POWER. IT WAS THE SUBMISSION THAT INCOME HAVING BEEN OFFERED U/S. 50 OF THE ACT AND PROVISIONS OF SECTION 41(2) OF TH E ACT WAS NOT APPLICABLE. IT WAS THE SUBMISSION THAT THE ORIGINAL ASSESSMENT WAS COM PLETED U/S. 143(3) OF THE ACT. ALL EVIDENCES IN RESPECT OF SALE OF THE LAND A ND BUILDING AND COMPUTATION BY APPLICATION OF SECTION 50 OF THE ACT HAVING BEEN A VAILABLE BEFORE THE AO IN THE COURSE OF THE ORIGINAL ASSESSMENT AND NOTHING HAV ING BEEN SHOWN THAT THE ASSESSEE DID NOT PROVIDE ALL INFORMATION NECESSAR Y FOR HIS ASSESSMENT NOR THERE BEING ANY FRESH EVIDENCE FOUND RE-OPENING ITSELF WAS BAD-IN-LAW. THE LEARNED AR FOR THE ASSESSEE HAS VEHEMENTLY SUPPORTED THE OR DER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ON THIS ISSUE. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PE RUSAL OF THE ASSESSMENT ORDER SHOWS THAT THE AO HAS INVOKED THE PROVISIONS OF SECTION 41(2) OF THE ACT. A PERUSAL OF THE PROVISIONS OF SECTION 41(2) SHOWS TH AT THIS SECTION APPLIES TO ITA NO. 1436/KOL/2012-C-JM ITO W 3(1) KOL VS. M/S. CASTRON TECHNOLOGIES LTD.. 3 BUILDING, MACHINERY, PLANT AND FURNITURE IN RESPECT OF DEPRECIATION CLAIMED UNDER SUB-CLAUSE (I) OF SUB-SECTION (1) OF SECTION 32. S UB- CLAUSE (I) OF SUB-SECTION (1) OF SECTION 32 DEALS WITH THE ASSETS OF AN UNDERTAKI NG ENGAGED IN THE BUSINESS OF GENERATION AND DISTRIBUTION OF POWER. ADMITTEDLY, THE ASSESSEE IS NOT DOING THE BUSINESS OF GENERATION AND DISTRIBUTION OF POWER. CONSEQUENTLY, THE PROVISIONS OF SECTION 41(2) OF THE ACT IS NOT APPLICABLE TO ASSE SSEES CASE. AS IT IS NOTICED THAT THE ISSUE OF RE-OPENING ITSELF IS FOR THE PURPOSE OF APPLYING THE PROVISIONS OF SECTION 41(2) OF THE ACT AND AS IT IS NOTICED THAT THE SAID PROVISIONS OF SECTION 41(2) DO NOT APPLY IN THE CASE OF THE ASSESSEE, WE ARE OF THE VIEW THAT THE FINDING OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ON THE ISSUE OF RE-OPENING IS ON A RIGHT FOOTING AND DOES NOT CALL FOR ANY INT ERFERENCE. WE UPHOLD THE SAME. THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IN ITA NO.1436/KOL/2012 FOR THE ASSESSMENT YEAR 2005-06 STANDS DISMISSED. 6 THIS ORDER IS PRONOUNCED IN OPEN COURT ON DT 24/7/ 2014 SD/- SD/- 1 +9 :9 / COPY OF THE ORDER FORWARDED TO: 1. . * / THE APPELLANT : I.T.O WARD 3(1), 8/2, ESPLANADE EAST, SWARH HOUSE, GR. FL, KOL-69. 2 +,* / THE RESPONDENT- M/S. CASTRON TECHNOLOGIES LTD 8 WATERLOO ST, KOL- 69. 3 / THE CIT, 4. ( )/ THE CIT(A) 5 . + / DR, KOLKATA BENCH 6 . GUARD FILE . ,9 +/ TRUE COPY, / BY ORDER, /ASSTT REGISTRAR ** PRADIP SPS ( . . , ) ( P.K.BANSAL, ACCOUNTANT MEMBER ) ( % 1 , ) (GEORGE MATHAN, JUDICIAL MEMBER) ( (( ( 2 2 2 2 ) )) ) DATE 24/7/14