Hartex Rubber Pvt. Ltd., Hyderabad V. CIT, Central - I, Kolkata, Kolkata

ITA 144/KOL/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 83182 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 9 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-11-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2004-2005
• Appeal Filed On: 27-01-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VARINDER MEHTA
• Assessee Lawyers: BRIJESH KR SINGH
• Keywords: Depreciation; Unabsorbed depreciation
• Section: 263; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH A KOLKATA BEFORE SHRI SHAMIM YAHYA , ACCOUNTANT MEMBER AND SHRI GEOGE MATHAN , JUDICIAL MEMBER ITA NO. 144 /KOL/ 2012 ASSESSMENT YEAR: 2004 - 05 HARTEX RUBBER PVT. LTD., KAMALA TOWERS PLOT NO.1 - 8 - 307, PATIGADDA ROAD, BEGUMPET, HYDERBAD 500 016 / V/S . CIT, CENTRAL - 1, KOLKATA 18, RABINDRA SARANI, PODDAR COURT, KOLKATA - 1 / APPELLANT .. / RESPONDENT / BY APPELLANT SHRI SUBASH AGARWAL, ADVOCATE & SHRI BRIJESH KR. SINGH / BY RESPONDENT SHRI VARINDER MEHTA, CIT / DATE OF HEARING 17 - 11 - 2014 / DATE OF PRONOUNCEMENT 19 - 11 - 2014 / O R D E R PER SHAMIM YAHYA, ACCOUNT ANT M EMBER : - THIS A PPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INC TAX CENTRAL - I, KOLKATA PASSED U/S 263 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT ) DATED 07 - 12 - 2011 AND PERTAINS TO ASSESSMENT YEAR 2004 - 05. 2. IN THIS CASE ASSESSEE S APPEAL FOR A.Y. 2004 - 05 WAS EARLIER SUBJECT - MATTER OF ADJUDICATION BY THIS TRIBUNAL IN ITA NO. 1256/KOL/2008 FOR A.Y. 2004 - 05 VIDE ORDER DATED 31 - 01 - 2014. THE TRIBUNAL HAD REMITTED ONE ISSUE BACK TO THE FILE OF ASSESSIN G OFFICER BY OBSERVING AS UNDER: - ITA NO.144/KOL/2012 A.Y. 2004 - 05 HARTEX RUBBER PVT. LTD. V. CIT CEN - I, KOL PAGE 2 3. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RECORD. SINCE IT IS A CASE AGAINST THE ORDER U/S 143(3)/154 PASSED BY THE AO THE ORIGINAL ASSESSMENT ORDER WAS NOT PRODUCED BEFORE US AT THE TIME OF HEARING.. THE LD. AR W AS DIRECTED TO FILE THE SAME LATER ON WHICH WAS FILED IN DUE COURSE AND FROM A PERUSAL OF THE SAID ORDER, IT IS NOT CLEAR AS TO WHETHER THE DOCUMENTS RELIED UPON BY THE CIT (APPEALS) IN PARA 6 OF HIS ORDER WHILE CONSIDERING THE ISSUE IN FAVOUR OF THE ASSES SEE AND DECIDING THE SAME IN PARA 7 OF HIS ORDER, WAS PRODUCED BEFORE THE AO OR NOT. ALTHOUGH THE LD. A.R. DID NOT AGREE TO THE AGITATION MADE BY THE LD. DR IN THIS REGARD, IT HAS BEEN DEEMED PROPER TO SET ASI D E THE ORDER OF THE CIT (APPEALS) AND SEND THE MATTER BACK TO THE FILE OF THE AO FOR THE LIMITED PURPOSE OF EXAMINING THE DOCUMENTS FILED BEFORE THE CIT(APPEALS) AND DECIDING THE SAME AS PER LAW. AC C ORDINGLY, THE ORDER OF THE CIT(APPEALS) IS HEREBY SET ASI D E AND THE MATTER IS SENT BACK TO THE AO FOR TH E LIMITED PURPOSE AS STATED ABOVE. THE ASSESSEE IS DIRECTED TO COOPERAT E AND COMPLY IN THE FRESH PROCEEDINGS IN ITS OWN INTEREST. IN TERMS OF THE AFORESAID ORDER OF THE TRIBUNAL, THE MATTER WAS TAKEN UP BY THE AO AS REGARDS THE ISSUE REMITTED BY THE TRIBUNAL. THE AO DECIDED THE ISSUES IN FAVOUR OF THE ASSESSEE BY OBSERVING AS UNDER: - THE COPY OF THE HIGH COURT S ORDER FOR AMALGAMATION AND THE COPIES OF ASSESSMENT ORDERS FOR AY 2001 - 02 TO AY 2002 - 03 OF M/S HARTEX RUBBER PVT. LTD., THE AMALGAMATING CO MPANY, AND THE ASSESSMENT ORDER FOR AY 2004 - 05 OF M/S KEMRUB PVT. LTD., THE AMALGAMATED COMPANY HAVE BEEN PERUSED. IT IS NOTED THAT THE ASSESSEE - COMPANY WAS ENTITLED TO SET - OFF OF UNABSORBED DEPRECIATION OF RS.31,43,881/ - 3. IN THE SAME ASSESSMENT ORDER, AO ALSO NOTED THE FOLLOWING AS UNDER: - AT THE TIME OF HEARING, THE LD. A/R FURTHER BROUGHT TO MY NOTICE THE RECTIFICATION PETITION SUBMITTED ON 27/01/2009 FOR NOT ALLOWING THE CREDIT OF TDS TO EXTENT OF RS.5,86,883/ - DULY ALLOWED IN THE ORDER PASSED U/S 143(3), WAS NOT ALLOWED IN THE ORDER U/S 154 DT. 29/10/2007. IT IS, THEREFORE, REQUESTED THAT THESE TWO ISSUES I.E FURTHER CREDIT OF TDS OF RS.5,86,883/ - AND MAT CREDIT OF RS.5,08,323/ - MAY BE CONSIDERED AT THE TIME OF CALCULATION OF TAX. THE CASE IS HEARD 4. CONSIDERING THESE SUBMISSIONS, THE AO HELD AS UNDER: - DOCUMENTS PERTAINING TO FURTHER CREDIT OF TDS OF RS.5,86,883/ - AND MAT CREDIT OF RS.5,08,323/ - HAVE BEEN EXAMINED AND FOUND TO BE IN ORDER. SINCE THESE ARE MISTAKES APPARENT FROM RECORD, NECESSAR Y RECTIFICATION IS DONE SIMULTANEOUSLY. ITA NO.144/KOL/2012 A.Y. 2004 - 05 HARTEX RUBBER PVT. LTD. V. CIT CEN - I, KOL PAGE 3 AGAINST THE ABOVE ORDER OF THE AO, LD. CIT EXERCISED HIS JURISDICTIONAL POWER U/S. 263 OF THE ACT. IN THIS ORDER, LD. CIT OBSERVED THAT IN THE SET ASIDE MATTER AO HAD LIMITED ROLE FOR DECIDING THE ONLY ISSUE, WHICH WAS RESTORED BACK TO HIM BY THE ITAT . AS REGARDS THE ADJUSTMENT OF DEPRECIATION OF RS.31,43,881/ - LD. CIT OBSERVED THAT ON THIS ISSUE AO HAS ALREADY APPLIED HIS MIND, HENCE, U/S 263 OF THE ACT IS NOT APPLICABLE. HOWEVER, AS REGARDS ALLOWING OF MINIMUM ALT ERNATE TAX (MAT FOR SHORT) CREDIT AND CREDIT FOR TDS GRANTED BY THE AO AND LD. CIT EXERCISED HIS JURISDICTION BY DISREGARDING ASSESSEE S SUBMISSION, LD. CIT CONCLUDED AS UNDER: - THE ISSUES OF MAT CREDIT U/S. 115JAA AND CREDIT OF TDS, THE ORDER PASSED U/S 254 OF THE IT ACT IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE BECAUSE THE ITAT HAD NOT ASKED THE AO TO LOOK INTO THE AFORESAID ISSUES. THE MAT CREDIT AND THE TES CREDIT WERE DISALLOWED IN THE ORDER PASSED U/S 154 OF THE IT ACT. THESE WERE NOT T AKEN IN THE GROUNDS OF APPEAL BEFORE THE CIT(A) AND THE ITAT HAS NOT GIVEN ANY DIRECTION TO THE AO ON THE AFORESAID ISSUES. THE ORDER PASSED U/S 254 OF THE OIT ACT IS THEREFORE SET ASIDE ON THE AFORESAID TWO ISSUES AND THE AO IS DIRECTED TO PASS FRESH ORDE R AS PER LAW REGARDING ALLOWABILITY OF MAT CREDIT AND TDS CREDIT. AGAINST THE ABOVE ORDER, ASSESSEE IS IN APPEAL BEFORE US. 5. WE HAVE HEARD BOTH COUNSELS AND PERUSED THE RECORDS. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT LD. CIT HAS ERRED IN APPRECIA TIN G THE ASSESSMENT ORDER PASSED BY AO. HE SUBMITTED THAT THE AO HAS DULY ADJUDICATED THE ISSUE REGARDING ADJUSTMENT OF UNABSORBED DEPRECIATION AS REMITTED BY THE TRIBUNAL. LD. COUNSEL FOR THE ASSESSEE FURTHER SUBMITTED THAT THE ISSUE OF MAT CREDIT AND CRE DIT OF TDS HAS BEEN CONSIDERED BY THE AO IN HIS ASSESSMENT ORDER NOT BECAUSE THE MATTER WAS REMITTED BY THE TRIBUNAL BUT BECAUSE ASSESSEE HAS FILED A SEPARATE PETITION OF RECTIFICATION ON 27 - 01 - 2009 IN THIS RESPECT. IT WAS WITH REFERENCE TO THAT RECTIFICAT ION PETITION THAT MATTER PERTAINING TO MAT CREDIT AND CREDIT OF TDS HAS BEEN CONSIDERED BY THE AO IN ASSESSMENT ORDER. ITA NO.144/KOL/2012 A.Y. 2004 - 05 HARTEX RUBBER PVT. LTD. V. CIT CEN - I, KOL PAGE 4 6. LD. DR ON THE OTHER HAND RELIED UPON THE ORDERS OF AUTHORITIES BELOW. 7. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS AND PERUSED THE RECORDS. WE FIND THAT IN HIS ORDER PASSED U/S 263 OF THE ACT LD. CIT HAS NOT FOUND THAT ADJUDICATION OF THE ISSUE OF MAT CREDIT AND CREDIT OF TDS BY THE AO RESULTED IN AN ERRONEOUS AND PREJUDICIAL ORDER BY ITSELF LD. CIT S CASE IS THAT THE SAID MATTER WA S NOT REMITTED BY THE TRIBUNAL . H ENCE , WE AGREE WITH THE LD. COUNSEL FOR THE ASSESSEE THAT LD. CIT HAS FAILED TO APPRECIATE THAT IMPUGNED ISSUE W AS CONSIDER ED BY THE AO BECAUSE OF RECTIFICATION PETITION FILED BY THE ASSESSEE AND NOT BECAUSE ANY REMISSION BY THE TRIBUNAL ON THESE ISSUES . A S ALREADY CONSIDERED EARLIER, THE LD. CIT HAS NOT FOUND ANY FAULT ON THE MERITS OF ADJUDICATION OF THESE TWO ISSUES. IN THIS VIEW OF THE MATTER, WE ARE OF THE CONSIDERED OPINION THAT ORDER PASSED BY THE AO IS NOT LIABLE FO R EXERCISE OF JURISDICTION BY THE LD. CIT U/S 263 OF THE ACT. IN THIS VIEW OF THE MATTER, WE SET ASIDE THE ORDER PASSED U/S 263 OF THE ACT AND DECIDE THE ISSUE IN FAVOUR OF ASSESSEE. 8. IN THE RESULT, THIS APPEAL FILED BY THE ASSESSEE STANDS ALLOWED. ORD ER PRONOUNCED IN OPEN COURT ON 19 / 11 /2014 SD/ - SD/ - ( GEOGE MATHAN ) ( SHAMIM YAHYA ) JUDICIAL MEMBER ACCOUNTANT MEM BER KOLKATA, *DKP - 19 / 11 /2014 ITA NO.144/KOL/2012 A.Y. 2004 - 05 HARTEX RUBBER PVT. LTD. V. CIT CEN - I, KOL PAGE 5 / COPY OF ORDER FORWARDED TO: - 1 . / APPELLANT HARTEX RUBBER PVT. LTD., KAMALA TOWERS PLOT NO.1 - 8 - 307, PATIGADDA RD. BEGUMPET, HYDERABAD - 16 2 . / RESPONDENT CIT, CENTRAL - I, 18, RABIDRA SARANI, PODOAR COURT, KOL - 1 3 . / CONCERNED CIT 4 . - / CIT (A) 5 . , / DR, ITAT, KOLKATA 6 . / GUARD FILE. BY ORDER/ , /TRUE COPY/ / ,