DELUXE CABLE INDUSTRIES, Jaipur V. ITO, Jaipur

ITA 146/JPR/2011

• Counselvise Citation: 14623114 RSA 2011
• Duration Of Justice: 5 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-08-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 1996-1997
• Appeal Filed On: 22-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D K MEENA
• Assessee Lawyers: MANISH AGARWAL
• Keywords: Depreciation
• Section: 147; 144; 154; 43B; 143(3)

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH SMC JAIPUR (BEFORE SHRI N.L.KALRA, ACCOUNTANT MEMBER) ITA NO. 146/JP/2011 ASSESSMENT YEAR: 1997-98 PAN : AAAFD 9571 F M/S. DELUXE CABLE INDUSTRIES VS. THE ITO 1258, GAITORE ROAD, BRAHMPURI WARD- 5 (1) JAIPUR JAIPUR (APPELLANT) (RESPONDENT) ASSESSEE BY: SHRI MANISH AGARWAL DEPARTMENT BY: SHRI D.K. MEENA ORDER THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A)-II, JAIPUR, DATED 02-12-2010 FOR THE ASSESS MENT YEAR 1996-97. 2.1 THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE AR E AS UNDER:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE THE LD. CIT(A) HAS GROSSLY ERRED IN SUSTAINING THE ORDER PASSED U/S 154 OF THE INCOME TAX ACT, 1961 WHEN THE SAME H AD BECOME BARRED BY LIMITATION, CONSEQUENTLY THE ORDER SO PASSED DESERVES TO BE ANNULLED. 2. THAT THE LD. CIT(A) HAS FURTHER ERRED IN IGNORIN G `THE FACT THAT THE AO HAS PASSED THE ORDER ON A ISS UE WHICH IS HIGHLY DEBATABLE THEREFORE, CANNOT BE COVERED UNDER THE PROVISIONS OF SECTION 154 OF THE INCOME TAX ACT, 19 61. HENCE, THE ORDER SO PASSED DESERVES TO BE QUASHED. 2 2.2 THE BRIEF FACTS ARE THAT THE ASSESSEE FILED ITS RETURN FOR THE ASSESSMENT YEAR 1996-97 VIDE WHICH INCOME OF RS. 13,880/- WAS DECLARED AND THE ASSESSEE CLAIMED BUSINESS LOSS OF RS. 29,416/- AND THE ASSESSEE GOT SET OFF OF BUSINESS LOSS OF RS. 29,416/-. THE RETURN WAS PROCE SSED U/S 143(1) ON 30-09- 1998. THE ASSESSMENT FOR ASSESSMENT YEAR 1995-96 WA S COMPLETED U 143(3) ON 29 TH JAN. 1998 AND THE FOLLOWING ADDITIONS WERE MADE. 1. TRADING ADDITION RS. 24,527/- 2. DISALLOWANCE OUT OF TELEPHONE, CONVEYANCE AND CARD REPAIRS RS. 5,500/- 3. ADDITION U/S 43B IN RESPECT OF CST/RST RS. 21, 657/- RS. 51,684/- THE TRADING ADDITION WAS DELETED BY THE TRIBUNAL AN D DISALLOWANCE OF RS. 5,500/- WAS CONFIRMED. THE ISSUE OF ADDITION OF RS. 21,657/- WAS RESTORED BACK TO THE FILE OF THE AO. THE AO COMPLETED THE RE STORED ASSESSMENT ON 22- 09-05 AND MADE THE ADDITION OF RS. 21,657/- U/S 43B . THE BUSINESS LOSS OF RS. 29,416/- RELATING TO ASSESSMENT YEAR 1993-94 WA S SET OFF FROM THE INCOME DETERMINED VIDE ORDER DATED 22-09-2005. THE SET OFF OF BUSINESS LOSS OF RS. 29,416/- WAS CLAIMED BY THE ASSESSEE IN THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 1996-97 AND THAT RETURN STOOD ALREA DY PROCESSED. THUS THE BUSINESS LOSS OF RS. 29,416/- STOOD SET OFF FOR IN THE ASSESSMENT ORDER OF 1995-96 AS WELL AS IN THE ASSESSMENT ORDER 1996-97. THEREFORE, THE AO 3 ISSUED THE NOTICE U/S 154 OF THE ACT TO WITHDRAW TH E SET OFF OF BUSINESS LOSS OF RS. 29,416/- FROM THE ASSESSMENT YEAR 1996-97. A GAINST NOTICE U/S 154 OF THE ACT, THE ASSESSEE FILED THE REPLY THAT LIMITATI ON OF PASSING ORDER U/S 154 STANDS EXPIRED AND HENCE ORDER 154 CANNOT BE PASSED FOR ASSESSMENT YEAR 1996-97. HOWEVER, THE AO REJECTED THE CONTENTION AN D REDUCED THE SET OFF OF BUSINESS LOSS FROM THE ASSESSMENT YEAR 1996-97. 2.3 THE ASSESSEE FILED THE REPLY BEFORE THE LD. CIT (A). THE LD. CIT(A) AFTER CONSIDERING THE PROVISIONS OF SECTION 153(3) HELD THAT TIME LIMIT WILL NOT BE APPLICABLE WHEN THE AO IS GIVING EFFECT TO T HE FINDING CONTAINED IN THE APPELLATE ORDER. 2.4 I HAVE HEARD BOTH THE PARTIES. SECTION 153(3) S AYS THAT LIMITATION PROVIDED IN SECTION AS CONTAINED IN SUB-SECTION (1) AND SUB-SECTION (2) WILL NOT APPLY TO THE CASES OF ASSESSMENTS/REASSESSMENTS AND RECOMPUTATION IN CASE THESE ARE TO BE MADE IN CONSEQUENCE OF OR TO G IVE EFFECT TO ANY FINDING OR DIRECTION. SECTION 153(1) AND 153() PROVIDE TIME LIMIT FOR MAKING ORDER U/S 143 OR 144 OF THE ACT. FOR THE ASSESSMENT YEAR 1996-97, THE AO HAS PROCESSED THE RETURN U/S 143(1). THE HON'BLE APEX C OURT IN THE CASE OF ACIT VS. RAJESH JHAVERI STOCK BROKERS (P) LTD , 291 ITR 500 HELD THAT INTIMATION IS NOT AN ASSESSMENT. MOREOVER, THERE HA VE BEEN NO FINDINGS OR DIRECTIONS BY THE APPELLATE AUTHORITY. THE APPELLAT E AUTHORITY RESTORED THE 4 ISSUE ON THE FILE OF THE AO. HENCE, SECTION 153(3) WILL NOT HELP THE REVENUE TO SAY THAT TIME LIMIT WILL NOT BE APPLICABLE. 2.5 SECTION 155(4) OF THE ACT PROVIDES FOR RECTIFIC ATION IN CASE THE ASSESSMENT IS COMPLETED U/S 147 OF THE ACT THEN LOS S OR DEPRECIATION ALLOWANCE WHICH HAS BEEN CARRIED FORWARD AND SET OF F IS CHANGED THEN THE EFFECT IN THE SUBSEQUENT YEARS BE GIVEN AND THE PER IOD OF THE RECKONING WILL BE THE END OF THE FINANCIAL YEAR IN WHICH THE ORDER IS PASSED U/S 147 OF THE ACT. HOWEVER, THERE IS NO PROVISIONS THAT IN CASE T HE COMPUTATION OR ASSESSMENT IS DONE AS A RESULT OF PASSING ORDER ON THE DIRECTION OF THE APPELLATE AUTHORITY THEN THE LOSS CARRIED FORWARD A ND SET OFF DETERMINED IN THE ORDER OR SET OFF AND THAT ORDER IS TO BE CONSID ERED FOR ADJUSTMENT IN SUBSEQUENT YEARS BY PASSING ORDER U/S 154 OF THE AC T. I AM AWARE THAT EQUITY IS IN FAVOUR OF THE REVENUE. THE BUSINESS LOSS CAN NOT BE SET OFF IN ASSESSMENT YEARS 1995-96 AND 1996-97 BUT THE REMEDY WITH THE REVENUE TO HAVE PASSED THE ORDER U/S 154 FOR ASSESSMENT YEAR 1 996-97 WITHIN THE TIME LIMIT AVAILABLE . WITH EFFECT FROM 01-06-1993, THE INTIMATION CANNOT BE REVISED UNLESS THERE IS SOME ARITHMETICAL ERROR.. L OOKING TO THE LIMITATION PROVIDED U/S 154(7) OF THE ACT, THE AO WAS NOT JUST IFIED IN RECTIFYING THE INTIMATION U/S 143(1) FOR ASSESSMENT YEAR 1996-97 V IDE ORDER U/S 154 DATED 28-04-2006 AS INTIMATION WAS DATED 30-09-1998. 5 3. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 05-0 8-2011. SD/- (N.L. KALRA) ACCOUNTANT MEMBER JAIPUR DATED: 05/08/2011 *MISHRA COPY FORWARDED TO:- 1. M/S. DELUXE CABLE INDUSTRIES, JAIPUR 2.THE I.T.O. , WARD 5 (1), JAIPUR 3.THE LD. CIT(A) 4.THE LD. CIT 5.THE LD. DR 6.THE GUARD FILE (I.T.A. NO 146/JP/11) BY ORDER A.R.. ITAT: JAIPUR 6 7