Texmo Industries, Coimbatore V. JCIT, Coimbatore

ITA 1462/CHNY/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 7668 (ITAT-CHENNAI)
• Duration Of Justice: 9 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 23-01-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 24-05-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: A. DHANAJAYAN
• Keywords: Set aside
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 92; 40(b); 80IA

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI . . . , . . , BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER ./ ITA NO. 1462/MDS/2016 / ASSESSMENT YEAR : 2011-12 M/S. TEXMO INDUSTRIES, METTUPALAYAM ROAD, G.N. MILLS POST, COIMBATORE 641 029. PAN : AABFT1899B V. THE JOINT COMMISSIONER OF INCOME TAX, RANGE-II, COIMBATORE. ( /APPELLANT) ( !' /RESPONDENT) # /APPELLANT BY : SHRI A. DHANAJAYAN, CA !' # /RESPONDENT BY : SHRI G.M. DAS, CIT # /DATE OF HEARING : 30.01.2017 # /DATE OF PRONOUNCEMENT : 28.02.2017 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER : THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE PRINCIPAL COMMISSIONER OF INCOME TAX -2, COIMBATORE DATED 24.03.2016 AND PERTAINS TO THE ASSESSMENT YEAR 2011 -12. 2. SHRI A. DHANANJAYAN, THE LD. REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE CLAIMED DEDUCTION OF RS .5,47,13,299/- 2 I.T.A. NO. 1462/MDS/2016 UNDER SECTION 80IA OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) FOR THE WIND ENERGY GENERATION UNIT. THE ASSESSEE HAS A LSO CLAIMED LOSS OF RS.41,34,41,562/- FROM THE WIND MILL DIVISION FO R THE YEAR ENDING 31.03.2011 AND SAME WAS SET OFF AGAINST OTHER BUSI NESS INCOME. THE ASSESSING OFFICER ALLOWED THE CLAIM OF THE ASSES SEE. THE PRINCIPAL COMMISSIONER IN THE GUISE OF EXERCISING H IS JURISDICTION UNDER SECTION 263 OF THE ACT, SET ASIDE THE ORDER OF THE CIT (APPEALS) AND DIRECTED THE ASSESSING OFFICER TO REDO THE ASSESSME NT. 3. THE PRINCIPAL COMMISSIONER HAS ALSO FOUND THAT IN TEREST ON PARTNERS CURRENT ACCOUNT HAS TO BE DISALLOWED UNDER SECTION 40(B) OF THE ACT. 4. ACCORDING TO THE LD. REPRESENTATIVE, THE HUF AS SUCH CANNOT BE A PARTNER IN THE PARTNERSHIP FIRM. HOWEVER ONE OF THE COPARCENER OF THE HUF CAN ALWAYS BE A PARTNER REPRESENTING THE HUF. IN THIS CASE, ACCORDING TO THE LD. REPRESENTATIVE, ONE OF THE COP ARCENER WAS A PARTNER REPRESENTING HUF. HENCE THE INTEREST PAID C ANNOT BE DISALLOWED UNDER SECTION 40(B) OF THE ACT. 5. ON THE CONTRARY, SHRI G.M. DAS, THE LD. DEPARTME NTAL REPRESENTATIVE SUBMITTED THAT THE CLAIM OF LOSS IN THE WIND MILL DIVISION 3 I.T.A. NO. 1462/MDS/2016 AND THE PAYMENT OF INTEREST TO THE PARTNERS WAS NOT SUBJECT MATTER OF DISCUSSION IN THE ASSESSMENT YEAR. ACCORDING TO TH E LD. D.R., THE ASSESSMENT ORDER SHALL CONTAIN THE REASONS FOR ALLO WING OR DISALLOWING THE CLAIM OF THE ASSESSEE. IN THIS CASE, ACCORDING TO THE LD. D.R., THE ASSESSING OFFICER HAS NOT APPLIED HIS MIND TO THE P ROVISIONS OF THE INCOME TAX ACT AND THE MATERIALS AVAILABLE ON RECORD . THEREFORE, THERE WAS AN ERROR IN THE ORDER OF THE ASSESSING OF FICER WHICH IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. HENCE, THE PRINCIPAL COMMISSIONER OF INCOME TAX HAS RIGHTLY SET ASIDE THE ORDER OF THE ASSESSING OFFICER AND DIRECTED THE ASSESSING OFFICE R TO REDO THE ASSESSMENT AFRESH IN ACCORDANCE WITH LAW. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE PRINC IPAL CIT FOUND THAT THE ASSESSING OFFICER HAS NOT CONSIDERED THE DEDUCT ION CLAIMED BY THE ASSESSEE TO THE EXTENT OF RS.5,47,13,299/- WHILE CO MPLETING THE ASSESSMENT IN RESPECT OF WIND MILL DIVISION. THE PR INCIPAL COMMISSIONER HAS ALSO FOUND THAT INTEREST PAID TO T HE PARTNER TO THE EXTENT OF RS.13 LAKHS WAS ALLOWED WITHOUT ANY DISCU SSION IN THE ASSESSMENT ORDER. THEREFORE, HE FOUND THAT THERE WA S AN ERROR IN THE ORDER OF THE ASSESSING OFFICER. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE PROCEEDINGS BEFORE THE ASSESSING O FFICER IS A JUDICIAL 4 I.T.A. NO. 1462/MDS/2016 PROCEEDING UNDER SECTION 131 OF THE ACT. THEREFORE, THE REASONS FOR THE CONCLUSION REACHED EITHER ALLOWING OR DISALLOWI NG THE CLAIM OF THE ASSESSEE HAS TO BE RECORDED IN THE ASSESSMENT ORDER ITSELF. THE REASONS FOR CONCLUSION REACHED IN THE ASSESSMENT OR DER CANNOT BE SUBSTITUTED EITHER BY FILING AN AFFIDAVIT BEFORE TH E REVISIONAL / APPELLATE AUTHORITIES OR BY WAY OF FILING ADDITIONAL MATERIAL S. THE REASONS RECORDED IN THE ASSESSMENT ORDER IS A LIVE LINK TO THE MATERIALS AVAILABLE ON RECORD AND THE MIND OF THE DECISION MA KER. THE REASONS FOR REACHING PARTICULAR CONCLUSION WOULD CERTAINLY REMOVE ARBITRARINESS AND DISPLAY FAIRNESS IN THE PROCEEDINGS. IT WILL A LSO REPOSE CONFIDENCE ON THE LITIGANT PUBLIC. IT IS WELL SETTLED PRINCI PLES OF LAW THAT THE JUDICIAL AND ADMINISTRATIVE ORDER SHALL CONTAIN THE REASONS FOR THE CONCLUSIONS REACHED THEREIN. 7. IN THE CASE BEFORE US, EVEN THOUGH THE ASSESSMEN T PROCEEDINGS IS A JUDICIAL PROCEEDING BEFORE THE ASS ESSING OFFICER, IT DOES NOT CONTAIN ANY REASONS FOR ALLOWING THE CLAIM OF THE ASSESSEE UNDER SECTION 80IA OF THE ACT AND ALSO THE PAYMENT OF INTEREST ON THE PARTNERS CURRENT ACCOUNT. THEREFORE, THIS TRIBUNAL I S OF THE CONSIDERED OPINION THAT THE PRINCIPAL CIT HAS RIGHTLY EXERCISED HIS JURISDICTION UNDER SECTION 263 OF THE ACT. HENCE, THIS TRIBUNAL DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LOWER AUT HORITY. ACCORDINGLY, 5 I.T.A. NO. 1462/MDS/2016 THE SAME IS CONFIRMED. IT IS MADE CLEAR THAT THE A SSESSING OFFICER SHALL REDO THE ASSESSMENT IN ACCORDANCE WITH LAW AF TER GIVING A REASONABLE OPPORTUNITY TO THE ASSESSEE WITHOUT BEIN G INFLUENCED BY THE OBSERVATION MADE BY THE PRINCIPAL CIT IN THE IMP UGNED ORDER. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS DISMISSED. ORDER PRONOUNCED ON 28 TH FEBRUARY, 2017 AT CHENNAI. SD/- SD/- ( . . ) ( . . . ) (D.S. SUNDER SINGH) (N.R.S. GANESAN) /ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, /DATED, THE 28 TH FEBRUARY, 2017. JR. # ! $ % $ /COPY TO: 1. /APPELLANT 2. !' /RESPONDENT 3. &' ( )/CIT(A)-II, COIMBATORE 4. &' /CIT 5. PRINCIPAL COMMISSIONER OF INCOME TAX-2, COIMB ATORE 6. ! $ /DR 7. () /GF.