Binjusaria Ispat Private Limited, Hyderabad V. Dy. CIT, Circle - 1(3), Hyderabad

ITA 1500/HYD/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 74735 (ITAT-HYDERABAD)
• Duration Of Justice: 4 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 13-11-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: K K KABRA
• Keywords: Depreciation; Additional depreciation; Revised return
• Section: 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A', HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA NO.1500/HYD/13 : ASSESSMENT YEAR 2007 - 08 M/S. BINJUSARIA ISPAT P. LTD., HYDERABAD (PAN AACCB 4555 G) V/S. DY. COMMISSIONER OF INCOME - TAX CIRCLE 1(3), HYDERABAD (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI K.K.KABRA RESPONDENT BY : SMT. K.HARITHA DR DATE OF HEARING 20.3.2014 DATE OF PRONOUNCEMENT 20.3.2014 O R D E R PER SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER: TH IS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME - TAX(APPEALS) II, HYDERABAD DATED 1.10.2013 FOR THE ASSESSMENT YEAR 200 7 - 08. 2. EFFECTIVE GROUNDS OF THE ASSESSEE IN THIS APPEAL READ AS FOLLOWS - 1. THE ORDER PASSED BY THE COMMISSIONER OF INCOME - TAX(APPEALS) IS ERRONEOUS IN LAW AND ON FACTS OF THE CASE. 2. THE COMMISSIONER OF INCOME - TAX(APPEALS) ERRED IN CONFIRMING THE ORDER OF ASSESSMENT PASSED BY THE ASSESSING OFFICER DETERMINING TOTAL INCOME AT RS.37,28,975/0 BY REWORKING THE OPENING WRITTEN DOWN VALUES OF AS S ETS AND BROUGHT FORWARD LOSSES FOR UNTENABLE REASONS. 3. ... 3. BRIEF FACTS OF THE CASE, WHICH HAS A CH EQUERED HISTORY, LEADING TO THE FILING OF THE PRESENT APPEAL ARE THAT THE ASSESSEE, A PRIVATE LIMI T ED COMPANY MANUFACTURING TMT BARS, FILED ITS RETURN OF INCOME FOR THE ITA NO. 1500/ HYD/20 13 M/S. BINJUSARIA ISPAT P. LTD., HYDERABAD 2 ASSESSMENT YEAR 2007 - 08 ON 24 T H OCTOB E R, 2007 ADMITTING NET INCOME OF RS .79,08,504, W HICH INCLUDED ADDITIONAL INCOME O F RS .46, 00 ,000 ADMITTED DURING TH E COU R SE OF SU R VEY PROCEEDINGS. SUBSEQUENTLY, TH E ASSESSEE FIL E D ITS REVISED RETURN ON 2 6 TH MARCH, 2009 ADMITTING AN INCOME OF RS .12,67,840 WHICH INCLUDED AN INCOME OF R S .46,00,000 ADMITTED DURING TH E COU R SE OF SURVEY PROCEEDINGS ON 9.10.2006. THE REV I SED RETURN WAS N E CESSITATED ON ACCOUNT O F CHANGE IN CARRY FORWARD LOSS OF ASSESSMENT YEAR 2006 - 07, ON ACCOUNT OF CLAIMING OF ADDITIONAL DEPRECIATION IN THE SAID YEAR, WHICH WAS OMITTED TO B E CL A IM E D EARLIER. RETURN UNDER S.153A WAS FIL E D ON 31.3.2009 VI D E ACKNOWLEDGEMENT NO.07589 ADMITTING THE SAME INCO M E OF RS .12,67,840 AS FILED IN THE REVISED RETURN OF INCOME FILED ON 26.3.2009. ASSESSMENT UNDER S.143(3) READ WITH S.153A WAS COMPLETED ON 30 TH DECE M BER, 2009, FOR THE ASSESSMENT YEAR 2006 - 07, BY ACCEPTING THE RETURNED LOSS OF R S .76,65,061, AFTER CONSIDERING DEPRECIATION AND ADDITIONAL DEPREC I ATION CLAIMED OF R S .1,38,44,169. ASSESSMENT UNDER S.143(3) RE A D WITH S.153A WAS COMPLETED ON 30.12.200 9 FOR THE ASSESSMENT YEAR 2007 - 08, BY ACCEPTING THE RETURNED INCOME O F R S .12,67,840 A F TER CON S IDERING DEPRECIATION OF RS.40,45,985, AS CLAIMED, AND AFTER SETTING OFF OF CARRY FORWARD UNABSORBED DEPRE C I A TION LOSS OF R S .79,65,061. 4. SUBSEQUENTLY, PROCEE D INGS UNDER S.263 HAVE BEEN INITIATED FOR ASSESSMENT YEAR 2007 - 08 AND THE COMMISSIONER OF INCOME - TAX VIDE O R DER DATE D 26.3.2012 SET ASIDE THE ORDER PASSED UN D ER S.143(3) READ WITH S.153A FOR THE ASSESSMENT YEAR 200 7 - 08 WITH A DIRECTION TO REDO THE ASSESSME NT DE NOVO CON S IDERIN G THE ISSUES DISCUSS E D IN THE SAID ORDER. IN PURSUANCE OF THE SAID ORDER OF THE COMMISSIONER OF INCOME - TAX, ASSESSMENT WAS MADE ON 10.1.2013 DETERMINING THE INCOME AT R S .37,28,975 AS AGAINST INCOME ORIGINALLY ASSESSED UNDER S.143(3) R EAD WITH S.153A AT RS.12,67,840. WHILE PASSING THE SAID ORDER, THE ASSESSING OFFICER HAS ACCEPTED THE ENTIRE RESULTS FOR THE ASSESSMENT YEAR 2007 - 08 AS ORIGINALLY FILED, BUT HAS ENHANCED THE DEPRECIATION ALLOWABLE (BASED ON HIS RE - WORKIN G OF THE DEPRECIAT ION O F THE ITA NO. 1500/ HYD/20 13 M/S. BINJUSARIA ISPAT P. LTD., HYDERABAD 3 ASSESSMENT YEAR 2006 - 07 R E SULTING IN CHANGE OF WDV AS ON 1.4.2006) A S AGAINST DEPRECIATION CLAIMED O F RS .40,85,985, THE ASSESSING OFFICER HAS CALCULATED AND ENHANCED DEPRE C IATION AT RS.42,16,313. 5. AGAINST THE SAID ORDER, THE ASSESSEE P R EFERRED AN APPEAL BEFORE THE COMMISSIONER OF INCOME - TAX(APPEALS) AND THE COMMISSIONER OF INCOME - TAX(APPEALS) , HAS DISMISSED THE APPEAL OF THE ASSESSEE BY THE IMPUGNED ORDER DATED 1.10.2013, INTER - ALIA WITH THE FOLLOWING OBSERVATIONS - I DO NO T AGREE WITH TH E CON T ENTION S O F THE AR AS THE DIFFERENCE IN THE ORIGINAL RETURN OF INCOME (R S .79,08,500/ - ) AND THE REVISED RETURN OF INCOME ( RS.12,67,840 ) WERE ESSENTIALLY DUE TO THE W RONG CLAIM OF DEPRECIATION AND ADDITIONAL DEPRECIATION CLAIMED BY THE APPELLANT AND THE ASSESSING OFFICER WAS WELL WI T HIN HIS POWERS TO VERIFY IN DETAIL SUCH ASPECT OF DEPRECIATION AND ADDITIONAL DEPRECIATION IN TUN E WITH THE DIRECTION GIVEN U/S.263. ACCOR D INGLY, THE GROUNDS RAISED BY THE APPELLANT A R E DISMISSED. 6. AGGRIEVED BY THE ABOVE ORDER OF THE CIT(A), ASSESSEE IS IN SECOND APPEAL BEFORE US. 7. W E H E ARD BOTH SIDES AND PERUSED THE IMPUGNED OR D ERS OF THE REVENUE AUTHORITIES AND OTHER MATERIAL ON RECORD. THE CASE OF THE ASSESSEE IS THAT THE ORDER PASSED UNDER S.263 BY OF THE C OMMISSIONER OF INCOME - TAX, IS IN RESPECT OF THE ASSESSMENT YEAR 2007 - 08, AND CONSEQUENTLY, THE ASSESSING OFFICER WHILE GIVING EFFECT TO THE SAID ORDER SHOULD CONFINE HIMSELF WHILE GIVING EFFECT TO THE DIRECTIONS OF THE COMMISSIONER OF INCOME - TAX , TO THE AS SESSMENT YEAR 2007 - 08, AND SHOULD NOT GO INTO OTHER ASPE C TS SUCH AS RE - WORKIN G OF DEPRECIATION/ADDITIONAL DEPRECIATION OF OTHER YEARS, ETC. ON GOING THROUGH THE ORDER OF THE COMMISSIONER OF INCOME - TAX DATED 26.3.2012, PASSED UNDER S.263 OF THE ACT, WE FIND THAT THE COMMISSIONER, HAVING NOTICED THAT THE ASSESSING OFFICER WHILE PASSING THE ORDER UNDER S.153A DATED 30.12.2009 HAS NOT VERIFIED SEV ERAL ASPECTS, SUCH AS THE BASIC DIFFERENCES BETWEEN THE ORIGINAL RETURN AND THE RETURN FILED IN RESPONSE TO NOTICE UNDER S.153A, HELD THE VIEW THAT THE SAID ORDER OF ASSESSMENT WAS ERRONEOUS AND PREJUDICIAL TO THE ITA NO. 1500/ HYD/20 13 M/S. BINJUSARIA ISPAT P. LTD., HYDERABAD 4 INTERESTS OF THE REVENUE, AND ACCORDINGLY SET ASIDE THE SAID ASSESSMENT PASSED UNDER S143(3) READ WITH S.153A OF THE ACT, WITH A DIRECTION TO THE ASSESSING OFFICER TO REDO THE ASSESSMENT DE NOVO CONSIDERING ALL THE ISSUES DISCUSSED IN HIS ORDER, AFTER GIVING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. ON GOING THROUGH THE CONSEQUENTIAL ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER, WHICH GAVE RISE TO THE PRESENT APPELLATE PROCEEDINGS BEFORE THIS TRIBUNAL, WE FIND THAT THE ASSESSING OFFICER HAS NOT STRICTLY COMPLIED WITH THE DIRECTIO NS OF THE COMMISSIONER OF INCOME - TAX WHILE MAKING THE DE NOVO ASSESSMENT AFTER VERIFICATION OF ALL THE RELEVANT ASPECTS OF THE MATTER, AND AS SUCH THE CIT(A), WAS NOT JUSTIFIED IN SIMPLY CONFIRMING SUCH ASSESSMENT MADE BY THE ASSESSING OFFICER. WE ACCO RDINGLY SET ASIDE THE IMPUGNED ORDER OF THE CIT(A) AND SET ASIDE THE MATTER TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO REFRAME THE ASSESSMENT, STRICTLY IN CONFORMITY WITH THE DIRECTION S OF THE COMMISSIONER OF INCOME - TAX IN THE ORDER UNDER S. 263 AFTER DUE VERIFICATION O N ALL THE RELEVANT ASPECTS DEALT WITH THEREIN, AND IN ACCORDANCE WITH LAW, AFTER GIVING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. ASSESSEES GROUNDS IN THIS APPEAL ARE ACCORDINGLY ALLOWED FOR STATISTICAL PURPOSES. 8. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 20.3.2014 SD/ - SD/ - (CHANDRA POOJARI ) (ASHA VIJAYARAGHAVAN) ACCOUNTANT MEMBER JUDICIAL MEMBER DT/ - 20 TH MARCH, 2014 COPY FORWARDED TO: 1. M/S. BINJUSARIA ISPAT P. LTD., C/O. M/S. R.B.KABRA & CO., CHARTERED ACCOUNTANTS, 1 - 917 TILAK ROAD, HYDERABAD 500 001 2 . DY. COMMISSIONER OF INCOME - TAX CIRCLE 1 (3), HYDERABAD 3. COMMISSIONER OF INCOME - TAX(APPEALS) II, HYDERABAD ITA NO. 1500/ HYD/20 13 M/S. BINJUSARIA ISPAT P. LTD., HYDERABAD 5 4. COMMISSIONER OF INCOME - TAX I HYDERABAD 5 DEPARTMENTAL REPRESENTATIVE, ITAT, HYDERABAD. B.V.S