ACIT, Coimbatore V. M/s. Dhandayuthapani foundry P Ltd., Coimbatore

ITA 1549/CHNY/2012

• Counselvise Citation: 154921714 RSA 2012
• Duration Of Justice: 1 year(s) 2 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-10-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 29-10-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 08-08-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANIRUDH RAI
• Assessee Lawyers: G BASKAR
• Section: 143(3); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH : CHENNAI [BEFORE SHRI. A. MOHAN ALANKAMONY, ACCOUNTANT MEM BER AND SHRI S.S. GODARA, JUDICIAL MEMBER] I.T.A.NO. 1549/MDS/2012 & CO NO.175/MDS/2012 (IN ITA NO.1549/MDS/2012). ASSESSMENT YEAR : 2006-2007 THE ASSISTANT COMMISSIONER OF INCOME TAX, COMPANY CIRCLE I(2), COIMBATORE VS M/S. DHANDAYUTHPANI FOUNDRY P. LTD, 131/4B, VILANKURICHI ROAD, COIMBATORE-35. [PAN AAACD6151G] (APPELLANT) (RESPONDENT/CROSS OBJECTOR) APPELLANT BY : SHRI ANIRUDH RAI, CIT-DR RESPONDENT BY : SHRI. G. BASKAR, ADV DATE OF HEARING : 29-10-2013 DATE OF PRONOUNCEMENT : 29-10-2013 O R D E R PER S.S. GODARA, JUDICIAL MEMBER THIS APPEAL BY THE REVENUE AND CROSS OBJECTIONS AT THE BEHEST OF THE ASSESSEE, EMANATE FROM THE ORDER OF T HE COMMISSIONER OF INCOME TAX (APPEALS)-I, COIMBATORE DATED 16.05. 2012 IN ITA NO. 164/11-12 FOR ASSESSMENT YEAR 2006-07, IN PROCEEDIN GS U/S 143(3) R.W.S. 147 OF THE INCOME TAX ACT 1961 [IN SHORT THE ACT]. I.T.A.NO.1549/MDS/2012 & CO NO.175/MDS/2012 :- 2 -: 2. THE ASSESSEE IS A COMPANY ENGAGED IN THE BUSINESS OF MANUFACTURING AND TRADING. FOR THE IMPUGNED ASSESS MENT YEAR, IT HAD FILED ITS RETURN ON 13.04.2007 DECLARING LOSS OF RS.19,64,300/-. THE SAME WAS SUMMARILY PROCESSED ON 22.08.2007 AND TH E ASSESSEES INCOME WAS ASSESSED AT RS.10,79,320/-. THEREAFTER, THE ASSESSING OFFICER FORMED AN OPINION THAT INCOME OF THE ASSESS EE LIABLE TO THE ASSESSED UNDER THE HEAD LONG TERM CAPITAL GAINS OF RS.10,11,12,800/- HAD ESCAPED ASSESSMENT. THIS PROMPTED HIM TO ISSU E SECTION 148 NOTICE DATED 24.12.2010 TO THE ASSESSEE. 3. IN RESPONSE, REGARDING AFORESAID LONG TERM CAPITAL GAINS, THE ASSESSEE PLEADED BEFORE THE ASSESSING OFFICER THAT IT HAD OWNED A FACTORY BUILDING IN LAND MEASURING 4 ACRES, 18 CENT S AND 148 SQ FT IN COIMBATORE. PER ASSESSEE, ON 28.12.2005 I.E. IN PRE VIOUS YEAR RELEVANT TO THE IMPUGNED ASSESSMENT YEAR, IT HAD ENTERED INT O A JOINT DEVELOPMENT AGREEMENT WITH A PARTNERSHIP FIRM BY TA KING ADVANCE OF RS.1.74 CRORES. THEREAFTER, THE COIMBATORE CORPORA TION ACCORDED APPROVAL TO THE DEVELOPMENT PLAN ONLY ON 27.09.2007 I.E. RELEVANT TO ASSESSMENT YEAR 2008-2009 AND POSSESSION WAS HANDED OVER TO THE FIRM/DEVELOPER WHO COMMENCED THE CONSTRUCTION. IN LIGHT THEREOF, THE ASSESSEE EXPLAINED TO HAVE DECLARED LONG TERM CAPIT AL GAINS IN I.T.A.NO.1549/MDS/2012 & CO NO.175/MDS/2012 :- 3 -: ASSESSMENT YEAR 2008-09, AND NOT IN IMPUGNED ASSESS MENT YEAR I.E. 2006-07. WE NOTICE THAT ON 01.12.2011 THE ASSESSIN G OFFICER REJECTED THE EXPLANATION AND HELD THAT THE TRANSFER UNDER SECTION 2(47)(V) OF THE ACT HAD BEEN DEEMED TO HAVE BEEN COMPLETED ONL Y IN THE IMPUGNED ASSESSMENT YEAR SINCE THE JOINT DEVELOPMEN T AGREEMENT (SUPRA) HAD BEEN REGISTERED ON 28.12.2005. AT THE SAME TIME, VIDE ORDER DATED 28.12.2010, HE ASSESSED THE VERY CAPITA L GAINS ON PROTECTIVE BASIS IN ASSESSMENT YEAR 2008-2009. IN THIS MANNER, THE CAPITAL GAINS STOOD SUBSTANTIVELY ASSESSED IN THE I MPUGNED ASSESSMENT YEAR. 4. AGGRIEVED, THE ASSESSEE PREFERRED AN APP EAL. IT IS TO BE SEEN FROM THE CASE FILE THAT VIDE ORDER UNDER CHALLENGE, THE CIT(A) HAS RELIED UPON HIS OWN ORDER IN ASSESSEES APPEAL FOR ASSESSMENT YEAR 2008-2009 HOLDING THAT THE LONG TERM CAPITAL GAINS ARE TO BE SUBSTANTIVELY ASSESSED IN SAID ASSESSMENT YEAR. TA KING NOTE OF THE SAME, HE OBSERVES THAT THE LONG TERM CAPITAL GAINS HAVE BEEN WRONGLY ASSESSED IN THE IMPUGNED ASSESSMENT YEAR. ACCORDING LY, THE ISSUE OF SUBSTANTIVE ASSESSMENT QUA LONG TERM CAPITAL GAINS IN THE IMPUGNED ASSESSMENT STANDS DECIDED IN ASSESSEES FAVOUR. I.T.A.NO.1549/MDS/2012 & CO NO.175/MDS/2012 :- 4 -: IN THIS BACKGROUND, THE REVENUE HAS FILED THE INSTANT APPEAL AGAINST THE ORDER OF THE CIT(A) AND THE ASSESSEE HAS FILED THE CROSS OBJECTIONS SUPPORTING THE FINDINGS UNDER CHALLENGE. 5. IN THE COURSE OF HEARING, THE ONLY ARGUM ENT ADVANCED BY THE REVENUE IS THAT THE CIT(A) HAS WRONGLY HELD THAT TH E LONG TERM CAPITAL GAINS ASSESSED BY THE ASSESSING OFFICER, ARE NOT LIABLE TO BE ASSESSED IN ASSESSMENT YEAR 2006-2007, BUT IN 2008-2009 ONLY. ON THIS ISSUE, THE ASSESSEE HAS SUBMITTED THAT IN ASSESSMEN T YEAR 2008-2009, THE REVENUE HAS NOT FILED ANY APPEAL. IN THIS VIEW OF THE MATTER, WE ONCE AGAIN DEEM IT PROPER TO OBSERVE THAT THE ASSES SING OFFICER HAD SUBSTANTIVELY ASSESSED THE IMPUGNED LONG TERM CAPIT AL GAINS IN THE IMPUGNED ASSESSMENT YEAR. THE CIT(A) HAS HELD THAT SAME DESERVE TO BE ASSESSED SUBSTANTIVELY IN ASSESSMENT YEAR 2008-2 009. UNDISPUTEDLY, THE REVENUE HAS NOT COME UP IN APPEAL IN ASSESSMENT YEAR 2008-2009. IN OTHER WORDS, THE SAID FINDINGS H AVE ATTAINED FINALITY. THEREFORE, WE AFFIRM THE ORDER OF THE C IT(A). 6. IN THE RESULT, THE REVENUE APPEAL STANDS DI SMISSED AND CROSS OBJECTIONS BY THE ASSESSEE HAVE BECOME INFRUCTUOUS. I.T.A.NO.1549/MDS/2012 & CO NO.175/MDS/2012 :- 5 -: ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF H EARING ON TUESDAY, THE 29TH OF OCTOBER, 2013, AT CHENNAI. SD/- SD/- (A. MOHAN ALANKAMONY) ACCOUNTANT MEMBER (S.S. GODARA) JUDICIAL MEMBER DATED:29 TH OCTOBER, 2013. K.V COPY TO: APPELLANT/RESPONDENT/CIT(A)/CIT/DR