ACIT, Coimbatore V. Sakthi Sugars Limited, Coimbatore

ITA 1625/CHNY/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 73609 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-01-2014
• Appeal Filed By: Department
• Bench Allotted: C
• Next Hearing Date: 09-01-2014
• Assessment Year: 2004-2005
• Appeal Filed On: 07-08-2013
• Court: TRIBUNAL
• Department Lawyers: P B SEKARAN
• Assessee Lawyers: R VIJAYARAGHAVAN
• Keywords: Depreciation; Difference of opinion; Condonation of delay; Change of opinion
• Section: 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : CHENNAI BEFORE DR. O.K. NARAYANAN, VICE PRESIDENT & SHRI VIKAS AWASTHY, JUDICIAL MEMBER I.T.A. NO. 1625/MDS/2013 ASSESSMENT YEAR : 2004-05 ASST. COMMISSIONER OF INCOME TAX, COMPANY CIRCLE-I(1), COIMBATORE 641 018 (APPELLANT) VS M/S. SAKTHI SUGARS LIMITED, NO.180, RACE COURSE ROAD, COIMBATORE - 18 [PAN: AADCS 0651 B] (RESPONDENT) REVENUE BY : SHRI P.B.SEKARAN, CIT ASSESSEE BY : SHRI R. VIJAYARAGHAVAN, ADV. DATE OF HEARING : 09-01-2014 DATE OF PRONOUNCEMENT : 09-01-2014 O R D E R PER VIKAS AWASTHY, JUDICIAL MEMBER: THE APPEAL HAS BEEN FILED BY THE REVENUE WITH THE DELAY OF SIX DAYS. AN APPLICATION FOR CONDONATION OF DELAY IN FILING OF THE APPEAL HAS BEEN FILED. AFTER PERUSING THE SAME, WE ARE SATISFIED THAT THE DELAY IN FILING OF THE APPEAL IS UN-INTENT IONAL AND IS FOR THE REASONS STATED IN THE ACCOMPANYING APPLICATION. TH E DELAY OF SIX I.T.A. NO. 1625/MDS/2013 2 DAYS IN FILING OF THE APPEAL IS CONDONED, THE APPEA L IS ADMITTED TO BE HEARD AND DISPOSED-OFF ON MERITS. 2. THE REVENUE HAS ASSAILED THE ORDER OF THE COMMIS SIONER OF INCOME TAX(APPEALS)-I, COIMBATORE DATED 30-05-2013 RELEVANT TO THE ASSESSMENT YEAR (AY) 2004-05. THE ONLY ISSUE I N THE APPEAL OF THE REVENUE IS SETTING ASIDE OF RE-ASSESSMENT PR OCEEDINGS BY THE CIT(APPEALS). 3. THE ASSESSEE HAD FILED ITS RETURN OF INCOME FOR THE AY. 2004- 05 ON 30-10-2004 DECLARING LOSS OF ` 45,48,98,099/-. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY AND NOTICE U /S. 143(2) OF THE INCOME TAX ACT, 1961 (HEREIN AFTER REFERRED TO AS THE ACT) WAS ISSUED TO THE ASSESSEE. ASSESSMENT U/S.143(3) WAS COMPLETED BY THE ASSESSING OFFICER VIDE ORDER DATED 20-12-2006 B Y MAKING CERTAIN ADDITIONS/DIS-ALLOWANCES. THEREAFTER, THE ASSESSING OFFICER ISSUED NOTICE U/S.148 ON 28-03-2012 I.E., AFTER THE PERIOD OF FOUR YEARS FROM THE DATE OF ORIGINAL ASSESSMENT. THE RE ASONS FOR RE-OPENING THE ASSESSMENT U/S.148 WERE COMMUNICATED TO THE ASSESSEE VIDE LETTER DATED 27-05-2011. THE SAME AR E REPRODUCED HEREIN BELOW: I.T.A. NO. 1625/MDS/2013 3 IN THIS CASE FOR THE ASSESSMENT YEAR 2004-05, THE COMPANY HAS DEBITED A SUM OF ` 17,13,43,198/- BEING INTEREST SAVINGS ON SALES AS A DEDUCTION. THIS IS A NORMAL EXPENDITURE AND NOT ALLOWABLE AS A DEDUCTION. THE COMPANY HAS CLAIMED HIGHER PERCENTAGE OF DEPRECIATION ON CO-GENERATION PLAT WHICH IT IS NOT ELIGIBLE FOR. IN THE LIGHT OF THE ABOVE, INCOME ASSESSABLE TO TAX HAS ESCAPED ASSESSMENT BY VIRTUE OF FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE TRULY AND FULLY ALL MATERIALS AND FACTS REQUIRED FOR THE COMPLETION OF ASSESSMENT AND THE P ROVISO TO SECTION 147 AND EXPLANATION 2(C) SECTION 147 ARE AT TRACTED IN THIS CASE. THE ASSESSEE FILED OBJECTIONS TO THE RE-OPENING. H OWEVER, THE ASSESSING OFFICER REJECTED THE SAME AND PASSED ASSE SSMENT ORDER U/S.143(3) R.W.S. 147 ON 30-12-2011 AND MADE ADDITION TO THE TUNE OF ` 17,13,43,198/- ON ACCOUNT OF INTEREST SAVINGS ON EXPORT SALES. AGGRIEVED AGAINST THE ASSESSMENT ORDER DATED 30-12 -2011, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(APP EALS). THE CIT(APPEALS) ALLOWED THE APPEAL OF THE ASSESSEE BY FOLLOWING THE JUDGMENT OF THE HONBLE DELHI HIGH COURT IN THE CAS E OF CIT VS. USHA INTERNATIONAL LTD., (DEL) (FB) REPORTED AS 348 ITR 485. THE I.T.A. NO. 1625/MDS/2013 4 REVENUE HAS FILED PRESENT APPEAL ASSAILING THE ORDE R OF CIT(APPEALS). 4. SHRI P.B.SEKARAN, APPEARING ON BEHALF OF THE REV ENUE RELIES ON THE GROUNDS OF APPEAL AND PRAYED FOR SETTING ASI DE THE ORDER OF THE CIT(APPEALS). 5. ON THE OTHER HAND, SHRI R. VIJAYARAGHAVAN, ADVOC ATE, APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED THAT RE-OPENING HAS BEEN DONE AFTER THE PERIOD OF FOUR YEARS ON THE BAS IS OF THE EXISTING MATERIAL. THIS IS CLEAR CASE OF CHANGE OF OPINION. NO FRESH MATERIAL WAS AVAILABLE BEFORE THE ASSESSING O FFICER TO RE- OPEN THE ASSESSMENT. THE ISSUE TAKEN UP U/S.148 PR OCEEDINGS HAS ALREADY BEEN CONSIDERED BY THE ASSESSING OFFICE R IN THE ORIGINAL ASSESSMENT. 6. BOTH SIDES HEARD. ORDERS OF THE AUTHORITIES BEL OW PERUSED. THE DOCUMENTS ON RECORD SHOW THAT RE-ASSESSMENT PRO CEEDINGS HAVE BEEN INITIATED AGAINST THE ASSESSEE FOR THE RE ASONS THAT THE ASSESSEE HAS DEBITED A SUM OF ` 17,13,43,198/- BEING INTEREST SAVINGS ON SALE AND THIS EXPENDITURE IS A NORMAL EX PENDITURE AND IS NOT ALLOWABLE AS DEDUCTION. WE FIND THAT THIS I SSUE HAS BEEN I.T.A. NO. 1625/MDS/2013 5 DEALT IN DETAIL BY THE ASSESSING OFFICER IN ASSESSM ENT PROCEEDINGS U/S.143(3). IN ORIGINAL ASSESSMENT ORDER DATED 20- 12-2006, THE ASSESSING OFFICER AFTER CONSIDERING THE ISSUE IN DE TAIL MADE THE FOLLOWING OBSERVATIONS: 13. IN ALL FAIRNESS TO THE ASSESSEE, IN THE RELEVA NT ASSESSMENT YEAR, THE ASSESSEE DESERVES RELIEF FOR T HE EXPENDITURE ADDED BACK ON ACCOUNT OF INTEREST SAVIN GS ON EXPORT OF SUGARS AS THE SAME HAS BEEN CONSIDERED IN THE EARLIER YEARS. THIS WOULD RESULT IN AN INCREASE IN LOSS FOR THE ASSESSEE BY ` 16,90,04,130/- ( ` 17,13,43,198/- - ` 23,39,068/-). THUS, IT IS A CASE OF CHANGE OF OPINION AND THAT T OO AFTER THE EXPIRY OF FOUR YEARS, FROM THE END OF THE RELEVANT AY. THERE IS NO INFIRMITY IN THE IMPUGNED ORDER. THE APPEAL OF THE REVENUE IS DISMISSED BEING DEVOID OF MERIT. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ON THURSDAY, THE 09 TH JANUARY, 2014 AT CHENNAI. SD/- SD/- (DR. O.K. NARAYANAN) (VIK AS AWASTHY) VICE PRESIDENT JUDICIAL MEMBER DATED: 09 TH JANUARY, 2014 TNMM COPY TO: APPELLANT/RESPONDENT/CIT(A)/CIT/DR