Refex Refrigerants Ltd., CHENNAI V. ACIT, CHENNAI

ITA 1671/CHNY/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 77389 (ITAT-CHENNAI)
• Duration Of Justice: 10 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-07-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 02-06-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 30-08-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P B SEKARAN
• Assessee Lawyers: M NARAYANAN
• Keywords: Depreciation; Additional depreciation; Revised return; Revenue expenditure
• Section: 139(5)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , B B ENCH, CHENNAI . , ' $ % , & ' BEFORE SHRI A.MOHAN ALANKAMONY ACCOUNTANT MEMBER AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER ./I.T.A.NO. 1671/MDS/2013 ( / ASSESSMENT YEAR: 2009-10) M/S. REFEX REFRIGERANTS LTD. 20, MOOKER NALLAMUTHU STREET, GEORGE TOWN, CHENNAI-600 001. VS ASSISTANT COMMISSIONER OF INCOME TAX, COMPANY CIRCLE-V(3), NUNGAMBAKKAM HIGH ROAD, CHENNAI-600 034. PAN: AACCR2495P ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR. M.NARAYANAN, A.R /RESPONDENT BY : MR. P.B.SEKARAN, CIT / DATE OF HEARING : 2 ND JUNE, 2014 /DATE OF PRONOUNCEMENT : 17 TH JULY, 2014 / O R D E R PER CHALLA NAGENDRA PRASAD, JM: THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-V, CHENNAI DATED 09.07.2013 FOR THE ASSESSMENT YEAR 2009-10. 2. THE FIRST ISSUE IN THE GROUNDS OF APPEAL OF THE ASSESSEE IS THAT COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN ALLOWING ADDITIONAL CLAIM OF ` 64,64,966/- TOWARDS INTEREST. BRIEF FACTS ARE THAT ASSESSEE FILED RETURN DECLARIN G INCOME OF ` 95,55,830/- UNDER THE HEAD INCOME FROM BUSINESS. IN THE 2 ITA NO. 1671/MDS/2 013 COURSE OF ASSESSMENT PROCEEDINGS, ASSESSEE CLAIMED THAT IT HAD INCURRED INTEREST EXPENDITURE OF ` 64,64,966/- ON VARIOUS LOANS OTHER THAN BANK LOANS AND CLAIMED INTEREST B Y WAY OF LETTER DATED 6.12.2011 WHICH WAS OMITTED TO CLAIM I N THE RETURN. THE ASSESSING OFFICER WHILE COMPLETING THE ASSESSMENT DID NOT CONSIDER THE CLAIM OF THE ASSESS EE. THE ASSESSEE PREFERRED AN APPEAL BEFORE THE COMMISSIONE R OF INCOME TAX (APPEALS). THE COMMISSIONER OF INCOME TA X (APPEALS) CALLED FOR REMAND REPORT FROM THE ASSESS ING OFFICER. THE ASSESSING OFFICER SENT REMAND REPORT D ATED 14.06.2013 OBSERVING THAT THE SAID INTEREST OF ` 64,64,996/- HAS BEEN INCURRED TOWARDS CAPITAL INVESTMENT. HOWE VER, ASSESSING OFFICER WAS OF THE VIEW THAT CLAIM OF THE ASSESSEE FOR INTEREST AS REVENUE EXPENDITURE IS NOT ADMISSI BLE AS THE ASSESSEE HAS NOT CLAIMED IN THE RETURN ORIGINALLY FILED NOR ASSESSEE FILED REVISED RETURN MAKING SUCH CLAIM. T HE COMMISSIONER OF INCOME TAX (APPEALS) REJECTED THE C LAIM OF THE ASSESSEE OBSERVING THAT DETAILS OF INTEREST CL AIMED BY THE ASSESSEE WERE NOT FURNISHED EITHER BEFORE THE ASSE SSING OFFICER OR BEFORE HIM AND IT IS A FRESH CLAIM WITHO UT ANY 3 ITA NO. 1671/MDS/2 013 EVIDENTIARY VALUE AND THEREFORE REJECTED THE CLAIM OF THE ASSESSEE. 3. COUNSEL FOR THE ASSESSEE SUBMITS THAT ASSESSEE IN THE COURSE OF ASSESSMENT PROCEEDINGS BY LETTER DATED 6 .12.2011 SUBMITTED COMPLETE DETAILS BEFORE THE ASSESSING OFF ICER IN RESPECT OF INTEREST PAYMENTS MADE TO VARIOUS PARTIE S OTHER THAN BANKS. COUNSEL SUBMITTED THAT ASSESSEE INADV ERTENTLY COULD NOT CLAIM THE SAID EXPENSES IN THE RETURN OF INCOME AND SINCE IT WAS INADVERTENTLY OMITTED TO CLAIM IN THE RETURN, IN THE COURSE OF PROCEEDINGS ASSESSEE MADE A CLAIM BE FORE THE ASSESSING OFFICER. COUNSEL SUBMITS THAT IT WAS NOT DISPUTED BY THE ASSESSING OFFICER IN THE REMAND REPORT THAT ASSESSEE HAS NOT SUBMITTED ANY DETAILS IN REGARD TO SAID INT EREST. THE ASSESSING OFFICER WAS OF THE OPINION THAT SINCE THE ASSESSEE DID NOT MAKE A CLAIM IN THE RETURN, ASSESSEE IS NOT ENTITLED FOR DEDUCTION. COUNSEL FOR THE ASSESSEE SUBMITS THAT COMMISSIONER OF INCOME TAX (APPEALS) IS NOT CORRECT IN OBSERVING THAT DETAILS WERE NOT FURNISHED WHILE REJ ECTING THE CLAIM ON THE GROUND THAT IT IS A FRESH CLAIM WITHOU T ANY EVIDENTIARY VALUE. 4 ITA NO. 1671/MDS/2 013 4. DEPARTMENTAL REPRESENTATIVE SUBMITS THAT ASSESS ING OFFICER IN THE COURSE OF ASSESSMENT PROCEEDINGS DI D NOT CONSIDER THE CLAIM OF THE ASSESSEE AS IT IS A FRES H CLAIM MADE BEFORE HIM. IN THE REMAND REPORT ALSO ASSESSI NG OFFICER OBSERVED THAT INTEREST PERTAINS TO CAPITAL INVESTMENT AND THEREFORE CLAIM OF THE ASSESSEE IS NOT ALLOWAB LE. 5. HEARD BOTH SIDES. PERUSED ORDERS OF LOWER AUTHOR ITIES AND SUBMISSIONS MADE BEFORE US. THE REVENUE IS NOT DISPUTING THAT ASSESSEE HAS NOT FURNISHED ANY INFOR MATION REGARDING INTEREST CLAIMED BY THE ASSESSEE PAID TO VARIOUS PARTIES OTHER THAN TO THE BANKS. THE CLAIM OF THE A SSESSEE WAS NOT CONSIDERED BY THE ASSESSING OFFICER AT THE STAGE OF COMPLETION OF ASSESSMENT. THE REMAND REPORT SUBMITT ED BY THE ASSESSING OFFICER IS CRYPTIC AND THERE WAS A RE QUEST BY THE ASSESSEE TO TAKE DECISION ON MERITS. THE COMM ISSIONER OF INCOME TAX (APPEALS) OBSERVED THAT NO DETAILS WE RE FURNISHED BY THE ASSESSEE AND CLAIM IS A FRESH CLAI M WITHOUT ANY EVIDENTIARY VALUE REJECTED THE ASSESSEES SUBMI SSIONS. IN OUR CONSIDERED VIEW, THIS ISSUE HAS NOT BEEN CONSID ERED ELABORATELY AND IN DETAIL BY THE LOWER AUTHORITIES WITH 5 ITA NO. 1671/MDS/2 013 REFERENCE TO SUBMISSIONS AND EVIDENCES FURNISHED BY THE ASSESSEE. THEREFORE, IN THE INTEREST OF JUSTICE, WE SET ASIDE THE IMPUGNED ORDER AND REMIT THIS ISSUE BACK TO TH E FILE OF THE ASSESSING OFFICER TO CONSIDER THE CLAIM OF THE ASSESSEE AFRESH IN ACCORDANCE WITH LAW AFTER PROVIDING ADEQU ATE OPPORTUNITY TO THE ASSESSEE. 6. THE NEXT ISSUE IN THE APPEAL OF THE ASSESSEE IS THAT COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN REFUS ING TO ALLOW ADDITIONAL DEPRECIATION CLAIMED BY THE ASSESS EE IN THE COURSE OF ASSESSMENT PROCEEDINGS. BRIEF FACTS ARE T HAT ASSESSEE IN THE COURSE OF ASSESSMENT PROCEEDINGS C LAIMED ADDITIONAL DEPRECIATION ON THE NEW PLANT & MACHINER Y ACQUIRED BY THE ASSESSEE DURING THE ASSESSMENT YEAR . THE CLAIM OF THE ASSESSEE FOR ADDITIONAL DEPRECIATION W AS NOT CONSIDERED BY THE ASSESSING OFFICER WHILE COMPLETI NG THE ASSESSMENT. THE ASSESSEE PREFERRED AN APPEAL BEFOR E THE COMMISSIONER OF INCOME TAX (APPEALS). THE COMMISSIO NER OF INCOME TAX (APPEALS) CALLED FOR REMAND REPORT A ND THE ASSESSING OFFICER IN THE REMAND REPORT SUBMITTED TH AT ADDITIONAL DEPRECIATION IS NOT ADMISSIBLE AS THE AS SESSEE DID 6 ITA NO. 1671/MDS/2 013 NOT CLAIM DEPRECIATION IN THE RETURN FILED BY THE A SSESSEE NOR IN THE REVISED RETURN WITHIN THE TIME ALLOWED UNDER SECTION 139(5) OF THE ACT. THE COMMISSIONER OF INCOME TAX (APPEALS) REJECTED THE CLAIM OF THE ASSESSEE STATIN G THAT ASSESSEE FAILED TO FURNISH DETAILS OF PLANT & MACHI NERY AND ALSO FAILED TO SHOW INCREASE IN INSTALLED CAPACITY OF PRODUCTION IN THE PRESCRIBED FORM AS WELL AS REPORT OF CHARTERED ACCOUNTANT IN THE PRESCRIBED FORM. COMMIS SIONER OF INCOME TAX (APPEALS) ALSO OBSERVED THAT ASSESSEE HAS COMMITTED A GRAVE MISTAKE IN NOT CLAIMING ADDITIONA L DEPRECIATION IN THE RETURN. THEREFORE, IN THE ABSEN CE OF ANY DETAILS, COMMISSIONER REJECTED THE CLAIM OF THE ASS ESSEE. 7. COUNSEL FOR THE ASSESSEE SUBMITS THAT COMMISSIO NER OF INCOME TAX (APPEALS) ERRED IN REFUSING TO ALLOW ADDITIONAL DEPRECIATION BY QUOTING PROVISION WHICH EXISTED PR IOR TO 1.4.2006 WHEREIN THE PROVISIONS PRESCRIBED FOR INCR EASE IN INSTALLED CAPACITY ETC. COUNSEL SUBMITS THAT ASSES SEE COULD NOT CLAIM IN THE RETURN INADVERTENTLY THEREFORE, C LAIM WAS MADE IN THE COURSE OF ASSESSMENT PROCEEDINGS. COUNS EL SUBMITS THAT UNDER SIMILAR SITUATION, THE TRIBUNAL IN 7 ITA NO. 1671/MDS/2 013 ASSESSEES OWN CASE IN ITA NO.967/MDS/2012 DATED 3 1 ST JULY, 2012 FOR THE ASSESSMENT YEAR 2008-09 DIRECTED THE ASSESSING OFFICER TO CONSIDER THE CLAIM OF THE ASSE SSEE FOR ADDITIONAL DEPRECIATION WHICH WAS OMITTED TO CLAIM IN THE RETURN BUT CLAIMED IN THE COURSE OF ASSESSMENT PROC EEDINGS. COPY OF THE ORDER IS PLACED ON RECORD. 8. HEARD BOTH SIDES. PERUSED ORDERS OF LOWER AUTHOR ITIES AND THE DECISION OF THIS TRIBUNAL RELIED ON. WE HAV E GONE THROUGH THE DECISION OF THIS TRIBUNAL IN ITA NO.967 /MDS/2012 DATED 6.8.2012 WHEREIN A SIMILAR SITUATION AROSE IN THE ASSESSEES CASE AND THE TRIBUNAL DIRECTED THE ASSE SSING OFFICER TO CONSIDER THE CLAIM OF THE ASSESSEE. RESP ECTFULLY FOLLOWING THE SAID DECISION, WE RESTORE THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER TO CONSIDER THE CLAIM OF THE ASSESSEE IN ACCORDANCE WITH LAW AFTER PROVIDING ADEQUATE OPPORT UNITY OF HEARING TO THE ASSESSEE. 8 ITA NO. 1671/MDS/2 013 9. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THURSDAY, T HE 17 TH DAY OF JULY, 2014 AT CHENNAI. SD/- SD/- ( A.MOHAN ALANKAMONY ) ( CHALLA NAGEND RA PRASAD ) . ( ' )* ) ACCOUNTANT MEMBER / , JUDICIAL MEMBER/ ) , ) /CHENNAI, - /DATED, 17 TH JULY, 2014 SOMU /0 10 /COPY TO: 1. APPELLANT 2. /RESPONDENT 3. 2 () /CIT(A) 4. 2 /CIT 5. 0 6 /DR 6. /GF .