M/s. Karnataka Forest Development Corporation Limited, Bengaluru V. Principal Commissioner of Income Tax, Bengaluru-4, Bengaluru

ITA 168/BANG/2019

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 2425 (ITAT-BANGALORE)
• Duration Of Justice: 9 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-11-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 30-01-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: B S BALACHANDRAN
• Keywords: TDS; Set aside
• Section: 263

Judgement Text

ITA NO. 168 (B)/201 9 1 S IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCHES : B , BANGALORE BEFORE SHRI B.R.BASKARAN , ACCOUNTANT MEMBER AND S MT. BEENA PILLAI, JUDIC I AL MEMBER ITA NO. 168 (BANG)/201 9 (ASSESSMENT YEAR : 20 14 - 15 ) M/S KARNATAKA FOREST DEVELOPMENT 1 FLOOR, VANA VIKAS, 18 TH CROSS, MALLESHWARAM, BANGALORE - 560 003 PAN NO. A AACK9424B APPELLANT VS THE PR.COMMISSIONER OF INCOME TAX , 5 TH FLOOR, BMTC BUILDING, KORAMANGALA, BANGALORE RESPONDENT APPELLANT BY : S HRI B. S. BALACHANDRAN, ADVOCATE RE VENUE BY : MS. NEERA MALHOTRA, CIT ,DR DATE OF HEARING : 2 5 - 11 - 2019 DATE OF PRONOUNCEMENT : 29 - 11 - 2019 O R D E R PER SMT BEENA PILLAI , JUDICIAL MEMBER : PRESENT APPEAL HAS BEEN FILED BY ASSESSEE AGAINST ORDER DATED 26/12/18 PASSED BY LD.CIT, BANGALORE - 4, UNDER SECTION 263 OF THE ACT FOR ASSESSMENT YEAR 2014 - 15 ON FOLLOWING GROUNDS OF APPEAL: ITA NO. 168 (B)/201 9 2 1. THE ORDER OF THE PR..CIT IS CONTRARY TO LAW, FACTS, EVIDENCES ON RECORD AND IS NOT MAINTAINABLE IN LAW. 2. THE LD.PR.CIT ERRED IN NOT CONSIDERING THE EVIDENCES FILED BEFORE HER ON MERITS WHICH EVIDENCES CLEARLY SHOWS THAT THERE IS NO LOSS OF REVENUE AND HENCE NO PREJUDICE TO THE INTEREST OF THE REVENUE WHICH RENDERS THE ORDER U/S 263 INVALID IN LAW. 3. THE LD.CIT ERRED IN SETTING ASIDE THE ISSUE OF RULE 7A(2) TO THE FILE OF THE AO WITHOUT CONSIDERING THE EVIDENCES FILED ON MERITS WHICH CLEARLY SHOWS THAT THE ALL OWANCE GRANTED WAS IN ORDER. 4. WITHOUT P REJUDICE TO THE ABOVE THE AO HAS APPLIED H I S MIND TO RULE &A(2) AS PER THE DETAILS CALLED FOR AND FURNISHED AND T H US TH E RE IS NO ANY FAILURE TO CONDUCT THE ENQUIRY. 5. FOR THESE ARE ANY OTHER GROUNDS OF APPEAL THAT MAY BE URGED AT THE TIME OF HEARING IT IS PRAYED THAT THE HONBLE ITAT MAY BE PLEASED TO ALLOW THIS APPEAL IN THE INTERE S T OF EQUITY AND JUSTICE. 2. BRIEF FACTS OF THE CASE ARE AS UNDER: ASSESSEE FILED ITS RE TURN OF INCOME FOR ASSESSMENT YEAR UNDER CONSIDERATION ON 31/03/15 DECLARING CURRENT LOSS OF RS.431,08,73,830/ - . THE ASSESSMENT WAS COMPLETED UNDER SECTION 143 (3) OF THE A CT V IDE ORDER DATED 26/12/16 WHEREIN , ADDITION OF RS.7,25,42,337/ - WAS MADE . 2.1 SUBSEQUENTLY, VIDE NOTICE DATED 24/09/18 LD.CIT HELD ORDER DATED 26/12/16 TO BE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE TO THE EXTENT OF ALLOWANCE CLAIMED BY ASSESSEE ON ITA NO. 168 (B)/201 9 3 RUBBER TREE PLANTATION UNDER RULE 7A (2) AMOUNTING TO RS .7,91,38,318/ - . L D.CIT NOTED THAT L D. AO FAILED TO CONDUCT ENQUIRIES REGARDING ABOVE ISSUE. LD.CIT , ON VERIFYING VARIOUS DETAILS FILED BY ASSESSEE , PASSED ORDER UNDER SECTION 263 ON 26/12/18 , HOLDING THAT SUM OF RS.4,72,34,627/ - CAPITALISED BY ASSESSEE OUT OF RS.7,91,38,318/ - BEING NOT CLEAR , NEEDS VERIFICATION AS PER RULE - 7A (2). HE FURTH ER DIRECTED LD.AO TO VERIFY REASON S FOR CAPITALISATION OF PART EXPENDITURE. 3. LD.AR SUBMITTED THAT DETAILS REFERRED TO BY LD.CIT IS FACTUALLY INCORRECT AS TOTAL DEDUCTION CLAIMED IS RS.7,91, 38,318/ - WHEREA S ACTUAL ADDITION DURING YEAR BEING RS.4,72,34,673/ - HAS BEEN C APITALISED AND REFLECTED IN FIXED ASSETS. 3.1 LD.CIT DR, ON THE CONTRARY , PLACING RELIANCE UPON DECISION OF HONBLE SUPREME COURT IN CASE OF MALABAR INDUSTRIAL CO LTD VS CIT REPORTED IN (2000) 243 ITR 83 AS WELL AS HONBLE SUPREME COURT IN CASE OF CIT VS AMITABH BACHCHAN REPORTED IN 384 ITR 200 . SHE SUBMITTED THAT REASON FOR REVISION OF ASSESSMENT ORDER WAS PROPOSED DUE TO NO ENQUIRY BY LD.AO AND THEREFORE DESERVES TO BE UPHE LD. 4. WE HAVE PERUSED SUBMISSIONS ADVANCED BY BOTH SIDES IN THE LIGHT OF RECORDS PLACED BEFORE US. 4.1 ADMITTEDLY, LD.AO AT THE TIME OF ORIGINAL ASSESSMENT PROCEEDINGS DID NOT VERIF Y CLAIM OF ASSESSEE UNDER R ULE - 7A ( 2). THERE IS NOTHING ON RECORD TO ESTABLISH THAT EVEN A QUERY W AS RAISED BY LD.AO IN REGARDS TO THE CLAIM. HOWEVER, FROM THE STATEMENT FURNISHED BY THE ASSESSEE, WE NOTE THAT THE AMOUNT ITA NO. 168 (B)/201 9 4 OF RS.4,72,34,673/ - REPRESENT OPENING BALANCE AND THE SAME HAS BEEN C APITALIZED BY THE ASSESSEE. DURING THE YEAR UNDER CONSIDERATION ASSESSEE HAS IN C URRED EXP E NSES OF RS.8,80,48,770/ - O UT OF WHICH A SUM OF RS.89,10,452/ - W A S CAPITALIZED. ACCORDINGLY, A SUM OF RS.7,91,38,318/ - WAS CLAIMED AS EXPENSES UNDER RULE 7A. WE NOTICE THAT LD.CIT HAS NOT A PPRECIATED THESE FACTS , IN PROPER PERSPECTIVE. ACCORDINGLY, WE ARE OF THE OPINION, THAT LD.CITA) SHOULD LOOK INTO THE FACTS ONCE AGAIN. ACCOR D INGLY, WE SET ASIDE THE ORD E R PASSED BY LD.CIT, AND RESTORE ALL ISSUES TO HIS FILE FOR EXAMIN IN G THEM AFRESH. IN THE RESULT , APPEAL FILED BY ASSESSEE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 29 - 11 - 2019. SD/ - S D / - ( B.R.BASKARAN ) ( BEENA P ILLAI ) ACCOUNTANT MEMB ER JUDICIAL MEMBER DATED: 29 - 11 - 2019 *AM COPY OF THE ORDER FORWARDED TO: 1.APPELLANT; 2.RESPONDENT; 3.CIT; 4.CIT(A); 5. DR 6. ITO (TDS) 7.GUARD FILE BY ORDER ASST. REGISTRAR