Emperor Spinners (P) Ltd., Tiruppur V. DCIT, Tiruppur

ITA 1697/CHNY/2013

• Counselvise Citation: 169721714 RSA 2013
• Duration Of Justice: 7 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-04-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 09-04-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 04-09-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HARI RAO IRS
• Assessee Lawyers: T BANUSEKAR
• Keywords: Depreciation; Difference of opinion; Change of opinion
• Section: 143(3); 148; 154

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI . , . . , ! ' BEFORE SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER & SHRI S.S. GODARA, JUDICIAL MEMBER ./ I.T.A. NO.1697/MDS/2013 ( / ASSESSMENT YEAR : 2006 -2007) EMPEROR SPINNERS (P) LTD, NO.1, INDIRA NAGAR, I STREET, AVINASHI ROAD, TIRUPUR 641 603 . [PAN: AAACE5287G] ( #$ /APPELLANT) VS THE DEPUTY COMMISSIONER OF INCOME TAX, COMPANY CIRCLE, TIRUPUR . ( %&#$ /RESPONDENT) / APPELLANT BY : SHRI. T. BANUSEKAR, C.A., / RESPONDENT BY : SHRI. HARI RAO, IRS, JCIT. /DATE OF HEARING : 09.04.2014 ! /DATE OF PRONOUNCEMENT : 10.04.2014 ' / O R D E R PER S.S. GODARA, JUDICIAL MEMBER THIS ASSESSEES APPEAL ARISES FROM O RDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-II, COIMBATORE DATED 05.06.2013, PASSED IN ITA NO.138/10-11 FOR ASSESSME NT YEAR 2006- I.T.A.NO.1697/MDS/2013 :- 2 -: 2007, IN PROCEEDINGS UNDER SECTION 143(3) R.W.S 147 OF THE INCOME TAX ACT 1961 [IN SHORT THE ACT]. 2. FROM THE GROUNDS RAISED THAT THE ASSESSEES GRIEVA NCE APPEARS TO BE FOUR FOLDED I.E. IT QUESTIONS VALIDITY OF RE OPENING AND PRAYS FOR DIRECTIONS TO THE ASSESSING OFFICER TO RECALCULATE CAPITAL GAINS FROM SLUMP SALE WITHOUT INCLUDING LIABILITY OF H2,55,983 /-, FOR DELETING DEPRECIATION CHARGED IN BLOCK OF ASSETS IN THE YEAR OF SLUMP SALE AND ALSO FOR ALLOWING INCIDENTAL EXPENSES OF H9,33,319 /-. 3. THE ASSESSEE A COMPANY; DEALS IN SPINNING AND S HARE TRADING. ON 23.11.2006, IT HAD FILED ITS RETURN DECLARING AN INCOME OF H2,74,70,350/- IN NORMAL COMPUTATION AND BOOK PROFI TS U/S.115JB OF H3,63,16,022/-. THE SAME WAS SUMMARILY PROCESSED. THEREAFTER, THE ASSESSING OFFICER FRAMED REGULAR ASSESSMENT ON 10 .12.2008. 4. SUBSEQUENTLY, THE ASSESSING OFFICER FORMED AN OPINI ON ON THE BASIS OF REASONS TO BELIEVE THAT IN AFORESAID ASSES SMENT, THE ASSESSEE HAD CLAIMED EXPENDITURE/DEDUCTIONS NOT ALLOWABLE WH ICH HAD BEEN ACCEPTED LEADING TO EXCESS RELIEF. SO, HE QUOTED S ECTION 147 EXPLANATION 2 (C) AND REOPENED ASSESSMENT BY WAY OF SECTION 148 NOTICE DATED 25.03.2010. ON 6.12.2010 HE FRAMED REASSESSMENT, INTERALIA, MAKING ABOVESAID ADJUSTMENTS. IN VIEW TH EREOF, ASSESSEES I.T.A.NO.1697/MDS/2013 :- 3 -: INCOME AFTER DISALLOWANCE UNDER SECTION 50B OF H90, 53,758/- WAS COMPUTED AS H3,65,24,108/- FROM THAT DECLARED AS H2 ,74,70,350/- (SUPRA). 5. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL. APART FROM CHALLENGING AFORESAID ADJUSTMENTS ON MERITS, IT HAD SPEFICALLY PLEADED BEFORE THE CIT(A) THAT REOPENING IN QUESTION WAS ON LY CHANGE OF OPINION NOT SUSTAINABLE IN THE EYES OF LAW. IT E MANATES FROM THE CIT(A)S ORDER THAT THIS LEGAL PLEA CHALLENGING REO PENING HAS NOWHERE BEEN ADJUDICATED. ON MERITS, THE ABOVESTATED ADJUS TMENT OF LIABILITY, DEPRECIATION AND INCIDENTAL EXPENSES STAND CONFIRM ED. THEREFORE, THE ASSESSEE IS IN APPEAL. 6. WE HAVE HEARD BOTH PARTIES AND GONE THROUGH THE CA SE FILE. THE ASSESSEE HAS FILED A PAPER BOOK IN SUPPORT OF I TS CONTENTIONS. ON NON-ADJUDICATION OF ITS GROUND CHALLENGING VALIDITY OF REOPENING IN QUESTION BY THE CIT(A); IT IS STATED AT THE BAR THA T A PETITION U/S 154 ON THE VERY ISSUE HAS BEEN PREFERRED BEFORE THE LOW ER APPELLATE AUTHORITY. THE REVENUE IS FAIR ENOUGH NOT TO DISPU TE THIS FACTUAL POSITION. IN THESE CIRCUMSTANCES AND CONSCIOUS OF TRITE PROPOSITION THAT THE PLEA CHALLENGING VALIDITY OF REOPENING WHI CH GOES TO ROOT OF THE MATTER HAS TO BE DECIDED FIRST, WE ARE OF THE O PINION THAT THIS I.T.A.NO.1697/MDS/2013 :- 4 -: APPEAL DESERVES TO BE REMITTED BACK TO CIT(A) FOR T HIS REASON ALONE. THUS WE REMAND THIS CASE BACK TO THE CIT(A) WHO SHA LL DECIDE THE APPEAL AFRESH IN ACCORDANCE WITH LAW AFTER GIVING A DEQUATE OPPORTUNITY OF HEARING TO THE ASSESSEE. 7. THIS ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL P URPOSES. ORDER PRONOUNCED ON THURSDAY, THE 10TH OF APRIL, 2014, AT CHENNAI. SD/- SD/- ( . ) ( . . ) ! (A.MOHAN ALANKAMONY) ACCOUNTANT MEMBER (S.S. GODARA) JUDICIAL MEMBER '# /CHENNAI, $% /DATED:10.04.2014. KV %& '( )( /COPY TO: 1. * APPELLANT 2. / RESPONDENT 3. + ( )/CIT(A) 4. + /CIT 5. (,- . /DR 6. -/ 0 /GF. I.T.A.NO.1697/MDS/2013 :- 5 -: