ITO, Kottayam V. M/s.Bharath Transport Co., Kottayam

ITA 177/COCH/2013

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 68950 (ITAT-COCHIN)
• Duration Of Justice: 4 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2013
• Appeal Filed By: Department
• Bench Allotted: DB
• Next Hearing Date: 01-07-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 10-04-2013
• Court: TRIBUNAL
• Department Lawyers: S VIJAYAPRABHA; M ANIL KUMAR
• Assessee Lawyers: IYPE JOHN
• Keywords: Depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE S/SHRI N.R.S.GANESAN, JM AND B.R.BASKAR AN, AM I.T.A. NO. 177/COCH/2013 ASSESSMENT YEAR : 2008-09 THE INCOME TAX OFFICER, WARD-1, KOTTAYAM. VS. M/S. BHARATH TRANSPORT CO., PERUVA P.O., VAIKOM, KOTTAYAM. [PAN: AAEFB 2360C] (REVENUE -APPELLANT) (ASSESSEE-R ESPONDENT) C.O. NO. 06/COCH/2013 (ARSG. OUT OF I.T.A. NO. 177/COCH/2013 ASSESSMENT YEAR : 2008-09 M/S. BHARATH TRANSPORT CO., PERUVA P.O., VAIKOM, KOTTAYAM. [PAN: AAEFB 2360C] VS. THE INCOME TAX OFFICER, WARD-1, KOTTAYAM. (ASSESSEE-APPELLANT) (REVENUE-RESPONDENT) REVENUE BY SMT. S. VIJAYAPRABHA, JR. DR & SHRI M. ANIL KUMAR, CIT(DR) ASSESSEE BY SHRI IYPE JOHN, CA DATE OF HEARING 01/07/2013 DATE OF PRONOUNCEMENT 30/08/2013 O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: THE APPEAL FILED BY THE REVENUE AND THE CROSS OBJE CTION FILED BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER DATED 11-02-2013 PAS SED BY THE LD. CIT(A)-IV, KOCHI AND THEY RELATE TO THE ASSESSMENT YEAR 2008-09. I.T.A. NO. 177/COCH/2013 & C.O. NO. 06/COCH/2013 2 2. THE REVENUE IS ASSAILING THE DECISION OF THE LD. CIT(A) IN DELETING THE AMOUNT ASSESSED U/S. 41(2) OF THE ACT. 3. IN THE CROSS OBJECTION, THE ASSESSEE IS CHALLENG ING THE DECISION OF THE LD. CIT(A) IN HOLDING THAT THE ASSESSMENT IS NOT BARRED BY LIM ITATION. 4. THE FACTS RELATING TO THE CASE ARE DISCUSSED IN BRIEF. THE ASSESSEE IS A PARTNERSHIP FIRM AND IS ENGAGED IN THE BUSINESS OF RUNNING A PETROL PUMP AND HIRING OF VEHICLES. IN THE PROFIT AND LOSS ACCOUNT FILED ALO NG WITH THE RETURN OF INCOME, THE ASSESSEE DECLARED PROFIT ON SALE OF VEHICLES AT RS. 4,72,329/-. THE AO NOTICED THAT THE ASSESSEE HAS SOLD 18 VEHICLES DURING THE YEAR UNDER CONSIDERATION. THE ASSESSING OFFICER CALLED FOR DETAILS RELATING TO THE VEHICLES SOLD, VIZ., DEPRECIATION CLAIMED IN THE EARLIER YEARS, THE WRITTEN DOWN VALUE OF THE VEHICL ES ETC. HOWEVER, THE ASSESSEE COULD NOT FURNISH THE DETAILS UP TO THE SATISFACTION OF T HE ASSESSING OFFICER. HENCE THE ASSESSING OFFICER DETERMINED THE PROFIT ON SALE OF VEHICLES AT RS.60,88,644/-. SINCE THE ASSESSEE HAD ALREADY DECLARED THE PROFIT OF RS.4,72 ,329/- IN THE PROFIT AND LOSS ACCOUNT, THE AO ASSESSED THE DIFFERENCE OF RS.56,16,315/- U/ S. 41(2) OF THE ACT. AGGRIEVED, THE ASSESSEE FILED THE APPEAL BEFORE THE LD. CIT(A) CHA LLENGING THE SAID ASSESSMENT ON THE GROUND THAT THE PROVISIONS OF SEC.41(2) SHALL NOT A PPLY TO IT. THE ASSESSEE ALSO CONTENDED BEFORE THE LD. CIT(A) THAT THE ASSESSMENT IS BARRED BY LIMITATION. THE FIRST APPELLATE AUTHORITY ACCEPTED THE CLAIM OF THE ASSES SEE THAT THE PROVISIONS OF SEC. 41(2) OF THE ACT SHALL NOT APPLY TO THE ASSESSEE AND ACC ORDINGLY, DELETED THE ADDITION. HOWEVER, THE LD. CIT(A) DID NOT AGREE WITH THE CONT ENTION OF THE ASSESSEE THAT THE ASSESSMENT IS BARRED BY LIMITATION. AGGRIEVED BY T HE ORDER OF THE LD. CIT(A), THE REVENUE HAS FILED THIS APPEAL BEFORE US. THE ASSESS EE HAS FILED CROSS OBJECTION CHALLENGING THE DECISION OF THE LD. CIT(A) WITH REG ARD TO THE LIMITATION. 5. WE SHALL FIRST TAKE UP THE CROSS OBJECTION FILED BY THE ASSESSEE. ACCORDING TO THE ASSESSEE, THE ASSESSMENT ORDER WAS DESPATCHED FROM THE DEPARTMENT ON 21-01-2011 AND THE SAME WAS SERVED UPON THE ASSESSEE ON 24-01- 2011. ACCORDING TO THE ASSESSEE, THE TIME PRESCRIBED FOR COMPLETION OF ASS ESSMENT EXPIRED ON 31-12-2010. BY I.T.A. NO. 177/COCH/2013 & C.O. NO. 06/COCH/2013 3 PLACING RELIANCE ON THE DECISION RENDERED BY THE HO NBLE HIGH COURT OF KERALA IN THE CASE OF COCHIN PLANTATIONS LTD. VS. STATE OF KERALA (227 ITR 38), THE ASSESSEE CONTENDED THAT THE ASSESSMENT ORDER SHOULD HAVE LEF T THE FILE OF THE DEPARTMENT BY 31- 12-2010. THE LD A.R SUBMITTED THAT THE ASSESSMENT ORDER WAS DESPATCHED FROM THE DEPARTMENT ONLY ON 21.01.2011 AND HENCE THE ASSESSM ENT IS BARRED BY LIMITATION. THE ASSESSEE ALSO FILED A CERTIFICATE DATED 12-12-2011 OBTAINED FROM SENIOR SUPERINTENDENT OF POST OFFICE, KOTTAYAM UNDER RTI ACT, TO SUPPORT HIS CONTENTIONS THAT HE RECEIVED THE ASSESSMENT ORDER WAS RECEIVED BY THE ASSESSEE ONLY ON 24.01.2011. THE LD D.R, HOWEVER, STRONGLY REFUTED THE CONTENTIONS RAISED BY LD A.R. THE LD D.R SUBMITTED THAT THE ASSESSEE HAS ONLY SUBMITTED A CERTIFICATE OBTAI NED FOR DELIVERY OF THE POST AND THE ASSESSEE COULD NOT PROVE THAT THE SAID POST CONTAIN ED THE ASSESSMENT ORDER. FURTHER IT WAS NOT PROVED THAT THE ASSESSMENT ORDER WAS DESPAT CHED ONLY ON 21.11.2011, AS ALLEGED BY THE ASSESSEE. 6. WE HAVE HEARD THE PARTIES ON THIS ISSUE AND CARE FULLY PERUSED THE RECORD. WE NOTICE THAT THE ASSESSEE IS PLACING HEAVY RELIANCE ON THE CERTIFICATE DATED 12-12-2011 ISSUED BY THE SENIOR SUPERINTENDENT OF POST OFFICE, KOTTAYAM. IN THE SAID CERTIFICATE, IT HAS BEEN MENTIONED THAT THE FOLLOWING ARTICLES WERE DELIVERED TO THE ASSESSEE FROM 01- 01-2011 TO 31-01-2011: 1) RL NO. 2861 FROM KOCHI. 2) EL 511686889 IN FROM VAIKOM. WE NOTICE THAT THE ASSESSING OFFICER IS LOCATED AT KOTTAYAM. THE FIRST TAPAL HAS BEEN POSTED FROM KOCHI AND THE SECOND TAPAL HAS BEEN POS TED FROM VAIKOM. THE CERTIFICATE DOES NOT SHOW ANY TAPAL POSTED FROM KOTTAYAM, I.E., THE PLACE OF THE ASSESSING OFFICER. HENCE, IN OUR VIEW, THE ABOVE SAID CERTIFICATE ISSU ED BY THE SENIOR SUPERINTENDENT OF POST OFFICE DOES NOT SUPPORT THE CONTENTIONS OF THE ASSESSEE. WHEN THESE DISCREPANCIES WERE POINTED TO THE LD. COUNSEL FOR T HE ASSESSEE, HE COULD NOT GIVE A CONVINCING REPLY. FURTHER THE CONTENTION OF THE AS SESSEE IS THAT THE ASSESSMENT ORDER SHOULD HAVE BEEN DESPATCHED BY 31.12.2010. HOWEVER , NO EVIDENCE WAS BROUGHT ON RECORD BY THE ASSESSEE THAT THE SAME WAS NOT DESPAT CHED BY THAT DATE. IF THE ASSESSMENT ORDER HAD LEFT THE HAND OF THE AO BY 31. 12.2010 AND IT WAS SERVED UPON I.T.A. NO. 177/COCH/2013 & C.O. NO. 06/COCH/2013 4 THE ASSESSEE SUBSEQUENTLY, MAY BE ON 24.1.2011 AS C ONTENDED BY THE ASSESSEE, THEN THERE MAY NOT BE ANY VIOLATION OF MANDATORY PROVISI ONS OF THE ACT. HENCE, IN OUR VIEW, THE ASSESSEE MAY NOT GAIN ANYTHING BY PLACING RELIA NCE ON THE CERTIFICATE OF DESPATCH OF THE TAPAL. UNDER THESE CIRCUMSTANCES, IN OUR VIEW, THE ASSESSEE HAS FAILED TO SUBSTANTIATE ITS CLAIM THAT THE ASSESSMENT ORDER WA S DESPATCHED FROM THE DEPARTMENT ONLY ON 21-01-2011. HENCE, WE DO NOT FIND ANY MERI T IN THE CONTENTIONS RAISED BY THE ASSESSEE IN THE CROSS OBJECTION. ACCORDINGLY, WE DISMISS SAME. 7. WE SHALL NOW TAKE UP THE APPEAL FILED BY THE REV ENUE. THE LD. DR FAIRLY AGREED THAT THE PROVISIONS OF SEC. 41(2), INVOKED BY THE A SSESSING OFFICER FOR ASSESSING PROFIT ON SALE OF VEHICLES, MAY NOT BE APPLICABLE TO THE A SSESSEE. THE LD. DR SUBMITTED THAT THE ASSESSING OFFICER SHOULD HAVE COMPUTED THE PROF IT ON SALE OF VEHICLES U/S. 50 OF THE ACT. ACCORDINGLY, THE LD. DR SUBMITTED THAT THE FI RST APPELLATE AUTHORITY SHOULD HAVE DIRECTED THE ASSESSING OFFICER TO COMPUTE THE PROFI T ON SALE OF VEHICLES U/S. 50 OF THE ACT. 8. WE HAVE HEARD THE LD. AR ALSO ON THIS ISSUE, WHO AGREED WITH THE SUBMISSIONS MADE BY LD D.R. WE HAVE ALSO GONE THROUGH THE PROV ISIONS OF SEC. 41(2) OF THE ACT. WE NOTICE THAT THE SAID PROVISION IS APPLICABLE TO THE UNDERTAKINGS ENGAGED IN GENERATION OR GENERATION AND DISTRIBUTION OF POWER WHERE DEPRECIATION IS ALLOWED ON THE ACTUAL COST TO THE ASSESSEE. THE ASSESSEE HEREIN IS NOT ENGAGED IN THE BUSINESS OF GENERATION OR GENERATION AND DISTRIBUTION OF POWER. HENCE THE PROVISIONS OF SEC. 41(2) OF THE ACT ARE NOT APPLICABLE TO THE FACTS OF THE I NSTANT CASE. IT IS ADMITTED BY BOTH THE PARTIES THAT THE ASSESSEE IS CLAIMING DEPRECIATION ON BLOCK OF ASSETS. HENCE THE PROVISIONS OF SEC. 50 OF THE ACT SHALL APPLY TO THE FACTS OF THE INSTANT CASE. ACCORDINGLY, WE MODIFY THE ORDER OF THE LD. CIT(A) AND REMIT THE MATTER TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO CONSIDER THE ISSUE AFRE SH IN ACCORDANCE WITH THE PROVISIONS OF SEC. 50 OF THE ACT. I.T.A. NO. 177/COCH/2013 & C.O. NO. 06/COCH/2013 5 9. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S TREATED AS ALLOWED FOR STATISTICAL PURPOSES AND THE CROSS OBJECTION FILED BY THE ASSES SEE IS DISMISSED. PRONOUNCED ACCORDINGLY ON 30-08-20 13. SD/- SD/- (N.R.S.GANESAN) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: KOCHI DATED: 30TH AUGUST, 2013 GJ COPY TO: 1. M/S. BHARATH TRANSPORT CO., PERUVA P.O., VAIKOM, KOTTAYAM. 2.THE INCOME TAX OFFICER, WARD-1, KOTTAYAM. 3 THE COMMISSIONER OF INCOME-TAX(APPEALS)-IV, KOCHI . 4.THE COMMISSIONER OF INCOME-TAX, KOTTAYAM. 5. D.R., I.T.A.T., COCHIN BENCH, COCHIN. 6. GUARD FILE. BY ORDER (ASSISTANT REGISTRAR) I.T.A.T, COCHIN