The DCITKheda Circle, Nadiad V. GE India Industrial (P) Ltd., Nadiad

ITA 1792/AHD/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 6765 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 11 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-05-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 07-04-2011
• Assessment Year: 2002-2003
• Appeal Filed On: 29-05-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJIB JAIN SRDR
• Assessee Lawyers: S N SOPARKAR SRAR
• Keywords: Depreciation; Unabsorbed depreciation
• Section: 115JB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH C AHMEDABAD BEFORE SHRI D.K. TYAGI, HONBLE JUDICIAL MEMBER AND SHRI A.N.PHAUJA, HONBLE ACCOUNTANT MEMBER ITA NO.1792/AHD/2009 ASSESSMENT YEAR:2002-03 DATE OF HEARING:7.4.10 DRAFTED:11.4.10 DY. COMMISSIONER OF INCOME-TAX, KHEDA CIRCLE, NADIAD V/S. GE INDIA INDUSTRIAL (P) LTD., N.H. NO.8 DHARAMSINH PARK, NADIAD PAN NO.AAACG9932G (APPELLANT) .. (RESPONDENT) APPELLANT BY :- SHRI RAJIB JAIN, SR-DR RESPONDENT BY:- SHRI S.N.SOPARKAR, SR-AR O R D E R PER D.K. TYAGI, JUDICIAL MEMBER:- THIS IS REVENUES APPEAL AGAINST THE ORDER OF COMM ISSIONER OF INCOME-TAX(APPEALS)-IV, BARODA IN APPEAL NO.CAB/IV- N-62/08-09 DATED 19-03-2009 FOR THE ASSESSMENT YEAR 2002-03. 2. THE REVENUE HAS TAKEN FOLLOWING GROUND:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LEARNED CIT(A) ERRED IN DELETING THE PENALTY OF RS.72,42,75 2/- LEVIED ON ADDITION MADE U/S.115JB OF THE INCOME TAX, 1961, OV ERLOOKING THE UNDERLYING PRINCIPLE LAID DOWN BY CLAUSE (III) OF E XPLANATION 1 TO 115JB THAT THE BOOK PROFIT SHOULD BE REDUCED BY THE AMOUNT OF ITA 1792/AHD/2009 A.Y. 2002-03 DCIT KHEDA CIR, NADIAD V. GE INDIA INDSTRL. )P) LTD. PAGE 2 LOSS BROUGHT FORWARD OR UNABSORBED DEPRECIATION WHI CHEVER WAS LESS. 3. THE BRIEF FACTS OF THE CASE ARE THAT DURING THE ASSESSMENT PROCEEDINGS ASSESSING OFFICER DID NOT ACCEPT THE WO RKING OF BOOK PROFIT U/S.115JB OF THE ACT AS PER FORM NO.29B FILED WITH THE RETURN OF INCOME. ASSESSEES CONTENTION WAS THAT THERE WAS NO SPECIFI C PROVISION IN THE COMPANIES ACT, 1956, WHICH PRESCRIBED THE MANNER IN WHICH UNABSORBED BUSINESS LOSS AND UNABSORBED DEPRECIATIO N ARE TO BE SET OFF AGAINST PROFITS IN THE BOOKS OF ACCOUNT AND THEREFO RE IT WAS PRUDENT TO ADOPT A RATIONAL METHOD OF SET OFF OF PROFITS AGAIN ST UNABSORBED DEPRECIATION. THE ASSESSING OFFICER DID NOT ACCEPT THE ASSESSEES METHOD AND RE-WORKED BOOK PROFIT U/S.115JB. THE ASS ESSING OFFICERS WORKING WAS UPHELD BY LD. CIT(A). AFTER LD. CIT(A) S ORDER PENALTY NOTICED U/S.271(1)(C) OF THE ACT WAS ISSUED TO ASSE SSEE. THE ASSESSEE DID NOT REPLY TO SUCH NOTICE. THEREFORE, AO LEVIED PENALTY U/S.271(1)(C) OF RS.72,42,752/-. IN APPEAL, LD. CIT(A) HAS DELETED T HIS PENALTY. 4. AGGRIEVED BY THIS ORDER OF LD. CIT(A) NOW REVENU E IS IN APPEAL BEFORE THE TRIBUNAL. 5. AT THE TIME OF HEARING, AT THE OUTSET LD. COUNSE L FOR THE ASSESSEE SUBMITTED THAT IN QUANTUM APPEAL MATTER HAS BEEN RE STORED BACK TO THE FILE OF ASSESSING OFFICER TO RE-COMPUTE THE BOOK PR OFIT U/S 115JB BY THE HONBLE ITAT VIDE ITS ORDER DATED 30-11-2010 IN ITA NO.4174/AHD/2007. SINCE THE BASIS FOR LEVYING OF PENALTY U/S 271(1)(C ) DOES NOT SURVIVE THE PENALTY HAS NO LEGS TO STAND AND THEREFORE WE FEEL NO NEED TO INTERFERE WITH THE ORDER PASSED BY LD. CIT(A). HOWEVER, IT IS MADE CLEAR THAT THE ASSESSING OFFICER WILL BE FREE TO RE-INITIATE THE P ENALTY PROCEEDINGS IN ITA 1792/AHD/2009 A.Y. 2002-03 DCIT KHEDA CIR, NADIAD V. GE INDIA INDSTRL. )P) LTD. PAGE 3 CASE HE IS SO SATISFIED AFTER RE-COMPUTING THE BOOK PROFIT OF THE ASSESSEE U/S 115JB OF THE I.T. ACT AS PER THE DIRECTION OF H ONBLE ITAT IN QUANTUM APPEAL. 6. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 06/05/2011 SD/- SD/- (A.N.PHAUJA) (D.K. TYA GI) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) AHMEDABAD, DATED : 06/05/2011 *DKP COPY OF THE ORDER FORWARDED TO :- 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT(APPEALS)-IV, BARODA 4. THE CIT CONCERNS. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, /TRUE COPY/ DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD