Indo Doha Chemicals & Pharmaceuticals Limited, CHENNAI V. DCIT, CHENNAI

ITA 1867/CHNY/2000

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 90465 (ITAT-CHENNAI)
• Duration Of Justice: 14 year(s) 6 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-06-2015
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 01-06-2015
• Assessment Year: 1996-1997
• Appeal Filed On: 24-11-2000
• Court: TRIBUNAL
• Department Lawyers: P RADHAKRISHNAN
• Assessee Lawyers: G SEETHARAMAN
• Keywords: Depreciation
• Section: 246

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : CHENNAI . . . , . , ! '# $ [ BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER ] ./ I.T.A.NO.1867/MDS/2000 / ASSESSMENT YEAR : 1996-97 M/S INDO DOHA CHEMICALS & PHARMACEUTICALS LTD C/O M/S S. VENKATRAM & CO. CHARTERED ACCOUNTANTS 285, TTK ROAD CHENNAI - 18 VS. THE DY. COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE II(2) CHENNAI [PAN/GI NO.101-I ] ( %& / APPELLANT) ( '(%& /RESPONDENT) / APPELLANT BY : SHRI G. SEETHARAMAN, CA /RESPONDENT BY : SHRI P. RADHAKRISHNAN, JCIT / DATE OF HEARING : 01-06-2015 ! / DATE OF PRONOUNCEMENT : 12-06-2015 / O R D E R PER D. KARUNAKARA RAO, ACCOUNTANT MEMBER: THIS IS THE APPEAL BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-I, CHENNAI, DA TED 28.8.2000 FOR ASSESSMENT YEAR 1996-97. 2. THERE ARE EIGHT GROUNDS IN THIS APPEAL. GROUND NOS . 2 TO 8 ARE NOT PRESSED AS THEY ARE ARGUMENTATIVE IN NATURE . ACCORDINGLY, ITA NO.1867/2000 :- 2 -: THEY ARE DISMISSED AS NOT PRESSED. IN CONNECTION W ITH FIRST GROUND, THE LD. COUNSEL FOR THE ASSESSEE MENTIONED THAT THE RE ARE A COUPLE OF LIMBS IN THIS GROUND AND THE SAME IS EXTRACTED AS U NDER: THE COMMISSIONER OF INCOME-TAX(APPEALS) ERRED BOTH IN LAW AND ON THE FACTS OF THE CASE, (I) IN NOT DIRECT ING THE ASSESSING OFFICER TO CALCULATE THE DEPRECIATION ON THE BASIS OF WRITTEN DOWN VALUE AS ON 31.3.1994, AND (I I) IN NOT SETTING OFF OF THE LOSS CARRIED FORWARD FROM ASSESS MENT YEAR 1994-95. 3. GIVING BACKGROUND OF THIS APPEAL, THE LD. COUNSEL F OR THE ASSESSEE SUBMITTED THAT IT IS SECOND ROUND OF THE PROCEEDINGS BEFORE THE TRIBUNAL. IN THE FIRST ROUND, THE TRIBUNAL DIS MISSED THE APPEAL OF THE ASSESSEE IN I.T.A.NO. 1867/MDS/2000 DATED 7.6. 2005. IN THIS ORDER, IT IS A FINDING OF THE TRIBUNAL THAT THE FIR ST ISSUE RELATES TO CONSIDERING THE CORRECT WRITTEN DOWN VALUE FOR THE PURPOSE OF COMPUTING DEPRECIATION FOR THE ASSESSMENT YEAR 1996 -97, WHEN THE ASSESSEE DID NOT FILE A VALID RETURN FOR THE PERIOD ENDING 31.3.1994 (A.Y 1994-95). THE ASSESSEE ADOPTED THE WRITTEN D OWN VALUE RELEVANT TO THE ASSESSMENT YEAR 1994-95 AS THE BASI S FOR CLAIM OF DEDUCTION FOR THE ASSESSMENT YEAR 1996-97. ASSESSE E IS OF THE OPINION THAT SINCE THE CLAIM OF DEPRECIATION WAS NOT VALID AND ULTIMATELY MADE FOR THE ASSESSMENT YEAR 1995-96, THE WRITTEN DOWN V ALUE AS ON 31.3.1994 BECOMES RELEVANT FOR THE PURPOSE OF COMPU TING ALLOWABLE DEPRECIATION FOR ASSESSMENT YEAR 1996-97. THE TRI BUNAL DISMISSED ITA NO.1867/2000 :- 3 -: THE SAID CLAIM OF THE ASSESSEE. THE MATTER TRAVEL ED TO THE HON'BLE MADRAS HIGH COURT. THIS ISSUE WAS ALLOWED IN FAVOU R OF THE ASSESSEE AS PER PARA 16,17 & 19 OF THE JUDGMENT. 4. SIMILARLY, THE SECOND ISSUE RELATES TO SETTING OFF OF THE LOSS CARRIED FORWARD FROM THE ASSESSMENT YEAR 1994-95. THIS ISSUE WAS NOT ADJUDICATED UNDISPUTEDLY BY THE CIT(A). THEREFORE, THE TRIBUNAL DISMISSED THE SAME HOLDING THAT THE ISSUE DID NOT E MANATE FROM THE CIT(A)S ORDER. THE ISSUES WAS REMANDED TO THE ITA T BY THE HON'BLE E HIGH COURT. THE HON'BLE MADRAS HIGH COURT PASSED A JUDGMENT DATED 8.6.2012 ALLOWING THE TAX CASE (APPEAL) NO. 1239 OF 2005 OF THE ASSESSEE. 5. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE BROUG HT OUR ATTENTION TO PARAS 16, 17 AND 19 OF THE BINDING JU DGMENT OF THE HON'BLE HIGH COURT (SUPRA) AND SUBMITTED THAT THE F INDINGS OF THE TRIBUNAL IN THE FIRST ROUND ON BOTH THE ISSUES STAN D SET ASIDE AND THE ISSUES ARE REMANDED BACK TO THE TRIBUNAL FOR FRES H CONSIDERATION. FURTHER, REFERRING TO PARA 16, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT ON THE GIVEN FACTS OF THE ASSESSEE, THE WRITTEN DOWN VALUE FOR THE ASSESSMENT YEAR 1994-95 REMAINS THE W RITTEN DOWN VALUE FOR THE ASSESSMENT YEAR 1995-96 ALSO IF THERE IS A VALID CLAIM IN THE VALID REURN, AND, THEREFORE, THE SAME HAS TO BE TAK EN INTO CONSIDERATION IN WORKING OUT THE DEPRECIATION FOR T HE ASSESSMENT YEAR ITA NO.1867/2000 :- 4 -: 1996-97. FURTHER, ON THE SECOND LIMB OF THE GROUND RELATING TO SETTING OFF OF THE BROUGHT FORWARD LOSSES, IT IS THE LD. CO UNSELS ARGUMENT THAT THE MATTER CAN BE REMANDED TO THE FILE OF THE CIT(A ) WHO FAILED TO ADJUDICATE THE GROUND IN THE IMPUGNED ORDER. 6. THE LD. DR RELIED ON THE ORDERS OF THE ASSESSING OF FICER AND THE TRIBUNAL DATED 7.6.2005 (SUPRA). 7. WE HEARD BOTH THE PARTIES ON THE ISSUES RAISED IN G ROUND NO.1 OF THE APPEAL. WE HAVE PERUSED THE ORDERS OF THE REVENUE AS WELL AS THE JUDGMENT OF THE HON'BLE MADRAS HIGH COU RT IN TAX CASE APPEAL NO.1239 OF 2005 DATED 8.6.2012. WE FIND IT RELEVANT TO REPRODUCE BELOW PARAGRAPHS 16, 17 AND 19 OF THE JUD GMENT OF THE HON'BLE MADRAS HIGH COURT: 16. GOING BY THE SAID DECISION OF THE APEX COURT, I T IS CLEAR THAT UNLESS THERE IS A VALID CLAIM BY THE ASSESSEE AND THE DEPRECIATION ALLOWED BY THE ASSESSING AUTHORITY IN 1995- 96, THE WRITTEN DOWN VALUE FOR THE ASSESSMENT YEAR 1994- 95 REMAINS THE WRITTEN DOWN VALUE FOR 1995-96 ALSO, AND THIS HAS TO BE TAKEN INTO CONSIDERATION IN WORKING OUT THE DEPRECIATION FOR ASSESSMENT YEAR 1996-97. 17. THE ASSESSEE MADE AN APPEAL BEFORE THE COMMISS IONER OF INCOME-TAX (APPEALS) CONTENDING THAT WRITTEN DOWN VA LUE AS ON 1994-95 OUGHT TO HAVE BEEN TAKEN INTO CONSIDERATION FOR WORKING OUT THE RELIEF FOR ASSESSMENT YEAR 1995-96. IT IS NO DOUBT TRUE THAT AT THE INITIAL STAGE, THE ASSESSMEN T WORKED OUT ITS RELIEF BASED ON WHAT IT THOUGHT WAS THE WRI TTEN DOWN VALUE FOR CLAIMING DEPRECIATION THEREIN FOR THE ASS ESSMENT ITA NO.1867/2000 :- 5 -: YEAR 1996-97. HOWEVER, WHEN THE ASSESSEE REALIZED THE MISTAKE IN THE CALCULATION, WE DO NOT THINK THAT TH ERE SHOULD BE ANY IMPEDIMENT FOR THE ASSESSEE IN KNOCKING AT THE DOORS OF THE APPELLATE AUTHORITY FOR REWORKING THE ASSESS MENT AND NO EXCEPTION HENCE COULD BE TAKEN TO THE CONDUCT OF THE ASSESSEE IN FILING SUCH AN APPEAL FOR THE RELIEF TO ARRIVE AT CORRECT TAX LIABILITY. EVE IN THE WORST SCENARIO, E VEN WHEN THE ASSESSEE CONCEDED TO THE ADDITION, IT IS ALWAYS OPE N TO THE ASSESSEE TO GO BEFORE THE APPELLATE AUTHORITY TO CH ALLENGE THE ASSESSMENT ON THAT PARTICULAR ADDITION. IN FAC T A READING OF SECTION 246 SHOWS THAT ANY ASSESSEE AGGRIEVED BY A NY OF THE ENUMERATED ORDERS OF THE ASSESSING AUTHORITY MA Y APPEAL TO THE APPELLATE AUTHORITY AGAINST SUCH ORDER. GOI NG BY THE SCOPE OF APPEAL THUS PRESCRIBED IN THE ABOVE SAID P ROVISION, WE DO NOT AGREE WITH THE VIEW OF THE TRIBUNAL THAT THE ASSESSEE WHO HAD MADE AN ERRONEOUS CALCULATION IS REMEDYLESS AND CANNOT FILE AN APPEAL IN THIS REGARD. CONSEQUENTLY , WE HAVE NO HESITATION IN SETTING ASIDE THIS PORTION OF ORDER O F THE TRIBUNAL, THEREBY REMANDING THIS ISSUE TO THE TRIBU NAL FOR ITS CONSIDERATION ON MERITS. 19. THUS, IN THE LIGHT OF THE DECISION REPORTED IN 229 ITR 383 NATIONAL THEREMAL POWER CO. LTD VS CIT THE VIEW OF THE TRIBUNAL REJECTING THE ASSESSEES PLEA THAT THE ASSESSEE COULD NOT COME BEFORE THE TRIBUNAL ON THE ISSUE WHICH WAS NOT AGITATED BEFORE THE TRIBUNAL CANNOT B E UPHELD AND HENCE, THE SAME IS SET ASIDE. AS POINTED OUT B Y THE APEX COURT, IT IS ALWAYS OPEN TO THE TRIBUNAL TO ALLOW O R NOT TO ALLOW A NEW GROUND TO BE RAISED BEFORE IT AND IT IS A MAT TER OF DISCRETION TO BE JUDICIOUSLY EXECUTED. THUS, GOING BY THE LAW LAID DOWN IN THE AFORESAID DECISION, WE SET ASIDE T HIS PORTION OF THE ORDER OF THE TRIBUNAL THEREBY REMAND ING BACK THE MATTER FOR FRESH CONSIDERATION ALONGWITH O THER ISSUE ON DEPRECIATION. 8. FROM THE ABOVE, IT IS THE DECISION OF THE HON'BLE M ADRAS HIGH COURT THAT THE WRITTEN DOWN VALUE RELEVANT FOR THE ASSESSMENT YEAR 1994-95 REMAINS THE WRITTEN DOWN VALUE OF THE ASSES SMENT YEAR 1995- 96 IF THERE IS A VALID CLAIM IN THE VALID RETURN, A ND THE SAME SHOULD BE ITA NO.1867/2000 :- 6 -: CONSIDERED FOR WORKING OUT THE DEPRECIATION FOR THE ASSESSMENT YEAR 1996-97. THE ASSESSING OFFICER IS DIRECTED TO GIVE EFFECT TO THE SAID JUDGMENT OF THE HON'BLE MADRAS HIGH COURT. ACCORDI NGLY, WE ORDER ON THE FIRST LIMB OF THE GROUND NO.1. 9. ON THE SECOND LIMB REGARDING ALLOWING SET OFF OF TH E BROUGHT FORWARD LOSSES, WE FIND THAT THIS PART OF THE GROUN D WAS NOT ATTENDED TO BY THE CIT(A). THEREFORE, WE REMAND THIS ISSUE TO THE FILE OF THE CIT(A) WITH THE DIRECTION TO ADJUDICATE THE SAME BY PASSING A SPEAKING ORDER AND AFTER GRANTING A REASONABLE OPPORTUNITY O F BEING HEARD TO THE ASSESSEE. ACCORDINGLY, GROUND NO.1 IS ALLOWED FOR STATISTICAL PURPOSES. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PART LY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 12 TH OF JUNE, 2015, AT CHENNAI. SD/- SD/- ( . . . ' ) (N.R.S. GANESAN) / JUDICIAL MEMBER ( . ) (D. KARUNAKARA RAO) ! / ACCOUNTANT MEMBER #$ / CHENNAI %& / DATED: 12 TH JUNE, 2015 RD &' ()*) / COPY TO: 1 . / APPELLANT 3. +,' / CIT(A) 5. )-. / / DR 2. / RESPONDENT 4. + / CIT 6. .01 / GF