M/s Filterco, Ujjain V. The CIT, Ujjain

ITA 191/IND/2009

• Counselvise Citation: [2010] 119 COUNSELVISE.COM (IT) 6031 (ITAT-INDORE)
• Duration Of Justice: 11 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-03-2010
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 11-03-2010
• Assessment Year: 2004-2005
• Appeal Filed On: 15-04-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: K K SINGH
• Assessee Lawyers: S C GOYAL
• Keywords: Revenue expenditure
• Section: 143(3); 263; 2

Judgement Text

PAGE 1 OF 5 - I.T.A.NO. 191/IND/2009 M/S. FILTERCO.,UJJAIN IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH : INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI V.K. GUPTA, ACCOUNTANT MEMBER PAN NO. : AAAFF6863A I.T.A.NO. 191/IND/2009 A.Y. : 2004-05 M/S.FILTERCO. COMMISSIONER OF INCOME-TAX, C/O S. C. GOYAL & CO., VS UJJAIN 19,SHANKU MARG, FREEGANJ, UJJAIN APPELLANT RESPONDENT APPELLANT BY : SHRI S. C. GOYAL, ADV. RESPONDENT BY : SHRI K.K.SINGH, CIT DR DATE OF HEARING : 11/03/2010 O R D E R PER V.K. GUPTA, A.M. THIS APPEAL FILED BY THE ASSESSEE ARISES OUT OF ORD ER OF THE LD. CIT, UJJAIN , DATED 20.02.2009, FOR THE ASSESSMENT YEAR 2004-05. 2. WE HAVE HEARD BOTH THE PARTIES AND HAVE ALSO PERUSE D THE MATERIAL AVAILABLE ON RECORD. 3. IN THIS APPEAL, THE ASSESSEE IS AGGRIEVED BY THE DE CISION OF THE LD. CIT IN HOLDING THAT ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER WAS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF T HE REVENUE IN SO FAR AS PAGE 2 OF 5 - I.T.A.NO. 191/IND/2009 M/S. FILTERCO.,UJJAIN LEASE AND PREMIUM EXPENSES WERE WRONGLY ALLOWED AND THE A.O. ALSO FAILED TO MAKE NECESSARY ENQUIRIES IN RESPECT OF SA LE OF RAW MATERIALS/LOSS OF RAW MATERIALS. 4. THE FACTS, IN BRIEF, ARE THAT THE ASSESSMENT IN THE CASE OF THE ASSESSEE WAS COMPLETED U/S 143(3) ON 2.11.2006. SUB SEQUENTLY, THE LD. CIT ISSUED NOTICE U/S 263 FOR THE REASON THAT THE A SSESSMENT ORDER HAD BEEN PASSED BY THE ASSESSING OFFICER WITHOUT APPLIC ATION OF MIND AND WITHOUT MAKING OUT ENQUIRIES AND THE A.O. ALSO DID NOT TAKE INTO CONSIDERATION THE DECISION OF THE JURISDICTIONAL HI GH COURT AS WELL AS OF HON'BLE SUPREME COURT IN FRAMING SUCH ASSESSMENT OR DER. THE ASSESSEE SUBMITTED THAT THE ASSESSEES CLAIM FOR AMORTIZATIO N OF LEASE AND PREMIUM EXPENSES WAS DULY EXAMINED BY THE ASSESSING OFFICER AND IT WAS ALLOWABLE AS REVENUE EXPENDITURE. HENCE, NO ERROR I N THE ORDER OF THE A.O. 5. AS REGARD TO DEDUCTION U/S 80G, THE ASSESSEE SUBMI TTED THAT IT WAS RIGHTLY CLAIMED AS BOTH THE ENTITIES WERE THE S AME. HOWEVER, THE LD CIT HELD THAT THE ASSESSEE HAD NOT PRODUCED ANY EVI DENCE TO THE EFFECT THAT INDIAN RED CROSS SOCIETY, NEEMUCH, HAD GOT APP ROVAL U/S 80G(5) FOR THE YEAR UNDER CONSIDERATION. HENCE, THE ORDER OF T HE A.O. IN THIS REGARD WAS ALSO BOTH ERRONEOUS AS WELL AS PREJUDICIAL TO T HE INTERESTS OF THE REVENUE. SIMILARLY, THE LD. CIT HELD THAT THE A.O. DID NOT EXAMINE THE SALE PAGE 3 OF 5 - I.T.A.NO. 191/IND/2009 M/S. FILTERCO.,UJJAIN PROCEEDS OF RAW MATERIAL AND INSURANCE CLAIM ASPECT S IN THE MANNER IN WHICH IT HAS BEEN DONE. HENCE, HE DIRECTED THE A.O. TO MAKE NECESSARY ENQUIRIES AND MAKE INVESTMENT INTO THE FACTS AND TO DECIDE THE ALLOWABILITY OF LOSS OF RAW MATERIAL DUE TO FIRE AN D WATER ACCORDINGLY. AGGRIEVED BY THIS, THE ASSESSEE IS IN APPEAL BEFORE US. 6. THE LEARNED COUNSEL NARRATED THE FACTS AND CONTENDE D THAT AS REGARD TO AMORTIZATION OF LEASE AND PREMIUM EXPENSE S, THE LD. CIT DECIDED THE ISSUE AGAINST THE ASSESSEE ON MERIT AND HE REFERRED TO THE FOLLOWING LINES IN PARA 1.2 OF THE LD. CITS ORDER FOR OUR CONSIDERATION :- THEREFORE, THERE IS NO DOUBT THAT THE ORDER OF TH E A.O. WAS BOTH ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF REVENUE AS THE EXPENDITURE WAS ALLOWED BY THE ASSESSING OFFICE R WRONGLY CONTRARY TO THE LEGAL POSITION ALREADY LAID DOWN BY THE APEX COURT AND IS HELD TO BE SO. 7. HOWEVER, WHEN HIS ATTENTION WAS DRAWN TO THE LAST LINES OF THE SAME PARA, WHEREIN THE A.O. HAD BEEN DIRECTED BY TH E LD. CIT TO DECIDE THIS ISSUE AS PER LAW AFTER TAKING INTO CONSIDERATI ON THE DECISIONS OF THE HON'BLE HIGH COURT AND APEX COURT AND AFTER EXAMINI NG THE CLAIM OF THE ASSESSEE MADE DURING THE COURSE OF PROCEEDINGS U/S 263. THE LEARNED COUNSEL REITERATED THE SAME VIEW. HIS ATTENTION WAS FURTHER DRAWN TO PARA NO. 4 OF THE SAID ORDER WHEREBY THE A.O. HAD BEEN D IRECTED TO DECIDE ALL PAGE 4 OF 5 - I.T.A.NO. 191/IND/2009 M/S. FILTERCO.,UJJAIN THESE ISSUES AFTER TAKING INTO CONSIDERATION THE OB SERVATIONS AND DIRECTIONS OF THE LD. CIT AS PER LAW. THE LEARNED COUNSEL, AT THIS STAGE, SHOWED HIS APPREHENSION THAT IN CASE THE A.O. MADE THESE ADDIT IONS, THEN, THE ASSESSEE MAY NOT BE IN A POSITION TO PURSUE THE MAT TER ON MERITS, AS THE LD. CIT(A) IN THAT SITUATION MAY HOLD THAT THE LD. CIT(A) HAD NO JURISDICTION AS THE LD. CIT HAD GIVEN SPECIFIC DIRE CTIONS. ON THE ASPECT OF LACK OF ENQUIRY, THE LEARNED COUNSEL FOR THE ASSESS EE SUBMITTED THE LETTER OF ENQUIRY SENT BY THE ASSESSING OFFICER IN THE COU RSE OF ASSESSMENT PROCEEDINGS, HOWEVER, DID NOT SUBMIT ANY COPY OF RE PLY MADE BY THE ASSESSEE. 8. THE LD. CIT DR, ON THE OTHER HAND, PLACED STRONG RE LIANCE ON THE ORDER OF THE LD. CIT. 9. WE HAVE CONSIDERED THE SUBMISSIONS MADE BY BOTH THE SIDES, MATERIAL ON RECORD AND THE ORDERS OF THE AUTHORITIE S BELOW. 10. IT IS NOTED THAT IN THE NOTICE DATED 05.07.2006, TH E A.O. HAS NOT RAISED ANY QUERY AS REGARD TO THE ISSUES RAISED BY THE LD. CIT IN THE COURSE OF PROCEEDINGS U/S 263 NOR ANY OTHER MATERI AL HAS BEEN BROUGHT ON RECORD BY THE ASSESSEE TO SHOW THAT IN THE COURSE O F ASSESSMENT PROCEEDINGS, THE A.O. HAD EXAMINED THESE ISSUES AND HAD TAKEN A POSSIBLE VIEW IN LAW. ACCORDINGLY, WE HOLD THAT THE ACTION O F THE LD. CIT U/S 263 IS CORRECT. PAGE 5 OF 5 - I.T.A.NO. 191/IND/2009 M/S. FILTERCO.,UJJAIN 11. AS REGARD TO THE APPREHENSION OF THE ASSESSEE, WE M AKE IT CLEAR THAT WE ARE OF THE VIEW THAT THE LD. CIT HAS NOT DE CIDED THE ISSUES ON MERIT ON HER OWN AND A DISCRETION HAS BEEN GIVEN TO THE A.O. AS IT APPEARS TO US FROM THE READING OF THE COMPLETE ORDER PASSED U/S 263. HENCE, IN CASE OF AN APPEAL FILED BY THE ASSESSEE BEFORE THE LD. CIT(A) ON MERITS, THE ASSESSEES RIGHT TO AGITATE THE SAME IS NOT RES TRICTED IN ANY WAY ON THE GROUND THAT LD. CIT HAD DECIDED THE ISSUE ON MERITS WITHOUT GIVING ANY DISCRETION TO THE A.O. 12. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STA NDS DISMISSED AS TERMS INDICATED ABOVE. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 15 TH MARCH,2010. SD/- SD/- (JOGINDER SINGH) (V. K. GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 15 TH MARCH, 2010. CPU* 11123