M/s. Eastern Sugar & Industries Ltd., Kolkata V. ACIT, Central Circle - XI, Kolkata, Kolkata

ITA 1950/KOL/2010

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 9353 (ITAT-KOLKATA)
• Duration Of Justice: 6 year(s) 3 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-02-2017
• Appeal Filed By: Assessee
• Bench Allotted: C
• Next Hearing Date: 02-02-2017
• Assessment Year: 2004-2005
• Appeal Filed On: 20-10-2010
• Court: TRIBUNAL
• Department Lawyers: PINAKI MUKHERJI
• Assessee Lawyers: S K TULSIYAN
• Keywords: Reopening of assessment; Unexplained expenditure; Capital asset; Depreciation; Tangible material; Difference of opinion; Corroborative evidences; Reason to believe; Change of opinion; Reassessment proceedings
• Section: 143(3); 115JB; 32; 147; 145; 148; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C, BENC H KOLKATA BEFORE SHRI N.V.VASUDEVAN & DR. A.L.SAINI, AM ./ ITA NO.1950/KOL/2010 ( / ASSESSMENT YEAR :2004-2005) M/S EASTERN SUGAR & INDUSTRIES LTD., C/O M/S SALARPURIA JAJODIA & CO., 7, C.R.AVENUE, KOLKATA- 700072 VS. ACIT, CC-XI, KOLKATA, PODDAR COURT BUILDING, 18, RABINDRA SARANI, KOLKATA-700001 ./ ./PAN/GIR NO. : AABCE 2944 F ( /APPELLANT ) .. ( / RESPONDENT ) AND ./ ITA NO.1951/KOL/2010 ( / ASSESSMENT YEAR :2006-2007) M/S EASTERN SUGAR & INDUSTRIES LTD., C/O M/S SALARPURIA JAJODIA & CO., 7, C.R.AVENUE, KOLKATA- 700072 VS. ACIT, CC-XI, KOLKATA, PODDAR COURT BUILDING, 18, RABINDRA SARANI, KOLKATA-700001 ./ ./PAN/GIR NO. : AABCE 2944 F ( /APPELLANT ) .. ( / RESPONDENT ) /ASSESSEE BY : SHRI S.K.TULSIYAN, ADVOCATE /REVENUE BY : SHRI PINAKI MUKHERJI, JCIT, SR.DR / DATE OF HEARING : 02/02/2017 /DATE OF PRONOUNCEMENT 15/02/2017 / O R D E R PER DR. ARJUN LAL SAINI, AM: THE CAPTIONED TWO APPEALS FILED BY THE ASSESSEE, PE RTAINING TO THE ASSESSMENT YEARS 2004-2005 & 2006-07, ARE DIRECTED AGAINST THE ORDER PASSED BY LD. COMMISSIONER OF INCOME TAX (APPEALS), CENTRAL-I, KOLKATA, IN APPEAL NO.434/CC-IV/CIT(A),C-I/08-09, DATED 05.0 8.2010 AND APPEAL NO.433/CC-XI/CIT(A),C-I/08-09, DATED 11.08.2010, RE SPECTIVELY WHICH IN TURN ARISES OUT OF AN ASSESSMENT ORDER PASSED BY TH E ASSESSING OFFICER ITA NO.1950&19510/KOL/2010 M/S. EASTERN SUGAR & INDUSTRIES LTD. 2 (AO) UNDER SECTION 143 (3) OF THE INCOME TAX ACT 19 61, (HEREINAFTER REFERRED TO THE ACT), DATED 08.12.2008 & 30.12.20 08, RESPECTIVELY. 2. SINCE THESE TWO APPEALS RELATE TO SAME ASSESSEE, DIFFERENT ASSESSMENT YEARS, DIFFERENT ISSUES INVOLVED, THEREF ORE, THESE HAVE BEEN CLUBBED TOGETHER AND A CONSOLIDATED ORDER IS BEING PASSED FOR THE SAKE OF CONVENIENCE AND BREVITY. ITA NO.1950/KOL/2010(AY : 2004-05) 3. BRIEF FACTS OF THE CASE QUA THE ASSESSEE ARE THA T THE ASSESSEE HAS FILED ITS RETURN OF INCOME ON 1 ST NOVEMBER, 2004 SHOWING TOTAL INCOME AT LOSS RS.10,25,83,680/-. THE ASSESSMENT OF THE ASSES SEE COMPANY WAS COMPLETED BY THE AO U/S.143(3) ON 18.10.2006. SUBSE QUENTLY IT WAS NOTICED BY THE AO THAT INCOME HAD ESCAPED ASSESSMEN T, THEREFORE, NOTICE U/S.148 WAS ISSUED AND SERVED UPON THE ASSESSEE. IN COURSE OF REASSESSMENT PROCEEDINGS, FOLLOWING OBSERVATIONS WE RE MADE :- THAT THE ASSESSEE HAS BEEN CLAIMING DEPRECIATION ON P&M (PLANT & MACHINERY). IN A.Y 2002-03 AND A.Y 2003-04. IN A.Y 2003-03 THE DEPRECIATION WAS DISALLOWED AS ASSESSEE DID NOT PRO DUCE NECESSARY EVIDENCES OF IT'S ACQUISITION. THE P&M ON WHICH DEPRECIATION HAS BEEN ALLOWED TO THE TUNE OF RS.25, 70,750/- REMAIN SAME IN A.Y 2004-05. THUS, ON P&M DEPRECIATION TO T HE TUNE OF RS.25,70,750/- HAS BEEN WRONGLY ALLOWED; FOR WHICH EVIDENCE OF ACQUISITION WERE NOT PRODUCED WHEN REQUIRED AS PER THE RECORD OF A.Y. 2003-03 IN THIS ASSESSEE'S CASE. IN RESPONSE THE ASSESSEE AR FILED A WRITTEN SUBMISS ION AND CLAIMED THAT THE BOOKS OF THE ASSESSEE WERE NOT REJ ECTED AND THAT THE FACTORY WAS WITNESSING LABOR UNREST. THE REPLY OF THE ASSESSEE DOES NOT SATISFY THE ISSUE IN BAND AND THEREFORE TH E SAME IS NOT ACCEPTABLE. (ADDITION RS.25,70,750/-) ITA NO.1950&19510/KOL/2010 M/S. EASTERN SUGAR & INDUSTRIES LTD. 3 4. AGGRIEVED FROM THE ORDER OF ASSESSING OFFICER, T HE ASSESSEE FILED AN APPEAL BEFORE THE LD. CIT(A), WHO HAS CONFIRMED THE ADDITION MADE BY THE AO OBSERVING THE FOLLOWINGS :- 3.3. MOREOVER, THE BOMBAY HIGH COURT IN THE CASE OF YUVRAJ V UNION OF INDIA (2009) 315 ITR HAS SPECIFICALLY HELD THAT THE POINTS NOT DECIDED WHILE PASSING ASSESSMENT ORDER U NDER SECTION 143(3) NOT A CASE OF CHANGE OF OPINION. FUR THER THE ALLAHABAD HIGH COURT IN THE CASE OF EMA INDIA VS AC IT,30 DTR (ALI)82 (ORDER DATED 5.10.2009) , HAS DISCUSSED THE ISSUE IN DETAIL AND AFTER TAKING INTO CONSIDERATION OF THE F INDING OF HON,BLE DELHI HIGH COURT IN THE CASE OF CIT V KALVINATOR (I ) LTD 256 ITR 1, HAS HELD THAT THE REASSESSMENT IS PERMISSIBLE WH ERE THE A.O HAS PASSED AN ASSESSMENT ORDER WITHOUT APPLICATION OF MIND . THE SUPREME COURT IN THE CASE OF CIT V KELVINATOR ( INDIA) LTD 320 ITR 651, HAS ONLY SETTLED THE LAW, THAT CHANGE OF OPINION CANNOT BE BASIS OF REASON TO BELIEVE AND REVIEW OF ORDER UNDER SECTION 147 IS NOT PERMISSIBLE. HOWEVER WHETHER ANY OPINION WAS FORMED AT THE TIME OF ORIGINAL ASSESSMENT IS A QUESTION OF FACT AND IS CASE SPECIFIC . IN THE CASE UNDER CONSI DERATION AS PER MATERIAL AVAILABLE ON RECORD THE ISSUE WAS NOT AT A LL CONSIDERED BY THE A.O . FURTHER THE CLAIM OF THE ASSESSEE THAT THE NOTICE ISSUED UNDER SECTION 148 WAS NOT IN THE PROPER FORM AT AS IT DOES NOT MENTIONED ALL DETAILS WERE EXAMINED AND FOUND T O HAVE NO MERIT. HENCE, IT IS HELD THAT THE REOPENING PROCEED ING INITIATED BY THE A.O IS AS PER PROVISION OF THE ACT. ACCORDINGLY THE GROUND NO 1 TO 5 TAKEN BY THE APPELLANT IS DISMISSED. 4. GROUND NO 6 TAKEN BY THE APPELLANT IS AGAINST TH E DISALLOWANCE OF DEPRECIATION OF RS.25,70,7501 . DUR ING THE COURSE OF APPEAL THE L.D AR MADE FOLLOWING SUBMISSI ON - 'GROUND NO. 6 IS AGAINST THE ACTION OF THE AO IN DI SALLOWING RS. 25,70,750/- OUT OF CLAIM FOR DEPRECIATION AND WHICH WAS ALLOWED IN THE ORIGINAL ASSESSMENT. IN THIS CONNECTION THIS IS TO SUBMIT THAT THE ACCOUNTS OF YOUR PETITIONER BEING AUDITED AND THE AUDITORS HAVING CERTIFIED THE ACQUISITION OF SUCH A SSETS, NO DISALLOWANCE COULD BE MADE SIMPLY ON THE GROUND THA T EVIDENCES IN RESPECT OF ACQUISITION OF SUCH PLANT & MACHINERY HAD NOT BEEN PRODUCED. HENCE THE DISALLOWANCE OF RS.25,70,750/- MAY KINDLY BE DELETED. 4.1 I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE LD. AR. THE ASSESSEE HAD CLAIMED DEPRECIATION ON THE WDV OF THE PLANT AND MACHINERY PURCHASED IN EARLIER YEARS, WHICH WAS DISALLOWED IN THE A.Y.2002-03 AND 2003-04 AS THE ASSESSEE FAIL ED TO PRODUCE THE NECESSARY EVIDENCES OF ITS ACQUISITION. THE DISALLOWANCE HAS BEEN CONFIRMED IN APPEAL FILED BY THE ITA NO.1950&19510/KOL/2010 M/S. EASTERN SUGAR & INDUSTRIES LTD. 4 APPELLANT. CONSIDERING ABOVE, THE DISALLOWANCE ON A CCOUNT OF DEPRECIATION MADE BY THE AO OF RS.25,70,750/- IS CO NFIRMED AND ACCORDINGLY GROUND NO.6 TAKEN BY THE APPELLANT IS D ISMISSED . 5. NOT BEING SATISFIED WITH THE ORDER OF LD. CIT(A) , THE ASSESSEE IS IN FURTHER APPEAL BEFORE US AND HAS TAKEN THE FOLLOWIN G GROUNDS OF APPEAL :- 1. FOR THAT IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) WAS WHOLLY WRONG AND UNJUSTIFIED IN CONFIRMI NG THE ACTION OF THE A.O IN WRONGLY INITIATING THE' PROCEEDING U/ S 147 OF THE IT ACT AND REASSESSING THE TOTAL LOSS AT A REDUCED FIG URE OF RS.9,84,51,950/- U/S 1471143(3) ON A MERE CHANGE OF OPINION AND WITHOUT PRIOR DISPOSAL OF THE OBJECTION PETITIO N DT. 04. 11. 2008 FILED BY THE ASSESSEE AGAINST THE NOTICE U/S 1 48 DT. 04.06.2008 AND THE A.O'S SUBSEQUENT LETTER DT.L3.10 .2008 COMMUNICATING THE RECORDED REASONS. THE PROCEEDING INITIATED U/S 147 AND THE RE-ASSESSMENT MADE 1471143(3) ARE T HEREFORE LIABLE TO BE WHOLLY QUASHED / CANCELLED.' 2. FOR THAT IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) WAS WHOLLY WRONG AND UNJUSTIFIED IN CONFIRMI NG THE SAID ACTION OF THE A.O IN WRONGLY INITIATING THE PROCEED ING U/S 147 AND MAKING THE REASSESSMENT U/S 147/143(3) WITHOUT CONSIDERING THE FACTS THAT THERE WAS NO FAILURE OR OMISSION ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRUL Y ALL THE MATERIAL FACTS NECESSARY FOR THE ASSESSMENT. 3. FOR THAT IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) WAS WHOLLY WRONG AND UNJUSTIFIED IN CONFIRMI NG THE SAID ACTION OF THE A.O IN MAKING THE REASSESSMENT ULS 14 71143(3) WITHOUT FINDING ANY DEFECT IN THE AUDITED ALCS AND WITHOUT REJECTING U/S 145 OF THE ACT THE AUDITED BOOKS OF A LC AS WELL AS THE TAX AUDIT REPORT U/S 44AB BEFORE RESORTING TO T HE DISALLOWANCES IN THE REASSESSMENT. 4. FOR THAT IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) WAS WHOLLY WRONG AND UNJUSTIFIED IN CONFIRMI NG THE A.O'S ACTION IN DISALLOWING IN THE REASSESSMENT THE ASSES SEE'S CLAIM OF DEPRECIATION OF RS.25, 70, 750(- ON THE BIF OLD PJANT & MACHINERY ACQUIRED IN AN EARLIER YEAR WITHOUT REJEC TING U/S 145 OF THE ACT THE AUDITED BOOKS OF ALC AS WELL AS THE TAX AUDIT REPORT U/S 44AB BEFORE RESORTING TO SUCH DISALLOWAN CE. THE ACTIONS OF BOTH THE A.O AND LD. CIT(A) WERE UNREASO NABLE, UNCALLED FOR AND BAD IN LAW. 5. EVEN OTHERWISE AND WITHOUT PREJUDICE TO THE GROU ND NOS. 1 TO 4 ABOVE, THE QUANTUM OF DISALLOWANCE OF DEPRECIATION OF RS.25,70,750/- MADE BY THE A.O IN THE REASSESSMENT WAS CLEARLY IN MUCH EXCESS IN VIEW OF THE A.O'S WRONG T REATMENT IN ITA NO.1950&19510/KOL/2010 M/S. EASTERN SUGAR & INDUSTRIES LTD. 5 THE ASSESSMENTS OF THE PRECEDING TWO ASSTT. YEARS A ND THE THE LD. CIT(A) WAS ALSO WHOLLY WRONG AND UNJUSTIFIED IN CONFIRMING THE A.O'S WRONGFULL ACTION IN DISALLOWING THE DEPRE CIATION IN MUCH EXCESS. ACTIONS OF BOTH THE A.O AND LD. CIT(A) WERE UNREASONABLE, UNCALLED FOR AND BAD IN LAW. 6. FOR THAT YOUR PETITIONER CRAVES THE RIGHT TO PUT ADDITIONAL GROUNDS AND/OR TO ALTER/AMEND/MODIFY THE PRESENT GROUNDS AT THE TIME OF HEARING. 6. ALTHOUGH IN THIS APPEAL THE ASSESSEE HAS RAISED SIX GROUNDS OF APPEAL, BUT AT THE TIME OF HEARING THE MAIN GRIEVAN CE OF THE ASSESSEE HAS BEEN CONFINED TO ONLY TWO ISSUES NAMELY, REASSESSME NT PROCEEDINGS INITIATED BY THE AO WAS WITHOUT ANY TANGIBLE MATERI AL AND SECONDLY DISALLOWANCE OF ASSESSEES CLAIM OF DEPRECIATION OF RS.25,70,750/- ON BROUGHT FORWARD OLD PLANT AND MACHINERY ACQUIRED IN EARLIER YEAR. 7. LD. AR FOR THE ASSESSEE HAS SUBMITTED BEFORE US :- 1. THE APPELLANT IS A LIMITED COMPANY. FOR THE RELE VANT ASSESSMENT YEAR ORIGINAL RETURN OF INCOME ACCOMPANIED WITH AUDITED ACCOUNTS AND TAX AUDIT REPORT WERE FILED ON 0111112004 DECLARING LOS S OF RS.I0,25,83,680/-. 1.1. THE ASSESSMENT WAS ORIGINALLY COMPLETED ULS.L4 3(3) ON 1811012006 DETERMINING THE LOSS AT RS.10,16,01,700/-. 1.2. SUBSEQUENTLY, BY LETTER DATED 0410612008, ISSU ED U/S.148 OF THE IT ACT, BEARING NO NUMBER, THE AO INFORMED THE ASSESSE E THAT ASSESSMENT COMPLETED U/S.143(3) OF THE ACT FOR THE RELEVANT AS SESSMENT YEAR, HAD BEEN REOPENED ULS.L47 OF THE ACT. COPY OF THE SAME IS ENCLOSED AT PAGE NO. 53 OF THE P/B. IT IS RELEVANT TO NOTE HERE THAT THE SAID NOTICE IS SUED ULS.148 OF THE IT ACT LACKED THE APPROVAL OF THE HIGHER AUTHORITY FOR INI TIATION OF PROCEEDINGS ULS.L47, WHICH IS REQUIRED AS PER PROVISO TO SEC.L5 1 (1) OF THE IT ACT. 1.3. IN RESPONSE TO THE AFORESAID NOTICE, THE ASSES SEE FILED RETURN ULS.L48, UNDER PROTEST, ON 07/07/2008, COPY OF WHICH IS ENCL OSED AT PAGE NO.55 OF THE PLB. FURTHER, VIDE LETTER DATED 03/07/2008, THE ASSESSEE REQUESTED THE AO TO COMMUNICATE THE REASONS FOR INITIATION OF PRO CEEDINGS ULS.L47. ITA NO.1950&19510/KOL/2010 M/S. EASTERN SUGAR & INDUSTRIES LTD. 6 1.4. THE REASONS WERE THEREAFTER COMMUNICATED BY TH E AO VIDE LETTER DATED 1311 012008. COPY OF THE SAME ENCLOSED AT PAG E NOS. 57-58 OF THE PLB. 1.5. THE REASONS RECORDED FOR REOPENING THE ASSESSM ENT RELATED TO THE CLAIM OF DEPRECIATION ON PLANT & MACHINERY WHICH WA S ALREADY DEALT WITH IN THE ORIGINAL ASSESSMENT ORDER FOR THE SAID ASSES SMENT YEAR. 1.6. IN THIS CONTEXT, AFTER THE RECEIPT OF THE REAS ONS, THE ASSESSEE VIDE LETTER DATED 04/11/2008, FILED ITS OBJECTION TO INI TIATION OF PROCEEDINGS U/S.147 OF THE ACT. COPY OF THE SAME ENCLOSED AT PA GE NO. 59-60 OF THE P/B. 1.7. HOWEVER, WITHOUT GIVING REPLY OR PASSING ORDER IN RESPECT OF SUCH OBJECTION FILED, THE AO COMPLETED THE ASSESSMENT FO R THE RELEVANT ASSESSMENT YEAR U/S.1471143(3) OF THE ACT VIDE ORDE R DATED 08112/2008. 1.8. BEING AGGRIEVED, THE ASSESSEE FILED AN APPEAL AGAINST THE SAID ASSESSMENT ORDER WHICH WAS DISMISSED BY THE LD.CIT( A), CENTRAL-I, KOL, BY HIS ORDER DATED 05.08.2010. 1.9. BEING AGGRIEVED BY THE ORDER OF THE LD. CIT, T HE ASSESSEE SEEKS THE KIND JUSTICE OF THE HON'BLE INCOME TAX APPELLATE TR IBUNAL AND HAS FILED AN APPEAL IN THIS REGARD. THE FOLLOWING SUBMISSIONS ARE, THEREFORE, GIVEN BY THE APPELLANT FOR YOUR KIND CONSIDERATION: 2. AS STATED ABOVE, THE ORIGINAL ASSESSMENT OF THE RELEVANT ASSESSMENT YEAR WAS COMPLETED ON 1811 0/2006, WHEREIN THE AO A FTER CONSIDERING THE TAX AUDIT REPORT AND THE DETAILS OF THE CLAIM O F DEPRECIATION - SUBMITTED ALONGWITH THE RETURN, ALLOWED THE ENTIRE CLAIM OF DEPRECIATION MADE IN THE RELEVANT ASSESSMENT YEAR. IT IS RELEVAN T TO NOTE HERE THAT DURING THE RELEVANT FINANCIAL YEAR THERE WAS NO FRE SH ACQUISITION OF PLANT AND MACHINERY. ONLY BROUGHT FORWARD BALANCE OF PREV IOUS YEAR WAS APPEARING AS OPENING W.D.V. ON WHICH COMPUTATION OF DEPRECIATION WAS MADE AS PER PROVISIONS OF SEC.32 OF THE IT ACT. AGA IN, ASSESSMENTS FOR THE A.Y'S 2002-03 & 2003-04, PLACING RELIANCE UPON WHICH THE ASSESSMENT WAS REOPENED FOR THE RELEVANT ASSESSMENT YEAR, BEING COMPLETED ON 29/03/2005 AND 30/03/2006 RESPECTIVELY , THE KNOWLEDGE OF THE EXISTENCE OF THE ABOVE SAID ORDERS WERE VERY MU CH WITH THE AO AT THE TIME OF PASSING THE ORIGINAL ASSESSMENT ORDER ON 18 /10/2006 U/S.143(3) OF THE IT ACT. 2.1. THEREFORE, ALLEGATION OF THE LD.CIT(A) IN HIS APPELLATE ORDER (DATED 05/08/2010), THAT IN COURSE OF THE ORIGINAL ASSESSM ENT THE AO ACCEPTED THE CLAIM OF DEPRECIATION MADE IN THE RETURN WITHOU T ANY INQUIRY AND ITA NO.1950&19510/KOL/2010 M/S. EASTERN SUGAR & INDUSTRIES LTD. 7 HENCE, THERE WAS NO FORMATION OF OPINION, IS TOTALL Y BASELESS. MOREOVER, THE CLAIM OF THE LD.CIT THAT IT IS FOUND FROM RECOR DS THE AO HAS NOT CONSIDERED THE ISSUE OF ALLOWABILITY OF DEPRECIATIO N AT THE TIME OF ORIGINAL ASSESSMENT IS ALSO NOT SUBSTANTIATED BY HIM BY BRIN GING ANY MATERIAL ON RECORD. 2.2. SIMPLY, BASED ON THE ABOVE, THE LD.CIT CONCLUD ED THAT SINCE THERE WAS NO FORMATION OF OPINION AT THE TIME OF ORIGINAL ASSESSMENT WITH REGARD TO THE CLAIM OF DEPRECIATION THERE WAS NO QUESTION OF CHANGING IT, WHICH IS NOT CORRECT AT ALL. 2.3. IT WILL BE CLEAR FROM PERUSAL OF THE COPY OF R EASONS RECORDED BY THE AO FOR ISSUANCE OF NOTICE U/S.148, AS ENCLOSED AT P AGE NO.57 OF THE P/B, THAT THE AO HAS FORMED HIS OPINION FOR REOPENING OF PROCEEDINGS U/S.147 FOR THE RELEVANT ASSESSMENT YEAR MERELY BASED ON TH E FACT THAT IN A.Y. 2002-03 PROPORTIONATE DEPRECIATION WAS DISALLOWED B ASED ON THE NON- PRODUCTION OF SUPPORTING EVIDENCES IN CONNECTION TO FRESH ACQUISITION DURING THAT YEAR DUE TO PROLONGED LABOUR TROUBLE IN THE SUGAR FACTORY. RELEVANT PORTIONS OF THE REASONS RECORDED ARE REPRO DUCED HEREUNDER: 'SEEN FROM THE RECORD THAT THE ASSESSEE HAS BEEN CL AIMING DEPRECIATION ON P&M IN A. Y 2002-03 AND A. Y 2003-04. IN A. Y 20 02-03 THE DEPRECIATION WAS DISALLOWED AS ASSESSEE DID NOT PRO DUCE NECESSARY EVIDENCES OF IT'S ACQUISITIONS. THE P&M ON WHICH DE PRECIATION HAS BEEN ALLOWED TO THE TUNE OF RS.25, -0, -50 - REMAIN SAME IN A. Y2004-05. THUS, ON P&M DEPRECIATION TO THE TUNE OF RS.25, 70, 750/- HAS BEEN WRONGLY ALLOWED; FOR WHICH EVIDENCE OF ACQUISITION WERE NOT PRODUCED WHEN REQUIRED AS PER THE RECORD OF A. Y 2002-03 IN THIS ASSESSEE'S CASE. THEREFORE, I HAVE REASON TO BELIEVE THAT INCOME TO THE TUNE OF RS.25, 70, 750/- HAS BEEN WRONGLY NOT CONSIDERED ' 2.4. IT IS PERTINENT TO NOTE HERE THAT THIS FACT WA S ALREADY AVAILABLE WITH THE AO AT THE TIME OF COMPLETION OF ORIGINAL ASSESSMENT ON 18/10/2006 AS THE ASSESSMENT FOR THE A.Y. 2002-03 WAS ALREADY COMPLET E ON 29/03/2005. THEREFORE, IT IS CLEAR THAT THE ORIGINAL ASSESSMENT HAVING BEEN COMPLETED U/S.143(3) BASED ON THE MATERIAL ON RECORD AND THAT NO NEW MATERIAL OR INFORMATION BEING RECEIVED BY THE AO SUBSEQUENTLY A FTER THE COMPLETION OF THE ASSESSMENT U/S.143(3), THE PROCEEDINGS INITIATE D U/S.147 MERELY TANTAMOUNT TO CHANGE OF OPINION WHICH CANNOT FORM T HE BASIS FOR REOPENING A COMPLETED ASSESSMENT. 2.5. TO BUTTRESS THE FOREGOING ARGUMENTS, RELIANCE IS PLACED ON THE JUDGMENT OF THE HON'BLE SUPREME COURT IN THE CASE O F COMMISSIONER OF INCOME-TAX V. KELVINATOR OF INDIA LTD. REPORTED IN [2010] 320 ITR 561. IN THE SAID CASE IT WAS HELD AS UNDER: ITA NO.1950&19510/KOL/2010 M/S. EASTERN SUGAR & INDUSTRIES LTD. 8 'THE CONCEPT OF 'CHANGE OF OPINION' ON THE PART OF THE ASSESSING OFFICER TO REOPEN AN ASSESSMENT DOES NOT STAND OBLITERATED AFTER THE SUBSTITUTION OF SECTION 147 OF THE INCOME-TAX ACT, 1961, BY THE DIRECT TAX LAWS (AMENDMENT) ACTS, 1987 AND 1989. AFTER THE AMENDMEN T, THE ASSESSING OFFICER HAS TO HAVE REASON TO BELIEVE THAT INCOME H AS ESCAPED ASSESSMENT, BUT THIS DOES NOT IMPLY THAT THE ASSESS ING OFFICER CAN REOPEN AN ASSESSMENT ON MERE CHANGE OF OPINION. THE CONCEP T OF 'CHANGE OF OPINION' MUST BE TREATED AS AN IN- BUILT TEST TO CH ECK THE ABUSE OF POWER. HENCE AFTER APRIL 1, 1989, THE ASSESSING OFFICER HA S POWER TO REOPEN AN ASSESSMENT, PROVIDED THERE IS 'TANGIBLE MATERIAL' T O COME TO THE CONCLUSION THAT THERE WAS ESCAPEMENT OF INCOME FROM ASSESSMENT. REASON MUST HAVE A LINK WITH THE FORMATION OF THE B ELIEF' 2.6. FURTHER, RELIANCE IS ALSO PLACED ON THE FOLLOW ING JUDGMENTS WHEREIN IT IS REPEATEDLY HELD THAT RE- OPENING OF ASSESSMENT O N MERE CHANGE OF OPINION IS NOT SUSTAINABLE: D. T. & T. D. C. LTD. VS. CIT (2010) 324ITR 234 ( DEL.). IN THE SAID CASE, IT WAS HELD AS UNDER: 'THE ASSESSING OFFICER HAS BEEN GIVEN POWER TO REAS SESS UNDER SECTION 147 UPON CERTAIN CONDITIONS BEING SATISFIED, AND TH E ASSESSING OFFICER DOES NOT HAVE POWER TO REVIEW. IF SUCH A CHANGE OF OPINION WERE TO BE PERMITTED AS A GROUND OF REASSESSMENT THEN IT WOULD AMOUNT TO GRANTING A LICENCE TO THE ASSESSING OFFICER TO REVIEW HIS DECI SION, WHICH HE DOES NOT HAVE UNDER THE PROVISION OF SECTION 147. ' MJ. PHARMACEUTICALS LTD VS. CIT (2008) 297ITR 119 (BOM) (ASSESSMENT YEAR 2003-2004) IN THIS CASE, THE HON'BLE HIGH COURT OBSERVED AS UN DER: 'ISSUE REGARDING ADDITION OF AMOUNT OF DEFERRED TAX ATION FOR COMPUTING BOOK PROFITS U/S. 115JB HAVING BEEN RAISED BY THE A O AT THE TIME OF ORIGINAL ASSESSMENT U/S. 143(3} AND NO ADDITION HAV ING BEEN MADE BY AO ON THE ACCOUNT ON BEING SATISFIED WITH THE EXPLANAT ION OF THE ASSESSEE REOPENING OF ASSESSMENT ON THE VERY SAME ISSUE SUFF ERED FROM CHANGE OF OPINION IN THE ABSENCE OF ANY FRESH MATERIAL HENCE INVALID. ' ASTEROIDS TRADING & INVESTMENT P. LTD. VS DCIT (2 009) 308 ITR 190 (BOM) IN THE SAID CASE, IT WAS HELD THAT SINCE NO NEW MAT ERIAL BROUGHT ON RECORD, REASSESSMENT ON CHANGE OF OPINION OF OFFICER NOT VA LID. ITA NO.1950&19510/KOL/2010 M/S. EASTERN SUGAR & INDUSTRIES LTD. 9 ASIAN PAINTS LTD. VS. DCIT (2008) 308 ITR 195 (BO M) IN THIS CASE, THE HON'BLE HIGH COURT OBSERVED THAT MERE CHANGE OF OPINION OF A.O. NOT GROUND FOR REASSESSMENT. ICICI PRUDENTIAL LIFE INSURANCE CO. LTD. (2010) 3 25 ITR 471 (BOM) IN THE SAID CASE, THE HON'BLE BOMBAY HIGH COURT HEL D THAT RE-OPENING OF ASSESSMENT ON THE SAME GROUND IN THE ABSENCE OF ANY TANGIBLE MATERIAL WAS BASED ON MERE CHANGE OF OPINION AND THEREFORE I S NOT SUSTAINABLE. AVENTIS PHARMA LTD. VS. ASTT. CIT (2010) 323 ITR 570 (BOM) (577). BHAVESH DEVELOPERS VS. A.O. (2010) 224 CTR 160 (B OM). 2.7. BASED ON THE RATIO OF JUDGMENT DECIDED IN THE AFORESAID CASES, IT FOLLOWS THAT NO VALID PROCEEDING U/S.147 COULD BE I NITIATED EVEN WITHIN A PERIOD OF FOUR YEARS ON MERE CHANGE OF OPINION, IF ALL MATERIAL FACTS HAD BEEN DISCLOSED BY THE ASSESSEE AND THE AO HAD COMPL ETE KNOWLEDGE OF ALL SUCH MATERIALS AND FURTHER, THE ASSESSMENT HAD ALSO BEEN COMPLETED AFTER TAKING INTO CONSIDERATION ALL SUCH MATERIAL F ACTS. 2.8. IN THE INSTANT CASE, THE AO HAS COMPLETED THE ORIGINAL ASSESSMENT ON 18/10/2006 BASED ON THE MATERIAL ON RECORD AND HAS ALLOWED THE CLAIM OF DEPRECIATION ON PLANT AND MACHINERY. THEREFORE, WHE RE THE ASSESSEE HAS DISCLOSED ALL MATERIAL PRIMARY FACTS, PROCEEDINGS U /S 147 CANNOT BE TAKEN IF THE AO FAILS TO DRAW THE CORRECT LEGAL INFERENCE FROM SUCH FACTS OR FAILS TO PURSUE THE MATTER APPROPRIATELY. (CIT V KRISHNAKUTT Y MENON 181 ITR 237). 2.9. AGAIN, AS WILL BE APPARENT FROM THE REASSESSME NT ORDER DATED 08/12/2008 FOR THE A.Y 2004-05, THE AO HAS MERELY S UBSTITUTED HIS OWN OPINION BY HOLDING THAT PROPORTIONATE DEPRECIATION TO THE TUNE OF RS.25, 70, 750/- WAS DISALLOWABLE THEREBY COMPLETELY IGNOR ING THE TAX AUDIT REPORT WHICH WAS AVAILABLE AND WAS CONSIDERED BEFOR E PASSING THE ORIGINAL ASSESSMENT ORDER FOR THE SAID YEAR. 2.10. HENCE, IN ABSENCE OF NEW INFORMATION OR DETAI L BEING AVAILABLE TO THE AO AFTER COMPLETION OF THE ORIGINAL ASSESSMENT U/S. 143(3) OF THE ACT, PROCEEDINGS INITIATED U/S.147 OF THE ACT FOR THE RE LEVANT ASSESSMENT YEAR, IS NOT VALID IN THE INSTANT CASE OF THE ASSESSEE. I T IS CLEAR IN THE PRESENT CASE OF THE ASSESSEE THE 'REASON TO BELIEVE' IS BAS ED ON NON EXISTING MATERIAL AND THEREFORE IN ABSENCE OF TANGIBLE MATER IAL TO REACH A REASONABLE BELIEF THAT THE INCOME LIABLE TO TAX HAS ESCAPED ASSESSMENT, THE ENTIRE PROCEEDING INITIATED U/S.147 OF THE ACT IS LIABLE TO BE QUASHED. ITA NO.1950&19510/KOL/2010 M/S. EASTERN SUGAR & INDUSTRIES LTD. 10 2.11. REFERENCE IN THIS CONNECTION IS INVITED TO TH E DECISION OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. AMITABH BA CHCHAN, ITA NO.4646 OF 2010 (ORDER COPY ENCLOSED), WHEREIN IT W AS HELD AS UNDER: 'THE ASSESSEE HAD MADE A CLAIM FOR 30% ADHOC EXPEND ITURE. THIS WAS WITHDRAWN BY THE ASSESSEE WHEN ASKED BY THE AO TO S UBSTANTIATE. THE REOPENING ON THE BASIS THAT THE SAID ADHOC EXPENDIT URE CONSTITUTED 'UNEXPLAINED EXPENDITURE' ULS 69 WAS BASED ON THE S AME MATERIAL. THERE WAS NO FRESH TANGIBLE MATERIAL BEFORE THE AO TO REA CH A REASONABLE BELIEF THAT THE INCOME LIABLE TO TAX HAS ESCAPED ASSESSMEN T. IT IS A SETTLED POSITION OF LAW THAT REVIEW UNDER THE GARB OF REASS ESSMENT IS NOT PERMISSIBLE.' 2.12. AGAIN, AT THIS JUNCTURE ATTENTION IS INVITED TO THE RECENT DECISION OF THE HON 'BLE DELHI HIGH COURT IN THE CASE OF PR. CO MMISSIONER OF INCOME- TAX V. TUPPERWARE INDIA (P.) LTD. REPORTED IN [2016 ] 236 TAXMAN 494, WHEREIN THE COURT WHILE OBSERVING THAT THE EXPRESSI ON 'REASON TO BELIEVE' CANNOT HAVE TWO DIFFERENT STANDARDS OR SETS OF MEAN ING, ONE APPLICABLE WHERE THE ASSESSMENT WAS EARLIER MADE UNDER SECTION 143(3) AND ANOTHER APPLICABLE WHERE AN INTIMATION WAS EARLIER ISSUED UNDER SECTION 143(1), HELD AS UNDER: THE REOPENING ORDER OF THE ASSESSING OFF ICER ONLY REFERS TO THE REPORT OF STATUTORY AUDITOR UNDER SECTION 44AB WHIC H REPORT WAS ALREADY ENCLOSED WITH THE RETURN FILED BY THE ASSESSEE. THE REFORE, FACTUALLY, THERE WAS NO NEW MATERIAL THAT THE ASSESSING OFFICER CAME ACROSS SO AS TO HAVE 'REASONS TO BELIEVE THAT THE INCOME HAD ESCAPE D ASSESSMENT .... ' IT IS PERTINENT TO NOTE HERE THAT THE ASSESSEE'S CA SE IS ON A MUCH BETTER FOOTING THAN THE ABOVE-SAID CASE SINCE IN THE CASE OF THE ASSESSEE THE ASSESSMENT WAS ORIGINALLY COMPLETED ULS.143(3) OF T HE ACT AND COMPLETE DETAILS OF THE CLAIM OF DEPRECIATION AND AUDIT REPO RT WERE ALREADY BEFORE THE AO AT THE TIME OF COMPLETION OF ASSESSMENT U/S. 143(3) OF THE ACT. 2.13. APART FROM THE ABOVE, THE ASSESSEE WOULD LIKE TO SUBMIT THAT THE NOTICE DATED 04/06/2008 ISSUED ULS.148 (COPY ENCLOS ED AT PAGE NO.53 OF THE PLB) DO NOT CONNOTE TO THE PRESCRIBED FORMAT AS IT LACKED THE APPROVAL OF THE HIGHER AUTHORITY AS REQUIRED AS PER PROVISO TO SECTION 151 (2) OF THE IT ACT FOR THE INITIATION OF PROCEEDINGS ULS.147 OF THE ACT. 2.14. IT IS TO BE NOTED HERE THAT WHEN A STATUTE RE QUIRES SOMETHING TO BE DONE IN A PARTICULAR MANNER, IT HAS TO BE DONE IN T HAT MANNER. THE PROVISIONS OF SECTION 151(2) OF THE INCOME TAX ACT, 1961, PROVIDES THAT WHERE AN ASSESSMENT HAS BEEN MADE UNDER SECTION 143 (3), A NOTICE UNDER SECTION 148 CANNOT BE ISSUED BY AN ASSESSING OFFICER, WHO IS BELOW THE RANK OF THE ASSISTANT COMMISSIONER OR THE DEPUTY COMMISSIONER, UNLESS THE JOINT COMMISSIONER IS SATI SFIED ON THE REASONS ITA NO.1950&19510/KOL/2010 M/S. EASTERN SUGAR & INDUSTRIES LTD. 11 RECORDED BY THE ASSESSING OFFICER THAT THERE IS A F IT CASE FOR THE ISSUANCE OF A NOTICE. 2.15. HOWEVER, AS EVIDENT FROM PERUSAL OF THE ABOVE SAID NOTICE DATED 04/06/2008 ISSUED ULS.148 OF THE ACT, THERE IS NO M ENTION OF THE APPROVAL OF THE JOINT COMMISSIONER AS REQUIRED ULS.151 (2) O F THE ACT. THUS, IT FOLLOWS FROM THE ABOVE THAT SUFFICIENT COMPLIANCE U LS.151 IS ABSENT IN THE INSTANT CASE THEREBY RENDERING THE NOTICE ISSUED TO BE INVALID. 2.16. IN SUPPORT OF THE AFORESAID PROPOSITION, RELI ANCE IS BEING PLACED ON THE DECISION OF THE BOMBAY HIGH COURT IN THE CASE O F COMMISSIONER OF INCOME-TAX V. SMT. SUMAN WAMAN CHAUDHARY [2010J 321 ITR 495 (BOM) , IN WHICH CASE, THE TRIBUNAL HELD THAT THE NOTICE WAS ISSUED WITHOUT JURISDICTIO N, AS THE ASSESSING OFFICER HAD TO RECORD THE REASONS WHICH REQUIRED TH E APPROVAL OF THE DEPUTY COMMISSIONER OR THE JOINT COMMISSIONER AND A CERTIFICATE THAT THE REASONS RECORDED BY THE ASSESSING OFFICER WERE SUFF ICIENT FOR ISSUE OF SUCH A NOTICE. ON APPEAL FURTHER BY THE DEPARTMENT, THE HON'BLE HI GH COURT, DISMISSING THE APPEAL, HELD AS UNDER: 'THAT THE FINDING OF THE TRIBUNAL THAT UNDER SECTIO N 151(2) OF THE INCOME- TAX ACT, 1961, PRIOR APPROVAL OF THE CONCERNED AUTH ORITY WAS REQUIRED TO BE TAKEN BEFORE ISSUING A NOTICE WAS CORRECT. ' IT IS PERTINENT TO NOTE HERE THAT THE SUPREME COURT HAS DISMISSED THE SPECIAL LEAVE PETITION FILED BY THE DEPARTMENT AGAI NST THE JUDGEMENT: [2009] 312 ITR (ST.) 339.] 2.17. MORE SO, IT IS RELEVANT TO NOTE HERE THAT SOO N AFTER THE ISSUE OF THE ALLEGED NOTICE ULS.148, THE ASSESSEE FILED THE RETU RN ULS.148, UNDER PROTEST, ON 07/07/2008 AND REQUESTED THE AO TO COMM UNICATE THE REASONS FOR INITIATION OF PROCEEDINGS ULS.147. THE REASONS WERE COMMUNICATED BY THE AO VIDE LETTER DATED 1311 0/200 8 AND THE ASSESSEE VIDE LETTER DATED 0411112008, FILED ITS OBJECTION. HOWEVER, WITHOUT GIVING REPLY OR PASSING ORDER IN RESPECT OF SUCH OBJECTION FILED, THE AO PASSED THE ASSESSMENT ORDER ON 08/12/2008 ULS.1471143(3) O F THE ACT FOR THE RELEVANT ASSESSMENT YEAR. THE SAID ACTION IS NOT AS PER LAW. THE AO HAS ERRED IN NOT DISPOSING OF THE ASSESSEE'S OBJECTION AGAINST THE 'REASON' RECORDED FOR REOPENING OF THE ASSESSMENT. 2.18. THE HON'BLE SUPREME COURT IN THE CASE OF GKN DRIVESHAFT (INDIA) LTD. REPORTED IN 259- ITR-19 HAS HELD THAT ON RECEI PT OF THE REASONS RECORDED BY THE A.O. WHILE REOPENING AN ASSESSMENT ULS 147, THE ASSESSEE IS ENTITLED TO SUBMIT AN OBJECTION AGAINST THE 'REASONS'. THE A.O. IS THEREAFTER REQUIRED TO DISPOSE O(SUCH OBJEC TIO,,:S BY A SPEAKING ITA NO.1950&19510/KOL/2010 M/S. EASTERN SUGAR & INDUSTRIES LTD. 12 ORDER AND ONLY THEREAFTER HE COULD PROCEED TO COMPL ETE THE REASSESSMENT PROCEEDING. 2.19. THERE ARE SEVERAL DECISIONS IN WHICH THE HON' BLE HIGH COURTS HAVE SET ASIDE THE REASSESSMENT PROCEEDING FOR THE FAILU RE OF THE A.O. TO FIRST DISPOSE OF THE OBJECTIONS RAISED BY THE ASSESSEE AG AINST THE REASONS RECORDED. FEW SUCH DECISIONS ARE CITED AS UNDER: ALLANA COLD STORAGE VS. ITO (2006) 287ITR 1 (BOM. ) (ASST YR 2001-2002) IN THE SAID CASE, FOLLOWING THE ORDER PASSED BY THE SUPREME COURT IN THE CASE OF GKN DRIVESHAFT [259-ITR-19J, THE MATTER WAS SET ASIDE TO PASS FRESH ORDER. LOT INFRASTRUCTURE AND ENG. SERVICES LTD. VS. ACI T (2010) 329ITR 547 (BOM): IN THE SAID CASE, THE HON'BLE HIGH COURT HELD THAT REASSESSMENT FRAMED BY THE ASSESSING OFFICER WITHOUT DISPOSING OF THE P RIMARY OBJECTION RAISED BY THE ASSESSEE TO THE ISSUE OF REASSESSMENT NOTICE ISSUED BY HIM WAS LIABLE TO BE QUASHED. SMT. KAMALESH SHARMA [DELHI HIGH COURT] (287-ITR- 337). VISHANATH ENGINEER [GUJRAT HIGH COURT] (352-ITR-5 49). 2.20. IN LIGHT OF THE AFORESAID JUDICIAL PRONOUNCEM ENTS, IT APPEARS THAT THE REASSESSMENT ORDER PASSED FOR THE RELEVANT ASSESSME NT YEAR REQUIRES TO BE SET ASIDE FOR DOING IT AFRESH. 2.21. TO SUM UP, THE FOLLOWING CONCLUSIONS CAN BE D RAWN IN ASSESSEE'S CASE: FIRST OF ALL THE ALLEGED NOTICE ISSUED U/S.148 LA CKED THE APPROVAL OF THE HIGHER AUTHORITY AS REQUIRED U/S.151(2) OF THE IT A CT. FURTHER, WHEN THE 'REASON' WAS INTIMATED TO THE A SSESSEE AND IT FILED WRITTEN OBJECTION TO THE 'REASON', THEN ALTHOUGH AS PER THE HON'BLE SUPREME COURT DIRECTION IN THE CASE OF GKN DRIVESHA FT (INDIA) LTD. (259- ITR-19) THE A.O. WAS REQUIRED TO DISPOSE OF THE OBJ ECTIONS BY A SPEAKING ORDER, THE A.O. IN THIS CASE DID NOT FOLLOW THIS PR OCEDURE AND EVENTUALLY PASSED THE REASSESSMENT ORDER. FINALLY, EVEN THOUGH DETAILS OF THE CLAIM OF DEPR ECIATION WAS ALREADY SUBMITTED ALONGWITH THE RETURN AND THE AO COMPLETED THE ORIGINAL ASSESSMENT BASED ON THE MATERIAL ON RECORD, THE AO INITIATED PROCEEDINGS U/S.147 WITHOUT ANY NEW FACT OR NEW MAT ERIAL AND DISALLOWED ITA NO.1950&19510/KOL/2010 M/S. EASTERN SUGAR & INDUSTRIES LTD. 13 PROPORTIONATE CLAIM OF DEPRECIATION, WHICH IS CLEAR LY A SUBSTITUTION OF HIS OWN OPINION AND CAN NEVER FORM THE BASIS FOR REOPEN ING A COMPLETED ASSESSMENT. 2.22. AS SUCH, TAKING INTO CONSIDERATION THE ABOVE, THE ASSESSEE WOULD LIKE TO SUBMIT THAT IN ABSENCE OF TANGIBLE MATERIAL TO REACH A REASONABLE BELIEF THAT THE INCOME LIABLE TO TAX HAS ESCAPED AS SESSMENT, THE ENTIRE PROCEEDING INITIATED U/S.147 OF THE ACT IS LIABLE T O BE QUASHED. CONSEQUENTLY, NO ADDITION ON ACCOUNT OF DEPRECIATIO N CLAIM IS POSSIBLE. FINALLY, IT IS URGED MOST RESPECTFULLY THAT THE HON 'BLE TRIBUNAL MAY BE PLEASED TO TAKE INTO CONSIDERATION THE AFORESAID SU BMISSIONS OF THE APPELLANT AND PASS APPROPRIATE ORDER ALLOWING DUE R ELIEF AS PRAYED FOR. 7. ON THE OTHER HAND, LD. FOR THE REVENUE SUBMITTED BEFORE US THAT THE ASSESSEE DID NOT PRODUCE RELEVANT DOCUMENTS AND INF ORMATION BEFORE THE AO AND TO THAT EXTENT, THE INCOME HAS ESCAPED ASSES SMENT. IN ADDITION TO THIS, LD. DR FOR THE REVENUE HAS ALSO RELIED ON THE FOLLOWING JUDGMENTS :- I) SOM DATT BUILDERS (P) LTD., 98 ITD 78 (KOL) :- FROM THE PERUSAL OF SECTION 147, IT IS APPARENT THA T THE ASSESSING OFFICER IS WELL EMPOWERED TO REOPEN THE CASE WITHIN FOUR YEARS EVEN THE ASSESSMENT HAS BEEN FRAMED UNDER SECTION 143(3) AND SINCE INITIATION OF REASSESSMENT PROCEEDINGS WERE INITIAT ED WELL WITHIN TIME TO RECOMPUTE THE ALLOWANCE WRONGLY ALLOWED, TH E ACTION OF THE ASSESSING OFFICER IN REOPENING THE CASE WAS JUSTIFI ED AND SAME COULD NOT BE HELD TO BE A CHANGE OF OPINION, WHICH WAS BASICALLY INVOKED FOR RECTIFYING THE GLARING MISTAKE COMMITTE D BY THE ASSESSING OFFICER AT THE TIME OF ORIGINAL ASSESSMEN T PROCEEDINGS. THE INTENTION OF THE LEGISLATURE IN AMENDING THE PR OVISION UNDER SECTION 147 WITH EFFECT FROM 1-4-1989 WAS ALSO MEAN T FOR ENABLING THE ASSESSING OFFICER TO RECOMPUTE THE EXCESS DEDUCTION/DISALLOWANCE WRONGLY ALLOWED TO THE ASSES SEE WHICH CAME TO HIS NOTICE SUBSEQUENTLY. [PARA 24] 8. HAVING HEARD THE RIVAL SUBMISSIONS, PERUSED THE MA TERIAL AVAILABLE ON RECORD, WE ARE OF THE VIEW THAT THERE IS MERIT I N THE SUBMISSIONS OF THE ASSESSEE, AS THE PROPOSITIONS CANVASSED BY THE LD. AR FOR THE ASSESSEE ARE SUPPORTED BY THE FACTS NARRATED BY HIM. LD. AR HAS POINTED OUT THAT ITA NO.1950&19510/KOL/2010 M/S. EASTERN SUGAR & INDUSTRIES LTD. 14 THE REASONS RECORDED FOR REOPENING THE ASSESSMENT R ELATED TO THE CLAIM OF DEPRECIATION ON PLANT & MACHINERY WHICH WAS ALREADY DEALT WITH IN THE ORIGINAL ASSESSMENT ORDER FOR THE SAID ASSESSMENT Y EAR BY THE AO AND THE AO DID NOT ANY TANGIBLE MATERIAL ON RECORD TO R EOPEN THE ASSESSMENT PROCEEDINGS. IT IS ALSO RELEVANT TO NOTE HERE THAT DURING THE RELEVANT FINANCIAL YEAR THERE WAS NO FRESH ACQUISITION OF PL ANT AND MACHINERY. ONLY BROUGHT FORWARD BALANCE OF PREVIOUS YEAR WAS APPEAR ING AS OPENING WDV ON WHICH COMPUTATION OF DEPRECIATION WAS MADE AS PE R THE PROVISIONS OF SECTION 32 OF THE IT ACT. THEREFORE, BASED ON THE F ACTUAL POSITION AND THE PRECEDENTS CITED BY LD. AR FOR THE ASSESSEE, WE ARE OF THE VIEW THAT REOPENING OF ASSESSMENT U/S.147 IS WITHOUT ANY TANG IBLE MATERIAL. ACCORDINGLY, WE ALLOW THE APPEAL OF THE ASSESSEE. 9. SINCE WE HAVE ALLOWED THE APPEAL OF THE ASSESSEE BASED ON TECHNICAL GROUND, THEREFORE, WE DO NOT ADJUDICATE T HE GROUND NO.4 & 5 RAISED BY THE ASSESSEE AS THE SAME HAVE BECOME INFR UCTUOUS. ITA NO.1951/KOL/2010(AY : 2006-07) 10. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- 1. FOR THAT IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) WAS WHOLLY WRONG AND UNJUSTIFIED IN CONFIRMI NG THE DISALLOWANCE OF DEPRECIATION OF RS.2,45,77,850/- MADE IN THE ASSESS MENT ON OLD PLANT AND MACHINERY ( OUT OF TOTAL DEPRECIATION CLAIM OF RS.2 ,49,15,745/- ON ALL THE DEPRECIABLE ASSETS) OWING TO THE ALLEGED NON-PRODUC TION IN BUSINESS AND ITS NON-USER DURING THE YEAR WITHOUT CONSIDERING AN D APPRECIATING THE FACTS THAT THE OLD P&M ALWAYS KEPT READY FOR USE AT ANY T IME IN THE EXISTING BUSINESS COULD NOT BE USED OWING TO THE TEMPORARY L ULL / SUSPENSION OF THE MANUFACTURING ACTIVITY DUE TO UNAVOIDABLE CIRCUMSTA NCES. THE ACTIONS OF BOTH THE A.O AND THE LD. CIT(A) WERE UNREASONABLE, UNCALLED FOR AND BAD IN LAW. ITA NO.1950&19510/KOL/2010 M/S. EASTERN SUGAR & INDUSTRIES LTD. 15 2. FOR THAT IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) WAS WHOLLY WRONG AND UNJUSTIFIED IN CONFIRMI NG THE ARBITRARY, AD- HOC AND ESTIMATED DISALLOWANCE OF RS. 24,600/- @ 5% OF RS. 4.92 LAKHS ON ACCOUNT OF MISC. EXPENSES MADE IN ASSESSMENT PUR ELY ON ASSUMPTIONS AND PRESUMPTIONS ON THE ALLEGED GROUND THAT THE ASSESSEE WAS UNABLE TO PRODUCE ALL THE BILLS AND VOUCHERS. T HE ACTIONS OF BOTH THE AO AND THE LD. CIT(A) WERE UNREASONABLE, UNCALLED F OR AND BAD IN LAW. 3. FOR THAT IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) WAS WHOLLY WRONG AND UNJUSTIFIED IN CONFIRMI NG THE SAID ESTIMATED DISALLOWANCE OF RS. 24,600/- MADE IN ASSESSMENT ON ACCOUNT OF MISC. EXPENSES WITHOUT HAVING FOUND ANY DEFECT IN THE AUD ITED BOOKS OF ACCOUNTS AND WITHOUT POINTING OUT / DETECTING WHICH PARTICULAR ITEM OF THE EXPENSES WAS/WERE NOT VOUCHED AND THIS WAS WELL EST ABLISHED BY THE FACT THAT THE AO HIMSELF HAS ALLOWED WITHOUT ANY RESERVA TION 95% OF THE EXPENSES. THE ACTIONS OF BOTH THE AO AND THE LD. CI T(A) WERE UNREASONABLE, UNCALLED FOR AND BAD IN LAW. 4. FOR THAT YOUR PETITIONER CRAVES THE RIGHT TO PUT ADDITIONAL GROUNDS AND/OR TO ALTER/AMEND/MODIFY THE PRESENT GROUNDS AT THE TI ME OF HEARING. 11. LD. AR FOR THE ASSESSEE HAS SUBMITTED BEFORE US :- 1. THE APPELLANT IS A LIMITED COMPANY. FOR THE RELE VANT ASSESSMENT YEAR RETURN OF INCOME WAS FILED ON 30/11/2006 DECLARING LOSS OFRS.3,68,30,210/-. 1.1. SUBSEQUENTLY, NOTICES U/S.142(1) & 143(2) OF T HE ACT WERE ISSUED AND SERVED ON THE ASSESSEE. IN RESPONSE TO THE ABOVE, T HE AR OF THE ASSESSEE APPEARED FROM TIME TO TIME AND EXPLAINED T HE RETURN. 1.2. FINALLY, THE ASSESSMENT WAS COMPLETED U/S.L43( 3) ON 30112/2008 DETERMINING THE LOSS AT RS.1 ,22,27,760/- THEREBY D ISALLOWING THE CLAIM OF DEPRECIATION ON PLANT AND MACHINERY TO THE TUNE OF RS.2,45,77,8501- AND FURTHER, MAKING AN ADHOC ADDITION @ 5% OF MISCELLAN EOUS EXPENSES FOR LACK OF SUPPORTING DOCUMENTS. THE DISALLOWANCE OF D EPRECIATION WAS MADE ON THE GROUND THERE WAS NO PRODUCTION IN THE C OMPANY DURING THE RELEVANT FINANCIAL YEAR. 1.3. BEING AGGRIEVED BY THE ORDER, THE ASSESSEE FIL ED AN APPEAL BEFORE THE LD.CIT, WHO, VIDE HIS APPELLATE ORDER DATED 1110812 010, CONFIRMED THE ADDITIONS MADE AS ABOVE. 1.4. BEING AGGRIEVED BY THE ORDER OF THE LD. CIT, T HE ASSESSEE SEEKS THE KIND JUSTICE OF THE HON'BLE INCOME TAX APPELLATE TR IBUNAL AND HAS FILED AN APPEAL IN THIS REGARD. ITA NO.1950&19510/KOL/2010 M/S. EASTERN SUGAR & INDUSTRIES LTD. 16 GROUND NO.1 2. BEFORE GOING INTO THE SPECIFIC ISSUE, IT SHALL B E BEFITTING TO THROW LIGHT ON THE BRIEF FACTS OF THE ASSESSEE'S CASE CONCERNING T HE SAID ISSUE. 2.1. THE ASSESSEE COMPANY RUNNING A SUGAR MILL STAR TED ITS PRODUCTION FROM THE ASSESSMENT YEAR 1996-97 AND CONTINUED PROD UCTION TILL ASSESSMENT YEAR 2004-05. THEREAFTER, LABOUR PROBLEM STARTED AND DUE TO PROLO NGED LABOUR DISPUTE PRODUCTION WAS TEMPORARILY STOPPED FROM ASSESSMENT YEAR 2005-06 ONWARDS. SUBSEQUENTLY, DURING THE FINANCIAL YEAR 2008-09, TH E COMPANY, M/S.SHREE HANUMAN SUGAR & INDUSTRIES LTD. PROPOSED TO USE THE PLANT & MACHINERY OF THE ASSESSEE COMPANY INSTALLED AT MOTIHARI, EAST CHAMPARAN, BIHAR. REFERENCE HERE IS INVITED TO THE OFFER LETTER DATED 0710812008 OF M/S.SHREE HANUMAN SUGAR & INDUSTRIES LTD. AS ENCLOS ED AT PAGE NO.1 OF THE ADDITIONAL PLB. 2.2. ON RECEIPT OF THE ABOVE PROPOSAL, THE ASSESSEE COMPANY WITH THE INTENTION OF TEMPORARY MAKING USE OF THE PLANT AGRE ED TO THE TERMS AND CONDITIONS FOR USAGE OF ITS PLANT & MACHINERY BY M/ S.SHREE HANUMAN SUGAR & INDUSTRIES LTD. FOR A MUTUALLY SETTLED CONS IDERATION. ACCORDINGLY, THE ASSESSEE COMPANY AGREED TO KEEP THE PLANT & MAC HINERY IN 'READY TO USE' CONDITION AT THE BEGINNING OF EVERY SEASON. RE FERENCE HERE IS INVITED TO THE LETTER OF ACCEPTANCE OF THE PROPOSAL BY THE ASSESSEE COMPANY DATED 1610812008, AS ENCLOSED AT PAGE NO. 2 OF THE ADDITIONAL PLB. 2.3. AS PER THE ABOVE AGREEMENT BETWEEN THE ASSESSE E COMPANY AND M/S.SHREE HANUMAN SUGAR & INDUSTRIES LTD., NECESSAR Y REPAIRS WERE MADE AND M/S.SHREE HANUMAN SUGAR & INDUSTRIES LTD. USED THE MACHINERIES OF THE ASSESSEE COMPANY IN ITS PRODUCTI ON AND STARTED PAYING MACHINERY USAGE CHARGES FROM THE FINANCIAL YEAR 200 9-10 ONWARDS. ATTENTION HERE IS INVITED TO THE AUDITED ACCOUNTS O F THE ASSESSEE COMPANY FOR THE ASSESSMENT YEAR'S 2010-11 & 2011-12 IN THIS CONNECTION, AS ENCLOSED AT PAGE NOS. 3-21 OF THE ADDITIONAL PLB, W HICH EVIDENCES THE RECEIPT OF THE MACHINERY USAGES CHARGES BY THE ASSE SSEE FOR THE USE OF ITS PLANT & MACHINERY IN THE PRODUCTION OF M/S.SHRE E HANUMAN SUGAR & INDUSTRIES LTD. REFERENCE IS ALSO INVITED TO THE LEDGER ACCOUNT OF FIXED ASSETS USAGE CHARGES AS APPEARING IN THE BOOKS OF THE ASSESSEE C OMPANY FOR THE FINANCIAL YEAR'S 2009-10 & 2010-11, AS ENCLOSED AT PAGE NOS. 22-25 OF THE ADDITIONAL PLB, WHICH FURTHER EVIDENCES THE ABOVE-S AID FACT. ITA NO.1950&19510/KOL/2010 M/S. EASTERN SUGAR & INDUSTRIES LTD. 17 2.4. AGAIN, THE FACT THAT THE COMPANY, M/S.SHREE HA NUMAN SUGAR & INDUSTRIES LTD. AFTER ENTERING INTO AGREEMENT WITH THE ASSESSEE COMPANY FOR THE USAGE OF ITS MACHINERY RESUMED ITS PRODUCTI ON FROM THE FINANCIAL YEAR 2010-11 SHALL BE EVIDENT FROM PERUSAL OF THE A UDITED ACCOUNT OF THE SAID COMPANY FOR THE FINANCIAL YEAR ENDING 31/03120 11, COPY OF WHICH IS ENCLOSED AT PAGE NOS. 26-40 OF THE ADDITIONAL PLB. THE PRODUCTION CONTINUED THEREAFTER. 2.5. THUS, IN VIEW OF THE FACTS AS DISCUSSED ABOVE IT IS CLEAR THAT THERE WAS PASSIVE USE OF THE PLANT & MACHINERY BY KEEPING THE SAME IN READY TO USE CONDITION SO THAT IT CAN BE USED ANYTIME IN PRODUCT ION BY M/S.SHREE HANUMAN SUGAR & INDUSTRIES LTD, AS AGREED UPON. NOW, THE TWO INGREDIENTS FOR DEPRECIATION ALLOWANCE ARE: (1) THE DEPRECIABLE ASSET SHOULD BE OWNED BY THE AS SESSEE; (2) IT SHOULD BE USEDFOR THE PURPOSE OF THE ASSESSE E'S BUSINESS OR PROFESSION. THE WORDS 'USED FOR THE PURPOSE OF BUSINESS' ARE CA PABLE OF A LARGER AND NARROWER INTERPRETATION. IF THE EXPRESSION 'USED' I S CONSTRUED STRICTLY IT COULD BE TAKEN AS CONNOTING OR REQUIRING THE ACTIVE EMPLOYMENT OR THE ACTUAL WORKING OF THE MACHINERY, PLANT OR BUILDING IN THE BUSINESS. ON THE OTHER HAND THE WIDER MEANING WOULD INCLUDE NOT ONLY CASES WHERE THE MACHINERY OR PLANT ARE ACTIVELY EMPLOYED BUT ALSO C ASES WHERE THERE IS PASSIVE USER OF THE SAME IN BUSINESS. THEREFORE, AN ASSET COULD BE SAID TO BE IN USE WHEN IT IS KEPT READY FOR USE. HENCE, IT FOLLOWS FROM THE ABOVE THAT DEPRECIATION HAS TO BE ALLOWED NOT ONLY FOR ACTIVE USE OF AN ASSET BUT ALSO FOR ITS PA SSIVE USE. THAT IS TO SAY, EVEN PASSIVE USE OF AN ASSET I.E. WHILE IT IS KEPT READY FOR USE, IT WOULD TANTAMOUNT TO USE OF THE ASSET FOR THE PURPOSES OF THE BUSINESS AND ASSESSEE WOULD BE ENTITLED TO DEPRECIATION THEREON 2,6. IN SUPPORT OF THE AFORESAID PROPOSITION, RELIA NCE IS BEING PLACED ON THE FOLLOWING JUDGMENTS WHEREIN IT IS HELD THAT EVEN PA SSIVE USE OF AN ASSET ENTITLES IT TO DEPRECIATION: CAPITAL BUS SERVICE (P.) LTD. 1980) 123 ITR 404) [DELHI HIGH COURT]: A PORTION OF THE HEAD NOTE IS REPRODUCED AS UNDER: 'THE ALLOWANCE FOR NORMAL DEPRECIATION DOES NOT DEP END UPON THE ACTUAL WORKING OF THE MACHINERY,' IT IS SUFFICIENT IF THE MACHINERY IN QUESTION IS ITA NO.1950&19510/KOL/2010 M/S. EASTERN SUGAR & INDUSTRIES LTD. 18 EMPLOYED BY THE ASSESSEE FOR THE PURPOSES OF THE BU SINESS AND FOR NO OTHER BUSINESS AND IT IS KEPT BY HIM READY FOR ACTU AL USE. CIT V. VISWANATH BHASKAR SATHE [(1937) 5 ITR 621] [BOMBAY HIGH COURT]: IN THIS CASE, THE HON'BLE HIGH COURT HELD THAT THE ASSESSEE WAS ENTITLED TO DEPRECIATION NOTWITHSTANDING THAT THE PLANT AND MAC HINERY DID NOT ACTUALLY WORK DURING THE PREVIOUS YEAR IN QUESTION. THE COUR T, WHILE HOLDING SO, INTERPRETED THE WORD 'USED' FOUND IN SECTION 10(2)( VI) OF THE 1922 ACT, AS UNDER: 'BUT, I THINK THAT THE WORD 'USED' IN THIS SECTION MAY BE GIVEN A WIDER MEANING AND EMBRACES PASSIVE AS WELL AS ACTIVE USER . MACHINERY WHICH IS KEPT IDLE MAY WELL DEPRECIATE, ' PARTICULARLY DU RING THE MONSOON SEASON. IT SEEMS TO ME THAT THE ULTIMATE TEST IS, WHETHER, WITHOUT THE PARTICULAR USER OF THE MACHINERY RELIED UPON THE PROFITS SOUGH T TO BE TAXED COULD HAVE BEEN MADE; AND AS I READ THE AGREEMENT IN THE CASE, THE PROFITS OF THE ASSESSEE DURING THE YEAR UNDER ASSESSMENT COULD NOT HAVE BEEN EARNED EXCEPT BY HIS MAINTAINING HIS FACTORY IN GOO D, WORKING ORDER, AND THAT INVOLVES THE USER OF THE FACTORY AND THE MACHI NERY', COMMISSIONER OF INCOME-TAX V. INDIA TEA AND TIMBE R TRADING CO. [IN THE GAUHATI HIGH COURT] [1996J 221 ITR 857 (GAU): IN THE SAID CASE, THE ASSESSEE OWNED A SUGAR MILL. THE ASSESSING OFFICER DENIED DEPRECIATION IN RESPECT OF THE FACTORY, PLAN T AND MACHINERY AS THERE WAS NO PRODUCTION AND NO USER OF MACHINERY DU RING THE YEAR . THE APPELLATE ASSISTANT COMMISSIONER AND THE TRIB UNAL UPHELD THE CLAIM OF THE ASSESSEE ON THE BASIS OF PASSIVE USER BY KEEPING THE MACHINERY IN READINESS. ON A REFERENCE, THE HON'BLE HIGH COURT HELD, 'THAT THE EXPRESSION 'USED' SHOULD HAVE A WIDER MEANING SO AS TO INCLUDE NOT ON LY ACTUAL BUT ALSO PASSIVE USER AND DEPRECIATION WAS ALLOWABLE. ' COMMISSIONER OF INCOME-TAX V. REFRIGERATION AND A LLIED INDUSTRIES LTD. [2001] 247 ITR 12 (DEL) [DELHI HIGH COURT]: IN THIS CASE, THE HON'BLE HIGH COURT OBSERVED AS UN DER: 'THE PRINCIPAL FACTORS RESPONSIBLE FOR REDUCTION IN VALUE OF A CAPITAL ASSET AND FOR DEPRECIATION ARE: (A) ORDINARY WEAR AND TEA R; (B) UNUSUAL DAMAGE; (C) INADEQUACY; (D) OBSOLESCENCE. THESE FACTORS INC LUDE NOT ONLY THOSE ITA NO.1950&19510/KOL/2010 M/S. EASTERN SUGAR & INDUSTRIES LTD. 19 RELATING TO PHYSICAL DETERIORATION BUT ALSO THOSE R ELATING TO THE SUITABILITY OF THE ASSET AS AN ECONOMICALLY PRODUCTIVE UNIT AFTER A PERIOD OF TIME. THE TWO INGREDIENTS FOR DEPRECIATION ALLOWANCE ARE (1) THE DEPRECIABLE ASSET SHOULD BE OWNED BY THE ASSESSEE; (2) IT SHOUL D BE USED FOR THE PURPOSE OF THE ASSESSEE'S BUSINESS OR PROFESSION. T HE WORDS 'USED FOR THE PURPOSE OF BUSINESS' ARE CAPABLE OF A LARGER AN D NARROWER INTERPRETATION. IF THE EXPRESSION 'USED' IS CONSTRU ED STRICTLY IT COULD BE TAKEN AS CONNOTING OR REQUIRING THE ACTIVE EMPLOYME NT OR THE ACTUAL WORKING OF THE MACHINERY, PLANT OR BUILDING IN THE BUSINESS. ON THE OTHER HAND THE WIDER MEANING WOULD INCLUDE NOT ONLY CASES WHERE THE MACHINERY OR PLANT ARE ACTIVELY EMPLOYED BUT ALSO C ASES WHERE THERE IS PASSIVE USER OF THE SAME IN BUSINESS. AN ASSET COUL D BE SAID TO BE IN USE WHEN IT IS KEPT READY FOR USE. ' CIT V. GEO TECH CONSTRUCTION CORPORATION (2000) 2 44 ITR 452 (KER): IN THE SAID CASE, THE ASSESSEE PURCHASED TWO TIPPER S ON MARCH 29, 1986, AND CLAIMED DEPRECIATION ALLOWANCE FOR THE ASSESSME NT YEAR 1986-87 ON THE SAME. THE ASSESSING OFFICER DID NOT ALLOW DEPRE CIATION ON THE GROUND THAT THE ASSESSEE HAD NOT PRODUCED ANY EVIDENCE TO SHOW THAT THEY WERE PUT TO USE BEFORE MARCH 31, 1986. ON APPEAL, THE TRIBUNAL HELD THAT EVEN IF THERE WAS NO ACTUAL USER THE FACT THAT THEY WERE KEPT READY FOR USE WOULD BE ENOUGH F OR GRANT OF DEPRECIATION ON THE PRINCIPLE OF PASSIVE USER OF TH E ASSET. ACCORDINGLY, THE CLAIM OF DEPRECIATION WAS ALLOWED. ON FURTHER APPEAL, THE HON'BLE HIGH COURT HELD AS U NDER: 'THAT THE WORDS 'USED FOR THE PURPOSE OF THE BUSINE SS' WERE CAPABLE OF A LARGER AND NARROWER INTERPRETATION. IF THE EXPRESSI ON 'USED' WAS CONSTRUED STRICTLY IT COULD BE TAKEN AS CONNOTING OR REQUIRIN G THE ACTIVE EMPLOYMENT OR THE ACTUAL WORKING OF THE MACHINERY, PLANT OR BU ILDING IN THE BUSI-NESS. ON THE OTHER HAND, THE WIDER MEANING WOULD INCLUDE NOT ONLY CASES WHERE THE MACHINERY, PLANT WERE ACTIVELY EMPLOYED BUT ALS O CASES WHERE THERE WAS WHAT MAY BE DESCRIBED AS PASSIVE USER OF THE SA ME IN THE BUSINESS. AN ASSET COULD BE SAID TO BE USED, WHEN IT WAS KEPT READY FOR USE. SINCE THE TRIBUNAL HAD RECORDED THE FINDING THAT TH ERE WAS POSITIVE MATERIAL TO SHOW THE EXISTENCE OF THE ASSET AT THE WORK SITE, AND ABOUT THE PASSIVE USER IT COULD NOT BE TERMED TO BE ONE WITHO UT ANY BASIS OR ILLEGAL. ACCORDINGLY, THE CLAIM FOR DEPRECIATION WAS ALLOWAB LE'. INCOME-TAX OFFICER VS GUJARAT MINI STEEL LTD. [(1 987) 23 ITD 74 AHD] [INCOME TAX APPELLATE TRIBUNAL- AHMEDABAD] ITA NO.1950&19510/KOL/2010 M/S. EASTERN SUGAR & INDUSTRIES LTD. 20 IN THE SAID CASE, THE HON'BLE TRIBUNAL HELD AS UNDE R: 'THE SHORT POINT FOR DECISION IS WHETHER ON THE FAC TS AND CIRCUMSTANCES OF THE CASE THE ASSESSEE WAS ENTITLED FOR DEPRECIATION ON THE BUILDING, PLANT, MACHINERY AND ELECTRIC INSTALLATIONS. THE ASSESSEE WAS RUNNING THE MINI STEEL PLANT. THE MINI STEEL PLANT STARTED ITS COMME RCIAL PRODUCTION IN DECEMBER, 1974, AND IT WAS IN OPERATION UP TO 6-8-1 975. THE STEEL MARKET WAS NOT FAVOURABLE TO THE ASSESSEE AND FURTHER THER E WAS A LABOUR PROBLEM. CONSEQUENTLY THE PLANT WAS CLOSED FROM 7-8-1975 TO APRIL, 1978. IT WAS RESTARTED IN MAY, 1978. THE D. R. HAS CHALLENGED TW O THINGS; FIRSTLY THE PLANT DID NOT CLOSE DUE TO THE LABOUR PROBLEM AND S ECONDLY IT IS NOT CORRECT THAT THE PLANT WAS RESTARTED IN MAY 1978. BOTH FACT S WERE EXAMINED AND IT WAS FOUND THAT CL'T (AJ HAS GIVEN A FINDING THAT TH E PLANT WAS CLOSED ALSO DUE TO LABOUR PROBLEM AND A FINDING HAS BEEN GIVEN BY THE ACCOUNTANT MEMBER THAT THE PLANT REOPENED IN MAY 1978. NO CONT RADICTORY MATERIALS WERE AVAILABLE SO THAT THE SAID FINDINGS CAN BE REV ERSED. THEREFORE, ON THESE FACTS THE QUESTION WHETHER THE ASSESSEE WAS E NTITLED FOR DEPRECIATION IS TO BE ANSWERED . THE CASE OF THE ASSESSEE IS THAT THERE WAS A TEMPOR ARY LULL WHEN THE BUSINESS ACTIVITIES OF THE ASSESSEE WERE SUSPENDED AND THE SAME WERE RESTARTED WHEN THE POSITION WAS FAVOURABLE TO IT. U NDER THE CIRCUMSTANCES, THE POSITION EVEN AFTER THE PREVIOUS YEAR WILL HAVE TO BE TAKEN INTO CONSIDERATION IN ORDER TO JUDGE WHETHER THERE WAS A TEMPORARY SUSPENSION OF THE BUSINESS OR THE ASSESSEE HAD ITS INTENTION TO CLOSE THE BUSINESS FOR EVER. IT IS CLEAR FROM THE ACTIVITIES OF THE ASSESSEE THAT THE BUSINESS WAS TEMPORARILY SUSPENDED DUE TO UNFAVOURA BLE STEEL MARKET AND LABOUR PROBLEM. AFTER TWO YEARS WHEN THE LABOUR PROBLEM WAS OVER AND THE STEEL MARKET WAS LITTLE FAVOURABLE TO THE A SSESSEE THE FACTORY WAS REOPENED. THEREFORE, IT IS CLEAR THAT THE ACTIVE US E OF THE PLANT AND MACHINERY, THOUGH WAS NOT DURING THE YEARS, THE PAS SIVE USE WAS AND IT CANNOT TO BE SAID THAT THE PLANT WAS CLOSED AND, TH EREFORE, THE PLANT AND MACHINERY ETC. WERE NOT ENTITLED FOR DEPRECIATION. SEVERAL DECISIONS HAD BEEN CITED FROM BOTH THE SIDES. AFTER CONSIDERING T HE ARGUMENTS AND THOSE DECISIONS IT IS CLEAR FROM THE FACTS THAT THERE WAS ONLY A TEMPORARY SUSPENSION OF THE BUSINESS AND, THEREFORE, THE ASSE SSEE WAS ENTITLED FOR DEPRECIATION FOR THE PASSIVE USE OF ITS BUILDING, P LANT, MACHINERY AND ELECTRIC INSTALLATIONS. ' 2.7. HENCE, IT IS AN ACCEPTED PRINCIPLE OF LAW, AS HAS BEEN ENUNCIATED BY THE DECISIONS, AS RELIED ON AS ABOVE, THAT EVEN IF THERE WAS NO ACTUAL USER OF THE PLANT & MACHINERIES, THE FACT THAT THEY WERE KEPT READY FOR USE WOULD BE ENOUGH FOR GRANT OF DEPRECIATION ON THE PR INCIPLE OF PASSIVE USER OF THE ASSET. ITA NO.1950&19510/KOL/2010 M/S. EASTERN SUGAR & INDUSTRIES LTD. 21 2.8. IN THE APPELLANT COMPANY'S CASE, ADMITTEDLY TH ERE WAS A TEMPORARY LULL OWING TO PROLONGED LABOUR DISPUTE DUE TO WHICH THE BUSINESS ACTIVITIES WERE SUSPENDED FROM ASSESSMENT YEAR 2005-06 ONWARDS . LATERON, DURING THE FINANCIAL YEAR 2008-09, THE ASSESSEE REC EIVED A PROPOSAL FROM M/S.SHREE HANUMAN SUGAR & INDUSTRIES LTD. FOR USAGE OF THE PLANT & MACHINERY OF THE ASSESSEE COMPANY INSTALLED AT MOTI HARI. THE ASSESSEE, IMMEDIATELY, GETTING AN OPPORTUNITY FOR TEMPORARY U SE OF THE PLANT, AGREED TO THE TERMS AND CONDITIONS FOR USAGE OF ITS PLANT & MACHINERY BY M/S.SHREE HANUMAN SUGAR & INDUSTRIES LTD. FOR A MUT UALLY SETTLED CONSIDERATION AND AGREED TO KEEP THE PLANT & MACHIN ERY IN 'READY TO USE' CONDITION. AS PER THE ABOVE AGREEMENT, M/S.SHREE HA NUMAN SUGAR & INDUSTRIES LTD. STARTED PAYING MACHINERY USAGE CHAR GES FROM THE FINANCIAL YEAR 2009-10 ONWARDS AS AGAINST USAGE OF THE PLANT & MACHINERIES OF THE ASSESSEE COMPANY IN ITS PRODUCTION. THEREFORE, IT IS CLEAR THAT EVEN THOUGH THERE WAS N O ACTIVE USE OF THE PLANT AND MACHINERY, THERE WAS PASSIVE USE BY KEEPING THE SAME IN 'READY TO USE' CONDITION AND THUS, THE ASSESSEE IS RIGHTFULLY ENTITLED TO CLAIM DEPRECIATION ON THE SAME. 2.9. AGAIN, IT IS RELEVANT TO NOTE AT THIS JUNCTURE THAT THE PROVISIONS OF SEC.32 OF THE ACT DOES NOT MANDATE USAGE OF THE ASS ET BY THE ASSESSEE ITSELF. AS LONG AS THE ASSET IS UTILISED {OR THE PU RPOSE OF BUSINESS OF THE ASSESSEE, THE REQUIREMENT OF SECTION 32 OF THE ACT WILL STAND SATISFIED, NOTWITHSTANDING NON-USAGE OFTHE ASSET ITSELFBY THE ASSESSEE. 2.1 O. TO BUTTRESS THE ARGUMENT, RELIANCE IS PLACED ON THE JUDGMENT OF THE APEX COURT IN THE CASE OF I.C.D.S. LTD. V. CIT [TS- 8-SC-2013] WHEREIN IT WAS EXPLICITLY HELD THAT AS PER SEC.32 OF THE IT AC T, A 'FINANCER' SATISFIES THE 'OWNERSHIP' & 'USER' TEST FOR DEPRECIATION. IT IS TO BE NOTED HERE THAT IN ARRIVING AT THIS CON CLUSION, THE SC RELIED UPON THE DECISION IN THE CASE OF SHAAN FINANCE PVT. LTD. [231 ITR 308 (SC)] IN WHICH CASE IT WAS CLARIFIED THAT THE PHRASE 'USED F OR THE PURPOSE OF BUSINESS' DOES NOT NECESSARILY REQUIRE USE OF THE A SSET BY THE ASSESSEE ITSELF. 2.11. IN LIGHT OF THE AFORESAID JUDICIAL PRONOUNCEM ENT IT IS CLEAR THAT IN A LEASING TRANSACTION, THE LESSOR, WHO IS THE OWNER O F THE ASSET, IS ENTITLED TO DEPRECIATION UNDER SECTION 32 OF THE ACT. 2.12. NOW, APPLYING THE SAME ANALOGY TO THE FACTS O F THE PRESENT CASE, IT IS SUBMITTED THAT THE PLANT & MACHINERY AT MOTIHARI OF THE ASSESSEE COMPANY WERE AGREED TO BE USED BY M/S.SHREE HANUMAN SUGAR & INDUSTRIES LTD. FOR A MUTUALLY SETTLED CONSIDERATIO N. FURTHER, AS PER THE ABOVE AGREEMENT, ITA NO.1950&19510/KOL/2010 M/S. EASTERN SUGAR & INDUSTRIES LTD. 22 FIXED ASSET USAGE CHARGES WERE PAID BY M/S.SHREE HA NUMAN SUGAR & INDUSTRIES LTD. FROM THE FINANCIAL YEAR 2009-10 ONW ARDS AS AGAINST USAGE OF THE SAME IN ITS PRODUCTION. SUCH INCOME DERIVED FROM THE LEASING BUSINESS OF THE ASSESSEE HAS BEEN DISCLOSED AS BUSI NESS INCOME IN THE ASSESSMENT YEARS 2010-11 & 2011-12 AND HAS BEEN ACC EPTED AS SUCH BY THE DEPARTMENT IN THOSE YEARS. RELEVANT COPIES OF C OMPUTATION OF TOTAL INCOME FOR ASSESSMENT YEARS 2010-11 & 2011-12 ARE E NCLOSED AT PAGE NOS. 41-48 OF THE ADDITIONAL PLB, IN THIS CONNECTIO N. REFERENCE HERE IS FURTHER INVITED TO RELEVANT EXTRA CTS OF MEMORANDUM OF ASSOCIATION OF THE ASSESSEE COMPANY AS ENCLOSED AT PAGE NOS. 49-54 OF THE ADDITIONAL PLB. PERUSAL OF CLAUSE 11 OF THE MAI N OBJECTS OF THE MEMORANDUM REVEALS THAT LEASING OUT OF PLANT & MACH INERIES IS ONE OF THE BUSINESS ACTIVITIES OF THE ASSESSEE COMPANY. 2.13. AS SUCH, CONSIDERING THE ABOVE, THE ASSESSEE WOULD LIKE TO SUBMIT THAT THE CLAIM OF DEPRECIATION ON PLANT & MACHINERY AT MOTIHARI WHICH WAS KEPT 'READY FOR USE' DUE TO TEMPORARY LULL IN THE B USINESS OWING TO PROLONGED LABOUR DISPUTE AND WAS ACTUALLY USED SUBS EQUENTLY BY GIVING THE SAME ON HIRE AGAINST RECEIPT OF HIRE CHARGES, I S TOTALLY ADMISSIBLE WITHIN THE FOUR CORNERS OF LAW. GROUND NO.2 &3 3. DURING THE RELEVANT ASSESSMENT YEAR, THE ASSESSE E CLAIMED MISCELLANEOUS EXPENSES TO THE TUNE OF RS.4.92 LACS IN ITS RETURN OF INCOME. 3.1. IN COURSE OF THE ASSESSMENT PROCEEDING, THE AS SESSEE WAS ASKED TO PRODUCE DETAILED BILLS AND VOUCHERS SUBSTANTIATING THE ABOVE CLAIM. 3.2. IN REGARD TO THE ABOVE, THE ASSESSEE OWING TO THE PROLONGED LABOUR DISPUTE GOING ON IN THE FACTORY AS A RESULT OF WHIC H EVERY RECORD COULD NOT MAINTAINED PROPERLY, EXPRESSED HIS INABILITY TO PRO DUCE ALL THE BILLS & VOUCHERS RELATING TO THE RELEVANT ASSESSMENT YEAR, UNDER CONSIDERATION. HOWEVER, THE ASSESSEE PRODUCED SOME BILLS & VOUCHER S WHICH WERE READILY AVAILABLE. 3.3. IN VIEW OF THE ABOVE, THE AA IN SPITE OF ACKNO WLEDGING SUCH EXPENSES TO BE GENUINE AND CORRECT IN THE ASSESSMENT ORDER P ASSED BY HIM, DISALLOWED 5% OF THE EXPENSES CLAIMED ON AN AD- HOC /ESTIMATED BASIS, ON THE ALLEGED GROUND OF LACK OF SUPPORTING EVIDENCES. 3.4. ON FURTHER APPEAL, THE LD. CIT(A) FURTHER UPHE LD THE CONTENTION OF THE AO AND CONFIRMED THE AFORESAID DISALLOWANCE. ITA NO.1950&19510/KOL/2010 M/S. EASTERN SUGAR & INDUSTRIES LTD. 23 3.5. IN VIEW OF THE ABOVE, IT IS CLEAR THAT THE LD. CIT(A) DID NOT PROVIDE ANY DISTINCT REASON FOR THE DISALLOWANCE. NEITHER HIS D ECISION WAS BASED ON ANY MATERIAL EVIDENCE TO JUSTIFY THE DISALLOWANCE. EVEN THE LD.CIT(A) HAS NOT DOUBTED THE GENUINENESS OF THE EXPENSE BUT HAS MERELY SUSTAINED DISALLOWANCE @ 5% OF THE EXPENSE ON AN AD HOC BASIS , WHICH PLEASE NOTE. 3.6. THE ASSESSEE HAS ALREADY EXPRESSED THE INABILI TY TO PRODUCE ALL THE BILLS & VOUCHERS DUE TO LACK OF MAINTENANCE OF OLD RECORDS OWING TO THE PROLONGED LABOUR DISPUTE GOING ON, WHICH FACT IS NO T DISPUTED. AGAIN, IT IS TO BE NOTED IN THIS REGARD THAT ACCOUNTS OF THE ASS ESSEE ARE DULY AUDITED BY A CHARTERED ACCOUNTANT AND AS SUCH, ALL EXPENDIT URES ARE ALREADY VOUCHED AND VERIFIED. THEREFORE, NO DISALLOWANCE CA N BE MADE ON ESTIMATE BASIS MERELY BASED ON SURMISES AND CONJECT URES. 3.7. IN SUPPORT OF THE ABOVE, RELIANCE IS PLACED ON THE FOLLOWING JUDICIAL DECISIONS: THE JUDGMENT OF THE HON'BLE ITAT, DELHI BENCH 'C' IN THE CASE OF ASSISTANT COMMISSIONER OF INCOME TAX VRS. GANPATI E NTERPRISES LTD., IT APPEAL NO. 6112 (DELHI) OF 2012 (COPY ENCLOSED AT P AGE NOS. 55-58 OF THE ADD!. PLB), WHEREBY THE TRIBUNAL UPHELD THE DELETIO N OF DISALLOWANCE BY THE LD. CIT(A). IT WAS HELD: 'ON THE PERUSAL OF THE PROFIT AND LOSS ACCOUNT, IT IS OBSERVED THAT THE ASSESSEE HAS DEBITED EXPENSES UNDER VARIOUS HEADS. ASSESSEE ALSO PRODUCED BILLS & VOUCHERS FOR VERIFICATION OF THE S AME. ON VERIFICATION, SOME OF THE EXPENSES WERE FOUND TO BE UNVERIFIABLE FOR WANT OF COMPLETE BILLS AND VOUCHERS. HENCE A LUMP SUM DISALLOWANCE O F RS. 5,00,000/- ON ESTIMATE BASIS IS MADE TO COVER UP ALL POSSIBLE LEA KAGES. ON APPEAL ID. CIT(A) HAS DELETED THIS DISALLOWANCE ON THE GROUND THAT ID. ASSESSING OFFICER HAS NOT PROPERLY EXAMINED THE BOO KS OF ACCOUNT AND NOT DEMONSTRATED AS TO HOW THE EXPENSES ARE NOT ADM ISSIBLE TO THE ASSESSEE. THEREFORE, IF WE WEIGH THE FINDING OF THE ASSESSING OFFICER EXTRACTED (SUPRA) VIS-A-VIS THE VIEW TAKEN BY THE ID. CIT(A) WHICH IS A HIGHER AUTHORITY IN THE PEDESTAL OF THE HIERARCHY, THE SCA LE WOULD TILT IN FAVOUR OF THE LD.. FIRST APPELLATE AUTHORITY, NO INTEREFERE I S CALLED FOR IN THE ORDER OF THE ID. CIT(A) ON THIS ISSUE, THE FIRST GROUND OF A PPEAL IS REJECTED. ' FURTHER, THE HON'BLE ITAT KOLKATA IN THE CASE OF JOINT COMMISSIONER OF INCOME TAX V. I.T.C LTD., REPORTED IN 299 ITR (A.T. ) 341, HELD: 'THAT WHILE DISALLOWING 10 PER CENT. OF EXPENDITURE , THE ASSESSING OFFICER HAD NOT BROUGHT ANY MATERIAL EVIDENCE ON RECORD TO JUSTIFY THE ITA NO.1950&19510/KOL/2010 M/S. EASTERN SUGAR & INDUSTRIES LTD. 24 DISALLOWANCE THAT SUCH EXPENDITURE HAD RESULTED IN BENEFIT TO A THIRD PARTY OR HAD NOT BEEN MADE BY THE ASSESSEE FOR ITS GENUIN E BUSINESS NEEDS. THE ASSESSEE HAD SUBMITTED THE DETAILS OF EXPENDITU RE RELATING TO SPONSORSHIP FOR ORGANIZING VARIOUS EVENTS FOR THE P ROMOTION OF DIFFERENT BRANDS OF CIGARETTES MANUFACTURED BY IT. THE ASSESS EE HAD SHOWN THE EXPENDITURE OF RS. 172.60 CRORES ON ACCOUNT OF ADVE RTISEMENT EXPENSES WHICH INCLUDED RS. 133 LAKHS AS SALES PROMOTION EXP ENSES. THE ASSESSEE-COMPANY HAD MADE AN EXPENDITURE ON THE SPO NSORSHIP OF VARIOUS EVENTS LIKE GOLF, POLO, FOOTBALL, CRICKET, RACING, BADMINTON, ETC. FOR THE PURPOSE OF ADVERTISEMENT OF ITS PRODUCT. THE DE PARTMENT HAD NOT DISPUTED THE IDENTICAL EXPENDITURE IN ANY OF THE PR EVIOUS YEAR AND THE AUDITORS HAD ALSO POINTED OUT THAT SUCH EXPENSES WE RE NOT RELATED OR INCIDENTAL TO THE BUSINESS NEEDS OF THE ASSESSEE. T HE ACTION OF THE ASSESSING OFFICER IN DISALLOWING 10 PER CENT. OF SU CH EXPENDITURE WITHOUT MATERIAL EVIDENCE ON RECORD WAS NOT JUSTIFIED.' 3.8. FURTHERMORE, RELIANCE FOR THE SAME CAN BE PLAC ED ON THE FOLLOWING JUDGMENTS OF THE HON'BLE SUPREME COURT OF INDIA: 1. DHIRAJLAL GIRDHARILAL V. CIT REPORTED IN 26 ITR 737 11. CIT V. DAULATRAM RAWATMULL REPORTED IN 87 ITR 3 49 111. DHAKESHWARI COTTON MILLS LTD. V. CIT REPORTED IN 26 ITR 775 3.9. IN THE BACKDROP OF THE ABOVE JUDGMENTS, THE AS SESSEE WOULD LIKE TO SUBMIT THAT ITS CASE HERE STANDS CLEARLY COVERED BY THE ABOVE MENTIONED DECISIONS. 3.10. AS SUCH, IT IS BEING HUMBLY PRAYED BEFORE YOU R HONOURS, THAT THE DISALLOWANCE OF 5% OF MISCELLANEOUS EXPENDITURE ON AN ADHOC BASIS, MAY KINDLY BE DELETED. 4. FINALLY, IT IS URGED MOST RESPECTFULLY THAT THE HON'BLE TRIBUNAL MAY BE PLEASED TO TAKE INTO CONSIDERATION THE AFORESAID SU BMISSIONS OF THE APPELLANT AND PASS APPROPRIATE ORDER ALLOWING DUE R ELIEF AS PRAYED FOR. 12. IN ADDITION TO THIS, LD. AR FOR THE ASSESSEE HA S RELIED THE FOLLOWING JUDGMENTS :- I) NORPLEX OAK INDIA, 198 TAXMAN 0470; CONCLUSION : ASSESSEE IS ENTITLED TO GET THE BENEF IT OF DEPRECIATION UNDER S.32 NOTWITHSTANDING THE FACT THAT THERE WAS NO OPERATION ITA NO.1950&19510/KOL/2010 M/S. EASTERN SUGAR & INDUSTRIES LTD. 25 CARRIED OUT AT THE FACTORY DURING THE RELEVANT PREV IOUS YEAR AND THE PLANT AND MACHINERY COULD NOT BE USED DURING THE AS SESSMENT YEAR DUE TO UNFAVOURABLE LAW AND ORDER SITUATION IN THE STATE OF JAMMU & KASHMIR. 13. ON THE OTHER HAND FOR THE REVENUE HAS PRIMARILY REITERATED THE STAND TAKEN BY THE AO, WHICH WE HAVE ALREADY NOTED IN OUR EARLIER PARA AND IS NOT BEING REPEATED FOR THE SAKE OF BREVITY. 14. HAVING HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD, WE ARE OF THE VIEW THAT THERE IS MERIT I N THE SUBMISSIONS OF THE ASSESSEE, AS THE PROPOSITIONS CANVASSED BY THE LD. AR FOR THE ASSESSEE ARE SUPPORTED BY THE FACTS NARRATED BY HIM. LD. AR HAS POINTED OUT THAT THE ASSESSEE IS ENTITLED TO GET THE BENEFIT FOR DEP RECIATION U/S.32 EVEN IF THERE WAS NO OPERATION AND NO MANUFACTURING ACTIVIT Y IN THE ASSESSEES FACTORY. THE CLAIM OF DEPRECIATION ON PLANT AND MAC HINERY SHOULD NOT BE DENIED BASED ON FACTS THAT THE PLANT AND MACHINERY COULD NOT BE USED BY THE ASSESSEE DURING THE PREVIOUS YEAR. 15. GROUNDS NO.2 & 3 RAISED BY THE ASSESSEE RELATE TO ADHOC AND ESTIMATED DISALLOWANCE MADE BY THE AO. LD. AR FOR T HE ASSESSEE HAS SUBMITTED THAT THE AO HAS MADE ADHOC AND ESTIMATED DISALLOWANCE OF RS.24,600/- @5% OF RS.4.92 LAKH ON ACCOUNT OF MISCE LLANEOUS EXPENSES. THE ADDITION MADE BY THE AO IS PURELY ON ASSUMPTION , SURMISES AND GUESS AND WITHOUT BRINGING ANY COGENT EVIDENCE ON R ECORD. LD. AR FOR THE ASSESSEE ALSO PURELY ON ASSUMPTIONS AND PRESUMPTIONS ON THE ALLEG ED GROUND THAT THE ASSESSEE WAS UNABLE TO PRODUCE ALL THE BILLS AND ITA NO.1950&19510/KOL/2010 M/S. EASTERN SUGAR & INDUSTRIES LTD. 26 VOUCHERS. THE ADHOC DISALLOWANCE MADE BY THE AO ON GUESS AND SURMISE WITHOUT REJECTING BOOKS OF ACCOUNT OF THE A SSESSEE IS NOT TENABLE. 15. ON THE OTHER HAND FOR THE REVENUE HAS PRIMARILY REITERATED THE STAND TAKEN BY THE AO, WHICH WE HAVE ALREADY NOTED IN OUR EARLIER PARA AND IS NOT BEING REPEATED FOR THE SAKE OF BREVITY. 16. HAVING HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD, WE ARE OF THE VIEW THAT THERE IS MERIT I N THE SUBMISSIONS OF THE ASSESSEE, AS THE PROPOSITIONS CANVASSED BY THE LD. AR FOR THE ASSESSEE ARE SUPPORTED BY THE FACTS NARRATED BY HIM. LD. AR HAS POINTED OUT THAT THE ADHOC DISALLOWANCE BASED ON ESTIMATE WITHOUT BR INGING ANY COGENT MATERIAL ON RECORD IS NOT TENABLE. THE AO HAS NOT R EJECTED THE BOOKS OF ACCOUNT OF THE ASSESSEE, THEREFORE, ADHOC ADDITION MADE BY THE AO NEEDS TO BE DELETED. ACCORDINGLY, WE DELETE THE ADD ITIONS. GROUNDS NO.2 & 3 ARE ALLOWED. 17. IN THE RESULT, APPEALS FILED BY THE ASSESSEE ON GRO UNDS NO.1,2 & 3 ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 15/02 /2017. SD/ - (N.V.VASUDEVAN) SD/ - (DR. A.L.SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER /KOLKATA ; $% DATED 15/02/2017 & ()* /PRAKASH MISHRA , . / PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT-M/S EASTERN SUGAR & INDUSTRIES LTD. 2. / THE RESPONDENT.-ACIT, CC-XI, KOLKATA 3. 4 ( ) / THE CIT(A), KOLKATA. ITA NO.1950&19510/KOL/2010 M/S. EASTERN SUGAR & INDUSTRIES LTD. 27 / BY ORDER, / ( ASSTT. REGISTRAR) & ' , / ITAT, KOLKATA 4. 4 / CIT 5. 56 7 8 , 8 , / DR, ITAT, KOLKATA 6. 7 9 / GUARD FILE. 5 //TRUE COPY//