SYNGENTA INDIA LTD, PUNE V. ASST CIT RG 1(3)(1), MUMBAI

ITA 1982/MUM/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 5493 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-02-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: J
• Assessment Year: 2012-2013
• Appeal Filed On: 21-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CH ARUN KUMAR SINGH LD
• Assessee Lawyers: NITESH JOSHI LD
• Keywords: Depreciation; Revised return; Revenue expenditure; Reassessment proceedings
• Section: 43B; 143(3); 147

Judgement Text

ITA NO. 1982/MUM/2017 SYNGENTA INDIA LIMITED ASSESSMENT YEAR: 2012-13 1 IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI , , BEFORE HONBLE SHRI PAWAN SINGH, JM AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM ./ I.T.A. NO.1982/MUM/2017 ( / ASSESSMENT YEAR: 2012-13) M/S. SYNGENTA INDIA LTD., AMAR PARADIGM SR. NO. 110/113, BANER ROAD PUNE - 411 045 / VS. ASSISTANT COMMISSIONER OF INCOME TAX-RANGE- 1(3)(1) AAYKAR BHAWAN, M.K.ROAD MUMBAI 400 020 ./ ./PAN/GIR NO. AAECS-9424-P ( /APPELLANT ) : ( / RESPONDENT ) ASSESSEE BY : MR. NITESH JOSHI- LD. AR REVENUE BY : CH. ARUN KUMAR SINGH- LD.DR ' / DATE OF HEARING : 28/01/2019 ' / DATE OF PRONOUNCEMENT : 05/02/2019 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. AFORESAID APPEAL BY ASSESSEE FOR ASSESSMENT YEAR [AY] 2012-13 CONTEST THE FINAL ASSESSMENT ORDER DATED 30/01/2017 PASSED BY LD. ASSISTANT COMMISSIONER OF INCOME TAX-1(3)(1), MUMBA I [AO] U/S 143(3) READ WITH SECTION 144C(13) PURSUANT TO THE DIRECTIONS OF LD. DISPUTE ITA NO. 1982/MUM/2017 SYNGENTA INDIA LIMITED ASSESSMENT YEAR: 2012-13 2 RESOLUTION PANEL-2, MUMBAI [DRP] U/S 144C(5) ON FOLLOWING EFFECTIVE GROUNDS OF APPEAL:- 1. HAVING DETERMINED THE TOTAL INCOME PURSUANT TO THE LD. DISPUTE RESOLUTION PANEL DIRECTIONS AT RS. 281,94,06,590/- THE A.O ERRED IN HOLDING THAT THE ASSESSED INCOME BE LOWER THAN THE RETURNED INCOME AND ACCORDINGLY A SSESSED THE APPELLANT ON A TOTAL INCOME OF RS. 284,78,22,610. 2. BASED ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. ASSESSING OFFICER ERRED IN NOT GRANTING DEPRECIATION ON SOFTW ARE EXPENDITURE TREATED AS CAPITAL IN NATURE IN THE FINAL ASSESSMENT ORDER FOR A.Y 200 6-07. 3. BASED ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. ASSESSING OFFICER ERRED IN NOT GRANTING DEPRECIATION ON REPAI RS & MAINTENANCE EXPENDITURE TREATED AS CAPITAL IN NATURE IN THE FINAL ASSESSMEN T ORDER FOR ASSESSMENT YEAR 2007- 08. 4. BASED ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. ASSESSING OFFICER IN NOT GRANTING DEPRECIATION ON REPAIRS & M AINTENANCE EXPENDITURE TREATED AS CAPITAL IN NATURE IN THE FINAL ASSESSMENT ORDER FOR ASSESSMENT YEAR 2008-09. 5. BASED ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. ASSESSING OFFICER ERRED IN NOT GRANTING DEPRECIATION ON REPAI RS & MAINTENANCE EXPENDITURE TREATED AS CAPITAL IN NATURE IN THE FINAL ASSESSMEN T ORDER FOR ASSESSMENT YEAR 2010- 11. 2.1 FACTS IN BRIEF THAT THE ASSESSEE BEING RESIDENT CORPORATE ASSESSEE WAS STATED TO BE ENGAGED IN MANUFACTURING OF CHEMICALS DURING IMPUGNED AY. THE ORIGINAL RETURN OF INCOME FOR THE IMPUGNED AY WAS FILED BY THE ASSESSEE ON 30/11/2012 AT RS.284.78 CR ORES WHICH WAS REVISED TO SAME FIGURE ON 09/07/2013. THE RETURN WA S PICKED UP FOR SCRUTINY ASSESSMENT AND ACCORDINGLY, A DRAFT ASSESS MENT ORDER U/S 144C(1) DATED 23/03/2016 WAS PASSED BY LD. ASSISTANT COMMISSIONER OF INCOME TAX-CIRCLE-1(3)(1), MUMBAI [AO]. DURING ASSESSMENT PROCEEDINGS, THE ASSESSEE MADE ADDITIONAL CLAIM OF RS.436.32 LACS U/S 43B ON ACCOUNT OF DIFFERENCE IN SUPERANNUATION FUND WHICH WAS REJECTED FOLLOWING GOETZ INDIA LTD. VS. CIT [157 TAXMAN 1 SC] ON THE GROUND THAT NEW CLAIM COULD NOT BE ENTERTAINED EXCEPT BY WAY OF REVISED RETURN OF INCOME. ITA NO. 1982/MUM/2017 SYNGENTA INDIA LIMITED ASSESSMENT YEAR: 2012-13 3 2.2 AGGRIEVED, THE ASSESSEE RAISED OBJECTION BEFORE LD. DRP VIDE DIRECTIONS U/S 144C(5) DATED 23/12/2016 WHEREIN LD. DRP NOTED THAT THE AFORESAID PAYMENT REPRESENTED CONTRIBUTION TO TATA AIG SUPERANNUATION FUND AND CONTRIBUTION TO LIC AND THE PROOF OF THE P AYMENT WAS ALSO SUBMITTED BY THE ASSESSEE TO LD.AO. IT WAS ALSO NOT ED THAT SIMILAR ADDITIONAL CLAIM WAS ALLOWED BY DRP IN AY 2009-10 A ND THEREFORE, THE ASSESSEE WAS ENTITLED TO CLAIM THE SAME. ACCORDINGL Y, THE LD. AO WAS DIRECTED TO VERIFY THE ASSESSEES CLAIM & GRANT DED UCTION THEREOF U/S 43B. 2.3 THE LD. AO, AFTER VERIFYING THE PAYMENT DETAILS , WAS SATISFIED WITH THE ASSESSEES CLAIM U/S 43B. HOWEVER, NOTICING THA T THE ASSESSED INCOME OF RS.281.94 CRORES WAS FALLING BELOW THE RE TURNED INCOME OF RS.284.78 CRORES, LD. AO OPINED THAT THE RETURNED I NCOME WAS TO BE ADOPTED AS ASSESSED INCOME. AGGRIEVED, THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 3. THE LD. AUTHORIZED REPRESENTATIVE FOR ASSESSEE [ AR], DREW OUR ATTENTION TO THE FACT THAT ALTHOUGH THE CLAIM WAS A DMISSIBLE EVEN AS PER FINDINGS OF LOWER AUTHORITIES, THE DEDUCTION OF THE SAME HAS BEEN DENIED IN THE FINAL ANALYSIS. THE LD. AR SUBMITTED THAT AS SESSEES TRUE INCOME WAS TO BE COMPUTED NOTWITHSTANDING THE RETURNED INC OME FILED BY THE ASSESSEE. RELIANCE HAS BEEN PLACED ON THE FOLLOWING JUDICIAL PRONOUNCEMENTS: - NO. CASE LAW JUDICIAL AUTHORITY CITATION 1. BALMUKUND ACHARYA VS DCIT HONBLE BOMBAY HIGH CO URT 310 ITR 310 2. NIRMALA L.MEHTA VS CIT HONBLE BOMBAY HIGH COURT 269 ITR 1 3. CIT VS MILTON LAMINATES LTD. HONBLE GUJARAT HIG H COURT 218 TAXMAN 108 ITA NO. 1982/MUM/2017 SYNGENTA INDIA LIMITED ASSESSMENT YEAR: 2012-13 4 PER CONTRA, LD. CIT-DR SUBMITTED THAT THE ACTION OF LD. AO WAS JUSTIFIED IN TERMS OF FOLLOWING JUDICIAL PRONOUNCEMENTS: - 4. WE HAVE CAREFULLY HEARD THE RIVAL SUBMISSIONS AN D PERUSED RELEVANT MATERIAL ON RECORD INCLUDING JUDICIAL PRON OUNCEMENTS AS CITED BEFORE US. THE UNDISPUTED THAT EMERGES IS THAT THE ASSESSEE HAS MADE NEW CLAIM U/S 43B ON ACCOUNT OF CONTRIBUTION TO CERTAIN SUPERANNUATI ON FUNDS. THIS CLAIM HAS NOT BEEN MADE EITHER IN THE O RIGINAL RETURN OR REVISED RETURN FILED BY THE ASSESSEE BUT THE SAME H AS BEEN CLAIMED FOR THE FIRST-TIME DURING ASSESSMENT PROCEEDINGS. ADMIT TEDLY, LD. DRP AS WELL AS LD. AO CAME TO CONCLUSION THAT THE DEDUCTIO N OF THE SAME WAS ALLOWABLE TO THE ASSESSEE. HOWEVER, THE ONLY BASIS TO DENY THE SAME IS THE FACT THAT ASSESSED INCOME COULD NOT FALL BELOW RETURNED INCOME. THE SAME IN OUR CONSIDERED OPINION, IS NOT A SOUND BASI S TO DENY THE DEDUCTION TO THE ASSESSEE SINCE IN TERMS OF ARTICLE 265 OF THE CONSTITUTION OF INDIA, NO TAX IS TO BE LEVIED OR COLLECTED EXCEP T BY THE AUTHORITY OF LAW. THERE COULD BE NO ESTOPPEL AGAINST LAW. ACQUIESCENC E COULD NOT TAKE AWAY FROM A PARTY THE RELIEF THAT HE WAS ENTITLED T O WHERE THE TAX IS LEVIED OR COLLECTED WITHOUT THE AUTHORITY OF LAW. FURTHER, IT IS OBLIGATORY ON THE PART OF LD. AO TO APPLY HIS MIND TO THE FACTS DISCL OSED IN THE RETURN AND ASSESS THE ASSESSEE KEEPING IN MIND THE LAW HOLDING THE FIELD. IT IS TRITE LAW THAT TRUE INCOME WAS TO BE ASSESSED AND THE REV ENUE COULD NOT NO. CASE LAW JUDICIAL AUTHORITY CITATION 1. CIT VS JAIHIND CO-OPERATIVE HOUSING SOCIETY LTD. HONBLE BOMBAY HIGH COURT 214 TAXMAN 134 2. CHOICE AQUACULTURE P. LTD. VS ITO ITAT AHMEDABAD 100 ITD 143 3. CIT VS H.P.STATE FOREST CORP. LTD. HONBLE HIMAC HAL PRADESH HIGH COURT 320 ITR 54 ITA NO. 1982/MUM/2017 SYNGENTA INDIA LIMITED ASSESSMENT YEAR: 2012-13 5 DERIVE BENEFIT OUT OF ASSESSEES IGNORANCE OR PROCE DURAL DEFECTS. OUR VIEW IS FULLY SUPPORTED BY THE JUDGMENTS CITED BY L D. AR. SO FAR AS THE JUDGMENT RELIED UPON BY REVENUE IS CONCERNED, THE D ECISION IN CIT VS. JAIHIND CO-OPERATIVE HOUSING SOCIETY LTD. WAS RENDERED IN THE CONTEXT OF REASSESSMENT PROCEEDINGS U/S 147 OF THE INCOME TAX ACT. THE DECISION IN CIT VS HP STATE FOREST CORPORATION LTD WAS RENDERED WHERE THE TRIBUNAL, WHILE SETTING ASIDE THE ASSESSMENT U/S 14 4, DIRECTED LD. AO THAT FRESH ASSESSMENT SHOULD NOT BE AT AMOUNT ABOVE INCOME ALREADY ASSESSED U/S 144. THE DECISION IN CHOICE AQUACULTURE P. LTD. VS. ITO WAS RENDERED IN THE CONTEXT OF POWERS OF LD. AO WHI LE PROCESSING OF RETURN OF INCOME U/S 143(1). THEREFORE, THESE CASE LAWS COULD NOT HELP REVENUE IN ANY MANNER. THE COMPUTATION OF INCOME FO R SUBSEQUENT AY 2013-14 HAS BEEN PLACED IN RECORD TO SUBMIT THE DED UCTION OF THIS EXPENDITURE HAS NOT BEEN CLAIMED IN THAT YEAR. KEEP ING IN VIEW THE ABOVE CONSIDERATIONS, WE DIRECT LD. AO TO ALLOW THE DEDUCTION OF THE SAME AFTER VERIFYING THE FACT THAT THE AMOUNT OF RS .10.94 CRORES CLAIMED U/S 43B IN AY 2013-14 DO NOT INCLUDE THE IMPUGNED A MOUNT OF RS.4.36 CRORES. THIS GROUND STAND ALLOWED IN TERMS OF OUR A BOVE ORDER. 5. IN REMAINING GROUNDS VIZ. 2 TO 5, THE ASSESSEE I S SEEKING DIRECTIONS TO LOWER AUTHORITY TO GRANT CONSEQUENTIAL DEDUCTION S / ALLOWANCES WHICH ARE SPRINGING FROM ORDERS OF EARLIER AYS. IT HAS BE EN SUBMITTED THAT THE ASSESSEE CLAIMED CERTAIN SOFTWARE EXPENDITURE AS REVENUE EXPENDITURE IN AY 2006-07 WHICH WERE ULTIMATELY HELD TO BE CAPI TAL IN NATURE AND ACCORDINGLY, THE ASSESSEE WAS ENTITLED FOR DEPRECIA TION AGAINST THE SAME. SIMILAR IS THE POSITION WITH RESPECT TO REPAIRS & MAINTENANCE EXPENDITURE FOR AYS 2007-08, 2009-09 & 2010-11. THE FINAL ASSESSMENT ITA NO. 1982/MUM/2017 SYNGENTA INDIA LIMITED ASSESSMENT YEAR: 2012-13 6 ORDERS FOR AY 2010-11 & 2011-12 HAS BEEN PLACED ON RECORD TO DEMONSTRATE THAT THE SAME ARE CONSEQUENTIAL IN NATU RE AND HAS ALREADY BEEN ALLOWED IN THOSE YEARS. IT HAS ALSO BEEN SUBMI TTED THAT ALTHOUGH THE ASSESSEE MADE THE CLAIM IN THIS RESPECT BEFORE LD. AO VIDE LETTER DATED 04/02/2016, HOWEVER, THE SAME HAS NOT BEEN GR ANTED. KEEPING IN VIEW THE AFORESAID SUBMISSIONS, LD. AO IS DIRECTED TO VERIFY THE ASSESSEES CLAIM IN THIS RESPECT AND ALLOW THE DEPR ECIATION AS PER LAW UNDER BOTH THESE HEADS. ALL THESE GROUNDS STAND ALL OWED FOR STATISTICAL PURPOSES. 6. THE ASSESSEES APPEAL STANDS ALLOWED IN TERMS OF OUR ABOVE ORDER. ORDER PRONOUNCED IN THE OPEN COURT ON 05 TH FEBRUARY, 2019. SD/- SD/- (PAWAN SINGH) (MA NOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 05.02.2019 PS / K. RAVI KUMAR / COPY OF THE ORDER FORWARDED TO : 1. ! / THE APPELLANT 2. '# ! / THE RESPONDENT 3. $$% ( ) / THE CIT(A) 4. $$% / CIT CONCERNED 5. & ''() , $) , / DR, ITAT, MUMBAI 6. ' +, / GUARD FILE / BY ORDER, / % (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.