DCIT, Circle - 3 Kolkata, Kolkata V. M/s. Shree Hanuman Sugar & Industries Ltd., Kolkata

ITA 2073/KOL/2010

• Counselvise Citation: 207323514 RSA 2010
• Duration Of Justice: 1 year(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-12-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 28-04-2011
• Assessment Year: 2002-2003
• Appeal Filed On: 18-11-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation; Difference of opinion; Change of opinion
• Section: 147; 143(3)

Judgement Text

, , , , B , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : KOLKATA [ . . . . , ,, , . . ! !! ! . , ] [BEFORE SHRI N. VIJAYA KUMARAN, J. M. & SHRI C. D. RAO, A.M.] $ $ $ $ / I.T.A NO.2073/KOL/2010 / // / ASSESSMENT YEAR : 2002-03 DY. COMMISSIONER OF INCOME TAX -VS.- M/S. SH REE HANUMAN SUGAR & INDUSTRIES LTD. CIRCLE-3, KOLKATA. KOLKATA [AAECS 0448M] [ + + + + /APPELLANT ] ]] ] [ -.+ -.+ -.+ -.+/ // / RESPONDENT ] ]] ] / 0 / 0 / 0 / 0 /C.O.NO.180/KOL/2010 $ $ $ $ / A/O ITA NO .2073 /KOL/2010 / // / ASSESSMENT YEAR : 2002-03 M/S. SHREE HANUMAN SUGAR & INDUSTRIES LTD. -VS.- DY. COMMISSIONER OF INCOME TAX KOLKATA [AAECS 0448M] KOLKAATA. [APPELLANT [CROSS OBJECTOR ] ]] ] + + + + / FOR THE DEPAARTMENT : SHRI A. K. PRAMANICK -.+ -.+ -.+ -.+ / FOR THE ASSESSEE : SHRI R. SALARPURIA 2 ! 2 ! 2 ! 2 ! /DATE OF HEARING : 28. 11. 2011 2 ! 2 ! 2 ! 2 ! /DATE OF PRONOUNCEMENT : 05.12.2011 /ORDER . . . . , PER N. VIJAYA KUMARAN, J. M. THIS APPEAL OF THE DEPARTMENT AND THE CROSS OBJECT ION OF THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF LD. CIT(A), CENTRAL-I, KOLKATA DATED 0 4.08.2010 FOR ASSESSMENT YEAR 2002-03. [ ITA NO.2073 & CO. 180/.KOL/2010 2 2. THE GROUND OF APPEAL TAKEN BY THE DEPARTMENT IS AS UNDER :- 1. LD.CITI.A) HAS ERRED ON FACTS AND IN LAW IN ANNU LLING THE ASSESSMENT ORDER U/S.147/143(3) OF THE I.T. ACT, 1961 FOR A.YR. 2002 -03 STATING THAT THE PRECONDITION FOR INVOKING THE PROVISO TO SECTION 14 7 WAS NOT SATISFIED WITHOUT CONSIDERING THE PROVISION OF EXPLANATION (1 ) BELOW THE SAID PROVISO AS THE EXCESS CLAIM OF DEPRECIATION WAS DISCOVERED WITH DUE DILIGENCE ON MINUTE SCRUTINY OF THE DETAILS FURNISHED BY THE ASS ESSEE. 3. GROUNDS OF CROSS OBJECTION OF THE ASSESSEE ARE A S UNDER :- 1. FOR THAT IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) WAS WHOLLY CORRECT AND JUSTIFIED IN CANCELLING THE RE-ASSESSMENT PROCEEDING U/S 147 OF THE LT ACT, 1961 INITIATED BY THE A.O FO R THE A.Y 2002-03 ON A MERE CHANGE OF OPINION BEYOND THE PRESCRIBED TIME L IMIT LAID DOWN IN THE ACT AS INVALID AND WITHOUT JURISDICTION IN VIEW OF THE FULL AND TRUE DISCLOSURE OF ALL MATERIAL FACTS IN THE RETURN NECESSARY FOR A SSESSMENT AND DUE CONSIDERATION OF THE ISSUE ALREADY MADE IN THE ORIG INAL ASSESSMENT FOR THAT YEAR AND CONSEQUENTLY ANNULLING THE ENTIRE ASSESSME NT ORDER U/S 147/143(3) DT. 05.12.2008 PASSED BY HIM FOR THE A.Y 2002-03. 2. WITHOUT PREJUDICE TO THE GROUND NO.1 ABOVE, IN CASE THE APPEAL OF THE DEPARTMENT IS ALLOWED BY REVERSING THE LD. CIT(A)S DECISION AND THE RE- ASSESSMENT PROCEEDING U/S 147 AS WELL AS THE ORDER U/S 147/143(3) ARE DECLARED VALID BY THE HONBLE TRIBUNAL, THE LD. CIT (A) MAY BE DIRECTED TO TAKE UP THE OTHER GROUNDS OF THE ASSESSEE S APPEAL I.E GROUND NOS. 5 & 6 FILED BEFORE THE LD. CIT(A) RELATING TO THE ISSUE O F DEPRECIATION BUT LEFT UNDECIDED BY HIM AS ACADEMIC BECAUSE OF ANNULLMENT OF THE WHOLE RE- ASSESSMENT ORDER. . 4. THE FACT RELEVANT ARE THAT FOR THIS ASSESSMENT Y EAR RELEVANT TO THE PREVIOUS YEAR ENDING WITH 31.03.2002 THE ASSESSEE-COMPANY FILED R ETURN OF INCOME ON 31.10.2002 DECLARING LOSS. BASED ON THAT 143(3) REGULAR ASSESS MENT WAS COMPLETED ON 29.03.2005. THEN THE ASSESSING OFFICER FOUND THAT THE CLAIM OF THE ASSESSEE ON DEPRECIATION WITH REGARD TO PLANT AND MACHINERY AT MOTIHARI FACTORY WAS WRON GLY ALLOWED. HENCE, THE ASSESSING OFFICER ADDED BACK THE EXCESS DEPRECIATION TO THE I NCOME OF THE ASSESSEE ON REASSESSMENT. 5. BEFORE LD. CIT(A) ASSESSEE CONTENDED THAT THE AT TEMPTED RE-OPENING OF THE ASSESSING OFFICER IS ON THE BASIS OF SAME SET OF FACTS WHICH WERE BEFORE HIM AND ON WHICH HE ALREADY FORMED AN OPINION AT THE TIME OF REGULAR ASSESSMENT ON 29. 03.2005. THERE IS NO OMISSION ON THE PART OF THE ASSESSEE TO DISCLOSE THE TRUE AND FULL DISCLOSURE O F MATERIALS NECESSARY FOR COMPLETION OF THE [ ITA NO.2073 & CO. 180/.KOL/2010 3 ASSESSMENT. HENCE, THE REOPENING IS BAD IS THE CONT ENTION. THE LD. CIT(A) ACCEPTED THAT AND SET ASIDE THE REASSESSMENT MADE UNDER SECTION 147 READ WITH SECTION 143(3). 6. ON THE OTHER HAND, DR CONTENDED THAT THE REOPENI NG IS VALID AND THERE IS CLEAR ESCAPEMENT OF TAXABLE INCOME WHICH WAS CLAIMED AS EXCESS DEPRECIA TION. DR RELIED THE GROUND BEFORE US AND OF THE ASSESSING OFFICERS ORDER. 7. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SAME SUBMISSION OBJECTING TO THE REOPENING. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD INCLUDING THE PRECEDENTS 9. THIS REOPENING WAS BEYOND FOUR YEARS. SECTION 14 7 FIRST PROVISO CLEARLY PUT AN EMBARGO ON THE ASSESSING OFFICER THAT NO ACTION SHALL BE TAKEN UNDER THIS SECTION AFTER THE EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR, UNLES S ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR SUCH ASSESSMENT YEAR BY REASON OF TH E FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ARE MATERIAL FACTS NECESSARY FOR HI S ASSESSMENT FOR THAT ASSESSMENT YEAR. 10. HERE IN THIS CASE, THE REASSESSMENT NOTICE WAS SLAPPED ON THE ASSESSEE TO DISALLOW THE EXCESS DEPRECIATION ALLOWED UNDER THE REGULAR ASSESSMENT U NDER SECTION 143(3) ON 29.03.2005. THAT DEPRECIATION WAS CONSIDERED AND THE ASSESSING OFFIC ER FOUND IN THE COURSE OF REGULAR ASSESSMENT AND HE WAS SATISFIED WITH THE VALIDITY OF THE ASSES SEES CLAIM AS PER THE DETAILS OF DEDUCTION UNDER WHICH IT WAS CLAIMED. FURTHER, THE ASSESSING OFFICE R IN THE REASONS RECORDED AS OBSERVED BY THE LD. CIT(A) THAT THE ASSESSING OFFICER HAS NOT STATED TH AT THE ESCAPEMENT OF INCOME IS BY REASON OF ASSESSEES FAILURE TO MAKE FULL AND TRUE DISCLOSURE OF ALL MATERIAL FACTS NECESSARY FOR ASSESSMENT. TH E DECISION OF THE HONBLE SUPREME COURT IN THE CASE O F CIT VS. KELVINATOR OF INDIA LTD. [2010] 320 ITR 561 (SC) AND THE CASE OF G.K.N. DRIVESHAFTS (IN DIA) LTD. VS. ITO AND OTHERS [2003] 259 ITR 19 (SC) ARE SQUARELY APPLICABLE TO THE FACTS OF THE CA SE. RESPECTFULLY, FOLLOWING THE DECISIONS OF HONBLE APEX COURT, WE CONFIRM THE ORDER OF THE LD. CIT(A) BY DISMISSING THE APPEAL OF THE REVENUE. 11. THE CROSS OBJECTION BY THE ASSESSEE ARE IN SUPP ORT OF THE FINDINGS OF THE LD. CIT(A). AS WE HAVE CONFIRMED THE FINDINGS OF LD. CIT(A) THE CROSS OBJECTION BECOMES INFRUCTUOUS AND AS SUCH [ ITA NO.2073 & CO. 180/.KOL/2010 4 DESERVED TO BE DISMISSED. 12. IN THE RESULT, THE REVENUES APPEAL AND THE ASS ESSEES CROSS OBJECTION ARE DISMISSED. 5 5 5 5 ! ! ! ! ORDER PRONOUNCED IN THE COURT ON 05.12.2011. SD/- SD/- [ . . ! !! ! . , ] [ . . . . , ,, , ] [ C. D. RAO ] [ N. VIJAYAKUMARAN ] ACCOUNTANT MEMBER JUDICIAL MEMBER D ATED : 05.12.2011. 2 - 9/ COPY OF THE ORDER FORWARDED TO: 1. + /APPELLANT : DY. COMMISSIONER OF INCOME TAX, CIRCL E-3, 8/2, ESPLANADE EAST, DWARLI HOU SE, 2 ND FLOOR, KOLKATA-700 069. 2 . -.+ / RESPONDENT : M/S. SHREE HANUMAN SUGAR & INDUSTRI ES LTD., 12, GOVT. PLACE (E), KOLKATA-70 0 069. 3. - / CIT, 4. ()/ CIT(A), KOLKATA. 5. -/ DR, KOLKATA BENCHES, KOLKATA [. -/ TRUE COPY] / BY ORDER, /ASSTT REGISTRAR [KKC CD E /SR.PS]