The ACIT, Central Circle,1, Surat V. Khemani Distilleries Pvt. Ltd., Daman

ITA 2112/AHD/2009

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 9107 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-09-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2001-2002
• Appeal Filed On: 03-07-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S N SOPARKAR AR SHRI S
• Keywords: Depreciation; Opportunity of being heard; Scheme of amalgamation; Documents seized; Set aside
• Section: 153A; 32; 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH A BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER AND SHRI D.C.AGRAWAL, ACCOUNTANT MEMBER DATE OF HEARING : 03/09/09 DRAFTED ON: 09/0 9/09 APPEAL(S) BY SL. NOS. ITA NOS ASSESSMENT YEAR(S) APPELLANT RESPONDENT 1. 2112/AHD/2009 2001-02 THE ACIT CENT.CIR-1 SURAT M/S.KHEMANI DISTILLERIES (P) LTD. KACHIGAM ROAD RINGANWADA DAMAN PAN : AAACK 9738 N 2. 2113/AHD/2009 2002-03 -DO- -DO- 3. 2114/AHD/2009 2003-04 -DO- -DO- 4. 2115/AHD/2009 2004-05 -DO- -DO- 5. 2116/AHD/2009 2005-06 -DO- -DO- 6. 2117/AHD/2009 2006-07 -DO- -DO- 7. 2118/AHD/2009 2007-08 -DO- -DO- ASSESSEE BY : SHRI S.N.SOPARKAR, AR REVENUE BY : SHRI S.S. PANWAR, CIT-DR O R D E R PER BENCH : THESE SEVEN APPEALS FILED BY THE REVENUE ARE AGAI NST THE SEPARATE ORDERS OF THE LEARNED CIT(APPEALS)-II, AHM EDABAD DATED 20/03/2009 ON THE COMMON ISSUES FOR ALL THESE ASSES SMENT YEARS 2001-02 TO 2007-08. 2. THE COMMON GROUNDS RAISED BY THE REVENUE ARE AS UNDER:- ITA NOS.2112 TO 2118/AHD/2009 THE ACIT VS. M/S.KHEMANI DISTILLERIES (P) LTD. ASST.YEARS 2001-02 TO 2007-08 - 2 - (FROM ITA NO.2112/AHD/2009 FOR ASSESSMENT YEAR 20 01-02) 1. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS TO CANC EL THE ASSESSMENT ON ADDITIONAL GROUND TAKEN BY THE ASSESS EE THAT ALL THE ADDITIONS WERE SUBJECT MATTER OF ORIGINAL A SSESSMENT PROCEEDINGS WHICH WERE SUBJECT MATTER OF APPELLATE PROCEEDINGS BEFORE THE CIT(A) AND ITAT, THE SAME CA NNOT BE RE-AGITATED BY THE ASSESSING OFFICER IN AN ACTIO N U/S.153A OF THE I.T. ACT, 1961. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE MADE BY THE AO AMOUNTING TO RS.19,61,690/-, ON ACCOUNT OF CLAI M OF DEPRECIATION. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF T HE A.O. 4. IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE CIT( A) BE SET ASIDE AND THAT OF THE A. O. BE RESTORED TO THE ABOV E EXTENT. 3. HOWEVER, THE FIGURE OF DEPRECIATION MENTIONED I N GROUND NO.2 VARIES IN DIFFERENT ASSESSMENT YEARS, WHICH ARE AS UNDER:- SL.NO(S) ASSESSMENT YEAR(S) AMOUNT (RS.) OF DEPRECIATION INVOLVED 1. 2001-02 19,61,690 2. 2002-03 71,70,982 3. 2003-04 11,84,363 4. 2004-05 12,43,485 5. 2005-06 10,34,573 6. 2006-07 7,14,037 7. 2007-08 7,14,037 ITA NOS.2112 TO 2118/AHD/2009 THE ACIT VS. M/S.KHEMANI DISTILLERIES (P) LTD. ASST.YEARS 2001-02 TO 2007-08 - 3 - 4. FIRST, WE TAKE UP THE REVENUES APPEAL IN ITA NO.2112/AHD/2009 FOR ASSESSMENT YEAR 2001-02. 5. THE BRIEF FACTS OF THE CASE ARE THAT A SEARCH WA S CARRIED OUT U/S.132 OF THE I.T. ACT, 1961 AT THE BUSINESS AS WE LL AS RESIDENTIAL PREMISES OF THE KHEMANI GROUP AT DAMAN ON 23/01/200 7. THIS INCLUDED M/S.KHEMANI DISTILLERIES PVT.LTD. AGAINST WHOM PROCEEDINGS U/S.153A OF THE I.T. ACT, 1961 WERE INI TIATED IN PURSUANCE TO DOCUMENTS SEIZED IN THE SEARCH. THE A SSESSEE HAD FILED ITS ORIGINAL RETURN ON 30/10/2001 ON A TOTAL INCOME OF RS.7,43,34,034/-. IN RESPONSE TO NOTICE U/S.153A O F THE I.T. ACT, 1961, THE SAME INCOME WAS DECLARED WITHOUT DECLARIN G ANY ADDITIONAL INCOME. IN THE PROCEEDINGS ARISING FROM ORIGINAL RETURN, THE ASSESSMENT WAS COMPLETED ON AN INCOME OF RS.7,67, 92,980/-. IN THE SAID ASSESSMENT, THE ASSESSING OFFICER HAS MADE VARIOUS ADDITIONS. ONE OF THE ISSUES IN RESPECT OF DEPRE CIATION WAS CONSIDERED IN THE ORIGINAL ASSESSMENT. THE ASSESSI NG OFFICER HAD NOTED THAT THE ASSESSEE HAD NOT CLAIMED ANY DEPRECI ATION ON ITS ASSETS TILL 2000-01. HE CONSIDERED THE OPENING WRITTEN DO WN VALUE (IN ITA NOS.2112 TO 2118/AHD/2009 THE ACIT VS. M/S.KHEMANI DISTILLERIES (P) LTD. ASST.YEARS 2001-02 TO 2007-08 - 4 - SHORT WDV) OF ASSETS, AS IN THE ASSESSMENT YEAR 1 995-96, ALLOWED NOTIONAL DEPRECIATION FOR SUBSEQUENT YEARS AND WOR KED OUT WDV AT THE END OF ASSESSMENT YEAR 2000-01. THE ASSESSING OFFICER CALCULATED DEPRECIATION ON THIS WDV, SO WORKED OUT NOTIONALLY BY HIM AND ALLOWED DEPRECIATION ONLY TO THE EXTENT OF RS.1,05,71,414/- AS AGAINST CLAIM OF RS.1,71,12,409/- ON THE ORIG INAL VALUE PLUS ADDITION BUT WITHOUT CONSIDERING NOTIONAL DEPRECIAT ION AFTER INCLUDING NEW ADDITION OF RS.5,00,42,986/-. THE DEPRECIATION ON THE OLD ASSETS WAS WORKED OUT BY THE ASSESSEE AT RS.1,25,33 ,104/- BY TAKING WDV WITHOUT REDUCING THEREFROM ANY NOTIONAL DEPRECI ATION WHICH IN REALITY WAS NOT CLAIMED BY IT. THE ASSESSING OFFIC ER, ON THE OTHER HAND, CONSIDERED SUCH NOTIONAL DEPRECIATION AND WO RKED OUT THE WDV AND CALCULATED DEPRECIATION THEREON AND, THUS, WORKED OUT DIFFERENCE AT RS.19,61,690/- (RS.1,25,33,104 RS. 1,05,71,414). THE ASSESSING OFFICER ACCORDINGLY DISALLOWED THIS DEPRE CIATION AND ADDED BACK THE SAME TO THE INCOME OF THE ASSESSEE. THIS ORDER IN ORIGINAL PROCEEDINGS WAS CHALLENGED IN APPEAL. NOW IN THE P ROCEEDINGS U/S.153A OF THE I.T. ACT, 1961, THE ASSESSING OFFIC ER, AFTER GIVING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE, REPEATE D THE SAME ADDITION ITA NOS.2112 TO 2118/AHD/2009 THE ACIT VS. M/S.KHEMANI DISTILLERIES (P) LTD. ASST.YEARS 2001-02 TO 2007-08 - 5 - ON THE SAME GROUND IN THE ORDER PASSED U/S.153A OF THE I.T. ACT, 1961. THE ASSESSMENT ORDER IN ORIGINAL ASSESSMEN T WAS PASSED ON 25/02/2004. THE MATTER RELATING TO ADOPTING NOTIO NAL WDV AS ON 31/03/2000 AND REDUCING THEREFROM THE DEPRECIATION , I.E. NOT ADOPTING ACTUAL WDV WITHOUT CONSIDERING DEPRECIATI ON NOT CLAIMED, TRAVELED TO THE ITAT AHMEDABAD BENCH D WHICH V IDE ITS ORDER DATED 16/01/2009 (IN ITA NO.3385/AHD/2004) PASSED F OR ASSESSMENT YEAR 2001-02 HELD THAT FOR WORKING OUT WDV, ONLY TH E ACTUAL DEPRECIATION ALLOWED SHOULD BE REDUCED. IF THE DE PRECIATION IS NOT CLAIMED, THEN IT CANNOT BE REDUCED TO WORK OUT THE WDV AND THEN ALLOW THE DEPRECIATION THEREON. IN THIS REGARD, W E REFER TO PARAGRAPH NOS.10 & 11 OF THE SAID ORDER OF THE TRIBUNAL AS UN DER:- 10. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSE D THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIAL AVAILABLE ON RECORD. IN THE INSTANT CASE, IT IS NOT IN DISPUTE THAT THE ASSESSE E NEITHER HAS CLAIMED NOR WAS ALLOWED DEPRECIATION IN RESPECT OF FIXED ASSETS USED IN ITS INDUSTRIAL UNIT. DURING THE YEAR UNDER CONSIDERATION, FOR ALLOWING DEPRECIATION THE ASSESSING OFFICER DEDUCTE D THE VALUE OF THE DEPRECIATION WHICH OUGHT TO HAVE BEEN CLAIMED BY TH E ASSESSEE IN EARLIER YEARS AND WHICH OUGHT TO HAVE BEEN ALLOWED TO THE ASSESSEE BY THE DEPARTMENT IN THE EARLIER YEARS. THUS, THE D ISPUTE BEFORE US RAISED ON DETERMINING OF THE WRITTEN DOWN VALUE OF THE YEAR UNDER CONSIDERATION WITH REFERENCE TO WHICH DEPRECIATION U/S 32 OF THE ACT IS TO BE CALCULATED. WE FIND THAT THE WRITTEN DOWN VALUE HAS BEEN DEFINED IN SECTION 43(6) OF THE ACT WHICH READS AS UNDER:- 6) WRITTEN DOWN VALUE MEANS ITA NOS.2112 TO 2118/AHD/2009 THE ACIT VS. M/S.KHEMANI DISTILLERIES (P) LTD. ASST.YEARS 2001-02 TO 2007-08 - 6 - (A) IN THE CASE OF ASSETS ACQUIRED IN THE PREVIOUS YEAR, THE ACTUAL COST TO THE ASSESSEE; (B) IN THE CASE OF ASSETS ACQUIRED BEFORE THE PREV IOUS YEAR, THE ACTUAL COST TO THE ASSESSEE LESS ALL DEPR ECIATION ACTUALLY ALLOWED TO HIM UNDER THIS ACT, OR UNDER TH E INDIAN INCOME-TAX ACT, 1922 (11 OF 1922), OR ANY ACT REPEA LED BY THAT ACT, OR UNDER ANY EXECUTIVE ORDERS ISSUED WHEN THE INDIAN INCOME-TAX ACT, 1886 (2 OF 1886), WAS IN FOR CE: [ PROVIDED THAT IN DETERMINING THE WRITTEN DOWN VALUE IN RESPECT OF BUILDINGS, MACHINERY OR PLANT FOR THE PU RPOSES OF CLAUSE (II) OF SUB-SECTION (1) OF SECTION 32, DEPR ECIATION ACTUALLY ALLOWED SHALL NOT INCLUDE DEPRECIATION AL LOWED UNDER SUB-CLAUSES (A), (B) AND (C) OF CLAUSE (VI) O F SUB- SECTION (2) OF SECTION 10 OF THE INDIAN INCOME-TAX ACT, 1922 (11 OF 1922), WHERE SUCH DEPRECIATION WAS NOT DEDUC TIBLE IN DETERMINING THE WRITTEN DOWN VALUE FOR THE PURPOSES OF THE SAID CLAUSE (VI);] [(C) IN THE CASE OF ANY BLOCK OF ASSETS, (I) IN RESPECT OF ANY PREVIOUS YEAR RELEVANT TO TH E ASSESSMENT YEAR COMMENCING ON THE 1ST DAY OF APRIL, 1988, THE AGGREGATE OF THE WRITTEN DOWN VALUES OF A LL THE ASSETS FALLING WITHIN THAT BLOCK OF ASSETS AT T HE BEGINNING OF THE PREVIOUS YEAR AND ADJUSTED, (A) BY THE INCREASE BY THE ACTUAL COST OF ANY ASSET FALLING WITHIN THAT BLOCK, ACQUIRED DURING TH E PREVIOUS YEAR; (B) BY THE REDUCTION OF THE MONEYS PAYABLE IN RESPECT OF ANY ASSET FALLING WITHIN THAT BLOCK, WHICH IS SOLD OR DISCARDED OR DEMOLISHED OR DESTROYED DURING THAT PREVIOUS YEAR TOGETHER WITH THE AMOUNT OF THE SCRAP VALUE, IF ANY, SO, HOWEVER, THAT THE AMOUNT OF SUCH REDUCTION DOES NOT EXCEED THE WRITTEN DOWN VALUE AS SO INCREASED; AND (C) IN THE CASE OF A SLUMP SALE, DECREASE BY THE ACTUAL COST OF THE ASSET FALLING WITHIN THAT BLOCK AS REDUCED (A) BY THE AMOUNT OF DEPRECIATION ACTUALLY ALLOWED TO HIM UNDER THIS ACT OR UNDER THE CORRESPONDING PROVISIONS OF THE INDIAN INCOME-TAX ACT, 1922 (11 OF 1922) IN RESPECT OF ANY PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR COMMENCING BEFORE THE 1ST DAY OF APRIL, 1988; AND ITA NOS.2112 TO 2118/AHD/2009 THE ACIT VS. M/S.KHEMANI DISTILLERIES (P) LTD. ASST.YEARS 2001-02 TO 2007-08 - 7 - (B) BY THE AMOUNT OF DEPRECIATION THAT WOULD HAVE BEEN ALLOWABLE TO THE ASSESSEE FOR ANY ASSESSMENT YEAR COMMENCING ON OR AFTER THE 1ST DAY OF APRIL, 1988 AS IF THE ASSET WAS THE ONLY ASSET IN THE RELEVANT BLOCK OF ASSETS, SO, HOWEVER, THAT THE AMOUNT OF SUCH DECREASE DOES NOT EXCEED THE WRITTEN DOWN VALUE;] (II) IN RESPECT OF ANY PREVIOUS YEAR RELEVANT TO T HE ASSESSMENT YEAR COMMENCING ON OR AFTER THE 1ST DAY OF APRIL, 1989, THE WRITTEN DOWN VALUE OF THAT BLOCK O F ASSETS IN THE IMMEDIATELY PRECEDING PREVIOUS YEAR A S REDUCED BY THE DEPRECIATION ACTUALLY ALLOWED IN RES PECT OF THAT BLOCK OF ASSETS IN RELATION TO THE SAID PRE CEDING PREVIOUS YEAR AND AS FURTHER ADJUSTED BY THE INCREA SE OR THE REDUCTION REFERRED TO IN ITEM (I).] EXPLANATION 1.WHEN IN A CASE OF SUCCESSION IN BUS INESS OR PROFESSION, AN ASSESSMENT IS MADE ON THE SUCCESSOR UNDER SUB- SECTION (2) OF SECTION 170 THE WRITTEN DOWN VALUE OF ANY ASSET OR ANY BLOCK OF ASSETS] SHALL BE THE AMOUNT WHICH W OULD HAVE BEEN TAKEN AS ITS WRITTEN DOWN VALUE IF THE ASSESSM ENT HAD BEEN MADE DIRECTLY ON THE PERSON SUCCEEDED TO. EXPLANATION 2.WHERE IN ANY PREVIOUS YEAR, ANY BLOC K OF ASSETS IS TRANSFERRED, (A) BY A HOLDING COMPANY TO ITS SUBSIDIARY COMPANY OR BY A SUBSIDIARY COMPANY TO ITS HOLDING COMPANY AND THE CONDITIONS OF CLAUSE (IV) OR, AS THE CASE MAY BE, O F CLAUSE (V) OF SECTION 47 ARE SATISFIED; OR (B) BY THE AMALGAMATING COMPANY TO THE AMALGAMATED COMPANY IN A SCHEME OF AMALGAMATION, AND THE AMALGAMATED COMPANY IS AN INDIAN COMPANY, THEN, NOTWITHSTANDING ANYTHING CONTAINED IN CLAUSE (1), T HE ACTUAL COST OF THE BLOCK OF ASSETS IN THE CASE OF T HE TRANSFEREE-COMPANY OR THE AMALGAMATED COMPANY, AS T HE CASE MAY BE, SHALL BE THE WRITTEN DOWN VALUE OF THE BLOCK OF ASSETS AS IN THE CASE OF THE TRANSFEROR-COMPANY OR THE AMALGAMATING COMPANY FOR THE IMMEDIATELY PRECEDING PREVIOUS YEAR AS REDUCED BY THE AMOUNT OF DEPRECIAT ION ACTUALLY ALLOWED IN RELATION TO THE SAID PRECEDING PREVIOUS YEAR.] [EXPLANATION 2A.WHERE IN ANY PREVIOUS YEAR, ANY A SSET FORMING PART OF A BLOCK OF ASSETS IS TRANSFERRED BY A DEMERGED COMPANY TO THE RESULTING COMPANY, THEN, NOTWITHSTAN DING ANYTHING CONTAINED IN CLAUSE (1), THE WRITTEN DOWN VALUE OF THE ITA NOS.2112 TO 2118/AHD/2009 THE ACIT VS. M/S.KHEMANI DISTILLERIES (P) LTD. ASST.YEARS 2001-02 TO 2007-08 - 8 - BLOCK OF ASSETS OF THE DEMERGED COMPANY FOR THE IMM EDIATELY PRECEDING PREVIOUS YEAR SHALL BE REDUCED BY THE [WR ITTEN DOWN VALUE OF THE ASSETS] TRANSFERRED TO THE RESULTING C OMPANY PURSUANT TO THE DEMERGER. EXPLANATION 2B.WHERE IN A PREVIOUS YEAR, ANY ASSE T FORMING PART OF A BLOCK OF ASSETS IS TRANSFERRED BY A DEMER GED COMPANY TO THE RESULTING COMPANY, THEN, NOTWITHSTANDING ANY THING CONTAINED IN CLAUSE (1), THE WRITTEN DOWN VALUE OF THE BLOCK OF ASSETS IN THE CASE OF THE RESULTING COMPANY SHALL B E THE [WRITTEN DOWN VALUE OF THE TRANSFERRED ASSETS [***] OF THE D EMERGED COMPANY IMMEDIATELY BEFORE THE DEMERGER. EXPLANATION 3.ANY ALLOWANCE IN RESPECT OF ANY DEPR ECIATION CARRIED FORWARD UNDER SUB-SECTION (2) OF SECTION 32 SHALL BE DEEMED TO BE DEPRECIATION ACTUALLY ALLOWED. [EXPLANATION 4.FOR THE PURPOSES OF THIS CLAUSE, T HE EXPRESSIONS MONEYS PAYABLE AND SOLD SHALL HAVE THE SAME MEANINGS AS IN THE EXPLANATION BELOW SUB-SECTION (4 ) OF SECTION 41 . [EXPLANATION 5.WHERE IN A PREVIOUS YEAR, ANY ASSET FORMING PART OF A BLOCK OF ASSETS IS TRANSFERRED BY A RECOG NISED STOCK EXCHANGE IN INDIA TO A COMPANY UNDER A SCHEME FOR CORPORATISATION APPROVED BY THE SECURITIES AND EXCH ANGE BOARD OF INDIA ESTABLISHED UNDER SECTION 3 OF THE S ECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992 (15 OF 1992), THE WRITTEN DOWN VALUE OF THE BLOCK OF ASSETS IN THE CASE OF SU CH COMPANY SHALL BE THE WRITTEN DOWN VALUE OF THE TRANSFERRED ASSETS IMMEDIATELY BEFORE SUCH TRANSFER.] 11. A PERUSAL OF THE ABOVE PROVISIONS SHOWS THAT T HE WDV IN RESPECT OF WHICH DEPRECIATION IS TO BE CALCULATED IS THE ACTUA L COST OF THE ASSET TO THE ASSESSEE AS REDUCED BY THE AMOUNT OF THE DEPREC IATION ACTUALLY ALLOWED TO THE ASSESSEE. NOW IN THE INSTANT CASE, I T IS NOT IN DISPUTE THAT IN THE EARLIER YEARS, NO DEPRECIATION WAS ALLOWED T O THE ASSESSEE IN RESPECT OF THE FIXED ASSETS IN QUESTION. THE REVENU E COULD NOT BRING ON RECORD ANY MATERIAL BEFORE US TO SHOW THAT THOUGH T HE DEPRECIATION WAS NOT CLAIMED BY THE ASSESSEE BUT IN FACT SUCH DEPREC IATION WAS ALLOWED BY THE DEPARTMENT AS DEDUCTION TO THE ASSESSEE IN T HE ASSESSMENT MADE IN RESPECT OF THE INCOME OF THE ASSESSEE. IN OUR CO NSIDERED OPINION, IT IS NOT OPEN TO THE REVENUE TO DEDUCT ANY AMOUNT FROM T HE COST OF THE ASSET TO DETERMINE THE WDV ON THE GROUND THAT SUCH AMOUNT SHOULD HAVE BEEN CLAIMED BY THE ASSESSEE AS DEPRECIATION IN EAR LIER YEAR. IN OUR CONSIDERED VIEW, WDV CAN BE ASCERTAINED ONLY BY RED UCING THE ACTUAL DEPRECIATION ALLOWED TO THE ASSESSEE IN AN ASSESSME NT AND NOT THE ITA NOS.2112 TO 2118/AHD/2009 THE ACIT VS. M/S.KHEMANI DISTILLERIES (P) LTD. ASST.YEARS 2001-02 TO 2007-08 - 9 - AMOUNT WHICH OUGHT TO HAVE BEEN ALLOWED TO THE ASSE SSEE. IT IS THE ACTUAL DEPRECIATION ALLOWED TO THE ASSESSEE WHICH O NLY CAN BE REDUCED FOR ASCERTAINING THE WDV AND NOT THE AMOUNT WHICH I S NOTIONALLY ALLOWED TO THE ASSESSEE. THUS, IN THE ABSENCE OF AN Y MATERIAL BROUGHT BEFORE US TO SHOW THAT ANY REMEDIAL MEASURE WAS TAK EN BY THE REVENUE IN THE EARLIER ASSESSMENT YEARS TO ACTUALLY ALLOW T HE DEPRECIATION TO THE ASSESSEE IN THE YEAR IN WHICH THE ASSESSEE HAS HIMS ELF NOT CLAIMED SUCH DEPRECIATION, IN OUR CONSIDERED VIEW, THE NOTIONAL AMOUNT CANNOT BE REDUCED TO ASCERTAIN THE WDV AS PER THE PROVISIONS OF SECTION 43(6) OF THE ACT. WE, THEREFORE, SET ASIDE THE ORDERS OF THE LOWER AUTHORITIES AND ALLOW THE DEPRECIATION OF RS.1,25,33,104/- AS CLAIM ED BY THE ASSESSEE AS AGAINST THE DEPRECIATION OF RS.1,05,71,414/- ALL OWED TO THE ASSESSEE. THUS, THIS GROUND OF APPEAL IS ALLOWED. 6. ORDER U/S.153A OF THE I.T. ACT, 1961 WAS CHALLEN GED BEFORE THE LEARNED CIT(APPEALS) VIDE HIS IMPUGNED ORDER DATED 20/03/2009. HE ALLOWED THE CLAIM OF THE ASSESSEE BY CANCELLING THE ASSESSMENT U/S.153A OF THE I.T. ACT, 1961. THEREFORE, THE IS SUE OF DEPRECIATION WAS ALSO CONSIDERED AS DECIDED BY IMPLICATION IN F AVOUR OF THE ASSESSEE BY THE LEARNED CIT(APPEALS). IN THIS REG ARD, WE REFER TO PARAGRAPH NOS.4.1, 4.2 & 5 FROM THE ORDER OF THE LE ARNED CIT(APPEALS) WHICH IS CHALLENGED BEFORE US. 4.1 THE APPELLANT HAS SUBMITTED THAT HE HAS TAKEN ADDITIONAL GROUNDS OF APPEAL. IN SUPPORT OF THE CONTENTIONS RA ISED IN THESE ADDITIONAL GROUNDS, THE APPELLANT RELIED ON THE DEC ISION OF HON'BLE ITAT, AHMEDABAD BENCH IN THE CASE OF DCIT VS MEGHMA NI INDUSTRIES LTD. ITA. NOS.3400,3401 & 3402/AHD/2008 DTD. 16.01.2003 AND MEGHMANI ORGANICS LTD. ITA! NOS.2938 TO ITA NOS.2112 TO 2118/AHD/2009 THE ACIT VS. M/S.KHEMANI DISTILLERIES (P) LTD. ASST.YEARS 2001-02 TO 2007-08 - 10 - 2942/AHD/2008 DTD. 16.01.2009. AS PER THESE DECISIO NS, THE ASSESSMENT WHICH WAS SUBJECT MATTER OF APPELLATE PR OCEEDINGS IN THE ORIGINAL ASSESSMENT PROCEEDINGS, CANNOT BE RE-A GITATED BY THE ASSESSING OFFICER IN AN ACTION U/S.153A OF THE I.T. ACT WHEN NO MATERIAL HAS BEEN FOUND DURING THE SEARCH IN RELATI ON TO THESE OLD ISSUES, HENCE, THE ASSESSMENT FRAMED U/S.153A OF TH E ACT WAS CANCELLED BY THE ITAT IN THESE CASES. THE HON'BLE I TAT FURTHER OBSERVED THAT ONLY THE PENDING ASSESSMENT AS .ON TH E DATE OF SEARCH SHALL ABATE AND NOT THE COMPLETED ASSESSMENTS. 4.2 THE APPELLANT FURTHER SUBMITTED THAT ALL TH E ADDITIONS WERE MADE IN THE ORIGINAL ASSESSMENT PROCEEDINGS AND THE SAME WERE DELETED BY THE CIT(A) AND THE ITAT HENCE, THE .SAME CANNOT BE ADDED AGAIN AND CANNOT BE THE SUBJECT MATTER OF THE ASSESSMENT. U/S.153A OF THE I.T.ACT. THE APPELLANT SUBMITTED TH AT ALL THE ADDITIONS WERE DELETED BY THE ITAT AND THE FACTS BE ING SAME, ON MERIT ALSO, THE ADDITIONS SHOULD BE DELETED AS ALL THE ISSUES ARE COVERED IN ITS FAVOUR BY THE APPELLATE AUTHORITIES I.E. THE CIT(A) & THE !TAT. 5. I HAVE CONSIDERED THE FACTS AND THE SUBMISSIO NS. I AGREE WITH THE APPELLANT'S VIEW. ON MERITS OF THE ADDITIONS, I T IS OBSERVED THAT THE ADDITIONS HAVE BEEN DELETED IN THE ORIGINAL ASS ESSMENT PROCEEDINGS AND ALL THE ISSUES ARE COVERED IN THE A PPELLANT'S FAVOUR. AS THE FACTS ARE SAME AND NO CONTRARY EVIDENCES HAV E BEEN FOUND DURING THE SEARCH, ALL THE .ADDITIONS ARE LIABLE TO BE DELETED. HOWEVER, CONSIDERING THE ADDITIONAL GROUNDS TAKEN B Y THE APPELLANT, IT IS OBSERVED THAT ALL THE ADDITIONS WE RE SUBJECT MATTER OF ITA NOS.2112 TO 2118/AHD/2009 THE ACIT VS. M/S.KHEMANI DISTILLERIES (P) LTD. ASST.YEARS 2001-02 TO 2007-08 - 11 - ORIGINAL ASSESSMENT PROCEEDINGS WHICH WERE SUBJECT MATTER OF APPELLATE PROCEEDINGS BEFORE THE CIT(A) AND THE ITA T, THE SAME CANNOT BE RE-AGITATED BY THE ASSESSING OFFICER IN A N ACTION U/S.153A OF THE I.T.ACT AS HELD BY THE HON'BLE ITAT IN THE C ASES OF MEGHMANI INDUSTRIES LTD. AND MEGHMANI ORGANICS LTD. (SUPRA). FOLLOWING THE RATIO OF DECISIONS OF HON'BLE ITAT, THE ASSESSMENT MADE U/S.153A OF THE ACT IS CANCELLED. 7. THE DEPARTMENT HAS NOW CHALLENGED THE FINDINGS O F THE LEARNED CIT(APPEALS) ON TWO ACCOUNTS AS ABOVE. 8. THE LD.DR BASICALLY RELIED ON THE ORDER(S) OF TH E ASSESSING OFFICER(S), WHEREAS THE LEARNED AUTHORISED REPRESEN TATIVE OF THE ASSESSEE SUBMITTED THAT ONCE NO MATERIAL IS FOUND D URING THE COURSE OF SEARCH, THEN THE ADDITIONS IN THE ORIGINAL ASSESSME NT WHICH HAVE ATTAINED FINALITY SHOULD NOT BE DISTURBED. FURTHE R, THE TRIBUNAL HAS SPECIFICALLY DELETED THE ADDITION MADE ON ACCOUNT O F DEPRECIATION, THEREFORE, THERE IS NO CASE FOR MAKING ANY ADDITION IN THE SEARCH ASSESSMENTS. NO MATERIAL IS FOUND DURING THE COURS E OF SEARCH. THEREFORE, NO DIFFERENT VIEW CAN BE TAKEN ON THE AD DITIONS ATTAINING FINALITY IN THE ORIGINAL ASSESSMENT. ITA NOS.2112 TO 2118/AHD/2009 THE ACIT VS. M/S.KHEMANI DISTILLERIES (P) LTD. ASST.YEARS 2001-02 TO 2007-08 - 12 - 9. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED TH E ORDERS OF THE LOWER AUTHORITIES AND THE MATERIALS AVAILABLE ON RE CORD. IN OUR CONSIDERED VIEW, THERE IS NO CASE FOR MAKING ANY AD DITION AS PROPOSED BY ASSESSING OFFICER. THE ISSUE HAS ATTAI NED FINALITY BY VIRTUE OF ORDER OF THE TRIBUNAL IN THE CASE OF ASSE SSEE IN THE ORIGINAL ASSESSMENT PROCEEDINGS. THEREFORE, THE SAME CANNO T BE DISTURBED UNLESS THERE IS SOME MATERIAL FOUND OR COLLECTED BY THE ASSESSING OFFICER IN THE PROCEEDINGS AS A CONSEQUENCE TO SE ARCH. 10. THE PROVISIONS OF SECTION 153A OF THE I.T. ACT , 1961 ALLOWS ABATEMENT OF PROCEEDINGS PENDING BEFORE THE ASSESSI NG OFFICER IN RESPECT OF ANY ASSESSMENT YEAR FALLING WITHIN THE P ERIOD OF SIX ASSESSMENT YEARS REFERRED TO IN SUB-SECTION(1) OF S ECTION 153A OF THE I.T. ACT, 1961. THIS IS SO PROVIDED IN PROVISO T O SECTION 153A(1) OF THE I.T. ACT, 1961. IN OTHER WORDS, PROCEEDINGS R ELATING TO PENDING ASSESSMENTS WILL MERGE IN THE PROCEEDINGS INITIATED U/S.153A OF THE I.T. ACT, 1961. IN RESPECT OF OTHER ASSESSMENT YEA RS, PROCEEDINGS RELATING TO WHICH ARE NOT PENDING BEFORE THE ASSESS ING ITA NOS.2112 TO 2118/AHD/2009 THE ACIT VS. M/S.KHEMANI DISTILLERIES (P) LTD. ASST.YEARS 2001-02 TO 2007-08 - 13 - OFFICER ON THE DATE OF INITIATION OF THE SEARCH, S UCH ABATEMENT DOES NOT OPERATE. HOWEVER, SUB-SECTION(1) EMPOWERS THE ASSESSING OFFICER TO INITIATE ASSESSMENT PROCEEDINGS U/S.153A OF THE I.T. ACT, 1961 IN RESPECT OF THOSE ASSESSMENT YEARS ALSO WHIC H ARE NOT PENDING BEFORE THE ASSESSING OFFICER ON THE DATE OF INITIAT ION OF THE SEARCH. THIS MEANS THAT ASSESSMENTS WHICH ARE COMPLETED HA VE ATTAINED FINALITY, AS THEY DO NOT ABATE. WHAT IS THEREFORE PROVIDED U/S.153A OF THE I.T. ACT, 1961, IS A PROCEEDINGS OF RE-ASSES SMENT AS A CONSEQUENCE OF SEARCH CONDUCTED U/S.132 OF THE I.T. ACT, 1961 AGAINST THE ASSESSEE. THE POWERS TO INITIATE RE-A SSESSMENT PROCEEDINGS US/.153A OF THE I.T. ACT, 1961 ARE IN A DDITION TO POWERS OF THE ASSESSING OFFICER TO INITIATE THE PROCEEDING S US/.148(1) OF THE I.T. ACT, 1961. 11. THE PURPOSE OF NOT ABATING THE CONCLUDED ASSES SMENT IS THAT WHERE A PARTICULAR ISSUE HAS ATTAINED FINALITY IN T HE ORIGINAL ASSESSMENT PROCEEDINGS, THEN THAT ISSUE CANNOT BE A GITATED IN THE PROCEEDINGS US/.153A OF THE I.T. ACT, 1961 UNLESS T HERE IS FRESH MATERIAL AVAILABLE WITH THE ASSESSING OFFICER EITHE R AS A RESULT OF SEARCH OR INVESTIGATION CARRIED OUT THEREAFTER. SI NCE ASSESSMENT IS RE- ITA NOS.2112 TO 2118/AHD/2009 THE ACIT VS. M/S.KHEMANI DISTILLERIES (P) LTD. ASST.YEARS 2001-02 TO 2007-08 - 14 - OPENED U/S.153A OF THE I.T. ACT, 1961, THE ASSESSIN G OFFICER HAS ALL THE POWERS TO CARRY INVESTIGATION, BUT IF NO INVEST IGATION IS CARRIED OUT AND NO FRESH MATERIAL IS COLLECTED, THEN THE FINALI TY OF THE ISSUE CANNOT BE DISTURBED. AT THE TIME WHEN THE ASSESSING OFFIC ER HAD PASSED THE ORDER U/S.153A OF THE I.T. ACT, 1961 ON 26/12/2008, THE ORDER OF THE TRIBUNAL IN ORIGINAL FOR ASSESSMENT YEAR 2002-03 PA SSED ON 28/11/2008 WAS AVAILABLE, WHEREIN ALSO SIMILAR VIEW WAS HELD. THIS WAS SUBSEQUENTLY FOLLOWED BY THE TRIBUNAL IN THE A SSESSMENT YEAR 2001-02 FOR WHICH THE ORDER WAS PRONOUNCED ON 16/0 1/2009. THUS, ON THE DATE WHEN THE ASSESSING OFFICER PASSED HIS ORDER U/S.153A OF THE I.T. ACT, 1961 ON 26/12/2008, THE VIEW OF THE T RIBUNAL ON THE ISSUE WAS AVAILABLE. NO FRESH MATERIAL IS SHOWN BY THE ASSESSING OFFICER IN HIS ORDER U/S.153A OF THE I.T. ACT, 1961 . THEN QUESTION OF TAKING A DIFFERENT VIEW THAN WHAT THE TRIBUNAL HAS TAKEN IN THE ASSESSMENT YEARS 2002-03 & 2001-02 DOES NOT ARISE. IN BRIEF, WE HOLD THAT IF AN ISSUE ATTAINED FINALITY IN THE ORI GINAL ASSESSMENT PROCEEDINGS AND THERE IS NO FRESH MATERIAL AVAILABL E WITH THE ASSESSING OFFICER TO DISTURB THAT FINALITY THAN A D IFFERENT VIEW ON THAT ISSUE CANNOT BE TAKEN. AS A RESULT, WE DO NOT UPHO LD THE ORDER OF THE ITA NOS.2112 TO 2118/AHD/2009 THE ACIT VS. M/S.KHEMANI DISTILLERIES (P) LTD. ASST.YEARS 2001-02 TO 2007-08 - 15 - ASSESSING OFFICER IN REPEATING THE ADDITION IN RESP ECT OF DEPRECIATION MADE BY HIM IN THE ORIGINAL PROCEEDINGS. 12. REGARDING THE ISSUE OF CANCELLING THE ASSESSM ENT U/S.153A OF THE I.T. ACT, 1961 BY THE LEARNED CIT(APPEALS), WE ARE OF THE VIEW THAT NO DIFFERENT VIEW CAN BE TAKEN THAN TAKEN BY HIM BE CAUSE THE ASSESSING OFFICER DID NOT HAVE ANY MATERIAL IN HIS POSSESSION EITHER AS A RESULT OF SEARCH OR AS A RESULT OF INVESTIGATI ON THEREAFTER. HE HAS SIMPLY REPEATED THE ADDITION MADE IN THE ORIGINAL A SSESSMENT PROCEEDINGS WITHOUT HAVING ANY FRESH MATERIAL IN HI S POSSESSION. THE LEARNED CIT(APPEALS) HAS MENTIONED THAT ALL THE ADD ITIONS MADE IN THE ORIGINAL ASSESSMENT PROCEEDINGS WERE SUBJECT M ATTER OF APPELLATE PROCEEDINGS. THE ITAT AHMEDABAD BENCH A IN ITA N OS.2938 TO 2942/AHD/2008 FOR ASSESSMENT YEARS 2000-01 TO 2004- 05 IN THE CASE OF MEGHMANI ORGANICS LTD. VS. DCIT A GROUP CONCERN , WHICH WAS SUBJECT TO PROCEEDINGS US/.153C OF THE I.T. ACT, 19 61 HAS HELD THAT IT IS ONLY THE ASSESSMENT PROCEEDINGS WHICH WILL ABATE AND NOT THE APPELLATE PROCEEDINGS, I.E. THE ASSESSMENTS WHICH W ERE SUBJECT MATER OF APPELLATE PROCEEDINGS CANNOT BE RE-AGITATED BY T HE ASSESSING ITA NOS.2112 TO 2118/AHD/2009 THE ACIT VS. M/S.KHEMANI DISTILLERIES (P) LTD. ASST.YEARS 2001-02 TO 2007-08 - 16 - OFFICER U/S.153A OF THE I.T. ACT, 1961. IN OTHER WORDS, THE ORIGINAL ASSESSMENT PROCEEDINGS WHICH WERE SUBJECT MATTER OF APPELLATE PROCEEDINGS WILL SURVIVE AND THE ISSUES CONTAINED T HEREIN CAN BE AGITATED ONLY WHEN SOME FRESH MATERIAL OR EVIDENCES FOUND AND DISCOVERED BY THE ASSESSING OFFICER IN THE SEARCH O R IN THE INVESTIGATION. 13. IN THE PRESENT CASE, THE ASSESSING OFFICER HAS ONLY REPEATED THE ADDITION MADE IN THE ORIGINAL ASSESSMENT PROCEEDING S INDICATING THERE THAT HE DOES NOT HAVE ANY FRESH MATERIAL. SINCE N O FRESH MATERIAL WAS POINTED OUT TO US, WE ARE UNABLE TO TAKE A DIFFEREN T VIEW THAN TAKEN BY THE TRIBUNAL IN THE CASE OF MEGHMANI ORGANICS LTD.( SUPRA). AS A RESULT, WE HOLD THAT THERE IS NO REASON TO DISTURB THE FINDINGS OF THE LEARNED CIT(APPEALS). THE SAME IS CONFIRMED. 14. IN THE RESULT, THE APPEAL OF THE REVENUE FOR AS SESSMENT YEAR 2001-02 IS DISMISSED. 15. THE ISSUES INVOLVED IN OTHER APPEALS FILED BY T HE REVENUE ARE SAME EXCEPT DIFFERENCE IN THE FIGURE OF DEPRECIATIO N. FOR THE SAME ITA NOS.2112 TO 2118/AHD/2009 THE ACIT VS. M/S.KHEMANI DISTILLERIES (P) LTD. ASST.YEARS 2001-02 TO 2007-08 - 17 - REASONING GIVEN ABOVE, WE UPHOLD THE ORDERS OF THE LEARNED CIT(APPEALS) AND DISMISS THE APPEALS OF THE REVENUE . 16. IN THE RESULT, ALL THE SEVEN APPEALS OF THE RE VENUE ARE DISMISSED. ORDER SIGNED, DATED AND PRONOUNCED IN THE COURT ON 11/09/2009. SD/- SD/- ( MAHAVIR SINGH ) ( D.C .AGRAWAL ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 11/ 09/2009 T.C. NAIR COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT(APPEALS)-II, AHMEDABAD 5. THE DR, AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT.REGISTRAR), ITAT, AHMEDABAD