South Eastern Coalfields Ltd, BILASPUR(CG) V. Joint Commissioner of Income Tax Range -1, BILASPUR(CG)

ITA 25/BIL/2012

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 1397 (ITAT-RAIPUR)
• Duration Of Justice: 4 year(s) 4 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 1988-1989
• Appeal Filed On: 16-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R K SINGH
• Assessee Lawyers: ASHISH AGARWAL
• Keywords: Depreciation

Judgement Text

ITA NO .25/ BLPR /201 2 ASSESSMEN T Y EAR: 1988 - 89 PAGE 1 OF 5 IN THE INCOME TAX APPELLATE TRIBUNAL, RAIPUR BENCH, RAIPUR [CORAM : PRAMOD KUMAR AM AND C.M. GARG JM] ITA NO .25 / BLPR /201 2 AS SESSMENT Y EAR : 1988 - 89 SOUTH EASTERN COALFIELDS LIMITED .APPELLANT SEEPAT ROAD, BILASPUR [P AN: AA DCS 2066 E ] V S. JOINT COMMISSIONER OF INCOME TAX RANGE - 1, BILASPUR. ... . RESPONDENT APPEARANCES BY: ASHISH AGARWAL , FOR THE A PPELLANT R.K. SINGH , F OR THE RE SPONDENT DATE OF CONCLUDING THE HEARING : JUNE 20 TH , 201 6 DATE OF PRONOUNCING THE ORDER : JUNE 20 TH , 201 6 O R D E R PER PRAMOD KUMAR , AM : BY WAY OF TH IS APPEAL, THE ASSESSEE APPELLANT HAS CHALLENGED CORRECTNESS OF THE ORDER DATED 30.11.2011 , PASSED BY THE LEARNED CIT(A) IN THE MATTER OF GIVING EFFECT TO THE DIRECTIONS OF THE T RIBUNAL VIDE TRIBUNAL S ORDER DATED 27.03.1995 FOR THE ASSESSMENT YEAR 1988 - 89. 2. THE GRIEVANCE OF THE ASSESSEE IN SUBSTANCE IS THAT THE LD . CIT(A) ERRED IN NOT ALLOWING AN AMOUNT OF RS. 2 56 . 61 LACS REPRESENTING THE DEPRECIATION RELATING TO EARLIER YEAR S WHILE COMPUTING BOOK PROFIT UNDER SECTION 115J OF THE INCOME TAX ACT, 1961 ( THE ACT HEREINAFTER) . ITA NO .25/ BLPR /201 2 ASSESSMEN T Y EAR: 1988 - 89 PAGE 2 OF 5 3. THE ISSUE IN APPEAL LIES IN A VERY NARROW COMPASS OF MATERIAL FACTS. THE ASSESSEE BEFORE U S IS A PUBLIC SECTOR UNDERTAKING ENGAGED IN THE BUSINESS OF COAL MINES. WHILE FINALISING THE ASSESSMENT UNDER SECTION 1 43 (3) OF THE ACT VIDE ORDER DATED 27.12.1989, THE ASSESSING OFFICER DID NOT TAKE INTO ACCOUNT RS.256.61 LA CS REPRESENTING PRIOR PERIOD ADJUSTMENT ON ACCOUNT OF UNDER CHARGE OF DEPRECIATION ON THE GROUND THAT THE PRIOR PERIOD EXPENSES CANNOT BE CONSIDERED IN COMPUTING NET PROFIT IN THE RELEVANT PREVIOUS YEAR. AGGRIEVED BY THIS ADJUSTMENT IN COMPUTATION OF PRIOR PERIOD EXPENSES UNDER SECTION 115J , THE ASSESSEE CARRIED THE MATTER IN APPEAL BE F ORE TH E LD . CIT(A). THE LD . CIT(A) RELYING UPON CLAUSE (B) OF SECTION 115J(IV) CONFIRMED TH E ACTION OF THE A SSESSING OFFICER. STILL AGGRIEVED, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CO - OR DINATE BENCH OF THIS TRIBUNAL WHICH UPHELD THE GRIEVANCE OF THE ASSESSEE IN PRINCIPLE BUT REMITTED THE MATTER TO THE FILE OF THE LD . CIT(A) FOR FACTUAL VERIFICATION WITH REGARD TO THE BASIS ON WHICH THE FIGURE OF RS.256.61 L ACS WAS ARRIVED AT. WHILE DOING SO, CO - ORDINATE BENCH VIDE ORDER DATED 27.03.1995 INTER ALIA O BSERVED AS FOLLOWS: - WE ARE OF THE OPINION THAT THE LOWER AUTHORITIES WERE NOT JUSTIFIED IN NOT TAKING INTO CONSIDERATION THIS ASPECT. HOWEVER, HOW THE FIGURE OF RS.256.61 WAS ARRIVED AT IS NO WHERE DISCUSSED BY THE ASSESSING OFFICER OR THE C IT(APPEALS ). UNDER THE CIRCUMSTANCES, WE ARE OF THE OPINION THAT THIS PART OF THE ORDER OF THE CIT(APPEALS) SHOULD BE SET ASIDE AND RESTORED TO HIS FILE WITH A DIRECTION TO HIM TO ASK THE ASSESSEE TO GIVE SUCH DETAILS BEFORE HIM AND THE CIT(APPEALS) SHOULD PASS A F RESH ORDER AFTER HEARING BOTH THE PARTIES. 4. IT WAS IN THIS BACKDROP THE LD . CIT(A) CAME TO BE IN SE ISIN OF THE MATTER ONCE AGAIN . THE LD . CIT(A) TOOK 16 LONG YEARS TO GIVE EFFECT TO THIS DIRECTION AND FINALLY VIDE ORDER DATED 30.11.2011 CONFIRMED THE ACTION OF THE ASSESSING OFFICER PRIMARILY ON THE GROUND THAT THE BOOKS OF ACCOUNT OF THE ASSESSEE ITA NO .25/ BLPR /201 2 ASSESSMEN T Y EAR: 1988 - 89 PAGE 3 OF 5 WERE NOT DRAWN UP IN ACCORDANCE WITH THE PROVISIONS OF PART S II & III OF SCH. VI OF THE C OMPANIES ACT. FOR THE REASONS WE WILL SET OUT LITTLE LATER , IT IS NO T NECESSARY TO GO INTO THE FINDING OF THE LD . CIT(A) IN BETTER DETAIL S . SUFFICE TO SAY ASSESSEE IS NOT SATISFIED AND IS IN FURTHER APPEAL BEFORE US. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND HAVE PERUSED THE MATERIAL AND HAS DULY CONSIDERED THE FACTUAL MATRIX OF THE CASE AS ALSO APPLICABLE LEGAL POSITION . 6. SHRI ASHIS AGARWAL, LEARNED COUNSEL FOR THE ASSESSEE POINT ED OUT THAT MUCH AS SEEN IN LAW AFTER DIRECTIONS WERE GIVEN BY THE T RIBUNAL VIDE ORDER DATED 27.03.1995 IT IS SUBMITTED THAT HON'BLE SUPREME COURT HAS NOW HELD IN THE CASE OF APOL L O TYRES LIMITED VS. CIT, 25 5 ITR 273 THAT ONCE THE FINAL ACCOUNTS OF THE ASSESSEE ARE ADOPTED IN ACCORDANCE WITH LAW AND DULY CERTIFIED UNDER THE PROVISIONS OF THE C OMPANIES ACT, IT IS NO LONGER OPEN TO THE ASSESSING OFFICER TO MAKE ANY ADJUSTMENT IN THE BOOK PROFIT EXCEPT AS SPECIFICALLY PROVIDED UNDER SECTION 115J. IT IS POINTED OUT THAT IN THE LIGHT OF THIS JUDICIAL DEVELOPMENT AND IN THE LIGHT OF THE LAW SO LAID DOWN BY THE HON'BLE SUPREME COURT WHICH FINDS ALL O F U S THE DIRECTIONS GIVEN BY THE T RIBU NAL ARE NOT LONGER RELEVANT. L EARNED COUNSEL TOOK PAINS TO TAKE U S T HROUGH THE OBSERVATION S MADE BY T HEIR L ORDSHIPS AND IN SUBSTANCE SUBMITTED THAT DIRECTIONS GIVEN BY THE T RIBUNAL, IN VIE W OF THIS JUDICIAL DEVELOPMEN T NO LONGER REQUIRE S TO BE ACTED UPON IN ASMUCH AS IT IS NOT OPEN TO THE REVENUE AUTHORITIES TO QUESTION THE MANNER IN WHICH NET PROFIT IS ITA NO .25/ BLPR /201 2 ASSESSMEN T Y EAR: 1988 - 89 PAGE 4 OF 5 ARRIVED AT IN THE PROFIT & LOSS ACCOUNT O NCE THE SAME IS CERTIFIED BY THE AUTHORITIES UNDER THE PROVISIONS OF THE C OMP ANIES ACT. 7. SHRI R.K. SINGH , LD . DEPARTMENTAL REPRESENTATIVE, ON THE OTHER HAND, POINTS OUT THAT THE LD . CIT(A) DID NOT IMPLEMENT DIRECTIONS OF THE TRIBUNAL . HE INVITED OU R ATTENTION TO THE FACT T HAT EVEN AT TH E STAGE OF SECOND ROUND OF PROCEEDINGS BEF ORE THE LD . CIT(A) THE ASSESSEE DID NOT FURNISH THE DETAIL ED REQUISITION B EFORE THE LD . CIT(A) NOR DID THE ASSESSEE CLARIF Y , BY GIVING EVIDENCES IN SUPPORT OF ITS CONTENTION , AS TO HOW THE SAID FIGURE WAS ARRIVED AT. HOWEVER , WHEN IT WAS POINTED OUT TO TH E LD . DEPARTMENTAL REPRESENTATIVE , THAT TH E VERY DIRECTIONS GIVEN BY THE CO - ORDINATE B ENCH IN THE LIGHT OF SUBSEQUENT DEVELOPMENTS SEEMS TO HAVE BECOME REDUNDANT , HE DID NOT HAVE MUCH TO SAY. HE , HOWEVER , RELIED UPON THE ORDER OF THE LD . CIT(A) . 8. WE HA VE NOTED WITH ANGUISH THE FACT THAT IT TOOK ONE AND H AL F DECADE FOR THE LD . CIT(A) TO GIVE EFFECT TO THE DIRECTION S OF THE TRIBUNAL. IT IS A SAD COMMENTARY ON THE INORDINATE AND WHOLLY AVOIDABLE DELAY I N COMPLETION OF THE JUDICIAL PROCESS. WHILE WE DO NO T SIT IN NOT JUDGEMENT OVER AS TO WHAT IS THE REASON FOR THIS DELAY , WE CANNOT BE , AND WE ARE NOT , HAPPY WI TH THE SAME. AS L EARNED COUNSEL RIGHTL Y POI N TS OUT , THE FU NDAMENTAL LEGAL POSITION STANDS MATERIALLY ALTERED. THE JUDGEMENT OF HON'BLE SUPREME COUR T IN THE CASE OF APOLLO TYRES LIMITED VS. CIT (SUPRA) HAS MADE THE DIRECTION S , GIVEN BY THE CO - ORDINATE BENCH, REDUNDANT INASMUCH AS IT IS NO LONGER RELEVANT AS TO HOW THE FIGURE HAS BEEN QUAN TIFIED ONCE THE FINAL ACCOUNT S HAVE BEEN ADJUSTED BY THE C OMPANY AND NO RESERVATION S HAVE BEEN MADE ON THE SAME UNDER THE ITA NO .25/ BLPR /201 2 ASSESSMEN T Y EAR: 1988 - 89 PAGE 5 OF 5 SCHEMES OF THE C OMPANIES ACT. WE HAVE ALSO NOTED THAT AS HELD BY THE CO - O RDINATE BENCH VIDE ORDER DATED 27.03.1995 , THE ADJUSTMENT MADE BY THE ASSESSEE W ERE UPHELD IN PRINCIPLE AND IT WAS ONLY VERI FICATION PART WHICH WAS REMITTED TO THE FILE OF LD . CIT(A) . IN THE LIGHT OF THESE DISCUSSIONS , IN OUR CONSIDERED VIEW , THE VERY BASIS OF DISALLOWANCE OF THIS ADJUSTMENT CEASES TO HOLD GOOD IN LAW. THE DIRECTION OF THE CO - ORDINATE BENCH ONLY TO THE EXTENT OF DELETING THE DISALLOWANCE IN PRINCIPLE ARE REQUIRED TO BE IMPLEMENTED AND DIRECTION OF THE CO - O RDINATE BENCH WITH RESPECT TO VERI F ICATIO N OF THE BASIS OF QUANTIFICATION IS NOW REDUNDANT. ACCORDINGLY , THE IMPU G NE D ADJUSTMENT MUST S T AND DELETED. WE DIR ECT SO. 9. IN THE RESULT, APPEAL IS ALLOWED. PRONOUNCED AND DICTATED IN THE OPEN COURT TODAY ON THE 20 TH DAY OF JUNE , 2016 . SD/ - SD/ - C.M. GARG PRAMOD KUMAR (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) DATED : THE 20 TH DAY OF JUNE, 2016 . PBN/* COPIES TO : (1) THE APPELLANT (2) THE RESPONDENT (3) CIT (4) CIT(A) (5) DR (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH, RAIPUR