M/s.Kings Infra Ventures Ltd, Cochin V. The ACIT, Cochin

ITA 25/COCH/2017

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 3886 (ITAT-COCHIN)
• Duration Of Justice: 5 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-07-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 22-05-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 27-01-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A DHANARAJ
• Assessee Lawyers: KURYAN THOMAS
• Keywords: Reopening of assessment; Depreciation; Competent authority; Onus to prove; Unabsorbed depreciation
• Section: 143(3); 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI GEORGE GEORGE K., JUDICIAL MEMBER I.T.A. NO. 25 /COCH/201 7 ASSESSMENT YEAR : 2011 - 12 M/S. KINGS INFRA VENTURES LTD., A-1, ATRIA APARTMENT, PERMANOOR ROAD, THEVARA, KOCHI. [PAN: AACCV 3411D] VS. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE-1(2),KOCHI. (ASSESSEE - APPELLANT) (REVENUE - RESPONDENT) ASSESSEE BY SHRI KURYAN THOMAS, ADV . REVENUE BY SHRI A. DHANARAJ , SR. DR DATE OF HEARING 05 / 0 7 / 201 7 DATE OF PRONOUNCEMENT 14 TH / 0 7 /201 7 O R D E R PER GEORGE GEORGE K.,JUDICIAL MEMBER: THIS APPEAL AT THE INSTANCE OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE CIT(A)-I, KOCHI DATED 24/11/2016. THE RELEVANT ASS ESSMENT YEAR IS 2011-12. 2. THE GROUNDS RAISED READ AS FOLLOWS: 1. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-I, ERRED IN HOLDING THAT THE APPELLANT IS NOT ENTITLED TO SET OFF, THE CARRIED FORWARD I.T.A. NO.25/COCH/2017 2 DEPRECIATION, RELATING TO ASSESSMENT YEAR 1998-99 A ND ONWARDS, AGAINST ITS INCOME FOR ASSESSMENT YEAR 2011-12 AND ONWARDS. 2. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-I H AS WRONGLY HELD THAT SINCE THE ASSETS HAVE NOT BEEN PUT TO USE DURI NG THE FINANCIAL YEARS 1997-98 TO 2008-09, THE APPELLANT IS NOT ENTI TLED TO CARRY FORWARD AND SET OF THE LOSS AND DEPRECIATION CLAIME D IN THE RETURN OF INCOME FOR AY 1998-99 TO 2009-10. HE GAVE THESE FIN DINGS IN SPITE OF ACCEPTING THAT THE DEPRECIATION LOSS CAN BE ALLOWED TO BE CARRIED FORWARD EVEN IF THE ORIGINAL BUSINESS HAS CHANGED. 3. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) HAS CONCURRENT AND COEXISTENT POWER OF ASSESSMENT ONLY IN RESPECT OF A SSESSMENTS UNDER APPEAL. HE HAS EXCEEDED HIS APPELLATE JURISDICTION, WHICH WAS LIMITED TO ASSESSMENT YEAR 2011-12, BY GIVING DIRECTIONS TH AT THE DEPRECIATION, PERTAINING THE ASSESSMENT YEAR 1998 TO 2009-10, CAN NOT BE ALLOWED TO BE CARRIED FORWARD AND SET OFF AGAINST THE INCOME F OR ASSESSMENT YEARS 2010-11 AND SUCCEEDING ASSESSMENT YEARS. 4. THE LEARNED COMMISSIONER OF INCOME TAX APPEAL (I) O UGHT TO HAVE DIRECTED THE ASSESSING OFFICER TO ALLOW THE CLAIM O F SET OFF OF DEPRECIATION LOSS OF EARLIER YEARS MADE IN THE RETU RN OF INCOME FOR AY 2011-12, AS THERE WAS NO SEPARATE ORDER EITHER U/S. 143(1) OR 143(3) OF THE INCOME TAX ACT DENYING ANY CLAIM OF DEPRECIA TION OR BUSINESS LOSS IN EACH OF THE ASSESSMENT YEARS FROM 1996-99 A ND ONWARDS. 5. ANY OTHER GROUND OF APPEAL AS MAY ARISE DURING THE APPEAL PROCEEDINGS. 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE AS F OLLOWS: THE ASSESSEE IS A PRIVATE LIMITED COMPANY WHI CH WAS ENGAGED IN THE BUSINESS OF AQUA FARM CULTURE AND SALE. THE NAME O F THE COMPANY WAS INITIALLY M/S. VICTORY AQUA FARM LTD. AND WAS CHANGED TO M/S. KINGS INFRA VENTURES LTD. I.T.A. NO.25/COCH/2017 3 IN THE YEAR 2007, IT VENTURED INTO CONSTRUCTION BUS INESS. FOR THE ASSESSMENT YEAR 2011-12, THE RETURN OF INCOME WAS FILED ON 30/ 09/2011, DISCLOSING NIL INCOME AFTER SET OFF UNABSORBED DEPRECIATION OF RS. 34,29,210/- AND RS.1,55,827/- FOR ASSESSMENT YEARS 1996-97 AND 1997 -98 RESPECTIVELY. THE BALANCE UNABSORBED DEPRECIATION OF RS.26,89,338/- R ELATING TO ASSESSMENT YEAR 1997-98 WAS SOUGHT TO BE SET OFF IN THE LATER YEARS ALONG WITH UNABSORBED DEPRECIATION RELATING TO ASSESSMENT YEARS 1998-99 T O 2009-10. THE ASSESSMENT WAS TAKEN UP FOR SCRUTINY BY ISSUANCE OF NOTICE U/S . 143(2) OF THE ACT. THE ASSESSING OFFICER IN THE COURSE OF THE ASSESSMENT P ROCEEDINGS SOUGHT TO DENY THE SET OFF CLAIMED BY THE ASSESSEE. 3.1 THE ASSESSEE VIDE LETTER DATED 20-12-2013 INFO RMED THE ASSESSING OFFICER THAT IT COULD NOT RUN AQUA FARM BUSINESS FROM APRIL 1999 ONWARDS, AS A CONSEQUENCE OF SUPREME COURT JUDGMENT BANNING AQUA FARM CULTURE. IT WAS STATED BY THE ASSESSEE THAT THE ASSETS HAD BEEN KEP T READY FOR USE AND THEREFORE, THE CLAIM OF SET OFF OF UNABSORBED DEPRE CIATION IS CORRECT. THE ASSESSING OFFICER, HOWEVER, HELD THAT SINCE THE ASS ESSEE HAS NOT PERFORMED ANY BUSINESS DURING THE FINANCIAL YEAR 1997-98, TILL TH E FINANCIAL YEAR 2006-07, THE UNABSORBED DEPRECIATION RELATING TO ASSESSMENT YEAR 1996-97 ONWARDS COULD NOT BE ALLOWED TO BE SET OFF AGAINST THE INCOME OF THE CURRENT ASSESSMENT YEAR. THE ASSESSING OFFICER THEREFORE CONCLUDED THE ASSESSMEN T BY DENYING THE CLAIM OF SET OFF OF UNABSORBED DEPRECIATION. THE ASSESSMENT WAS COMPLETED U/S. 143(3) I.T.A. NO.25/COCH/2017 4 OF THE ACT VIDE ORDER DATED 25-02-2014 AT A TOTAL A GGREGATE INCOME OF RS. 35,85,037/-. 4. AGGRIEVED BY THE ORDER OF THE ASSESSMENT IN D ENYING THE CLAIM OF SET OFF OF UNABSORBED DEPRECIATION, THE ASSESSEE PREFERRED AN APPEAL TO THE FIRST APPELLATE AUTHORITY. THE CIT(A) PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. THE CIT(A) HELD THAT: (A) THE UNABSORBED DEPRECIATION BROUGHT FORWARD FROM AS SESSMENT YEARS 1996-97 AND 1997-98 COULD BE ALLOWED TO BE SET OFF AGAINST THE INCOME FOR ASSESSMENT YEAR 2010-11 AND SUCCEEDING ASSESSME NT YEARS. (B) UNABSORBED DEPRECIATION CLAIMED FOR THE ASSESSMENT YEARS 1998-99 ONWARDS COULD NOT BE ALLOWED TO BE SET OFF AS THERE WAS NO BUSINESS OF AQUA FARMING DURING THESE YEARS. 4.1 THE CIT(A) ALSO DIRECTED THE ASSESSING OFFICE R TO TAKE NECESSARY ACTION INCLUDING REOPENING OF ASSESSMENT FOR THE ASSESSMEN T YEAR 2010-11 AND SUCCEEDING ASSESSMENT YEARS 2012-13 ONWARDS TO DISA LLOW THE SET OFF OF UNABSORBED DEPRECIATION CLAIMED FROM 1998-99 ONWARD S. 5. AGGRIEVED BY THE ORDER OF THE CIT(A), THE AS SESSEE HAS PREFERRED THE PRESENT APPEAL BEFORE THE TRIBUNAL. THE LD. COUNSE L FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE INCOME TAX AUTHORIT IES. FURTHER, IT WAS SUBMITTED THAT THE CIT(A) IN THE RECTIFICATION APPL ICATION FILED BY THE ASSESSEE I.T.A. NO.25/COCH/2017 5 HAD ALLOWED UNABSORBED DEPRECIATION FOR THE ASSESSM ENT YEAR 1998-99 ALSO TO BE CARRIED FORWARD AND SET OFF AGAINST THE INCOME FOR ASSESSMENT YEARS 2012-13 ONWARDS. A COPY OF THE ORDER PASSED IN RECTIFICATI ON APPLICATION DIRECTING THE ASSESSING OFFICER TO ALLOW UNABSORBED DEPRECIATION FOR THE ASSESSMENT YEAR 1998-99 TO BE CARRIED FORWARD FOR FUTURE YEARS IS A LSO PLACED ON RECORD. THE LD. DR SUPPORTED THE ORDERS OF THE ASSESSING OFFICER AN D THE CIT(A). 6. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ASSESSEE HAD CLAIMED SET OFF OF UNABSORBED DEPR ECIATION FOR THE ASSESSMENT YEAR 1996-97 TO 2009-10. THE DETAILS OF THE UNABSO RBED DEPRECIATION CLAIMED BY THE ASSESSEE FOR THE RESPECTIVE YEARS ARE DETAILED IN PARA 2.2 OF THE ASSESSMENT ORDER. THE CLAIM OF SET OFF AND CARRY FORWARD OF UN ABSORBED DEPRECIATION WAS DISALLOWED BY THE ASSESSING OFFICER FOR THE REASON THAT THE ASSESSEE HAD DIS- CONTINUED ITS AQUA CULTURE BUSINESS. 6.1 THE CIT(A), ON FURTHER APPEAL, ALLOWED THE SET OF OFF UNABSORBED DEPRECIATION FOR ASSESSMENT YEARS 1996-97 AND 1997- 98. ON RECTIFICATION APPLICATION FILED BY THE ASSESSEE, THE CIT(A) ALSO ALLOWED CARRY FORWARD OF UNABSORBED DEPRECIATION FOR THE AY 1998-99. THE C IT(A) WAS OF THE VIEW THAT NO BUSINESS WAS CARRIED ON BY THE ASSESSEE FOR THE AY 1999-2000 TO AY 2009-10 AND THEREFORE, THE UNABSORBED DEPRECIATION FOR THE ABOVE SAID PERIOD COULD NOT BE CARRIED FORWARD AND SET OFF FOR FUTURE YEARS. I.T.A. NO.25/COCH/2017 6 6.2 THE CIT(A) HAS ELABORATELY CONSIDERED THE LEGI SLATIVE HISTORY OF THE RELEVANT PROVISIONS, NAMELY SECTION 32(2) OF THE ACT AND THE JUDICIAL PRONOUNCEMENTS ON THE SAME. AFTER EXAMINING THE LEGISLATIVE HISTORY AND THE JUDICIAL PRONOUNCEMENTS, IT WAS HELD BY THE CIT(A) THAT THE CLAIM OF DEPRECIATION IS ALLOWABLE FOR BOTH ACTIVE AND PASSIVE USE OF THE ASSET INCLUDING AN ASSET THAT IS IN READY-FOR-USE CONDITION. THE CIT(A) WAS OF T HE VIEW THAT PASSIVE USE AND READY-TO-USE DOES NOT IMPLY A SITUATION WHERE THE ASSET IS SIMPLY LYING IDLE FOR A LONG PERIOD OF TIME AND THERE IS NO RE-STARTING O F BUSINESS. THE CIT(A) EXAMINED THE FACTS IN DEPTH AND CONCLUDED THAT IN T HE INSTANT CASE THE ASSETS WERE NOT KEPT FOR READY FOR USE CONDITION. THE DET AILED FACTUAL FINDING OF THE CIT(A) AS REGARDS NON-USAGE OF THE ASSETS FOR THE R ELEVANT PERIODS ARE REPRODUCED BELOW FOR READY REFERENCE. X) FROM ALL THE ABOVE, THE MAJORITY OF THE JUDI CIAL DECISIONS HOLD THAT A CLAIM OF DEPRECIATION ALLOWABLE FOR BOTH ACTIVE AND PASS IVE USE OF THE ASSET INCLUDING AN ASSET THAT IS IN READY-FOR-USE CONDITION. HOWEV ER THE PHRASES 'PASSIVE USE' AND 'READY-TO-USE DO NOT IMPLY A SITUATION WHERE T HE ASSETS IN QUESTION ARE SIMPLY LYING IDLE FOR A LONG PERIOD OF TIME OF SEVE RAL FINANCIAL YEARS IN THE INSTANT CASE OF THE APPELLANT. (I) THE APPELLANT HAS STATED IN WRITING BEFORE THE AO VIDE ITS REFERENCED LETTER DATED 20.12.2013 THAT FOR THE PERIOD 01.04.1 999 TO 31.03.2006, THE PRODUCTION FACILITIES OF VICTORY AQUA FARM LTD. ( SIC) WERE NOT USED BUT WERE KEPT READY FOR USE. TO PROVE THIS READY-FOR-U SE STATUS OF THE ASSETS, IT IS ALWAYS NECESSARY TO ESTABLISH SUCH ACTUAL STATUS AND CERTIFICATION FOR THE SAME FROM THE MANAGERS/EMPLOYEES OF THE APPELLANT A ND/OR GOVERNMENT AUTHORITIES, WHICH HAS NOT BEEN DONE. NO CIRCUMSTA NTIAL EVIDENCES AS TO SUCH STATUS, FOR EXAMPLE, READINESS TO PROCURE NEW MATERIALS AND NECESSARY PROCESS MATERIALS AND ANY MOVE TO RESTART THE AQUA FARM BUSINESS, I.T.A. NO.25/COCH/2017 7 MAINTENANCE EXPENSES TOWARDS KEEPING THEM IN A WELL -OILED STATE OF READINESS, ETC. HAVE BEEN PROVIDED. (II) AS IDENTIFIED AND CITED BY THE AO, IN ITEM N O. L OF PART B OF THE NOTES ON ACCOUNTS OF THE APPELLANT, IT HAS BEEN STATED, A MONG OTHER THINGS, THAT THE 'COMPANY WAS NOT IN OPERATION FOR A LONG PERIOD FROM 31-3-1997 TO 2005' (SIC) AND THAT 'AT PRESENT, THE COMPANY HAS D IVERSIFIED ITS ACTIVITIES AND IS PURSUING LAND DEVELOPMENT AND RELATED ACTIVI TIES'. THIS MEAN THAT THE COMPANY SIMPLY DID NOT CARRY OUT ANY AQUA FARM-RELA TED ACTIVITIES, AND BEING VISIBLY DETAINED BY LAW AS WELL AS UNINTEREST ED IN CARRYING OUT SUCH ACTIVITIES, AND ACCORDINGLY PUTTING TO USE THE ASSE TS OWNED TOWARDS SUCH BUSINESS. IN ITEM NO. 15 OF PART B OF THE NOTES ON ACCOUNTS IT HAS BEEN, INTER ALIA, STATED THAT 'OUT OF THE 33795.80 SQ. FT. AS O N 01/04/2010 COMPANY HAS SOLD AN AREA OF 13674.36 SQ. FT. DURING THE CURREN T F.Y. AND BALANCE OF 20121.44 SQ. FT. VALUED AT RS. 3,02,86,003/- AS ON 31.03.2011. THE LAND HELD FOR PROJECT DEVELOPMENT IS TREATED AS INVENTOR IES'. IN ITS STATEMENT OF FACTS PROVIDED ALONGSIDE THE GROUNDS OF APPEAL, THE APPELLANT HAS STATED THAT THE AO HAD FAILED TO NOTE THAT THE LANDS ALONG WITH THE PONDS OWNED BY THE APPELLANT WHICH ASSETS WERE EMPLOYED FOR THE AQ UA FARM BUSINESS HAD BEEN RETAINED. (A) TAKING TOGETHER THE ABOVE FACTS AS AVERRED BY THE APPELLANT, MEAN THAT THE PRINCIPAL ASSETS EARLIER EMPLOYED FOR THE AQUA FARM BUSINESS WERE LAND AND PONDS WHICH HAD REMAINED INACTIVE AND IDLE. THIS IS MADE CLEAR BY THE GROUNDS OF APPEAL NUMBERED 5 PREFERRED BY THE APPEL LANT WHICH STATES THAT THE APPELLANT WAS RESTARTING THE AQUA FARM BUSINES S IN VIEW OF THE SUBSEQUENT ORDERS PASSED BY THE CONCERNED AUTHORITY. WHEN THE RE IS A STATEMENT OF RESTARTING OF BUSINESS AFTER A PROLONGED PERIOD ( OF SEVERAL YEARS) OF QUIESCENCE AND DORMANCY (TO TAKE A CHARITABLE INTER PRETATION), THERE CANNOT BE A SIMULTANEOUS ACCEPTANCE OF THE CONTRADICTING STAT EMENT THAT THE ATTENDANT ASSETS WERE IN A READY-FOR-USE CONDITION. TO REAC H SUCH READY-FOR-USE OR EVEN PASSIVE STATUS, CONSIDERABLE GROUNDWORK WOULD BE REQUIRED WHICH INCLUDES RE-REGISTRATION OF THE PROPOSED ACTIVITIE S, RE-CERTIFICATION OF THE LANDS, PONDS AND OTHER ASSOCIATED ASSETS AS TO THEIR FITNE SS TO CARRY OUT THE PROPOSED ACTIVITIES, RE-INSTALLATION AND RE-COMMISSIONING OF PLANT AND MACHINERY NEEDED IN THE PROPOSED ACTIVITIES, ETC. SANS THESE, IT CA NNOT BE STATED THAT THE ASSETS IN QUESTION ARE IN A READY-FOR-USE OR EVEN PASSIVE C ONDITION. TO BORROW FROM THE PARLANCE OF GEOLOGY, THERE IS A DIFFERENCE BETW EEN ACTIVE, PASSIVE (OR DORMANT) AND EXTINCT. IN THE INSTANT CASE, THE ASSETS IN QUESTION WERE EXTINCT IN THE SENSE THAT THEY WERE SIMPLY THERE OR EXTANT IN THEIR STATES OF UNREGISTERED IN THE CONSCIOUSNESS OF THE APPE LLANT PRESENCE. THE APPELLANT HAS NOT SHOWN THAT IT WAS ACTIVELY CONSCI OUS OF THEIR PRESENCE/EXISTENCE AND HAS NOT SHOWN THAT ANY STEPS WERE BEING TAKEN TO MAINTAIN THEM IN A STATE OF READINESS. IT HAPPEN SO METIMES, AS GEOLOGISTS WILL TESTIFY THAT VOLCANOES THAT WERE ORIGINALLY BELIEVE D TO BE EXTINCT HAVE COME ALIVE INTO ACTIVE STATUS. THE PRESENT CASE OF THE A PPELLANT IS ONE SUCH, THAT ITS I.T.A. NO.25/COCH/2017 8 AQUA FARM BUSINESS WHICH HAD BEEN GIVEN UP FOR DEAD FOLLOWING THE BAN IMPOSED BY THE HONBLE SUPREME COURT HAS SUDDENLY S PRUNG UP TO LIFE IN LATER FAVOURABLE CIRCUMSTANCES. THE POSITIONS HELD BY THE APPELLANT THAT IT WAS RESTARTING THE BUSINESS AFTER A PROLONGED PERIOD (OF SEVERAL YEARS) OF BEING CONDEMNED TO EXTINCTION AND HAD DIVERSIFIED INTO OTHER ACTIVE AND FERTILE TERRITORIES OF BUSINESS (OF BUILDING AND CONSTRUCT ION) AND HAD ALSO SIMULTANEOUSLY KEPT ITS ASSETS UNDER REFERENCE IN A READY-TO-USE CONDITION, ARE SELF-SERVING, SWEEPING, INCONSISTENT AND UNSUBS TANTIATED, FACTUALLY OR OTHERWISE. IT WOULD HAVE TO BE A VERY UNNATURALLY C REDULOUS AND BIASED-IN- FAVOUR OF THE APPELLANT PERSON WHO WOULD SWALLOW SU CH A RIGMAROLE AND TALE. (B) THE APPELLANT HAS NOT SHOWN ANY EVIDENCE, FACTU AL OR OTHERWISE TO PROVE THAT IT WAS EVEN REMOTELY INTERESTED IN THE AQUA FA RM BUSINESS, EVEN AS LATE AS IN THE IMPUGNED F.Y, 2010-11). INDEED, ALL ITS AVER MENTS HAVE BEEN TO THE CONTRARY. IT WAS ONLY WHEN THE AO ASKED THE RELEVAN T QUESTIONS THAT THE APPELLANT MADE THE CONVENIENTLY VAGUE AVERMENTS. IN ITEM NO, 8(A) OF THE FORM 3CD EVEN AS LATE AS FOR THE IMPUGNED A. Y. 201 1-12, THE APPELLANT HAS MENTIONED THAT THE NATURE OF ITS BUSINESS WAS 'BUI LDERS' (SIC). LTEM NO. 18 OF PART B OF THE NOTES ON ACCOUNTS FOR THE IMPUGNED A. Y. 2011-12 STATED THAT 'THE COMPANY IS ENGAGED IN THE BUSINESS OF DEVELOP MENT OF INFRASTRUCTURE FACILITIES WHICH CONSTITUTES A SINGLE BUSINESS SEGM ENT. SO PRIMARY AND SECONDARY REPORTING DISCLOSURES FOR BUSINESS/GEOGRA PHICAL SEGMENT AS ENVISAGED IN AS-17 ARE NOT APPLICABLE TO THE COMPAN Y. AS REPEATED ABOVE AND REITERATED AGAIN, ITEM NO. 1 OF PART B OF THE N OTES ON ACCOUNTS FOR THE IMPUGNED AY 2011-12 STATED THAT THE COMPANY WAS NOT IN OPERATION FOR A LONG PERIOD FROM 31-3-1997 TO 2005 (SIC) AND THAT AT PR ESENT THE COMPANY HAS DIVERSIFIED ITS ACTIVITIES, AND IS PURSUING LAND DE VELOPMENT AND RELATED ACTIVITIES'. ALL OF THESE MEAN THAT EVEN IN THE FY 2010-11 RELATING TO THE IMPUGNED A.Y. 2011-12, THE APPELLANT WAS GETTING IT S ACT READY AND STILL PREPARING TO RE-START ITS AQUA FARM BUSINESS. HOW LONG SUCH PREPARATIONS WILL CONTINUE AND WHEN THE BUSINESS WILL SO RESTART (AND DID SO RESTART) IS ANYONE'S GUESS FROM THE VIEW POINT OF THE DATE ON WHICH THE STATEMENTS WERE MADE. (C) THE ASSETS USED IN THE AQUA FARM BUSINESS ARE PRINCIPALLY STATED BY THE APPELLANT AS BEING OF THE NATURE OF LAND AND PONDS, ON WHICH NO VISIBLE, EVIDENCED AND/OR WELL-DOCUMENTED MAINTENANCE OR OTH ER ACTIVITIES HAVE TAKEN PLACE. THEY WERE JUST LYING THERE IN A NEAR-ORPHANE D AND UNDESIRED DEAD- INVESTMENT STATUS. ALL THE PRESENT EXCITEMENT OF CL AIMING THE LARGE AMOUNTS OF UNABSORBED DEPRECIATION HAS HAPPENED BECAUSE OF WIS DOM ACQUIRED IN HINDSIGHT FOLLOWING THE ONSET OF FAVOURABLE CONDITI ONS. THE SITUATION IS NOT UNLIKE THAT OF THE PRODIGAL DELINQUENT OFFSPRING WH O IS THROWN OUT OF THE HOME AS A DO-NO-GOOD AND/OR VALUELESS DERELICT, BUT RETU RNS TO EXCITEMENT AND ADULATION, AND RESULTANT UNSCRUPULOUS EXPLOITATION, FOLLOWING HIS PRODIGIOUS SUCCESS IN FAR-OFF LANDS. WHAT WAS HELD AND IGNORED AND MENTALLY DISCARDED OR WRITTEN-OFF AS WITHOUT VALUE OR EARNING-CAPACITY OR LIFE HAS SUDDENLY BEGUN TO PULSE WITH LIFE AND ACTION. THE POTENTIAL FOR CLAIM ING UNABSORBED DEPRECIATION I.T.A. NO.25/COCH/2017 9 THAT HAS SO FAR BEEN CAREFULLY TENDED ONLY IN THE A CCOUNTS (BY CARRYING OUT THE ROUTINE COMPUTATION AND ENSURING THE FILING ON TIME OF THE RETURNS OF INCOME EACH YEAR) HAS NOW BECOME A POTENT INSTRUMENT OF UN DESERVED TAX REDUCTION. THE LONG PERIOD OF SEVERAL YEARS WHEN NO VALUE WAS ASCRIBED TO THE ASSETS CANNOT BE IGNORED IN A MANNER THAT IS SUFFICIENT T O BRIDGE THE DESOLATE (FOR THE PRODIGAL SON/OR ASSETS) INTERREGNUM INTO A LIFE-GIV ING CONTINUUM. IT IS ALSO A FACT THAT LAND VALUES APPRECIATE AND DO NOT DEPRECI ATE, AND THEREFORE NO CLAIM OF DEDUCTIBLE DEPRECIATION CAN BE MADE ON THEIR VAL UE. THERE IS NO EVIDENCE TO SHOW THAT THERE HAVE BEEN ANY EXPENSES RENDERED OR STEPS THAT HAVE BEEN CONTINUOUSLY TAKEN (OTHER THAN THE ROUTINE COMPUTAT IONS AND ENSURING THE FILLING ON TIME OF THE RETURNS OF INCOME EACH YEAR, AS MENTIONED ABOVE) IN RESPECT OF THE PONDS (OR OTHER ASSETS RELATED TO TH E AQUA FARM BUSINESS) THAT SHOW THAT THEY WERE IN A READY-TO-USE OR EVEN PA SSIVE STATE. (D) AS ALREADY STATED EARLIER, FROM A PERUSAL OF I TS ANNUAL REPORT FOR THE F.Y. 2007-08 (AVAILABLE ON THE PUBLIC DOMAIN BEING THE I NTERNET), IT IS SEEN THAT THE APPELLANT HAS UNDERGONE AN IMAGE CHANGE AND MAKEOVE R WHICH IS KEEPING WITH ITS STATEMENT IN THE GROUNDS OF APPEAL PREFERR ED THAT 'ONLY FROM THE F. Y. 199798 THE ASSESSEE COULD NOT DO THE SAID BUSINESS ON ACCOUNT OF THE SUPREME COURT BAN, WHICH POSITION WAS REITERATED IN THE ST ATEMENSE OF FACTS SUBMITTED ALONGSIDE. THIS, ALONGSIDE THE APPELLANT S STATEMENT BEFORE THE ASSESSING OFFICER VIDE ITS REFERENCED LETTER DATED 20.12.2013 THAT FOR THE PERIOD 01.04.1999 TO 31.03.2006 MEANS THAT THE TOTAL PERIO D OF IMPUTED INACTIVITY AND AS ACCEPTED BY THE APPELLANT FROM THE AQUA FARM BUS INESS WOULD BE THE F.YRS. 1999-98 TO 2005-06. IN REALITY, THESE WILL BE SHOWN BELOW TO BE THE F.YRS. 1997-98 TO 2010-11. IN ITS GOVERNING STATEMENT UNDER THE HEADER 'CORPOR ATE INFORMATION', THAT CONTINUES IN THE ANNUAL STATEMENTS OF ALL FINANCIAL YEARS FROM THE F.Y. 2007-08 UNTIL THE F. Y. 2014-15 THE APPELLANT HAS STATED TH AT 'THE COMPANY WAS INCORPORATED ON 23RD NOVEMBER I987 UNDER THE NAME V ICTORY AQUA FARM LIMITED. DURING THE YEAR 2007 THE COMPANY CHANGED ITS NAME TO KINGS INFRA VENTURES LIMITED. THE MAIN OBJECTS OF THE COMPANY A RE TO PROMOTE, DEVELOP, FINANCE, ESTABLISH, TO ENTER INTO JOINT VENTURES, T O ESTABLISH SPECIAL PURPOSE VEHICLES, BUILD, CONSTRUCT, EQUIP OPERATE AND MAINT AIN INFRASTRUCTURE PROJECTS AND FACILITIES. THERE IS NO MENTION OF ANY AQUA FA RM ACTIVITY. IT IS ONLY IN THE ANNUAL STATEMENT FOR THE F.Y. 2015-16 THAT THERE IS MENTION OF SUCH ACTIVITY. FROM THE STATEMENTS IN THE NOTES ON ACCOUNT REFERRE D TO ABOVE, THERE IS ALSO NO PROOF THAT THE APPELLANT HAS CARRIED OUT ANY AQUA F ARM BUSINESS EVEN UNTIL THE IMPUGNED F.Y. 2010-11, WHEN IT IS STILL STATED TO B E GETTING ITS ACT READY. EVEN AS ON DATE,THE DESCRIPTION OF THE COMPANY FROM ITS WEBSITE HTTP://WWW.KINGSINFRA.COMCOMPANY.HTM , READS AS FOLLOWS: KINGS INFRA VENTURES LTD. THE FLAGSHIP OF THE GROUP WAS FOUNDED IN THE YEAR 1987. AFTER TRANSFORMATION IN 2007, KINGS INFRA VENTURES LTD. H AS EMERGED AS A LEADING PLAYER IN THE FIELD OF LAND BANKING AND CREATING IN FRASTRUCTURE FOR PROJECTS IN I.T.A. NO.25/COCH/2017 10 THE KEY SECTORS OF INTEGRATED LIFE SPACES, LOGISTIC S, WAREHOUSING, HOSPITALITY, HEALTHCARE, EDUCATION AND CLEAN ENERGY. THERE IS N O MENTION OF AQUA FARMS OR EVEN THE WHISPER OF AN UMBILICUS TO SUCH ACTIVITY I N ITS ANNUAL REPORT FOR THE IMPUGNED F.Y. 2010-11. THERE IS NO MENTION OF AQUA FARMING AS AN INTENDED ACTIVITY. AS ALREADY STATED BY THE ASSESSING OFFICE R, IT SIMPLY STATES THEREIN THAT THUS THE COMPANY WAS NOT IN OPERATION FOR A LONG P ERIOD FROM 31.3.1997 TO 2005. IT ALSO STATES SEPARATELY IN THE NOTES ON A CCOUNTS THAT THERE ARE CERTAIN INCOME TAX CASES PENDING FOR THE PERIOD WH EN COMPANY WAS ENGAGED IN AQUA CULTURE BUSINESS. WHILE THE MANAGEMENT ARG UED THAT AQUA CULTURE FARMING SHOULD BE TREATED AS AGRICULTURE, THE DEPAR TMENT HAS NOT ACCEPTED THIS CONTENTION. SIMILARLY THERE WERE CONTRADICTORY CONF LICTS IN HON. HIGH COURTS IN REGARD TO THE TREATMENT OF PRAWN PONDS FOR THE P URPOSE OF DEPRECIATION. IN ONE VERDICT IT WAS FOUND TREATED AS PLANT AND IN AN OTHER VERDICT IT WAS TREATED AS BUILDING. THE ENTIRE MATTER IS NOW UNDER APPEAL WITH THE HON. SUPREME COURT'. THESE CLEARLY MEAN THAT THE AQUA FARMING BU SINESS WAS TREATED BY THE COMPANY AS A THING OF THE PAST. IN THE ANNUAL STAT EMENT FOR THE SUCCEEDING F.Y. 2011-12, ONCE AGAIN THERE IS NOT THE REMOTEST MENTION OF AQUA FARMING. SEPARATELY, UNDER THE HEADER OPPORTUNITIES, OUTLOO K AND THREATS, THE COMPANY HAS HERALDED ITS INTENDED AND IMMINENT ACTI VITIES AS FOLLOWS: THE COMPANY IS PLANNING TO DEVELOP A TOWNSHIP PROJECT I N COCHIN AND A FREE TRADE WAREHOUSING ZONE IN TUTICORIN. MOST OF THE LA ND REQUIRED FOR THE PROJECTS ARE TIED UP FOR DEVELOPMENT. THE COMPANY S HALL PROCEED WITH OBTAINING APPROVALS FROM THE AUTHORITIES AT APPROP RIATE TIME AND HOPES TO INITIATE THE PROJECTS WITHIN THE NEXT 12 MONTHS. ME ANWHILE THE COMPANY 'S SALE OF APARTMENTS IN THE ATRIA PROJECT IS ALSO PROGRESS ING AND WILL BE COMPLETED WITHIN THIS FINANCIAL YEAR. THE COMPANY WILL START WORK ON ITS BUDGET HOTEL PROJECT AT VADAKKANCHERRY DURING THE COMING YEAR. I T IS HOPED THAT BY THE TIME THE COMPANY WOULD LAUNCH ITS TOWNSHIP PROJECT, THE REAL ESTATE ENVIRONMENT IN COCHIN WOULD ALSO BE MORE CONDUCIVE FOR THE SUCCESS OF THE PROJECT. THE BORROWING COSTS MAY ESCALATE SOMEWHAT AS THE GOVER NMENT IS KEEN TO REIN IN INFLATION, BUT THE COMPANY IS CONFIDENT THAT IT CAN ABSORB THE HIGHER BORROWING COSTS AS AND WHEN INCURRED'. FROM THE ABOVE IT IS CLEAR THAT EVEN IN THE SUCCEED ING FY 2011-12 NOT TO SPEAK OF THE IMPUGNED F.Y.2010-11 OR EARLIER, THE APPELLA NT-COMPANY HAD NOT PLANNED OR PREPARED TO RE-COMMENCE AQUA FARM ACTIVI TIES. THEREFORE, ITS PROTESTATIONS THAT THE ASSETS ASSOCIATED WITH AQUA FARMING WERE BEING KEPT IN A STATE OF CONTINUOUS AND WELL-OILED WELL-BEING AND R EADY-TO-USE CONDITION APPEAR TO BE FALSE. THESE SELF-SERVING AND UNSUBSTA NTIATED STATEMENTS CANNOT BE ACCEPTED. DURING THE ENTIRE PERIOD OF SUCH NON-U SE, THE APPELLANT HAS CLAIMED DEPRECIATION ON THE EXTINCT ASSETS NOW SOUG HT TO BE REVIVED AFTER HAVING BEING SPRINKLED WITH LIFE-GIVING WATERS BY T HE 'SUBSEQUENT ORDERS PASSED BY THE COMPETENT AUTHORITY'. (IN APPELLANT-S PEAK). I.T.A. NO.25/COCH/2017 11 (E) THE APPELLANT IS ENTITLED TO CARRY OUT WHATEVE R BUSINESS IS EXPLICITLY DESIRED AND TARGETED BY IT AND STATED IN ITS MEMORA NDUM AND ARTICLES OF ASSOCIATION, AND TO REAP THE BENEFITS OF THE CARRYI NG OUT OF THE SAME. FOR THE REASON BEING THE BAN IMPOSED BY THE HONBLE SUPREME COURT, THE APPELLANT WAS NOT ABLE TO CONDUCT ITS AQUA FARM BUSINESS AND DROPPED ITS BUSINESS, AND HAS CONSEQUENTLY DIVERSIFIED INTO OTHER (THE BUILDI NG AND CONSTRUCTION) BUSINESS FOR REASONS OF BUSINESS OPPORTUNITY. NOW, IT STATES THAT IT PLANS TO REVIVE ITS EARLIER AQUA FARM BUSINESS, AND USE WHATEVER ASSETS CONTINUE TO BE RETAINED BY IT FROM THE FY 1997-98 ONWARDS, THIS IS BECAUSE OF BUSINESS OPPORTUNITY SEEN IN REVIVING THE SAID EARLIER BUSINESS IN BOTH DECIS IONS, THAT OF ENGAGING IN THE BUILDING AND CONSTRUCTION BUSINESS AND OF RE-START ING THE AQUA FARM BUSINESS, THE APPELLANT WILL EARN THE FUTURE REVENUE STREAMS FROM THE DATE OF THEIR RESPECTIVE COMMENCEMENT AND THE DECISIONS THEMSELVE S WOULD HAVE BEEN TAKEN BASED ON THE RESPECTIVE NET PRESENT VALUE (NPVS) OF SUCH RESPECTIVE REVENUE STREAMS AS AGAINST THE RESPECTIVE INVESTMENTS. THE APPELLANT WILL NEED TO BEGIN CLAIMING THE VALUES OF DEPRECIATION ON THE ASSETS T O BE EMPLOYED IN THE AQUA FARM BUSINESS ONLY FROM THE START OF SUCH BUSINESS, AND WOULD ALSO BE ENTITLED TO ANY REVENUE-NATURED CLAIMS OF THE EXPENSES IN RE PAIRING OR COMMISSIONING OR OTHERWISE ENABLING THE IMPUGNED ASSETS. IT CANNO T ASK THAT IT BE ALLOWED THE CLAIMS OF DEDUCTIONS ON DEPRECIATIONS ON THE ASSETS DURING THE PERIOD OF THEIR NON-USE AND 'EXTINCT' ('SIMPLY THERE' OR 'EXTANT' I N THEIR STATES OF 'UNREGISTERED - IN THE CONSCIOUSNESS OF THE APPELL ANT - PRESENCE') STATUS THAT ARE NOW SOUGHT TO BE REVIVED. THEREFORE, NO RETROSP ECTIVE CLAIMS OF DEPRECIATION ON SUCH ASSETS, DURING THE YEARS OF IN ACTIVITY FROM F.Y. 1997-98 UNTIL THE IMPUGNED F. Y. 2010-11 WHEN THERE WAS NOT EVEN AN INTENTION TO COMMENCE AQUA FARM BUSINESS ACTIVITY, CAN BE ACCEPT ED. THESE CAPITAL INVESTMENTS REPRESENTED SUNK COSTS THAT WERE NOT IN THE RADAR-ZONE OF THE APPELLANT'S CONSIDERATION DURING ITS PURSUIT OF THE ALTERNATIVE BUSINESS ACTIVITIES, AND BECAME ALIVE THROUGH RESUSCITATION ONLY WHEN THE NPV ANALYSES OF THE AQUA FARM BUSINESS WAS CARRIED OUT, WHICH W AS DEFINITELY NOT EVEN THE INTENTION OF THE APPELLANT UNTIL AFTER THE END OF T HE FY 2011-12 IN THE INVESTMENT BUDGETING ANALYSES CARRIED OUT TO RESTAR T THE AQUA FARM BUSINESS ACTIVITY, THE NPV ANALYSES WOULD HAVE DULY INCORPOR ATED THE RESUSCITATED SUNK COSTS BEING THE INVESTMENTS IN ASSETS (PERHAPS AFT ER REVALUATION) AS ABOVE. THE APPELLANT CANNOT BE ALLOWED TO BOTH REMAIN AWAY FRO M THE AQUA FARMING BUSINESS ACTIVITY FOR THE LONG PERIOD AS ABOVE, RES ULTING IN ZERO INCOMES OR LOSSES DUE TO SUCH INACTIVITY AND TEMPORARY EXTINCT ION OF ASSETS, AND ALSO SIMULTANEOUSLY CLAIM BENEFITS IN THE FORM OF CLAIM OF DEDUCTION CURRENT-TURNED UNABSORBED DEPRECIATION LOSSES. THE EATING OF THE ALLOWANCE OF THE CLAIM OF DEPRECIATION WILL NEED TO BE CO-EXTENSIVE WITH THE VOLUNTARY USE OF THE ASSETS INVOLVED WHICH WILL RESULT IN THEIR TRUE DEPRECIATI ON THROUGH SUCH USE. THE APPELLANT CANNOT KEEP THE CAKE OF UNUSED AND UNDEPR ECIATED ASSETS AND ALSO EAT ONE OF THE CLAIM OF DEPRECIATION. THE DEPRECIAT ION CLAIMS WILL BE ALLOWED WHEN THE ASSETS ARE USED PASSIVELY, ACTIVELY OR IN A READY-TO-USE CONDITION, BUT NOT OTHERWISE WHEN THEY ARE IN A STATE OF SUSPENDED EXTINCTION AND DISUSE. I.T.A. NO.25/COCH/2017 12 (F) THE RESPONSIBILITY TO PROVE ENTRIES, DEDUCTIONS , AND STATEMENTS MADE ON TAX RETURNS IS ENTIRELY UPON THE TAX PAYER. THE BURDEN OF PROOF AS WELL AS THE INITIAL ONUS TO PROVE THE VALIDITY OF A CLAIM OF DEPRECIATI ON BEING MADE LIES ON THE CLAIMANT. IT IS FOR THE APPELLANT TO SHOW CAUSE WH Y THE BENEFITS OF THE CLAIMS OF THE SET-OFFS OF UNABSORBED DEPRECIATION LOSSES BROU GHT FORWARD FROM THE MULTIPLE ASSESSMENT YEARS OF VISIBLE AND STATED BUS INESS INACTIVITY AND CONSEQUENT INFERRED, APPARENT AND UNCONTRADICTED DI SUSE OF THE ASSETS IN QUESTION NEEDED TO BE ALLOWED IN ITS FAVOUR. ONCE T HERE IS A STATUTORY PROVISION THAT SETS OUT CERTAIN CONDITIONS (THAT THE ASSET WA S ACTUALLY PUT TO USE FOR THE PURPOSE OF BUSINESS , IN THE INSTANT CASE) TO BE FULFILLED WHILE MAKING A CLAIM, IT IS THE MANDATORY DUTY OF THE CLAIMANT TO SHOWCASE T HE VALID, RELIABLE AND VERIFIABLE EVIDENCES SUPPORTING SUCH CLAIM. THE BUR DEN OF PROOF IN SUCH MATTERS IS EXCLUSIVELY ON THE CLAIMANT AND THE FAC T REMAINS THAT THE APPELLANT HAS FAILED TO SUBSTANTIATE ITS CLAIM AND FULFIL THE BURDEN OF PROOF AND ONUS CAST UPON IT IS TO PROVE CONCLUSIVELY THAT THE ASSETS IN QUESTION WERE BEING ACTUALLY PUT TO USE. IN THE CASE OF SUMATI DAYAL V. CIT 214 ITR 801 (SC), THE HONBLE SUPREME COURT HELD THAT THE ONUS TO PROVE THAT THE APPARENT (VIZ. WHICH MEANS IN THE INSTANT CASE THAT THE ASSETS COULD NOT REASO NABLY BE HELD TO HAVE BEEN PUT TO USE IN THE BUSINESS) IS NOT THE REAL (VIZ. WHICH MEANS IN THE INSTANT CASE THAT THEY WERE INDEED PUT TO SUCH USE) IS ON THE PARTY ( THE APPELLANT, IN THE INSTANT CASE) WHO CLAIMS IT TO BE SO. IN ITS DECISION DATE D 20 AUGUST, 1968 IN THE CASE OF METAL BOX. CO. OF INDIA LTD V. THEIR WORKMEN [1 969 AIR 612, 1969 SCR (1) 759), THE HONBLE SUPREME COURT HELD AS FOLLOWS : 'SINCE THE COMPANY CLAIMED THE DEDUCTION OF DEPRECIATION, IT STANDS TO REASON THAT THE BURDEN OF PROOF THAT THE DEPRECIATION CLAIMED BY IT WAS THE C ORRECT AMOUNT IN ACCORDANCE WITH THE INCOME TAX ACT WAS ON THE COMPANY AND THAT BURDEN THE COMPANY MUST DISCHARGE ONCE ITS FIGURES WERE CHALLENGED. (Y) FROM ALL OF THE ABOVE, IT IS HELD THAT THE APPE LLANT HAS BEEN UNABLE TO SATISFACTORILY DISCHARGE THE BURDEN AND ONUS OF PRO OF CAST ON IT TO SUBSTANTIATE ITS CLAIMS OF SET OFFS OF UNABSORBED DEPRECIATION LOSSE S BROUGHT FORWARD FROM THE AY 998-99 TO THE AY 2009-10. IN THE ABSENCE OF SATISF ACTORY PROOFS SUBSTANTIATING THE USE OF THE ASSETS IN REFERENCE, THE UNABSORBED LOSS ES OF DEPRECIATION FROM THE FY 1997-98 UNTIL THE FY 2011-12 CANNOT BE CONSIDERED T O BE STATUTORILY VALID AND ACCEPTABLE CURRENT DEPRECIATIONS IN THE FIRST PLACE IN THE RESPECTIVE FINANCIAL YEARS AS ABOVE AND CANNOT BE ALLOWED TO BE BROUGHT FORWAR D AND SET OFF FROM THE TAXABLE INCOMES OF THE IMPUGNED F.Y. 2010-11, THE PRECEDING F.Y. 2009-10 ( IF APPLICABLE POSITIVE TAXABLE INCOMES EXIST) AND SUCCEEDING FINA NCIAL YEARS, UNTIL THE FINANCIAL YEAR IS REACHED WHEREIN THE APPELLANT IS ABLE TO CL EARLY DEMONSTRATE THAT SUCH AQUA FARM BUSINESS ACTIVITIES HAD COMMENCED (NB: AS PER AVAILABLE INFORMATION BEFORE ME AS EXTRACTED FROM THE ANNUAL REPORTS OF T HE APPELLANT, THIS WOULD NOT BE UNTIL THE FY 2015-2016; HOWEVER, THE APPELLANT CAN BE GIVEN THE OPPORTUNITY TO CONTRADICT THIS AND PRESENT AN EARLIER APPLICABLE FINANCIAL YEAR OF COMMENCEMENT IN THE RESPECTIVE ASSESSMENT PROCEEDINGS). THE DECI SIONS OF THE JUDICIAL AUTHORITIES THAT BEAR ON THE NEED FOR ACTUAL USE OF THE ASSETS IN MAKING A CLAIM OF DEPRECIATION INCLUDING THAT OF THE HON'BLE KERALA HIGH COURT IN THE CASE OF FOREST INDUSTRIES I.T.A. NO.25/COCH/2017 13 TRAVANCORE LTD. VS. CIT (SUPRA) AND CIT VS. GEO-TEC H CONSTRUCTION CORPORATION (SUPRA) ARE INAPPLICABLE AND DISTINGUISHED ON FACTS FROM THOSE IN THE INSTANT CASE BECAUSE THE ASSETS IN QUESTION, THAT HAVE BEEN LYIN G IN A STATE OF DISUSE OVER SEVERAL FINANCIAL YEARS, ARE HELD TO BE NEITHER RE ADY-TO-USE NOR PASSIVE IN THEIR NATURE AND CONDITION. THE RATIO OF HONBLE MADRAS HIGH COURT IN THE CASE OF CIT VS. MAPS TOURS & TRAVELS (SUPRA) IS HELD TO APPLY ( THE PROCESS OF REGISTRATION OF THE CAR IN THAT CASE IS AKIN TO THE PROCESS TO RE-E NABLE THE ASSETS IN THE INSTANT CASE) WHILE THAT OF THE HONBLE BOMBAY HIGH COURT I N THE CASE OF DINESHKUMAR GULABCHAND AGARWAL VS. CIT (SUPRA) IS HELD TO LEND SUPPORTIVE VALUE. Z) THE ABOVE DECISIONS ENABLE US TO ARRIVE AT THE F OLLOWING POSITIONS IN RESPECT OF THE CLAIMS OR UNABSORBED DEPRECIATION LOSSES SOUGHT TO BE BROUGHT FORWARD AND SET OFF FROM THE A.Y. 1996-97 TO THE A.Y.2009-10: (I) THE IMPUGNED AQUA FARM BUSINESS OF THE APPELLAN T WAS BEING CARRIED OUT FOR THE AYRS 1996-97 AND 1997 -98. THEREFORE, THE ASSETS RELATING AND ASSOCIATED TO THE SAID BUSINESS WERE BEING PUT TO U SE IN THESE YEARS AND IN CONSEQUENCE, THE AMOUNTS OF UNABSORBED DEPRECIATION LOSSES OF RS.34,29,210 RELATING TO THE AY 1996-97 AND RS.28,3 6,165/- RELATING TO THE AY 1997-98 (OUT OF WHICH OF RS.1,55,827/- HAS ALREA DY BEEN SET OFF BY THE APPELLANT IN THE IMPUGNED AY 2011-12) CAN BE ALLOWE D TO BE BROUGHT FORWARD AND SET OFF IN SUBSEQUENT ASSESSMENT YEARS. (II) THESE HAVE BEEN ALREADY BEEN CLAIMED BY THE AP PELLANT IN THE IMPUGNED A.Y. 2011-12 AGAINST THE TAXABLE INCOME OF RS. 35,8 5,037/-, WHICH IS ACCEPTED. THEREFORE, THE TOTAL TAXABLE INCOME FOR T HE IMPUGNED A.Y. 2011-12 IS HELD TO BE RS. NIL. (III) THIS WOULD LEAVE A BALANCE UNABSORBED DEPREC IATION LOSSES OF RS.26,89,338 RELATING TO THE AY 1997-98 TO BE SET O FF IN SUBSEQUENT ASSESSMENT YEARS. ALL OF THE OTHER LISTED (IN THE ASSESSMENT ORDER) AMOUNTS OF UNABSORBED DEPRECIATION FOR THE AYRS. 1998-99 TO 2009-10, WHICH ALONG WITH THE BALANCE AMOUNT OF RS.26,89,338 RELATING TO THE AY 1997-98 AS ABOVE TOTAL TO RS.1,52,76,459/- ARE TO BE DISALLOWE D FROM BEING BROUGHT FORWARD AND SET OFF IN THE A.YRS 2010-11 ONWARDS UN TIL (AS STATED ABOVE BASED ON THE INFORMATION AS EXTRACTED FROM THE ANNU AL REPORTS) THE F.Y. 2015-16. THIS IS BECAUSE UNTIL PROVED TO BE OTHERW ISE BY THE APPELLANT, THE ASSETS IN QUESTION HAVE NOT BEEN PUT TO USE. THESE DISALLOWANCES ARE ONLY BECAUSE OF THE CLEAR AND UN-CONTRADICTED EVIDENCES OF THE ASSETS NOT BEING PUT TO USE (AS DETERMINED AND DISCUSSED ABOVE) IN T HE RESPECTIVE FINANCIAL YEARS ABOVE AND DESPITE THE FACT THAT THE CLAIMS OF CARRY FORWARD AND SET OFF OF UNABSORBED DEPRECIATION LOSSES ARE NOT BARRED BY THE 8 YEAR LIMIT OR THE FACT THAT THE ORIGINAL BUSINESS HAS CHANGED, AS HEL D IN THE JUDICIAL RATIOS DISCUSSED EARLIER. I.T.A. NO.25/COCH/2017 14 (IV) THE AO MAY THEREFORE TAKE NECESSARY ACTIONS THAT MAY INCLUDE THE REOPENING OF ASSESSMENT PROCEEDINGS FOR THE A.Y. 20 10-11 THAT PRECEDES THE IMPUGNED A.Y. 2011- 12 AS WELL AS FOR THE SUCCEEDIN G A.YRS 2012-13 ONWARDS TO DISALLOW THE CLAIMS OF UNABSORBED DEPREC IATION LOSSES MADE IN SUCH YEARS, NEEDLESS TO SAY, IF THE ASSESSMENT FOR THE PRECEDING A.Y. 2010- 11 DISALLOWS ANY CONCURRENT CLAIM OF THE UNABSORBED DEPRECIATION LOSSES OF RS.26,89,338 RELATING TO THE A.Y. 1997-98 AS ABOVE, THE NECESSARY ADJUSTMENT WILL NEED TO BE MADE TO DISALLOW ANY SUC H EQUIVALENT VALUE IN THE IMPUGNED A.Y. 2011-12 AND SUCCEEDING ASSESSMENT YEA RS, AS APPLICABLE. AA) THE FACT THAT THE AOS HAVE ALLOWED THE CLAIMS O F UNABSORBED DEPRECIATION LOSSES BROUGHT FORWARD FROM THE A.YRS. 1998-99 TO 2009-10 IN THE ASSESSMENTS MADE U/S 143(3) OF THE ACT FOR T HE A.YRS 2012-13 AND 2013-14, AS PROVED THROUGH THE SUBMITTED COPIES OF THE SAID ASSESSMENT ORDERS ARE NOT BINDING ON THIS OFFICE. IF ANYTHING, NECESSARY RECTIFICATIONS OR OTHER CORRECTIVE ACTIONS INCLUDING THEIR REOPENI NG WILL NEED TO BE CARRIED OUT IN RESPECT OF THESE ASSESSMENTS TO DISA LLOW THE CLAIMS ERRONEOUSLY ALLOWED. THE AO IS DIRECTED TO TAKE THE NECESSARY ACTIONS IN THIS REGARD. BB) ANY ERRORS/OMISSION DEEMED TO HAVE BEEN COMMITT ED BY THE AO, INCLUDING NON-APPLICATION OF THE PRINCIPLE OF THE N EED FOR THE ASSETS IN QUESTION TO BE PUT TO USE TO ALLOW A CLAIM OF DEPRE CIATION AND THUS FOR THE PURPOSE OF ASSESSMENT ARE NOW HELD AS HAVING BEEN C ORRECTED AND CURED BY ME THROUGH THE ANALYSES ABOVE. THIS HAS BEEN DON E IN EXERCISE OF CONCURRENT AND CO-EXTENSIVE POWERS OF ASSESSMENT CO NFERRED ON ME BY THE STATUTE, AS ALSO SANCTIFIED BY THE RATIO OF THE HONBLE SUPR EME COURT OF INDIA IN THE CASE OF M/S. JUTE CORPORATION OF INDI A LIMITED VS. COMMISSIONER OF INCOME-TAX AND ANR (1991) AIR 241, 1990 SCR SUPL.(1) 340. IN THE CITED RATIO, THE HONBLE APEX COURT H ELD INTER ALIA THAT THE DECLARATION OF LAW IS CLEAR THAT THE POWER OF THE A PPELLATE ASSISTANT COMMISSIONER IS CO-TERMINUS WITH THAT OF THE INCOM E TAX OFFICER. IF THAT BE SO, THERE APPEARS TO BE NO REASON AS TO WHY THE APPELLATE AUTHORITY CANNOT MODIFY THE ASSESSMENT ORDER ON AN ADDITIONAL GROUND EVEN IF NOT RAISED BEFORE THE INCOME TAX OFFICER. NO EXCEPTION COULD BE TAKEN TO THIS VIEW AS THE ACT DOES NOT PLACE ANY RESTRICTION OR L IMITATION ON THE EXERCISE OF APPELLATE POWER. EVEN OTHERWISE AN APPELLATE AU THORITY WHILE HEARING APPEAL AGAINST THE ORDER OF A SUBORDINATE AUTHORITY HAS THE POWERS WHICH THE ORIGINAL AUTHORITY MAY HAVE IN DECIDING THE QUE STION BEFORE IT SUBJECTS TO RESTRICTION OR LIMITATION IF ANY PRESCRIBED BY T HE STATUTORY PROVISIONS. IN THE ABSENCE OF ANY STATUTORY PROVISIONS TO THE CONT RARY THE APPELLATE AUTHORITY IS VESTED WITH ALL THE PLENARY POWERS WHI CH THE SUBORDINATE AUTHORITY MAY HAVE IN THE MATTER. CONSEQUENTLY, A LL ACTIONS OF THE ASSESSING OFFICER INCLUDING THE COMPUTATION OF ASSE SSABLE AND TAXABLE INCOME IN THE INSTANT CASE WILL BE THOSE OF THIS OF FICE DETERMINED IN CONSONANT AND CONGRUENT SUPERSESSION OF THOSE CARRI ED OUT BY THE I.T.A. NO.25/COCH/2017 15 ASSESSING OFFICER. THE ABOVE WOULD MEAN THAT THIS A SSESSMENT CAN NOW BE TAKEN TO BE ONE COMPLETED AS DISCUSSED IN THE BODY OF THE ORDER ABOVE AND AS SUMMARIZED BELOW. THERE IS NOTHING THE ASSESSIN G OFFICER HAS DONE WHICH IS NOT CURABLE THROUGH THIS ACTION. 7. LN SUM, THE APPEAL FOR THE IMPUGNED A.Y. 2011- 12 IS PARTLY ALLOWED. THE AMOUNTS OF UNABSORBED DEPRECIATION BROUGHT FORWARD FROM THE A.YRS. 1996-97 AND 1997-98 (RS. 34,29,210 AND RS. 28,36,165 RESPEC TIVELY) ARE ALLOWED TO BE SET OFF AGAINST THE TAXABLE INCOMES OF THE A.YRS. 2010- 11, 2011-12 (THE IMPUGNED ASSESSMENT YEAR) AND FOLLOWING YEARS. THE REMAINDER AMOUNTS THAT RELATE TO THE A.YRS. 1998-99 TO 2009-10 ARE DISALLOWED FROM BEING BROUGHT FORWARD AND SET OFF IN THE A.Y. 2010-11, THE IMPUGNED A.Y. 2011-12 AND FOR THE SUCCEEDING A.YRS. 2012-13 ONWARDS UNTIL (AS STATED ABOVE BASED ON THE INFORMATION AS EXTRACTED FROM THE ANNUAL REPORTS, AND CONTESTABLE ON THE BAS IS OF EVIDENCES OF COMMENCEMENT OF AQUA FARM BUSINESS ACTIVITY) THE F. Y. 2015-16. THE AO MAY TAKE THE NECESSARY ACTIONS TO REOPEN THE ASSESSMENT PROCEEDINGS FOR THE ASSESSMENT YEARS IMPACTED. BESIDES AND NEEDLESS TO SAY, IF THE ASSESSMENT OR RE- ASSESSMENT FOR THE PRECEDING AY 2010-11 SERVES TO D ISALLOW ANY CONCURRENT CLAIM OF THE UNABSORBED DEPRECIATION LOSSES OF RS.2 6,89,338/- RELATING TO THE AY 1997-98 AS ABOVE, THE NECESSARY ADJUSTMENT WILL NEE D TO BE MADE TO DISALLOW ANY SUCH EQUIVALENT VALUE IN THE IMPUGNED AY 2011-12 AN D SUCCEEDING ASSESSMENT YEARS, AS APPLICABLE. ALSO, NEEDLESS TO SAY, THE A SSESSING OFFICER MAY EXAMINE WHETHER FOR EACH OF THE A.YRS. 1996-97 TO 2009-10 A S WELL AS 2010-11 ONWARDS, THE APPELLANT HAS FILED ITS RETURN OF INCOME WITHIN THE TIMEFRAMES STIPULATED U/S. 139(1) OF THE ACT, AND TAKE NECESSARY ACTIONS IN RE SPECT OF THE DISALLOWANCES OF LOSSES CARRIED/BROUGHT FORWARD AND SET OFF, IF AND AS NEEDED. 6.3 THE ABOVE FACTUAL FINDING OF THE CIT(A) TH AT THE ASSET IN QUESTION WAS NOT KEPT READY FOR USE CONDITION AND THERE WAS NO P ASSIVE USE OF THE SAME FOR THE ASSESSMENT YEARS 1999-2000 TO 2009-10, HAS NOT BEEN DISPELLED BY THE ASSESSEE BY PLACING ANY CONTRARY EVIDENCE BEFORE TH E TRIBUNAL. THEREFORE, I CONFIRM THE ORDER OF THE CIT(A). 6.4 AS REGARDS THE ASSESSEES CONTENTION THAT TH E CIT(A) HAS EXCEEDED HIS JURISDICTION BY GIVING DIRECTION TO THE ASSESSING O FFICER TO MAKE REMEDIAL MEASURES TO WITHDRAW SET OFF UNABSORBED DEPRECIATIO N FOR THE ASSESSMENT YEAR I.T.A. NO.25/COCH/2017 16 2010-11 AND THE ASSESSMENT YEARS 2012-13 ONWARDS, I AM OF THE VIEW THE ASSESSEE HAS TO CHALLENGE THE ORDER OF THE ASSESSI NG OFFICER WHEN REMEDIAL MEASURES ARE TAKEN BY AO FOR THE RESPECTIVE AY 2010 -11 AND AYS 2012-13 ONWARDS. THE TRIBUNAL HAS TO CONFINE ITSELF TO EXA MINATION OF THE ISSUE CONCERNING THE CURRENT YEAR, NAMELY AY 2011-12. 6.5 FOR THE AFORESAID REASONING, I SEE NO MERIT I N THE APPEAL FILED BY THE ASSESSEE AND I DISMISS THE SAME. IT IS ORDERED ACC ORDINGLY. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSE E IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 14 TH -07-2017. SD/- (GEORGE GEORGE K.) JUDICIAL MEMBER PLACE: KOCHI DATED: 14 TH JULY, 2017 GJ COPY TO: 1. M/S. KINGS INFRA VENTURES LTD., A-1, ATRIA APART MENT, PERMANOOR ROAD, THEVARA, KOCHI. 2. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE -1(2), KOCHI. 3. THE COMMISSIONER OF INCOME-TAX(APPEALS) - 1, KOCHI. 4. THE PR.COMMISSIONER OF INCOME-TAX, KOCHI. 5. D.R., I.T.A.T., COCHIN BENCH, COCHIN. 6. GUARD FILE. BY ORDER (AS SISTANT REGISTRAR) I.T.A.T., COCHIN