DCIT (IT) 3(2)(1), MUMBAI V. MARUBENI CORPORATION, MUMBAI

ITA 2710/MUM/2017

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 0590 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2018
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: I
• Assessment Year: 2007-2008
• Appeal Filed On: 13-04-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: V SREEKAR
• Assessee Lawyers: V K DUGGAL
• Keywords: Depreciation; Revised return; Unabsorbed depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL I BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY, JUDICIAL MEMBER AND SHRI RAJESH KUMAR , ACCOUNTANT MEMBER ITA NO. 2710/MUM./2017 ( ASSESSMENT YEAR : 20 07 08 ) DY . COMMISSIONER OF INCOME TAX (I.T) CIRCLE 3( 2 )(1) , MUMBAI . APPELLANT V/S MARUBENI CORPORATION 25, MITTAL CHAMBERS 2 ND FLOOR, NARIMAN POINT MUMBAI 400 01 PAN AAACM7682D . RESPONDENT REVENUE BY : SHRI V. SREEKAR ASSESSEE BY : SHRI V.K. DUGGAL DATE OF HEARING 2 5 . 1 0.2018 DATE OF ORDER 30.11.2018 O R D E R PER SAKTIJIT DEY, J.M. AFORESAID APPEAL HAS BEEN FILED BY THE REVENUE CHALLENGING THE ORDER DATED 24 TH JANUARY 2017, PASSED BY THE LEARNED COMMISSIONER (APPEALS) 57, MUMBAI, FOR THE ASSESSMENT YEAR 2007 08. 2 . THE GRIEVANCE OF THE REVENUE IN THE PRESENT APPEAL IS, THE LEARNED COMMISSIONER (APPEALS) HAS ACTED WITHOUT JURISDICTION IN REMITTING THE ISSUE TO THE FILE OF THE ASSESSING OFFICER AS NO SUCH POWER OF SET ASIDE IS CONFERRED ON HIM. 2 MARUBENI CORPORATION 3 . BRIEF FACTS ARE, THE AS SESSEE , A COMPANY , FILED ITS RETURN OF INCOME ORIGINALLY FOR THE IMPUGNED ASSESSMENT YEAR ON 31 ST OCTOBER 2007. SUBSEQUENTLY, THE ASSESSEE FILED ITS REVISED RETURN OF INCOME ON 30 TH NOVEMBER 2011, DECLARING TOTAL INCOME OF ` 1,46,08,113. DURING THE ASSESSM ENT PROCEEDINGS, ASSESSING OFFICER AFTER CALLING FOR VARIOUS DETAILS AND DOCUMENTS, COMPLETED THE ASSESSMENT VIDE ORDER DATED 31 ST JANUARY 2011, DETERMINING THE TOTAL INCOME AT ` 17,00,22,100. WHILE COMPLETING THE ASSESSMENT, THE ASSESSING OFFICER RE ADJUS TED THE BROUGHT FORWARDED LOSS AND UNABSORBED DEPRECIATION OF EARLIER YEARS BY RE ADJUSTING THE INCOME FROM ASSESSMENT YEAR S 1999 2000 TO 2006 07. BEING AGGRIEVED WITH THE AFORESAID DECISION OF THE ASSESSING OFFICER, THE ASSESSEE PREFERRED APPEAL BEFORE TH E FIRST APPELLATE AUTHORITY AND BEING UNSUCCESSFUL , WENT IN FURTHER APPEAL BEFORE THE TRIBUNAL. DURING THE HEARING OF APPEAL, THE TRIBUNAL TAKING NOTE OF THE FACT THAT THE ASSESSING OFFICER HAS RE ADJUSTED UNABSORBED DEPRECIATION AND BUSINESS LOSS CARRIED FORWARD FROM THE ASSESSMENT YEAR S 1999 2000 TO 2006 07 AND REDUCED THE CLAIM OF THE ASSESSEE TO AN AMOUNT OF ` 8,65,07,302, OBSERVED THAT THE ASSESSING OFFICER COULD NOT HAVE ALTERED THE SETTLED ISSUES WITHOUT DISTURBING THE ASSESSMENTS COMPLETED FOR THE P RECEDING ASSESSMENT YEARS. THEREFORE, THE TRIBUNAL RESTORED THE ISSUE OF SET OFF OF UNABSORBED DEPRECIATION AND UNABSORBED BUSINESS LOSS FOR FRESH ADJUDICATION BY THE ASSESSING 3 MARUBENI CORPORATION OFFICER. WHILE COMPLETING THE ASSESSMENT IN PURSUANCE TO THE DIRECTIONS OF THE TRIBUNAL, THE ASSESSING OFFICER AGAIN ALLOWED SET OFF OF BROUGHT FORWARD LOSSES AND DEPRECIATION AT THE SAME FIGURE AS WAS WORKED OUT BY THE ASSESSING OFFICER IN THE ORIGINAL ASSESSMENT ORDER. BEING AGGRIEVED BY THE AFORESAID DECISION OF THE ASSESSING OFFI CER, THE ASSESSEE PREFERRED APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 4 . BEFORE THE LEARNED COMMISSIONER (APPEALS) ASSESSEE SUBMITTED THAT WHILE RE ADJUSTING THE BROUGHT FORWARD LOSS AND DEPRECIATION IN THE IMPUGNED ASSESSMENT YEAR THE ASSESSING OFFICER H AS RE COMPUTED THE INCOME OF THE PREVIOUS YEARS FROM 1999 2000 TO 2006 07. HE ALSO SUBMITTED, THOUGH, T HE ASSESSING OFFICER HAS PASSED THE ASSESSMENT ORDER FOR THE ASSESSMENT YE AR 2004 05 ON THE VERY SAME DAY HE PASSED THE ASSESSMENT ORDER FOR THE IMPUGNED ASSESSMENT YEAR , BUT , HE HAS NOT ADOPTED THE INCOME COMPUTED FOR THE ASSESSMENT YEAR 2004 05 IN THE IMPUGNED ASSESSMENT ORDER. THE LEARNED COMMISSIONER (APPEALS) OBSERVED , ONCE THE ASSESSMENT ORDERS FOR THE PRECEDING ASSESSMENT YEARS HAVE BECOME FINAL, TH E ASSESSING OFFICER CAN NOT ASSUME JURISDICTION TO ALTER THE INCOME DETERMINE IN THOSE ASSESSMENT ORDER S . THUS, THE LEARNED COMMISSIONER (APPEALS) ULTIMATELY CONCLUDED THAT SET OFF OF BROUGHT FORWARD LOSS AND UNABSORBED DEPRECIATION HAS TO BE ALLOWED BY THE ASSESSING OFFICER AS PER THE LOSS AND DEPRECIATION COMPUTED IN THE RELEVANT ASSESSMENT 4 MARUBENI CORPORATION YEAR S . ACCORDINGLY, HE DIRECTED THE ASSESSING OFFICER TO VERIFY THE LOSS AND DEPRECIATION AS PER RECORD OF EARLIER YEARS AND ALLOW SET OFF IN THE IMPUGNED ASSESSMENT YE AR. BEING AGGRIEVED BY THE ORDER OF THE LEARNED COMMISSIONER (APPEALS), THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL . 5 . WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED MATERIALS ON RECORD. AS COULD BE SEEN FROM THE FACTS EMANATING FROM RECORD, IN THE RETURN OF INCOME FOR THE IMPUGNED ASSESSMENT YEAR, THE ASSESSEE CLAIMED SET OFF OF CARRIED FORWARD BUSINESS LOSS AND UNABSORBED DEPRECIATION AT ` 24,77,90,711, AND ` 70,81,00,086, RESPECTIVELY AS DETERMINED IN THE ASSESSMENT ORDERS PASSED FOR ASSESSMENT YE ARS 1999 2000 TO 2006 07 . WHILE COMPLETING THE ASSESSMENT FOR THE IMPUGNED ASSESSMENT YEAR, ORIGINALLY, THE ASSESSING OFFICER RE WORKED THE LOSS AND DEPRECIATION RELATING TO THE EARLIER ASSESSMENT YEAR S AND ALLOWED SET OFF OF BROUGHT FORWARD LOSS AND UNAB SORBED DEPRECIATION FOR AN AMOUNT OF ` 8,65,07,302. THE ASSESSEE CHALLENGED THE AFORESAID DECISION BEFORE TH E LEARNED COMMISSIONER (APPEALS) AND THEREAFTER BEFORE THE TRIBUNAL. THE TRIBUNAL, WHILE DECIDING THE ASSESSEES APPEAL IN ITA NO.1087/MUM./2012, DA TED 28 TH AUGUST 2013, BEING OF THE VIEW THAT THE ASSESSING OFFICER COULD NO T HAVE RE WORKED BUSINESS LOSS AND DEPRECIATION OF THE EARLIER ASSESSMENT YEAR S WITHOUT DISTURBING THE ASSESSMENT ORDER S PASSED FOR THOSE ASSESSMENT YEARS RESTORED THE 5 MARUBENI CORPORATION ISSUE TO THE ASSESSING OFFICER FOR DE NOVO ADJUDICATION. HOWEVER, ON PERUSAL OF THE IMPUGNED ASSESSMENT ORDER, IT BECOMES ABSOLUTELY CLEAR THAT THE ASSESSING OFFICER WITHOUT COMPLYING TO THE DIRECTIONS OF THE TRIBUNAL HAS SIMPLY ADOPTED THE FIGURE OF BROUGHT FORWARD LO SS AND UNABSORBED DEPRECIATION ALLOWED BY HIM IN THE ORIGINAL ASSESSMENT ORDER FOR THE IMPUGNED ASSESSMENT YEAR. THE IMPUGNED ASSESSMENT ORDER ON THE ISSUE OF SET OFF OF BROUGHT FORWARD LOSS AND UNABSORBED DEPRECIATION IS NOT ONLY BEREFT OF ANY REASONING B UT HAS BEEN PASSED IN A MOST PERFUNCTORY MANNER WITHOUT FOLLOWING THE DIRECTIONS OF THE TRIBUNAL TO VERIFY THE BUSINESS LOSS AND UNABSORBED DEPRECIATION DETERMINED IN THE PRECEDING ASSESSMENT YEARS. THE LEARNED COMMISSIONER (APPEALS) HAVING TAKEN NOTE OF T HE AFORESAID FACTUAL POSITION, HAS DIRECTED THE ASSESSING OFFICER TO ALLOW SET OFF OF BROUGHT FORWARD LOSS AND UNABSORBED DEPRECIATION AFTER VERIFYING THE LO SS AND DEPRECIATION DETERMINED IN THE EARLIER ASSESSMENT YEAR S . WE FAIL TO UNDERSTAND HOW THE DEPAR TMENT CAN HAVE ANY GRIEVANCE AGAINST THE AFORESAID DIRECTION OF LEARNED COMMISSIONER (APPEALS) AND PREFER THE PRESENT APPEAL WHICH, IN OUR VIEW, IS TOTALLY FRIVOLOUS. THERE BEING NO INFIRMITY IN THE ORDER OF LEARNED COMMISSIONER (APPEALS), WE UPHOLD THE SA ME BY DISMISSING THE GROUNDS RAISED. 6 MARUBENI CORPORATION 6 . IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON SD/ - RAJESH KUMAR ACCOUNTANT MEMBER SD/ - SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED: 30.11.2018 COPY OF THE ORDER FORWARDED TO : ( 1 ) THE ASSESSEE; ( 2 ) THE REVENUE; ( 3 ) THE CIT(A); ( 4 ) THE CIT, MUMBAI CITY CONCERNED; ( 5 ) THE DR, ITAT, MUMBAI; ( 6 ) GUARD FILE . TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY ( SR. PRIVATE SECRETARY ) ITAT, MUMBAI