Jindal Steels, CHENNAI V. DCIT Corporate Circle 10(1), CHENNAI

ITA 2718/CHNY/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 5053 (ITAT-CHENNAI)
• Duration Of Justice: 7 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-06-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 13-11-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B SAGADEVAN
• Assessee Lawyers: N VIJAYAKUMAR
• Keywords: Depreciation; Tangible material; Difference of opinion; Change of opinion

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: CHENNAI . . . , . , ! BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI ABRAHAM P.GEORGE, ACCOUNTANT MEMBER ./ ITA NO.2718 /CHNY/2017 ' ' /ASSESSMENT YEAR: 2009-10 M/S.JINDAL STEELS, NO.4 & 5, T.V.KOIL STREET, II FLOOR, OFF. TAYLORS ROAD, KILPAUK, CHENNAI-600 010. VS. THE DY. COMMISSIONER OF- INCOME TAX, CORPORATE CIRCLE-10(1), CHENNAI. [PAN: AADFJ 7711 J ] ( % /APPELLANT) ( &'% /RESPONDENT) % ( / APPELLANT BY : MR.N. VIJAYAKUMAR, CA &'% ( /RESPONDENT BY : MR.B. SAGADEVAN, JCIT ( /DATE OF HEARING : 20.06.2018 ( /DATE OF PRONOUNCEMENT : 21.06.2018 / O R D E R PER ABRAHAM P.GEORGE , ACCOUNTANT MEMBER : THE ASSESSEE IN THIS APPEAL, ASSAILING AN ORDER DA TED 28.09.2017 OF COMMISSIONER OF INCOME TAX(A) HAS RAISED THE FOLLOW ING GROUNDS: 1. FOR THAT THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) IS CONTRARY TO THE LAW, FACTS AND CIRCUMSTANCES OF THE CASE TO THE EXTENT PREJUDI CIAL TO THE INTEREST OF THE ASSESSEE AND IS OPPOSED TO THE PRINCIPLES OF EQUITY, NATURAL JUSTIC E AND FAIR PLAY. 2. FOR THAT THE COMMISSIONER OF INCOME TAX (APPEALS ) FAILED TO APPRECIATE THAT THE ORDER OF THE ASSESSING OFFICER IS WITHOUT JURISDICTION. 3. FOR THAT THE COMMISSIONER OF INCOME TAX (APPEALS ) FAILED TO APPRECIATE THAT THE REOPENING WAS BAD IN LAW. 4. FOR THAT THE COMMISSIONER OF INCOME TAX (APPEALS ) FAILED TO APPRECIATE THAT THE REOPENING WAS DONE ON A MERE CHANGE OF OPINION. ITA NO.2718/CHNY/2017 :- 2 -: 5. FOR THAT THE COMMISSIONER OF INCOME TAX (APPEALS ) ERRED IN HOLDING THAT THE TOYOTA INNOVA CAR OPERATED BY THE APPELLANT WAS ELIGIBLE FOR DEPR ECIATION AT THE RATE OF 25% (HALF OF 50%) OF THE WRITTEN DOWN VALUE. 6. FOR THAT THE COMMISSIONER OF INCOME TAX (APPEALS ) FAILED TO APPRECIATE THAT THE TOYOTA INNOVA CAR WHICH IS ACQUIRED BY THE APPELLANT AFTER 01.01.2009 BUT BEFORE 01.10.2009 IS ELIGIBLE FOR DEPRECIATION AT THE RATE OF 50% AS PER CLAUSE (VIA) OF ENTRY 111(3) OF PARA A OF THE NEW APPENDIX TO THE INCOME TAX RULES. 7. FOR THAT THE APPELLANT OBJECTS TO THE LEVY OF IN TEREST U/S.234B. PRAYER FOR THESE GROUNDS AND SUCH OTHER GROUNDS THAT MAY B E ADDUCED BEFORE OR DURING THE HEARING OF THIS APPEAL IT IS MOST HUMBLY PRAYED THAT THE HO NBLE TRIBUNAL MAY BE PLEASED TO I. QUASH THE ORDER OF REASSESSMENT OR II. ALLOW THE DEPRECIATION AT THE RATE OF 50% OR III. PASS SUCH OTHER ORDERS AS THE HONBLE TRIBUNAL MAY DEEM FIT. 2. A READING OF GROUNDS 2 TO 4 SHOWS THAT ASSESSEE IS AGGRIEVED ON THE RE- OPENING DONE FOR THE IMPUGNED ASSESSMENT YEAR. 3. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT ORIG INAL ASSESSMENT FOR THE IMPUGNED ASSESSMENT YEAR WAS COMPLETED ON 23.12.201 1 U/S.143(3) OF THE INCOME TAX ACT (IN SHORT THE ACT). AS PER THE LD.AR, THE SAID ASSESSMENT WAS COMPLETED AFTER SCRUTINIZING THE DETAILS FILED BY THE ASSESSE E. SUBMISSION OF THE LD.AR WAS THAT THE ASSESSEE WAS ISSUED A NOTICE U/S.148 OF THE ACT ON 30.03.2015, SEEKING RE- OPENING OF THE ASSESSMENT. AS PER THE LD.AR, ASSES SEE HAD THROUGH A LETTER DATED 30.04.2015 REQUESTED THE AO TO FURNISH THE REASONS FOR RE-OPENING. HOWEVER, AS PER THE LD.AR, THIS WAS NEVER SUPPLIED TO THE ASSESSEE. ACCORDING TO THE LD.AR, THE RE- ASSESSMENT WHICH WAS COMPLETED ON 28.12.2015 CLEARL Y INDICATED THAT THE RE- OPENING WAS DONE FOR DISALLOWING A PART OF THE CLAI M OF DEPRECIATION PREFERRED BY THE ASSESSEE ON A TOYOTA INNOVA CAR. AS PER THE LD.AR I N THE ORIGINAL ASSESSMENT, THIS WAS CONSIDERED BY THE AO AS A COMMERCIAL VEHICLE AN D DEPRECIATION ALLOWED. HOWEVER, ACCORDING TO THE LD.AR, IN THE RE-ASSESSME NT, THE TOYOTA INNOVA CAR WAS ITA NO.2718/CHNY/2017 :- 3 -: NOT CONSIDERED AS A COMMERCIAL VEHICLE AND THE AO D ENIED THE DEPRECIATION AVAILABLE TO COMMERCIAL VEHICLES. AS PER THE LD.AR, THE RE-A SSESSMENT WAS MADE ON A CHANGE OF OPINION AND THERE WERE NO FRESH TANGIBLE MATERIALS WITH THE AO. FURTHER, AS PER THE LD.AR, THE AO HAD ALSO FAILED TO FURNISH THE REASONS FOR THE RE-OPENING. RELYING ON THE JUDGMENTS OF THE HONBLE APEX COURT IN THE CASE OF CIT V. KELVINATOR OF INDIA LTD., REPORTED IN 320 ITR 561 AND GK DRIVE SHAFT (INDIA) LTD. VS. ITO (2002) 70 CCH 1264 ISCC LD.AR SUBMITTED THAT THE RE-ASSESS MENT DONE WAS BAD IN LAW. 4. PER CONTRA, THE LD.DR STRONGLY SUPPORTING THE OR DERS OF THE AUTHORITIES BELOW, SUBMITTED THAT THE RE-ASSESSMENT WAS JUSTIFIED SINC E ASSESSEE HAD CLAIMED A TOYOTA INNOVA CAR TO BE A COMMERCIAL VEHICLE. AS PER THE LD.DR, THIS ASPECT WAS NEVER EXAMINED BY THE AO DURING THE COURSE OF THE ORIGINA L ASSESSMENT PROCEEDINGS. CONTENTION OF THE LD.DR WAS THAT IT WAS NOT ON ACCO UNT OF ANY CHANGE OF OPINION THAT THE RE-ASSESSMENT WAS DONE. ACCORDING TO HIM, THE ASSESSEE HAD NO CASE THAT TOYOTA INNOVA CAR WAS A COMMERCIAL VEHICLE. AS PER THE LD.DR, THE RE-ASSESSMENT WAS VALIDLY INITIATED AND DONE. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE ORDERS CAREFULLY. IT IS NOT DISPUTED BY THE REVENUE AND THAT THE ASSESSEE WAS N OT GIVEN THE REASONS FOR WHICH THE RE-OPENING WAS DONE, DESPITE A SPECIFIC REQUEST FROM THE ASSESSEE IN THIS REGARD. BY VIRTUE OF THE JUDGMENT OF THE HONBLE APEX COURT IN THE CASE OF GK DRIVE SOFT, SUPRA, NON-FURNISHING OF REASONS, DESPITE A REQUEST FROM ASSESSEE, CAN RENDER SUCH RE-OPENING INVALID. THAT APART, THERE WAS NO FRESH MATERIAL AVAILABLE WITH THE AO FOR RESORTING TO A RE-OPENING. THE RE-OPENING WAS DONE ONLY FOR RESTRICTING THE CLAIM OF DEPRECIATION ON A TOYOTA INNOVA CAR AND IT WAS NOT BASED ON ANY FRESH MATERIAL. THE ITA NO.2718/CHNY/2017 :- 4 -: HONBLE DELHI HIGH COURT IN THE CASE OF CIT V. ORIE NT CRAFT LTD., REPORTED IN 354 ITR 536 HAS CLEARLY HELD THAT WITHOUT ANY TANGIBLE MATE RIAL WHICH CAME INTO THE POSSESSION OF THE AO, AFTER THE ORIGINAL ASSESSMENT , A RE-ASSESSMENT COULD NOT BE DONE ONLY BASED ON THE MATERIAL FILED BY THE ASSESS EE ALONG WITH ITS RETURN OF INCOME. HERE IN THE CASE BEFORE US RE-OPENING WAS DONE AFTE R FOUR YEARS FROM THE END MAIN ASSESSMENT YEAR AND PROVISO TO SEC.147 CLEARLY APPL IED. WE ARE OF THE VIEW THAT THE RE-OPENING DONE ON THE ASSESSEE HAD NO LEGS TO STAN D. IMPUGNED ORDERS ARE SET ASIDE. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT IN JUNE 21, 20 18, IN CHENNAI. SD/- SD/- ( . . . ) (N.R.S. GANESAN) /JUDICIAL MEMBER ( . ) ( ABRAHAM P.GEORGE ) /ACCOUNTANT MEMBER /CHENNAI, / /DATED: JUNE 21, 2018. TLN ( &01 21 /COPY TO: 1. % /APPELLANT 4. 3 /CIT 2. &'% /RESPONDENT 5. 1 & /DR 3. 3 ( )/CIT(A) 6. ' /GF