M/s M.P.Rajya Van Vikas Nigam LTD, Bhopal, Bhopal V. Pr CIT-1, Bhopal, Bhopal

ITA 273/Ind/2018

• Counselvise Citation: [2019] 113 COUNSELVISE.COM (IT) 6418 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 7 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-11-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 11-11-2019
• Assessment Year: 2013-2014
• Appeal Filed On: 28-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHIMA GUPTA
• Keywords: Depreciation
• Section: 263

Judgement Text

[ITA NO.273/IND/2018] [M/S. M.P. RAJYA VAN VIKAS NIGAM LTD., BHOPAL] , , IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ITA NO.273/IND/2018 ASSESSMENT YEAR: 2013-14 M/S. M.P. RAJYA VAN VIK AS NIGAM LTD. 5 TH FLOOR, PANCHANAN BUILDING T.T. NAGAR BHOPAL / VS. PR. CIT - 1 BHOPAL ( APPELLANT ) ( REVENUE ) P.A. NO. AACCM0331R APPELLANT BY SHRI SUMIT NEMA, A.R. RESPONDENT BY SMT. ASHIMA GUPTA, D.R. DATE OF HEARING: 18.11.2019 DATE OF PRONOUNCEMENT: 21.11.2019 / O R D E R PER KUL BHARAT, J.M: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST ORDER O F THE PRINCIPAL CIT-1, BHOPAL DATED 6.3.2018 PERTAINING T O [ITA NO.273/IND/2018] [M/S. M.P. RAJYA VAN VIKAS NIGAM LTD., BHOPAL] 2 THE ASSESSMENT YEAR 2013-14. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. THAT THE IMPUGNED ORDER PASSED U/S 263 OF THE ACT B Y PR. CIT IS BAD IN LAW AND DESERVES TO BE CANCELLED. 2. THAT THE LD. PR. CIT ERRED IN HOLDING THAT THE ORDE R OF ASSESSMENT PASSED BY A.O. WAS ERRONEOUS IN SO FAR AS IT WAS PR EJUDICIAL TO THE INTEREST OF REVENUE. 3. THAT PR. CIT ERRED IN PASSING THE ORDER U/S 263 CAN CELLING THE ORDER OF ASSESSMENT PASSED BY THE A.O. PARTICULARLY WHEN THE ORDER OF ASSESSMENT HAS MERGED IN THE ORDER OF APPELLATE AUT HORITY AND TRIBUNAL. 2. BRIEFLY STATED FACTS ARE THAT THE ASSESSMENT U/S 143( 3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED AS TH E ACT) WAS FRAMED VIDE ORDER DATED 25.2.2016. WHILE FRAMING T HE ASSESSMENT, THE A.O. MADE ADDITION IN THE DECLARED INCO ME OF RS.63,44,21,181/- AND RS.2,69,08,343/- IN RESPECT OF DISALLOWANCE OF LEASE RENT AND DISALLOWANCE OF CORPORATE EXPENSES. HOWEVER, THE LD. PR. CIT REVISED THIS OR DER BY INVOKING PROVISIONS OF SECTION 263 OF THE ACT ON TH E BASIS THAT SINCE THE ASSESSEE HAD DEBITED DEPRECIATION OF RS.62,66,000/- SAME WAS REQUIRED TO BE ADDED BACK IN THE [ITA NO.273/IND/2018] [M/S. M.P. RAJYA VAN VIKAS NIGAM LTD., BHOPAL] 3 COMPUTATION OF INCOME. FURTHER, THE ASSESSEE DEPOSIT ED EPF OF EMPLOYEES CONTRIBUTION AMOUNTING TO RS.1,02,13,075/- BELATEDLY. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, THE LD. PR. CIT CANCELLE D THE ASSESSMENT ORDER AND DIRECTED THE A.O. TO REFRAME THE ASSESSMENT AFTER EXAMINING THE ISSUES, WHICH ARE REFERR ED IN THE IMPUGNED ORDER. AGGRIEVED AGAINST THIS, THE ASSESSEE HAS PREFERRED THE PRESENT APPEAL. 3. THE ONLY EFFECTIVE GROUND IN THIS APPEAL IS AGAIN ST THE INVOKING PROVISIONS OF SECTION 263 OF THE ACT. 4. LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS AS MADE IN THE WRITTEN SUBMISSIONS AND SUBMITTED THAT THE ISSUES WHICH ARE ON THE BASIS OF WH ICH THE LD. PR. CIT SOUGHT TO REVISE THE ASSESSMENT ORDE R ARE DIRECTLY COVERED IN FAVOUR OF THE ASSESSEE. THEREFOR E, THERE WAS NO PREJUDICE CAUSED TO THE REVENUE. THE WRITTEN SUBMISSIONS OF THE ASSESSEE ARE REPRODUCED AS UNDER: [ITA NO.273/IND/2018] [M/S. M.P. RAJYA VAN VIKAS NIGAM LTD., BHOPAL] 4 [ITA NO.273/IND/2018] [M/S. M.P. RAJYA VAN VIKAS NIGAM LTD., BHOPAL] 5 [ITA NO.273/IND/2018] [M/S. M.P. RAJYA VAN VIKAS NIGAM LTD., BHOPAL] 6 5. LD. CIT(DR) PLACED RELIANCE ON THE IMPUGNED ORDER AND VEHEMENTLY OPPOSED THESE SUBMISSIONS. LD. CIT(D R) SUBMITTED THAT THE A.O. GROSSLY FAILED TO EXAMINE THES E ISSUES AND PROCEEDED TO MAKE ASSESSMENT WITHOUT MAKING DUE CONSIDERATION OF THESE ISSUES. IT IS SUBMITTED THAT [ITA NO.273/IND/2018] [M/S. M.P. RAJYA VAN VIKAS NIGAM LTD., BHOPAL] 7 THERE WAS NO APPLICATION OF MIND BY THE ASSESSING OFFI CER ON THESE ISSUES. THEREFORE, LD. PR. CIT HAS RIGHTLY INVOKED THE PROVISIONS OF SECTION 263 OF THE ACT. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THERE IS NO DISPUTE WITH REGARD TO THE POSITION OF LAW THAT THE LD. PR. CIT IS EMPOWERE D TO REVISE THE ASSESSMENT ORDER IF IT IS FOUND THAT THE ASSESSMENT SOUGHT TO BE REVISED IS ERRONEOUS SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. THEREFO RE, LAW IS WELL SETTLED THAT TWIN CONDITIONS ARE REQUIRED TO BE SATISFIED FOR ASSUMING JURISDICTION U/S 263 OF THE ACT I.E. TH E ORDER SOUGHT TO BE REVISED SHOULD BE ERRONEOUS AND PREJUDI CIAL TO THE INTEREST OF THE REVENUE. THUS, TWO CONDITIONS ARE TO BE READ IN CONJUNCTION AND THE ABSENCE OF ANY ONE OF THE CONDITIONS WOULD RENDER INVOKING OF JURISDICTION U/ S 263 OF THE ACT AS ILLEGAL AND CONTRARY TO THE SETTLED LAW. [ITA NO.273/IND/2018] [M/S. M.P. RAJYA VAN VIKAS NIGAM LTD., BHOPAL] 8 7. IN THE PRESENT CASE, THE LD. PR. CIT HAS REVISED T HE ASSESSMENT ORDER ON THE GROUND THAT THE ASSESSING OFFI CER DID NOT EXAMINE THE ISSUE RELATED TO THE DEPRECIATION AND THE LATE DEPOSIT OF THE EPF IN RESPECT OF EMPLOYEES CONTRIBUTION. IT IS CONTENDED BY THE LD. COUNSEL F OR THE ASSESSEE THAT ASSESSEE HAD CHARGED DEPRECIATION OF RS.62,60,000/- IN PROFIT & LOSS ACCOUNT WHO AT THE SAM E TIME REVERSED MAJOR PART OF THE AMOUNT OF RS.53,06,64 7/- IN CREDIT SIDE OF THE PROFIT & LOSS ACCOUNT AS OTHER INCOME. THUS, THE ASSESSEE HAS CLAIMED ONLY BOOK DEPRECIATION O F RS.9,59,353/- WHICH HAS BEEN ADDED BACK IN COMPUTATION OF INCOME CAUSING NO REVENUE LOSS. IN SUPPORT OF TH IS CONTENTION, THE LD. COUNSEL FOR THE ASSESSEE HAS DRAW N OUR ATTENTION TO PROFIT & LOSS ACCOUNT. THE FACT THAT THE ASSESSEE HAS DISCLOSED THE DEPRECIATION AS OTHER INCOME IS NOT CONTROVERTED BY THE REVENUE NOR THE LD. PR. CIT HAS BROUGHT ANY CONTRARY MATERIAL ON RECORD. THEREFORE, IN OUR [ITA NO.273/IND/2018] [M/S. M.P. RAJYA VAN VIKAS NIGAM LTD., BHOPAL] 9 CONSIDERED VIEW, THE LD. PR. CIT WAS NOT JUSTIFIED I N REVISING THE ASSESSMENT ORDER ON THIS GROUND. THE O THER GROUND OF THE REVISING ASSESSMENT ORDER IS IN RESPEC T OF LATE DEPOSIT OF EPF OF EMPLOYEES CONTRIBUTION. IT IS S TATED BY THE ASSESSEE THAT ALL THE AMOUNTS HAVE BEEN PAID IN EPF ACCOUNT BEFORE THE DUE DATE OF FILING AND FILING OF RE TURN OF INCOME. IT IS SUBMITTED THAT THE SAID EXPENDITURE IS ALLOWABLE IN VIEW OF THE JUDGEMENT OF THE HON'BLE SU PREME COURT RENDERED IN THE CASE OF CIT VS. ALOM EXTRUSION S LTD. 319 ITR 306, JUDGEMENT OF THE HON'BLE RAJASTHAN HIGH COURT RENDERED IN THE CASE OF CIT VS. STATE BANK OF BIKANER & JAIPUR 363 ITR 70 AND ALSO JUDGEMENT OF THE HON'BLE RAJASTHAN HIGH COURT IN THE CASE OF DCIT VS. JAIPUR VIDYUT VITARAN NIGAM 363 ITR 307 IT IS CONTENDE D THAT THE SPECIAL LEAVE PETITIONS FILED BY THE REVENUE AGAINST THESE JUDGEMENTS HAVE BEEN DISMISSED BY THE HON'BLE SUPREME COURT. THEREFORE, IT IS CONTENDED THAT THE LD. PR. [ITA NO.273/IND/2018] [M/S. M.P. RAJYA VAN VIKAS NIGAM LTD., BHOPAL] 10 CIT WAS NOT JUSTIFIED IN REVISING THE ORDER ON THIS GROUND. WE FIND MERIT INTO THE CONTENTION OF THE ASSESSEE AS THE LAW IS SETTLED BY THE JUDICIAL PRONOUNCEMENTS THAT IF ASSE SSEE HAS DEPOSITED EPF, WHICH IS BEFORE THE DUE DATE OF FI LING OF RETURN, THERE SHOULD NOT BE ANY DISALLOWANCE. HENCE, THERE IS NO PREJUDICE CAUSED TO THE REVENUE IN THIS RESPEC T AS WELL. THEREFORE, ON BOTH THE ISSUES INVOKING OF PR OVISIONS U/S 263 OF THE ACT IS NOT JUSTIFIED. WE THEREFORE, QUASH THE IMPUGNED ORDER BEING CONTRARY TO THE SETTLED PRINCIP LE OF LAW. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 21 . 11.2019. SD/- (MANISH BORAD) SD/- (KUL BHARAT) A CCOUNTANT MEMBER JUDICIALMEMBER INDORE; DATED : 21/11/2019 VG/SPS [ITA NO.273/IND/2018] [M/S. M.P. RAJYA VAN VIKAS NIGAM LTD., BHOPAL] 11 COPY TO: ASSESSEE/AO/PR. CIT/ CIT (A)/ITAT (DR)/GUAR D FILE. BY ORDER ASSISTANT REGISTRAR, INDORE