The DCIT, Circle-1, Ahmedabad V. M/s. Arvind Mills Ltd., Ahmedabad

ITA 292/AHD/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 8269 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 8 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-10-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 13-09-2017
• Assessment Year: 2004-2005
• Appeal Filed On: 29-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D P GUPTA
• Assessee Lawyers: P M MEHTA
• Keywords: Depreciation; Difference of opinion; Unabsorbed depreciation; Change of opinion
• Section: 143(3); 80HHC; 115JB; 148; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH (BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER) ITA. NO: 292/AHD/2014 (ASSESSMENT YEAR: 2004-05) DCIT, CIRCLE-1, AHMEDABAD V/S M/S. ARVIND MILLS LTD. NARODA ROAD, AHMEDABAD (APPELLANT) (RESPONDENT) PAN: AABCA2398D APPELLANT BY : SHRI D.P. GUPTA, CIT/DR RESPONDENT BY : SHRI P. M. MEHTA, A.R. ( )/ ORDER DATE OF HEARING : 23 -10-201 7 DATE OF PRONOUNCEMENT : 25 -10-2017 PER N.K. BILLAIYA, ACCOUNTANT MEMBER 1. WITH THIS APPEAL, THE REVENUE HAS CHALLENGED THE CO RRECTNESS OF THE ORDER OF THE LD. CIT(A)-VI, AHMEDABAD DATED 11.11.2013 PERTA INING TO A.Y. 2004-05. ITA NO. 292/ AHD/2014 . A.Y. 2004-05 2 2. THE SOLE GRIEVANCE OF THE REVENUE IS THAT THE LD. C IT(A) ERRED IN DELETING THE PENALTY OF RS. 13.84 CRORES LEVIED U/S. 271(1)(C) O F THE ACT DESPITE THE FACT THAT THE CORRESPONDING QUANTUM ADDITION WAS ALREADY CONF IRMED BY THE LD. CIT(A). 3. THE ROOTS FOR THE LEVY OF PENALTY LIE IN THE ASSESS MENT ORDER DATED 30.12.2008 FRAMED U/S. 143(3) R.W.S. 147 OF THE ACT. 4. FACTS ON RECORD SHOW THAT THE RETURN OF INCOME WAS FILED ON 30.10.2004 DECLARING NIL INCOME. FOR THE COMPUTATION OF MAT U/ S. 115JB OF THE ACT, THE ASSESSEE DECLARED BOOK PROFIT OF RS. 101.28 CRORES AND CLAIMED DEDUCTION U/S. 80HHC OF THE ACT AS PER BOOK PROFIT OF RS. 11.57 CR ORES AND FURTHER CLAIMED BROUGHT FORWARD BUSINESS LOSSES/DEPRECIATION TO THE EXTENT OF RS. 296.11 CRORES THEREBY MAKING THE BOOK PROFIT AT RS. NIL. THE ASSE SSMENT WAS FRAMED U/S. 143(3) OF THE ACT VIDE ORDER DATED 29.12.2006. 5. THEREAFTER, AN ORDER WAS FRAMED U/S. 154 OF THE ACT AND THE CLAIM OF BROUGHT FORWARD BUSINESS LOSS/UNABSORBED DEPRECIATION WAS R EDUCED FROM 205.44 CRORES TO 164.36 CRORES. 6. HAVING REASONS TO BELIEVE THAT SOME INCOME CHARGEAB LE TO TAX HAD ESCAPED ASSESSMENT FOR THE YEAR UNDER CONSIDERATION, AFTER RECORDING REASONS, A NOTICE U/S. 148 OF THE ACT WAS ISSUED AND SERVED UPON THE ASSESSEE. THE RE-ASSESSMENT ORDER WAS COMPLETED AND THE CLAIM OF THE ASSESSEE W ERE REJECTED AND WORKING OF MAT WAS COMPUTED AS UNDER:- 1. NET PROFIT AS PER BOOKS 1012842940 LESS: SET OFF OF B/F BUSINESS LOSS OR DEPRECIATION WHICH EVER IS LOWER TO THE EXTENT 1012842940 BOOK PROFIT U/S. 115JB NIL ITA NO. 292/ AHD/2014 . A.Y. 2004-05 3 MAT NIL 2. B/F. BUSINESS LOSS OR DEPRECIATION WHICH EVER IS LOWER AS PER ORDER U/S. 154 DTD. 21/01/2008 1643623091 LESS: SET OFF DURING THIS YEAR 1012842940 3. C/F. BUSINESS LOSS OR DEPRECIATION WHICH EVER IS LOWER AS PER THIS ORDER 630780151 7. PENALTY PROCEEDINGS WERE SEPARATELY INITIATED FOR F URNISHING INACCURATE PARTICULARS/CONCEALMENT OF INCOME. THE ASSESSEE CHA LLENGED THE RE-ASSESSMENT ORDER AND THE MATTER TRAVELLED UP TO THE TRIBUNAL A ND THE TRIBUNAL IN ITA NOS. 673 & 269/AHD/2011 BY ITS ORDER DATED 23.07.2015 QU ASHED THE ASSESSMENT FRAMED U/S. 143(3) R.W.S. 147 OF THE ACT. THE RELEV ANT FINDINGS OF THE CO- ORDINATE BENCH READS AS UNDER:- 6.1. IN VIEW OF THE BINDING PRECEDENT, WE ARE OF TH E CONSIDERED VIEW THAT IT IS NOT THE CASE WHERE THE MATERIAL WAS NOT AVAILABLE WITH THE AO AND AO HAS NOT APPLIED HIS MIND IN THE CASE UNDER APPEAL. THEREFOR E, WE HOLD THAT THE REOPENING OF THE ASSESSMENT IS MADE ON THE BASIS OF CHANGE OF OPINION ONLY AS THE ID. COUNSEL FOR THE ASSESSEE HAS DEMONSTRATED FROM THE RECORDS THAT ALL INFORMATION/DETAILS WERE AVAILABLE WITH THE AO AND THE AO HAS APPLIED HIS MIND ON THE ALLOWABILITY OF DEDUCTION U/S.80HHC AND COMP UTATION OF BOOK PROFIT. THEREFORE, ORDER UNDER APPEAL IS SET ASIDE AND ASSE SSMENT FRAMED U/S. 143(3) READ WITH SECTION 147 IS QUASHED BEING INVALID. 8. SUBLATO FUNDAMENTO CADIT OPUS- WHEN THE FOUNDATIO N IS REMOVED, THE SUPER STRUCTURE MUST FALL. SINCE THE RE-ASSESSMENT ORDER HAS BEEN QUASHED BY THE TRIBUNAL THERE REMAINS NO FOUNDATION FOR THE LE VY OF THE IMPUGNED PENALTY. ITA NO. 292/ AHD/2014 . A.Y. 2004-05 4 9. APPEAL FILED BY THE REVENUE IS ACCORDINGLY DISMISSE D. ORDER PRONOUNCED IN OPEN COURT ON 25 - 10- 20 17 SD/- SD/- (MAHAVIR PRASAD) (N. K. BILLAIYA) JUDICIAL MEMBER TRUE COPY A CCOUNTANT MEMBER AHMEDABAD: DATED 25 /10/2017 RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHME DABAD