The DCIT, Circle-4, Ahmedabad V. Gujarat Agro Industries Corporation, Ahmedabad

ITA 3003/AHD/2013

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 9258 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 1 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-02-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 25-01-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 16-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: AARTI N SHAH
• Keywords: Depreciation; Unabsorbed depreciation; Reassessment proceedings
• Section: 143(3); 115JB; 148

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD .., , !' BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER AND SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER ./ I.T.A. NO.3003/AHD/2013 ( / ASSESSMENT YEAR : 2007-08) THE DCIT CIRCLE-4 AHMEDABAD / VS. GUJARAT AGRO INDUSTRIES CORPORATION KHET BHAVAN OFF. ASHRAM ROAD NR.OLD HIGH COURT AHMEDABAD % ./ ./ PAN/GIR NO. : AAACG 5620 R ( %( / APPELLANT ) .. ( )%( / RESPONDENT ) %(* / APPELLANT BY : MR.JAMES KURIAN, SR.DR )%(+* / RESPONDENT BY : MS. AARTI N. SHAH, AR ,+ / DATE OF HEARING 25/01/2007 -./+ / DATE OF PRONOUNCEMENT 6/02/2017 / O R D E R PER PRADIP KUMAR KEDIA, AM: THE CAPTIONED APPEAL OF THE REVENUE IS DIRECTED AG AINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-VIII, A HMEDABAD [CIT(A) IN SHORT] DATED 12/09/2013 ARISING OUT OF T HE ASSESSMENT ORDER PASSED UNDER SECTION 143(3) R.W.S.147 OF THE INCOME TAX ACT, 1961 ITA NO.3003/AHD /2013 DCIT VS. GUJARAT AGRO INDU.CORPN. ASST.YEAR 2007-08 - 2 - (HEREINAFTER REFERRED TO AS 'THE ACT') DATED 22/02/ 2013 FOR ASSESSMENT YEAR ASSESSMENT YEAR (AY) 2007-08. 2. THE GROUND OF APPEAL RAISED BY THE REVENUE READ S AS UNDER:- 1. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.1,21,19,801/- MADE TO THE BOOK PROFIT BEING L OWER OF LOSSES BROUGHT FORWARD OR UNABSORBED DEPRECIATION OF AYS 2 000-0, 2001-02 AND 2002-03 WITHOUT PROPERLY APPRECIATING THE FACTS OF THE CASE AND THE MATERIAL BROUGHT ON RECORD. 3. BRIEFLY STATED, THE ASSESSEE-COMPANY FILED ITS R ETURN OF INCOME FOR AY 2007-08 DECLARING TOTAL INCOME AT RS.42,86,990/- UNDER THE NORMAL PROVISIONS OF ACT AND BOOK PROFIT WAS DECLARED AT R S.3,72,85,814/- UNDER SECTION 115JB OF THE ACT. THE RETURN WAS SUBJECTED TO SCRUTINY AND THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) VIDE ORDER DATED 24/12/2009. SUBSEQUENTLY, IT WAS NOTICED BY THE AS SESSING OFFICER (AO) THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSME NT IN RESPECT OF THE IMPUGNED ASSESSMENT YEAR. AS PER THE REASONS RECOR DED UNDER SECTION 148 SUPPLIED TO THE ASSESSEE, IT WAS ALLEGED BY THE AO THAT BOOK PROFIT UNDER SECTION 115JB BY THE ASSESSEE WAS CALCULATED AFTER INCORRECTLY DEDUCTING BROUGHT FORWARD LOSSES OF RS.1,21,19,801/ -. IT WAS ALSO ALLEGED THAT BROUGHT FORWARD LOSSES WERE ALREADY ADJUSTED I N AY 2003-04 AND THUS THE BOOK PROFIT OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION WAS UNDER ASSESSED BY AN AMOUNT OF RS.1,21,19,801/-. I T WAS OBSERVED BY THE AO THAT NO SPECIFIC OBJECTION WAS FILED IN CONSEQUE NCE OF REASONS ITA NO.3003/AHD /2013 DCIT VS. GUJARAT AGRO INDU.CORPN. ASST.YEAR 2007-08 - 3 - SUPPLIED TO THE ASSESSEE WHICH SPECIFICALLY SPEAKS ABOUT ESCAPEMENT OF INCOME IN REPORTING OF BOOK PROFITS. THE AO IN CONSEQUENCE OF THE NOTICE ISSUED UNDER SECTION 148 OF THE ACT, ENHANC ED THE BOOK PROFIT BY THE AFORESAID AMOUNT OF BROUGHT FORWARD LOSS OF RS. 1,21,19,801/- AS NOT ALLOWABLE TO BE ADJUSTED AND COMPUTED THE BOOK PROF IT AT RS.4,94,05,615/- IN THE REASSESSMENT ORDER DATED 22 /02/2013. 4. IN THE FIRST APPEAL AGAINST THE REASSESSMENT ORD ER, THE CIT(A) SET ASIDE AND CANCELLED THE RECOMPUTATION OF BOOK PROFI T MADE UNDER SECTION 115JB FOR THE AY 2007-08 ACCEPTING THE CONTENTION OF ASSESSEE THAT NO SUCH LOSS WAS ACTUALLY ADJUSTED IN AY 2003-04. IT WAS NOTED BY THE CIT(A) THAT THE ASSESSMENT FOR AY 2003-04 WAS MADE AT A FIGURE OF LOSS OF RS.1,97,51,522/- AND THEREFORE IN VIEW OF THE L OSS AS PER BOOKS, THERE WAS NO QUESTION OF ANY ADJUSTMENT TOWARDS UNABSORBE D BUSINESS LOSS OR DEPRECIATION FOR WORKING OUT ANY BOOK PROFIT. ACCO RDINGLY, THE ACTION OF THE AO TOWARDS ADJUSTMENT IN BOOK PROFIT IN THE REA SSESSMENT PROCEEDINGS WAS STRUCK DOWN BY THE CIT(A). 5. AGGRIEVED BY THE ORDER OF THE CIT(A), THE REVENU E IS IN APPEAL BEFORE THE TRIBUNAL. 6. THE LD.DR RELIED UPON THE ORDER OF THE AO. ITA NO.3003/AHD /2013 DCIT VS. GUJARAT AGRO INDU.CORPN. ASST.YEAR 2007-08 - 4 - 7. THE LD.AR, ON THE OTHER HAND, REITERATED ITS S UBMISSIONS MADE BEFORE THE AO AS WELL AS CIT(A) AND REFERRED TO THE COMPUT ATION OF INCOME RELEVANT TO AY 2003-04 TO SAY THAT IN VIEW OF NEGA TIVE BOOK PROFIT ASSESSABLE UNDER SECTION 115JB THERE WAS NO OCCASI ON FOR THE ASSESSEE TO ADJUST THE BROUGHT FORWARD LOSS ALLEGED BY THE AO I N THE REASSESSMENT PROCEEDINGS. THE LD.AR THUS SUBMITTED THAT THE CIT (A) HAS CORRECTLY APPRECIATED THE FACTS IN PERSPECTIVE AND GRANTED RE LIEF IN ACCORDANCE WITH LAW. IT WAS THUS SUBMITTED THAT NO INTERFERENCE WI TH THE ORDER OF THE CIT(A) IS CALLED FOR. 8. ON CAREFUL CONSIDERATION OF THE RIVAL SUBMISSION S IN THE LIGHT OF FACTS NOTED ABOVE, WE DO NOT FIND ANY TANGIBLE REAS ON TO INTERFERE WITH THE ORDER OF THE CIT(A). WE TAKE NOTE OF THE FACT THAT THE ASSESSEE HAS DENIED, BOTH BEFORE THE AO AS WELL AS BEFORE THE CI T(A), TO HAVE CLAIMED ANY SET OFF OF UNABSORBED LOSS IN THE AY 20 03-04 AS ALLEGED IN THE REASONS RECORDED. THE ASSERTIONS MADE BY THE A O HAS NOT BEEN REBUTTED BY THE AO. ON THE CONTRARY, AVERMENTS MAD E BY THE ASSESSEE ARE CORROBORATED BY THE DOCUMENTARY EVIDENCES IN THE F ORM OF COMPUTATION OF INCOME, RETURN OF INCOME, ASSESSMENT ORDER, ETC. IN THE BACKDROP OF THESE FACTS, IT IS MANIFEST THAT THE AO PROCEEDED T O REASSESS THE BOOK PROFITS ON WRONG ASSUMPTION OF FACTS. THUS, THE RE LIEF GRANTED BY THE CIT(A) IS UNDOUBTEDLY WITHIN THE BOUNDS OF LAW. WE THEREFORE DO NOT ITA NO.3003/AHD /2013 DCIT VS. GUJARAT AGRO INDU.CORPN. ASST.YEAR 2007-08 - 5 - SEE ANY JUSTIFICATION IN THE APPEAL OF THE REVENUE AND ACCORDINGLY APPEAL FILED BY THE REVENUE IS LIABLE TO BE DISMISSED. 9. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. THIS ORDER PRONOUNCED IN OPEN COURT ON 6/02/2017 SD/- SD/- ( ..) ( ) ( R.P. TOLANI ) ( PR ADIP KUMAR KEDIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 6/ 02 /2017 3..,.../ T.C. NAIR, SR. PS !'#$#! / COPY OF THE ORDER FORWARDED TO : 1. %( / THE APPELLANT 2. )%( / THE RESPONDENT. 3. 456 7 / CONCERNED CIT 4. 7 ( ) / THE CIT(A)-VIII, AHMEDABAD 5. 89:56 , 56/ , 4 / DR, ITAT, AHMEDABAD 6. :<, / GUARD FILE. / BY ORDER, )8 //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION .. 25.1.17 (DICTATION-PAD 10- PAGES ATTACHED AT THE END OF THIS APPEAL-FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 25/30.1.17 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.6.2.17 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 6.2.17 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER