ASST CIT 15(1)(1), MUMBAI V. BAYER CROPSCIENCE LTD, MUMBAI

ITA 3044/MUM/2015

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 8597 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 5 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-11-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 23-02-2017
• Assessment Year: 2004-2005
• Appeal Filed On: 08-05-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RAM TIWARI
• Keywords: Opportunity of being heard
• Section: 147; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL H BENCH, MUMBAI BEFORE SHRI SHAMIM YAHYA , A M AND SHRI SANDEEP GOSAIN, JM ./ I.T.A. NO. 3044/MUM/2015 ( / ASSESSMENT YEAR: 2004 - 05 ) ASST. CIT - 15( 1)(2), ROOM NO. 403, 4 TH FLOOR, AAYAKAR BHAVAN, M. K. ROAD, MUMBAI - 400 020 / VS. BAYER CROOPSCIENCES LTD. BAYER HOUSE, CENTRAL AVENUE, HIRANANDANI GARDENS, POWAI, MUMBAI - 400 076 ./ ./ PAN/GIR NO. AAACB 9651 K ( REVENUE ) : ( ASSESSEE ) CO . NO. 24/MUM/2017 (ARISING OUT OF ITA NO. 3044/MUM/2015) ( / ASSESSMENT YEAR: 2004 - 05 ) BAYER CROOPSCIENCES LTD. MUMBAI - 400 076 / VS. ASST. CIT - 15(1)(2), MUMBAI - 400 020 ( ASSESSEE ) : ( REVENUE ) REVENUE BY : SHRI RAM TIWARI ASSESSEE BY : SHRI PARAS SAVLA MS. KEERTHIGA SHARMA / DATE OF HEARING : 11.09.2017 / DATE OF PRONOUNCEMENT : 07.11 .2017 / O R D E R PER SHAMIM YAHYA , A. M.: THIS APPEAL BY THE REVENUE AND CROSS OBJECTION BY THE ASSESSEE ARISES OUT OF THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) , MUMBAI (CIT(A) FOR SHORT) DATED 23.02.2015 AND PERTAINS TO THE ASSESSMENT YEAR (A.Y.) 2004 - 05. 2 ITA NO. 3044/M/2015 & CO. NO. 24/M/2017 BAYER CROOPSCIENCES LTD. 2. THE GROUNDS RAISED IN REVENUES APPEAL READ AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN HOLDING THAT THE ASSESSMENT COMPLETED U/S. 147 IS BAD IN LAW. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN HOLDING THAT THE ASSESSMENT COMPLE TED U/S. 147 IS BAD IN LAW WITHOUT TAKING INTO CONSIDERATION THAT IF A SINGLE VALID REASON IS AVAILABLE FOR RE - OPENING THE ASSESSMENT U/S. 147, THE ASSESSMENT IS VALID. 3. THE GROUNDS RAISED IN THE ASSESSEES CROSS OBJECTION READ AS UNDER: CO NO.1: ADD ITION OF DIVIDEND INCOME 1.1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL) ('CIT(A)') ERRED IN NOT ADJUDICATING GROUND NUMBER 2 OF THE APPEAL BEFORE HIM WHICH PERTAINED TO ADDITION OF RS.18,55,543 IN RESPECT OF DIVIDEND INCOME. 1.2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) ERRED IN NOT APPRECIATING THE FACT THAT THE SAID DIVIDEND INCOME IS EXEMPT UNDER SECTION 10(34) OF THE INCOME - TAX ACT, 1 961 ('ACT'). CO NO. 2: ADDITION OF BOOK PROFIT ON SALE OF UNIT SCHEME 64: 2.1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) ERRED IN NOT ADJUDICATING GROUND NUMBER 3 OF THE APPEAL BEFORE HIM WHICH PERTAINED TO ADD ITION OF RS. 6,22,000 IN RESPECT OF BOOK PROFIT ON SALE OF UNIT SCHEME 64. CO NO. 3: ADDITION OF REVERSED PROVISION FOR PENSION: 3.1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, DIE LEARNED CIT(A) ERRED IN NOT ADJUDICATING GROUND N UMBER 4 OF THE APPEAL BEFORE HIM WHICH PERTAINED TO ADDITION OF RS. 54,03,480 IN RESPECT OF REVERSAL OF PROVISION FOR PENSION. 3.2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) ERRED NOT APPRECIATING THE FACT THAT THE RELATED PROVISION HAS ALREADY BEEN DISALLOWED BY THE ASSESSEE IN THE EARLIER YEARS. CO NO. 4: DISALLOWANCE OF RESTRUCTURING COST: 4.1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) ERRED IN NOT ADJUDICATING GRO UND NUMBER 5 OF THE APPEAL BEFORE 3 ITA NO. 3044/M/2015 & CO. NO. 24/M/2017 BAYER CROOPSCIENCES LTD. HIM WHICH PERTAINED TO DISALLOWANCE OF ADDITION OF RS. 80,97,600 IN RESPECT OF RESTRUCTURING COST FOR AMALGAMATION. 4.2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) ERRED NOT APPRE CIATING THE FACT THAT A RECTIFICATION APPLICATION UNDER SECTION 154 OF THE ACT WAS PENDING BEFORE THE AO WITH RESPECT TO THE RESTRUCTURING COST FOR AMALGAMATION. CO NO.5: LEVY OF INTEREST: 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, T HE LD. CIT(A) ERRED IN UPHOLDING THE ACTION OF THE A.O. IN LEVYING INTEREST UNDER SECTION 234B, 234D AND SECTION 220 OF THE ACT. 4. THE ISSUE RAISED IN THE REVENUES APPEAL AND THE ISSUE RAISED IN CROSS OBJECTION READ AS UNDER: IN THIS CASE THE ASSESS MENT WAS REOPENED AS ASSESSMENT FRAMED U/S. 143 R/W S. 147 OF THE ACT. IN THE ABOVE ASSESSMENT ORDER, THE ASSESSING OFFICER ADDED THE FOLLOWING: COMPUTATION OF TOTAL INCOME : TOTAL INCOME AS PER ORDER DATED 30.03.2011 U/S. 154 100,15,30,306 ADD: DIVIDEND INCOME (PARA 4.2) 18,55,543 PROFIT ON SALE OF US 64 (PARA 5.2) 6,22,000 PENSION PROVISION (PARA 5.3) 54,03,480 PROFESSIONAL FEES IN EXCESS OF 35DD (PARA 6.2) 80,97,600 1,59,78,623 TOTAL INCOME 101,75,08,929 5 . AGAINST THE ABOVE ORDER, THE AS SESSEE APPEALED BEFORE THE LD. CIT(A) CHALLENGING BOTH THE VALIDITY OF THE REOPENING AND THE MERITS OF THE ADDITION. THE LD. CIT(A) IN HIS APPELLATE ORDER QUASHED THE REOPENING HOLDING THE SAME TO BE B AD AND NOT VALID. THE LD. CIT(A) DECLINE D TO GO INTO TH E MERITS OF THE GROUNDS RAISED BEFORE HIM AND DID NOT ADJUDICATE THE SAME. 4 ITA NO. 3044/M/2015 & CO. NO. 24/M/2017 BAYER CROOPSCIENCES LTD. 6 . AGAINST THE ABOVE ORDER OF LD. CIT(A), THE REVENUE HAS FILED AN APPEAL CHALLENGING THE ORDER OF LD. CIT(A) HOLDING THE REOPENING AS INVALID. THE ASSESSEE HAS FILED CROSS OBJEC TION CHALLENGING THAT THE LD. CIT(A) HAS ERR ED IN NOT ADJUDICATING THE GROUNDS ON MERITS RAISED BEFORE HIM. 7 . UPON CAREFUL CONSIDERATION, WE NOTE THAT THE LD. CIT(A) HAS ONLY ADJUDICATED THE ISSUE OF REOPENING AND HAS NOT ADJUDICATED THE ISSUE ON MERITS. 8 . AGAINST THIS, THE ASSESSEE HAS FILED CROSS OBJECTION THAT THE LD. CIT(A) SHOULD HAVE ADJUDICATED THE GROUNDS ON MERITS DULY RAISED BEFORE HIM. WE FIND THAT THE GROUNDS RAISED ON MERITS WERE DULY RAISED BEFORE THE LD. CIT(A) , BUT HE HAS NOT ADJUDICATE D THE SAME. HIGHER COURTS HAVE HELD THAT LOWER AUTHORITIES SHOULD ADJUDICATE ON ALL THE ASPECTS A PPEALED B EFORE THEM AND COMPLETE THEIR ORDER FOR PROPER APPRECIATION OF THE ISSUE S AT THE HIGHER APPELLATE LEVEL. HENCE, WE ARE OF THE OPINION THAT THE LD. CIT (A) NEEDS TO ADJUDICATE ON THE MERITS OF THE ISSUE S RAISED BEFORE HIM IN ORDER TO MAKE HIS APPELLATE ORDER COMPLETE. ACCORDINGLY, WE REMIT THE ISSUE ON MERITS RAISED IN THE CROSS OBJECTION BY THE ASSESSEE WHICH WERE ALSO BEFORE THE FILE OF LD. CIT(A) TO TH E FILE OF LD. CIT(A) . THE LD. CIT(A) IS DIRECTED TO CONSIDER THE ISSUE ON MERITS AND PASS A SPEAKING ORDER ON THE SAME. NEEDLESS TO ADD, THE ASSESSEE SHOULD BE GRANTED ADEQUATE OPPORTUNITY OF BEING HEARD. WE MAKE IT CLEAR THAT WE HAVE NOT CONSIDERED THE IS SUE ON THE VALIDITY OF REOPENING IN ANY MANNER WHATSOEVER. BOTH THE 5 ITA NO. 3044/M/2015 & CO. NO. 24/M/2017 BAYER CROOPSCIENCES LTD. PARTY IS FREE TO RAISE THE NECESSARY ISSUES AS DESIRED AFTER T HE ORDER OF THE LD. CIT(A) IS COMPLETE IN TERMS OF OUR REMITTING AS ABOVE. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE AND THE CROSS OBJECTION FILED BY THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 07.11.2017 SD/ - SD/ - ( SANDEEP GOSAIN ) (S HAMIM YAHYA ) / J UDICIA L MEMBER / A CCOUNTANT MEMBER MUMBAI ; DATED : 07.11.2017 . . ./ ROSHANI , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT - CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD F ILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI