M/s. Hotel Bahia Fort, Bathinda V. The Asstt. Commissioner of Income-tax, Bathinda

ITA 312/ASR/2014

• Counselvise Citation: 31220914 RSA 2014
• Duration Of Justice: 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-05-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2004-2005
• Appeal Filed On: 09-05-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: P N ARORA
• Keywords: Depreciation; Audit objection; Difference of opinion; Change of opinion
• Section: 143(3); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER I.T.A. NOS. 311 & 312(ASR)/2014 ASSESSMENT YEARS: 2003-04 & 2004-05 PAN: AAAFH4470R M/S HOTEL BAHIA FORT, VS. ASSISTANT COMMISSIONER THE MALL, BATHINDA OF INCOME TAX, CIRCLE-1, BATHINDA (APPELLANT) (RESPONDENT) APPELLANT BY: SH. P.N. ARORA, ADVOCATE RESPONDENT BY: SH. TARSEM LAL, DR DATE OF HEARING: 28.05.2014 DATE OF PRONOUNCEMENT: 30.05.2014 ORDER 1) THE ASSESSEE HAS FILED THE PRESENT TWO AP PEALS AGAINST DIFFERENT ORDERS OF LEARNED CIT(A), BATHINDA, EACH DATED 26.0 3.2014 PASSED FOR THE ASSESSMENT YEARS 2003-04 & 2004-05. SINCE THE ISSUE S INVOLVED IN BOTH THE APPEALS ARE IDENTICAL, EXCEPT DIFFERENCE IN AMO UNT, I PROCEED TO DECIDE BOTH THE APPEALS BY PASSING A CONSOLIDATED ORDER. 2) THE ASSESSEE HAS TAKEN ALMOST IDENTICAL GROUNDS OF APPEAL IN BOTH THE APPEALS, THEREFORE, FOR THE SAKE OF CONVEN IENCE THE GROUNDS OF APPEAL TAKEN IN ITA NO. 311(ASR)/2014 ARE REPRODUCE D AS UNDER: I. ON THE FACTS & CIRCUMSTANCES OF THE CASE AND IN LAW , THE LEARNED CIT(A) ERRED IN UPHOLDING THE VALIDITY OF NOTICE IS SUED UNDER SECTION 148 BY THE A.O. MERELY ON SUSPICION WITHOUT ANY EVIDENCE 2 I.T.A. NOS. 311 & 312(ASR)/2014 ASSESSMENT YEARS: 2003-04 & 2004-05 OR REASONS THAT THE ASSESSEE APPELLANT HAS CLAIMED EXCESSIVE DEPRECIATION. II. ON THE FACTS & CIRCUMSTANCES OF THE CASE AND IN LAW , THE LEARNED CIT(A) ERRED BY UPHOLDING THE DISALLOWANCE OF DEPRE CIATION ON BUILDING & QUALIS AMOUNTING TO RS. 214582/- MADE BY THE A.O. BY TAKING THE PRESUMPTIVE WRITTEN DOWN VALUE OF THE AS SETS. III. THAT THE APPELLANT CRAVES TO ADD OR AMEND THE GROUN DS OF APPEAL. 3) THE FACTS NARRATED BY THE REVENUE AUTHORITY ARE NOT DISPUTED BY BOTH THE PARTIES; THEREFORE FOR THE SAKE OF CONVENI ENCE, THERE IS NO NEED TO REPEAT THE SAME. 4) AT TIME OF HEARING, LEARNED COUNSEL FOR THE ASSE SSEE FILED HIS WRITTEN SUBMISSION AND RELIED UPON THE WRITTEN SUBM ISSION AND THE CONTENTIONS RAISED IN THE GROUNDS OF APPEAL AND ON THE CONTRARY, LEARNED DR RELIED UPON THE IMPUGNED ORDER PASSED BY LEARNED FIRST APPELLATE AUTHORITY. 5) I HAVE HEARD BOTH THE PARTIES AND PERUSED THE MA TERIALS AVAILABLE ON RECORD. 6) AS REGARDS TO THE ISSUE OF VALIDITY OF NOTICE IS SUED UNDER SECTION 148 OF THE INCOME-TAX ACT, 1961( IN SHORT THE ACT) BY THE ASSESSING OFFICER, LEARNED FIRST APPELLATE AUTHORIT Y HAS GIVEN HIS FINDING IN PARA NO 3 (PAGE 4 & 5) OF HIS ORDER, FOR THE SAK E OF CONVENIENCE THE SAME IS REPRODUCED AS UNDER: 3. I HAVE CAREFULLY CONSIDERED THE FACTS OF THE C ASE AS WELL AS FINDINGS OF THE A.O. AND WRITTEN SUBMISSION OF LEAR NED A/R OF THE ASSESSEE APPELLANT AND THE ASSESSMENT ORDER. THE AP PEAL IS BEING DECIDED AS UNDER:- 3 I.T.A. NOS. 311 & 312(ASR)/2014 ASSESSMENT YEARS: 2003-04 & 2004-05 THE FIRST AND FIFTH GROUNDS OF APPEAL ARE OF GENERAL IN NATURE, HENCE DISMISSED. THE SECOND GROUND OF APPEAL OF THE ASSESSEE APPELLANT IS ON ACCOUNT OF VALIDITY OF THE NOTICE ISSUED UNDER SECT ION 148 OF THE INCOME TAX ACT. IN APPEAL THE LEARNED A/R OF THE ASSESSEE APPELLANT ARGUED THAT NOTICE HAS BEEN ISSUED MERELY ON SUSPICION ON THE B ASIS OF PRESUMPTION MADE BY THE AUDIT PARTY AT THE TIME OF CONDUCTING A UDIT OF THE ASSESSMENT FRAMED UNDER SECTION 143(3) OF THE INCOME TAX ACT F OR THE ASSESSMENT YEAR 2005-06. DURING AUDIT, THE AUDIT PARTY HAS POI NTED OUT THAT THE ASSESSEE HAS CLAIMED EXCESSIVE DEPRECIATION ON BUIL DING AND QUALIS. FROM THE ASSESSMENT ORDER, I FIND THAT A LETTER HAS BEEN ISSUED TO THE ASSESSEE APPELLANT BY THE A.O. WITH A SPECIFIC REQ UEST TO FILE THE PROFIT AND LOSS ACCOUNT, DEPRECIATION CHART AND BALANCE SH EET FOR THE ASSESSMENT YEARS 2003-04 AND 2004-05 SO AS TO ASCERTAIN WHETHE R EXCESSIVE DEPRECIATION HAS BEEN CLAIMED OR NOT. THE ASSESSEE HAS NOT FILED ANY REPLY TO THE LETTER ISSUED BY THE A.O. THEREFORE, A NOTIC E UNDER SECTION 148 HAS BEEN ISSUED. THE ASSESSEE HAS FILED THE OBJECTIONS IN RESPECT OF RE-OPENING OF THE ASSESSMENT DURING THE ASSESSMENT PROCEEDINGS . THE SAME HAVE PROPERLY BEEN DEALT WITH BY THE ASSESSING OFFICER B EFORE MAKING ASSESSMENT AND AFTER RELYING UPON THE LATEST JUDGME NT OF THE HON'BLE SUPREME COURT IN THE CASE OF ACIT VS. RAJESH JAVERI STOCK BROKERS PVT. LTD. 291 ITR 500 (SC), REJECTED THE SAME. THE JUDGM ENTS QUOTED BY THE LEARNED A/R OF THE ASSESSEE APPELLANT ARE NOT RELEV ANT AS THE LAW HAS BEEN AMENDED W.E.F. 01.04.1989 AND THE JUDGMENTS QUOTED BY THE LEARNED A/R OF THE ASSESSEE APPELLANT ARE PRIOR TO THE AMENDMEN T MADE IN THE ACT. THEREFORE, I CONFIRM THE VALIDITY OF THE NOTICE ISS UED UNDER 148 BY THE ASSESSING OFFICER. AS SUCH, THIS GROUND OF APPEAL O F THE ASSESSEE APPELLANT IS DISMISSED. 7) LEARNED COUNSEL FOR THE ASSESSEE PRODUCED A COPY OF REASONS FOR ISSUING NOTICE U/S 148 OF THE ACT BY THE ASSESS ING OFFICER IN THE CASE OF ASSESSEE AND STATED THAT THIS NOTICE HAS BEEN IS SUED ON THE BASIS OF AUDIT OBJECTION MECHANICALLY WITHOUT APPLYING THE M IND AND AS SUCH THE NOTICE ISSUED IS INVALID AND SUFFER FROM CHANGE OF OPINION. THEREFORE, THE SAME IS LIABLE TO BE CANCELLED IN VIEW OF THE FOLLO WING DECISIONS: A. DECISION OF HIGH COURT OF DELHI, IN THE CASE OF COM MISSIONER OF INCOME-TAX. VS. INDIAN SUGAR & GENERAL INDUSTRY EXP ORT CORPORATION LTD., REPORTED IN (2008) 170 TAXMAN 229 . 4 I.T.A. NOS. 311 & 312(ASR)/2014 ASSESSMENT YEARS: 2003-04 & 2004-05 B. DECISION OF HIGH COURT OF BOMBAY IN THE CASE OF IL & FS INVESTMENT MANAGERS LTD. VS. INCOME-TAX OFFICER & O RS. REPORTED IN (2008) 298 ITR 32 (BOM). C. DECISION OF SUPREME COURT OF INDIAN IN THE CASE OF COMMISSIONER OF INCOME-TAX VS. KELVINATOR OF INDIA LTD., REPORTE D IN (2010) 320 ITR 561. 8) HE FURTHER SUBMITTED THAT THE CASE OF THE ASSESS EE CANNOT BE REOPENED WITHOUT ANY SPECIFIC INFORMATION AND MATER IAL AVAILABLE WITH THE ASSESSING OFFICER. THEREFORE, THE ASSESSMENT MA Y BE CANCELLED ON THIS GROUND ONLY. KEEPING IN VIEW THE FINDING GIVEN BY THE LEARNED FIRST APPELLANT AUTHORITY REPRODUCED ABOVE, I AM OF THE C ONSIDERED VIEW THAT THE NOTICE IN DISPUTE HAS BEEN ISSUED ON THE BASIS OF MATERIAL THAT THE ASSESSEE HAS CLAIMED EXCESSIVE DEPRECIATION ON BUIL DING AND QUALIS. THE REVENUE AUTHORITY HAS GIVEN OPPORTUNITY TO THE ASSE SSEE TO NULLIFY THE AVERMENT MADE BY THE ASSESSING OFFICER IN THE NOTIC E BUT THE ASSESSEE HAS NOT FILED ANY REPLY TO THE SAME. KEEPING IN VIE W THE LATEST JUDGMENT OF HON'BLE SUPREME COURT IN THE CASE OF ACIT VS. RA JESH JAVERI STOCK BROKERS PVT. LTD. 291 ITR 500 (SC), LEARNED FIRST A PPELLANT AUTHORITY HAS RIGHTLY CONFIRMED THE VALIDITY OF NOTICE ISSUED UND ER SECTION 148 OF THE ACT. THEREFORE, NO INTERFERENCE IS CALLED FOR IN TH E WELL REASONED ORDER PASSED BY LEARNED FIRST APPELLATE AUTHORITY ON THE ISSUE INVOLVED IN GROUND NO. 1 AND THE SAME IS REJECTED AND DECIDED AGAINST THE ASSESSEE. 9) AS REGARDS TO THE ISSUE RAISED BY THE ASSESSEE I N GROUND NO. 2 REGARDING DISALLOWANCE OF DEPRECIATION ON BUILDING AND QUALIS, AFTER 5 I.T.A. NOS. 311 & 312(ASR)/2014 ASSESSMENT YEARS: 2003-04 & 2004-05 HEARING BOTH PARTIES, I AM OF THE VIEW THAT THE ASS ESSEE HAS NOT FILED ANY DOCUMENTARY EVIDENCE FOR SUBSTANTIATING ITS CLAIM B EFORE THE REVENUE AUTHORITY BUT IN THE INTEREST OF JUSTICE, AS REQUES TED BY LEARNED COUNSEL FOR THE ASSESSEE THAT THE ASSESSEE IS HAVING ALL THE NE CESSARY EVIDENCES FOR SUBSTANTIATING ITS CLAIM, THE MATTER REQUIRES EXAMI NATION AT THE LEVEL OF ASSESSING OFFICER. ACCORDINGLY, I SET ASIDE THE MAT TERS TO THE ASSESSING OFFICER WITH A DIRECTION TO DECIDE THE ISSUE INVOLV ED IN GROUND NO. 2 AFRESH UNDER THE LAW AFTER AFFORDING ADEQUATE OPPOR TUNITY TO THE ASSESSEE. 10) IN THE RESULT, BOTH THE APPEALS FILED BY ASSESSEE ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES, AS INDICATED ABOV E. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH MAY, 2014 SD/./- (H.S. SIDHU) JUDICIAL MEMBER DATED: 30 TH MAY, 2014 /RK/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE: M/S HOTEL BAHIA FORT, THE MALL, BATHI NDA 2. THE ACIT, CIRCLE-1, BATHINDA 3. THE CIT(A), 4. THE CIT, 5. THE SR DR, I.T.A.T., TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.