DCIT, Coimbatore V. M/s. Vijayeswari Textiles Ltd., Coimbatore

ITA 3176/CHNY/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 7912 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 03-01-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 17-11-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R. DURAI PANDIAN
• Keywords: Reopening of assessment; Wrong claim; Revenue expenditure
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 143(3); 92; 143(1)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI . . . , .. ' #$, & '( BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER ./ ITA NO.3176/MDS/2016 * +* / ASSESSMENT YEAR : 2007-08 THE DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 1, 63-A, RACE COURSE ROAD, COIMBATORE. V. M/S VIJAYESWARI TEXTILES LTD., (NOW M/S VTX INDUSTRIES LTD.), NO.10/400, PALGHAT ROAD, KUNIYAMUTHUR, COIMBATORE 641 008. PAN : AAACV 6388 F (-./ APPELLANT) (/0-./ RESPONDENT) -. 1 2 / APPELLANT BY : SHRI R. DURAI PANDIAN, JCIT /0-. 1 2 / RESPONDENT BY : NONE ' 1 3& / DATE OF HEARING : 03.01.2017 45+ 1 3& / DATE OF PRONOUNCEMENT : 31.01.2017 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) 1, COIMB ATORE, DATED 26.08.2016 AND PERTAINS TO ASSESSMENT YEAR 2007-08. 2 I.T.A. NO.3176/MDS/16 2. SHRI R. DURAI PANDIAN, THE LD. DEPARTMENTAL REPR ESENTATIVE, SUBMITTED THAT THE ASSESSEE AMORTIZED A PORTION OF PROJECT DEVELOPMENT EXPENDITURE AND THE BALANCE AMOUNT WAS CLAIMED AS DEFERRED REVENUE EXPENDITURE. THIS WAS NOTICED BY THE ASSESSING OFFICER AFTER COMPLETION OF ORIGINAL ASSESSMENT. T HEREFORE, THE ASSESSING OFFICER REOPENED THE ASSESSMENT AFTER ISS UING NOTICE UNDER SECTION 148 OF THE INCOME-TAX ACT, 1961 (IN S HORT 'THE ACT') ON 11.06.2013. DUE TO WRONG CLAIM MADE BY THE ASSESSE E, THERE WAS AN UNDER ASSESSMENT OF INCOME CHARGEABLE OTHERWISE TO TAX. THEREFORE, THE ASSESSING OFFICER FOUND THAT THE INC OME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. ACCORDINGLY, THE NO TICE WAS ISSUED. ACCORDING TO THE LD. D.R., THE ASSESSEE CL AIMED DEFERRED REVENUE EXPENDITURE AT ` 3,99,27,000/-. HOWEVER, IN THE PROFIT & LOSS ACCOUNT, THE ASSESSEE AMORTIZED A SUM OF ` 1,33,49,000/-. THE BALANCE AMOUNT OF ` 2,65,78,000/- WAS CLAIMED AS DEFERRED REVENUE EXPENDITURE. ACCORDING TO THE LD. D.R., TH E EXPENSES WHICH ARE NOT DEBITED TO PROFIT & LOSS ACCOUNT CANN OT BE ALLOWED WHILE COMPUTING TOTAL INCOME. THE ASSESSING OFFICE R RIGHTLY REOPENED THE ASSESSMENT AND DISALLOWED THE SO-CALLE D EXPENDITURE OF ` 2,65,78,000/-. 3 I.T.A. NO.3176/MDS/16 3. NO ONE APPEARED FOR THE ASSESSEE INSPITE OF RECE IPT OF NOTICE ISSUED BY RPAD. THEREFORE, WE DISPOSE OF THE APPEA L ON MERIT AFTER HEARING THE LD. DEPARTMENTAL REPRESENTATIVE. 4. FROM THE ORDERS OF THE LOWER AUTHORITIES IT APPE ARS THAT THE ASSESSEE FILED THE RETURN OF INCOME FOR THE ASSESSM ENT YEAR 2007- 08 ON 13.11.2007 DECLARING A TOTAL LOSS OF ` 62,77,473/-. INITIALLY, THE RETURN WAS PROCESSED UNDER SECTION 143(1) OF THE AC T. SUBSEQUENTLY, THE ASSESSMENT WAS COMPLETED UNDER SE CTION 143(3) OF THE ACT ON 31.12.2010 DETERMINING THE TOTAL TAXA BLE INCOME OF ` 15,76,55,602/-. THE ASSESSMENT ORDER DATED 31.12.2 010 WAS ALSO RECTIFIED BY AN ORDER PASSED UNDER SECTION 154 OF T HE ACT ON 19.04.2012. ACCORDINGLY, THE ASSESSING OFFICER DET ERMINED THE TOTAL LOSS AT ` 52,50,239/-. 5. WE HAVE CAREFULLY GONE THROUGH THE PROVISIONS OF SECTION 147 OF THE ACT. WHEN THE ASSESSING OFFICER HAS COM PLETED ASSESSMENT UNDER SECTION 143(3) OF THE ACT, THE COM PLETED ASSESSMENT CANNOT BE REOPENED UNDER SECTION 147 OF THE ACT UNLESS THERE WAS NEGLIGENCE ON THE PART OF THE ASSE SSEE, AFTER EXPIRY OF A PERIOD OF FOUR YEARS FROM THE END OF TH E RELEVANT ASSESSMENT YEAR. IN THIS CASE, THE FOUR YEARS PERI OD FROM THE END OF 4 I.T.A. NO.3176/MDS/16 THE RELEVANT ASSESSMENT YEAR EXPIRED ON 31.03.2012. HOWEVER, THE ASSESSING OFFICER ISSUED NOTICE UNDER SECTION 148 O F THE ACT ONLY ON 11.06.2013. THEREFORE, OBVIOUSLY, THE ASSESSMEN T WAS REOPENED AFTER EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR. THE ASSESSEE ADMITTEDLY FILED THE PROFIT & LOSS ACCOUNT AND OTHER DETAILS WHICH ARE REQUIRED FOR CO MPLETING THE ASSESSMENT. THEREFORE, IT CANNOT BE SAID THAT THER E WAS ANY NEGLIGENCE ON THE PART OF THE ASSESSEE. MERELY BEC AUSE THE ASSESSING OFFICER COULD NOT EXAMINE THE PROFIT & LO SS ACCOUNT FILED BY THE ASSESSEE IN THE COURSE OF REGULAR ASSESSMENT , THAT CANNOT BE A REASON TO SAY THAT THE ASSESSEE HAS NOT FILED RELEVANT DETAILS. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT WHE N THE ASSESSEE PROVIDED ALL THE RELEVANT DETAILS BEFORE THE ASSESS ING OFFICER AND THE ASSESSING OFFICER HAS ALSO COMPLETED ASSESSMENT UNDER SECTION 143(3) OF THE ACT, IT CANNOT BE SAID THAT T HERE WAS ANY NEGLIGENCE ON THE PART OF THE ASSESSEE. THEREFORE, REOPENING OF ASSESSMENT BEYOND THE PERIOD OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR IS OUTSIDE THE SCOPE OF SE CTION 147 OF THE ACT. IN VIEW OF THE ABOVE, THIS TRIBUNAL DO NOT FI ND ANY REASON TO INTERFERE WITH THE ORDER OF THE LOWER AUTHORITY AND ACCORDINGLY THE SAME IS CONFIRMED. 5 I.T.A. NO.3176/MDS/16 6. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED ON 31 ST JANUARY, 2017 AT CHENNAI. SD/- SD/- ( . . ' #$ ) ( . . . ) (D.S. SUNDER SINGH) (N.R.S. GANESAN) & / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 7 /DATED, THE 31 ST JANUARY, 2017. KRI. 1 /3#8 98+3 /COPY TO: 1. -. /APPELLANT 2. /0-. /RESPONDENT 3. ' :3 () /CIT(A)-1, COIMBATORE 4. PRINCIPAL CIT-1, COIMBATORE 5. 8; /3 /DR 6. * < /GF.