Sri.P.Srinivas, Calicut V. ITO, Cochin

ITA 320/COCH/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1003 (ITAT-COCHIN)
• Duration Of Justice: 2 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 29-11-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUSAN GEORGE VERGHESE
• Assessee Lawyers: IYPE MATHEW
• Keywords: Depreciation

Judgement Text

1 ITA NO. 320/COCH/2012 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI N.R.S. GANESAN (JM) AND SHRI B.R. BASKA RAN(AM) I.T.A NO. 320/COCH/2012 (ASSESSMENT YEAR 2008-09) SHRI P SHRINIVAS VS ITO (INTL TAXATION)-1 SAMS PROPERTY DEVELOPERS & HOTELS (P) LTD KOCHI CHAKKORATHUKULAM KOZHIKODE 673 006 PAN : AOXPS9241Q (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI IYPE MATHEW RESPONDENT BY : SMT. SUSAN GEORGE VERGHESE DATE OF HEARING : 27-02-2013 DATE OF PRONOUNCEMENT : 28-02-2013 O R D E R PER N.R.S. GANESAN (JM) THIS APPEAL OF THE TAXPAYER IS DIRECTED AGAINST TH E ORDER OF CIT(A)-III, KOCHI DATED 20-07-2012 AND PERTAINS TO ASSESSMENT Y EAR 2008-09. 2. THE ONLY ISSUE ARISES FOR CONSIDERATION IS DISAL LOWANCE OF DEPRECIATION. 2 ITA NO. 320/COCH/2012 3. SHRI IYPE MATHEW, THE LD.REPRESENTATIVE FOR THE TAXPAYER SUBMITTED THAT THE TAXPAYER HAS PRODUCED ALL THE MATERIALS BE FORE THE ASSESSING OFFICER AND CLAIMED DEPRECIATION. THE ASSESSING OF FICER, HOWEVER, REJECTED THE CLAIM OF THE TAXPAYER ON THE GROUND THAT THE TA XPAYER HAS NOT MAINTAINED PROPER BOOKS OF ACCOUNT, THEREFORE, THE INCOME WAS ESTIMATED. THE ASSESSING OFFICER HAS ALSO OBSERVED THAT ONCE T HE INCOME WAS ESTIMATED, EXPENSES, DEDUCTION AND DEPRECIATION ARE DEEMED TO HAVE BEEN ALLOWED. REFERRING TO THE CIRCULAR ISSUED BY CBDT IN CIRCULAR NO.29D(XIX-14) DATED 31-08-1965 THE LD.REPRESENTATIVE SUBMITTED TH AT WHEREVER THE PROFIT IS ESTIMATED AND THE PRECRIBED PARTICULARS ARE FURN ISHED BY THE TAXPAYER THE DEPRECIATION ALLOWANCE SHALL BE WORKED OUT SEPARATE LY. THE DEPRECIATION WORKED OUT SHALL BE DEDUCTED FROM THE GROSS PROFIT ESTIMATED. ONCE THE NET PROFIT IS ESTIMATED IT SHOULD BE ESTIMATED SUBJ ECT TO ALLOWANCE OF DEPRECIATION AND DEPRECIATION ALLOWANCE SHOULD BE D EDUCTED THEREFROM. THIS CIRCULAR OF THE BOARD IS BINDING ON THE ASSESS ING OFFICER AND THE CIT(A). HOWEVER, BOTH THE AUTHORITIES BELOW HAVE NOT CONSID ERED THIS CIRCULAR. 3 ITA NO. 320/COCH/2012 4. ON THE CONTRARY, SMT. SUSAN GEORGE VERGHESE, THE LD.DR SUBMITTED THAT THE TAXPAYER HAS TO FURNISH THE REQUIRED PARTI CULARS TO WORK OUT THE DEPRECIATION. IN THIS CASE, THE TAXPAYER HAS NOT F URNISHED ANY PARTICULARS, THEREFORE, THE DEPRECIATION COULD NOT BE COMPUTED. IN THE ABSENCE OF ANY MATERIAL, ACCORDING TO THE LD.DR, THE LOWER AUTHORI TIES HAVE RIGHTLY DISALLOWED THE CLAIM OF THE TAXPAYER. ON A QUERY FROM THE BENCH WHETHER THE DEPRECIATION COULD BE ALLOWED WHEN THE PROFIT W AS ESTIMATED, THE LD.DR CLARIFIED THAT IN VIEW OF THE CBDT CIRCULAR, THE DE PRECIATION HAS TO BE ALLOWED EVEN WHEN THE PROFIT WAS ESTIMATED. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS NO T IN DISPUTE THAT WHEN THE PROFIT WAS ESTIMATED, THE DEPRECIATION HAS TO BE WO RKED OUT SEPARATELY AND IT HAS TO BE DEDUCTED FROM THE GROSS PROFIT. ONCE THE NET PROFIT WAS ESTIMATED IT HAS TO BE MADE SUBJECT TO ALLOWANCE OF DEPRECIATION. THE CONTENTION OF THE LD.DR IS THAT THE PARTICULARS WER E NOT FURNISHED BEFORE THE ASSESSING OFFICER. HOWEVER, THE LD.REPRESENTAT IVE FOR THE TAXPAYER CLAIMS THAT ALL THE PARTICULARS WERE FURNISHED. IN VIEW OF THE ABOVE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE MATT ER NEEDS TO BE 4 ITA NO. 320/COCH/2012 RECONSIDERED BY THE ASSESSING OFFICER IN THE LIGHT OF THE MATERIAL THAT MAY BE FILED BY THE TAXPAYER BEFORE THE ASSESSING OFFIC ER. ACCORDINGLY, THE ORDERS OF THE LOWER AUTHORITIES ARE SET ASIDE AND T HE ISSUE OF DEPRECIATION IS RESTORED TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER SHALL RECONSIDER THE ISSUE AFRESH IN THE LIGHT OF THE MAT ERIAL THAT MAY BE SUBMITTED BEFORE THE ASSESSING OFFICER. WE MAY MAK E IT CLEAR THAT IT IS OPEN TO THE TAXPAYER TO FILE ALL THE MATERIALS TO W ORK OUT THE DEPRECIATION. THE ASSESSING OFFICER SHALL RECONSIDER THE ISSUE AF RESH AND DECIDE THE SAME IN ACCORDANCE WITH LAW AFTER GIVING REASONABLE OPPO RTUNITY TO THE TAXPAYER. 6. IN THE RESULT, THE APPEAL OF THE TAXPAYER IS ALL OWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 28 TH FEBRUARY, 2013. SD/- SD/- (B.R. BASKARAN) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN, DT : 28 TH FEBRUARY, 2013 PK/- 5 ITA NO. 320/COCH/2012 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE COMMISSIONER OF INCOME-TAX 4. THE COMMISSIONER OF INCOME-TAX(A) 5. THE DR (TRUE COPY) BY ORDER ASSTT. REGISTRAR, INCOME-TAX APPELLATE TRIBUNAL, COCHIN BENCH