M.S. Industries, Yamunanagar V. ITO, Yamunanagar

ITA 331/CHANDI/2014

• Counselvise Citation: 33121514 RSA 2014
• Duration Of Justice: 1 year(s) 7 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-11-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 24-06-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 31-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Assessee Lawyers: S K MUKHI; PRERNA
• Keywords: Depreciation; Principle of natural justice; Unabsorbed depreciation
• Section: 143(3); 154; 139

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES, CHANDIGARH BEFORE SHRI H.L.KARWA, HON'BLE VICE PRESIDENT & MS. ANNAPURNA MEHROTRA, ACCOUNTANT MEMBER ITA NO. 331/CHD/2014 ASSESSMENT YEAR: 2009-10 M/S M.S. INDUSTRIES, VS. THE ITO, C/O BANSAL HOSPITAL, WARD-3, YAMUNANAGAR YAMUNANAGAR, PAN NO. AAJFM6168J (APPELLANT) (RESPONDENT) APPELLANT BY : SH. S.K. MUKHI & MS. PRERNA RESPONDENT BY : SH. MANJIT SINGH DATE OF HEARING : 14.10.2015 DATE OF PRONOUNCEMENT : 16.11.2015 ORDER PER H.L.KARWA, VP THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGA INST THE ORDER OF LD. CIT(A), PANCHKULA DATED 16.01.2014 RELATING TO ASS ESSMENT YEAR 2009-10. 2. IN THIS APPEAL, THE ASSESSEE HAS RAISED THE FOLL OWING GROUNDS:- 1. THAT THE ORDERS OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS), KARNAL IS ARBITRARY, DEVOID OF FACTS ON RECORD, AGAINST PRINCIPLES OF NATURAL JUSTICE THEREFORE ILLEGAL, ERRONEOUS, PERVERSE AND THUS UNCALLED FOR. 2. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS), IS NOT JUSTIFIED IN CONCURRING WITH THE ORDERS U/S 154 BY A.O., / ACIT-CPC BY NOT ALLOWING THE SET OFF OF LEGALLY COMPUTED DEPRECIATION BEING UNABSORBED DEPRECI ATION OF 2 EARLIER YEARS AND NOT ALLOWING SET OFF TO THE EXTEN T OF RS. 1,20,829/- FOR THE YEAR UNDER APPEAL WHICH NEEDS DU E CONSIDERATION BY THIS HON'BLE TRIBUNAL. 3. THAT THE LD. COMMISSIONER OF INCOME TAX ( APPEALS), IS NOT JUSTIFIED IN NOT CARRYING OUT NECESSARY VERI FICATION OF DOCUMENTS FOR ALLOWING CLAIM FOR UNABSORBED DEPRECI ATION UNDER INCOME TAX ACT, 1961 THAT WAS ALLOWED BY A.O. , VIDE ITS ORDER U/S 143(3} FOR THE AY 2007-08 WHICH NEEDS DUE CONSIDERATION BY THIS HON'BLE TRIBUNAL. 3. THE ASSESSEE IS A PARTNERSHIP FIRM AND IS A REGU LAR INCOME TAX ASSESSEE AT WARD-3, YAMUNANAGR. THE YEAR UNDER CONSIDERATION WA S THE FIRST MANDATORY YEAR OF E-FILING OF TAX AUDIT RETURNS TO CPC, BANGLORE. THE RETURN WAS SUBMITTED BY THE ASSESSEE THROUGH SOFTWARE AND CURRENT YEARS PROFIT WAS ADJUSTED FROM BROUGHT FORWARD UNABSORBED DEPRECIATION. IN THIS CASE AN IN TIMATION U/S 143(1) OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT') WAS SENT TO THE ASSESSEE VIDE WHICH THE ASSESSING OFFICER HAS RAISED A DEMAND OF RS. 39,530 /-. THE ASSESSEE HAS SHOWN INCOME OF RS. 1,20,829/- AND SAID PROFIT WAS ADJUST ED AGAINST CARRY FORWARD LOSSES OF PREVIOUS YEAR, SO INCOME WAS NIL. WHEN A DEMAND OF RS. 39,530/- WAS RECEIVED BY THE ASSESSEE, AN APPLICATION UNDER SECTION 154 O F THE ACT WAS SUBMITTED TO THE ASSESSING OFFICER WHEREIN IT WAS STATED THAT CARRIE D FORWARD LOSSES WERE NOT ADJUSTED AGAINST CURRENT YEARS PROFIT. IT WAS ALSO SUBMITTED THAT DUE TO NON ADJUSTMENTS OF CARRY FORWARD LOSSES, THE MISTAKE HA S OCCURRED IN THE ORDER AND, THEREFORE, TAX DEMAND HAS RAISED. ACCORDINGLY, IT WAS SUBMITTED THAT ORDER MAY BE RECTIFIED U/S 154 OF THE ACT. THE ASSESSING OFFICER REJECTED THE APPLICATION STATING THAT THERE WAS NO PRIMA FACIE ERROR IN THE ORDER WH ICH WAS SOUGHT TO BE RECTIFIED. 4. ON APPEAL, THE CIT(A) REJECTED THE APPEAL OF THE ASSESSEE, OBSERVING AS UNDER:- 3 6. I HAVE GONE THROUGH THE FACTS OF THE CASE AND THE WRITTEN SUBMISSIONS FILED BY THE APPELLANT. IT IS NOTED THA T THE APPELLANT HAD E-FILED ITS RETURN OF INCOME AND SUBSEQUENTLY A REC TIFICATION APPLICATION BEFORE CPC, BANGALORE. THE AO AT CPC, B ANGALORE PASSED THE ORDER ON 06.06.2011 AND COMMUNICATED TO APPELLANT AS UNDER:- 'AS SEEN FROM THE RETURN OF INCOME, FILED BY THE ASSESSEE, IT IS SEEN THAT THE ASSESSEE HAS NOT FILL ED THE SCH. CFL & BFLA, FOR ALLOWING THE SET OFF OF BROUGH T FORWARD LASSES. HENCE, THERE IS NO MISTAKE, APPARENT FROM THE RECORDS, TO BE RECTIFIED. ' SO THE AO ON VERIFICATION HAVE FOUND THAT THERE WAS NO PRIMA-FAEIE ERROR IN THE ORDER SOUGHT TO BE RECTIFIED. ON PERUS AL OF ORDER IF IS NOTICED THAT APPELLANT ITSELF HAS NOT FILLED UP THE SCHEDULES RELATED TO CARRY FORWARD AND BROUGHT FORWARD LOSSES IN THE RETURN. THERE WAS NO MISTAKE FOUND APPARENT FROM THE RECORD. THER EFORE, IN VIEW OF THESE FACTS I DO NOT FIND ANY DEFECT IN THE ORDE R PASSED U/S 154 OF THE ACT BY THE AO. HENCE, THIS GROUND OF APPEAL IS NOT ALLOWED. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS. SHRI S. K. MUKHY, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT IN THIS YEAR RETURN WAS SUB MITTED THROUGH SOFTWARE AND CURRENT YEAR PROFIT WAS ADJUSTED FROM BROUGHT FORWA RD UNABSORBED DEPRECIATION ACCORDING TO HIM, UNABSORBED DEPRECIATION IS GENUIN E. HE FURTHER POINTED OUT THAT IN THE ASSESSMENT YEAR 2007-08, THE ASSESSING OFFIC ER HAS ALLOWED THE CARRY FORWARD UNABSORBED DEPRECIATION OF RS. 6,54,618/- FOR THE NEXT YEAR AND THE ASSESSMENT WAS FRAMED US/ 143(3) OF THE ACT. SHRI S. K. MUKHY, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT IN THE ORDER U/S 143(3 ) OF THE ACT FOR THE ASSESSMENT YEAR 2007-08 THE BALANCE UNABSORBED DEPRECIATION TO THE EXTENT OF RS. 6,54,618/- WAS ALLOWED TO BE CARRIED FORWARDED AND TO BE SET O FF AGAINST THE INCOME OF SUBSEQUENT YEAR. ACCORDING TO LD. COUNSEL FOR THE ASSESSEE, THE FIRM DECLARED A NET PROFIT OF RS. 20,168/- FOR THE ASSESSMENT YEAR 2008-09 AND THE ASSESSEE WAS LEGALLY ALLOWED OF BALANCE AMOUNT OF RS. 6,34,450/- TO BE CARRY FORWARD FOR 4 ASSESSMENT YEAR 2009-10. HE FURTHER SUBMITTED THAT ASSESSEE HAS ADJUSTED PROFIT OF RS. 1,20,829/- OUT OF THE BROUGHT FORWARD UNABSORBE D DEPRECIATION. IT IS ALSO CLAIMED THAT THE ASSESSEE IS FILING INCOME TAX RETU RNS REGULARLY WITHIN DUE PERIOD U/S 139 OF THE ACT. SHRI S.K.MUKHY, LD. COUNSEL FO R THE ASSESSEE VEHEMENTLY ARGUED THAT THE QUERIES RAISED BY CPC, BANGLORE AR E NOT GENUINE AS ALL THE COLUMNS WERE PROPERLY FILLED AND ONLY AFTERWARDS SO FTWARE ALLOWED AND ADJUSTED THE CURRENT YEAR PROFIT AGAINST THE BROUGHT FORWARD UNABSORBED DEPRECIATION. THERE IS NO MATERIAL ON RECORD TO CONTROVERT THE ABOVE SU BMISSIONS OF LD. COUNSEL FOR THE ASSESSEE. CONSIDERING THE ENTIRE FACTS AND CIRCUMST ANCES OF THE PRESENT CASE, WE HOLD THAT THE CURRENT YEAR INCOME OF RS. 1,208,29/- IS TO BE ABSORBED AND ALLOWED FOR SET OFF AGAINST THE UNABSORBED DEPRECIATION OF EARLIER YEARS AND DIRECT THE ASSESSING OFFICER ACCORDINGLY. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 16.11.2015 SD/- SD/- (ANNAPURNA MEHROTRA) (H.L.KARWA) ACCOUNTANT MEMBER VICE PRESIDENT DATED: 16 TH NOV., 2015 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR