K.C.C. Software Ltd., New Delhi V. DCIT, New Delhi

ITA 3389/DEL/2008

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 9949 (ITAT-DELHI)
• Duration Of Justice: 8 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-08-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 12-08-2009
• Assessment Year: 2000-2001
• Appeal Filed On: 14-11-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BK GUPTA
• Keywords: Depreciation; Opportunity of being heard; Principle of natural justice
• Section: 271(1)(c); 234B; 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : D : NEW DELHI BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI K.D. RANJAN, ACCOUNTANT MEMBER ITA NO. 3389 & 3390/DEL/2008 ASSESSMENT YEARS : 2000-01 & 2001-02 KCC SOFTWARES LTD., M-78, CONNAUGHT PLACE, NEW DELHI 110 001. PAN: AAACK6307R VS. THE DY. COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE 5, JHANDEWALAN, NEW DELHI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI SANAT KAPOOR, ADVOCATE REVENUE BY : SHRI B.K. GUPTA, SR. DR O R D E R PER I.P. BANSAL, JUDICIAL MEMBER: THESE ARE APPEALS FILED BY THE ASSESSEE. THEY ARE DIRECTED AGAINST THE TWO SEPARATE ORDERS OF THE CIT (A) DATED 10 TH SEPTEMBER, 2008 FOR ASSESSMENT YEAR 2000-01 AND DATED 3 RD SEPTEMBER, 2008 FOR ASSESSMENT YEAR 2001-02. THE GROUNDS OF APPEAL IN BOTH THE APPEALS ARE AS UN DER:- ASSESSMENT YEAR : 2000-01 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND THE PROVISION OF LAW THE LD. CIT (A)-I HAS FAI LED TO APPRECIATE THAT NOTICE ISSUED U/S 153 A IS ILLEGAL, BAD IN LAW AND WITHOUT JURISDICTION AND AS SUCH THE ASSESSMENT ORDER PASSED U/S 153 A IS ALSO ILLEGAL AND BAD IN LAW. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND THE PROVISION OF LAW THE LD. CIT (A) HAS FAILED TO APPRECIATE THAT THE ASSESSMENT ORDER PASSED BY THE LD. ASSESSI NG OFFICER IS BAD IN LAW AND WRONG ON FACTS. ITA NOS.3389 & 3390/DEL/2008 2 3. THAT THE LD. CIT (A) I HAS FAILED TO APPRECIATE THAT IMPUGNED ASSESSMENT ORDER PASSED BY THE LEARNED ASS ESSING OFFICER IS AGAINST THE PRINCIPLES OF NATURAL JUSTIC E AND HAS BEEN PASSED WITHOUT AFFORDING REASONABLE OPPORTUNITY OF BEING HEARD. 4. THAT THE LD. CIT (A)- I HAS FAILED TO APPRECIAT E THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE VARIOUS OB SERVATIONS AND FINDINGS OF THE LEARNED ASSESSING OFFICER IN TH E IMPUGNED ASSESSMENT ORDER IS IRRELEVANT AND VITIATED IN THE LAW. 5. THAT THE LD. CIT (A) I HAS ERRED ON FACTS AND I N LAW IN UPHOLDING DISALLOWANCE OF DEPRECIATION ON COMPUTERS BY RS.227308/-. 6. THAT THE LD. CIT (A)-I HAS FAILED TO APPRECIAT E THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. ASSESS ING OFFICER HAS ERRED IN LAW IN NOT CONSIDERING THE RELEVANT MA TERIAL ON RECORD AND HAS MADE THE ADDITION EVEN WHEN NO ADVER SE MATERIAL IS THERE. 7. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED ASSESSING OFFICER HAS ERRED IN INITIATING T HE PROCEEDINGS U/S 271(1)(C) OF THE INCOME-TAX ACT, 19 61. 8. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE THE INTEREST CHARGED U/S 234 A & 234B IS EXCESSIVE AND HAS BEEN WRONGLY AND ILLEGALLY CHARGED. 9. THAT THE APPELLANT CRAVES THE RIGHT TO AMEND, A PPEND, DELETE ANY OR ALL GROUNDS OF APPEAL. ASSESSMENT YEAR : 2001-02 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND THE PROVISION OF LAW THE LD. CIT (A)- I HAS FA ILED TO APPRECIATE THAT NOTICE ISSUED U/S 153 A IS ILLEGAL, BAD IN LAW AND WITHOUT JURISDICTION AND AS SUCH THE ASSESSMENT ORDER PASSED U/S 153 A IS ALSO ILLEGAL AND BAD IN LAW. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND THE PROVISION OF LAW THE LD. CIT (A) HAS FAILED TO APPRECIATE THAT THE ASSESSMENT ORDER PASSED BY THE LD. ASSESSI NG OFFICER IS BAD IN LAW AND WRONG ON FACTS. 3. THAT THE LD. CIT (A) I HAS FAILED TO APPRECIATE THAT IMPUGNED ASSESSMENT ORDER PASSED BY THE LEARNED ASS ESSING ITA NOS.3389 & 3390/DEL/2008 3 OFFICER IS AGAINST THE PRINCIPLES OF NATURAL JUSTIC E AND HAS BEEN PASSED WITHOUT AFFORDING REASONABLE OPPORTUNITY OF BEING HEARD. 4. THAT THE LD. CIT (A)- I HAS FAILED TO APPRECIAT E THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE VARIOUS OB SERVATIONS AND FINDINGS OF THE LEARNED ASSESSING OFFICER IN TH E IMPUGNED ASSESSMENT ORDER IS IRRELEVANT AND VITIATED IN THE LAW. 2. THAT THE LD. CIT (A) I HAS ERRED ON FACTS AND I N LAW IN UPHOLDING DISALLOWANCE OF DEPRECIATION ON COMPUTERS BY RS.187857/-. 6. THAT THE LD. CIT (A)-I HAS FAILED TO APPRECIAT E THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. ASSESS ING OFFICER HAS ERRED IN LAW IN NOT CONSIDERING THE RELEVANT MA TERIAL ON RECORD AND HAS MADE THE ADDITION EVEN WHEN NO ADVER SE MATERIAL IS THERE. 7. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED ASSESSING OFFICER HAS ERRED IN INITIATING T HE PROCEEDINGS U/S 271(1)(C) OF THE INCOME-TAX ACT, 19 61. 8. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE THE INTEREST CHARGED U/S 234 A & 234B IS EXCESSIVE AND HAS BEEN WRONGLY AND ILLEGALLY CHARGED. 9. THAT THE APPELLANT CRAVES THE RIGHT TO AMEND, A PPEND, DELETE ANY OR ALL GROUNDS OF APPEAL. 2. AS IT CAN BE SEEN FROM THE ABOVE GROUNDS, THE ON LY ISSUE ARISES FOR DETERMINATION ON MERIT IS NON-GRANTING OF DEPRECIAT ION ON COMPUTERS AS CLAIMED BY THE ASSESSEE. 3. LD. AR OF THE ASSESSEE HAS DREW OUR ATTENTION TO THE FOLLOWING SUBMISSIONS MADE BEFORE THE LD. CIT (A):- THAT ON THE FACTS & CIRCUMSTANCES OF THE CASE AND THE PROVISION OF LAW THE LD.A.O. HAS ERRED IN MAKING DISALLOWANCE OF DEPRECIATION ON COMPUTERS BY RS.227308/-. ITA NOS.3389 & 3390/DEL/2008 4 DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE CO MPANY HAS MADE INVESTMENT IN COMPUTERS AMOUNTING TO RS.333092 6/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, COPIES F THE BILLS OF PURCHASE OF COMPUTERS WERE FILED. THE LD. A.O. WHI LE MAKING THE ASSESSMENT HAS CONDUCTED THE ENQUIRIES BY WAY OF IS SUE OF SUMMONS U/S 131 TO EACH AND EVERY PARTY. WITHOUT P ROVIDING US COPIES OF THE REPLIES RECEIVED AND THE MATERIAL COL LECTED HE HAS MADE AN ADDITION OF RS.227308/- ON ACCOUNT OF DIS ALLOWANCE OF DEPRECIATION ON COMPUTERS WORTH RS.378847/-. NO OP PORTUNITY WAS GIVEN TO THE ASSESSEE COMPANY TO REBUT THE MATERIAL COLLECTED BY THE LD. A.O. EVEN BEFORE MAKING THE ADDITION THE L D. A.O. HAS NOT ISSUED ANY SHOW CAUSE NOTICE IN CONNECTION WITH T HE ABOVE. IN VIEW OF THE ABOVE THERE IS NO JUSTIFICATION FOR MAKING THE DISALLOWANCE OF DEPRECIATION ON COMPUTERS BY RS.227 308/-. 4. HE SUBMITTED THAT IT HAS BEEN SUBMITTED BEFORE T HE LD. CIT (A) THAT THE ASSESSEE WAS NOT CONFRONTED WITH THE DISALLOWANCE P ROPOSED TO BE MADE BY THE ASSESSING OFFICER AND, THEREFORE, THE ADDITION WAS MADE BY THE ASSESSING OFFICER WITHOUT GIVING THE ASSESSEE A REASONABLE OPPORTUNIT Y OF HEARING. HE SUBMITTED THAT THE LD. CIT (A) WITHOUT GIVING ANY REASON HAS UPHELD THE DISALLOWANCE WITH THE FOLLOWING OBSERVATIONS:- 9. THE ASSESSING OFFICER HAS DISALLOWED DEPRECIATI ON ON COMPUTERS AMOUNTING TO RS.2,27,308/-. THE ASSESSIN G OFFICER FOLLOWED THE LOGICAL PATH OF INVESTIGATION. HE EST ABLISHED BEYOND DOUBT THERE WERE NO SUCH PURCHASES. SO HE WAS COR RECT IN NOT ALLOWING THE DEPRECIATION OVER IT. THE APPELLANT C OULD NOT GIVE ANY LOGICAL REPLY ALONG WITH DOCUMENTARY SUPPORT IN HIS SUPPORT. THE STAND TAKEN BY THE A.O. IS CORRECT. 5. THEREFORE, THE LD. AR SUBMITTED THAT ON MERITS T HIS ISSUE MAY BE RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER WITH A DI RECTION TO RE-DECIDE THE SAME AFTER GIVING THE ASSESSEE A REASONABLE OPPORTUNITY OF HEARING. 6. ON THE OTHER HAND, THE LD. DR RELIED ON THE ORDE R OF THE ASSESSING OFFICER AND LD. CIT (A). ITA NOS.3389 & 3390/DEL/2008 5 7. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIO NS IN THE LIGHT OF THE MATERIAL PLACED BEFORE US. ON THE ISSUE OF DISALLO WANCE OF DEPRECIATION ON COMPUTERS AS CLAIMED BY THE ASSESSEE, WE FIND THAT THE REPLY WAS FILED BY THE ASSESSEE BEFORE THE LD. CIT (A) CONTENDING THEREIN THAT THE DISALLOWANCE HAS BEEN MADE BY THE ASSESSING OFFICER WITHOUT GIVING R EASONABLE OPPORTUNITY OF HEARING. AS AGAINST THAT THE LD. CIT (A) HAS NOT A DJUDICATED THAT WHETHER OR NOT ANY SUCH OPPORTUNITY WAS GIVEN BY THE ASSESSING OFF ICER AND HE HAS UPHELD THE DISALLOWANCE. IN OUR OPINION, BEFORE MAKING ANY DI SALLOWANCE, AS PER PRINCIPLES OF NATURAL JUSTICE, THE ASSESSEE SHOULD HAVE BEEN G IVEN REASONABLE OPPORTUNITY OF HEARING. THIS PROCEDURE APPEARS TO HAVE NOT BE EN ADOPTED. THUS, WE ARE OF THE OPINION THAT THE LD. CIT (A) WAS WRONG IN UPHOL DING THE ADDITION ESPECIALLY IN VIEW OF THE SUBMISSIONS MADE BY THE ASSESSEE BEFORE HIM. WE, THEREFORE, RESTORE THIS ISSUE OF NON-GRANTING OF DEPRECIATION ON COMPUTERS AS RAISED IN BOTH THE YEARS BEFORE US TO THE FILE OF THE ASSESSING OF FICER FOR RE-DECIDING THE SAME AFTER GIVING REASONABLE OPPORTUNITY OF HEARING TO T HE ASSESSEE. WE DIRECT ACCORDINGLY. THEREFORE, GROUND NO.5 FOR BOTH THE Y EARS IS CONSIDERED TO HAVE BEEN ALLOWED FOR STATISTICAL PURPOSES. 8. SO AS IT RELATES TO OTHER GROUNDS, IN VIEW OF TH E RESTORATION OF THE ISSUE ON MERITS TO THE FILE OF THE ASSESSING OFFICER, THEY H AVE BECOME ACADEMIC FOR WHICH NO ADJUDICATION AT PRESENT IS REQUIRED. 9. IN THE RESULT, THE APPEALS OF THE ASSESSEE ARE C ONSIDERED TO BE ALLOWED FOR STATISTICAL PURPOSES IN THE MANNER AFOREMENTIONED. . 10. THE ORDER PRONOUNCED IN THE OPEN COURT ON 12.08 .2009. [K.D. RANJAN] [I.P. BANSAL] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED, 12.08.2009. DK ITA NOS.3389 & 3390/DEL/2008 6 COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT, DELHI BENCHES