Cochin International Airport Ltd, Cochin V. ACIT, Ernakulam

ITA 341/COCH/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 64794 (ITAT-COCHIN)
• Duration Of Justice: 1 year(s) 3 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-09-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2005-2006
• Appeal Filed On: 11-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S PRAVEEN
• Assessee Lawyers: R RAJASEKHARAN
• Keywords: Depreciation; Period of limitation; Unabsorbed depreciation
• Section: 115JB; 263

Judgement Text

1 ITA NO. 341/COCH/2011 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. 341/COCH/2011 (ASSESSMENT YEAR 2005-06) COCHIN INTERNATIONAL AIRPORT LTD VS THE A.C.I.T. , CIR.1(2) 35, 4 TH FLOOR, GCDA COMMERCIAL COMPLEX ERNAKULAM MARINE DRIVE, COCHIN-31 PAN : AAACC9658B (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI R RAJASEKHARAN RESPONDENT BY : SHRI S PRAVEEN DATE OF HEARING : 23-08-2012 DATE OF PRONOUNCEMENT : 07-09-2012 O R D E R PER N.R.S. GANESAN (JM) THIS APPEAL OF THE TAXPAYER IS DIRECTED AGAINST TH E ORDER OF THE ADMINISTRATIVE COMMISSIONER DATED 18-03-2011 PASSED U/S 263 OF THE INCOME-TAX ACT, 1961. 2. SHRI S RAJASEKHARAN, THE LD.REPRESENTATIVE FOR T HE TAXPAYER SUBMITTED THAT THE ADMINISTRATIVE COMMISSIONER BY EXERCISING HIS POWER S U/S 263 OF THE INCOME-TAX ACT FOUND THAT THE ORDER PASSED BY THE ASSESSING AUTHOR ITY WHILE GIVING EFFECT TO THE ORDER OF THE COMMISSIONER OF INCOME-TAX(A) IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. REFERRING TO THE IMPUGNED ORDER OF THE CO MMISSIONER OF INCOME-TAX, THE LD.REPRESENTATIVE FOR THE TAXPAYER SUBMITTED THAT T HE BOOK PROFIT AS PROVIDED U/S 115JB WAS COMPUTED AT RS.3,466.30 LAKHS AFTER ALLOWING UN ABSORBED DEPRECIATION AS PER THE BOOKS OF ACCOUNT. THE BOOK PROFIT COMPUTED BY THE TAXPAYER IS ACCEPTED BY THE 2 ITA NO. 341/COCH/2011 ASSESSING OFFICER IN THE ORIGINAL ASSESSMENT ORDER. THEREFORE, THE COMPUTATION OF BOOK PROFIT WAS NOT THE SUBJECT MATTER BEFORE THE COMMIS SIONER OF INCOME-TAX(A). MOREOVER, THE ADMINISTRATIVE COMMISSIONER HAS NOT F OUND ANY ERROR IN THE COMPUTATION OF BOOK PROFIT IN THE ORIGINAL ASSESSMENT ORDER. W HILE GIVING EFFECT TO THE ORDER OF COMMISSIONER OF INCOME-TAX(A) THE ASSESSING AUTHORI TY HAS NOT DISTURBED THE FINDING RECORDED IN RESPECT OF COMPUTATION OF BOOK PROFIT I N THE ORIGINAL ASSESSMENT ORDER. HOWEVER, THE ADMINISTRATIVE COMMISSIONER FOUND THAT THE COMPUTATION OF BOOK PROFIT AND THE ALLOWANCE OF UNABSORBED DEPRECIATION WERE N OT CORRECT. ACCORDING TO THE LD.REPRESENTATIVE, THIS COMPUTATION OF BOOK PROFIT AND ALLOWANCE OF UNABSORBED DEPRECIATION WAS NOT SUBJECT MATTER BEFORE THE COMM ISSIONER OF INCOME-TAX(A) AND THEREFORE IT IS ALSO NOT THE SUBJECT MATTER BEFORE THE ASSESSING AUTHORITY WHILE GIVING EFFECT TO THE ORDER OF THE COMMISSIONER OF INCOME-T AX(A). ACCORDING TO THE LD.REPRESENTATIVE, THE ASSESSMENT ORDER CAN BE REVI SED U/S 263 OF THE ACT WITHIN A PERIOD OF TWO YEARS. THE ORIGINAL ASSESSMENT ORDER WAS PASSED ACCEPTING THE BOOK PROFIT COMPUTED BY THE ASSESSEE ON 28-12-2007 WHERE AS THE REVISION OF THE ASSESSMENT ORDER WAS PASSED BY THE ADMINISTRATIVE COMMISSIONER ON 18-03-2011. THEREFORE, ACCORDING TO THE LD.REPRESENTATIVE, THE REVISIONAL ORDER PASSED BY THE ADMINISTRATIVE COMMISSIONER IS BARRED BY LIMITATION. 3. ON THE OTHER HAND, SHRI S PRAVEEN, THE LD.DR VER Y FAIRLY CONCEDED THAT IN THE ORIGINAL ASSESSMENT ORDER THE ASSESSING OFFICER ACC EPTED THE COMPUTATION OF THE BOOK PROFIT AND ALLOWANCE OF UNABSORBED DEPRECIATION. T HEREFORE, IT WAS NOT SUBJECT MATTER OF APPEAL BEFORE THE COMMISSIONER OF INCOME-TAX(A); HENCE THE ASSESSING AUTHORITY CANNOT DISTURB THE COMPUTATION OF BOOK PROFIT IN TH E ORDER GIVING EFFECT TO THE ORDER OF THE COMMISSIONER OF INCOME-TAX(A). THEREFORE, THE PERIOD OF LIMITATION HAS TO BE COMPUTED WHILE EXERCISING JURISDICTION U/S 263 ONLY FROM THE DATE OF ORIGINAL ASSESSMENT ORDER AND NOT FROM THE DATE OF ORDER GIVING EFFECT TO THE ORDER OF THE CIT(A) PASSED BY THE ASSESSING AUTHORITY. THE LD.DR VERY FAIRLY SUB MITTED THAT THE ORDER OF THE ADMINISTRATIVE COMMISSIONER U/S 263 IS PASSED BEYON D THE TIME LIMIT. 3 ITA NO. 341/COCH/2011 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND ALS O PERUSED THE MATERIAL AVAILABLE ON RECORD. ADMITTEDLY, THE COMPUTATION O F BOOK PROFIT U/S 115JB AND ALLOWANCE OF DEPRECIATION WAS SUBJECT MATTER IN THE ORIGINAL ASSESSMENT AND IT WAS CONCLUDED IN THE ASSESSMENT ORDER DATED 28-12-2007 ITSELF. THEREFORE, IT IS NOT THE SUBJECT MATTER IN THE ORDER DATED 16-06-2008 GIVING EFFECT TO THE ORDER OF THE COMMISSIONER OF INCOME-TAX(A). AS SUCH, IF AT ALL THE ADMINISTRATIVE COMMISSIONER FINDS THAT THE ORIGINAL ASSESSMENT ORDER WAS ERRONEOUS AN D PREJUDICIAL TO THE INTEREST OF THE REVENUE HE HAS TO EXERCISE HIS POWERS WITHIN THE PE RIOD OF TWO YEARS AS PROVIDED IN SECTION 263 OF THE ACT. SINCE, ADMITTEDLY, THE ADM INISTRATIVE COMMISSIONER PASSED THE ORDER BEYOND THE PERIOD OF TWO YEARS FROM THE DATE OF ORIGINAL ASSESSMENT ORDER DATED 28-12-2007, THIS TRIBUNAL IS OF THE OPINION THAT TH E ORDER PASSED BY THE ADMINISTRATIVE COMMISSIONER IS BARRED BY LIMITATION. ACCORDINGLY THE ORDER OF THE ADMINISTRATIVE COMMISSIONER IS QUASHED. 5. IN THE RESULT, THE APPEAL OF THE TAXPAYER IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 07 TH SEPTEMBER, 2012. SD/- SD/- (B.R. BASKARAN) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN, DT : 07 TH SEPTEMBER, 2012 PK/- 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