DCIt, Trivandrum V. English Indian clays Ltd, Trivandrum

ITA 36/COCH/2003

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 61499 (ITAT-COCHIN)
• Duration Of Justice: 9 year(s) 3 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-06-2012
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 28-05-2012
• Assessment Year: 1995-1996
• Appeal Filed On: 11-02-2003
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S VIJAYAPRABHA
• Assessee Lawyers: R KRISHNA IYER
• Keywords: Depreciation
• Section: 263

Judgement Text

1 ITA NO. 36/COCH/2003 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI N.R.S. GANESAN (JM) AND SHRI B.R. BASKA RAN(AM) I.TA NO. 36/COCH/2003 (ASSESSMENT YEAR 1995-96) MS T.N. THANKAMMA VS M/S ENGLISH INDIAN CLAYS L TD DY.CIT, CIR.1(1), TRIVANDRUM VELI, TRIVANDRUM PAN : NOT AVAILABLE (APPELLANT) (RESPONDENT) APPELLANT BY : SMT. S VIJAYAPRABHA RESPONDENT BY : SHRI R KRISHNA IYER DATE OF HEARING : 28-05-2012 DATE OF PRONOUNCEMENT : 01-06-2012 O R D E R PER N.R.S. GANESAN (JM) THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME-TAX(A)-I, TRIVANDRUM DATED 28-10-2002 AND PE RTAINS TO ASSESSMENT YEAR 1995- 96. 2. SHRI R KRISHNA IYER, THE LD.REPRESENTATIVE FOR T HE ASSESSEE SUBMITTED THAT ORIGINALLY THIS APPEAL WAS DISMISSED BY THIS TRIBUN AL BY AN ORDER DATED 28-04-2003 ON THE GROUND THAT THE ORDER PASSED BY THE COMMISSIONE R U/S 263 WAS SET ASIDE BY THE TRIBUNAL. HOWEVER, THE REVENUE TOOK THE MATTER BEF ORE THE HIGH COURT AGAINST THE ORDER OF THIS TRIBUNAL. THE HIGH COURT BY JUDGMENT IN ITA NO.150 OF 2008 DATED 10-06- 2009 FOUND THAT THE COMMISSIONER HAS RIGHTLY EXERCI SED HIS JURISDICTION U/S 263 AND ACCORDINGLY REVERSED THE ORDER OF THE TRIBUNAL. TH E HIGH COURT FURTHER OBSERVED THAT IT IS OPEN TO THE ASSESSEE TO PRODUCE EVIDENCE AND EST ABLISH CASE BEFORE THE OFFICER IN THE 2 ITA NO. 36/COCH/2003 FRESH ASSESSMENT BASED ON THE ORDER OF THE COMMISSI ONER. THEREFORE, IN THE PROCEEDINGS U/S 263, THE MATTER WAS REMITTED BACK T O THE FILE OF THE ASSESSING OFFICER BY THE HIGH COURT. HOWEVER, IN THIS APPEAL, THE HIGH COURT, IN ITA NO.156 OF 2009 DATED 30- 06-2009 AFTER REFERRING TO ITS EARLIER ORDER IN ITA NO.150 OF 2008 FOUND THAT CONSEQUENT TO THE ORDER OF THE HIGH COURT AGAINST THE ORDER PA SSED BY THE COMMISSIONER U/S 263, THE ORDER OF THE TRIBUNAL WAS VACATED. THEREFORE, THE APPEAL WAS RESTORED ON THE FILE OF THIS TRIBUNAL AND THE TRIBUNAL WAS FURTHER DIRECTED TO TAKE A DECISION ON MERIT AFTER NOTICE TO PARTIES. ACCORDING TO THE LD.REPRESENTAT IVE, THERE ARE TWO DIRECTIONS OF THE HIGH COURT. IN THE 263 PROCEEDINGS THE HIGH COURT DIRECTED THE ASSESSING OFFICER TO PASS THE ORDER AFTER GIVING LIBERTY TO THE ASSESSEE TO P RODUCE THE EVIDENCE AND ESTABLISH THE CASE. HOWEVER, IN THIS APPEAL, THE HIGH COURT DIRE CTED THE TRIBUNAL TO DISPOSE OF THE CASE ON MERIT AFTER NOTICE TO PARTIES. ON A QUERY FROM THE BENCH, WHETHER THE MATTER CAN BE REMANDED BACK TO THE FILE OF THE ASSESSING O FFICER TO DECIDE THE CASE ON MERIT SO AS TO GIVE HARMONIOUS EFFECT TO THE ORDER OF THE HI GH COURT, THE LD.REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT HE MAY NOT HAVE ANY OBJECTI ON IN REMITTING BACK THE MATTER TO THE FILE OF THE ASSESSING OFFICER. HOWEVER, THE LD .REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THIS IS A VERY OLD MATTER AND THE RELEVANT ASSESSMENT YEAR IS 1995-96. THEREFORE, REMANDING THE MATTER AT THIS STAGE MAY N OT SERVE ANY PURPOSE. 3. WE HEARD SMT. S VIJAYAPRABHA, THE LD.DR ALSO. T HE LD.DR SUBMITTED THAT DUE TO THE BOGUS TRANSACTION THE ASSESSEE CLAIMED DEPRECIA TION. ACCORDING TO THE LD.DR, THE SO-CALLED LEASE TRANSACTION WAS NOT GENUINE. FOR T HE ASSESSMENT YEAR 1994-95 IDENTICAL TRANSACTIONS WERE FOUND TO BE FRAUDULENT AND THE LE ASE AGREEMENT WAS ONLY A DEVISE TO AVOID TAX. THEREFORE, ACCORDING TO THE LD.REPRESEN TATIVE, THERE IS NO MERIT IN THE CASE. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND ALSO PERUSED THE MATERIAL ON RECORD. THIS TRIBUNAL FOUND THAT THE E XERCISE OF JURISDICTION U/S 263 OF THE INCOME-TAX ACT WAS NOT JUSTIFIED. ACCORDINGLY, THE PRESENT APPEAL OF THE REVENUE WAS DISMISSED ON THE GROUND THAT THE ORDER PASSED BY TH E ADMINISTRATIVE COMMISSIONER U/S 3 ITA NO. 36/COCH/2003 263 WAS SET ASIDE. HOWEVER, ON APPEAL BY THE REVEN UE, THE HIGH COURT REVERSED THE ORDER OF THIS TRIBUNAL AND DIRECTED THE ASSESSING O FFICER TO RE-CONSIDER THE MATTER. FOR THE PURPOSE OF CONVENIENCE, WE ARE REPRODUCING THE OPERATIVE PORTION OF THE ORDER OF HIGH COURT BELOW: .WE, THEREFORE, ALLOW THE APPEAL BY REVERSING THE ORDER OF THE TRIBUNAL AND BY RESTORING THE ORDER OF THE COMMISSIONER. IT WILL BE OPEN TO THE ASSESSEE TO PRODUCE AND ESTABLISH THE CASE BEFORE T HE OFFICER IN THE FRESH ASSESSMENT PROCEEDINGS BASED ON THE ORDER OF THE CO MMISSIONER. IN VIEW OF THIS DIRECTION OF THE HIGH COURT IT IS O PEN TO THE ASSESSEE TO PRODUCE THE MATERIAL BEFORE THE ASSESSING OFFICER TO ESTABLISH THE CASE IN THE FRESH ASSESSMENT PROCEEDINGS BASED ON THE ORDER OF THE COMMISSIONER. HOWEVER, THE HIGH COURT RESTORED THE PRESENT APPEAL ON THE FILE OF THIS TRI BUNAL WITH THE DIRECTION TO DECIDE THE SAME ON MERIT. FOR THE PURPOSE OF CONVENIENCE, WE ARE REPRODUCING THE RELEVANT DIRECTION OF THE HIGH COURT. : ...... HOWEVER, SUBSEQUENT TO THE TRIBUNALS ORDER THIS COURT VIDE ORDER IN APPEAL INCOME-TAX ACT 1961150/2008 REVERSED THE ORD ER OF THE TRIBUNAL CANCELLING SECTION 263 ORDER. CONSEQUENT UPON THIS COURTS JUDGMENT THE ASSESSMENT PURSUANT TO THE ORDER UNDER SECTION 263 SURVIVES. WE THEREFORE ALLOW THE APPEAL BY VACATING THE ORDER OF THE TRIBUNAL AND RESTORE THE APPEAL TO THE TRIBUNAL FOR DECISION ON MERITS AFTER NOTICE TO PARTIES. THIS TRIBUNAL IS OF THE OPINION THAT BOTH THE DIREC TION OF THE HIGH COURT IS BINDING ON THIS TRIBUNAL AND IT HAS TO BE GIVEN EFFECT HARMONIOUSLY . SINCE THE HIGH COURT HAS ALREADY DIRECTED THE ASSESSING OFFICER TO CONSIDER THE MATE RIAL THAT MAY BE FILED BY THE ASSESSEE IN THE FRESH ASSESSMENT PROCEEDINGS, THIS TRIBUNAL IS OF THE OPINION THAT IN THE INTEREST OF JUSTICE, THE ASSESSING OFFICER HAS TO RECONSIDER TH E MATTER AS DIRECTED BY THE HIGH COURT ON THE BASIS OF THE MATERIAL THAT MAY BE FILED BY T HE ASSESSEE TO ESTABLISH THE CASE. ACCORDINGLY, THE IMPUGNED ORDER OF COMMISSIONER OF INCOME-TAX(A) IS SET AIDE AND THE ENTIRE ISSUE OF DEPRECIATION IS REMITTED BACK TO TH E FILE OF THE ASSESSING OFFICER. AS 4 ITA NO. 36/COCH/2003 DIRECTED BY THE HIGH COURT, THE ASSESSEE WILL BE AT LIBERTY TO PRODUCE EVIDENCE AND ESTABLISH THE CASE BEFORE THE OFFICER IN THE FRESH PROCEEDINGS BASED ON THE ORDER OF THE COMMISSIONER. THE ASSESSING OFFICER SHALL PASS AN ORDER AFTER CONSIDERING ALL THE MATERIAL AVAILABLE ON RECORD AND GIVING AN OPPORTUN ITY TO THE ASSESSEE OF BEING HEARD. THE ASSESSING OFFICER SHALL COMPLETE ASSESSMENT PRO CEEDINGS WITHIN A PERIOD OF FOUR MONTHS FROM THE DATE OF RECEIPT OF COPY OF THIS ORD ER. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLO WED, FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 01 ST JUNE, 2012. SD/- SD/- (B.R. BASKARAN) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN, DT : 01 ST JUNE, 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