DCIT, New Delhi V. M/s. National Building Construction Corporation Ltd., New Delhi

ITA 3636/DEL/2010

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 97785 (ITAT-DELHI)
• Duration Of Justice: 5 year(s) 3 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 08-10-2015
• Assessment Year: 2003-2004
• Appeal Filed On: 29-07-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B D MISHRA
• Assessee Lawyers: SOMIL AGGARWAL S; SSH DR RAKESH GUPTA
• Keywords: Depreciation; Period of limitation; Assessment record; Unabsorbed depreciation; Reassessment proceedings
• Section: 143(3); 32; 148; 6; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : E : NEW DELHI BEFORE SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA NO S . 3635, 3636, 3637 & 3638 DEL/201 0 ASSESSMENT YEAR S : 2000 - 01, 2003 - 04, 2004 - 05 & 2006 - 07 DCIT, CIRCLE - 13(1), ROOM NO. 406, VS. NATIONAL BUILDING CONSTRUCTION LTD C.R. BUILDING, I.P. ESTATE, NBCC BHAWAN, LODI ROAD, NEW DELHI (PAN: AAACN3053B ) (APPELLANT) (RESPONDENT) AND C.O. NO. 232/DEL/2010 [IN ITA NO. 3636/DEL/2010] ASSESSMENT YEAR : 2003 - 04 NATIONAL BUILDING CONSTRUCTION LTD. , VS. DCIT, CIRCLE - 13(1), ROOM NBCC BHAWAN, LODI ROAD, NO. 406, C.R. BUILDING, NEW DELHI I.P. ESTATE, NEW DELHI (PAN: AAACN3053B ) (APPELLANT) (RESPONDENT) ASSESSEE BY : S/SH. (DR.) RAKESH GUPTA & SOMIL AGGARWAL, ADVOCATES DEPARTMENT BY : SH. B.D. MISHRA, CIT(DR) DATE OF HEARING: 09.10.2015 DATE OF PRONOUNCEMENT: 30.10.2015 ORDER PER INTURI RAMA RAO, A.M. : THE PRESENT APPEALS FILED BY THE REVENUE ARE DIRECTED AGAINST THE ORDER OF THE LEARNED CIT(A) DATED 31.05.2010 PASSED FOR THE ASSESSMEN T YEARS 2000 - 01, 2003 - 04, 2004 - 05 & 2006 - 07. THE ASSESEE HAS ALSO FILED CROSS OBJECTION BEARING C.O. NO. 232/DEL/2010 (ARISING OUT OF ITA NO. 3636/DEL/2010). SINCE COMMON 2 ISSUES ARE INVOLVED IN ALL THE APPEALS, WE PROCEED TO DISPOSE OF THE SAME BY A CONSOLIDATED ORDER. THE GROUNDS OF APPEAL RAISED IN ITA NO.3635/DEL/2010 FOR AY 2000 - 01 ARE AS FOLLOWS: I. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) ERRED IN DIRECTING THE A.O. TO ALLOW THE CARRY FORWARD OF UNABSORBED DEPRECIATION OF RS. 12,74,14,023/ - SUBJECT TO VERIFICATION OF THE FIGURES AS SHOWN BY THE ASSESSEE COMPANY IN THE CHART WITH THE DEPARTMENTAL RECORDS. II. THE LD. CIT(A) HAS FAILED TO APPREC IATED THAT THE ORDER U/S 143(3)/147 DATED 16.03.2005 HAS ATTAINED FINALITY HAS ATTAINED FINALITY WITH THE ORDER OF LD. CIT(A) - XVI, NEW DELHI, DATED 23.12.2005 UPHOLDING THE ACTION OF AO. III. THE APPELLANT CRAVES TO BE ALLOWED TO ADD, ANY FRESH GROUNDS OF APPEA L AND/OR DELETED OF AMEND ANY OF THE GROUNDS OF APPEAL. 2. FOR THE SAKE OF CONVENIENCE AND CLARITY, THE FACTS OF APPEAL IN ITA NO. 3635/DEL/2010 FOR ASSESSMENT YEAR 2000 - 01 ARE STATED HEREUNDER: 2.1 THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2000 - 01 WAS FILED ON 28.11.2000 , DE CLARING INCOME OF RS. 16,19,85,219/ - . AFTER SET OFF OF THE BROUGHT FORWARD LOSSES, TOTAL INCOME WAS DECLARED AS NIL INCOME. THE ORIGINAL ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) OF THE INCOME - TAX ACT, 1961 (FOR SHORT THE ACT ) VIDE ORDER DATED 29 TH JANUARY, 2003 ACCEPTING THE RETURNED INCOME. SUBSEQUENTLY, PURSUANT TO THE APPLICATION MADE UNDER SEC TION 154 OF THE ACT DATED 4 TH JULY, 2003, THE ASSESSING OFFICER HAD QUANTIFI ED THE BROUGHT FORWARD BUSINESS LOSSES OF RS. 29,87 ,04,563/ - AND UNABSORBED DEPRECIATION OF RS. 4,91,27,891/ - VIDE ORDER DATED 4 TH DECEMBER, 2003. THEREAFTER , PURSUANT TO THE RE - ASSESSMENT NOTICE UNDER SECTION 148 OF THE ACT, THE REASSESSMENT PROCEEDINGS WERE COMPLETED VIDE ORDER DATED 143(3) R.W.S. 147 OF THE ACT VIDE 3 ORDER DATED 16 TH MARCH, 2005 AT A TOTAL INCOME OF RS. 18,75,86,422/ - BEFORE SET OFF OF BROUGHT FORWARD LOSSES. ON APPEAL B EFORE THE CIT(A), THE LEARNED CIT(A) GRANTED RELIEF . THE ASSESSING OFFICER WHILE PASSING CONSEQUENTIAL ORDER TO THE ORDER OF CIT(A) HAD QUANTIFIED THE UNABSORBED DEPRECIATION AT RS. 4,91,27,891/ - AS AGAINST THE CORRECT UNABSORBED DEPRECIATION OF RS. 12,74, 14,023/ - VIDE ORDER DATED 16 TH MARCH, 2005 . SUBSEQUENTLY, THE ASSESSEE COMPANY FILED A PETITION ON 5 TH FEBRUARY, 2009 PRAYING FOR THE RECTIFICATION OF THIS MISTAKE AND THIS APPLICATION WAS DISMISSED BY THE ASSESSING OFFICER VIDE HIS ORDER DATED 23 RD MARCH, 2009 ON THE GROUND THAT THE ISSUE OF QUANTIFICATION OF BROUGHT FORWARD UNABSORBED DEPRECIATION WAS NOT THE SUBJECT MATTER OF CONSEQUENTIAL ORDER DATED 16 TH MARCH, 2005. THEREFORE, THE APPLICATION DATED 5 TH FEBRUARY, 2009 IS BARRED BY LIMITATION. BEING AGG RIEVED, AN APPEAL WAS FILED BEFORE THE LEARNED CIT(A) WHO VIDE ORDER DATED 31 ST MARCH, 2010 FOLLOWING THE DECISION OF PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT(A) VS. HARYANA HOTELS LTD., 276 ITR 521 , WHEREIN IT WAS HELD THAT THE ASSESSING OFFICER WAS DUTY BOUND TO CARRY FORWARD THE UNABSORBED LOSSES, HAD DIRECTED THE ASSESSING OFFICER TO QUANTIFY THE UNABSORBED LOSSES AFTER DUE VERIFICATION. THE RELEVANT PARAS OF THE CIT(A) S ORDER I.E PARA S 3 TO 3.3 ARE REPRODUCED AS UNDER: 3. I HAVE GONE THROUGH THE ORDER OF ASSESSING OFFICER, SUBMISSIONS MADE BY THE ID. AR OF THE APPELLANT COMPANY AND VARIOUS JUDICIAL PRONOUNCEMENTS ON THE ISSUE. THE ONLY DISPUTE INVOLVED WHICH HAS TO BE ADJUDICATED IS WHETHER THE CARRY FORWARD OF UN ABSORBED D EPRECIATION IS TO BE FOR AN AMOUNT OF RS. 4,91,27,891/ - AS GRANTE D BY A.O. OR FOR AN AMOUNT OF RS .12,74, 14,023/ - CLAIMED BY THE APPELLANT. 4 3.1 THE A.O. HAS GIVEN FOLLOWING TWO REASONS IN THE ASSESSMENT ORDER FOR NOT ACCEPTING THE CLAIM OF ASSESSEE. I ) THE ISSUE OF CARRY FORWARD OF UNABSORBED DEPRECIATION WAS NOT THE SUBJECT MATTER OF THE ORDER DATED 16 - 03 - 2005 PASSED BY A.D. ULS 147/143(3) OF THE INCOME TAX ACT AND II) THE CLAIM OF UNABSORBED DEPRECIATION WAS REVISED BY THE A.O. VIDE ORDER PASSED UL S 154/143(3) ON 04 - 12 - 2003 AND SINCE FOUR YEARS HAD ELAPSED FROM THIS DATE AND THEREFORE THE RECTIFICATION APPLICATION FILED BY THE ASSESSEE WAS BARED BY TIME. ON THE OTHER HAND, THE APPELLANT HAS CITED FOLLOWING REASONS IN SUPPORT OF ALLOWABILITY OF ITS CLAIM. I) FIRSTLY, THE BROUGHT FORWARD UNABSORBED DEPRECIATION WAS TO THE TUNE OF RS .12,74,14,023/ - WHICH THE A.O. OUGHT TO HAVE CARRIED FORWARD IN TERMS OF MANDATE OF SECTION 32(2) OF THE ACT ,ITSELF, EVEN WITHOUT ANY APPLICATION FROM THE ASSESSEE SIDE . II) IN ANY CASE, SINCE THE ASSESSEE HAD MADE AN APPLICATION IN THIS REGARD, ALL THE MORE IT WAS NECESSARY FOR A.O. TO ALLOW THE CORRECT AMOUNT OF CARRY FORWARD OF UNABSORBED DEPRECIATION. 3.2. IT IS SEEN THAT VIDE ORDER PASSED U/S 250/143(3) DATED 11.06.2002 FOR A.Y.1998 - 99 THE A.D HAS GRANTED CARRY FORWARD OF UN ABSORBED DEPRECIATION AND OF LOSSES AMOUNTING TO RS.42,88,50,691/ - . FURTHER, VIDE ORDER PASSED U/S 250/143(3) DATED 16 - 10 - 2002 FOR A.Y. 1999 - 00 PLACED AT, THE A.O. MADE A SET OFF OF RS.5,55 ,85,067/ - FROM THE AMOUNT OF BROUGHT FORWARD LOSSES AND UNABSORBED DEPRECIATION. THE APPELLANT SUBMITTED DETAILED CHART SHOWING YEAR WISE DETAILS FROM THE ASSESSMENT YEAR 1986 - 87 ONWARDS ALONGWITH COPY OF ASSESSMENT ORDER OF ALL THE YEARS TO SHOW THAT THIS SUM SO CARRIED FORWARD AT RS.42,88,50,691 FOR A.Y. 1998 - 99 CONSISTS OF UNABSORBED DEPRECIATION OF RS.12, 74,14,023/ - . THUS, THE AMOUNT OF CARRY FORWARD ALLOWED ON ACCOUNT OF CARRY FORWARD OF UNABSORBED DEPRECIATION IN A.Y. 1999 - 2000 AND THE AMOUNT BROUGHT FORWARD ON ACCOUNT OF UNABSORBED DEPRECIATION IN A.Y. 2000 - 01 WAS FOR RS.12,7 4,14,023/ - . THE A. O. IS ALWAYS AT LIBERTY TO VERIFY, WHETHER THIS FIGURE IS CORRECT AND HE CAN DULY RECONCILE IT WITH THE ASSESSMENT RECORDS OF THE PAST YEARS. FURTHER, IT IS N OTED THAT EXP. 5 OF SECTION 32 READS AS UNDER: - 'FOR THE REMOVAL OF DOUBTS, IT IS HEREBY DECLARED THAT THE PROVISIONS OF THIS SUB - SECTION SHALL APPLY WHETHER OR NOT THE ASSESSEE HAS CLAIMED THE DEDUCTION IN COMPUTING HIS TOTAL INCOME.' 5 3.3 IT IS FURTHER SEEN THAT HON'BLE PUNJAB AND HARYANA IN THE CASE OF CIT VS. HARYANA HOTELS LTD. (276 ITR 521) HAS HELD THAT IT IS THE DUTY OF AO TO ALLOW THE CARRY FORWARD OF UNABSORBED DEPRECIATION. 3.4. IN VIEW OF THE ABOVE FACTS AND LEGAL POSITION ON T HE ISSUE I AM OF THE VIEW THAT THE A.O. WAS DUTY BOUND TO GRANT THE CARRY FORWARD OF UNABSORBED DEPRECIATION AT CORRECT AMOUNT AS PER LAW WHICH HAS BEEN CLAIMED AT RS.12,74, 14,203/ - AND WHICH CAN BE FURTHER CROSS VERIFIED BY AO FROM THE ASSESSMENT RECORDS . 3.5 THE OTHER REASON GIVEN BY THE AO WAS THAT SINCE, THE APPLICATION DATED 05 - 02 - 2009 WAS FILED AFTER THE EXPIRY OF PERIOD OF FOUR YEARS AND THERFORE THE CLAIM OF ASSESSEE WAS TIME BARRED. IN THIS REGARD, THE APPELLANT HAS RELIED UPON THE JUDGMENT OF DELHI HIGH COURT IN THE CASE OF CI T VS. TONY ELECTRONICS LTD. (18 5 TAXMAN 121) AND ALSO OF HON'BLE SUPREME COURT IN THE CASE OF HINDUSTAN WIRES LTD. VS. CIT (212 ITR 639) HOLDING THAT LIMITATION ULS 154 IS TO BE COUNTED FROM THE LATEST ORDER PASSED AND NO T FROM THE ORIGINAL ORDER. I FIND FORCE IN THE SUBMISSION OF THE APPELLANT THAT THE REASONING GIVEN BY A.O. IS NOT IN ACCORDANCE WITH LAW AND THEREFORE, THE RIGHTFUL CLAIM OF APPELLANT CAN NOT BE REJECTED ON THIS GROUND AS WELL. IT MAY BE SEEN THAT THERE WE RE SUBSEQUENT ORDERS PASSED BY THE AO I.E. ORDER DATED 20 - 06 - 2006 AND APPLICATION FILED DATED 05 - 02 - 2009 AND THEREFORE IN VIEW OF THE ABOVE SAID JUDGMENT, THE APPLICATION OF APPELLANT CANNOT BE HELD TO BE BARRED BY LIMITATION. CONSIDERING THE FACTS OF TH E CASE AND THE SETTLED POSITION OF LAW, I DIRECT THE A.O TO ALLOW THE CARRY FORWARD OF UNABSORBED DEPRECIATION OF RS .12,74,14,023/ - SUBJECT TO VERIFICATION OF THE FIGURES AS SHOWN BY THE APPELLANT COMPANY IN THE CHART WITH THE DEPARTMENTAL RECORDS. AS A RE SULT, THE APPEAL FILED BY THE ASSESSE IS PARTLY ALLOWED IN THE AFORESAID MANNER. BEING AGGRIEVED BY THE ABOVE ORDER, THE REVENUE IS BEFORE US WITH THE PRESENT APPEAL S. 3. THE GRIEVANCE OF THE REVENUE APPEARS TO BE THAT THE APPLICATION FILED BY THE RES PONDENT ASSESSEE COMPANY IS BARRED BY LIMITATION. TO ADJUDICATE THE ISSUE IN APPEAL, IT IS RELEVANT TO EXTRACT BELOW THE PROVISIONS OF SECTION 157 AND CLAUS E II TO SUB - SECTION ( 3 ) OF SECTION 153 OF THE ACT : 6 SECTION 157. WHEN, IN THE COURSE OF THE ASSESSMENT OF THE TOTAL INCOME OF ANY ASSESSEE, IT IS ESTABLISHED THAT A LOSS HAS TAKEN PLACE WHICH THE ASSESSEE IS ENTITLED TO HAVE CARRIED FORWARD AND SET OFF UNDER THE PROVISIONS OF SUB - SECTION (1) OF SECTION 72 , SUB - SECTION (2) OF SECTION 73 , SUB - SECTION (1) OR SUB - SECTION (3) OF SECTION 74 OR SUB - SECTION (3) OF SECTION 74A , THE ASSESSING OFFICER SHALL NOTIFY TO THE ASSESSEE BY AN ORDER IN WRITING THE AMOUNT OF THE LOSS AS COMPUTED BY HIM FOR THE PURPOSES OF SUB - SECTION (1) OF SECTION 72 , SUB - SECTION (2) OF SECTION 73 , SUB - SECTION (1) OR SUB - SECTION (3) OF SECTION 74 OR SUB - SECTION (3 ) OF SECTION 74A . XXXXXXXXXXXX SECTION 153 (3) : ( I ) [***] ( II ) WHERE THE ASSESSMENT, REASSESSMENT OR RECOMPUTATION IS MADE ON THE ASSESSEE OR ANY PERSON IN CONSEQUENCE OF OR TO GIVE EFFECT TO ANY FINDING OR DIRECTION CONTAINED IN AN ORDER UNDER SECTION 250 , 254 , 260 , 262 , 263 , OR 264 OR IN AN ORDER OF ANY COURT IN A PROCEEDING OTHERWISE THAN BY WAY OF APPEAL OR REFERENCE UNDER THIS ACT ; ( III ) 4. FROM THE PERUSAL OF THE ABOVE PROVISIONS, IT IS CLEAR THAT THE ASSESSING OFFICER IS DUTY - BOUND TO INTIMATE THE LOSSES WHICH ARE ENTITLED TO BE CARRY FORWARD. IF THE ASSESSING O FFICER FAILS TO DO SO, THE RIGHT OF THE RESPONDENT ASSESSEE IS TO CARRY FORWARD SUCH LOSSES IS IN NO WAY AFFECTED. THE RIGHT CONFERRED UPON THE ASSESSEE TO CARRY FORWARD THE LOSSES OF THE PREVIOUS YEARS FOR A SPECIFIED PERIOD IS AN ABSOLUTE UNQUALIFIED STA TUTORY RIGHT IS NOWHERE CONDITIONAL UPON THE QUANTIFICATION OR INTI MATION OF THE LOSSES. THAT A PART KEEPING IN VIEW THE PROVISIONS OF CLAUSE II TO SUB - SECTION (3) OF SECTION 153, THE PERIOD OF LIMITATION IS NOT APPLICABLE TO THE PROCEEDINGS CONSEQUENT UPON THE ORDERS OF APPELLATE OR REVISIONAL AUTHORITIES. THEREFORE, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDERS OF LD. CIT(A). ACCORDINGLY, THE APPEALS FILE D 7 BY THE REVENUE ARE DISMISSED AND THE CROSS OBJECTION FILED BY THE ASSESSEE COMPANY IS DISMIS SED AS WITHDRAWN. 5. IN THE RESULT, ALL THE APPEALS FILE D BY THE REVENUE ARE DISMISSED AND THE CROSS OBJECTIONS FILED BY THE ASSESSEE ARE ALSO DISMISSED. THE DECISION IS PRONOUNCED IN THE OPEN COURT ON 3 0 T H OCTOBER , 2015. S D / - S D / - ( SUDHANSHU SRIVASTAVA ) (INTURI RAMA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 3 0 T H OCTOBER , 2015. RK/ - COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI