Phelix Appliances Limited, Baroda V. The ACIT.,Circle-4, Baroda

ITA 3763/AHD/2008

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 2011 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 2 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-02-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 03-02-2011
• Assessment Year: 2003-2004
• Appeal Filed On: 18-11-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJA RAM SAH
• Assessee Lawyers: TALATI
• Keywords: Depreciation; Principle of natural justice; Unabsorbed depreciation; Set aside

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD AHMEDABAD C BENCH (BEFORE S/SHRI G.D. AGARWAL, VICE-PRESIDENT AND MUKUL KUMAR SHRAWAT, JUDICIAL MEMBER) ITA NO.3763 AND 3764/AHD/2008 [ASSTT. YEAR : 2003-2004 AND 2004-05] PHELIX APPLIANCES LTD. 9-B, SHEETALKUNJ SOCIETY NR. DAWAT HOTEL, MANJALPUR BARODA. VS. ACIT, CIR.4 BARODA. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI S.H.TALATI REVENUE BY : SHRI RAJA RAM SAH O R D E R PER BENCH: BOTH THESE APPEALS HAVE BEEN FILED BY THE ASSESSEE ARISING FROM THE ORDER OF THE COMMISSIONER OF INCOME TAX (A)-III , BARODA VIDE IDENTICAL ORDERS DATED 25.08.2008 FOR THE ASSESSMENT YEARS 20 03-04 AND 2004-05. 2. SUBSTANTIVE GROUND AS ARGUED BEFORE US IS GROUND NO.3 FOR A.Y.2003-04 AND GROUND NO.2 FOR A.Y.2004-05. FOR BOTH THE YEAR S, THE APPELLANT HAS RAISED THE ISSUE IN RESPECT OF DISALLOWANCE OF EXPENSES OF RS.11,45,872/- PERTAINING TO PUBLIC ISSUE EXPENSES. 3. HAVING HEARD BOTH THE SIDES, IT IS INFORMED DURI NG THE COURSE OF HEARING THAT IN ASSESSEES OWN CASE FOR A.Y.2002-03, THE RE SPECTED CO-ORDINATE BENCH A, AHMEDABAD IN ITA NO.146/A/2007 VIDE ORDER DATE D 16-3-2007 HAS RESTORED THE ISSUE BACK TO THE FILE OF THE AO BY RE FERRING AN EARLIER DECISION PERTAINING TO THE ASSESSMENT YEAR 1998-99 DATED 2-8 -2006. FOR THE SAKE OF COMPLETENESS, PARA-3 AND 4 OF THE ORDER OF THE TRIB UNAL IS REPRODUCED BELOW: 3. AT THE OUTSET LD. AUTHORISED REPRESENTATIVE OF T HE ASSESSEE SUBMITTED THAT THE ISSUE IS COVERED BY THE ORDER OF ITAT IN ASSESSEES OWN CASE FOR A.Y.1998-99 IN ITA NO.2113/AHD/02 ORDE R DATED 2/8/2006. RELEVANT GROUND AND FINDING OF ITAT ARE REPRODUCED BELOW:- XXXX SINCE THE FACTS ARE IDENTICAL, WE RESPECTFULLY FOL LOW THE ABOVE ORDER OF ITAT. ACCORDINGLY WE ARE ALSO RESTORING THE ISSUE BACK TO THE FILE OF ITA NO.3763 AND 3764/AHD/2008 -2- ASSESSING OFFICER WITH IDENTICAL DIRECTIONS. THE A PPEAL IS ALLOWED FOR STATISTICAL PURPOSES.. 4. ONCE A VIEW HAS ALREADY BEEN TAKEN IN RESPECT OF 1/10 TH OF THE CLAIM OF EXPENDITURE UNDER SECTION 35D INCURRED TOWARDS RAI SING THE SHARE CAPITAL FOR RE-ADJUDICATION WITH CERTAIN DIRECTIONS, THEN FOLL OWING THE PAST HISTORY OF THE CASE, WE HAVE NO REASON BUT TO SET ASIDE THIS GROUN D WITH IDENTICAL DIRECTIONS TO BE DECIDED DE NOVO , NEEDLESS TO SAY, AFTER PROVIDING ADEQUATE OPPORTU NITY OF HEARING TO THE ASSESSEE. WITH THE RESULT, FOR BOTH THE YEARS, THE ABOVE GROUNDS MAY BE TREATED AS ALLOWED FOR STATISTICAL PURPOSE. FOR ASSTT.YEAR : 2003-2004: 5. GROUND NO.2 IS IN RESPECT OF SUB-LETTING CHARGES AMOUNTING TO RS.48,800/-. THOUGH THE LEARNED AR HAS ADMITTED TH AT THERE WAS INCOMPLETE COMPLIANCE FROM THE SIDE OF THE ASSESSEE TO FURNISH DETAILS OF SUB-LETTING BEFORE THE REVENUE AUTHORITIES, BUT THIS FACT SHOULD ALSO NOT BE DENIED THAT THE AGENCY INVOLVED BEING A PUBLIC SECTOR UNDER TAKING I.E., G IDC, BARODA, THEREFORE, THERE WAS NO QUESTION OF ANY DOUBT IN RESPECT OF THE CLAI M OF EXPENDITURE, HOWEVER THE EVIDENCE IN RESPECT OF THE QUANTUM WAS WANTING AT THAT TIME. THE LEARNED AR HAS ALSO PLEADED THAT IT WAS A REGULAR FEATURE I NVOLVED IN NUMBER OF ASSESSMENT YEARS, THEREFORE, THE SAME OUGHT TO HAVE BEEN ALLOWED FOLLOWING THE PAST HISTORY OF THE CASES. 6. AFTER HEARING BOTH THE SIDES, WE ARE OF THE VIEW THAT NATURAL JUSTICE DEMANDS TO RESTORE THIS GROUND AS WELL BACK TO THE STAGE OF THE AO WITH THE DIRECTIONS TO THE ASSESSEE TO FURNISH THE REQUISITE EVIDENCES IN SUPPORT OF SUB- LETTING EXPENSES AND TO PROMPTLY COMPLY WITH THE NO TICE OF THE AO SO THAT THIS MATTER SHOULD GET RESOLVED AT AN EARLY DATE. SINCE THE MATTER HAS BEEN RESTORED BACK TO THE FILE OF THE AO THEREFORE THIS GROUND MA Y BE TREATED AS ALLOWED FOR STATISTICAL PURPOSE. FOR ASSTT.YEAR 2004-2005: ITA NO.3763 AND 3764/AHD/2008 -3- 7. THERE IS ONE MORE GROUND NO.3 IN RESPECT OF CLAI M OF BROUGHT FORWARD UNABSORBED DEPRECIATION. THE FIRST APPELLATE AUTHO RITY HAS NOT ADJUDICATED UPON THIS GROUND, HOWEVER, IT HAS BEEN BROUGHT TO OUR NO TICE THAT FOR A.Y.2003-04 THIS ISSUE WAS RESTORED BACK BY THE CIT(A) TO THE F ILE OF THE AO WITH DIRECTION TO QUANTIFY THE CLAIM OF BROUGHT FORWARD LOSS/UNABS ORBED DEPRECIATION AS PER THE LAW. THEREFORE, THE PRESENT POSITION IS THAT F OR A.Y.2003-04, THE MATTER NOW REST WITH THE AO, HOWEVER, FOR THE YEAR UNDER C ONSIDERATION I.E. A.Y.2004- 05, THE LEARNED CIT(A) HAS NOT ENTERTAINED THIS GRO UND AT ALL. THEREFORE, NATURAL JUSTICE DEMANDS TO RESTORE THIS GROUND AS WELL BACK TO THE STAGE OF THE AO TO BE DECIDED ALONG WITH A.Y.2003-04. WE ORDER ACCORDIN GLY AND THIS GROUND IS TO BE TREATED AS ALLOWED FOR STATISTICAL PURPOSE. 8. REST OF THE GROUNDS ARE GENERAL IN NATURE THEREF ORE NEEDS NO SPECIFIC ADJUDICATION. 9. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN OPEN COURT ON 11 TH FEBRUARY, 2011. SD/- SD/- (G.D. AGARWAL) VICE-PRESIDENT (MUKUL KR. SHRAWAT) JUDICIAL MEMBER PLACE : AHMEDABAD DATE : 11-02-2011 COPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT. BY ORDER DR/AR, ITAT, AHMEDABAD