NOBEL BIOCARE INDIA PRIVATE LIMITED, MUMBAI V. ASSISTANT COMMISSIONER OF INCOME TAX 15(2)(1), MUMBAI

ITA 405/MUM/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 2476 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-09-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 18-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ALISAGER RAMPURWALA
• Keywords: Depreciation; Opportunity of being heard; Unabsorbed depreciation; Set aside
• Section: 201

Judgement Text

T HE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI BEFORE SHRI SHAMIM YAHYA ( A M) & SHRI SANDEEP GOSAIN (JM) I.T.A. NO. 405 /MUM/ 201 8 (ASSESSMENT YEAR 20 12 - 1 3 ) NOBEL BIOCARE INDIA PVT. LTD. UNIT NO. 702, 7 TH FLOOR A - WING, HIRANANDANI GARDENS, POWAI MU MBAI - 400 076. PAN : AACCN0274A V S . ITO 15(2)(1) 4 TH FLOOR AAYAKAR BHAVAN M.K. ROAD MUMBAI - 400 020. ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY SHRI ALISAGER RAMPURWALA DEPARTMENT BY SHRI ASHISH KUMAR DATE OF HEARING 30.8 . 201 9 DATE OF PRONOUNCE MENT 03 . 9 . 201 9 O R D E R PER SHAMIM YAHYA (AM) : - THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(A) DATED 11.10.2017 AND PERTAINS TO A.Y. 2012 - 13. 2. THE GROUNDS OF APPEAL READ AS UNDER : - 1. ON THE FACTS AND IN THE CIRCUMST ANCES OF THE CASE AND IN LAW, THE LD. CIT ERRED IN NOT DIRECTING THE LD. AO TO GRANT DEDUCTION OF THE PROVISION FOR OBSOLETE AND NON - MOVING INVENTORY OF RS. 94,47,108 DISALLOWED IN THE PRECEDING YEAR (I.E. AY 2011 - 12), SINCE THE SAME HAS BEEN REVERSED IN T HE CURRENT YEAR. IT IS PRAYED THAT THE LD. AO BE DIRECTED TO GRANT DEDUCTION OF THE PROVISION FOR OBSOLETE AND NON - MOVING INVENTORY OF RS. 94,47,108. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT ERRED IN NOT DIRECTING THE LD. AO TO GRANT DEDUCTION OF THE PROVISION FOR SALES RETURN OF RS.30,00,000 DISALLOWED IN THE PRECEDING YEAR (I.E. AY 2011 - 12), SINCE THE SAME HAS BEEN REVERSED IN THE CURRENT YEAR. IT IS PRAYED THAT THE LD. AO BE DIRECTED TO GRANT DEDUCTION OF THE PROVISION FOR SALES RETURN OF RS. 30,00,000. NOBEL BIOCARE INDIA PVT. LTD . 2 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT ERRED IN NOT DIRECTING THE LD. AO TO GRANT SET - OFF OF BROUGHT FORWARD BUSINESS LOSS AND UNABSORBED DEPRECIATION OF AY 2011 - 12. IT IS PRAYED THAT THE LD. AO BE DIRECTED TO GRANT SET - OFF OF BROUGHT FORWARD BUSINESS LOSS AND UNABSORBED DEPRECIATION OF AY 2011 - 12. 3. VARIOUS GROUNDS AS ABOVE LEAD TO T HE ISSUE RAISED IN THIS APPEAL THAT THE ASSESSEE CLAIMS THAT IT HAD MADE CERTAIN PROVISIONS IN THE PRE CEDING ASSESSMENT YEAR. THE SAME WERE DISALLOWED. THE MATTER WAS CARRIED TO ITAT. THE ITAT HAS REMITTED THE ISSUE TO THE FILE OF THE ASSESSING OFFICER. IN THE MEANWHILE THE ASSESSEE HAS FILED THE APPEAL BEFORE THE LEARNED CIT(A) FOR THE PRESENT ASSESSMENT YEAR . I N THIS APPEAL THE ASSESSEE HAS INTER ALIA PLEADED THAT THE ASSESSEE HAS REVERSED THE ENTRIES OF THOSE PROVISIONS MADE IN THE PREVIOUS ASSESSMENT YEAR AND CORRESPONDINGLY INCOME WAS AGAIN CREDIT ED . HENCE FOR THIS THE ASSESSEE HAS SOUGHT RELIEF IN THE PRESENT PROCEEDINGS BEFORE LEARNED CIT(A). 4. IT IS THE PLEA OF THE LEARNED COUNSEL OF THE ASSESSEE THAT SUBSEQUENT TO THE REMAND OF THE ITAT, THE ASSESSING OFFICER HAS CONFIRMED THE EARLIER ADDITION MADE. HENCE IT IS THE PLEA OF THE ASSESSEE THAT SINCE THE ABOVE PROVISIONS WERE ALREADY CONFIRMED IN THE EARLIER YEAR, THE REVERSAL OF THOSE ENTRIES BY CREDIT TO THE INCOME IN THE CURRENT YEAR GIVES RISE TO DOUBLE TAXATION. HENCE, ASSESSEE SHOULD BE ALLOWED CORRESPONDING REDUCTION IN THE INCOME OF THE CURRENT ASSESSMENT YEAR. LEARNED DEPARTMENTAL REPRESENTATIVE DOES NOT HAVE ANY OBJECTION TO FACTUAL VERIFICATION AND CONSEQUENT ORDER IN THIS REGARD. IN THIS REGARD WE MAY GAINFULLY REFER TO THE GROUNDS OF APPEAL BY THE ASSESSEE BEFORE THE LEARNED CIT(A), THE SAM E READS AS UNDER : - ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED AO ERRED IN NOT GRANTING DEDUCTION OF THE PROVISION FOR OBSOLETE AND NON MOVING INVENTORY OF RS. 94,74,108 / - DISALLOWED IN THE PRECEDING YEAR (I.E. AY. 2011 - 12), SINCE THE SAME HAS BEEN REVERSED IN THE CURRENT YEAR. THE APPELLANT PRAYS THAT THE AMOUNT OF RS. 94,74,10 8/ - BE ALLOWED IN THE CURRENT YEAR. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN. LAW, TH E LEARNED AO E RR ED IN NOT GRANTING DEDUCTION OF THE PROVISION FOR SALES RETURN OF RS. 30,00, 000 / - DISALLOWED IN THE PRECEDING YEAR (I.E. AY, 2011 - 12), SINCE, THE NOBEL BIOCARE INDIA PVT. LTD . 3 SAME HAS BEEN REVERSED IN THE CURRENT YEAR. THE APPELLANT PRAYS THAT TH E AMOUNT OF RS. 30,00,000/ - BE ALLOWED IN THE CURRENT YEAR . 5. LEARNED CIT(A) ADJ UDICATED THE SAME AS UNDER : - THE ASSESSEE HAS SUOMDTO DISALLOWED THE PROVISION IN THE SUBSEQUENT YEAR IN THE COMPUTATION OF INCOME IN THE YEAR IN WHICH THE PROVISION IS MADE. THE ASSESSEE HAS SUBMITTED DURING THE COURSE OF PROCEEDINGS THAT THE PROV ISION DISALLOWED IN THE EARLIER YEAR I.E., AY 2011 - 12 ON ACCOUNT OF STOCK AND SALES RETURN OF RS,94,47,108 AND RS.30,00,000 RESPECTIVELY BE ALLOWED AS THE SAME HAVE BEEN REVERSED IN AY 2012 - 13. THE ASSESSEE HAS VOLUNTARILY ADDED BACK THE PROVISION ONLY FRO M AY 2013 - 14 ONWARDS. THE HON'BLE MAT FOR AY 2011 - 12 HAS SET ASIDE THE MATTER TO THE FILE OF THE AO. IN THESE CIRCUMSTANCES AND IN PARTICULAR THE ISSUE NOT BEING COVERED FOR THE YEAR IN APPEAL I.E. AY 2012 - 13, I DO NOT WARRANT ANY INTERFERENCE IN THIS MATT ER . 6. SUBSEQUENT TO THE ORDER OF THE LEARNED CIT(A), THE ASSESSING OFFICER BY GIVING EFFECT TO THE ORDER OF THE ITAT VIDE ORDER DATED 30.5.2017 HAS CONFIRMED THE DISALLOWANCE FOR EARLIER ASSESSMENT YEAR . IN VIEW OF THE AFORESAID DISCUSSION AND THE BACK GROUND, WE ARE OF THE CONSIDERED OPINION THAT THIS ISSUE NEEDS TO BE REMITTED TO THE FILE OF THE ASSESSING OFFICER. FIRSTLY THE ASSESSING OFFICER SHALL TAKE AN UNDERTAKING FROM THE ASSESSEE THAT HE WILL NOT APPEAL/HAS NOT APPEALED AGAINST THE SAID ORDER OF THE ASSESSING OFFICER WHICH GA VE EFFECT TO THE ORDER OF THE ITAT. SECONDLY THE ASSESSING OFFICER SHALL EXAMINE THE SCHEME OF ENTRIES IN THE CURRENT ASSESSMENT YEAR. IF ON ACCOUNT OF REVERSAL OF THOSE PROVISIONS ASSESSEES INCOME HAS AGAIN INCREASED DUR IN G THE CURRENT ASSESSMENT YEAR, U NDOUBTEDLY IT WILL BE DOUBLE PREJUDICE TO THE ASSESSEE WHICH IS NOT SUSTAINABLE IN LAW. ACCORDINGLY, WITH THESE DIRECTIONS AND OBSERVATION , WE REMIT THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER SHAL L CONSIDER THE ISSUE AFRESH AFTER GIVING THE ASSESSEE PROPER OPPORTUNITY OF BEING HEARD. 7. IN THE RESULT, APPEAL BY THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER HAS BE EN PRONOUNCED IN THE COURT ON 3 . 9 . 201 9 . SD/ - SD/ - (SANDEEP GOSAIN ) (SH A MIM YAHYA ) JUDICIAL MEMBER ACCOUNTANT MEMBER NOBEL BIOCARE INDIA PVT. LTD . 4 M UMBAI ; DATED : 3 / 9 / 20 1 9 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT 5. DR, ITAT, MUM BAI 6. GUARD FILE. BY ORDER, //TRUE COPY// ( ASSISTANT REGISTRAR ) PS ITAT, MUMBAI