DCIT, Moradabad V. M/s HTE Enterprises (P) Ltd., Moradabad

ITA 4092/DEL/2013

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 4425 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 2 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-09-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 24-05-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 03-07-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ARUN KUMAR YADAV SENIOR
• Assessee Lawyers: PUNEET SACHDEV
• Keywords: Business income; Depreciation; Unabsorbed depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH C : NEW DELHI) BEFORE SHRI B.P. JAIN, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO.4092/DEL./2013 (ASSESSMENT YEAR : 2009-10) DCIT, CIRCLE II, VS. M/S. HTE ENTERPRISES (P) LTD. , NEW DELHI. LAJPAT NAGAR, MORADABAD. (PAN : AAACH7414A) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI PUNEET SACHDEV, CA REVENUE BY : SHRI ARUN KUMAR YADAV, SENIOR DR DATE OF HEARING : 31.08.2017 DATE OF ORDER : 18.09.2017 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : APPELLANT, DEPUTY COMMISSIONER OF INCOME-TAX, CIRC LE II, NEW DELHI (HEREINAFTER REFERRED TO AS THE REVENUE ), BY FILING THE PRESENT APPEAL SOUGHT TO SET ASIDE THE IMPUGNED ORD ER DATED 17.04.2013 PASSED BY THE COMMISSIONER OF INCOME-TAX (APPEALS), BAREILLY, FOR THE ASSESSMENT YEARS 2009-10 ON THE G ROUNDS INTER ALIA THAT :- 1. THAT THE LD. COMMISSIONER OF INCOME TAX(APPEALS) HAS ERRED IN LAW IN ALLOWING THE CLAIM OF ITA NO.4092/DEL./2013 2 UNABSORBED DEPRECIATION OF RS.3,59,47,305/-TO THE ASSESSEE WITHOUT APPRECIATING THE FACTS MENTIONED I N THE ASSESSMENT ORDER REGARDING TOTAL LOSS AVAILABLE & T O BE SET OFF FROM TOTAL INCOME. 2. THAT THE LD. COMMISSIONER OF INCOME TAX(APPEALS) HAS ERRED IN LAW IN ALLOWING THE CLAIM OF UNABSORBED DEPRECIATION OF RS.3,59,47,305/- TO THE ASSESSEE WITHOUT APPRECIATING THE FACT THAT THERE I S NO YEAR WISE BREAKUP OF SUCH ABSORBED DEPRECIATION TO VERIFY CORRECTNESS OF SUCH UNABSORBED DEPRECIATION. 3. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW IN NOT REJECTING THE CLA IM OF UNABSORBED DEPRECIATION OF RS.3,57,47,305/- OF THE ASSESSEE AS SUCH LOSS WAS NOT DETERMINED IN ANY OF THE ASSESSMENT COMPLETED UNDER SCRUTINY. 4. LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW IN ALLOWING THE SHORT TERM CAPITAL LOS S OF RS.86,52,832/-WITH REFERENCE TO PROVISIONS OF SECTI ON 71 OF THE INCOME TAX ACT 1961 AS CAPITAL GAIN LOSS CAN NOT BE SET OFF FROM INCOME UNDER ANY OTHER HEAD. 2. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICAT ION OF THE CONTROVERSY AT HAND ARE : DURING THE YEAR UNDER ASS ESSMENT, THE ASSESSEE COMPANY HAS NOT CARRIED OUT ANY BUSINESS A CTIVITY BUT SHOWN INCOME FROM CONSULTANCY, COMMISSION AND LOSS ON SALE OF ASSETS AND AT THE SAME TIME, THE ASSESSEE COMPANY H AS APPLIED FOR ITA NO.4092/DEL./2013 3 DECLARING THE ASSESSEE UNIT AS SICK BEFORE BIFR. C ONSEQUENTLY, ASSESSEE COMPANY WAS ALLOWED TO DISPOSE OFF THE FAC TORY LAND WITH PLANT AND MACHINERY WITH SCRAP ETC. IN ORDER TO UTI LIZE THE SALE PROCEEDS FOR SETTLEMENT OF DUES OF OBC. 3. ASSESSING OFFICER NOTICED FROM PROFIT & LOSS ACC OUNT THAT THE ASSESSEE HAS CLAIMED IMPAIRMENT LOSS OF RS.44,75,00 0/- BUT SUBSEQUENTLY SURRENDERED THIS IMPAIRMENT LOSS AND T OTAL INCOME FROM BUSINESS AND PROFESSION, WORKED OUT AT RS.62,7 5,479/- WHICH HAS BEEN SET OFF FROM THE CAPITAL LOSS OF RS.86,52, 932/-. ON QUERY, THE ASSESSEE FILED COPIES OF BILLS OF PLANT AND MAC HINERY SOLD FOR RS.6,00,000/-, RS.8,50,000/- AND RS.3,50,000/- SOLD ON 25.04.2007, 28.04.2007 AND 28.05.2007 RESPECTIVELY. AO AFTER N OTICING THAT ALL THE PLANT AND MACHINERY WERE SOLD DURING AY 2008-09 AND NO BILLS/VOUCHERS OR ANY DOCUMENTARY EVIDENCE IN RESPE CT OF SALE OF ASSETS DURING THE YEAR UNDER ASSESSMENT HAVE BEEN F ILED, DISALLOWED THE CAPITAL LOSS CLAIMED BY THE ASSESSEE TO THE TUN E OF RS.86,52,832/-. 4. ASSESSEE ALSO CLAIMED SET OFF BROUGHT FORWARD LO SSES OF RS.56,70,868/-, RS.1,85,914/- AND RS.43,236/- FOR A YS 2004-05, 2005-06 AND 2008-09 RESPECTIVELY AND UNABSORBED DEP RECIATION OF RS.3,75,461/-. AO NOTICED THAT THE ASSESSEE HAS SE T OFF CARRY FORWARD LOSSES TO THE TUNE OF RS.1,42,42,001/- FOR AY 2007-08 ITA NO.4092/DEL./2013 4 FROM THE GROSS TOTAL INCOME OF AY 2007-08 AND THERE REMAINED NO AMOUNT TO FURTHER CARRY FORWARD AS LOSSES TO BE SET OFF. SO, THE AO HAS ALLOWED SET OFF CARRY FORWARD LOSSES OF RS.15,3 1,941/- ONLY AND ASSESSED THE TOTAL INCOME OF THE ASSESSEE AT RS .48,97,240/-. 5. ASSESSEE CARRIED THE MATTER BY WAY OF FILING APP EAL BEFORE THE LD. CIT (A) WHO HAS DELETED THE DISALLOWANCE OF 48,97,240/- BY ALLOWING THE APPEAL. FEELING AGGRIEVED, THE REVENU E HAS COME UP BEFORE THE TRIBUNAL BY WAY OF CHALLENGING THE IMPUG NED ORDER PASSED BY LD. CIT (A). 6. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS R ELIED UPON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN T HE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. GROUNDS NO.1, 2 & 3 7. AO HAS NOT DISPUTED THE DEPRECIATION CLAIMED BY THE ASSESSEE COMPANY BUT FROM THE ASSESSMENT ORDER IT I S DIFFICULT TO MAKE OUT AS TO FOR WHICH YEARS THE DEPRECIATION PER TAINS. PERUSAL OF THE IMPUGNED ORDER AT PAGE 3 GOES TO SHOW THAT T HE LD. CIT (A) HAS ALLOWED THE SET OFF BY RELYING UPON THE ASSESSM ENT ORDER FOR AY 2008-09 WITHOUT SEEKING CLARITY FROM THE ASSESSE E COMPANY AS WELL AS AO THAT AS TO WHICH YEAR THE UNABSORBED DEP RECIATION CLAIMED BY THE ASSESSEE COMPANY ACTUALLY PERTAINS. EVEN THERE IS ITA NO.4092/DEL./2013 5 NO SUCH DETAIL BEFORE THE AO NOR BEFORE THE LD. CIT (A). IN THESE CIRCUMSTANCES, WE ARE OF THE CONSIDERED VIEW THAT T HIS ISSUE IS REQUIRED TO BE SET ASIDE BY REMANDING THE SAME TO T HE FILE OF THE AO WHO SHALL DECIDE AFRESH AFTER PROVIDING AN OPPOR TUNITY OF BEING HEARD TO THE ASSESSEE. CONSEQUENTLY, GROUNDS NO.1, 2 & 3 ARE DETERMINED IN FAVOUR OF THE REVENUE FOR STATISTICAL PURPOSES. GROUND NO.4 8. UNDISPUTEDLY, THE ASSESSEE COMPANY HAS SOLD ITS FIXED ASSETS DURING THE YEAR UNDER ASSESSMENT AND CALCULATED THE LOSS ON THE SALE UNDER PROVISIONS CONTAINED U/S 50 OF THE ACT. THE LD. DR FOR THE REVENUE CONTENDED THAT SHORT TERM CAPITAL LOSS CANN OT BE ALLOWED WITH NORMAL INCOME AND THIS PROPOSITION OF LAW HAS NOT BEEN DISPUTED BY THE LD. AR FOR THE ASSESSEE. EVEN OTHE RWISE, NO BLOCK OF ASSETS LEFT WITH THE ASSESSEE TO CLAIM THE CAPIT AL LOSS. WHEN UNDISPUTEDLY THE FIXED ASSETS TO THE TUNE OF RS.6,0 0,000/-, RS.8,50,000/- AND RS.3,50,000/- WERE SOLD BY THE AS SESSEE ON 25.04.2007, 28.04.2007 AND 28.05.2007 RESPECTIVELY DURING AY 2008-09, THE SAME CANNOT BE ALLOWED BEING SHORT TER M CAPITAL LOSS WITH NORMAL BUSINESS INCOME. MOREOVER, THE ASSESSE E HAS NOT BROUGHT ON RECORD ANY BILLS OR VOUCHERS OR ANY OTHE R DOCUMENTARY EVIDENCES TO PROVE THE SALE OF ASSETS DURING THE YE AR UNDER ASSESSMENT. SO, WE ARE OF THE CONSIDERED VIEW THAT LD. CIT (A) HAS ITA NO.4092/DEL./2013 6 ERRED IN DELETING THE ADDITION BY INVOKING THE PROV ISIONS CONTAINED U/S 50 OF THE ACT READ WITH SECTION 71 & 74 OF THE ACT. SO, GROUND NO.4 IS DETERMINED IN FAVOUR OF THE REVENUE. 9. RESULTANTLY, THE APPEAL OF THE REVENUE IS ALLOWE D FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON THIS 18 TH DAY OF SEPTEMBER, 2017. SD/- SD/- (B.P. JAIN) (KULDIP SING H) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 18 TH DAY OF AUGUST, 2017 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A), BAREILLY. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.