Bhojal Gems, Surat V. The CIT-III, Surat

ITA 423/AHD/2008

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 0347 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 6 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-08-2010
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 16-08-2010
• Assessment Year: 2003-2004
• Appeal Filed On: 06-02-2008
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: N S DAYAM
• Assessee Lawyers: R N VEPARI
• Keywords: Depreciation; Opportunity of being heard; Additional evidence; Valuation report
• Section: 143(3); 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL : B BENCH : AHMEDABA D (BEFORE HON'BLE SHRI G.D. AGRAWAL, V.P.(AZ) & HON BLE SHRI T.K. SHARMA, J.M. ) I.T.A. NO. 423/AHD./2008 ASSESSMENT YEAR : 2003-2004 M/S. BHOJAL GEMS, SURAT -VS.- COMMISSIONER OF INCOME TAX-III, SURAT (PAN : AACFB 6118 Q) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI R.N. VEPARI RESPONDENT BY : SHRI N.S. DAYAM, D.R. O R D E R PER SHRI T.K. SHARMA, JUDICIAL MEMBER : THIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE O RDER DATED 20.11.2007 OF LEARNED COMMISSIONER OF INCOME TAX-III, SURAT FOR THE ASSES SMENT YEAR 2003-04. 2. THE GROUNDS RAISED BY THE ASSESSEE IN ITS APPEAL ARE AS UNDER :- (I) DISALLOWANCE OF DEPRECIATION :- (1) THE LEARNED. COMMISSIONER OF INCOME TAX ERRED IN DISALLOWING DEPRECIATION OF RS.7,68,114/-. (2) THE APPELLANT SUBMITS THAT LD. CIT ERRED IN NOT CON SIDERING VALUATION REPORT OF GOVT. APPROVED VALUER. (3) THE APPELLANT SUBMITS THAT LD. CIT HAS NOT DEALT WI TH SUBMISSIONS MADE DURING THE PROCEEDINGS. (II) SET-ASIDE FOR INTEREST RS.7,21,648/- THE LEARNED COMMISSIONER OF INCOME TAX ERRED IN SET TING ASIDE ISSUE OF ADDITION OF INTEREST TO THE ASSESSING OFFI CER WHEN ENTIRE EVIDENCE WAS FURNISHED TO SHOW THAT INCOME WAS ALRE ADY RECEIVED AND SHOWN. 3. THE CONTROVERSY INVOLVED IN GROUND NO. 1 OF THIS APPEAL IS THAT IN THE ASSESSMENT FRAMED UNDER SECTION 143(3) ON 30.01.2006 THE ASSESSING OF FICER ALLOWED THE DEPRECIATION ON FACTORY BUILDING. SUBSEQUENTLY, IN THE IMPUGNED ORDER UNDER SECTION 263, THE LD. COMMISSIONER OF INCOME TAX HELD THAT THE ASSESSEE IS NOT ENTITLED T O DEDUCTION OF DEPRECIATION AMOUNTING TO RS.7,68,114/- ON FACTORY BUILDING AS IT WAS UNDER C ONSTRUCTION. AGGRIEVED BY THIS, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 2 ITA NO. 423/AHD/2008 4. AT THE TIME OF HEARING, ON BEHALF OF ASSESSEE SH RI R.N. VEPARI, LD. COUNSEL APPEARED AND FILED AN APPLICATION FOR ADMISSION OF ADDITIONAL EV IDENCE BEING CERTIFICATE DATED 4.4.2008 OF VINOD SHAH & ASSOCIATES CHARTERED ACCOUNTANTS. THE LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT IN THIS CERTIFICATE, IT IS STATED THAT THE SAID CER TIFICATE PERTAINED TO ASSESSMENT YEAR 2002-03. IN T HE YEAR UNDER CONSIDERATION, I.E. ASSESSMENT YEAR 2003 -04, FACTORY PREMISES CONSTRUCTION WAS COMPLETED AND FACTORY WAS PUT TO USE BY THE ASSESSE E ON WHICH THE DEPRECIATION HAS BEEN CLAIMED. THE LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT IN THE SHOW-CAUSE NOTICE ISSUED PRIOR TO PASSING THE ORDER UNDER SECTION 263 OF THE ACT, THI S FACT WAS NOT MENTIONED. THIS RESULTED IN NON- SUBMISSION OF ANY EVIDENCE. THE ASSESSEE BECAME AWA RE OF THE REASON FOR ACTION UNDER SECTION 263 ONLY RECEIPT OF ORDER AND CONTACTED THE CHARTER ED ACCOUNTANT POINTING OUT THE MISTAKE MADE BY THEM IN REPORT UNDER SECTION 44AB OF THE ACT. TH E CHARTERED ACCOUNTANT ACCEPTED IT AND ISSUED CERTIFICATE DATED 04.04.2008 ACCEPTING THE M ISTAKE. IN VIEW OF THIS, THE LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT EITHER THE DEPRECIATION BE ALLOWED OR THE LD. COMMISSIONER OF INCOME TAX BE DIRECTED TO MODIFY HIS ORDER. 5. ON THE OTHER HAND, SHRI N.S. DAYAM, LD. D.R. APP EARING ON BEHALF OF THE REVENUE POINTED OUT THAT SINCE NOW ADDITIONAL EVIDENCE IS FILED, TH E ISSUE BE RESTORED TO THE FILE OF LD. COMMISSIONER OF INCOME TAX, WHO WILL EXAMINE THE AD DITIONAL EVIDENCE AND MAY PASS APPROPRIATE ORDER. 6. HAVING HEARD BOTH THE SIDES, WE HAVE CAREFULLY G ONE THROUGH THE APPLICATION FOR ADMISSION OF ADDITIONAL EVIDENCE AS WELL AS THE REL EVANT PORTION OF THE ORDER OF LD. COMMISSIONER OF INCOME TAX. IN OUR OPINION, THE ASSESSEE WAS PRE VENTED BY SUFFICIENT CAUSE IN FILING THE ADDITIONAL EVIDENCE, WHICH IS NOW BEING FILED. THER EFORE, IT IS ADMITTED. THE ORDER OF LD. COMMISSIONER OF INCOME TAX ON THIS ISSUE IS SET ASI DE WITH THE DIRECTION THAT HE WILL EXAMINE THE ADDITIONAL EVIDENCE AND PASS FRESH ORDER ON ALLOWAN CE OF DEPRECIATION OF RS.7,68,114/- ON FACTORY BUILDING AFTER GIVING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 7. THE FACTS RELATING TO CONTROVERSY INVOLVED IN GR OUND NO. 2 IS THAT THE LD. COMMISSIONER OF INCOME TAX SET ASIDE THE ISSUE OF ADDITION OF IN TEREST TO THE FILE OF ASSESSING OFFICER. THIS 3 ITA NO. 423/AHD/2008 GROUND OF APPEAL WAS NOT PRESSED BY THE LD. COUNSEL OF THE ASSESSEE AT THE TIME OF HEARING. THEREFORE, THIS GROUND OF APPEAL IS DISMISSED BEING NOT PRESSED. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. THE ORDER WAS PRONOUNCED IN THE COURT ON 16.08.20 10 SD/- SD/- (G.D. AGRAWAL) (T.K. SHARMA ) VICE-PRESIDENT (AZ) JUDICIAL MEMBER DATED : 16/ 08 / 2010 COPY OF THE ORDER IS FORWARDED TO : 1) THE ASSESSEE (2) THE DEPARTMENT. 3) CIT CONCERNED, (4) D.R., ITAT, AHMEDABAD. TRUE COPY BY ORDER DEPUTY REGISTRAR, ITAT, AHMEDABAD LAHA/SR.P.S.