DCIT, Circle - 5, Kolkata, Kolkata V. M/s. Kesoram Industries Ltd., Kolkata

ITA 443/KOL/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 54715 (ITAT-KOLKATA)
• Duration Of Justice: 8 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-12-2011
• Appeal Filed By: Department
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 15-03-2011
• Court: TRIBUNAL
• Department Lawyers: AJAY KR SINGH
• Assessee Lawyers: A K GUPTA
• Keywords: Depreciation

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL, BEN CH B, KOLKATA () BEFORE . .. . , ,, , !, SHRI N.VIJAYAKUMARAN, JUDICIAL MEMBER. ' ' ' ' /AND . .. .#$ #$#$ #$. .. . , %& ! SHRI C.D.RAO, ACCOUNTANT MEMBER '' '' '' '' / ITA NO . 443/KOL/2011 () *+/ ASSESSMENT YEAR : 2006-07 (-. / APPELLANT ) D.C.I.T., CIRCLE-5, KOLKATA - - - VERSUS - . (01-./ RESPONDENT ) M/S. KESORAM INDUSTRIES LTD., KOLKATA (PAN :: AABCK 2417 P) -. 2 3 %/ FOR THE APPELLANT: SHRI AJAY KR.SINGH 01-. 2 3 %/ FOR THE RESPONDENT: SHRI A.K.GUPTA 4 2 $& /DATE OF HEARING : 08.12.2011. 5* 2 $& /DATE OF PRONOUNCEMENT : 12.12.2011. %6 / ORDER ( (( ( . .. .#$ #$#$ #$. .. . ) )) ), , , , %& ! PER SHRI C.D.RAO, AM THIS APPEAL IS FILED BY REVENUE AGAINST THE ORDER DATED 06.12.2010 OF THE LD. CIT(A)-VI, KOLKATA PERTAINING TO A.YR. 2006-07. 2. THE ONLY EFFECTIVE GROUND RAISED BY THE REVENUE READS AS UNDER :- 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE , LD.CIT(A)-VI, KOLKATA HAS ERRED IN LAW AS WELL AS ON FACTS BY DELETING THE AD DITION OF EXCESS DEPRECIATION CLAIMED OF RS.1,61,95,130/- BY RELYING UPON THE DEC ISION OF THE HONBLE ITAT IN THE CASE OF THE ASSESSEE FOR THE A.YRS. 2001-02 TO 2005-06 IN VIEW OF THE FACT THAT IT HAS NOT BEEN ACCEPTED BY THE DEPARTMENT AND HAS FILED APPEAL BEFORE THE HONBLE HIGH COURT. 3. AT THE TIME OF HEARING BEFORE US THE LD. COU NSEL APPEARING ON BEHALF OF ASSESSEE HAS SUBMITTED THAT ON SIMILAR ISSUE IN ASSESSEES O WN CASE FOR A.YR. 2007-08 THIS 2 TRIBUNAL HAS DISMISSED THE DEPARTMENTAL APPEAL IN I TA NO.190/KOL/2011 ORDER DATED 02.11.2011. SINCE THE FACTS IN THIS CASE ARE IDENTI CAL TO THAT OF THE DECISION OF THE TRIBUNAL FOR A.YR. 2007-08 HE REQUESTED TO DISMISS THE REVENUES APPEAL. 4. ON THE OTHER HAND THE LD. DR APPEARING ON B EHALF OF THE REVENUE THOUGH RELIED ON THE ORDERS OF AO COULD NOT CONTRADICT THE SUBMIS SIONS OF THE LD. COUNSEL FOR ASSESSEE. 5. AFTER HEARING THE RIVAL SUBMISSIONS AND ON CAREFUL PERUSAL OF MATERIALS AVAILABLE ON RECORD, IT IS OBSERVED THAT THE ISSUE RAISED BY THE REVENUE IS COVERED BY EARLIER ORDERS OF THIS TRIBUNAL. THE RELEVANT FINDINGS OF T HIS TRIBUNAL IN ITA NO.190/KOL/2011 ORDER DATED 02.11.2011 ARE AS UNDER :- 3. THE BRIEF FACTS OF THIS ISSUE ARE THAT THE ASSESSEE CLAIMED DEPRECIATION OF RS.109,13,25,097/- IN THE RETURN OF INCOME. THE ASS ESSEE CLAIMED THIS DEPRECIATION ON AN ENHANCED WDV BY ASSUMING THAT THE DEPRECIATION F OR ASSESSMENT YEAR 1999-2000 WAS NOT ALLOWED TO IT. WHILE DOING THE SCRUTINY ASS ESSMENT ASSESSING OFFICER HAS DISALLOWED AN AMOUNT OF RS.1,35,87,876/-. THE OBSER VATIONS OF LD. CIT(A) ON THE ACTION OF ASSESSING OFFICER ARE AS UNDER :- FOR A.YR. 1999-2000, THE ASSESSEE DID NOT CLAIM AN Y DEPRECIATION ON CERTAIN ASSETS ADDED TO THE BLOCK IN ITS RETURN OF INCOME BUT LATE R ON MAY, 24, 2001 THE ASSESSEE FILED AN APPLICATION U/S. 154 WHICH WAS REJECTED BY A.O. ON 05/05/2006. THE ASSESSEE DID NOT TAKE ANY FURTHER STEP TO CHALLENGE THE ORDER OF A. O. FOR THE SUBSEQUENT ASSTT. YEARS NAMELY 2000-01, 200 1-02, 2002-03 AND 2003-04 THE ASSESSEE CLAIMED DEPRECIATION IN ITS RETURNS BY COM PUTING THE WRITTEN DOWN VALUE (WDV) OF THE BLOCK IN ACCORD WITH ITS CLAIM MADE, I N THE RECTIFICATION APPLICATION FILED ON 24/05/2001 FOR A.Y.1999-00. THE ASSESSEE FILED T HREE RECTIFICATION APPLICATIONS FOR A. YS. 2 000-01, 2001-02 & 2002-03 STATING THAT THE OPENING WDV OF THE BLOCK OF ASSETS FOR THE SAID A. YS. SHOULD BE ENHANCED IN AC CORD WITH HIS ORDER DT. 05/05/06 REJECTING THE CLAIM FOR DEPRECIATION FOR THE A. Y. 1999-00 THE A. 0. AGAIN REJECTED THE RECTIFICATION APPLICAT IONS FILED BY THE ASSESSEE FOR A. YS. 2000-01, 2001-02 AND 2002-03 STATING THAT THERE WAS NO GROUND FOR RECTIFICATION SINCE THE DEPRECIATION HAD BEEN ALLOWED AS CLAIMED BY THE ASSESSEE IN ITS RETURN ITSELF AND THE ISSUE WAS ALSO DEBATABLE. - AGAINST THE SAID THREE ORDERS REJECTING THE APPLICA TIONS FOR RECTIFICATION FOR A. YS. 2001-02, 2001-02 AND 2002-03, ASSESSEE FILED THREE APPEALS BEFORE LD. CIT(A), WHO ALLOWED SUCH APPEALS AND DIRECTED THE A.O. TO DETER MINE WDV OF THE BLOCK OF ASSETS. THE DEPARTMENT HAS PREFERRED THESE THREE APPEALS AG AINST THE ORDER OF LD CIT(A). FOR THE A. Y. 2003-04, THE ASSESSE WAS IN APPEAL BE FORE CIT(A) AND TOOK AN ADDITIONAL GROUND CLAIMING DEPRECIATION ON SUCH HIG HER WDV OF THE BLOCK OF ASSETS AS A RESULT OF DENIAL OF THE DEPRECIATION FOR A. Y. 1999-00, WHICH WAS REJECTED BY THE CIT(A). AGAINST THE ORDER OF LD. CIT(A) FOR A.Y 200 3-04, THE ASSESSEE FILED AN APPEAL BEFORE HONBLE TRIBUNAL. THE HONBLE ITAT IN ITA NO .308/KOL/07 DIRECTED THE A.O. TO DETERMINE THE CORRECT OPENING WDV OF THE BLOCK O F ASSETS IN ACCORDANCE WITH THE PROVISIONS OF SEC. 43(6)(C)(II) OF THE I.TACT. 3 THEREFORE, THE ISSUE IS WHETHER THE A. 0. WAS BOUND TO RECTIFY THE WDV OF THE BLOCK OF ASSETS FOR THE THREE SUBSEQUENT A. YS. INVOLVED CON SEQUENT UPON REJECTION OF THE CLAIM FOR DEPRECIATION FOR A. Y. 1999-00. THE HONBLE ITAT UPHELD THE DECISION OF LD. CIT(A) HOLDING THAT THE APPLICATION FOR RECTIFICATION FILED BY THE ASSESSEE WAS JUST AND PR OPER. THUS IN ALL THE ASSESSMENT YEARS SUBSEQUENT TO ASSE SSMENT YEAR 1999- 2000 THE ASSESSEE HAS CLAIMED DEPRECIATION ON THE ENHANCED W DV ON THE GROUND THAT ITS REQUEST FOR ALLOWING DEPRECIATION FOR ASSESSMENT YE AR 1999- 2000 HAD BEEN REJECTED. IN ASSESSMENT YEARS PRIOR TO ASSESSMENT YEAR 2007-0 8 THE PLEA OF THE ASSESSEE FOR ALLOWING DEPRECIATION ON ENHANCED VALUE OF WDV HAS BEEN ACCEPTED IN APPEAL. HOWEVER, IN THE ASSESSMENT ORDER THE A.O. DID NOT A CCEPT THIS CLAIM OF THE ASSESSEE ON THE GROUND THAT FOR THE ASSESSMENT YEARS 2001-02 TO 2005-06 THE DEPARTMENT HAD GONE IN APPEAL BEFORE THE HONBLE HIGH COURT AGAINST THE DECISIONS OF HONBLE ITAT, KOLKATA IN THIS MATTER. THUS THE A.O. DISALLOWED AN AMOUNT OF RS.L,35,87,876/- AS EXCESS DEPRECIATION CLAIMED. 3.1. ON APPEAL LD. CIT(A ) AFTER TAKING INTO CO NSIDERATION OF THE VARIOUS DOCUMENTS FILED BY ASSESSEE BEFORE HIM AND FOLLOWING THE DECI SIONS OF THE ITAT, KOLKATA FROM 2001-02 TO 2005-06 DELETED THE DISALLOWANCE OF RS.1 ,35,87,876/- MADE BY AO. 6.1. IT IS FURTHER OBSERVED THAT THE FILING OF APPEAL BEFORE THE HONBLE HIGH COURT AGAINST THE DECISION OF THIS TRIBUNAL FOR A.YRS.200 1-02 TO 2005-06 WILL NOT HAVE ANY EFFECT SINCE THE HONBLE HIGH COURT HAS NEITHER SET ASIDE THE ORDERS OF THE TRIBUNAL NOR GRANTED ANY STAY. 5.1. RESPECTFULLY FOLLOWING THE SAME WE DISMISS TH E APPEAL OF THE REVENUE. 6. IN THE RESULT THE APPEAL OF THE REVENUE I S DISMISSED. 7 8 9: &7 ; <=> ORDER PRONOUNCED IN THE COURT ON 12.12.2011. SD/- SD/- . .. . , ,, , ( ( ( ( ! ! ! ! N.VIJAYAKUMARAN, JUDICIAL MEMBER . .. .#$ #$#$ #$. .. . , , , , %& ! %& ! %& ! %& !, C.D.RAO, ACCOUNTANT MEMBER. ( (( ($& $& $& $&) )) ) DATE: 12.12.2011. ORDER PRONOUNCED BY SD/- SD/- (MS) (CDR) JM AM R.G.(.P.S.) 4 %6 2 0(( ?%*8- COPY OF THE ORDER FORWARDED TO: 1. KESORAM INDUSTRIES LTD., 9/1, R.N.MUKHERJEE ROAD, K OLKATA-700001. 2 THE D.C.I.T., CIRCLE-5, KOLKATA. 3. THE CIT, 4. THE CIT(A)-VI, KOLKATA. 5. DR, KOLKATA BENCHES, KOLKATA 1 0(/ TRUE COPY, %6/ BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES