Shree Anandhakumar Mills Ltd., CHENNAI V. ACIT, CHENNAI

ITA 460/CHNY/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 8324 (ITAT-CHENNAI)
• Duration Of Justice: 10 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-01-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 31-12-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 06-03-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A B KOLI IRS
• Assessee Lawyers: VIJAYARAGHAVAN
• Keywords: Depreciation; Rectification of order; Assessment record; Unabsorbed depreciation
• Section: 143(3); 115JB; 154

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI , . , ! ' BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI G. PAVAN KUMAR, JUDICIAL MEMBER ./ I.T.A.NO.460/MDS/2015 ! # $# / ASSESSMENT YEAR : 2010-2011 M/S. SHREE ANANDHAKUMAR MILLS LTD, 307, SATHY ROAD, SARAVANAMPATTI (PO) COIMBATORE 641 035. VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, COMPANY CIRCLE I(2) COIMBATORE. [PAN AADCS 0690J] ( / APPELLANT) ( /RESPONDENT) %& ' ( / APPELLANT BY : SHRI. VIJAYARAGHAVAN, ADVOCATE )*%& ' ( /RESPONDENT BY : SHRI. A.B. KOLI, IRS, JCIT. ' + / DATE OF HEARING : 31-12-2015 ,-$ ' + / DATE OF PRONOUNCEMENT : 08 -01-2016 / O R D E R PER G. PAVAN KUMAR, JUDICIAL MEMBER : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED A GAINST ORDER OF COMMISSIONER OF INCOME-TAX (APPEALS)-I, COIMBAT ORE IN APPEAL NO.316/13-14, DATED 19.01.2015 FOR THE ASSESSMENT Y EAR 2010-2011 PASSED U/S.271(1) (C) AND 250 OF THE INCOME TAX ACT , 1961. ITA NO.460/MDS/2015. :- 2 -: 2. THE ASSESSEE COMPANY HAS RAISED THE GROUNDS ON L EVY OF PENALTY U/S.271(1)(C) OF THE ACT ON ADDITION BY L D. ASSESSING OFFICER WITH REGARD TO CARRY FORWARD BUSINESS AND DEPRECIAT ION LOSS. 3. THE BRIEF FACTS OF THE CASE THAT THE ASSESSEE COMP ANY IS ENGAGED IN THE BUSINESS OF MANUFACTURER OF TEXTILE YARN AND FOR THE ASSESSMENT YEAR 2010-2011 RETURN OF INCOME WAS FIL ED ON 30.09.2010 ADMITTING TOTAL INCOME OF <1,50,65,840/- UNDER NORM AL COMPUTATION OF INCOME AND <3,00,94,626/- U/SEC. 115JB OF THE ACT. SUBSEQUENTLY, RETURN WAS PROCESSED U/S.143(1) OF THE ACT AND SELE CTED FOR SCRUTINY. IN COMPLIANCE TO THE NOTICE, THE LD. AUTHORISED REP RESENTATIVE OF THE ASSESSEE APPEARED FROM TIME TO TIME AND FILED INFOR MATION AND PRODUCED LEDGER ACCOUNTS AND EXPLAINED TDS CALCULAT IONS. THE ASSESSING OFFICER UPON HEARING THE SUBMISSIONS HAS COMPLETED ASSESSMENT U/S.143(3) OF THE ACT ON 04.02.2013 BY M AKING ADDITIONS INCLUDING DISALLOWANCE OF SET OFF CARRY FORWARD BUS INESS LOSS OF ASSESSMENT YEAR 2005-2006 OF <9,90,344/- AND UNABSO RBED DEPRECATION OF <5,09,574/-. SUBSEQUENTLY, THE ASSES SING OFFICER INITIATED PENALTY PROCEEDINGS AND ISSUED NOTICE U/S .274 R.W.S. 271 ON 04.02.2013. IN COMPLIANCE TO THE NOTICE, THE LD. A UTHORISED REPRESENTATIVE APPEARED FROM TIME TO TIME AND FILE D WRITTEN SUBMISSIONS IN RESPECT OF EACH DISALLOWANCE AND ALS O EXPLAINED THE ITA NO.460/MDS/2015. :- 3 -: CIRCUMSTANCES OF SET OFF CARRY FORWARD BUSINESS LOS S AND UNABSORBED DEPRECATION AVAILABLE TO THE ASSESSEE COMPANY AT TH E TIME OF FILING OF RETURN OF INCOME ON 30.09.2010. THE LD. AUTHORISED REPRESENTATIVE EXPLAINED TO THE ASSESSING OFFICER THAT FOR ASSESS MENT YEAR 2006- 2007, THE ASSESSING OFFICER PASSED ORDER U/S.143(3 ) R.W.S.147 OF THE ACT DATED 29.07.2010 WERE BUSINESS LOSS <16,31,133 /- WAS ALLOWED TO BE CARRIED FORWARD. MEANWHILE ASSESSING OFFICER SU O-MOTO RECTIFIED THE ASSESSMENT ORDER DATED 29.07.2010 UNDER THE PRO VISIONS OF SECTION 154 BY DISALLOWING THE LOSS AND PASSED THE ORDER ON 16.04.2011. THE ASSESSEE COMPANY BASED ON THE INFOR MATION AVAILABLE ON RECORD AT THE TIME OF FILING THE RETURN HAS CLAI MED THE SET OFF AND THERE IS NO DELIBERATE ACTION. THE LD.AO WITHOUT CO NSIDERING THE FACTUAL POSITION AND EXPLANATIONS HAS LEVIED A MINIMUM PENA LTY OF <4,49,975/- . AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER, THE ASSESSEE FILED AN APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEA LS). 4. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) CONSID ERED THE GROUNDS RAISED BY THE ASSESSEE ON DISALLOWANCE BUT OVERLOOKED THE SUBMISSIONS MADE IN THE PENALTY PROCEEDINGS AND CON FIRMED THE FINDINGS OF ASSESSING OFFICER AND DISMISSED THE ASS ESSEE APPEAL. AGGRIEVED BY THE ORDER OF THE COMMISSIONER OF INCOM E TAX (APPEALS), THE ASSESSEE HAS FILED APPEAL BEFORE THE TRIBUNAL. ITA NO.460/MDS/2015. :- 4 -: 5. BEFORE THE TRIBUNAL THE LD. AUTHORISED REPRESENTATI VE ARGUED THE GROUNDS AND RELIED ON THE APEX COURT DECISION O F CIT VS. RELIANCE PETRO PRODUCTS LTD (SC) (322 ITR 158 ) AND EXPLAINED THAT LEVY OF PENALTY IS NOT AUTOMATIC AND MERELY DUE TO DISALLOW ANCE, PENALTY CANNOT BE LEVIED FURTHER REITERATED SUBMISSIONS TH AT THE ASSESSEE HAS CLAIMED SET OFF OF CARRIED FORWARD BUSINESS LOSS O F ASSESSMENT YEAR 2005-2006 <9,90,344/- AND UNABSORBED DEPRECIATION <5,09,574/- OF ASSESSMENT YEAR 2004-2005 WITH THE CURRENT YEAR INC OME AND EMPHASIZED THAT ON THE DATE OF FILING OF RETURN ON 30.09.2010. THE LOSS WAS AVAILABLE TO THE ASSESSEE AND CLAIMED SET OFF AS PER THE PROVISIONS OF ACT. THE ASSESSMENT ORDER U/S.143(3) R.W.S. 147 FOR ASSESSMENT YEAR 2006-07 WAS PASSED ON 29.07.2010 WH ERE THE DCIT- I(3) COIMBATORE HAS CONSIDERED THE DEPRECIATION LOS S AND BUSINESS LOSS OF THE ASSESSEE FOR SET OFF. IN THE APPELLATE PROC EEDINGS THE LD. AUTHORISED REPRESENTATIVE PLEADED THAT THE LOSS WAS SUBSEQUENTLY RECTIFIED U/S. 154 OF THE ACT BY ASSESSING OFFICER ON 16.04.2011. THE COMMISSIONER OF INCOME TAX (APPEALS) HAS OVERLOOKED THE ORDERS OF ASSESSMENT YEAR 2006-2007 AND CONFIRMED THE FINDING S OF THE ASSESSING OFFICER. HENCE PRAYED FOR DELETION OF PEN ALTY. 6. ON THE OTHER HAND, THE LD. DEPARTMENTAL REPRESENTAT IVE RELIED ON THE ORDER OF THE COMMISSIONER OF INCOME T AX (APPEALS) AND CONTESTED THE GROUNDS. ITA NO.460/MDS/2015. :- 5 -: 7. WE HEARD THE RIVAL SUBMISSIONS OF BOTH THE PARTIES, PERUSED THE MATERIAL ON RECORD AND ALSO JUDICIAL DECISIONS CITED. THE ASSESSEE COMPANY HAS CLAIMED SET OFF OF CARRY FORWARD BUSINE SS LOSS AND DEPRECATION LOSS PERTAINING TO THE EARLIER ASSESSME NT YEARS AS PER THE RECORDS AND SAME WAS AVAILABLE FOR SET OFF AT THE T IME OF FILING OF RETURN ON 30.09.2010. THE ASSESSING OFFICER BASED ON DISALLOWANCE IN SCRUTINY ASSESSMENTS LEVIED PENALTY WITHOUT TAKING INTO CONSIDERATION THE ASSESSMENT ORDER U/S. 143(3) R.W.S. 147 OF THE ACT FOR ASSESSMENT YEAR 2006-07 BEFORE COMPLETION OF PENALTY PROCEEDIN GS. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) WAS NOT IN A POSITION TO VERIFY THE ORDER OF THE DCIT, FOR THE ASSESSMENT YEAR 200 6-2007 DATED 29.07.2010. SUBSEQUENTLY, SUO-MOTO THE DCIT HAS P ASSED AN ORDER U/S.154 OF THE ACT ON 16.04.2011. ON COMPARISON WI TH THE DATE OF FILING OF RETURN ON 30.09.2010 AND DATE OF ORDER U /S.154 OF THE ACT, ASSESSEE CLAIMED SET OFF OF BUSINESS CARRIED FORWAR D AT THE TIME OF FILING OF RETURN U/S.139(1) OF THE ACT IN ACCORDANC E WITH LAW. THE LD. AUTHORISED REPRESENTATIVE PRODUCED THE COPY OF ORDE R OF ASSESSMENT 2006-07 AND ALSO LETTER DATED 21.01.2015 ADDRESSED TO THE COMMISSIONER OF INCOME TAX (APPEALS) TO CONSIDER TH E RECTIFICATION ORDER U/S.154 OF THE ACT BUT THE COMMISSIONER OF I NCOME TAX (APPEALS) HAS PASSED ORDER ON 19.01.2015. THE ASSE SSEE HAS NOT FILED ANY INACCURATE PARTICULARS OR CLAIMED ANY WRONG DED UCTION FOR WARRANT ITA NO.460/MDS/2015. :- 6 -: OF LEVY OF PENALTY AND RELY ON THE APEX COURT DECIS ION OF RELIANCE PETRO PRODUCTS LTD (SUPRA) AND CLAIMED THE LOSS BASED ON THE INCOME TAX ASSESSMENT RECORDS. THEREFORE, IT IS APPARENT FROM THE FACTS OF THE CASE THAT THERE IS NO CONCEALMENT OF INCOME NOR SUB MISSIONS OF ANY INACCURATE PARTICULARS BY ASSESSEE. HENCE, WE SET ASIDE THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) AND DIRECT THE ASSESSING OFFICER TO DELETE THE PENALTY. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN ITA NO.460/MDS/2015 IS ALLOWED. ORDER PRONOUNCED ON FRIDAY, THE 8TH DAY OF JANU ARY, 2016, AT CHENNAI. SD/- SD/- ( ) (CHANDRA POOJARI) / ACCOUNTANT MEMBER ( . ) (G. PAVAN KUMAR) /JUDICIAL MEMBER / CHENNAI . / DATED:08.01.2016. KV / ' )!+12 32$+ / COPY TO: 1 . %& / APPELLANT 3. 4+ () / CIT(A) 5. 278 )!+! / DR 2. )*%& / RESPONDENT 4. 4+ / CIT 6. 89# : / GF