ITO 11(1)-3, MUMBAI V. NEW ERA TALIKES, MUMBAI

ITA 4651/MUM/2010

• Counselvise Citation: 465119914 RSA 2010
• Duration Of Justice: 1 year(s) 3 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-09-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: J
• Next Hearing Date: 30-08-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 04-06-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABANI KANTA NAYAK
• Assessee Lawyers: BHUPENDRA SHAH
• Keywords: Depreciation; Set aside
• Section: 263; 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES, J, MUMBAI BEFORE S/SHRI D.K.AGARWAL (JM) AND RAJENDRA SINGH(A .M ) ITA NO.4651/MUM/2010 (ASSESSMENT YEAR:2004-05) INCOME TAX OFFICER 11 (1)(3), ROOM NO.438, AAYAKAR BHAVAN, M.K.ROAD, MUMBAI-400020 NEW ERA TALKIES, 3E, NAZZ BUILDING, LAMINGTON ROAD, MUMBAI-400004. PAN: AACFN7269A APPELLANT V/S RESPONDENT DATE OF HEARING : 30.8.2011 DATE OF PRONOUNCEMENT : APPELLANT BY : SHRI ABANI KANTA NAYAK RESPONDENT BY : SHRI BHUPENDR A SHAH O R D E R PER D.K.AGARWAL (JM) THIS APPEAL PREFERRED BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 15.4.2010 PASSED BY THE LD. CIT(A) FOR THE ASSESSMENT YEAR 2004-05. 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE A SSESSEE FIRM IS ENGAGED IN THE BUSINESS OF EXHIBITION OF C INE FILMS. IT FILED RETURN DECLARING TOTAL INCOME AT RS.2,56,5 9,461/-. HOWEVER, THE ASSESSMENT WAS COMPLETED AT AN INCOME OF RS.2,57,30,130/- INCLUDING LONG TERM CAPITAL GAIN OF RS.2,15,75,356/-, VIDE ORDER DATED 20.10.2006 PASS ED U/S ITA NO.4651/MUM/2010 (ASSESSMENT YEAR:2004-05) 2 143(3) OF THE INCOME TAX ACT, 1961(IN SHORT THE AC T). SUBSEQUENTLY, THE LD.CIT-XI, MUMBAI ISSUED NOTICE U /S 263 ON THE GROUND THAT THE LONG TERM CAPITAL GAIN DECL ARED BY THE ASSESSEE ON THE SALE OF LAND AT RS.2,15,75,356/- W AS NOT CORRECT AS THE LAND SOLD WAS PART OF THE BLOCK OF THE ASSET ALONG WITH THE BUILDING AND THE ASSESSEE HAS CLAIM ED DEPRECIATION, HENCE THE GAIN ON THE SALE OF THE LA ND WAS A SHORT TERM CAPITAL GAIN. ACCORDINGLY, THE LD. CIT P ASSED ORDER U/S 263 OF THE ACT, DATED 2.3.2009 AND SET ASIDE TH E ASSESSMENT ORDER WITH THE DIRECTION TO THE AO TO FRAME FRESH ASSESSMENT IN ACCORDANCE WITH LAW ON MERITS . PURSUANT TO THE ORDER OF THE LD.CIT, THE AO PASSED THE IMPUGNED ASSESSMENT ORDER TREATING THE CAPITAL GAIN AS SHORT TERM CAPITAL GAIN AMOUNTING TO RS.2,42,93,834/- AND THEREBY COMPLETED THE ASSESSMENT AT AN INCOME OF RS.2,84,4 8,600/- VIDE ORDER DATED 16.12.2009 PASSED U/S 143(3) R.W. S.263 OF THE ACT. ON APPEAL, THE LD. CIT(A) FOLLOWING THE O RDER OF THE TRIBUNAL IN ASSESSEES OWN CASE IN M/S NEW ERA TALK IES V/S ITO IN ITA NO.2066/MUM/2009 (AY-2004-05) DATED 22.3.2010, WHEREIN THE TRIBUNAL WHILE HOLDING THAT THE CIT HAS NO JURISDICTION TO INVOKE THE PROVISIONS OF SEC TION 263 OF THE ACT, CANCELLED THE ORDER PASSED BY THE CIT U/S 263 DATED 2.3.2009 AND THE LD. CIT(A) FOLLOWING THE SAME A NNULLED ITA NO.4651/MUM/2010 (ASSESSMENT YEAR:2004-05) 3 THE IMPUGNED ASSESSMENT MADE U/S 143(3) R.W.S.263 O F THE ACT. 3. BEING AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE REVENUE IS IN APPEAL BEFORE US CHALLENGING IN ALL T HE GROUNDS THE CANCELLATION OF THE ORDER PASSED U/S 143(3) R.W .S.263 AND DELETION OF ADDITION OF SHORT TERM CAPITAL GAIN. 4. THE LD. DR SUPPORTS THE ORDER OF THE AO. 5. ON THE OTHER HAND, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITS THAT SINCE THE TRIBUNAL HAS CAN CELLED THE ORDER PASSED BY THE LD.CIT U/S 263, THEREFORE, THE LD. CIT(A) WAS JUSTIFIED IN CANCELLING THE ASSESSMENT ORDER P ASSED BY THE AO U/S 143(3) R.W.S 263 OF THE ACT. AND HENCE THE ORDER PASSED BY THE LD.CIT(A) BE UPHELD. 6. HAVING CAREFULLY HEARD THE SUBMISSIONS OF THE RI VAL PARTIES AND PERUSING THE MATERIAL AVAILABLE ON REC ORD WE FIND MERIT IN THE PLEA OF THE LEARNED COUNSEL FOR THE A SSESSEE THAT THE TRIBUNAL HAS CANCELLED THE ORDER PASSED BY THE LD.CIT U/S 263, THEREFORE, CONSEQUENTIAL ORDER PASS ED BY THE AO U/S 143(3) R.W.S.263 OF THE ACT DOES NOT SURVIV E AND ACCORDINGLY, WE ARE INCLINED TO UPHOLD THE ORDER OF THE LD.CIT(A) IN CANCELLING THE ASSESSMENT MADE BY THE AO. THE GROUNDS TAKEN BY THE REVENUE ARE, THEREFORE, RE JECTED. ITA NO.4651/MUM/2010 (ASSESSMENT YEAR:2004-05) 4 7. IN THE RESULT, THE REVENUES APPEAL STANDS DISMI SSED. ORDER PRONOUNCED IN THE OPEN COURT ON 7 TH SEPTEMBER, 2011. SD SD (RAJENDRA SINGH) (D.K .AGARWAL) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED 7TH SEPTEMBER, 2011 SRL: COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT CONCERNED 4. CIT(A) CONCERNED 5. DR CONCERNED BENCH 6. GUARD FILE. TRUE COPY BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI