DCIT -5(2)(2), MUMBAI V. M/S. MORRIES ENERGY LTD., MUMBAI

ITA 5227/MUM/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 4057 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-06-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2012-2013
• Appeal Filed On: 08-08-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJENDRA JOSHI LD
• Assessee Lawyers: POONAM AGNIHOTRI LD
• Keywords: Reopening of assessment; Depreciation; Tangible material; Reassessment proceedings
• Section: 143(3); 148; 2

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI , , BEFORE HONBLE SHRI MAHAVIR SINGH, VP AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM (HEARING THROUGH VIDEO CONFERENCING MODE) ./ I.T.A. NO.5227/MUM/2019 ( / ASSESSMENT YEAR: 2012-13) DCI T - 5(2)(2) 5 TH FLOOR, 571, AAYKAR BHAWAN M.K.ROAD, MUMBAI 400 020 / VS. M/S MORRIES ENERGY LIMITED 11-A, EMBASSY APARTMENTS 46, NEPEAN SEA ROAD, MUMBAI-36 PAN NO. : AA BCG - 4831 - B ( !' /APPELLANT ) : ( #$!' / RESPONDENT ) ASSESSEE BY : MS. POONAM AGNIHOTRI LD. AR REVENUE BY : SHRI RAJENDRA JOSHI LD. SR. DR / DATE OF HEARING : 25/05/2021 / DATE OF PRONOUNCEMENT : 01/06/2021 / O R D E R MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. AFORESAID APPEAL BY REVENUE FOR ASSESSMENT YEAR [AY IN SHORT] 2012-13 CONTEST THE ORDER OF LD. COMMISSIONER OF IN COME TAX (APPEALS)-10, MUMBAI [IN SHORT CIT(A) ] DATED 31/05 /2019 WHICH HAS INVALIDATED THE REASSESSMENT PROCEEDINGS AS INITIAT ED BY LD. AO FOR THE YEAR UNDER CONSIDERATION. 2. AFTER HEARING RIVAL ARGUMENTS, OUR ADJUDICATION TO THE SUBJECT MATTER OF APPEAL WOULD BE AS GIVEN IN SUCCEEDING PARAGRAPH S. 2 3.1 THE MATERIAL FACTS ARE THAT THE ASSESSEE BEING RESIDENT CORPORATE ASSESSEE STATED TO BE ENGAGED IN POWER GENERATION, REAL ESTATE, SECURITIES ETC. WAS SUBJECTED TO REASSESSMENT PROCE EDINGS FOR THE YEAR UNDER CONSIDERATION AND AN ASSESSMENT WAS FRAMED U/ S 143(3) R.W.S. 147 ON 15/12/2017. THE RETURN OF INCOME WAS ALREADY SCRUTINIZED U/S 143(3) VIDE ORDER DATED 28/03/2015. HOWEVER, THE CA SE WAS REOPENED VIDE NOTICE U/S 148 DATED 31/03/2017. THE REASON TO TRIGGER REASSESSMENT WAS THAT THE ASSESSEE CLAIMED DEPRECIA TION OF 100% ON WINDMILL HAVING CAPACITY OF 1.25 MW WHICH WAS SO EL IGIBLE ONLY IF THE WINDMILL WAS PUT TO USE FOR MORE THAN 180 DAYS DURI NG THE RELEVANT PREVIOUS YEAR. SINCE THE WINDMILL WAS PUT TO USE FO R LESS THAN 180 DAYS, THE ASSESSEE WAS NOT ELIGIBLE TO CLAIM THE DEPRECIA TION AND ACCORDINGLY, THERE WAS EXCESS DEPRECIATION CLAIM FOR RS.125.69 L ACS. 3.2 THE ASSESSEE WHILE OPPOSING THE REASSESSMENT PR OCEEDINGS, SUBMITTED THAT THE WINDMILL WAS OUT TO USE FOR MORE THAN 180 DAYS AND THE CLAIM WAS RIGHTLY MADE AND ALLOWED. THIS ASPECT WAS ALREADY EXAMINED BY LD. AO DURING SCRUTINY ASSESSMENT PROCE EDINGS U/S 143(3) AND THE CLAIM WAS ALLOWED WITH DUE APPLICATION OF M IND. HOWEVER, REJECTING THE SAME AND AFTER APPRECIATING ASSESSEE S DOCUMENTARY EVIDENCES, LD.AO OPINED THAT THE ASSESSEE WAS ENTIT LED TO 50% RATE OF DEPRECIATION ONLY ON THESE ASSETS. ACCORDINGLY, THE ASSESSED LOSS WAS REDUCED WITH THE ALLEGED EXCESS CLAIM. 4. BEFORE LD. CIT(A), THE ASSESSEE ASSAILED REASSES SMENT PROCEEDINGS BY SUBMITTING THAT REQUISITE DETAILS AS WELL AS DOCUMENTARY EVIDENCES ETC. WITH RESPECT TO DEPRECIATION CLAIM W ERE DULY SUBMITTED DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDIN GS U/S 143(3). THE SAME WERE DULY VERIFIED AND ACCEPTED BY LD. AO WITH DUE APPLICATION OF 3 MIND. FURTHER, THERE WAS NO NEW EVIDENCE ON RECORD WHICH WOULD PROVE THAT INCOME ESCAPED ASSESSMENT. RELIANCE WAS PLACED , INTER-ALIA, ON THE DECISION OF HONBLE APEX COURT IN KELVINATOR OF INDIA LTD. (2010; 320 ITR 561) FOR THE SUBMISSIONS THAT IN THE ABSENCE OF ANY NEW TANGIBLE MATERIAL, THE CASE COULD NOT BE REOPENED ON MERE CH ANGE OF OPINION. 5. THE LD. CIT(A) APPRECIATED THE DETAILS & EVIDEN CES FURNISHED BY THE ASSESSEE WITH RESPECT TO DEPRECIATION CLAIM DUR ING ORIGINAL ASSESSMENT PROCEEDINGS U/S 143(3). THE SAME HAS ALR EADY BEEN ENUMERATED IN PARA 6.3.3 OF THE IMPUGNED ORDER. AFT ER CONSIDERING THESE SUBMISSIONS, LD. CIT(A) CONCURRED THAT THE CLAIM WA S DULY VERIFIED DURING ORIGINAL ASSESSMENT PROCEEDINGS. FURTHER, LD . AO WAS NOT IN POSSESSION OF ANY NEW MATERIAL TO CONCLUDE THAT THE INCOME HAD ESCAPED ASSESSMENT. THE WHOLE BASIS OF FORMATION OF BELIEF WAS ONLY EXISTING RECORD AS AVAILABLE WITH LD. AO. THEREFORE , THE RATIO OF CITED DECISION WAS SQUARELY APPLICABLE TO THE FACTS OF TH E CASE. DURING ORIGINAL ASSESSMENT PROCEEDINGS, LD. AO HAD VERIFIED ALL THE NECESSARY DETAILS REGARDING CLAIM OF DEPRECIATION AND APPLIED HIS MIN D ON THE ISSUE. THEREFORE, REOPENING OF ASSESSMENT ON MERE CHANGE O F OPINION COULD NOT BE HELD TO BE JUSTIFIED. ACCORDINGLY, THE REOPE NING WAS HELD TO BE INVALID. CONSEQUENTLY, CONSIDERATION OF ISSUE ON ME RITS, WAS HELD TO BE INFRUCTUOUS. AGGRIEVED, THE REVENUE IS IN FURTHER A PPEAL BEFORE US. 6. UPON CAREFUL CONSIDERATION OF THE IMPUGNED ORDER , IT IS QUITE EVIDENT THAT THE ORIGINAL RETURN OF INCOME STOOD SC RUTINIZED U/S 143(3) WHEREIN ASSESSE CLAIM OF DEPRECIATION WAS DULY EXA MINED BY LD. AO. THE CLAIM WAS ALLOWED AFTER DUE APPLICATION OF MIND . THE REQUISITE DOCUMENTS AND DETAILS WERE ALREADY FURNISHED BY THE ASSESSEE DURING ORIGINAL ASSESSMENT PROCEEDINGS. HOWEVER, SUBSEQUE NTLY, ON THE BASIS 4 OF EXISTING MATERIAL AS AVAILABLE ON RECORD, LD. AO FORMED AN OPINION OF ESCAPEMENT OF INCOME WHICH WAS NOTHING BUT MERE CHA NGE OF OPINION. THERE WAS NO NEW TANGIBLE MATERIAL WHICH WOULD DEMO NSTRATE ANY ESCAPEMENT OF INCOME IN THE HANDS OF THE ASSESSEE. THIS BEING SO, THE RATIO OF CITED DECISION WAS SQUARELY APPLICABLE TO THE FACTS OF THE CASE AND LD. CIT(A) WAS QUITE JUSTIFIED IN DECLARING THE REASSESSMENT PROCEEDINGS AS INVALID. FINDING NO INFIRMITY IN THE SAME, WE DISMISS THE APPEAL. 7. THE APPEAL STANDS DISMISSED. ORDER PRONOUNCED ON 01 ST JUNE, 2021 SD/- SD/- (MAHAVIR SINGH) ( MANOJ KUMAR AGGARWAL) / VICE PRESIDENT / ACCOUNTANT MEMBER MUMBAI; DATED : 01/06/2021 SR.PS, JAISY VARGHESE ! / COPY OF THE ORDER FORWARDED TO : 1. !' / THE APPELLANT 2. #$!' / THE RESPONDENT 3. * ( ) / THE CIT(A) 4. * / CIT CONCERNED 5. +,#&- , - , / DR, ITAT, MUMBAI 6. ,./0 / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.