WINSTON FERNANDES, MUMBAI V. CIT 2(1), MUMBAI

ITA 5507/MUM/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 2902 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 1 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-10-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 23-06-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 01-09-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MRS VIDISHA KALRA
• Assessee Lawyers: S C AGRAWAL
• Keywords: Depreciation; Principle of natural justice; Difference of opinion; Condonation of delay; Change of opinion
• Section: 263; 63

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI BEFORE S/SHRI SANJAY ARORA, ACCOUNTANT MEMBER AND AMARJIT SINGH, JUDICIAL MEMBER / I .T.A. NO.5507/MUM/2014 ( / ASSESSMENT YEAR: 2009-10) WINSTON FERNANDES A- 1, FAIR VILLE ESTATE, 66A, 12 TH ROAD, JVPD SCHEME, JUHU, MUMBAI - 400049 / VS. OFFICE OF THE COMMISSIONER OF INCOME TAX 21 C-11, PRATYAKSHKAR BHAVAN, B.K.C., BANDRA (E), MUMBAI - 400051 ./ ./ PAN/GIR NO. : AADPF2541A ( / APPELLANT ) .. ( / RESPONDENT ) ASSESSEE BY: S.C.AGRAWAL DEPARTMENT BY: MRS. VIDISHA KALRA / DATE OF HEARING: 23.06.2016 /DATE OF PRONOUNCEMENT: 05.10.2016 ! / O R D E R PER AMARJIT SINGH, JM: THE ASSESSEE HAS FILED THE PRESENT APPEAL AGAINST THE ORDER DATED 20.03.2014 PASSED BY THE COMMISSIONER OF INCO ME TAX - 21, MUMBAI [HEREINAFTER REFERRED TO AS THE CIT] RELEV ANT TO THE A.Y.2009-10. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS:- 1. THAT THE ORIGINAL ASSESSMENT WAS COMPLETED U/S.143( 3) OF THE INCOME TAX ACT AND IN THE COURSE OF ASSESSMENT PROCEEDINGS THE ISSUE OF DEPRECIATION ON ASSET PURC HASE IN THE MONTH OF MARCH 2009 WAS CONSIDERED. ITA NO.5507/MUM/2014 ASSESSMENT YEAR: 2009-10 2 2. THAT THE ASSESSMENT CAN NOT BE REOPENED ON THE BASI S OF CHANGE OF OPINION OR ON THE BASIS OF OPINION OF THE AUDIT PARTY. 3. THAT THE ASSESSMENT CAN NOT BE REOPENED ON THE BASI S OF MERE SUSPICION. 4. THAT THE ORDER PASSED BY LEARNED COMMISSIONER OF IN COME TAX IS BAD IN LAW AND THEREFORE THE APPELLATE PRAYE D THAT THE ORDER MAY BE QUASHED. 3. THE DEPARTMENTAL REPRESENTATIVE HAS ARGUED THAT THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE, IS BARRED BY THE TIME OF 89 DAYS THEREFORE THE SAME IS LIABLE TO BE DISMISSED. ON THE OTHER HAND THE LEARNED REPRESENTATIVE OF THE ASSESSEE HAS REFU TED THE SAID CONTENTION. FILE PERUSED. THE ASSESSEE FILED AN APP LICATION FOR CONDONATION OF DELAY ALONG WITH AN AFFIDAVIT STATI NG THAT HE WAS OUT OF COUNTRY FROM 24.05.2014 TO 13.06.2014 FOR 81 DAYS. SO HE DID NOT FILED AN APPEAL WELL IN TIME. IN VIEW OF T HE REASON RECORDED IN THE AFFIDAVIT WE ARE OF THE VIEW THAT THERE ARE SUFFICIENT AND REASONABLE GROUND ON RECORD TO CONDONE DELAY IN FIL ING THE APPEAL HENCE APPLICATION FOR CONDONATION OF DELAY IS HEREB Y ALLOWED. 4. THE BRIEF FACTS OF THE CASE ARE THAT IN THE CASE ASSESSEE THE ASSESSMENT ORDER WAS PASSED BY THE JOINT COMMISSION ER OF INCOME TAX, RANGE 21(2), MUMBAI U/S.143(3) OF THE INCOME T AX ACT, 1961( IN SHORT THE ACT) ON 28.11.2011 FOR THE A.Y .2009-10. A PROPOSAL U/S.263 OF THE ACT DATED 20.03.2014 WAS RE CEIVED FROM OFFICE OF THE COMMISSIONER OF INCOME TAX 21 THROU GH JOINT COMMISSIONER OF INCOME TAX, RANGE 21(2) POINTING OU T SOME ITA NO.5507/MUM/2014 ASSESSMENT YEAR: 2009-10 3 SHORTCOMING AND DISCREPANCIES IN THE ASSESSMENT ORD ER. THE SHORTCOMINGS NOTICED WERE AS UNDER:- ON VERIFICATION OF THE RECORDS, IT HAS BEEN OBSERV ED THAT YOU HAVE ACQUIRED TEN TRUCKS AND THEIR MIXERS FROM DIFF ERENT PARTIES IN THE MONTH OF MARCH BETWEEN 12.03.2009 AN D 31.03.2009 AND THESE MIXERS WERE REQUIRED TO BE MOU NTED ON THE TRUCKS BEFORE UTILIZING IT AS TRANSIT MIXERS. AS PER THE DETAILS OF ASSETS, YOU HAD PURCHASED FIVE MIXERS ON 30 TH AND 31 ST MARCH, 2009 AND THEY WERE NOT PUT TO USE BEFORE 31 ST MARCH, 2009 FOR THE PURPOSE OF BUSINESS. THEREFORE , THE DEPRECIATION CLAIMED ON THESE FIVE TRANSIT MIXERS S HOULD HAVE BEEN DISALLOWED. 5. THEREAFTER, THE NOTICE WAS GIVEN TO THE ASSESSEE AND AFTER CONSIDERING THE REPLY OF THE ASSESSEE, THE CIT HEL D THE ORDER U/S.143(3) OF THE ACT DATED 28.12.2011 TO BE ERRONE OUS AND PREJUDICIAL TO THE INTEREST OF REVENUE AND DIRECTED THE ASSESSING OFFICER TO DECIDE THE ISSUE AFRESH AFTER DUE VERIFI CATION. FEELING AGGRIEVED, THE ASSESSEE HAS FILED THE PRESENT APPEA L BEFORE US. 6. WE HAVE HEARD THE ARGUMENTS ADVANCED BY THE LEAR NED REPRESENTATIVE OF THE PARTIES AND PERUSED THE RECOR D. THE LEARNED REPRESENTATIVE OF THE ASSESSEE HAS ARGUED THAT THE CIT CONCERNED DID NOT APPLY HIS MIND BEFORE INVOKING JURISDICTION U/S.263 OF THE ACT, THEREFORE, IN THE SAID CIRCUMSTANCES THE ORDER DATED 20.03.2013 IS WRONG AGAINST LAW AND FACTS AND IS LIABLE TO BE SET ASIDE. IT IS ALSO ARGUED THAT THE ASSESSEE PURCHASED THE MIXER I N THE MONTH OF ITA NO.5507/MUM/2014 ASSESSMENT YEAR: 2009-10 4 MARCH BETWEEN 12.03.2009 AND 31.03.2009 AND USED TH E SAME FOR BUSINESS PURPOSE, THEREFORE, THE ASSESSING OFFICER HAS RIGHTLY ALLOWED THE DEPRECIATION IN ACCORDANCE WITH LAW. IT IS ARGUED THAT IN THE SAID SPECIFIC CIRCUMSTANCES THE CIT WAS WRON G IN INVOKING THE PROVISION U/S.263 OF THE ACT. IN SUPPORT OF TH ESE CONTENTION THE LD REPRESENTATIVE OF THE ASSESSEE HAS PLACE RELIANC E UPON THE LAW SETTLED IN M/S AV INDUSTRIES ITA N.3469/M/2010.DATE D 6.11.2015 AND SPAN OVERSEAS LTD ITA N. 1223/PN/2013.DATED 21. 12. 2015. HOWEVER, ON THE OTHER HAND LEARNED REPRESENTATIVE O F THE DEPARTMENT HAS STRONGLY PLACED RELIANCE UPON THE OR DER PASSED BY THE CIT IN QUESTION. WHILE GOING THROUGH THE ORDER DATED 20.03.2014 PASSED U/S.263 OF THE ACT IT CAME TO THE NOTICE THAT THE CIT INVOKED THE PROVISION U/S.263 OF THE ACT IN VIE W OF THE FOLLOWING GROUNDS:- ON VERIFICATION OF THE RECORDS, IT HAS BEEN OBSERV ED THAT YOU HAVE ACQUIRED TEN TRUCKS AND THEIR MIXERS FROM DIFF ERENT PARTIES IN THE MONTH OF MARCH BETWEEN 12.03.2009 AN D 31.03.2009 AND THESE MIXERS WERE REQUIRED TO BE MOU NTED ON THE TRUCKS BEFORE UTILIZING IT AS TRANSIT MIXERS. AS PER THE DETAILS OF ASSETS, YOU HAD PURCHASED FIVE MIXERS ON 30 TH AND 31 ST MARCH, 2009 AND THEY WERE NOT PUT TO USE BEFORE 31 ST MARCH, 2009 FOR THE PURPOSE OF BUSINESS. THEREFORE , THE DEPRECIATION CLAIMED ON THESE FIVE TRANSIT MIXERS S HOULD HAVE BEEN DISALLOWED. ITA NO.5507/MUM/2014 ASSESSMENT YEAR: 2009-10 5 7. ORDER DATED 28.12.2011 PERUSED, THE SAID ORDER N OWHERE SPEAKS ABOUT THESE FACTS THAT THE FIVE MIXERS PURCH ASED ON 30 TH AND 31 ST MARCH 2009 WERE PUT TO USE ON OR BEFORE 31 ST MARCH, 2009 FOR THE PURPOSE OF BUSINESS TO AVAIL THE DEPRECIATION O N THE SAME. 8. THE LAW RELIED BY THE LEARNED REPRESENTATIVE OF THE ASSESSEE SPEAKS ABOUT THE FACT WHERE CIT TOOK THE COGNIZANCE OF THE MATTER WITHOUT THE APPLICATION OF MIND MERELY UPON THE MAT TER FORWARD BY THE OTHER OFFICERS FOR INVOKING THE PROVISION U/S.2 63 OF THE ACT. BUT IN THE INSTANT CASE JOINT COMMISSIONER OF INCOM E TAX RANGE 21(2) , MUMBAI, PUT THE SHORT COMINGS / DISCREPANCI ES BEFORE THE COMMISSIONER AND THE COMMISSIONER AFTER RECEIPT OF THE PROPOSAL ISSUED THE NOTICE TO THE CONCERNED PARTIES AND THER EAFTER, AFTER DUE APPLICATION OF HIS MIND, PASSED THE ORDER U/S.263 O F THE ACT, ALSO RELYING UPON CERTAIN LAW MENTIONED THEREIN. THEREF ORE, IN THE SAID CIRCUMSTANCES, THE LAW I.E. SPAN OVERSEAS LTD ITA N . 1223/PN/2013.DATED 21.12.2015 RELIED BY THE LEARNED REPRESENTATIVE OF THE ASSESSEE IS NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. SO FAR AS THE OTHER LAW RELIED BY TH E LEARNED REPRESENTATIVE OF THE ASSESSEE IS CONCERNED I.E. M/ S AV INDUSTRIES ITA N.3469/M/2010.DATED 6.11.2015, IT SPEAKS ABOUT THE POSSIBLE VIEW WHICH HAS ALREADY BEEN TAKEN BY THE ASSESSING OFFICER WHEREAS IN THE INSTANT CASE NO VIEW OF ANY KIND WAS TAKEN BY THE ASSESSING OFFICER. WHEREAS THIS IS THE QUESTION O F DUE APPLICATION OF MIND BY HIM? AS DISCUSSED ABOVE, THE ASSESSING OFFICER DID NOT TAKE UP THE ISSUE OF PURCHASE OF FIVE MIXERS ON 30 TH AND 31 ST ITA NO.5507/MUM/2014 ASSESSMENT YEAR: 2009-10 6 MARCH 2009 AND TO PUT TO USE ON OR BEFORE 31.03.200 9 FOR THE PURPOSE OF BUSINESS TO AVAIL THE DEPRECIATION ON TH E SAME THEREFORE IN THE SAID CIRCUMSTANCES WE ARE OF THE VIEW THAT T HE CIT HAS RIGHTLY INVOKED THE PROVISION U/S.263 OF THE ACT. IN THIS REGARD WE ALSO FIND SUPPORT OF THE LAW SETTLED BY THE FULL BE NCH OF GAUHATI HIGH COURT IN THE CASE OF CIT VS. JAWAHAR BHATTACHA RJEE (ITA NO.2008) VIDE ITS ORDER DATED 07.02.2012 WHEREIN IT IS SPECIFICALLY HELD THAT: JURISDICTION UNDER SECTION 263 CAN BE EXERCISED WH ENEVER IT IS FOUND THAT THE ORDER OF ASSESSMENT WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. NOT HOLDIN G SUCH INQUIRY AS IS NORMAL AND NOT APPLYING MIND TO RELEV ANT MATERIAL WOULD MAKE THE ASSESSMENT ERRONEOUS WARRAN TING EXERCISE OF REVISIONAL JURISDICTION. AN INCORRECT ASSUMPTION OF FACTS OR AN INCORRECT APPLICATION OF LAW WILL SA TISFY THE REQUIREMENT OF THE ORDER BEING ERRONEOUS. NON APPL ICATION OF MIND AND OMISSION TO FOLLOW NATURAL JUSTICE IS I N SAME CATEGORY. 9. THE FORGOING INFACT REPRESENTS TRITE LAW, AS EXP LAINED BY THE HONBLE APEX COURT IN THE CASE OF MALABAR INDUSTRIE S CO. LTD., REPORTED AT 243 ITR 83 (SC). IN VIEW OF THE ABOVE SAID CIRCUMSTANCES WE ARE OF THE VIEW THAT THE CIT HAS P ASSED THE ORDER JUDICIOUSLY AND CORRECTLY AND INVOKED THE PROVISION U/S.263 OF THE ACT IN A RIGHT MANNER AND IN A RIGHT SENSE WHICH DO ES NOT REQUIRE TO BE INTERFERE WITH AT THIS APPELLATE STAGE. WITH RE GARD TO THE CLAIM OF ITA NO.5507/MUM/2014 ASSESSMENT YEAR: 2009-10 7 DEPRECIATION, WE MAY ADVERT TO THE DECISION BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF DINESH KUM AR REPORTED AT 267 ITR 768 (BOMBAY) 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS HE REBY DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT 5 TH OCTOBER, 2016 SD/- SD/- (SANJAY ARORA) (AMARJIT SINGH) / ACCOUNTANT MEMBER '# /JUDICIAL MEMBER % & MUMBAI; ' DATED : 5 TH OCTOBER, 2016 MP MP MP MP / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ( ) / THE CIT(A)- 4. ( / CIT 5. )*+ ##,- , ,- , % & / DR, ITAT, MUMBAI 6. +./ 0 / GUARD FILE. / BY ORDER, ) # //TRUE COPY// / ! (DY./ASSTT. REGISTRAR) ' # , % & / ITAT, MUMBAI