Income Tax Officer, Sitapur V. M/s Vikas Traders, Sitapur

ITA 619/LKW/2014

• Counselvise Citation: 61923714 RSA 2014
• Duration Of Justice: 1 year(s) 3 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-11-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 29-10-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 28-07-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: K R RASTOGI
• Keywords: Reopening of assessment; Depreciation; Difference of opinion; Change of opinion
• Section: 143(3); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI. A. K. GARODIA, ACCOUNTANT MEMBER ITA NO.619/LKW/2014 ASSESSMENT YEAR:2007-08 INCOME TAX OFFICER SITAPUR V. M/S VIKASH TRADERS C/O AYYUBI CHAMBERS NEAR EYE HOSPITAL SITAPUR TAN/PAN:AADFV3386M (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI. AMIT NIGAM, D.R. RESPONDENT BY: SHRI. K. R. RASTOGI, C.A. DATE OF HEARING: 29 10 2015 DATE OF PRONOUNCEMENT: 09 11 2015 O R D E R PER SUNIL KUMAR YADAV: THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST THE ORDER OF THE LD. CIT(A) ON A SOLITARY GROUND THAT THE LD. CIT(A) IS NOT JUSTIFIED IN DELETING THE ADDITION BY ANNULLING THE PROCEEDINGS RIGHTLY INITIATED BY THE ASSESSING OFFICER UNDER SECTION 148 OF THE INCOME-TAX ACT, 1961 (HEREINAFTER CALLED IN SHORT THE ACT') AND RIGHTLY MADE THE ADDITION TO THE TOTAL INCOME OF THE ASSESSEE. ON MERIT, THE ORDER OF THE LD. CIT(A) IS ALSO CHALLENGED IN ALLOWING DEPRECIATION TO THE ASSESSEE ON HIGHER RATE. 2. THE FACTS IN BRIEF BORNE OUT FROM THE RECORD ARE THAT THE ASSESSEE IS A GOVERNMENT CONTRACTOR AND ASSESSMENT UNDER SECTION 143(3) OF THE ACT WAS COMPLETED VIDE ORDER DATED 25.11.2009. THE ASSESSING OFFICER, HAVING RECORDED REASONS THAT EXCESS DEPRECIATION WAS ALLOWED TO THE ASSESSEE ON JCB LOADER, TRUCKS AND TIPPER, THE INCOME CHARGEABLE TO :- 2 -: TAX HAS ESCAPED ASSESSMENT, REOPENED THE ASSESSMENT BY ISSUING NOTICE UNDER SECTION 148 OF THE ACT. CONSEQUENTLY, THE ASSESSMENT WAS FRAMED UNDER SECTION 143(3) READ WITH 147 OF THE ACT AND THE ASSESSING OFFICER HAS DISALLOWED THE EXCESS DEPRECIATION TO THE TUNE OF RS.34,38,284/- AND MADE ADDITION OF THE SAME. 3. ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A) WITH THE SUBMISSION THAT THE ISSUE OF EXCESS DEPRECIATION WAS EXAMINED BY THE ASSESSING OFFICER IN THE ORIGINAL ASSESSMENT, THEREFORE, REOPENING OF ASSESSMENT ON THE BASIS THAT EXCESS DEPRECIATION WAS ALLOWED TO THE ASSESSEE WAS A MERE CHANGE OF OPINION, THEREFORE, THE REOPENING IS BAD. HE HAS FILED WRITTEN SUBMISSION IN THIS REGARD BEFORE THE LD. CIT(A). THE LD. CIT(A) RE-EXAMINED THE ISSUE IN THE LIGHT OF ASSESSEES CONTENTIONS AND WAS OF THE VIEW THAT IN THE ORIGINAL ASSESSMENT THE ASSESSING OFFICER HAD ALL PRIMARY FACTS ON RECORD AT THE TIME OF MAKING ASSESSMENT. THE LD. CIT(A) ACCORDINGLY QUASHED THE REOPENING AND ANNULLED THE ASSESSMENT FRAMED CONSEQUENT THERETO. 4. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL AND HAS PLACED HEAVY RELIANCE UPON THE ORDER OF THE ASSESSING OFFICER; WHEREAS THE LD. COUNSEL FOR THE ASSESSEE HAS INVITED OUR ATTENTION TO THE COPY OF PROCEEDINGS RECORDED BY THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND REASONS RECORDED BY THE ASSESSING OFFICER FOR REOPENING THE ASSESSMENT. WITH THESE PROCEEDINGS, THE LD. COUNSEL FOR THE ASSESSEE HAS TRIED TO ESTABLISH THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS ASKED TO JUSTIFY THE INCOME FROM TRUCK, TIPPERS, ETC. OUR ATTENTION WAS ALSO INVITED TO THE REPLY FILED BEFORE THE ASSESSING OFFICER, IN WHICH IT HAS BEEN STATED THAT DEPRECIATION ON HEAVY MOTOR VEHICLES IS CLAIMED UNDER THE HEAD MOTOR LORRY, ETC. OUR ATTENTION WAS ALSO INVITED TO THE OTHER QUERIES RAISED BY THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS WITH RESPECT TO THE INCOME FROM TRUCKS, ETC. HE HAS ALSO INVITED OUR ATTENTION :- 3 -: TO THE PROFIT AND LOSS ACCOUNT IN WHICH TRUCK INCOME WAS SHOWN. WITH THESE DOCUMENTS, THE LD. COUNSEL FOR THE ASSESSEE HAS CONTENDED THAT DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER HAS EXAMINED ALL THESE FACTS BEFORE ALLOWING HIGHER DEPRECIATION ON TRUCKS. THEREFORE, REOPENING OF ASSESSMENT ON THE GROUND THAT HIGHER DEPRECIATION WAS ALLOWED TO THE ASSESSEE AMOUNTS TO ESCAPEMENT OF INCOME CHARGEABLE TO TAX, IS NOTHING BUT MERE CHANGE OF OPINION. 5. HAVING GIVEN A THOUGHTFUL CONSIDERATION TO THE RIVAL SUBMISSIONS AND FROM A CAREFUL PERUSAL OF THE ORDERS OF THE AUTHORITIES BELOW, WE FIND THAT DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER HAS RAISED A QUERY WITH RESPECT TO THE INCOME FROM TRUCKS AND IN RESPONSE THERETO THE ASSESSEE HAS FURNISHED THE RELEVANT INFORMATION AND HAVING APPLIED HIS MIND THE ASSESSING OFFICER HAS ALLOWED THE CLAIM OF HIGHER DEPRECIATION ON TRUCKS. NOW WHILE REOPENING THE ASSESSMENT, THE ASSESSING OFFICER HAS RECORDED THE REASONS THAT EXCESS DEPRECIATION WAS ALLOWED TO THE ASSESSEE WHICH AMOUNTS TO ESCAPEMENT OF INCOME CHARGEABLE TO TAX. SINCE THIS ASPECT WAS ALREADY EXAMINED BY THE ASSESSING OFFICER IN THE ORIGINAL ASSESSMENT PROCEEDINGS, THE ASSESSMENT CANNOT BE REOPENED ON ACCOUNT OF CHANGE OF OPINION. THE LD. CIT(A) HAS EXAMINED THIS ISSUE IN THE LIGHT OF VARIOUS JUDICIAL PRONOUNCEMENTS AND HAS QUASHED THE REOPENING OF THE ASSESSMENT. OUR ATTENTION WAS ALSO INVITED TO VARIOUS ORDERS OF THE TRIBUNAL AND THE JUDGMENTS OF DIFFERENT HIGH COURTS AND THE SUPREME COURT. SOME OF THE JUDGMENTS ARE MENTIONED HEREUNDER:- 1. CIT VS. USHA INTERNATIONAL LTD., 348 ITR 485 (DELHI). 2. PARIXIT INDUSTRIES PVT. LTD. VS. ACIT (OSD), 352 ITR 349 (GUJ.). 3. PARIXIT INDUSTRIES PVT. LTD. VS. ACIT, 210 TAXMAN 93. :- 4 -: 4. ARUN GUPTA, ISHWAR CHANDRA, VINEET CHANDRA, RAGHAV GUPTA AND PREM CHAND GUPTA VS. UNION OF INDIA AND OTHERS, 371 ITR 394 (ALLD.) 5. RAYMON GLUES & CHEMICALS VS. DCIT, 55 TAXMANN.COM 421 (GUJ.). 6. CIT VS. GAYLORD CONSTRUCTIONS, 190 TAXMAN 406 (KER.). 7. CIT VS. RAKESH JAIN, 20 TAXMANN.COM 404 (P&H). 6. IN ALL THESE JUDGMENTS, IT HAS BEEN REPEATEDLY HELD THAT ON ACCOUNT OF CHANGE OF OPINION, THE REOPENING IS NOT POSSIBLE. SINCE IT IS EVIDENT FROM THE RECORD THAT REOPENING WAS DONE ON ACCOUNT OF CHANGE OF OPINION, THE REOPENING IS NOT VALID AND WE ACCORDINGLY FIND OURSELVES IN AGREEMENT WITH THE ORDER OF THE LD. CIT(A) HOLDING THE REOPENING TO BE INVALID. SINCE THE REOPENING IS INVALID AND IS QUASHED, THE ASSESSMENT FRAMED CONSEQUENT THERETO DESERVES TO BE ANNULLED AND WE ACCORDINGLY AGREE WITH THE VIEW OF THE LD. CIT(A) ANNULLING THE ASSESSMENT. THEREFORE, THE APPEAL FAILS AND THE ORDER OF THE LD. CIT(A) IS CONFIRMED. 7. IN THE RESULT, APPEAL OF THE REVENUE STANDS DISMISSED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTIONED PAGE. SD/- SD/- [A. K. GARODIA] [SUNIL KUMAR YADAV] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED:9 TH NOVEMBER, 2015 JJ:0311 :- 5 -: COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR ASSISTANT REGISTRAR