DCIT, CHENNAI V. M/s. A.V.Thomas Leathers & Allied Products Ltd., CHENNAI

ITA 66/CHNY/2011

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 4779 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-06-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 29-06-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 13-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANIRUDH RAI
• Section: 143(3); 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BENCH D CHENNAI BEFORE SHRI N.S. SAINI, AM AND SHRI GEORGE MATHAN, J.M. .. I.T.A. NO. 66/MDS/2011 DY. C.I.T COMPANY CIRCLE I(1) CHENNAI 600 034. VS. M/S A.V. THOMAS LEATHERS & ALLIED PRODCUTS LTD 64, RUKMANI LAKSHMIPATHY SALAI CHENNAI 600 008. PAN NO. AAACA 6246 K (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE DEPARTMENT BY : SHRI ANIRUDH RAI, CIT O R D E R PER N.S. SAINI, A.M :- THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER PASSED BY THE CIT(A)-III, CHENNAI DATED 28.10.2010. 2. THE SOLE ISSUE RAISED BY THE REVENUE IN THIS APP EAL IS THAT THE LD. CIT(A) ERRED IN STATING THAT THE ORDER PASSED B Y THE ASSESSING PAGE 2 OF 4 I.T.A. NO. 66/MDS/2011 OFFICER PURSUANT TO THE DIRECTION OF THE CIT U/S 26 3 OF THE INCOME- TAX ACT, 1961 [IN SHORT, THE ACT] DOES NOT SURVIVE AS THE ITAT HAS QUASHED THE PROCEEDINGS U/S 263 OF THE ACT BECAUSE THE SAID ORDER OF THE TRIBUNAL DATED 30.8.2010 PASSED IN ITA NO. 6 28/MDS/2009 HAS NOT BECOME FINAL AS THE REVENUE HAS PREFERRED AN AP PEAL BEFORE THE HON'BLE MADRAS HIGH COURT. 3. THE LD. D.R. RELIED ON THE GROUNDS OF APPEAL OF THE REVENUE WHEREAS THE LD. A.R. OF THE ASSESSEE FILED AN ADJOU RNMENT APPLICATION WHICH WAS REJECTED BY THE BENCH. 4. AFTER CONSIDERING THE SUBMISSIONS OF THE LD. D.R . AND PERUSING THE MATERIAL ON RECORD, WE FIND THAT IN THE INSTANT CASE, THE ONLY ISSUE INVOLVED WAS THAT OF SET OFF OF LOSSES OF EXE MPT UNIT OF RS. 43,37,552/- AGAINST THE INCOME OF OTHER UNITS. THE ASSESSEE WENT IN APPEAL AGAINST THE ORDER OF THE LD. CIT U/S 263 OF THE ACT BEFORE THE TRIBUNAL. THE CHENNAI BENCH OF THE TRIBUNAL VIDE O RDER DATED 31.8.2010 PASSED IN ITA NO. 628/MDS/2009 QUASHED TH E PROCEEDINGS OF THE LD. CIT U/S 263 BY OBSERVING AS UNDER: PAGE 3 OF 4 I.T.A. NO. 66/MDS/2011 THE VIEW TAKEN BY THE ASSESSING OFFICER JUST BECAUSE IT IS NOT FREE FROM CONTROVERSY, COULD NOT BE CONSIDERED AS AN ERRONEOUS VIEW. AS HELD BY THE HON'BLE APEX COURT IN THE CASE OF CIT VS. MAX INDIA LTD 295 ITR 282, WHERE THE ITO ADOPTED ONE OF THE COURSES PERMITTED BY LAW AND IT HAD RESUL TED IN SOME LOSS TO THE REVENUE, ORDER CANNOT BE DEEMED AS ERRONEOUS IN SO FAR AS PREJUDICIAL TO THE INTEREST OF THE REVENUE. IN OUR CONSIDERED OPINION, THE LD. CIT COULD NOT HAVE INVOKED HIS POWER U/S 263 OF THE ACT ON AN ASPE CT WHICH HE HIMSELF CONSIDERED TO BE NOT FREE FROM CONTROVER SY. PROCEEDINGS U/S 263, THEREFORE, ARE QUASHED. THE LD. A.R. ACCORDINGLY REQUESTED TO REVERSE THE DI SALLOWANCE MADE BY THE ASSESSING OFFICER. 5. SINCE THE ORDER U/S 263 OF THE ACT PASSED BY THE LD. CIT WAS QUASHED, THEREFORE, THE ORDER PASSED BY THE ASSESSI NG OFFICER ON 27.7.2009 PURSUANT TO THE ORDER OF THE LD. CIT U/S 143(3) R.W.S 263 OF THE ACT DOES NOT SURVIVE. THEREFORE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT IN HOLDING THAT AS THE TRIBUNAL QUASHED THE PROCEEDINGS OF LD. CIT U/S 263, ORDER PASSED BY THE ASSESSING OFFICER PURSUANT TO THE DIRECTION OF THE LD. CIT U/ S 263 DOES NOT SURVIVE. GROUND OF APPEAL RAISED BY THE REVENUE IS DISMISSED. PAGE 4 OF 4 I.T.A. NO. 66/MDS/2011 6. IN THE RESULT, THE APPEAL FILED BY THE REVENUE S TANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT IMMEDIATELY AFT ER THE CONCLUSION OF HEARING ON 29 TH JUNE 2011. SD/- SD/- ((GEORGE MATHAN ) (N.S. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 29 TH JUNE, 2011. VL COPY TO: