M/s. Bodal Chemical Ltd., Ahmedabad V. The CIT,Ahmedabad-1, Ahmedabad

ITA 766/AHD/2012

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 1869 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-04-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 08-03-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 04-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S N DIVATIA
• Keywords: Depreciation; Principle of natural justice; Unabsorbed depreciation
• Section: 263

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD .. , , BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER ./ I.T.A. NO.766/AHD/2012 ( / ASSESSMENT YEAR : 2007-08) BODAL CHEMICALS LTD. PLOT NO.123/124, PHASE-I GIDC VATVA AHMEDABAD-392 445 / VS. THE CIT AHMEDABAD-1 AHMEDABAD # ./ ./ PAN/GIR NO. : AAACD 5352 M ( #& / APPELLANT ) .. ( '(#& / RESPONDENT ) #& ) / APPELLANT BY : SHRI S.N. DIVATIA, AR '(#& * ) / RESPONDENT BY : SHRI SOMOGYAN PAL, SR.DR +, * - / DATE OF HEARING 08/03/2016 ./01 * - / DATE OF PRONOUNCEMENT 12/04/2016 / O R D E R PER SHRI KUL BHARAT, JUDICIAL MEMBER : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE LD.COMMISSIONER OF INCOME TAX(APPEALS)-1, AHMEDABAD [CIT(A) IN SHORT] DATED 04/01/2012 PERTAINING TO ASSESSMENT Y EAR (AY) 2007-08. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF A PPEAL:- ITA NO.766/AHD/ 2012 BODAL CHEMICALS LTD. VS. CIT ASST.YEAR 2007-08 - 2 - 1.1 THE ORDER PASSED U/S.263 ON 4.1.2012 FOR A.Y. 2007- 08 BY CIT, ABAD-1, ABAD REVISING THE ASSTT. U/S.14(3) MADE BY AO IS WHOLLY ILLEGAL, UNLAWFUL AND AGAINST THE PRINCIPLES OF NATURAL JUSTICE. 1.2. THE LD. CIT HAS GRIEVOUSLY ERRED IN LAW AND OR ON FACTS IN NOT CONSIDERING FULLY AND PROPERLY THE SUBMISSION M ADE AND EVIDENCE PRODUCED BY THE APPELLANT. 2.1. THE LD.CIT HAS GRIEVOUSLY ERRED IN LAW AND ON FACTS IN HOLDING THAT THE ORDER OF ASSTT.PASSED U/S.143(3) O N 31.12.2009 BY AO WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE SO THAT THE PROCEEDINGS INITIATED U/S.263 W ERE JUSTIFIED. 2.2. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CAS E AS WELL AS IN LAW, THE LD.CIT OUGHT NOT TO HAVE REVISED THE OR DER OF ASSTT. PASSED U/S.143(3) ON 31.2.2009 BY AO, SINCE IT WAS NEITHER ERRONEOUS OR PREJUDICIAL AND AO HAD PASSED IT AFTER MAKING ENQUIRY AND TAKING ONE OF THE POSSIBLE VIEWS. 3.1. THE LD.CIT HAS ERRED IN HOLDING THAT THE UNABS ORBED DEPRECIATION AMOUNTING TO RS.1,52,18,528 OF A.Y. 19 96-97 TO 1998-1999 COULD NOT BE CARRY FORWARD FOR MORE THAN 8 SUCCEEDING YEARS SO THAT THE AO COULD NOT HAVE ALLO WED THE SET OFF IN AY 2007-08. 4.1. THE LD.CIT HAS ERRED IN LAW AND OR ON FACTS IN CONSTRUING THE PROVISIONS OF SEC.32(2) OF C/F. AND SET OFF OF UNABSORBED DEPRECIATION AND HOLDING THAT THE SET OFF OF UNABSO RBED DEPRECIATION WAS AVAILABLE ONLY FOR 8 YEARS SUCCEED ING TO THE YEAR IN WHICH IT WAS FIRST COMPUTED. 4.2. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CAS E, THE LD.CIT OUGHT TO HAVE CONSIDERED FULLY AND PROPERLY HE CONTENTIONS OF THE APPELLANT IN THIS REGARD AND PAS SED A REASONED ORDER. ITA NO.766/AHD/ 2012 BODAL CHEMICALS LTD. VS. CIT ASST.YEAR 2007-08 - 3 - IT IS, THEREFORE, PRAYED THAT THE ORDER PASSED BY T HE CIT MAY KINDLY BE CANCELLED. 2. BRIEFLY STATED FACTS ARE THAT THE ASSESSMENT U/ S.143(3) OF THE INCOME TAX ACT,1961 (HEREINAFTER REFERRED TO AS TH E ACT) IN THE CASE OF THE APPELLANT-ASSESSEE WAS COMPLETED VIDE ORDER DA TED 31/12/2009. 3. THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE LD.CIT OBSERVED THAT THE ASSESSING OFFICER (AO IN SHORT) ALLOWED T HE SET OFF OF UNABSORBED DEPRECIATION AMOUNTING TO RS.1,52,185/- WHICH RESULTED INTO UNDER ASSESSMENT. ACCORDINGLY, THE LD.CIT ISSUED A NOTICE DATED 21/12/2011. THE REASON FOR EXERCISING THE POWER U/ S.263 OF THE ACT IS STATED TO BE AN AMENDMENT MADE UNDER THE PROVISIONS OF SECTION 32(2)(B) OF THE ACT W.E.F. 01/04/1997, WHEREBY THE PROVISION WAS AMENDED THAT UNABSORBED DEPRECIATION COULD BE CARRY FORWARD ONLY FOR ASSESSMENT YEARS IMMEDIATELY SUCCEEDING THE YEAR IN WHICH IT W AS FIRST COMPUTED. ACCORDINGLY, THE UNABSORBED DEPRECIATION OF AYSS 1 997-98 TO 2011-02 WAS NOT AVAILABLE FOR SET OFF AGAINST THE INCOME FO R AY 2007-08. THE LD.CIT, THEREFORE, CANCELLED THE ASSESSMENT ORDER D ATED 31/12/2009 AND DIRECTED THE AO TO MAKE A DE NOVO ASSESSMENT. THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ACTION OF L.CIT IS BAD IN LAW. HE SUBMITTED THAT THE AO HAD APPLIED HIS MIND RAISED A QUERY IN RESPECT OF DEPRECIATION ITA NO.766/AHD/ 2012 BODAL CHEMICALS LTD. VS. CIT ASST.YEAR 2007-08 - 4 - AND AFTER APPLYING HIS MIND HE HAS RIGHTLY ALLOWED THE SAME. HE FURTHER SUBMITTED THAT IN VIEW OF THE JUDGEMENT OF HONBLE HIGH COURT OF GUJARAT RENDERED IN THE CASE OF GENERAL MOTORS INDI A (P) LTD. VS. DCIT REPORTED AT (2013) 354 ITR 244 (GUJ.) WHICH IS FOLL OWED BY ANOTHER BENCH OF HONBLE HIGH COURT OF GUJARAT IN THE CASE OF CIT VS. GUJARAT THEMIS BIOSYN LTD. REPORTED AT (2014) 44 TAXMANN.CO M 204 (GUJ.) AND HELD THAT CARRY FORWARD OF UNABSORBED DEPRECIATION CONCERNING IMPUGNED ASSESSMENT YEARS, I.E. 1997-98 TO 2001-02 COULD BE SET OFF IN SUBSEQUENT YEARS. UNDER THESE FACTS, HE SUBMITTED THAT THE ORD ER OF THE AO WAS NEITHER ERRONEOUS NOR PREJUDICIAL TO THE INTERESTS OF REVENUE. 3.1. ON THE CONTRARY, THE LD.SR.DR SUPPORTED THE OR DERS OF THE AUTHORITIES BELOW. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE ONLY BASIS FOR INVOKING THE PROVISIONS OF SECTI ON 263 OF THE ACT WAS THAT THERE WERE AMENDMENT INTO PROVISION. SINCE TH E ISSUE HAS BEEN DECIDED BY THE HONBLE JURISDICTIONAL HIGH COURT WI TH REGARD TO AVAILABILITY OF UNABSORBED DEPRECIATION, WE ARE OF THE CONSIDERED VIEW THAT IT IS NOT A FIT CASE FOR INVOKING THE PROVISIO NS OF SECTION 263 OF THE ACT. THUS, THE GROUND RAISED IN THIS APPEAL IS ALL OWED. ITA NO.766/AHD/ 2012 BODAL CHEMICALS LTD. VS. CIT ASST.YEAR 2007-08 - 5 - 5. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE COURT ON TUESDAY, THE 12 TH DAY OF APRIL, 2016 AT AHMEDABAD. SD/- SD/- (.. ) ( ) ( N.K. BILLAIYA) ( KUL BHARAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 12/ 04 /2016 5-.., +.../ T.C. NAIR, SR. PS !'#$%&%# / COPY OF THE ORDER FORWARDED TO : 1. #& / THE APPELLANT 2. '(#& / THE RESPONDENT. 3. 67 8 / CONCERNED CIT 4. 8 ( ) / THE CIT(A)-1, AHMEDABAD 5. 9+: '67 , - 671 , / DR, ITAT, AHMEDABAD 6. :<= >, / GUARD FILE. / BY ORDER, (9 ' //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION .. 10.3.16 (DICTATION-PAD 9+ PAGES ATTACHED AT THE END OF THIS FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER ..6.4.16 3. OTHER MEMBER... 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.12.4.16 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 12.4.16 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER