Apeejay Shipping Ltd., Kolkata V. CIT, KOLKATA-3, Kolkata

ITA 781/KOL/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 5052 (ITAT-KOLKATA)
• Duration Of Justice: 10 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-04-2016
• Appeal Filed By: Assessee
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 02-06-2015
• Court: TRIBUNAL
• Assessee Lawyers: MANISH TIWARI
• Keywords: Period of limitation; Bad and doubtful debts; Assessment record
• Section: 143(3); 115JB; 263; 63; 154

Judgement Text

I.T.A. NOS. 781 TO 784/KOL./2015 ASSESSMENT YEARS: 2007-2008 TO 2010-2011 PAGE 1 OF 11 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA A BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER I.T.A. NOS. 781, 782, 783 & 784/KOL/ 2015 ASSESSMENT YEARS: 2007-2008, 2008-09, 2009-10 & 201 0-2011 APEEJAY SHIPPING LIMITED,.......................... ............................APPELLANT 15, PARK STREET, KOLKATA-700 016 [PAN: AADCS 7605 P] -VS.- COMMISSIONER OF INCOME TAX,........................ .......................RESPONDENT KOLKATA-3, KOLKATA, AAYAKAR BHAWAN, P-7, CHOWRINGHEE SQUARE, KOLKATA-700 069 APPEARANCES BY: SHRI MANISH TIWARI, FCA, FOR THE ASSESSEE SHRI RAJAT SUBHRA BISWAS, CIT, D.R., FOR THE DEPARTMENT DATE OF CONCLUDING THE HEARING : MARCH 03, 2016 DATE OF PRONOUNCING THE ORDER : APRIL 06, 2016 O R D E R PER SHRI P.M. JAGTAP :- THESE FOUR APPEALS FILED BY THE ASSESSEE ARE DIRECT ED AGAINST A COMMON ORDER OF THE LD. COMMISSIONER OF INCOME TAX, KOLKATA-3, KOLKATA DATED 30.03.2015 PASSED UNDER SECTION 263 OF THE IN COME TAX ACT, 1961 FOR ASSESSMENT YEARS 2007-08, 2008-09, 2009-10 AND 2010-11. 2. THE RELEVANT FACTS OF THE CASE GIVING RISE TO TH ESE APPEALS ARE AS FOLLOW:- THE ASSESSEE IS A COMPANY, WHICH IS ENGAGED IN THE BUSINESS OF OPERATING SHIPS FOR CARRIAGE OF GOODS. THE RETURN O F INCOME FOR A.Y. 2007- I.T.A. NOS. 781 TO 784/KOL./2015 ASSESSMENT YEARS: 2007-2008 TO 2010-2011 PAGE 2 OF 11 08 WAS FILED BY IT ON 31.10.2007 DECLARING TOTAL IN COME OF RS.10,10,27,870/-. IN THE ASSESSMENT COMPLETED ORIG INALLY UNDER SECTION 143(3) VIDE AN ORDER DATED 30.11.2009, THE TOTAL IN COME OF THE ASSESSEE WAS DETERMINED BY THE ASSESSING OFFICER AT RS.11,11 ,92,560/- UNDER THE NORMAL PROVISIONS OF THE ACT. THE BOOK PROFIT UNDER SECTION 115JB, HOWEVER, WAS NOT COMPUTED BY THE ASSESSING OFFICER IN THE SAID ASSESSMENT ORDER IN ORDER TO ASCERTAIN THE MINIMUM ALTERNATE TAX PAYABLE BY THE ASSESSEE. THE ISSUE RELATING TO TREATMENT OF PROFIT/ GAIN EARNED BY THE ASSESSEE-COMPANY ON SALE OF SHIPS/VESSELS ALSO WAS NOT CONSIDERED BY THE ASSESSING OFFICER. AFTER HAVING NOTICED THESE E RRORS IN THE ORDER OF THE ASSESSING OFFICER PASSED UNDER SECTION 143(3), WHICH WERE PREJUDICIAL TO THE INTEREST OF THE REVENUE, THE LD. CIT EXERCIS ED HIS POWERS UNDER SECTION 263 AND SET ASIDE THE ORDER PASSED BY THE A SSESSING OFFICER UNDER SECTION 143(3) WITH A DIRECTION TO THE ASSESSING OF FICER TO PASS A FRESH ASSESSMENT ORDER AFTER TAKING INTO CONSIDERATION BO TH THE ERRORS POINTED OUT BY HIM. ACCORDINGLY, A FRESH ASSESSMENT WAS COM PLETED BY THE ASSESSING OFFICER UNDER SECTION 143(3) READ WITH SE CTION 263 OF THE ACT VIDE AN ORDER DATED 08.12.2011, WHEREIN HE COMPUTED THE BOOK PROFIT OF THE ASSESSEE UNDER SECTION 115JB AT RS.14,240.98 LA KHS AND SINCE THE MAT CREDIT PAYABLE THEREON AT RS.1,424.098 LAKHS CALCUL ATED AT 10% OF THE BOOK PROFIT WAS MORE THAN THE TAX OF RS.333.57 LAKH S PAYABLE UNDER THE NORMAL PROVISIONS OF THE ACT, THE ASSESSEE WAS TAXE D ON THE BASIS OF BOOK PROFIT UNDER SECTION 115JB BY THE ASSESSING OFFICER . HE ALSO ALLOWED THE MAT CREDIT OF RS.1,090.528 LAKHS (RS.1,424.098 LAKH S MINUS RS.333.570 LAKHS) TO BE CARRIED FORWARD UNDER SECTION 115JAA(5 ) OF THE ACT VIDE AN ORDER DATED 08.12.2011 PASSED UNDER SECTION 143(3) READ WITH SECTION 263 OF THE ACT. 3. AGAINST THE ORDER PASSED BY THE ASSESSING OFFICE R UNDER SECTION 143(3) READ WITH SECTION 263 OF THE ACT, AN APPEAL WAS PREFERRED BY THE ASSESSEE BEFORE THE LD. CIT(APPEALS) AND WHILE DISP OSING OF THE SAME, THE LD. CIT(APPEALS) DIRECTED THE ASSESSING OFFICER TO INCLUDE SURCHARGE AS I.T.A. NOS. 781 TO 784/KOL./2015 ASSESSMENT YEARS: 2007-2008 TO 2010-2011 PAGE 3 OF 11 WELL AS EDUCATION CESS WHILE COMPUTING THE AMOUNT OF MAT CREDIT TO BE CARRIED FORWARD. ACCORDINGLY, AN ORDER UNDER SECTIO N 143(3) READ WITH SECTIONS 263 AND 251 DATED 29.11.2012 WAS PASSED BY THE ASSESSING OFFICER GIVING EFFECT TO THE ORDER OF THE LD. CIT D ETERMINING THE MAT CREDIT TO BE CARRIED FORWARD AT RS.12,23,56,380/- I NSTEAD OF RS.10,90,52,800/-. 4. THE ASSESSMENT RECORDS IN THE CASE OF THE ASSESS EE THEREAFTER CAME TO BE EXAMINED BY THE LD. CIT. ACCORDING TO HIM, TH E MAT CREDIT UNDER SECTION 115JAA WAS AVAILABLE ONLY WHEN TAX WAS ACTU ALLY PAID UNDER SECTION 115JB AND SINCE THE ASSESSEE HAD NOT ACTUAL LY PAID TAX UNDER SECTION 115JB, THERE WAS AN ERROR IN THE ORDER OF T HE ASSESSING OFFICER IN ALLOWING THE MAT CREDIT TO BE CARRIED FORWARD IN TH E CASE OF THE ASSESSEE FOR A.Y. 2007-08. SINCE SUCH MAT CREDIT ALLOWED TO BE CARRIED FORWARD IN A.Y. 2007-08 WAS ADJUSTED BY THE ASSESSING OFFICER IN THE ASSESSMENTS COMPLETED FOR IMMEDIATELY SUCCEEDING THREE YEARS, I .E. A.Y. 2008-09, 2009-10, 2010-11 VIDE ORDERS DATED 27.02.2013, 27.1 2.2013 AND 28.03.2013, HE WAS OF THE OPINION THAT THE SAME WER E ALSO ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTEREST OF THE REVENUE. HE ACCORDINGLY ISSUED SHOW-CAUSE NOTICES UNDER SECTION 263 REQUIRING THE ASSESSEE TO SHOW- CAUSE AS TO WHY THE ASSESSMENTS FOR ALL THE FOUR YE ARS UNDER CONSIDERATION SHOULD NOT BE REVISED BY TREATING THE SAME AS ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTEREST OF THE REVENUE. IN REPLY, THE FOLLOWING EXPLANATION WAS OFFERED BY THE ASSESSEE IN WRITING: - 'THE ORDER U/S 263/143(3) DATED 08-2-2011 FOR THE A Y 2007-08 CORRECTLY STATES MAT CREDIT OF RS.1090.528 LACS ALL OWABLE TO BE CARRIED FORWARD U/S 15JAA OF THE ACT. HOWEVER, BY T HAT TIME THE ASSESSMENT HAD ALREADY BEEN COMPLETED FOR THE FOLLO WING ASSESSMENT YEAR I.E AY 08.09, 09-10,10-1F DETERMINI NG TAX PAYABLE UNDER THE NORMAL PROVISIONS OF THE ACT. THE ASSESSEE HAD ALREADY PAID TAX IN EXCESS OF THE AMOUNT WHICH IT W OULD HAVE BEEN LIABLE TO PAY, HAD THE MAT CREDIT OF AY 2007-0 8 WAS SET OFF AGAINST THE NORMAL TAX PAYABLE. ACCORDINGLY, EVEN I F THE AMOUNT OF MAT TAX PAYABLE PURSUANT TO THE ORDER DATED 8.12 .2011 WAS PAID FOR THE ASSESSMENT YEAR 200708, THE ASSESSEE WOULD HAVE I.T.A. NOS. 781 TO 784/KOL./2015 ASSESSMENT YEARS: 2007-2008 TO 2010-2011 PAGE 4 OF 11 BEEN ENTITLED TO A REFUND FOR THE FOLLOWING ASSESSM ENT YEARS. THUS, THE ORDERS PASSED BY THE ASSESSING OFFICER, E NVISAGING THE ADJUSTMENT OF SUCH MAT CREDIT AGAINST THE NORMAL TA X PAID FOR THE AY 08-09, 09-10 AND 2010-11 CANNOT BE SAID TO B E PREJUDICIAL TO THE INTEREST OF REVENUE. THE ORDERS REFERRED TO IN NOTICE U/S 263 ARE THE FI NAL SUBSISTING ORDERS FOR THE RELEVANT ASSESSMENT YEARS SUBSEQUENT TO APPEAL EFFECT/RECTIFICATION/SCRUTINY ASSESSMENT ETC. IN FACT, ORDER 263/143(3) FOR THE ASSESSMENT YEAR 2007-08 PU RSUANT TO THE DIRECTION U/S 263 WAS PASSED ON 08.12.2011 AND FOR ALL THE FOLLOWING ASSESSMENT YEARS IMMEDIATELY THEREAFTER. THE ORDER FOR THE AY 2007-08 PASSED U/S 263/143(3) DATED 8.12 .2011, DETERMINED TAX PAYABLE ON BOOK PROFITS U/S 115JB OF THE ACT. THEREAFTER THE SAID ORDER WAS MERGED WITH ORDER U/S 251 DATED 29.1.2012, ON GIVING EFFECT OF THE APPEAL ORDER OF THE COMMISSIONER (APPEALS). THE ORDERS FOR THE SUBSEQUENT A.YS 08-09, 09-10 AND 10-11 WERE PASSED ON 8.12.2011, 29.11.2011 AND 13.01.2012 RESPECTIVELY ALLOWING THE CREDIT OF SUCH MA T TAX D ETERMINED FOR THE AY 2007-08. THE MAT TAX PAYABLE WAS ADJUSTED IN THE SUBSEQUENT ASSESSMENT YEARS AGAINST THE NORMAL TAX PAID IN EXCESS TO THE EXTENT CREDIT FOR SUCH MA T TAX WAS A LLOWABLE AGAINST THE NORMAL TAX PAYABLE. A) ASSESSMENT YEAR 2008-09 THE ORDER U/S 154/143(3) DATED 8.12.2011 WAS PASSED AFTER ADJUSTING THE CREDIT OF MAT TAX FOR THE AY 2007-08. THE ORDER WAS THEREAFTER RECTIFIED U/S 154 VIDE ORDER DATED 2 7.02.2013. B) A.Y. 09-10 THE ORIGINAL ASSESSMENT ORDER U/S 143(3) DATED 29.1 2.2011 WAS PASSED RAISING REFUND OF RS.4,32,34,500/- AFTER ADJ USTING THE CREDIT OF MAT TAX FOR THE AY 2007-08. THEREAFTER TH E ORDER WAS RECTIFIED U/S 154 ON 27.02.2013 DETERMINING THE AMO UNT REFUNDABLE AT RS.99,95,710/-. C) A.Y. 10-11 ORDER U/S 154/143(1) WAS PASSED ON 13.01.2012 RAISI NG A REFUND OF RS.2,10,81,550/- AFTER ADJUSTING THE CREDIT U/S 5JAA. THE ASSESSMENT U/S.143(3) WAS SUBSEQUENTLY COMPLETED ON 28.03.2013. I.T.A. NOS. 781 TO 784/KOL./2015 ASSESSMENT YEARS: 2007-2008 TO 2010-2011 PAGE 5 OF 11 FURTHER, WHERE THERE EXIST TWO POSSIBLE VIEWS TO A GIVEN SITUATION, AND WHERE THE WHERE THE ASSESSING OFFICE R HAS RESORTED TO A PARTICULAR VIEW THEN PROCEEDING U/S 2 63 OF THE ACT CANNOT BE INVOKED. A SIMILAR VIEW HAS BEEN HELD BY THE DELHI HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TA X VS HONDA SIEL POWER PRODUCTS LTD[2010] 194 TAXMAN 175 (DELHI ) WHEREIN IT WAS HELD THAT 'IN CASES WHERE THE ASSESSING OFFI CER ADOPTS ONE OF THE COURSES PERMISSIBLE, IN LAW, OR WHERE TWO VI EWS ARE POSSIBLE AND THE ASSESSING OFFICER HAS TAKEN ONE OF THE POSSIBLE VIEWS, THE COMMISSIONER CANNOT EXERCISE HIS POWERS UNDER SECTION 263 TO DIFFER WITH THE VIEW OF THE ASSESSIN G OFFICER, EVEN IF THERE HAS BEEN A LOSS OF REVENUE' THE ASSESSEE HAD ALREADY PAID THE NORMAL TAX FOR TH E AY'S 08-09, 09-10, 10-11. IN THE GIVEN SITUATION THERE E XISTS TWO POSSIBLE VIEWS/APPROACHES. FIRSTLY, THE ASSESSEE CO ULD EITHER PAY THE MAT TAX U/S 115JB FOR THE AY 2007-08 AND THEREA FTER RECEIVE A REFUND FOR THE SUBSEQUENT A Y'S TO THE EXTENT THE NORMAL TAX PAID FOR THE SUBSEQUENT YEARS EXCEEDS THE AMOUNT AS PAYABLE AFTER THE ADJUSTMENT OF CREDIT OF MAT TAX PAID FOR AY 2007-08. THE OTHER VIEW AS IS ADOPTED BY THE ASSESSING OFFIC ER IS TO ADJUST THE TAX PAYABLE U/S 115JB FOR THE AY 2007-08 AND TH E TAX REFUNDABLE FOR THE AY'S 08-09, 09-10, 10-1 AFTER TA KING EFFECT OF CREDIT AVAILABLE TO THE ASSESSEE IN SUCH SUBSEQUENT AY'S U/S 15JAA. THUS, WHERE THERE EXISTS TWO POSSIBLE VIEWS TO A GIVEN SITUATION, THEN REVISIONARY ASSESSMENT PROCEEDINGS U/S 263 CANNOT BE INVOKED, AND THE PROCEEDINGS U/S 263 MAY PLEASE BE DROPPED. 5. THE LD. CIT DID NOT FIND MERIT IN THE ABOVE SUBM ISSION MADE BY THE ASSESSEE. ACCORDING TO HIM, THE ASSESSEE HAVING ADM ITTEDLY NOT PAID MAT CREDIT UNDER SECTION 115JB FOR THE ASSESSMENT YEAR 2007-08, IT WAS NOT ENTITLED TO ANY CREDIT FOR THE SAME AND THERE WAS A N ERROR IN THE ORDER OF THE ASSESSING OFFICER PASSED FOR A.Y. 2007-08 VIDE ITS ORDER DATED 29.11.2012 PASSED UNDER SECTION 143(3) READ WITH SE CTION 263 AND 251 OF THE ACT TO ALLOW THE SAME AND ALSO TO CARRY FORWARD THE SAME FOR THE SUBSEQUENT YEARS. HE ALSO HELD THAT THIS ERROR HAD CASCADING EFFECT FOR A.YS. 2008-09, 2009-10 AND 2010-11, WHEREIN THE MAT CREDIT WRONGLY ALLOWED TO BE CARRIED FORWARD IN A.Y. 2007-08 WAS A CTUALLY ADJUSTED. HE, THEREFORE, HELD THAT THE ASSESSMENTS MADE BY THE AS SESSING OFFICER FOR A.YS. 2008-09, 2009-10 AND 2010-11 WERE ALSO ERRONE OUS AS WELL AS I.T.A. NOS. 781 TO 784/KOL./2015 ASSESSMENT YEARS: 2007-2008 TO 2010-2011 PAGE 6 OF 11 PREJUDICIAL TO THE INTEREST OF THE REVENUE. ACCORDI NGLY, THE ORDERS OF ASSESSMENTS PASSED BY THE ASSESSING OFFICER FOR ALL THE FOUR YEARS, I.E. A.YS. 2007-08, 2008-09, 2009-10 AND 2010-11 WERE SE T ASIDE BY THE LD. CIT(APPEALS) WITH A DIRECTION TO THE ASSESSING OFFI CER TO COMPLETE THE ASSESSMENTS AFRESH BY RE-COMPUTING THE MAT CREDIT F OR A.Y. 2007-08 AND ALSO TO CONSIDER THE EFFECT OF SUCH RE-COMPUTATION IN THE SUBSEQUENT YEARS, I.E. A.Y. 2008-09, 2009-10 AND 2010-11. AGGR IEVED BY THE ORDER PASSED BY THE LD. CIT UNDER SECTION 263 FOR ALL THE FOUR YEARS UNDER CONSIDERATION, THE ASSESSEE HAS PREFERRED THESE APP EALS BEFORE THE TRIBUNAL. 6. THE LD. COUNSEL FOR THE ASSESESE AT THE TIME OF HEARING BEFORE US RAISED A PRELIMINARY LEGAL ISSUE CHALLENGING THE VA LIDITY OF THE IMPUGNED ORDER PASSED BY THE LD. CIT UNDER SECTION 263 FOR A .Y. 2007-08 ON THE GROUND THAT THE SAME IS BARRED BY LIMITATION. HE SU BMITTED THAT THE MAT CREDIT WAS ACTUALLY ALLOWED BY THE ASSESSING OFFICE R IN THE ORDER PASSED UNDER SECTION 143(3) READ WITH SECTION 263 ON 08.12 .2011 AND THE SAME WAS ALSO ALLOWED TO BE CARRIED FORWARD BY HIM VIDE THE SAID ORDER AS PER THE PROVISION OF SECTION 115JAA. HE SUBMITTED THAT THE LIMITED ISSUE INVOLVED IN THE APPEAL FILED BY THE ASSESSEE AGAINS T THE SAID ORDER OF THE ASSESSING OFFICER WAS WHETHER CREDIT FOR MAT IS AVA ILABLE FOR SURCHARGE AND EDUCATION CESS ALSO AND THE SAME WAS DECIDED BY THE LD. CIT(APPEALS) VIDE ORDER DATED 19.10.2012 IN FAVOUR OF THE ASSESS EE. HE SUBMITTED THAT THE ASSESSING OFFICER ACCORDINGLY PASSED AN ORDER U NDER SECTION 143(3) READ WITH SECTION 263 AND 251 ON 29.11.2012 GIVING EFFECT TO THE ORDER OF THE LD. CIT(APPEALS) THEREBY INCREASING THE MAT CRE DIT BY THE AMOUNT OF SURCHARGE AND EDUCATION CESS. HE CONTENDED THAT THE LD CIT VIDE HIS IMPUGNED ORDER PASSED UNDER SECTION 263 FOR A.Y. 20 07-08, HAS SOUGHT TO REVISE THE ASSESSMENT ON THE ISSUE OF CREDIT FOR MA T ALLOWED BY THE ASSESSING OFFICER UNDER SECTION 115JAA AND SINCE SU CH CREDIT WAS ALLOWED BY THE ASSESSING OFFICER IN THE ORDER PASSED UNDER SECTION 143(3) READ WITH SECTION 263 ON 08.12.2011, WHAT HE HAS ACTUALL Y REVISED BY THE I.T.A. NOS. 781 TO 784/KOL./2015 ASSESSMENT YEARS: 2007-2008 TO 2010-2011 PAGE 7 OF 11 IMPUGNED ORDER PASSED UNDER SECTION 263 FOR A.Y. 20 07-08 IS THE ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 143(3 ) READ WITH SECTION 263 ON 08.12.2011. HE CONTENDED THAT THE IMPUGNED O RDER UNDER SECTION 263 FOR A.Y. 2007-08 THUS HAS BEEN PASSED BY THE LD . CIT AFTER THE EXPIRY OF TWO YEARS FROM THE END OF THE FINANCIAL YEAR, IN WHICH THE ORDER SOUGHT TO BE REVISED WAS PASSED AND THE SAME IS CLEARLY BA RRED BY LIMITATION AS PROVIDED IN SUB-SECTION (2) OF SECTION 263. 7. THE LD. D.R., ON THE OTHER HAND, STRONGLY SUPPOR TED THE IMPUGNED ORDER OF THE LD. CIT PASSED UNDER SECTION 263 FOR A .Y. 2007-08. HE SUBMITTED THAT THE LD. CIT VIDE HIS ORDER HAS ACTUA LLY REVISED THE ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 143(3 ) READ WITH SECTION 263 AND 251 OF THE ACT ON 29.11.2012 AND SINCE THE SAID ORDER UNDER SECTION 263 IS MADE BEFORE THE EXPIRY OF TWO YEARS FROM THE END OF THE FINANCIAL YEAR IN WHICH THE ORDER SOUGHT TO BE REVI SED WAS PASSED, IT IS NOT BARRED BY LIMITATION. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND ALS O PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS OBSERV ED THAT THE LD. CIT BY HIS IMPUGNED ORDER PASSED UNDER SECTION 263 OF THE ACT FOR A.Y. 2007-08 HAS REVISED THE ASSESSMENT MADE IN THE CASE OF THE ASSESSEE FOR A.Y. 2007-08 ON THE ISSUE OF ALLOWING CREDIT FOR MAT AS PER SECTION 115JAA, WHICH, ACCORDING TO HIM, WAS WRONGLY ALLOWED BY THE ASSESSING OFFICER IN THE ABSENCE OF ANY ACTUAL PAYMENT MADE BY THE ASSES SEE TOWARDS MAT. IT IS PERTINENT TO NOTE HERE THAT THE MAT CREDIT AS PE R THE PROVISIONS OF SECTION 115JAA WAS ACTUALLY ALLOWED BY THE ASSESSIN G OFFICER ORIGINALLY IN THE ASSESSMENT COMPLETED UNDER SECTION 143(3) READ WITH SECTION 263 PASSED ON 08.12.2011 AND IN THE APPEAL FILED BY THE ASSESSEE AGAINST THE SAID ORDER, THE LIMITED ISSUE INVOLVED WAS WHETHER THE MAT CREDIT ALLOWED BY THE ASSESSING OFFICER SHOULD INCLUDE THE AMOUNT OF SURCHARGE AND EDUCATION CESS AS WELL. WHEN THE LD. CIT(APPEAL S) DECIDED THE SAID I.T.A. NOS. 781 TO 784/KOL./2015 ASSESSMENT YEARS: 2007-2008 TO 2010-2011 PAGE 8 OF 11 ISSUE IN FAVOUR OF THE ASSESESE VIDE HIS APPELLATE ORDER DATED 19.10.2012, THE ORDER DATED 29.11.2012 WAS PASSED BY THE ASSESS ING OFFICER UNDER SECTION 143(3) READ WITH SECTION 263 AND 251 GIVING EFFECT TO THE APPELLATE ORDER OF THE LD. CIT DATED 19.10.2012 AND ACCORDINGLY THE MAT CREDIT ORIGINALLY ALLOWED BY HIM VIDE ORDER DATED 0 8.12.2011 PASSED UNDER SECTION 143(3) READ WITH SECTION 263 ON 08.12 .2011 WAS ONLY INCREASED BY HIM BY THE AMOUNT OF SURCHARGE AND EDU CATION CESS. THE ERROR, IF ANY, IN ALLOWING THE MAT CREDIT AS ALLEGE D BY THE LD. CIT IN HIS IMPUGNED ORDER PASSED UNDER SECTION 263 THUS WAS TH ERE IN THE ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 143(3 ) READ WITH SECTION 263 ON 08.12.2011 WHEREBY THE MAT CREDIT WAS ORIGIN ALLY ALLOWED BY HIM AND NOT IN THE ORDER DATED 29.11.2012 PASSED BY THE ASSESSING OFFICER UNDER SECTION 143(3) READ WITH SECTION 263 AND 251 WHEREBY THE MAT CREDIT ALREADY ALLOWED WAS ONLY INCREASED BY THE AS SESSING OFFICER BY THE AMOUNT OF SURCHARGE AND EDUCATION CESS WHILE GIVING EFFECT TO THE APPELLATE ORDER OF THE LD. CIT(APPEALS). 9. IN THE CASE OF CIT VS.- ALAGENDRAN FINANCE LIMI TED [211 CTR (SC) 69], A SIMILAR FACT SITUATION WAS INVOLVED, INASMUC H AS THE CLAIM MADE BY THE ASSESSEE UNDER THE HEAD LEASE EQUALISATION FUN D WAS ACCEPTED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORIGINALLY COMPLETED UNDER SECTION 143(3) AND THE SAID ASSESSMENT WAS SUBSEQUE NTLY REOPENED ONLY IN RESPECT OF THREE ITEMS, VIZ. (1) THE EXPENSES CL AIMED FOR SHARE ISSUE; (2) BAD AND DOUBTFUL DEBTS; AND (3) EXCESS DEPRECIA TION ON GAS CYLINDER AND GOOD CONTAINERS. ALTHOUGH THE ISSUE RELATING TO ASSESSEE'S CLAIM IN RESPECT OF LEASE EQUALIZATION FUND WAS NOT THE SUBJ ECT MATTER OF THE RE- ASSESSMENT PROCEEDINGS, THE LEARNED COMMISSIONER PU RPORTED TO INVOKE HIS REVISIONAL JURISDICTION IN TERMS OF S.263 OF TH E ACT AND DIRECTED THE ASSESSING OFFICER BY AN ORDER DATED 29TH MARCH, 200 4 TO CHECK AND ASSESS THE LEASE RENTAL FROM LEASE EQUALIZATION FUND, IF A NY, AND TO BRING TO TAX THE SAME. IN THESE FACTS AND CIRCUMSTANCES OF THE C ASE, THE HON'BLE SUPREME COURT, AFTER DISCUSSING ELABORATELY THE LEG AL POSITION ON THE I.T.A. NOS. 781 TO 784/KOL./2015 ASSESSMENT YEARS: 2007-2008 TO 2010-2011 PAGE 9 OF 11 ISSUE OF SCOPE OF RE-ASSESSMENT PROCEEDINGS AND THE DOCTRINE OF MERGER, HELD THAT THE LEARNED CIT HAVING EXERCISED HIS REVI SIONAL JURISDICTION TO REOPEN THE ORDER OF ASSESSMENT ONLY IN RELATION TO LEASE EQUALIZATION FUND, WHICH WAS NOT THE SUBJECT MATTER OF RE-ASSESS MENT PROCEEDINGS, THE PERIOD OF LIMITATION PROVIDED FOR IN SUB-SECTION (2 ) OF S.263 OF THE ACT WOULD BEGIN TO RUN FROM THE DATE OF ORDER OF ORIGIN AL ASSESSMENT AND NOT FROM THE DATE OF ORDER OF RE-ASSESSMENT. ACCORDINGL Y, THE ORDER PASSED BY THE CIT UNDER S.263 WAS HELD TO BE INVALID BY THE H ON'BLE SUPREME COURT, HAVING BEEN PASSED BEYOND THE PERIOD OF LIMITATION AS PROVIDED IN SUB-SECTION (2) OF S.263 OF THE ACT. TO THE SIMILAR EFFECT IS THE DECISION OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF ASHOKA BUILDCON LTD. 239 CTR (BOM.) 318 WHEREIN IT WAS HELD THAT WHERE AN AS SESSMENT HAS BEEN REOPENED UNDER S.147 IN RELATION TO PARTICULAR GROU NDS OR IN RELATION TO CERTAIN SPECIFIED GROUND, AND SUBSEQUENT TO THE PAS SING OF THE ORDER OF RE-ASSESSMENT, JURISDICTION UNDER S.263 IS SOUGHT T O BE EXERCISED WITH REFERENCE TO THE ISSUE WHICH DID NOT FORM THE SUBJE CT OF RE-OPENING OF THE ASSESSMENT OR ORDER OF RE-ASSESSMENT, THE PERIOD OF LIMITATION PROVIDED IN SUB-SECTION (2) OF S.263 WOULD COMMENCE FROM THE DATE OF THE ORDER OF ASSESSMENT AND NOT FROM THE DATE ON WHICH THE ORDER REOPENING THE ASSESSMENT HAS BEEN PASSED. 10. KEEPING IN VIEW THE LEGAL POSITION EMANATING FR OM THE JUDICIAL PRONOUNCEMENTS DISCUSSED ABOVE INCLUDING THE DECISI ON OF THE HONBLE SUPREME COURT IN THE CASE OF ALEGENDRAN FINANCE LIM ITED (SUPRA) AND HAVING REGARD TO THE FACTS OF THE CASE, WE ARE OF T HE VIEW THAT THE PERIOD OF LIMITATION FOR A.Y. 2007-08 HAS TO BE RECKONED F ROM THE DATE OF ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 143(3 ) READ WITH SECTION 263, I.E. 08.12.2011 AND NOT FROM THE DATE OF ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 143(3) READ WITH SE CTION 263 AND 251, I.E. 29.11.2012 AS THE ISSUE RELATING TO THE MAT CREDIT ON WHICH THE ASSESSMENT FOR A.Y. 2007-08 WAS SOUGHT TO BE REVISE D BY THE LD. CIT WAS DECIDED IN PRINCIPLE BY THE ASSESSING OFFICER VIDE HIS ORDER DATED I.T.A. NOS. 781 TO 784/KOL./2015 ASSESSMENT YEARS: 2007-2008 TO 2010-2011 PAGE 10 OF 11 08.12.2011 PASSED UNDER SECTION 143(3) READ WITH SE CTION 263 AND SINCE THE IMPUGNED ORDER UNDER SECTION 263 PASSED BY THE LD. CIT FOR A.Y. 2007-08 ON 30.03.2015 WAS BEYOND THE PERIOD OF TWO YEARS FROM THE END OF THE FINANCIAL YEAR, IN WHICH THE ORDER DATED 08. 12.2011 SOUGHT TO BE REVISED WAS PASSED, THE SAME IS BARRED BY LIMITATIO N AS PROVIDED IN SECTION 263(2) OF THE ACT. THE SAID ORDER PASSED BY THE LD. CIT UNDER SECTION 263 FOR A.Y. 2007-08 IS ACCORDINGLY CANCELL ED TREATING THE SAME AS INVALID AND THE APPEAL OF THE ASSESSEE FOR A.Y. 200 7-08 IS ALLOWED. 11. AS A RESULT OF OUR DECISION RENDERED ABOVE CANC ELLING THE ORDER PASSED BY THE LD. CIT UNDER SECTION 263 FOR A.Y. 20 07-08 AND RESTORING THE ORDER OF THE ASSESSING OFFICER FOR THAT YEAR WH EREBY HE ALLOWED THE MAT CREDIT TO THE ASSESSEE, THE ORDERS PASSED BY TH E ASSESSING OFFICER FOR THE SUBSEQUENT THREE YEARS, I.E. A.YS. 2008-09, 200 9-10 AND 2010-11 ALLOWING ADJUSTMENT FOR SUCH MAT CREDIT CANNOT BE S AID TO HAVE ANY ERROR AS ALLEGED BY THE LD. CIT CALLED FOR REVISION UNDER SECTION 263 AND THIS CONSEQUENTIAL POSITION IS NOT DISPUTED EVEN BY THE LD. D.R. WE, THEREFORE, SET ASIDE THE IMPUGNED ORDERS PASSED BY THE LD. CIT UNDER SECTION 263 FOR A.YS. 2008-09, 2009-10 AND 2010-11 AND RESTORE THAT OF THE ASSESSING OFFICER. 12. IN THE RESULT, ALL THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON APRIL 6, 2016 . SD/- SD/- (S.S. VISWANETHRA RAVI) (P.M. JAGTAP) JUDICIAL MEMBER ACCOUNTANT MEMBER KOLKATA, THE 6 TH DAY OF APRIL, 2016 COPIES TO : (1) APEEJAY SHIPPING LIMITED, 15, PARK STREET, KOLKATA-700 016 I.T.A. NOS. 781 TO 784/KOL./2015 ASSESSMENT YEARS: 2007-2008 TO 2010-2011 PAGE 11 OF 11 (2) COMMISSIONER OF INCOME TAX, KOLKATA-3, KOLKATA, AAYAKAR BHAWAN, P-7, CHOWRINGHEE SQUARE, KOLKATA-700 069 (3) COMMISSIONER OF INCOME-TAX, KOLKATA-3, KOLKATA ; (4) CIT(APPEALS)- , KOLKATA (4) THE DEPARTMENTAL REPRESENTATIVE (5) GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.