The DCIT, Circle-5, Ahmedabad V. M/s. Rajratna Metal Industries, Ahmedabad

ITA 792/AHD/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 6847 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 1 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-04-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 07-04-2011
• Assessment Year: 1997-1998
• Appeal Filed On: 09-03-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reopening of assessment; Business income; Depreciation; Opportunity of being heard; Principle of natural justice
• Section: 143(3); 80HHC; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL : B BENCH : AHMEDABAD (BEFORE HONBLE SHRI T.K. SHARMA, J.M. & HON'BL E SHRI N.S.SAINI, A.M. ) I.T.A. NO. 2099/AHD./2010 : ASSESSMENT YEAR : 1996-1997 RAJRATNA METAL INDUSTRIES LTD., AHMEDABAD -VS - D.C.I.T., CIRCLE-5, AHMEDABAD (PAN : AAACR 9980M) (APPELLANT) (RESPONDENT) I.T.A. NO. 1866/AHD./2010 : ASSESSMENT YEAR : 2007-2008 D.C.I.T., CIRCLE-5, AHMEDABAD -VS- RAJRATNA M ETAL INDUSTRIES LTD., AHMEDABAD (APPELLANT) (RESPONDENT) I.T.A. NO. 792/AHD./2009 : ASSESSMENT YEAR : 1997-1998 D.C.I.T., CIRCLE-5, AHMEDABAD -VS- RAJRATNA METAL INDUSTRIES LTD., AHMEDABAD (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI S.N.SOPARKAR, A.R. WIT H MS.URVASHI SHODHAN DEPARTMENT BY : SHRI K. MADHUSUDA N, SR.D.R O R D E R PER SHRI T.K.SHARMA, J.M. : THESE ARE THREE APPEALS, THE FIRST ONE FILED BY TH E ASSESSEE IS AGAINST THE ORDER DATED 02.03.2010 PASSED BY THE LEARNED COMMISSIONER OF IN COME TAX (APPEALS)-XVI, AHMEDABAD FOR THE ASSESSMENT YEAR 1996-1997 AND THE OTHER TWO FILED BY THE REVENUE ARE AGAINST THE TWO SEPARATE ORDERS DATED 19.03.2010 AN D 22.12.2008 PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-XI FOR THE ASSE SSMENT YEARS 2007-2008 AND 1997- 1998 RESPECTIVELY. AS ALL THESE APPEALS WERE HEARD ON THE SAME DAY AND ARGUED BY THE COMMON REPRESENTATIVE, THEREFORE, THESE ARE DECIDED BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2 ITA NOS.2099,792 & 1866-AHD-2 010 2. FIRST WE TAKE UP THE ASSESSEES APPEAL IN ITA NO.2099/AHD./2010 FOR THE ASSESSMENT YEAR 1996-97. 3. BRIEF FACTS RELATING TO CONTROVERSY INVOLVED IN GROUND NO.1 ARE THAT THE REGULAR ASSESSMENT FOR THE ASSESSMENT YEAR UNDER APPEAL WAS COMPLETED UNDER SECTION 143(3) ON 09.03.1999 DETERMINING TOTAL INCOME AT RS.1,45,84,9 55/-. IN THIS ASSESSMENT ORDER, THE ASSESSING OFFICER TOOK THE VIEW THAT DEPRECIATION I S MANDATORY BEFORE ALLOWING DEDUCTION UNDER SECTION 80HHC/80-I. THE CIT(A)-XIV VIDE ORDER DATED 29.02.2000 DECIDED THE APPEAL IN FAVOUR OF THE ASSESSEE. ON FURTHER APPEAL BY THE REVENUE, THE ITAT A BENCH, AHMEDABAD VIDE ORDER DATED 28.09.2005 IN ITA NO.114 5/AHD/2000 FOR THE ASSESSMENT YEAR 1996-97 IN ASSESSEES OWN CASE HELD THAT WHILE WOR KING OUT THE DEDUCTION UNDER SECTION 80- HHC, SALES TAX AND EXCISE DUTY SHOULD BE EXCLUDED F OLLOWING THE SUDARSHAN CHEMICALS INDUSTRIES LTD. (SUPRA) DECISION, REST OF THE ISSUE S WERE SET ASIDE AND RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER TO CONSIDER THE SAME AFRES H, IN VIEW OF THE SPECIAL BENCH DECISION IN THE CASE OF LALSON ENTERPRISES (SUPRA) AND OTHER APPLICABLE LAW INCLUDING AHMEDABAD SPECIAL BENCH DECISION ON THE ISSUE. THIS IS CONTAI NED IN PARA 4 OF THE TRIBUNALS ORDER DATED 28.09.2005 WHICH IS REPRODUCED AS UNDER: 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERU SED THE RECORD. IN VIEW OF THE ABOVE, WE HOLD THAT WHILE WORKING OUT THE DEDUCTIO N UNDER SECTION 80HHC, SALES-TAX AND EXCISE DUTY SHOULD BE EXCLUDED FOLLOWING THE S UDARSHAN CHEMICALS INDUSTRIES LTD. (SUPRA) DECISION, REST OF THE ISSUES ARE SET ASIDE AND RESTORED BACK TO THE FILE OF THE AO TO CONSIDER THE SAME AFRESH, IN VIEW OF THE SPECIAL BENCH DECISION IN THE CASE OF LALSON ENTERPRISES (SUPRA) AND OTHER APPLICABLE LAW INCLUDING AHMEDABAD SPECIAL BENCH DECISION ON THE ISSUE. 3.1 IN ORDER TO GIVE APPEAL EFFECT TO THE AFORESAID ORDER OF THE TRIBUNAL, THE ASSESSING OFFICER PASSED AN ORDER UNDER SECTION 143(3) READ W ITH SECTION 154 OF THE I.T. ACT DATED 15.10.2007 WHEREIN HE RE-WORKED OUT THE TOTAL INCOM E OF THE ASSESSEE COMPANY AT RS.25,69,847 AS UNDER: BUSINESS INCOME AS PER STATEMENT OF INCOME 17,7 4,61,517 LESS: DEPRECIATION 1,70,56,056 INCOME FROM PROFIT AND GAINS FROM BUSINESS 16,0 4,05,461 ADD: INCOME FROM OTHER SOURCES 84,0 00 GROSS TOTAL INCOME 16,04,89,461 3 ITA NOS.2099,792 & 1866-AHD-2 010 DEDUCTION UNDER CHAPTER VI-A (I) 80 HHC (AS PER WORKING GIVEN IN ANNEXURE-A 11,77,97,249 (II) 80-I 4,01,22,365 15,79,19,614 TOTAL INCOME RS.25,69,847 ROUNDED OFF TO RS.25,69,850 4. AGAINST THE AFORESAID ORDER, THE ASSESSEE PREFER RED AN APPEAL BEFORE THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) WHEREIN, INTER ALIA , ONE OF THE GROUNDS RAISED IS GROUND NO.1, WHICH READS AS UNDER: 1. THAT THE LEARNED ASSESSING OFFICER OUGHT TO H AVE ACCEPTED THE RETURNED INCOME AND NOTES ATTACHED TO THE RETURN OF INCOME AND OUG HT TO HAVE ALLOWED OUR CLAIMS MADE IN THE RETURN OF INCOME AND PLACED DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE ORDER PASSED BY THE LEARNED AO IS (A) AGAINST THE LAW AND NATURAL JUSTICE (B) AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE (C) SUBMISSIONS MADE (D) WITHOUT JURISDICTION (E) AGAINST THE DIRECTIONS OF THE HON'BLE ITAT AND THE GROUNDS OF APPEAL BEFORE THE HON'BLE ITAT AND THEREFORE THE A DDITION/DISALLOWANCES/ALLOWANCES, MADE THEREIN SHOULD BE DELETED IN FULL. 4.1 THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) -XIV, AHMEDABAD DECIDED THE APPEAL OF THE ASSESSEE VIDE ORDER DATED 02.03.2010. AGGRIEVED WITH THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS), THE ASSESSEE I S IN APPEAL BEFORE THE TRIBUNAL ON THE FOLLOWING GROUNDS: 1. THAT THE LEARNED CIT(A) HAS ERRED IN LAW AND FACTS BY NOT ANNULLING THE ORDER PASSED BY THE LEARNED AO AS THE SAME IS WITHOUT JU RISDICTION AND FURTHER IT IS AGAINST THE DIRECTION OF THE HON'BLE ITAT AND THEREFORE TH E LEARNED AO SHOULD BE DIRECTED TO NOT TO MAKE ANY ADJUSTMENT(S) INTO TOTAL INCOME. WITHOUT PREJUDICE TO ABOVE GROUND:- 2. THAT THE LEARNED CIT(A) HAS ERRED IN LAW AND FA CT BY CONFIRMING THE ACTION OF THE LEARNED AO FOR THE GRANTING OF THE DEPRECIATION, N OT CLAIMED BY THE ASSESSEE, WHILE COMPUTING THE DEDUCTION OF CHAPTER VIA OF THE ACT. 3. (A) THAT THE LEARNED CIT (A) HAS ERRED IN LAW AND FACTS BY NOT ALLOWING DEDUCTION OF EXPENSES OF INTEREST AGAINST INTEREST INCOME AN D BY NOT ALLOWING ALL EXPENSES TOWARDS CONVERSION CHARGES INCOME, WHILE COMPUTING THE DEDUCTION U/S.80HHC AND ACCORDINGLY THE LEARNED AO BE DIRECTED TO ALLOW TH E CLAIM AS PER OUR WORKING. 4 ITA NOS.2099,792 & 1866-AHD-2 010 (B) FURTHER, THAT LEARNED CIT(A) HAS NOT GIVEN FIN DING FOR THE GROUND NO.3(B), RELATING TO CORRECT CALCULATION OF CLAIM OF DEDUCT ION U/S.80HHC OF THE ACT. 5. AT THE TIME OF HEARING BEFORE US, ON BEHALF OF T HE ASSESSEE, SHRI S.N.SOPARKAR ALONG WITH MS. URBASHI SODHAN APPEARED AND POINTED OUT TH AT IN THE IMPUGNED ORDER, THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) HAS NOT ADJUDIC ATED THE GROUND NO.1 WHEREIN THE ASSESSEE SPECIFICALLY ALLEGED THAT ASSESSMENT FRAME D IS WITHOUT JURISDICTION. THE COUNSEL OF THE ASSESSEE ALSO PRODUCED THE WRITTEN SUBMISSION D ATED 04.02.2009 WHICH WAS FILED BEFORE THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) ON THE SAME DATE, WHEREIN PARA 1.2 READS AS UNDER: 1 THAT HON'BLE ITAT HAS PASSED THE ORDER U/S.254 OF THE ACT ON 28.9.2005 AND THE ISSUES UNDER CONSIDERATION HAVE BEEN SET ASIDE TO THE FILE OF THE LEARNED AO. WE LEARNT THAT THE ORDER HAS BEEN SERVED BEFORE 31/3/2006 TO THE COMMISSIONER OF INCOME TAX AND THEREAFTER THE LEARNED AO HAS TO PASS THE ORDE R WITHIN NINE MONTHS FROM THE END OF THE MONTH IN WHICH THE ORDER HAS BEEN RECEIVED BY THE LEARNED COMMISSIONER OF INCOME TAX I.E. BY 31/12/2006, AND WHEREAS THE LEA RNED AO HAS PASSED THE ORDER ON 15/10/2007 AND THEREFORE THE LEARNED AO HAS PASSED THE ORDER BEYOND THE TIME LIMIT PRESCRIBED U/S 153(2A) OF THE ACT AND THEREFORE IT IS BAD IN LAW AND THEREFORE IT SHOULD BE QUASHED AND THE DISALLOWANCES/ADDITIONS MADE TH EREIN SHOULD BE DELETED IN FULL. IN THIS REGARD WE RELY ON THE JUDGMENT OF THE HON'BLE DELHI HIGH COURT IN THE CASE CIT VS BHAN TEXTILES (300 ITR 176)(DEL) AND HON'BLE IT AT VISHAKHAPATNAM BENCH IN THE CASE OF RAGHAVA HEALTH CARE LIMITED VS DCIT. GIST OF THE JUDGMENT IS SUBMITTED AS ANNEXURE 2. 5.1 THE COUNSEL OF THE ASSESSEE ALSO RELIED ON THE DECISION OF THE COMMISSIONER OF INCOME-TAX VS- BHAN TEXTILE(P) LTD. REPORTED IN 30 0 ITR 176 (DEL) FOR THE PROPOSITION THAT CIT(A) HAVING REMANDED THE MATTER TO ASSESSING OFFI CER FOR MAKING FRESH ASSESSMENT, IT WAS A CASE OF SETTING ASIDE. THEREFORE, LIMITATION FOR MAKING FRESH ASSESSMENT IS GOVERNED BY SECTION 153(2A) AND NOT SECTION 153(3)(II). 6. ON THE OTHER HAND, SHRI K. MADHUSUDAN, SR.D.R.,A PPEARING ON BEHALF OF THE REVENUE, POINTED OUT THAT CASE OF THE ASSESSEE IS GOVERNED B Y SECTION 153(3)(II) BECAUSE IN THIS CASE THE ASSESSING OFFICER IS REQUIRED TO COMPLY WITH THE FI NDING OR DIRECTION GIVEN BY THE APPELLATE AUTHORITY WITHOUT NECESSARILY DISTURBING THE ASSESS MENT ORDER. HE ACCORDINGLY CONTENDED THAT 5 ITA NOS.2099,792 & 1866-AHD-2 010 THIS PLEA OF THE ASSESSEE BE REJECTED. IN SUPPORT O F THIS, LD. D.R. RELIED ON THE FOLLOWING DECISIONS. I) HON'BLE HIGH COURT OF BOMBAY IN THE CASE OF RIKHABD AS JHAVERCHAND VS- CIT & ANR. REPORTED IN 249 ITR 774(BOM) FOR THE PROPOSITION THAT WHERE TRIBUNAL ONLY DIRECTED THE ASSESSING OFFICER TO VERIFY THE CORRE CTNESS OF A CLAIM, SECTION 153(2A) IS NOT ATTRACTED AND ASSESSMENT WAS NOT BARRED BY LIM ITATION. (II) DECISION OF ITAT, AGRA BENCH IN THE CASE OF SM T. KRISHNA DEVI, LR OF CHANDER KUMAR VS- ACIT REPORTED IN (2004) 90 ITD 641 FOR THE PROPOSITION THAT AN ASSESSMENT IN PURSUANCE OF SPECIFIC DIRECTION OF T HE TRIBUNAL CAN BE MADE AT ANY TIME UNDER SECTION 153(3)(II). (III) DECISION OF HON'BLE MADHYA PRADESH HIGH COURT IN THE CASE OF M.P. RAJYA VAN VIKAS NIGAM LTD. VS- CIT REPORTED IN (2005) 275 ITR 189 (MP) FOR THE PROPOSITION THAT LIMITATION VIS--VIS ASSESSMENT G IVING EFFECT TO APPELLATE ORDER. ONCE THE ASSESSMENT ORDER IS NOT NULLIFIED, DIRECT ION IN THE ORDER OF THE APPELLATE AUTHORITY RELATING TO CLAIM OF INVESTMENT ALLOWANC E REMAINS INTACT. IF ANY ASPECT FALLS WITHIN THE SCOPE AND AMBIT OF SUB-SECTION (2A) OF SECTION 153, THERE IS NO LIMITATION. THUS, BAR OF LIMITATION WOULD NOT COME INTO EFFECT . 6.1 IN A REJOINDER, LD. COUNSEL FOR THE ASSESSEE SU BMITTED THAT VITAL ISSUE IS THAT THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) HAS NOT ADJUDICATED THE GROUND NO.1. THEREFORE, IN THE INTEREST OF JUSTICE, THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) BE SET ASIDE AND HE BE DIRECTED TO DEC IDE THE APPEAL OF THE ASSESSEE AFRESH INCLUDING GROUND NO.1, AFTER GIVING OPPORTUNITY OF BEING HEARD TO BOTH SIDES AND CONSIDERING VARIOUS DECISIONS CITED BEFORE THE TRIBUNAL. 7. HAVING HEARD BOTH THE SIDES, WE HAVE CAREFULLY G ONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. IT IS PERTINENT TO NOTE THAT IN THE GROUNDS OF APPEAL FILED BEFORE THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS), THE ASSESSEE, VIDE GROUND NO.1, CONTESTED THAT ASSESSMENT IS WITHOUT JURISDICTION. IN CONNECTION W ITH THIS GROUND, WRITTEN SUBMISSIONS WERE ALSO FURNISHED, PORTION OF WHICH HAS BEEN REPRODUCE D BY US HEREINABOVE. WE ARE, THEREFORE, OF THE VIEW THAT IT WILL MEET THE ENDS OF JUSTICE, IF THE IMPUGNED ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) IS SET ASIDE AN D HE BE DIRECTED TO DECIDE THE GROUND NO.1, AFTER GIVING OPPORTUNITY OF BEING HEARD TO BO TH THE SIDES AND CONSIDERING THE VARIOUS DECISIONS CITED BEFORE US OR ANY OTHER DECISION WHI CH BOTH THE PARTIES MAY CITE BEFORE HIM. 6 ITA NOS.2099,792 & 1866-AHD-2 010 AFTER DECIDING THE GROUND NO.1, THE LEARNED COMMISS IONER OF INCOME TAX(APPEALS) WILL DECIDE THE REMAINING GROUNDS OF APPEAL, IF REQUIRED . RESULTANTLY, FOR STATISTICAL PURPOSES, THE APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED. 8. NOW WE TAKE UP THE APPEAL OF THE REVENUE IN ITA NO.1866/AHD/2010 FOR THE ASSESSMENT YEAR 2007-08. 9. THE ONLY GROUND RAISED IN THIS APPEAL IS AS UNDE R: 1. THE LD. COMMISSIONER OF INCOME TAX (A)-XI, AHMED ABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE DISALLOWANCE ON ACCOUNT OF D EPRECIATION OF RS.16,33,860/- DUE TO RE-WORKING OF WDV. 10. BRIEF FACTS RELATING TO CONTROVERSY INVOLVED IN THIS GROUND OF APPEAL ARE THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFF ICER NOTICED THAT THE ASSESSEE DID NOT CLAIM DEPRECIATION IN THE ASSESSMENT YEARS 1996-97 AND 1998-99, RESULTING INTO CHANGE IN WDV. THE ASSESSING OFFICER ACCORDINGLY ASKED THE AS SESSEE TO WORK OUT THE AMOUNT OF DEPRECIATION, DEPRECIATION ALLOWABLE, AFTER CONSIDE RING THE DEPRECIATION CLAIM ALLOWED BY THE DEPARTMENT TO THE ASSESSEE IN THE ASSESSMENT YEARS 1996-97 AND 1998-99. THE ASSESSEE FURNISHED THE DETAILS, ACCORDING TO WHICH, DEPRECIA TION ALLOWABLE WORKED OUT TO RS.11,92,04,965/- AS AGAINST RS.12,08,38,824/- CLAI MED BY THE ASSESSEE. THE ASSESSING OFFICER, THEREFORE, DISALLOWED THE EXCESS CLAIM OF DEPRECIATION AMOUNTING TO RS.16,33,860/-. 11. ON APPEAL, IN THE IMPUGNED ORDER, THE LEARNED C OMMISSIONER OF INCOME TAX(APPEALS) DIRECTED THE ASSESSING OFFICER TO ALLO W DEPRECIATION IN CONSONANCE WITH THE ORDER GIVING EFFECT TO THE APPELLATE ORDER IN THE I MMEDIATELY PRECEDING ASSESSMENT YEAR I.E. ASSESSMENT YEAR 2006-2007. 12. AT THE TIME OF HEARING, ON BEHALF OF THE ASSESS EE, SHRI S.N.SOPARKAR, A.R. APPEARED AND CONTENDED THAT THE APPEAL OF THE ASSESSEE FOR T HE ASSESSMENT YEAR 1996-97 IN ITA NO.2099/AHD./2010 IS PENDING. THEREFORE, WDV OF THE CURRENT YEAR WILL DEPEND ON THE OUTCOME OF THE APPEAL FOR THE ASSESSMENT YEAR 1996- 97 AND IN OTHER INTERVENING YEARS. 7 ITA NOS.2099,792 & 1866-AHD-2 010 13. ON THE OTHER HAND, SHRI K. MADHUSUDAN, SR.D.R., APPEARING ON BEHALF OF THE REVENUE, VEHEMENTLY SUPPORTED THE ORDER OF THE LEARNED COMMI SSIONER OF INCOME TAX(APPEALS). HE POINTED OUT THAT FOR THE PURPOSE OF COMPUTING DEPRE CIATION, WDV, AS PER INCOME-TAX RECORD, IS RELEVANT. IN THE IMPUGNED ORDER, THE LEARNED COM MISSIONER OF INCOME TAX(APPEALS) MERELY DIRECTED THE ASSESSING OFFICER TO ALLOW DEPR ECIATION IN CONSONANCE WITH THE ORDER GIVING EFFECT TO THE APPELLATE ORDER IN THE IMMEDIA TELY PRECEDING ASSESSMENT ORDER I.E. 2006- 2007. HE ACCORDINGLY CONTENDED THAT THE VIEW TAKEN BY THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) BE UPHELD. 14. HAVING HEARD BOTH THE SIDES, WE HAVE CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. AS PER THE PROVISIONS CONTAINED IN SECTION 32, DEPRECIATION IS REQUIRED TO BE COMPUTED ON OPENING WDV FOR IMMEDIATELY PRECEDIN G ASSESSMENT YEARS. IN THE IMPUGNED ORDER, THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) DIRECTED THE ASSESSING OFFICER TO ALLOW DEPRECIATION IN CONSONANCE WITH TH E ORDER GIVING EFFECT TO THE APPELLATE ORDER IN THE IMMEDIATELY PRECEDING ASSESSMENT YEAR I.E. A SSESSMENT YEAR 2006-2007. THE LD. D.R. COULD NOT POINT OUT IN WHAT RESPECT THIS DIRECTION OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) IS NOT ACCEPTABLE. WE, THEREFORE, DECL INE TO INTERFERE. RESULTANTLY, THE APPEAL OF THE REVENUE IN ITA NO. 1866/AHD/2010 IS DISMISSED. 15. NOW WE TAKE UP THE REVENUES APPEAL IN ITA NO.7 92/A/2009 FOR THE ASSESSMENT YEAR 1997-1998. VARIOUS GROUNDS RAISED BY THE REVENUE IN THIS APPEAL ARE AS UNDER: 1. THE LD. COMMISSIONER OF INCOME TAX (A) - XI, AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN DIRECTING TO TAKE THE OPENING WDV FOR A. Y.I997-98 ON THE BASIS OF FINAL OUTCOME FOR THE APPELLATE PROCEEDINGS FOR A. Y. 19 96-97 AND ACCORDINGLY DEDUCTION U/S. 80HHC OF THE ACT IS TO BE RECOMPUTED ON ENHAN CED BUSINESS PROFIT 2. THE LD. COMMISSIONER OF INCOME TAX (A)- XI , AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN DIRECTING TO DELETE THE ADDITI ON MADE OF RS.37,98,488/- TO THE BOOK PROFIT U/S.115-JA OF THE ACT. 3. THE LD. COMMISSIONER OF INCOME TAX (A) - XI, A HMEDABAD HAS ERRED IN LAW AND ON FACTS IN DIRECTING TO DELETE THE ADDITIONAL TAX OF RS.3,77,812/- FROM THE COMPUTATION OF THE TOTAL TAX LIABILITY. 8 ITA NOS.2099,792 & 1866-AHD-2 010 16. THE FACTS RELATING TO CONTROVERSY INVOLVED IN G ROUND NOS. 1 AND 2 OF REVENUES APPEAL FOR THE ASSESSMENT YEAR 1997-98 ARE THAT IN THE ASS ESSMENT ORDER THE ASSESSING OFFICER RE- WORKED OUT THE DEPRECIATION, KEEPING IN VIEW THE DE CISION OF ITAT, AHMEDABAD IN ITS ORDER DATED 28.09.2005 FOR THE ASSESSMENT YEAR 1996-97. O N THIS BASIS, THE ASSESSING OFFICER WORKED OUT THE EXCESS DEPRECIATION AT RS.37,98,488/ -. 17. ON APPEAL, IN THE IMPUGNED ORDER, THE LEARNED C OMMISSIONER OF INCOME TAX(APPEALS) DIRECTED THE ASSESSING OFFICER TO TAKE OPENING WDV ON THE BASIS OF FINAL OUTCOME OF APPELLATE PROCEEDINGS FOR THE ASSESSMENT YEAR 1996-97 AND CONSIDER THE FINAL CLOSING WDV OF ASSESSMENT YEAR 1996-97, AS OPENING WDV OF THE ASSESSMENT YEAR 1997-98 AND ACCORDINGLY DEDUCTION UNDER SECTION 80-HHC OF T HE ACT IS TO BE RE-COMPUTED ON THE ENHANCED BUSINESS PROFIT. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 18. AT THE OUTSET, THE LD. COUNSEL, APPEARING ON BE HALF OF THE ASSESSEE, POINTED OUT THAT THERE IS NO INFIRMITY IN THE AFORESAID DIRECTIONS O F THE TRIBUNAL. THEREFORE, THE VIEW TAKEN BY THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) BE UPHELD. 19. ON THE OTHER HAND, THE LD. D.R. COULD NOT CONTR OVERT THE AFORESAID SUBMISSIONS MADE BY THE LD. COUNSEL FOR THE ASSESSEE. 20. WE HAVE CAREFULLY GONE THROUGH THE ORDERS OF TH E AUTHORITIES BELOW. IT IS WELL-SETTLED LAW THAT IN THE CURRENT YEAR, DEPRECIATION IS ALLOW ABLE, AS PER CLOSING WDV OF THE IMMEDIATELY PRECEDING ASSESSMENT YEAR I.E. ASSESSME NT YEAR 1996-97. THE ISSUE REGARDING GRANT OF DEPRECIATION/REOPENING OF ASSESSMENT HAS B EEN RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER VIDE OUR DECISION IN ASSESSEES A PPEAL IN ITA NO.2099/AHD/2010 FOR THE ASSESSMENT YEAR 1996-97( SUPRA ). THE RELIEF CLAIMED BY THE REVENUE IN GROUND NO.2 IS CONSEQUENTIAL TO THE FINAL WORKING OF DEPRECIATION OF THE ASSESSMENT YEAR UNDER APPEAL. WE ARE, THEREFORE, OF THE VIEW THAT THERE IS NO INFIRM ITY IN THE IMPUGNED DIRECTION OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS). HENCE, WE DECL INE TO INTERFERE. GROUND NOS. 1 AND 2 ARE REJECTED. 9 ITA NOS.2099,792 & 1866-AHD-2 010 21. THE FACTS RELATING TO GROUND NO.3 OF REVENUES APPEAL ARE THAT IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER CHARGED ADDITIONAL TAX, THOUG H PRIMA FACIE ADJUSTMENTS WERE ALREADY DELETED BY THE LEARNED COMMISSIONER OF INCOME TAX(A PPEALS). 22. ON APPEAL BEFORE THE LEARNED COMMISSIONER OF IN COME TAX(APPEALS), THE ASSESSEE CONTENDED AS UNDER: THAT THE LEARNED ASSESSING OFFICER HAS ERRED IN L AW AND FACTS BY CHARGING ADDITIONAL TAX OF RS.3,77,812/-, THOUGH THE PRIMA-FACIE ADJUS TMENTS HAS ALREADY BEEN DELETED BY THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) AN D THEREFORE THE LEARNED ASSESSING OFFICER SHOULD BE DIRECTED TO DELETE THE ADDITIONAL TAX LEVIED, WHILE COMPUTING THE TOTAL TAX LIABILITY. IN THIS REGARD WE ARE SUBMITTING HEREWITH THE COPY OF THE ORDER GIVING EFFECT TO LEARNED COMMISSIONER O F INCOME TAX(APPEALS)S ORDER DATED 14/6/2002 AS ANNEXURE 2. 23. ON VERIFICATION, THE LEARNED COMMISSIONER OF IN COME TAX(APPEALS) FOUND THAT IN THE ORDER GIVING EFFECT TO CIT(A)S ORDER DATED 14/6/ 2002, PRIMA FACIE ADJUSTMENTS WERE ALREADY DELETED AND CONSEQUENTIAL ADDITIONAL TAX WA S ALSO DELETED. ON THIS BASIS, HE DIRECTED THE ASSESSING OFFICER TO DELETE THE ADDITIONAL TAX OF RS.3,77,812/- FROM THE COMPUTATION OF TOTAL TAX LIABILITY. AGGRIEVED, THE REVENUE IS IN A PPEAL. 24. AT THE TIME OF HEARING, THE LD. D.R., APPEARING ON BEHALF OF THE REVENUE, COULD NOT PINPOINT HOW THE AFORESAID DIRECTION OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) IS NOT ACCEPTABLE. WE, THEREFORE, INCLINE TO UPHOLD THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) DIRECTING THE ASSESSING OFFICER TO DELETE THE ADDITIONAL TAX OF RS.3,77,812/- FROM THE COMPUTATION OF TOTAL TAX LIA BILITY. HENCE, THIS GROUND OF APPEAL IS ALSO REJECTED. RESULTANTLY, THIS APPEAL OF THE REVENUE I S ALSO DISMISSED. 25. IN THE RESULT, FOR STATISTICAL PURPOSES, THE AP PEAL FILED BY THE ASSESSEE IS TREATED AS ALLOWED WHEREAS THE APPEALS FILED BY THE REVENUE AR E DISMISSED. THE ORDER PRONOUNCED IN THE COURT ON 15.04.2011. SD/- SD/- (N.S.SAINI) (T.K. SHARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 15/04/2011 10 ITA NOS.2099,792 & 1866-AHD-2 010 COPY OF THE ORDER IS FORWARDED TO : 1) THE ASSESSEE 2) THE DEPARTMENT. 3) CIT(A.) CONCERNED, 4) CIT CONCERNED, 5) D.R., ITAT, AHMEDABAD. TRUE COPY BY ORDER DEPUTY REGISTRAR, ITAT, AHMEDABAD TALUKDAR/SR.P.S.