HSM India Pvt. Ltd., Hyd (formerly known as HSM India Ltd.,), Hyderabad V. ITO, Ward-16(1), Hyd, Hyderabad

ITA 819/HYD/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 6056 (ITAT-HYDERABAD)
• Duration Of Justice: 9 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-03-2017
• Appeal Filed By: Assessee
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 01-06-2016
• Court: TRIBUNAL
• Department Lawyers: V SREEKAR
• Assessee Lawyers: A V RAGHURAM
• Keywords: Reopening of assessment; Depreciation
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B (SMC), HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER I.T.A. NO. 819/HYD/2016 ASSESSMENT YEAR: 2005-06 M/S. HSM INDIA PVT. LTD., (FORMERLY KNOWN AS M/S. HSM INDIA LTD/ M/S. MAHENDRA INFRA VENTURES LTD/ M/S. MAHENDRA INFO SOLUTIONS & INDUSTRIES LTD.,) HYDERABAD [PAN: AABCM3642A] VS INCOME TAX OFFICER, WARD-16(1), HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI A.V. RAGHU RAM, AR FOR REVENUE : SHRI V. SREEKAR, DR DATE OF HEARING : 15-03-2017 DATE OF PRONOUNCEMENT : 22-03-2017 O R D E R THIS IS AN APPEAL BY ASSESSEE AGAINST THE ORDER OF TH E COMMISSIONER OF INCOME TAX (APPEALS)-4, HYDERABAD D ATED 18-03-2016. ASSESSEE HAS RAISED THREE GROUNDS MAINL Y STATING THAT LD.CIT(A) HAS NOT CONSIDERED THE REVISED GROUNDS FILED AND DISMISSED THE ASSESSEES GROUNDS WITHOUT CONSIDERING THE SAME. 2. BRIEFLY STATED, ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUFACTURE OF TEXTILES AND SOFTWARE DEVELOPMENT. AT THE RELEVANT POINT OF TIME WHEN THE ASSESSMENT WAS COMPLETED, ASSESS EE WAS DOING BUSINESS IN THE NAME AND STYLE OF M/S. MAHENDR A INFO I.T.A. NO. 819/HYD/2016 :- 2 - : SOLUTIONS AND INDUSTRIES LTD. SUBSEQUENTLY, ASSESSEE H AS CHANGED ITS NAME TO MAHENDRA INFRA VENTURES LTD., BY A FRESH CE RTIFICATE OF INCORPORATION CONSEQUENT UPON CHANGE OF NAME W.E.F. 0 5-09-2013. SUBSEQUENTLY, VIDE ORDER DT. 06-04-2015, ASSESSEES N AME WAS FURTHER CHANGED TO HSM INDIA LTD., CONSEQUENT UPON CONV ERSION FROM PUBLIC COMPANY TO PRIVATE COMPANY. THESE CHANG ES HAVE NOT BEEN NOTICED BY THE LD.CIT(A) AND THE ORDER WAS PASSED DT. 18-03- 2016 IN THE OLD NAME OF M/S. MAHENDRA INFO SOLUTIONS AND INDUSTRIES LTD. ASSESSEE ALSO HAS NOT INTIMATED THE CHA NGES OF NAME TO LD.CIT(A). EVEN BEFORE THIS FORUM, THE APPEAL WAS FILED WITH THE OLD NAME AND WHEN IT WAS POINTED OUT BY REGI STRY, ASSESSEE FILED REVISED FORM-36 IN THE NAME OF HSM IN DIA PVT. LTD. 3. THE MAIN CONTENTION OF ASSESSEE BEFORE THE CIT(A) I N THE ORIGINAL GROUNDS RAISED IS WITH REFERENCE TO ASSESSME NT ORDER WHICH IS CONTENDED TO BE ARBITRARY, AGAINST LAW. HOWEV ER, IN THE WRITTEN SUBMISSIONS FILED WHICH ARE EXTRACTED BY THE CI T(A) IN PARA 3.2, ASSESSEE HAS RAISED SPECIFIC GROUNDS OF 1 & 2. GROUND NO. 1 PERTAINS TO REOPENING OF ASSESSMENT AND GROUND NO. 2 PERTAINS TO DISALLOWANCE OF DEPRECIATION. AS SEEN FROM THE ORDER OF THE CIT(A), CIT(A) REJECTED THE ISSUE NO.1 ON THE REASON THAT ASS ESSEE HAS NOT RAISED THE GROUND AND WITH REFERENCE TO GROUND NO.2, THE CIT(A) CONCURRED WITH THE FINDINGS OF THE AO. 4. ASSESSEES GROUNDS BEFORE THIS FORUM IS THAT LD.CI T(A) OUGHT TO HAVE CONSIDERED THE GROUNDS WITH RESPECT TO REOPENIN G AND ALSO ON MERITS OF ADDITION MADE. I.T.A. NO. 819/HYD/2016 :- 3 - : 5. LD. COUNSEL SUBMITTED THAT THERE WAS AN ORDER U/S. 14 3(3) ON 03-12-2007 IN WHICH ASSESSEE WAS ALLOWED DEPRECI ATION. BUT SUBSEQUENTLY, ASSESSMENT WAS REOPENED (WITHIN FOUR Y EARS) FOR DISALLOWING THE DEPRECIATION CLAIM TO AN EXTENT OF RS. 7,65,637/- ON THE REASON THAT THE SAID ASSETS WERE NOT PUT TO USE DU RING THE YEAR. ACCORDINGLY, ASSESSEE HAS RAISED THE GROUNDS BEFORE THE CIT(A). SINCE ASSESSEE DID NOT RAISE PROPER GROUNDS IN THE APPEAL FILED BEFORE THE CIT(A), REVISED GROUNDS WERE FURNIS HED ALONG WITH WRITTEN SUBMISSIONS WHICH WERE EXTRACTED BY THE LD.CIT(A ) IN PARA 3.2. SINCE THE SPECIFIC GROUND WAS RAISED ON THE RE ASON OF REOPENING, CIT(A) OUGHT TO HAVE ADJUDICATED THE ISSUE. 6. LD.DR HOWEVER, RELIED ON THE ORDERS OF THE CIT(A) TO SUBMIT THAT ASSESSEE HAS NOT FILED GROUNDS IN THE ORIGINAL A PPEAL ON THE ISSUE OF REOPENING AND ACCORDINGLY, THE ORDER OF THE CIT(A) IS TO BE UPHELD. 7. I HAVE CONSIDERED THE RIVAL CONTENTIONS AND PERUSED THE ORDER OF THE CIT(A). IT IS A FACT THAT AN ORDER U/S. 143(3) WAS PASSED ORIGINALLY ALLOWING ASSESSEE THE CLAIM OF DEPRECIATIO N. SUBSEQUENTLY, THE ASSESSMENT WAS REOPENED. THE REASON S FOR REOPENING ARE NOT COMMUNICATED TO ASSESSEE, AS WAS IN FORMED DURING THE PROCEEDINGS, BUT ORDER OF AO IN PARA 2 I NDICATES THAT THE REASON FOR REOPENING IS THAT ASSESSEE BEING A TRADE R AND HAVING NO MANUFACTURING ACTIVITY DURING THE YEAR, THE CLAIM O F DEPRECIATION CANNOT BE ALLOWED. HOWEVER, ACTUAL REASON S FOR REOPENING HAVE NOT BEEN PLACED ON RECORD TO EXAMINE THE CONTENTIONS. IT IS ALSO TRUE THAT ASSESSEE FILED WRITTEN SUBMISSIONS IN WHICH REVISED GROUNDS WERE SPECIFICALLY MENTIONED , WHICH WERE I.T.A. NO. 819/HYD/2016 :- 4 - : EXTRACTED BY THE CIT(A) IN PARA 3.2 OF THE ORDER. HAVI NG RECORDED THE SAME IN THE ORDER, IT IS INCUMBENT ON THE LD.CIT(A) TO ADJUDICATE THEM. AS SEEN FROM THE ORDER OF CIT(A) REJ ECTED THE CONTENTIONS ON THE REASON THAT THERE IS NO GROUND WITH R EGARD TO THIS. I AM OF THE OPINION THAT ASSESSEES CONTENTIONS SH OULD HAVE BEEN ADJUDICATED ON MERITS. FOR THIS REASON, I HEREBY SET ASIDE THE ORDER OF THE CIT(A) AND RESTORE THE APPEAL TO THE FILE O F CIT(A) TO ADJUDICATE ON THE ISSUES CONTESTED AFRESH. ASSESSEE SHO ULD BE GIVEN DUE OPPORTUNITY AND TO FILE FRESH/REVISED GROUN DS OF APPEAL, IF REQUIRED AND ALSO TO MAKE SUBMISSIONS ON THE ISS UE WHICH ARE CONTESTED. WITH THESE OBSERVATIONS, THE ORDER OF THE CIT (A) IS SET ASIDE AND THE APPEAL IS RESTORED TO THE FILE OF CIT(A). 8. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED FOR S TATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND MARCH, 2017 SD/- (B. RAMAKOTAIAH) ACCOUNTANT MEMBER HYDERABAD, DATED 22 ND MARCH, 2017 TNMM I.T.A. NO. 819/HYD/2016 :- 5 - : COPY TO : 1. M/S. HSM INDIA PVT. LTD., HYDERABAD. C/O. A.V. RAGHU RAM, ADVOCATE, FLAT NO. 610, 6 TH FLOOR, BABUKHAN ESTATE, BASHEERBAGH, HYDERABAD. 2. THE INCOME TAX OFFICER, WARD-16(1), HYDERABAD. 3. COMMISSIONER OF INCOME TAX(APPEALS)-4, HYDERABAD . 4. THE PR.COMMISSIONER OF INCOME TAX-6, HYDERABAD. 5. D.R. ITAT, HYDERABAD. 6. GUARD FILE.