Lotte India Corporation Limited, CHENNAI V. ACIT, CHENNAI

ITA 884/CHNY/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 57796 (ITAT-CHENNAI)
• Duration Of Justice: 7 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-01-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 11-01-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 13-05-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: B RAMANA KUMAR
• Keywords: Revision of order; Set aside
• Section: 143(3); 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, JUDICIAL MEMBER I.T.A. NO. 884/MDS/2011 (ASSESSMENT YEAR : 2006-07) LOTTEE INDIA CORPORATION LIMITED POST BOX NO. 702, MURUGESAN COMPLEX SECOND FLOOR, NEW NO. 84, GREAMS ROAD, THOUSAND LIGHTS CHENNAI 600 006. PAN : AAACP 1916 F (APPELLANT) VS . THE A.C.I.T COMPANY CIRCLE WARD II(4), CHENNAI (RESPONDENT) APPELLANT BY : SHRI B. RAMANA KUMAR , C.A RESPONDENT BY : SHRI SHAJI P. JA COB, SR. DR. DATE OF HEARING : 11.1.2012 DATE OF PRONOUNCEMENT : 11.1.2012 O R D E R PER N.S. SAINI, ACCOUNTANT MEMBER : THIS IS AN APPEAL FILED BY ASSESSEE FOR THE ASSESS MENT YEAR 2006-2007 AGAINST THE ORDER DATED 15.02.2011 OF COM MISSIONER OF INCOME TAX, CHENNAI. I.T.A. NO. 884/MDS/2011 2 2. AT THE OUTSET, THE LD. A.R. SHRI B. RAMANA KUMAR ARGUED GROUND NO. 2 OF THE APPEAL WHICH READS AS UNDER: 2 . ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE , THE CIT FAILED TO APPRECIATE THAT THE SHOW CAUSE NOTICE INTENDING TO ASSUME JURISDICTION U/S 263 OF THE ACT CANNOT BE ISSUED FOR ASSESSMENT YEAR 2006-07 IN AS MUCH THE CONDITIONS LAID BY SECTION 72A OF THE ACT READ WITH RULE 9C OF THE INCOME-TAX RULES, 1962 CANNOT B E EXAMINED FOR COMPLIANCE IN ASSESSMENT YEAR 2006-07. THE SAID NOTICE, BEING PREMATURE IS THEREFORE, INFRUCTUOUS AND CONSEQUENTLY THE PROCEEDINGS AND OR DER U/S 263 IS NULL AND VOID AND LIABLE TO BE QUASHED. THE LD. CIT RELYING ON PRECEDENTS WHICH ARE DISTINGUISH ABLE ON FACTS, HAS ERRONEOUSLY ASSUMED JURISDICTION IN ASSESSMENT YEAR 2006-07. 3. THE LD. A.R. SUBMITTED THAT THE ASSESSEE HAD SET OFF AN AMOUNT OF RS. 5,55,72,223/- BEING THE UNABSORBED D EPRECIATION OF M/S CONFECTIONARY SPECIALTIES LIMITED FROM THE INCO ME OF M/S LOTTE INDIA CORPORATION LIMITED AS PER THE PROVISIONS OF SECTION 72A OF THE INCOME-TAX ACT, 1961. THE SAME WAS ALLOWED BY THE ASSESSING I.T.A. NO. 884/MDS/2011 3 OFFICER IN AN ORDER PASSED U/S 143(3) DATED 19.12.2 008. HE FURTHER SUBMITTED THAT THE LD. CIT BECAUSE OF AN AUDIT OBJE CTION WHICH WAS STATED BY THE AUDITORS OF THE COMPANY IN THE AUDIT REPORT ON THE STATEMENT OF ACCOUNTS OF THE ASSESSEE COMPANY THAT SINCE THE INSTALLED CAPACITY IS NOT ASCERTAINABLE BY THE MANA GEMENT AS DISCLOSED IN THE NOTES OF ACCOUNT, THE CONDITIONS R EGARDING ACHIEVEMENT OF 50% PRODUCTION IN RESPECT OF AMALGAM ATING UNDERTAKING DOES NOT APPEAR TO HAVE BEEN FULFILLED. IN VIEW OF THIS, THE LD. CIT WAS OF THE VIEW THAT THE ASSESSMENT COM PLETED BY THE ASSESSING OFFICER WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. THEREFORE, THE LD. CIT SET ASIDE THE ORDER PASSED BY THE ASSESSING OFFICER ON 19.12.2008 AND DIRECTED HI M TO PASS A FRESH ORDER IN ACCORDANCE WITH LAW AFTER EXAMINING THE PR OVISIONS OF SECTION 72A OF THE ACT AND AFTER ALLOWING SUFFICIEN T OPPORTUNITY OF HEARING TO THE ASSESSEE. 4. THE LD. A.R. SUBMITTED THAT SINCE THE ORDER U/S 263 OF THE AT WAS PASSED BY THE LD. CIT ONLY ON THE BASIS OF AUDI T OBJECTION, THE SAME WAS NOT VALID IN THE EYE OF LAW. HE SUBMITTED THAT DURING THE I.T.A. NO. 884/MDS/2011 4 COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFF ICER HAD EXAMINED AND ALLOWED THE SET OFF OF LOSS TO THE ASS ESSEE. 5. ON THE OTHER HAND, THE LD. D.R. SHRI SHAJI P. JA COB ARGUED THAT IT WILL BE SEEN FROM THE ASSESSMENT ORDER PLACED ON RECORD THAT THERE IS ABSOLUTELY NO DISCUSSION WHATSOEVER ON ANY OF THE ISSUES OR POINTS BY THE ASSESSING OFFICER AND INCOME RETURNED BY THE ASSESSEE WAS ACCEPTED AS SUCH BY THE ASSESSING OFFICER. THU S, FROM THIS IT IS CLEAR THAT THE ASSESSING OFFICER DID NOT GO INTO TH E ISSUE OF APPLICABILITY OF SECTION 72A AT ALL AND CLAIMS MADE BY THE ASSESSEE HAVE BEEN ACCEPTED AS SUCH. IT WAS A SETTLED POSIT ION OF LAW THAT IF THE ASSESSING OFFICER DID NOT MAKE ANY ENQUIRIES OR INVESTIGATION AND ACCEPTED CLAIMS MADE BY THE ASSESSEE, SUCH AN O RDER PASSED BY HIM WAS CLEARLY ERRONEOUS AND PREJUDICIAL TO THE IN TEREST OF THE REVENUE WARRANTING INTERVENTION OF THE LD. CIT U/S 263 OF THE ACT. HE ALSO RELIED ON THE DECISION OF THE HON'BLE JURIS DICTIONAL HIGH COURT IN THE CASE OF INDIAN TEXTILES VS. CIT [1986] 157 ITR 112 [MAD] AND ADDL. CIT VS. MUKUR CORPN [1978 111 ITR 312 [GU J] WHICH WAS RELIED ON BY THE LD. CIT IN HIS ORDER. I.T.A. NO. 884/MDS/2011 5 6. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERU SING THE RELEVANT MATERIAL ON RECORD, WE FIND THAT THE LD. C IT HAS STATED IN HIS ORDER AT PAGE 2 THAT THERE WAS NO DISCUSSION WH ATSOEVER ON ANY ISSUE OR POINT BY THE ASSESSING OFFICER AND THE RET URNED INCOME OF THE ASSESSEE WAS ACCEPTED AS SUCH BY HIM. ON A QUE RY BY THE BENCH THAT WHETHER ANY ENQUIRY WAS MADE BY THE ASSESSING OFFICER FROM THE ASSESSEE ON THE ISSUE OF SET OFF OF LOSS U/S 72 A OF THE ACT AND IN RESPONSE TO THE SAME WHETHER THE ASSESSEE FILED ANY REPLY TO THE ASSESSING OFFICER, THE LD. A.R. FOR THE ASSESSEE CO ULD NOT PRODUCE ANY EVIDENCE TO SHOW THAT SUCH AN ENQUIRY WAS MADE BY THE ASSESSING OFFICER AND THE ASSESSEE HAD FILED HIS RE PLY TO THE SAME AND AFTER TAKING INTO CONSIDERATION THE SAME, THE A SSESSING OFFICER HAD MADE THE ASSESSMENT. FURTHER, FROM THE ASSESSM ENT ORDER ALSO, WE FIND THAT THERE IS NO DISCUSSION IN THE ASSESSME NT ORDER BY THE ASSESSING OFFICER REGARDING THE SET OFF OF LOSS U/S 72A OF THE ACT. IN THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE, IN O UR CONSIDERED OPINION, THERE IS NO MISTAKE IN THE ORDER OF THE LD . CIT WHICH CALLS FOR OUR INTERFERENCE. ACCORDINGLY, THE SAME IS CON FIRMED AND THE I.T.A. NO. 884/MDS/2011 6 GROUND OF APPEAL OF THE ASSESSEE IS DISMISSED. NO OTHER POINT OR WAS ARGUED OR PRESSED BY THE LD. A.R. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS MISSED. ORDER PRONOUNCED IN THE COURT ON 11 TH JANUARY, 2012. SD/- SD/- (GEORGE MATHAN) (N.S. SAI NI) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 11 TH JANUARY, 2012. VL COPY TO: (1) APPELLANT (2) RESPONDENT (3) CIT(A), CHENNAI (4) CIT, CHENNAI (5) D.R. (6) GUARD FILE