DCIT Corporate Circle 6(2), CHENNAI V. Sindya Infrastructure Development Co. Pvt Ltd., CHENNAI

ITA 918/CHNY/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 5724 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-10-2019
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 16-03-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S BHARATH
• Keywords: Depreciation; Unabsorbed depreciation; Set aside
• Section: 37

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . . . , ! ' , $ '% BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ./ ITA NO.918/CHNY/2018 & C.O. NO.91/CHNY/2019 (IN I.T.A. NO.918/CHNY/2018) ( )( / ASSESSMENT YEAR : 2013-14 THE DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE - 6(2), CHENNAI - 600 034. V. M/S SINDYA INFRASTRUCTURE DEVELOPMENT CO. PVT. LTD., 4 TH FLOOR, LAKSHMI BHAVAN, NO.609, SUNDARAM AVENUE (NEAR KANNAMMAI BUILDING), THOUSAND LIGHTS, CHENNAI - 600 006. PAN : AAGCS 6759 M (+,/ APPELLANT) (RESPONDENT / CROSS-OBJECTOR) +, - . / APPELLANT BY : SHRI S. BHARATH, CIT /0+, - . / RESPONDENT BY : SH. SAROJ KUMAR PARIDA, ADVOCAT E 1 - 2$ / DATE OF HEARING : 31.07.2019 34) - 2$ / DATE OF PRONOUNCEMENT : 01.10.2019 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER : THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) -15, CHENNAI, DATED 30.11.2017 AND PERTAINS TO ASSESSMENT YEAR 2013-14. THE ASSES SEE HAS FILED CROSS- OBJECTION AGAINST THE VERY SAME ORDER OF THE CIT(AP PEALS). THEREFORE, 2 I.T.A. NO.918/CHNY/18 C.O. NO.91/CHNY/18 WE HEARD THE APPEAL AND THE CROSS-OBJECTION TOGETHE R AND DISPOSING THE SAME BY THIS COMMON ORDER. 2. THERE WAS A DELAY OF 6 DAYS IN FILING THE APPEAL BY THE REVENUE. THE REVENUE HAS FILED A PETITION FOR CONDONATION OF DELAY. WE HAVE HEARD THE LD. DEPARTMENTAL REPRESENTATIVE AND THE L D.COUNSEL FOR THE ASSESSEE. WE FIND THAT THERE WAS SUFFICIENT CAUSE FOR NOT FILING THE APPEAL BEFORE THE STIPULATED TIME. THEREFORE, WE C ONDONE THE DELAY AND ADMIT THE APPEAL. 3. SHRI S. BHARATH, THE LD. DEPARTMENTAL REPRESENTA TIVE, SUBMITTED THAT THE CIT(APPEALS) DIRECTED THE ASSESSING OFFICE R TO EXAMINE THE ASSESSEES CLAIM WITH REGARD TO SET OFF OF BROUGHT FORWARD BUSINESS LOSSES AND UNABSORBED DEPRECIATION. ACCORDING TO T HE LD. D.R., UNDER SECTION 251(1)(A) OF THE INCOME-TAX ACT, 1961 (IN S HORT 'THE ACT'), THE CIT(APPEALS) HAS NO POWER TO SET ASIDE THE MATTER T O THE FILE OF THE ASSESSING OFFICER. THE CIT(APPEALS) IS EXPECTED TO DISPOSE OF THE MATTER ONE WAY OR OTHER, IF NECESSARY, BY CALLING F OR REMAND REPORT. THEREFORE, ACCORDING TO THE LD. D.R., THE CIT(APPEA LS) IS NOT JUSTIFIED IN DIRECTING THE ASSESSING OFFICER TO EXAMINE THE CLAI M ON THE BASIS OF THE MATERIAL AVAILABLE ON RECORD. 4. WE HEARD SH. SAROJ KUMAR PARIDA, THE LD.COUNSEL FOR THE ASSESSEE ALSO. ACCORDING TO THE LD. COUNSEL, THE C IT(APPEALS) DIRECTED 3 I.T.A. NO.918/CHNY/18 C.O. NO.91/CHNY/18 THE ASSESSING OFFICER TO EXAMINE THE ASSESSEES CLA IM AND TO ALLOW SET OFF OF BROUGHT FORWARD BUSINESS LOSSES AND UNABSORB ED DEPRECIATION ON THE BASIS OF THE MATERIAL AVAILABLE ON RECORD. REF ERRING TO THE CROSS- OBJECTION, THE LD.COUNSEL SUBMITTED THAT THE ASSESS EE HAS ADVANCED ITS OWN FUND TO THE GROUP CONCERNS, THEREFORE, THE CIT( APPEALS) IS NOT JUSTIFIED IN CONFIRMING THE DISALLOWANCE OF INTERES T PROPORTIONATELY TO THE EXTENT OF 5.49 CRORES. 5. HAVING HEARD THE LD. D.R. AND THE LD.COUNSEL FOR THE ASSESSEE, THIS TRIBUNAL FINDS THAT THE CIT(APPEALS) HAS NO PO WER TO SET ASIDE THE ASSESSMENT TO THE FILE OF THE ASSESSING OFFICER. T HE CIT(APPEALS) HAVING THE POWER COTERMINOUS WITH THAT OF THE ASSESSING OF FICER, IS EXPECTED TO EXAMINE THE MATTER HIMSELF OR HE MAY DECIDE THE MAT TER BY CALLING FOR REMAND REPORT FROM THE ASSESSING OFFICER, IF NECESS ARY. IN THIS CASE, THE CIT(APPEALS) DIRECTED THE ASSESSING OFFICER TO EXAM INE THE ASSESSEES CLAIM ON THE BASIS OF THE MATERIAL AVAILABLE ON REC ORD AND TO ALLOW SET OFF OF BROUGHT FORWARD BUSINESS LOSSES AND UNABSORBED D EPRECIATION. THIS ACTION OF THE CIT(APPEALS) IS TANTAMOUNT TO SETTING ASIDE TO ASSESSING OFFICER. SINCE SUCH A POWER IS NOT AVAILABLE WITH THE CIT(APPEALS), THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT HE OUGHT NOT TO HAVE DIRECTED THE ASSESSING OFFICER TO EXAMINE THE MATTER. HOWEV ER, THE FACT REMAINS THAT THE ISSUE OF SET OFF OF BROUGHT FORWARD LOSSES AND UNABSORBED DEPRECIATION NEEDS TO BE RE-EXAMINED BY THE ASSESSI NG OFFICER. 4 I.T.A. NO.918/CHNY/18 C.O. NO.91/CHNY/18 THEREFORE, IN EXERCISE OF THE POWER CONFERRED ON TH IS TRIBUNAL, THE ISSUE OF CLAIM OF SET OFF OF BROUGHT FORWARD BUSINESS LOS SES AND UNABSORBED DEPRECIATION IS REMITTED BACK TO THE FILE OF THE AS SESSING OFFICER. THE ASSESSING OFFICER SHALL RE-EXAMINE THE MATTER ON TH E BASIS OF THE MATERIAL AVAILABLE ON RECORD AND THE MATERIAL THAT MAY BE FI LED BY THE ASSESSEE AND THEREAFTER DECIDE THE ISSUE AFRESH IN ACCORDANC E WITH LAW, AFTER GIVING A REASONABLE OPPORTUNITY TO THE ASSESSEE. 6. NOW COMING TO THE CROSS-OBJECTION OF THE ASSESSE E, THE CIT(APPEALS) RESTRICTED THE DISALLOWANCE OF INTERES T TO THE EXTENT OF 5.49 CRORES INSTEAD OF 10.23 CRORES. THE CIT(APPEALS) ALSO FOUND THAT THE ASSESSEE IS NOT ELIGIBLE FOR DEDUCTION UNDER SECTIO N 37 OF THE ACT. NOW THE ASSESSEE CLAIMS THAT ITS OWN FUND WAS AVAILABLE TO ADVANCE TO THE GROUP CONCERNS. THEREFORE, THE CIT(APPEALS) OUGHT NOT TO HAVE RESTRICTED THE DISALLOWANCE PROPORTIONATELY. THE A VAILABILITY OF THE ASSESSEES OWN FUND WAS NOT BROUGHT ON RECORD BY TH E ASSESSING OFFICER. NO MATERIAL IS FILED BY THE ASSESSEE EVEN BEFORE TH IS TRIBUNAL. THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE MATTER NEEDS TO BE RE- EXAMINED BY THE ASSESSING OFFICER AND BRING ON RECO RD THE AVAILABILITY OF OWN FUNDS AND BORROWED FUNDS OF THE ASSESSEE. ACCO RDINGLY, ORDERS OF BOTH THE AUTHORITIES BELOW ARE SET ASIDE AND THE IS SUE OF DISALLOWANCE UNDER SECTION 37 OF THE ACT AND PROPORTIONATE DISAL LOWANCE OF INTEREST IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER 5 I.T.A. NO.918/CHNY/18 C.O. NO.91/CHNY/18 SHALL RE-EXAMINE THE MATTER IN THE LIGHT OF THE MAT ERIAL THAT MAY BE FILED BY THE ASSESSEE AND BRING ON RECORD THE AVAILABILITY O F OWN FUNDS OF THE ASSESSEE AND THEREAFTER DECIDE THE ISSUE AFRESH IN ACCORDANCE WITH LAW, AFTER GIVING A REASONABLE OPPORTUNITY TO THE ASSESS EE. 7. IN THE RESULT, BOTH THE APPEAL OF THE REVENUE AN D THE CROSS- OBJECTION OF THE ASSESSEE ARE ALLOWED FOR STATISTIC AL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 1 ST OCTOBER, 2019 AT CHENNAI. SD/- SD/- ( ! ' ) ( . . . ) (INTURI RAMA RAO) (N.R.S. GANESAN) $ / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 6 /DATED, THE 1 ST OCTOBER, 2019. KRI. - /278 98)2 /COPY TO: 1. +, /APPELLANT 2. /0+, /RESPONDENT 3. 1 :2 () /CIT(A)-15, CHENNAI-34 4. PRINCIPAL CIT- 6, CHENNAI 5. 8; /2 /DR 6. <( = /GF.