Venkateswara Crushing and Mining Company, Secunderabad, Hyderabad V. ACIT, Circle-10(1), Hyderabad, Hyderabad

ITA 934/HYD/2017

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 7545 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 7 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-01-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB-B
• Next Hearing Date: 12-12-2019
• Assessment Year: 2007-2008
• Appeal Filed On: 29-05-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: NILANJAN DEY
• Assessee Lawyers: K SRIRAM
• Keywords: Depreciation; Opportunity of being heard; Condonation of delay
• Section: 143(3); 143(1); 72

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B - SMC , HYDERABAD BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ITA NO. 934 /HYD/20 17 ASSESSMENT YEAR: 20 07 - 08 M/S. VENKATESWARA CRUSHING AND MINING CO., SECUNDERABAD. PAN: AAGFV 1201 N VS. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE - 10(1), HYDERABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY: SRI K. SRIRAM REVENUE BY: SRI NILANJAN DEY, DR DATE OF HEARING: 12/12/2019 DATE OF PRONOUNCEMENT: 16 /01/2020 ORDER THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A) - 6, HYDERABAD IN APPEAL NO.0439/14 - 15/CIT(A) - 6/16 - 17, DATED 01/12/2016 PASSED U/S. 143(3) R.W.S 250(6) OF THE ACT FOR THE A.Y. 2007 - 08. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS IN HIS APPEAL: 1. THE ORDER OF THE LD. CIT(A) - 6, DATED 01/12/2016 IS CONTRARY TO LAW AND TO FACTS. 2. THE LD. CIT(A) ERRED IN PASSING AN ORDER DENYING THE NORMAL DEPRECIATION CLAIM ON PURCHASE OF CRUSHER PLANT AND RELATED ASSETS, STATING THE ACTUAL COST OF SAID PLANT AND MACHINERY IS UNSUBSTANTIATED DEPOSIT NECESSARY SUBMISSIONS IN THIS REGARD AT THE TIME OF ASSESSMENT AND / OR APPEAL PROCEEDINGS. 2 3. THE LD. CIT(A) ERRED IN PASSING AN ORDER BY ASSESSING THE BUSINESS LOSS AT RS. 11,62,330/ - INSTEAD OF RS. 22,12,230/ - DUE TO DENIAL OF NORMAL DEPRECIATION CLAIM OF RS. 10,50,000/ - . 4. THE LD. CIT(A) ERRED IN PA SSING AN ORDER BY SIMPLY STATING THAT THE ASSESSEE FAILED TO EXPLAIN THE SOURCES OF CREDITS TO PARTNERS CAPITAL ACCOUNT, IGNORING THE SUBMISSIONS MADE IN REGARD AT THE TIME OF ASSESSMENT ITSELF. 5. THE APPELLANT CRAVES LEADS TO ADD, AMEND, OR ALTER ANY OF THE AFORESAID GROUNDS AS MAY RAISE DURING THE COURSE OF PROCEEDINGS IN THIS REGARD. 3 . AT THE OUTSET, IT IS OBSERVED FROM THE RECORD THAT THERE IS A DELAY OF 72 DAYS IN FILING THE APPEAL BEFORE THE TRIBUNAL. IN THIS REGARD, THE ASSESSEE HAD SUBMITTED AN AFFIDAVIT SEEKING CONDONATION OF DELAY WHEREIN THE REASONS FOR NOT FILING THE APPEAL WITHIN THE PRESCRIBED TIME LIMIT WAS EXPLAINED. FOR REFERENCE, THE RELEVANT PORTIONS FROM THE AFFIDAVIT IS EXTRACTED HEREIN BELOW: - THE ORDER OF THE CIT (APPEALS) - 6 ABOVE REFERRED, HYDERABAD DATED 1.12.2016 WAS DELIVERED AT THE OFFICE OF THE ASSESSEE ON 17.01.2017, AND WAS UNFORTUNATELY DELIVERED/ACCEPTED TO/BY THE OFFICE ATTENDER OF THE ASSESSEE. THE SAID ORDER WAS PLACED IN A DRAW A T THE ASSESSEE'S OFFICE AND NOT INTIMATED TO THE PARTNERS, NOR INTIMATED TO THE OFFICE IN CHARGE ACCOUNTANT OR ANY OF THE CONCERNED RESPONSIBLE PERSONS. POSSIBLE THE IMPORTANCE OF THE SAID ORDER WAS NOT UNDERSTOOD BY THE SAID OFFICE ATTENDER. ALSO, THE PA RTNERSHIP FIRM OF THE ASSESSEE, M/S VENKATESHWARA CRUSHING & MINING COMPANY, WAS CONVERTED INTO A PRIVATE LIMITED COMPANY BY THE NAME OF SRI VENKATESHA CRUSHING & MINING PRIVATE LIMITED IN THE FY 2013 - 14, WHICH ALSO RESULTED IN THE ATTENDER NOT BEING AWARE OF THE EXISTENCE OF THE ERSTWHILE PARTNERSHIP FIRM. THEREBY THE EXISTENCE OF THE SAID ORDER AND ITS EARLIER RECEIPT, WHICH WAS OVERLOOKED BY THE OFFICE OF THE SUCCESSOR ASSESSEE, CAME TO LIGHT DUE TO AN INTIMATION BY AN SMS TO GANESH NAGARAJ, ERSTWHILE PARTNER, FROM THE INCOME TAX E - PROCEEDINGS PORTAL DATED 20/4/2017 INTIMATING THE EXISTENCE OF NOTICE/LETTER UNDER E PROCEEDINGS, WHICH TOOK A FEW DAYS TO UNDERSTAND AND INITIATE. THEREAFTER THE SAID ORDER OF TILE CIT (APPEALS) - 6 WAS DOWNLOADED AND PRINTED ON 29.4.2017 ONLY. BEFORE THE LATTER DATE, THERE WAS NO INKLING AMONGST THE PARTNERS OR OWNERS OR EVEN THE AUTHORISED REPRESENTATIVE ABOUT THE EXISTENCE OF THE SAID ORDER. A SEARCH OF THE OFFICE AS A CONSEQUENCE OF THE SAID SMS, LED TO THE FINDING O F THE ORIGINAL ORDER, AND REVEALED THAT THE ORIGINAL ORDER OF THE CIT 3 (APPEALS) - 6, WAS RECEIVED ON 17.01.2017 , WHICH WAS UNFORTUNATELY OVERLOOKED DUE TO THE OVERSIGHT AT TH E OFFICE O F THE ASSESSEE SUCCESSOR. 4. ON PERUSAL OF THE AFFIDAVIT FILED BY THE ASSESSEE EXPLAINING THE REASONS FOR DELAY IN FILING THE APP EAL BEFORE THE TRIBUNAL, THOUGH I DO NOT FIND MUCH MERIT IN HIS SUBMISSIONS , CONSIDERING THE PLIGHT OF THE ASSESSEE, IN THE INTEREST OF JUSTICE, I HEREBY CONDONE THE DELAY IN THE FILING THE APPEAL BEFORE THE TRIBUNAL AND PROCEED TO HEAR THE MATTER ON MERI TS. 5. BRIEFLY FACTS OF THE CASE ARE THAT THE ASSESSEE FIRM IS ENGAGED IN THE BUSINESS OF OPERATING CRUSHERS AT BIRBHUM DISTRICT, WEST BENGAL , FILED ITS RETURN OF INCOME ON 31/10/2007 ADMITTING TOTAL LOSS AT RS. 25,09,147/ - . THE RETURN WAS INITIALLY PROCESSED U/S. 143(1) OF THE ACT AND T HEREAFTER, THE CASE WAS TAKEN UP FOR SCRUTINY UNDER CASS AND THE ASSESSMENT ORDER WAS PASSED U/S. 143(3) ON 18 /12/2009 WHEREIN THE LD. A.O. DISALLOWED THE DEPRECIATION CLAIMED BY THE ASSESSEE OF RS. 10,50,000/ - I.E., 7.5% ON RS. 1.40 CRS, WHICH IS THE VALUE OF THE CRUSHER PLANT P URCHASED FROM RBM - PATI JOINT VENTURE AND PUT TO USE IN THE RELEVANT ASSESSMENT YEAR . DURING THE ASSESSMENT PROCEEDINGS, ON QUERY, THE ASSESSEE COULD N EITHER FURNISH ANY DETAILS WITH RESPECT TO THE PREVIOUS COST OF THE ASSET TO THE ORIGINAL OWNER NOR THE DEPRECIATION CLAIMED BY THEM . THE WRITTEN DOWN VALUE OF THE ASSET IN THE BOOKS OF 4 THE RBM - PATI JOINT VENTURE WERE ALSO NOT FURNISHED . THEREFORE, LD. A.O. DISALLOWED THE DEPRECIATION CLAIMED BY THE ASSESSEE. 6. ON APPEAL, THE ASSESSEE COULD N OT FURNISH THE REQUISITE DETAILS BEFORE TH E LD. CIT(A) ALSO WITH RESPECT TO THE ASSET PURCHASED, HENCE THE LD. CIT(A) DISMISSED THE ASSESSEES APPEAL. AGGRIEVED, BY THE ORDER OF THE LD. CIT (A) THE ASSESSEE IS NOW IN APPEAL BEFORE US. 7. AT THE OUTSET, THE LD. AR SUBMITTED BEFORE US THAT ONE MORE OPPORTUNITY MAY BE PROVIDED TO THE ASSESSEE IN ORDER TO FURNISH ALL RELEVANT PARTICULARS AS THE SAME IS NOW AVAILABLE WITH THE ASSESSEE. IT WAS FURTHER PLEADED THAT THE ASSESSEE HAS A FAIR CHANCE TO SUCCEED AND IF SUCH OPPORTUNITY IS NOT PROVIDED TO THE ASSESSEE, THE ASSESSEE WOULD SUFFER GREAT HARDSHIP. THE LD. DR ON THE OTHER VEHEMENTLY OPPOSED TO THE SUBMISSION OF THE LD. AR AND REQUESTED FOR CONFIRMING THE ORDERS OF THE LD. REVENUE AUTHORITIE S. 8. I HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY PERUSED THE MATERIALS ON RECORD. FROM THE ORDER OF THE LD. AO AND THE LD. CIT (A) IT IS EVIDENT THAT THE ASSESSEE HAS NOT CO - OPERATED WITH THE LD. REVENUE AUTHORITIES IN THEIR PROCEEDINGS. IN SUCH S ITUATION, I DO NOT FIND MUCH MERIT IN THE SUBMISSION OF THE LD. AR. HOWEVER, CONSIDERING THE ISSUE IN THE APPEAL, IN THE INTEREST OF JUSTICE, I HEREBY REMIT THE MATTER BACK TO THE FILE OF THE LD. AO FOR DE NOVO CONSIDERATION THEREBY PROVIDING THE 5 ASSESSEE WITH ONE MORE OPPORTUNITY OF BEING HEARD. AT THE SAME BREATH WE ALSO HEREBY DIRECT THE ASSESSEE TO PROMPTLY CO - OPERATE BEFORE THE LD. REVENUE AUTHORITIES IN THEIR PROCEEDINGS FAILING WHICH THEY SHALL BE AT LIBERTY TO PASS APPROPRIATE ORDER IN ACCORDANCE W ITH LAW AND MERITS BASED ON THE MATERIALS ON RECORD. IT IS ORDERED ACCORDINGLY. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES AS INDICATED HEREINABOVE. PRONOUNCED IN THE OPEN COURT ON 16 TH JANUARY, 2020. SD/ - ( A. MOHAN ALANKAMONY ) ACCOUNTANT MEMBER HYDERABAD, DATED: 16 TH JANUARY, 2020. OKK COPY TO: - 1) M/S. VENKATESWARA CRUSHING AND MINING COMPANY, C/O. M/S. PRATURI AND SRIRAM, 3 - 6 - 220, 1 ST FLOOR, STREET NO.15, HIMAYATNAGAR, HYDERABAD 500029. 2) ASST. COMMISSIONER OF INCOME TAX, CIRCLE - 10(1), HYDERABAD. 3) THE CIT(A) - 6, HYDERABAD 4) THE PR. CIT - 6, HYDERABAD 5) THE DR, ITAT, HYDERABAD 6) GUARD FILE