Nilgiri Oil & Allied Industries, Kolkata V. ACIT, CIR-28, KOLKATA, Kolkata

ITA 939/KOL/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 1511 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 9 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-02-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 15-05-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 04-05-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Depreciation; Bad and doubtful debts
• Section: 142(1); 32; 27; 263

Judgement Text

1 ITA NO.939/KOL/2016 NILGIRI OIL & ALLIED INDUSTRIES, AY- 2011-12 , C , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: KOL KATA ( ) BEFORE . , /AND . . , ) [BEFORE SHRI J. SUDHAKAR REDDY, AM & SHRI A. T. VA RKEY, JM] I.T.A. NO. 939/KOL/2016 ASSESSMENT YEAR: 2011-12 NILGIRI OIL & ALLIED INDUSTRIES (PAN: AACFN3936A) VS. ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE-28, KOLKATA. APPLICANT RESPONDENT DATE OF HEARING 04.12.2017 DATE OF PRONOUNCEMENT 14.02.2018 FOR THE APPLICANT SHRI SOMNATH BANERJEE, AR FOR THE RESPONDENT SHRI G. MALLIKARJUNA, CIT, DR ORDER PER SHRI A.T.VARKEY, JM THIS IS AN APPEAL PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF LD. PR. CIT, KOLKATA- 10, KOLKATA PASSED U/S. 263 OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR AY 2011-12 DATED 02.03.2016. 2. AT THE OUTSET ITSELF, IT HAS BEEN BROUGHT TO OUR NOTICE THAT THE AO HAS GIVEN EFFECT TO THE ORDER IMPUGNED BEFORE US I.E. 263 ORDER ON 30.1 2.2016 AND HAS ONLY MADE ADDITION ON TWO COUNTS I.E. DEPRECIATION OF FLATS AND ON ACCOUN T OF PRIOR PERIOD ADJUSTMENT, ALTHOUGH THE LD. CIT IN HIS ORDER PASSED U/S. 263 OF THE ACT HAS TAKEN NOTE OF FOUR FAULTS. THEREFORE, WHEN WE ADJUDICATE THE LEGALITY OF 263 ORDER OF LD. CIT, WE NEED TO ONLY CONSIDER THESE TWO ISSUES POINTED OUT BY THE LD. CIT IN HIS ORDER PASSED U/S. 263 OF THE ACT I.E. PRIOR PERIOD ADJUSTMENT AND DEPRECIATION ON FIXED ASSETS I.E FLATS. IN RESPECT TO PRIOR PERIOD ADJUSTMENT, THOUGH THE AO ASKED DURING THE ORIGINAL ASSESSMENT BY 142(1) NOTICE ABOUT THE PRIOR PERIOD ADJUSTMENT, WE NOTE THAT THE ASSESSEE HAD ALTHOUGH REPLIED MERELY BY FILING THE LIST OF ITEMS AND NOWHERE BEFORE THE AO IT WAS STAT ED THAT IT WAS BAD DEBTS WRITTEN OFF. WE NOTE THAT ONLY BEFORE THE LD. CIT FOR THE FIRST TIM E IT WAS STATED BY THE ASSESSEE THAT IT WAS BAD DEBT WRITTEN OFF INSTEAD OF PRIOR PERIOD ADJUST MENT. WE ALSO NOTE FROM PERUSAL OF THE 2 ITA NO.939/KOL/2016 NILGIRI OIL & ALLIED INDUSTRIES, AY- 2011-12 LIST OF ITEMS SHOWN BY THE ASSESSEE TO THE AO PURSU ANT TO THE NOTICE U/S 142(1) THAT THERE WERE SALES TAX DEPOSIT, SCOOTER DEPOSIT ETC. WE NO TE THAT DEPOSITS MADE BY THE ASSESSEE ARE ASSET AND CANNOT BE A DEBT. SO, THE CONTENTION BY A SSESSEE BEFORE THE LD. CIT THAT THE CLAIM WAS NOT PRIOR PERIOD ADJUSTMENT BUT BAD DEBT WRITTE N OFF ON CERTAIN ITEMS AS POINTED OUT BY LD. CIT, DR MAKES THE CLAIM LEGALLY UNSUSTAINABLE. IN ANY CASE, THE AO AFTER RECEIVING THE REPLY OF THE ASSESSEE WHICH CONTAINED ONLY A LIST O F ITEMS WHICH WE HAVE STATED EARLIER DID NOT MAKE ANY ENQUIRY AND HAS SIMPLY ACCEPTED THE CL AIM. ON THIS ISSUE, THEREFORE THE AO HAS NOT APPLIED HIS MIND TO THE REPLY RENDERED BY T HE ASSESSEE WHICH MAKES THE ORIGINAL ORDER OF ASSESSMENT ERRONEOUS AND PREJUDICIAL TO TH E INTEREST OF THE REVENUE AND THE LD. CIT HAS JURISDICTION TO INTERFERE IN HIS REVISIONAL JUR ISDICTION U/S. 263 OF THE ACT. COMING TO THE DEPRECIATION OF FIXED ASSETS, WE NOTE THAT THE ASSE SSEE HAD CLAIMED DEPRECIATION TO THE TUNE OF RS.17,30,702/- ON THE BLOCK OF ASSET, BUILDING A ND THE ASSESSEE HAS FLATS IN VEDIC VILLAGE, KOLKATA ETC. THE ASSESSEE HAS ALSO SHOWN RENTAL IN COME FROM THE LAND AND BUILDING AT HYDERABAD AND SINCE THE ASSESSEE HAS SHOWN RENTAL I NCOME FROM HOUSE PROPERTY THEN IT HAS TO BE ASSESSED U/S. 22 TO 27 OF THE ACT THEN ONLY S TANDARD DEDUCTION CAN BE GIVEN AND DEPRECIATION U/S. 32 CANNOT BE ALLOWED. WE NOTE TH AT THE AO HAS NOT MADE ANY ENQUIRY REGARDING THE ALLOWABILITY OF DEPRECIATION CLAIMED BY THE ASSESSEE, WHICH MAKES THE AOS ORIGINAL ORDER ERRONEOUS AND PREJUDICIAL TO THE INT EREST OF THE REVENUE. THEREFORE, THE REVISIONAL JURISDICTION EXERCISED BY THE LD. CIT IS VALID IN THE EYES OF LAW AND, THEREFORE, WE DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF THE LD. CIT PASSED U/S. 263 OF THE ACT AND, THEREFORE, WE ARE INCLINED TO DISMISS THE APPE AL OF THE ASSESSEE. WE ORDER ACCORDINGLY. 3. IN THE RESULT, THE APPEAL OF ASSESSEE IS DISMISS ED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 14.02.2018 SD/- SD/- (J. SUDHAKAR REDDY) (ABY. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 14TH FEBRUARY, 2018 JD.(SR.P.S.) 3 ITA NO.939/KOL/2016 NILGIRI OIL & ALLIED INDUSTRIES, AY- 2011-12 COPY OF THE ORDER FORWARDED TO: 1. APPELLANT NILGIRI OIL & ALLIED INDUSTRIES, UNI T NO. 4, NEW ALIPORE MARKET COMPLEX, TOLLYGUNGE CIRCULAR ROAD, KOLKATA-7 00 053. 2 RESPONDENT ACIT, CIRCLE-28, KOLKATA. 3. THE CIT(A) KOLKATA 4. 5. CIT KOLKATA DR, ITAT, KOLKATA. / TRUE COPY, BY ORDER, SR. PVT. SECRETARY