DCIT, Coimbatore V. M/s. G.V.G. Paper Mills (Pvt.) Ltd., Udamalpet

ITA 96/CHNY/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 77349 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-06-2014
• Appeal Filed By: Department
• Bench Allotted: C
• Next Hearing Date: 19-06-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 10-01-2014
• Court: TRIBUNAL
• Department Lawyers: N MADHAVAN
• Assessee Lawyers: A DHANANJAYAN

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHE NNAI . . . , ! , ' # $ BEFORE DR. O.K. NARAYANAN, VICE PRESIDENT & SHRI VIKAS AWASTHY, JUDICIAL MEMBER . / I.T.A. NO. 96/MDS/2014 / ASSESSMENT YEAR : 2005-06 DEPUTY COMMISSIONER OF INCOME TAX, SALARY CIRCLE-I, COIMBATORE ( !% /APPELLANT) VS M/S.G.V.G.PAPER MILLS (PVT) LTD., 168/2, SIKKANDAR BATCHA STREET, GANDHI NAGAR, UDUMALPET-642 128 [PAN: AABCG 1438 N] ( &'!% /RESPONDENT) REVENUE BY : SHRI N.MADHAVAN, JCIT ASSESSEE BY : SHRI A.DHANANJAYAN, CA / DATE OF HEARING : 19-06-2014 / DATE OF PRONOUNCEMENT : 19-06-2014 #( / O R D E R PER VIKAS AWASTHY, J.M: THE APPEAL HAS BEEN FILED BY THE REVENUE ASSAILING THE ORDER OF COMMISSIONER OF INCOME TAX(APPEALS)-II, CO IMBATORE DATED 30-10-2013 RELEVANT TO THE ASSESSMENT YEAR (A Y) 2005-06. I.T.A. NO. 96/MDS/2014 2 2. THE ASSESSEE HAD FILED ITS RETURN OF INCOME FOR THE AY UNDER CONSIDERATION ON 27-10-2005 DECLARING TOTAL INCOME OF ` 2,38,31,200/-. THE CASE OF THE ASSESSEE WAS RE-OPE NED AND NOTICE U/S.148 OF THE INCOME TAX ACT, 1961 (HEREIN AFTER REFERRED TO AS THE ACT) WAS SENT TO THE ASSESSEE ON 10-01-200 8. AGAIN RE-ASSESSMENT PROCEEDINGS WERE INITIATED AGAINST TH E ASSESSEE ON 31-03-2012. BOTH THE RE-ASSESSMENT PROCEEDINGS WER E INITIATED QUESTIONING THE CLAIM OF ASSESSEE U/S.80IA. IN FIR ST RE-ASSESSMENT PROCEEDINGS, THE CLAIM OF DEDUCTION U/S.80IA WAS WI THDRAWN BY THE ASSESSING OFFICER IN RESPECT OF PROFITS DERIVED BY A SEPARATE UNDERTAKING ENGAGED IN GENERATION AND DISTRIBUTION OF POWER THROUGH WIND MILLS. THE ASSESSING OFFICER HELD THA T THE ASSESSEE VIOLATED THE CONDITIONS AS LAID DOWN IN SECTION 80I A(5). IN APPEAL, THE CIT(APPEALS) AND THE TRIBUNAL DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. IN APPEAL BY THE DEPARTMENT, THE HON 'BLE MADRAS HIGH COURT UPHELD THE FINDINGS OF THE TRIBUNAL. IN SECOND RE-ASSESSMENT PROCEEDINGS, NOTICE U/S.148 WAS ISSUED TO THE ASSESSEE ON 31-03-2012. THE ASSESSEE HAD SET UP A SEPARATE UNDERTAKING FOR GENERATION OF POWER THRO UGH FLUIDIZED BED BOILER CUM TURBINE. THE ASSESSEE CLAIMED PROFIT FROM THE SAID UNDERTAKING AS EXEMPT U/S.80IA IN THE FIRST AND INI TIAL AY.2004-05. I.T.A. NO. 96/MDS/2014 3 THE SAME WAS ALLOWED. HOWEVER, IN THE SECOND YEAR OF CLAIM I.E., AY.2005-06, THE ASSESSING OFFICER QUESTIONED THE EL IGIBILITY OF UNDERTAKING FOR CLAIMING EXEMPTION U/S.80IA IN RE-A SSESSMENT PROCEEDINGS. THE ASSESSING OFFICER VIDE ORDER DT.0 5-02-2013, DIS- ALLOWED THE CLAIM OF THE ASSESSEE U/S.80IA ON TURBI NE DIVISION, ON THE GROUND THAT IT WAS SET UP BY SPLITTING UP OR RE -CONSTRUCTION OF EXISTING BUSINESS. AGGRIEVED BY THE ASSESSMENT ORDER U/S.143(3) R.W.S. 147, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(APPEALS ). THE CIT(APPEALS) ALLOWED THE APPEAL OF THE ASSESSEE BY FOLLOWING THE DECISION OF THE HON'BLE SUPREME COURT OF INDIA IN TH E CASE OF CIT VS. KELVINATOR OF INDIA LTD., REPORTED AS 320 ITR 561. THE CIT(APPEALS) OBSERVED THAT THE SECOND RE-ASSESSMENT PROCEEDINGS HAVE BEEN INITIATED AFTER THE PERIOD OF FOUR YEARS FROM THE END OF RELEVANT AY. THERE IS NO FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE ANY MATERIAL FACTS AND HELD TH E RE-OPENING PROCEEDINGS AS BAD IN LAW. NOT SATISFIED WITH THE ORDER OF CIT(APPEALS), THE REVENUE HAS COME IN APPEAL BEFORE THE TRIBUNAL. I.T.A. NO. 96/MDS/2014 4 3. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESENTATIVES OF BOTH THE SIDES AND HAVE PERUSED THE ORDERS OF THE AUTHORITIES BELOW. THE FIRST RE-ASSESSMENT PRO CEEDINGS WERE INITIATED AGAINST THE ASSESSEE ON 10-01-2008 ON THE GROUND TO CONSIDER THE ISSUE OF SET-OFF OF CARRY FORWARD DEPR ECIATION IN ORDER TO COMPUTE THE INCOME ELIGIBLE FOR DEDUCTION U/S.80 IA. AGAIN, ASSESSMENT WAS RE-OPENED VIDE NOTICE U/S.148 DT.31- 03-2012 TO CONSIDER THE ELIGIBILITY OF ANOTHER UNIT TO CLAIM D EDUCTION U/S.80IA. THE SECOND RE-ASSESSMENT PROCEEDINGS HAVE BEEN INIT IATED AFTER THE EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVA NT AY. IT IS NOT THE CASE OF THE REVENUE THAT THE ASSESSEE HAS NOT D ISCLOSED FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR ASSESSME NT. THE REVENUE HAD OPPORTUNITY TO CONSIDER THIS ISSUE AT T HE TIME OF ASSESSMENT OR IN THE FIRST RE-ASSESSMENT PROCEEDING S, INSTEAD OF FUTILE RIGOR OF RE-OPENING ASSESSMENT AGAIN TO CONS IDER THE ELIGIBILITY OF UNIT U/S.80IA. IN OUR CONSIDERED OPINION, THE ASSESSING OFFICER HA S EXCEEDED HIS JURISDICTION IN INITIATING SECOND RE-A SSESSMENT PROCEEDINGS BEYOND THE PERIOD OF FOUR YEARS WITHOUT SUFFICIENT CAUSE. WE DO NOT FIND ANY INFIRMITY IN THE ORDER O F THE I.T.A. NO. 96/MDS/2014 5 CIT(APPEALS). THE APPEAL OF THE REVENUE IS DISMISSE D, ACCORDINGLY. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ON THURSDAY, THE 19 TH JUNE, 2014 AT CHENNAI. SD/- SD/- ( . . . ) ( ! ) (DR. O.K. NARAYANAN) (VIKAS AWAS THY) / VICE PRESIDENT ! / JUDICIAL MEMBER '# /CHENNAI, $ /DATED: 19 TH JUNE, 2014 TNMM #% & '( )#( /COPY TO: 1. *+ /APPELLANT 2. &,*+ /RESPONDENT 3. - () /CIT(A) 4. - /CIT 5. (01 & 2 /DR 6. 13 4 /GF