DCIT, C.C.-XXVIII, Kolkata, Kolkata V. Subhash Project & Marketing, Kolkata

ITA 997/KOL/2010

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3190 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 1 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-06-2013
• Appeal Filed By: Department
• Bench Allotted: B
• Next Hearing Date: 10-08-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 13-05-2010
• Court: TRIBUNAL
• Department Lawyers: D K SONOWAL SRDR
• Keywords: Capital asset; Depreciation; Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH B KOLKATA BEFORE SHRI N.S.SAINI, ACCOUNTANT MEMBER AND SHRI MAHAVIR SINGH, JUDICIAL MEMBER ITA NO.997/KOL/2010 ASSESSMENT YEAR:2006-07 DCIT, CENTRAL CIRCLE- XXVIII, 18, RABINDRA SARANI, KOLKATA / V/S . SUBHASH PROJECT & MARKETING LT., 22, CAMAC STREET, KOLKATA 700 016 [ PAN NO. AADCS 2469 K ] /APPELLANT .. /RESPONDENT /BY APPELLANT SHRI D.K. SONOWAL, SR-DR /BY RESPONDENT SHRI RAVI TULSIYAN, AR /DATE OF HEARING 12-06-2013 /DATE OF PRONOUNCEMENT 21-06-2013 /O R D E R PER MAHAVIR SINGH, JUDICIAL MEMBER:- THIS APPEAL FILED BY REVENUE IS ARISING OUT OF ORD ER OF COMMISSIONER OF INCOME-TAX (APPEALS), CENTRAL-I, KOLKATA (CIT(A) FOR SHORT) IN APPEAL NO. 312/CC- XXVIII/CIT(A)C-I/08-09 DATED 26-02-2010. THE ASSESS MENT WAS FRAMED BY ACIT, CENTRAL CIRCLE, XXVIII, KOLKATA U/S.143(3) OF THE I NCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) VIDE HIS ORDER DATED02-12 -2008 FOR ASSESSMENT YEAR (AY) 2006-07. 2. FIRST ISSUE IN THIS APPEAL OF REVENUE IS AGAINST THE ORDER OF CIT(A) DELETING THE ADDITION MADE BY ASSESSING OFFICER (AO ) ON ACCOUNT OF NON- PAYMENT OF EMPLOYEES CONTRIBUTION TOWARDS PF AND E SI WITHIN THE DUE DATES ITA NO.997/KOL/2010 A.Y.2006-07 DCIT,CC-XXVIII KOL V. SUBHASH PROJECT & MARKETING LTD. P AGE 2 AS PRESCRIBED UNDER THOSE ACTS. FOR THIS, REVENUE H AS RAISED FOLLOWING GROUND NO.1:- 1. WHETHER ON THE FACTS AND THE CIRCUMSTANCES OF T HE CASE THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.9,12,895/- ON ACCOUN T OF EMPLOYEES CONTRIBUTION TOWARDS PF AND ESI ALTHOUGH THE PAYMENT WERE MADE A FTER THE DUE DATE. 3. WE HAVE HEARD RIVAL CONTENTIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT ASSESSING O FFICER ADDED BELATED PAYMENT OF EMPLOYEES CONTRIBUTION TO PF AND ESI AT RS.9,12,895/- FOR THE REASON THAT THESE WERE PAID BEYOND DUE DATE AS PRES CRIBED THOSE ACTS, BUT THE ASSESSEE HAS PAID WITHIN THE DUE DATE OF FILING OF RETURN OF INCOME U/S. 139(1) OF THE ACT. IN SUCH CIRCUMSTANCES, WE FIND THAT CIT(A) HAS DELETED THE DISALLOWANCE BY OBSERVING IN PARA-4.1 OF HIS ORDER AS UNDER:- 4.1 I HAVE CAREFULLY CONSIDERED THE SUBMISSION OF THE LD. A.R IN THE CASE UNDER CONSIDERATION THOUGH THE PAYMENT WAS EFFECTED BEYON D THE TIME PRESCRIBED IN SECTION 36(1)(VA) BUT THE SAME WAS DULY PAID BY THE APPELLA NT BEFORE DUE DATE OF FURNISHING OF THE RETURN. HENCE CONSIDERING THE DECISION OF THE H ONBLE KARNATAKA HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX V. SABARI EN TERPRISES (2008) 298 ITR 141 (KARN) AND DULY AFFIRMED BY THE APEX COURT IN THE R ATIO OF CIT VS. ALOM EXTRUSIONS LTD. [319 ITR 306] AND THE RECENT DECISION OF THE H ONBLE DELHI HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX V. AIMIL LIMITED THE DISALLOWANCE OF RS.9,12,895/- MADE BY THE A.O U/S. 43B/36(1)(VA) IS DELETED. THE APPELLANT WILL GET NECESSARY RELIEF ACCORDINGLY. EVEN NOW, THE ISSUE IS SQUARELY COVERED BY THE DECI SIONS OF VARIOUS COURTS AS CITED BY CIT(A) IN HIS ORDER REPRODUCED ABOVE. AS THE ISSUE IS SQUARELY COVERED, WE CONFIRM THE ORDER OF CIT(A) AND THIS IS SUE OF REVENUES APPEAL IS DISMISSED. 4. COMING TO SECOND ISSUE IN THIS APPEAL OF REVENUE IS AGAINST THE ORDER OF CIT(A) IN DELETING THE ADDITION OF PROFIT ON SALE O F CAR I.E. DEPRECIATING ASSET AMOUNTING TO RS.6,06,536/-. FOR THIS, REVENUE HAS R AISED GROUND NO.2:- 2. WHETHER ON THE FACTS AND THE CIRCUMSTANCES OF T HE CASE THE LD. CIT(A) HAS ERRED IN CONSIDERING THE ADDITIONAL EVIDENCES IN RESPECT OF PROFIT ON SALE OF ASSETS AMOUNTING TO RS.6,06,536/- WITHOUT GIVING REASONABL E OPPORTUNITY TO THE AO TO EXAMINE THE SAME. ITA NO.997/KOL/2010 A.Y.2006-07 DCIT,CC-XXVIII KOL V. SUBHASH PROJECT & MARKETING LTD. P AGE 3 5. WE HAVE HEARD RIVAL CONTENTIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT ASSESSING O FFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS ADDED THE PROFIT AT RS.6,06, 536/- WHICH COMPRISES TO PROFIT ON SALE OF CAR AND PROFIT ON SALE OF TEMPORA RY SITE SHED. AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE CIT(A), WHO AFTER CONSIDERING THE SUBMISSIONS OF ASSESSEE AND CONSIDERING SECTION 50 OF THE ACT, DELETED THE ADDITION BY OBSERVING AS UNDER:- 5.1. I HAVE CAREFULLY CONSIDERED THE SUBMISSION O F THE LD. A.R. THE AO HAS NOT SPECIFIED THE BASIS OF CALCULATION OF THE CAPITAL G AINS. HOWEVER, CONSIDERING THE SUBMISSION OF THE LD. A.R THAT THE SALE VALUE OF TH E ASSET SOLD HAS BEEN DULLY ACCOUNTED AS PER PROVISION THE PROVISIONS OF SEC. 50 OF THE A CT, THERE WILL BE NO TAXABLE CAPITAL GAIN. FURTHER, SINCE THE FULL VALUE OF CONSIDERATIO N OF THE ASSET SOLD DOES NOT EXCEED THE VALUE OF THE RESPECTIVE BLOCKS THEREFORE AS PER THE PROVISIONS OF SEC. 50 NO CAPITAL GAIN ARISES. THE PROFIT OF RS.6,06,536/- IS AS PER THE BOOKS OF ACCOUNT IS NOT RELEVANT FOR DETERMINING CAPITAL GAIN. CONSIDERING ABOVE THE ADDITION OF RS.6,06,536/- MADE BY THE AO IS DELETED. WE FIND THAT THE PROVISIONS OF SECTION 50 OF THE AC T CLEARLY COMPUTE THE CAPITAL GAINS IN THE CASE OF DEPRECIABLE ASSET AS UNDER:- THE AO CLEARLY FAILED TO CONSIDER THAT CAPITAL GA IN IN CASE OF DEPRECIABLE ASSETS IS DETERMINED AS PER SEC. 50 OF THE IT ACT, WHICH SAYS : NOTWITHSTANDING ANYTHING CONTAINED INN CLAUSE (42A ) OF SECTION 2, WHERE A CAPITAL ASSET IS AN ASSET FORMING PART OF A BLOCK O F ASSETS IN RESPECT OF WHICH DEPRECIATION HAS BEEN ALLOWED UNDER THIS ACT OR UND ER INDIAN INCOME TAX ACT, 1922, THE PROVISIONS OF SECTIONS 48 AND 49 SHALL BE SUBJECT TO THE FOLLOWING MODIFICATIONS:- (1) WHERE THE FULL VALUE OF CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF THE TRANSFER OF THE ASSET TOGETHER WITH T HE FULL VALUE OF SUCH CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF T HE TRANSFER OF ANY OTHER CAPITAL ASSET FALLING WITHIN THE BLOCK OF THE ASSETS DURING THE PREVIOUS YEAR, EXCEEDS THE AGGREGATE OF THE FOLLOWI NG AMOUNTS, NAMELY:- (I) EXPENDITURE INCURRED WHOLLY AND EXCLUSIVELY IN CONNECTION WITH SUCH TRANSFER OR TRANSFERS; (II) THE WRITTEN DOWN VALUE OF THE BLOCK OF ASSETS AT THE BEGINNING OF THE PREVIOUS YEAR; AND ITA NO.997/KOL/2010 A.Y.2006-07 DCIT,CC-XXVIII KOL V. SUBHASH PROJECT & MARKETING LTD. P AGE 4 (III) THE ACTUAL COST OF ANY ASSET FALLING WITHIN T HE BLOCK OF ASSETS ACQUIRED DURING THE PREVIOUS YEAR, SUCH EXCE SS SHALL BE DEEMED TO BE THE CAPITAL GAINS ARISING FROM THE TRA NSFER OF SHORT-TERM CAPITAL ASSETS; FURTHER, WE FIND THAT BOTH THE ASSETS SOLD BY ASSES SEE FORM PART OF BLOCK OF ASSETS AND WERE ENTITLED TO DEPRECIATION UNDER THE ACT AS STATED BY LD. COUNSEL FOR THE ASSESSEE AND DISCLOSED IN THE PAPER BOOK OF THE ASSESSEE. THE DEPRECIATION CHART REVEALS THAT BLOCK OF ASSET HAS NOT COME TO AN END. IT IS VERY MUCH AVAILABLE AND ONCE THE RESPECTIVE BLOCK IS NOT WIPED OUT, THE PROFIT CANNOT BE ASSESSED ON ACCOUNT OF SALE OF ASSET. WE FIND TH AT WDV OF THE RESPECTIVE BLOCK AS ON 01-04-2005 WAS AT RS.1,59,50,531/- AND RS.91,11,398/- (AS PER AUDIT REPORT ENCLOSED). WE FURTHER FIND THAT OPENING WDV FAR EXCEEDS THE FULL VALUE OF CONSIDERATION RECEIVED ON SALE FOR THIS ASSET. H ENCE, THE PROFIT CANNOT BE BROUGHT TO TAX ON CAPITAL GAINS. IN SUCH CIRCUMSTAN CES, WE CONFIRM THE ORDER OF CIT(A) AND THIS ISSUE OF REVENUES APPEAL IS DISMIS SED. 6. IN THE RESULT, REVENUES APPEAL STANDS DISMISSED . ORDER IS PRONOUNCED IN OPEN COURT ON 21 ST JUNE, 2013 SD/- SD/- (N.S.SAINI) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER KOLKATA, *DKP DATE: 21ST JUNE, 2013 !'# - ITA NO.997/KOL/2010 A.Y.2006-07 DCIT,CC-XXVIII KOL V. SUBHASH PROJECT & MARKETING LTD. P AGE 5 %%& %%& %%& %%& '& '& '& '& / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. ''%( ) / CONCERNED CIT 4. ) - / CIT (A) 5. &*+ %%%( , %( / DR, ITAT, KOLKATA 6. +,- ./ / GUARD FILE. BY ORD ER/ , 0/2 '3 %(,