M/s K.S. Conduit, Bhawanigarh V. ACIT, Patiala

ITSSA 14/CHANDI/1996

• Counselvise Citation: [2018] 122 COUNSELVISE.COM (IT) 3716 (ITAT-CHANDIGARH)
• Duration Of Justice: 21 year(s) 3 month(s) 14 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 11-04-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 16-04-2013
• Assessment Year: misc
• Appeal Filed On: 27-12-1996
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GULSHAN RAJ
• Assessee Lawyers: S K MUKHI
• Keywords: Depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND DR. B.R.R. KUMAR, ACCOUNTANT MEMBER IT(SS)A NO. 14/CHD/1996 (BLOCK PERIOD 1986-87 TO 1996-97) M/S K.S. CONDUIT, VS. THE ACIT, INVESTIGATION CIRC LE, BHAWANIGARH PATIALA (APPELLANT) (RESPONDENT) APPELLANT BY : SH. S.K. MUKHI, ADVOCATE RESPONDENT BY : SH. GULSHAN RAJ, CIT-DR DATE OF HEARING : 11.04.2018 DATE OF PRONOUNCEMENT: 11.04.2018 ORDER PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESS EE AGAINST THE ORDER DATED 29.11.1996 OF ASSTT. COMMISSIONER O F INCOME TAX INVESTIGATION CIRCLE, PATIALA. 2. BEFORE PROCEEDING FURTHER, WE DEEM IT FIT TO MEN TION HERE THAT EARLIER THE APPEAL OF THE ASSESSEE WAS DECIDED BY T HE TRIBUNAL VIDE ORDER DATED 25.7.2001 AGAINST WHICH THE ASSESSEE PR EFERRED APPEAL BEFORE THE HON'BLE PUNJAB & HARYANA HIGH COURT. HOW EVER, THE HON'BLE HIGH COURT VIDE ORDER DATED 14.10.2010 PASS ED IN ITA NO. 37 OF 2002 HAS REMANDED THE MATTER FOR FRESH DECISI ON ON MERITS IN ACCORDANCE WITH LAW. THEREAFTER, THE TRIBUNAL HEARD THE MATTER AFRESH IT(SS) NO.14/CHD/1996- M/S K.S. CONDUIT, BHAWANIGARH 2 AS PER THE DIRECTION OF THE HON'BLE HIGH COURT AND DECIDED VARIOUS GROUNDS OF APPEAL VIDE ORDER DATED 21.5.2013. HOW EVER, GROUND NO.9 TAKEN BY THE ASSESSEE WAS DISMISSED AS NOT PRE SSED. THEREAFTER, THE ASSESSEE MOVED MISC. APPLICATION NO. 68/CHD.201 3 AND PLEADED THAT THE ASSESSEE IN FACT ACTUALLY PRESSED THE GRO UND HAS PRAYED THAT THE SAME BE DECIDED AS PER THE DECISION OF TRIBUNAL DATED 25.7.2001. THIS TRIBUNAL AFTER CONSIDERING THE APPLICATION OF THE ASSESSEE IN THIS RESPECT RECALLED THE ORDER OF THE TRIBUNAL DATED 21 .5.2013 FOR THE LIMITED PURPOSE TO ADJUDICATE GROUND NO.9 AFRESH VI DE ORDER PASSED IN MISC. APPLICATION DATED 31.8.2017. 3. HEARD ON GROUND NO.9, WHICH READS AS UNDER:- 9. THAT THE LD. A.A. IS NOT JUSTIFIED IN NOT GIVING TH E SET OFF AGAINST DEPRECIATION AND EXCISE DUTY WHICH ARE ALLOWABLE AND STATUTORY DEDUCTION. 4. THIS TRIBUNAL VIDE EARLIER ORDER DATED 25.7.2001 HAS DEALT WITH THIS GROUND VIDE PARA NOS. 16.1 AND 16.2 AND WHILE RELYING UPON THE DECISION OF THE COORDINATE BENCH OF THE TRIBUNAL IN SATPAL SINGH VS. ACIT REPORTED IN 67 TTJ 602 HAS HELD THAT THE PROVISIONS OF SECTION 2(45) OF THE ACT WOULD APPLY AND THAT THE A SSESSEE WOULD BE ENTITLED FOR ADJUSTMENT UNDER CHAPTER IV, VI AND VI A WHILE RETURNING TOTAL INCOME FOR EACH PREVIOUS YEAR FALLI NG IN THE BLOCK PERIOD AND ACCORDINGLY DIRECTED THE ASSESSING OFFIC ER TO COMPUTE THE INCOME AFTER ALLOWING NECESSARY SET OFF AGAINST DEP RECIATION AND EXCISE DUTY. THE RELEVANT PART OF THE ORDER DATED 2 5.07.2001 FOR THE SAKE OF REFERENCE IS REPRODUCED AS UNDER:- IT(SS) NO.14/CHD/1996- M/S K.S. CONDUIT, BHAWANIGARH 3 16.1 BRIEFLY STATED THE FACTS ARE THAT THE ASSESS EE CLAIMED CERTAIN ADJUSTMENTS ON ACCOUNT OF DEPRECIAT ION AND EXCISE DUTY. HOWEVER, THE ASSESSING OFFICER OBSERVED THAT BY APPLYING THIS DEVICE THE ASSESSEE HAS UNDERSTATED ITS INCOME NOW RETURN AT RS. (-) 134930 /- (LOSS RETURN). HE HAS OBSERVED THAT SINCE THE RETUR N FILED WAS A LOSS RETURN IT WAS IN SHARP CONTRAST TO THE RETURN ALREADY ASSESSED U/S 143(1) OF THE ACT, 1961 FOR THE SAME ASSESSMENT YEAR I.E. 1994-95. THE RETURN O F LOSS AT RS. 134830/- WAS IN SPITE OF THE FACT THAT THE ASSESSEE HAD MADE DISCLOSURE OF RS. 295830/- (RS. 125830 RS. 1,70,000/-) IN THE RETURN FOR THE BLOC K PERIOD. HENCE HE HELD THAT THE ADJUSTMENT MADE BY T HE ASSESSEE ON ACCOUNT OF DEPRECIATION AND EXCISE DUTY WERE NOT ADMISSIBLE KEEPING IN VIEW THE PROVISIONS OF SECT. 158BB(1) OF THE ACT. 16.2 BEFORE US, THE LD. COUNSEL FOR THE ASSESSE E HAS SUBMITTED THAT THE ASSESSING OFFICER WAS NOT JUSTIF IED IN NOT GIVING THE SET OFF AGAINST DEPRECIATION AND EXC ISE DUTY. THE CHANDIGARH BENCH IN THE CASE OF SAT PAL SINGH V ACIT REPORTED IN 67 TTJ 602 HAS HELD THAT T HE PROVISIONS OF SECTION 2(45) OF THE ACT WOULD APPLY AND THE ASSESSEE WOULD BE ENTITLED FOR ADJUSTMENT UNDE R CHAPTER IV, VI AND VI A WHILE RETURNING TOTAL INCOM E FOR EACH PREVIOUS YEAR FALLING IN THE BLOCK PERIOD. WE, THEREFORE, CONCURRING WITH THE SAID OBSERVATION OF THE TRIBUNAL, DIRECT THE ASSESSING OFFICER TO RECOMPUTE THE INCOME AFTER ALLOWING NECESSARY SET OFF AGAINST DEPRECIATION AND EXCISE DUTY. 5. THE LD. DR HAS NOT POINTED OUT ANY DISTINGUISHAB LE FACTS WARRANTING OUR INTERFERENCE AT THIS STAGE, ON THIS ISSUE, WHICH HAS ALREADY BEEN DISCUSSED BY THE TRIBUNAL IN ITS ORDER DATED 25.07.2001. IT(SS) NO.14/CHD/1996- M/S K.S. CONDUIT, BHAWANIGARH 4 ACCORDINGLY, IN VIEW OF THE ABOVE, THIS GROUND NO. 9 OF THE APPEAL IS ALLOWED IN FAVOUR OF THE ASSESSEE. THE FI NDINGS GIVEN BY THE TRIBUNAL IN ITS ORDER DATED 21.5.2013 ON OTHER GROU NDS OF APPEAL WILL REMAIN AS SUCH AND THIS ORDER OF US WILL NOT HAVE A NY BEARING ON OTHER ISSUES RAISED IN THE APPEAL WHICH STOOD ALREA DY ADJUDICATED VIDE ORDER DATED 21.5.2013. 6. IN VIEW OF THIS, ISSUE RAISED IN THIS APPEAL IS ACCORDINGLY ALLOWED IN FAVOUR OF THE ASSESSEE. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (B.R.R.KUMAR) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 11.04.2018 RKK COPY TO: THE APPELLANT THE RESPONDENT THE CIT THE CIT(A) THE DR