ACIT, Bhubaneswar V. Anil Kumar Agarwal, Bhubaneswar

ITSSA 17/CTK/2012

• Counselvise Citation: [2012] 124 COUNSELVISE.COM (IT) 7537 (ITAT-CUTTACK)
• Duration Of Justice: 2 month(s) 2 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 02-04-2012
• Appeal Filed By: Department
• Bench Allotted: DB
• Assessment Year: 2003-2004
• Appeal Filed On: 30-01-2012
• Court: TRIBUNAL
• Department Lawyers: PARAMITA TRIPATHY
• Assessee Lawyers: P
• Keywords: Depreciation
• Section: 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE : SHRI K.K.GUPTA, AM, AND SHRI K.S.S.PRASAD RAO, JM ITA NO. 17/CTK/2012 (ASSESSMENT YEAR 2003 - 04) ASST.COMMISSIONER OF INCOME - TAX, CIRCLE 2(1), BHUBANESWAR. VERSUS SRI ANIL KUMAR AGAR WAL, N - 1/93, NAYAPALLY, BHUBANESWAR PAN: AATPA 3717 B. (APPELLANT) (RESPONDENT) FOR THE APPELLANT: SMT. PARAMITA TRIPATHY, CIT - DR FOR THE RESPONDENT SHRI P.S.PANDA/K.AGARWAL, ARS DATE OF HEARING : 14.03.2012 DATE OF PRONOUNCEMENT : 02.04.2012 ORDER SHRI K.S.S.PRASAD RAO, JM : THIS APPEAL IS BY THE DEPARTMENT HAVING BEEN AGGRIEVED BY THE ORDER OF THE COMMISSIONER OF INCOME - TAX (APPEALS) DT.28.2.2007 FOR THE ASSESSMENT YEAR 2003 - 04 IN THE CASE OF THE ASSESSEE. 2. THE SOLE ISSUE RAISED BY THE D EPARTMENT IS THAT THE LEARNED CIT(A) IS NOT JUSTIFIED IN AMENDING ITS ORDER DT.28.2.2007 BY ALLOWING DEPRECIATION AFTER ESTIMATING INCOME AT 8% OF THE GROSS RECEIPTS. 3. BOTH THE PARTIES WERE HEARD REGARDING THE ISSUE RAISED IN THE APPEAL AND ITS LEGAL IMP LICATIONS. 4. ON CAREFUL CONSIDERATION OF THE MATERIAL MADE AVAILABLE TO THE TRIBUNAL AND ANALYZING THE SAME IN THE LIGHT OF THE SUBMISSIONS OF BOTH THE PARTIES, THE UNDISPUTED FACTS RELATING TO THE ISSUE ARE THAT THE LEARNED CIT(A) HAS PASSED THE ORDER DT .28.2.2007 BY ADJUDICATING THE APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE ASSESSING OFFICER FOR THE ASSESSMENT YEAR 2003 - 04. THE ASSESSEE HAS FILED A PETITION U/S.154 OF THE I.T.ACT,1961 ON 16.6.2010 PRAYING FOR RECTIFICATION OF THE APPELLATE OR DER DT.28.2.2007 PASSED BY THE LEARNED CIT(A). THE LEARNED CIT(A) HAS HEARD THE LEARNED AR OF THE ASSESSEE AND THE OPINION OF THE ASSESSING OFFICER AND IN THE IMPUGNED ORER IT WAS OBSERVED BY THE LEARNED CIT(A) THAT ON PERUSAL OF THE ORDER PASSED ON ITA NO.17/CTK/2012 2 28.2.2 007 IT WAS NOTICED BY THE LEARNED CIT(A) THAT THE PERCENTAGE OF PROFIT OF 3.84% HAS BEEN INCREASED TO 8% AND THIS 3.84% CALCULATED IS BEFORE DEPRECIATION. THEREFORE 8% SHOULD ALSO BE BEFORE DEPRECIATION. IN ALL THE YEARS WHEREVER PERCENTAGE OF PROFIT WAS DETERMINED DEPRECIATION WAS ALLOWED FROM THE PROFIT DETERMINED. THIS HAS ALSO BEEN WR ITTEN IN THE SAME PARAGRAPH AND THERE IS NO OBSERVATION IN THE SAID ORDER DENYING DEPRECIATION TO THE ASSESSEE. THE DEPRECIATION CLAIMED BEING A STATUTORY ALLOWANCE CANNOT BE DENIED. THEREFORE, HE CAME TO THE CONCLUSION THAT THE PERCENTAGE OF 3.84% IS BEFORE DEPRECIATION. HENCE, 8% SHOULD ALSO BE BEFORE DEPRECIATION. THE OMISSION OF WORDS BEFORE DEPRECIATION HAS CREATED UNNECESSARY CONFUSION. THEREFORE, CONSIDERING THE AP PELLATE ORDER AND THE RECORD AND THE SUBMISSIONS OF THE ASSESSEE, HE CAME TO THE CONCLUSION THAT THE OMISSION OF THE WORDS BEFORE DEPRECIATION IS A MISTAKE APPARENT FROM RECORD AND HENCE, HE AMENDED THE SAID ORDER BY INVOKING SECTION 154 OF THE I.T.ACT B Y INSERTING THE WORDS BEFORE DEPRECIATION AT THE RELEVANT PLACE IN THE ORDER PASSED BY HIM ON 28.2.2007. HAVING BEEN AGGRIEVED WITH THIS ORDER THE DEPARTMENT IS IN APPEAL BEFORE THE TRIBUNAL. 5. DURING THE COURSE OF HEARING, THE DEPARTMENT IS NOT ABLE TO SHOW ANY REASON AS TO HOW THE ORDER PASSED BY THE LEARNED CIT(A) IS NOT CORRECT. ON THE OTHER HAND, AS CAN BE SEEN FROM THE IMPUGNED ORDER, THE LEARNED CIT(A) HAS CATEGORICALLY OBSERVED THAT SINCE THE ASSESSING OFFICER HAS DETERMINED THE PERCENTAGE OF PRO FIT TO BE TAXABLE IN THE HANDS OF THE ASSESSEE AND THE LEARNED CIT(A) WHOLE CONSIDERING THE DETERMINATION MADE BY THE ASSESSING OFFICER HAS THOUGHT FIT THE PERCENTAGE SHOULD BE @3.84% AND IT IS MADE BEFORE DEPRECIATION. THE ESTIMATION IS MADE BEFORE THE D EPRECIATION. SINCE THE CLAIM OF DEPRECIATION IS A STATUTORY ONE AND CANNOT BE DENIED TO THE ASSESSEE MORE SO IN THE ESTIMATION OF PERCENTAGE OF PROFIT TO BE TAXED N THE ITA NO.17/CTK/2012 3 HANDS OF THE ASSESSEE, THE DEPRECIATION AMOUNT IS TO BE ALLOWED FROM THE OUT OF THE DE TERMINED PERCENTAGE OF PROFIT ESTIMATED. THE LEARNED AR OF THE ASSESSEE HAS POINTED OUT THAT WHENEVER THERE IS ANY ESTIMATION OF PROFIT, IT IS ALWAYS SUBJECT TO DEPRECIATION AS DEPRECIATION IS A STATUTORY ALLOWANCE THAT CANNOT BE DENIED TO THE ASSESSEE. SI NCE THE CONTENTION OF THE ASSESSEE AND THE REASONING GIVEN BY THE LEARNED CIT(A) FOR MAKING THE DISPUTED AMENDMENT ARE LEGALLY TENABLE, WE ARE OF THE CONSIDERED VIEW THAT THERE IS NO INFIRMITY IN THE ORDER PASSED BY THE LEARNED CIT(A) REQUIRING ANY INTERF ERENCE. HENCE, THE SAID ORDER OF THE LEARNED CIT(A) IS UPHELD AND THE ISSUE RAISED BY THE DEPARTMENT IS DISMISSED FINDING THE SAME AS DEVOID OF MERITS. 6. IN THE RESULT, THE APPEAL OF THE DEPARTMENT IS DISMISSED. S D/ - S D/ - (K.K.GUPTA) ACCOUNTANT MEMBER (K.S.S.PRASAD RAO) JUDICIAL MEMBER DATE: 02.04.2012 H.K.PADHEE, SENIOR PRIVATE SECRETARY. COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT: ASST.COMMISSIONER OF INCOME - TAX, CIRCLE 2(1), BHUBANESWAR 2. THE RESPONDENT: SRI ANIL KUMAR AGARWAL, N - 1/93, NAYAPALLY, BHUBANESWAR 3. THE CIT, 4. THE CIT(A), 5. THE DR, CUTTACK 6. GUARD FILE (IN DUPLICATE) TRUE COPY, BY ORDER, SENIOR PRIVATE SECRETARY .