INDIAN RAYON AND INDUSTRIES LTD, V. ASST CIT RG 3(2),

MA 135/MUM/2014

• Counselvise Citation: [2014] 124 COUNSELVISE.COM (IT) 2122 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 18-07-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: I
• Assessment Year: 1999-2000
• Appeal Filed On: 17-04-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B SATYANARAYANA RAJA
• Assessee Lawyers: J D MISTRI
• Keywords: Depreciation; Rectification of order; Capital receipt; Benefit of exemption

Judgement Text

1 MA NO.135/MUM/2014 ARISING OUT OF ITA NO.6669/MUM/2003 (ASSESSMENT YEAR: 99-00) IN THE INCOME TAX APPELLATE TRIBUNAL 'I' BENCH, MUMBAI BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SHRI VIJAY PAL RAO, JUDICIAL MEMBER MA NO.135/MUM/2014 ARISING OUT OF ITA NO.6669/MUM/2003 (ASSESSMENT YEAR: 1999-2000) INDIAN RAYON INDUSTRIES LTD . CORPORATE FINANCE DVN. ADITYA BIRLA CENTRE A-WING, 4 TH FLOOR S.K. AHIRE MARG WORLI MUMBAI-400 025. VS. ASTT. COMMISSIONER OF INCOME TAX , RANGE 3(2) MUMBAI. (APP LIC ANT) (RESPONDENT) PERMANENT ACCOUNT NO. : AAA CI 1747 H APPLICANT BY : SHRI J.D. MISTRI REVENUE BY : SHRI B . SATYANARAYANA RAJA DATE OF HEARING : 18/07/201 4 DATE OF PRONOUNCEMENT : 18/07 /2014 O R D E R PER VIJAY PAL RAO, JUDICIAL MEMBER: BY WAY OF THIS MISCELLANEOUS APPLICATION THE ASSESS EE IS SEEKING RECTIFICATION OF MISTAKES U/S. 254(2) IN THE ORDER OF THIS TRIBUNAL DATED 12/08/2011 FOR THE ASSESSMENT YEAR 1999-2000. 2. WE HAVE HEARD THE LD. SR. COUNSEL SHRI J.D. MIST RI AS WELL AS THE LD. DR AND CAREFULLY PERUSED THE IMPUGNED ORDER. THE LD. S R. COUNSEL HAS POINTED OUT THAT WHILE DECIDING THE APPEALS FOR THE ASSESSMENT YEAR 1999-2000, THE TRIBUNAL HAS NOT ADJUDICATED THE ADDITIONAL GROUND 1 AND 2 RAISED BY ASSESSEE. 2 MA NO.135/MUM/2014 ARISING OUT OF ITA NO.6669/MUM/2003 (ASSESSMENT YEAR: 99-00) THEREFORE, THERE IS AN APPARENT MISTAKE IN THE IMPU GNED ORDER TO THE EXTENT OF NON ADJUDICATION OF THE ADDITIONAL GROUNDS RAISED B Y THE ASSESSEE FOR THE ASSESSMENT YEAR 1999-00. THE LD. DR HAS NOT DISPUTE D THE ERROR POINTED OUT BY THE LD. SR. COUNSEL THAT THE ADDITIONAL GROUNDS FOR THE YEAR 1999-00 REMAINED UN-ADJUDICATED. 3. HAVING HEARD THE SUBMISSIONS OF THE LD. SR. COUN SEL AS WELL AS THE LD. DR AND CAREFUL PERUSAL OF THE RECORD WE FIND THAT THE ASSESSEE RAISED FOLLOWING TWO ADDITIONAL GROUNDS FOR THE ASSESSMENT YEAR 1999-200 0. ADDITIONAL GROUND NO.1 FOR A Y 1999-00: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE APPELLANT PRAYS THAT THE ('AO') BE DIRECTED TO: I). EXCLUDE FROM THE TAXABLE PROFITS, THE SALES TAX EXEMPTION BENEFIT OF RS 2,37,47,223/- WHICH IS INCLUDED IN SALES AND WHICH IS TAXED IN THE ASSESSMENT ORDER AS PART OF PROFITS OF THE BUSINESS ; II. TO TREAT THE SAME AS CAPITAL RECEIPT NOT CHARGE ABLE TO TAX.' A COPY OF APPLICATION DATED 24TH AUGUST, 2007 FILED BY THE ASSESSEE COMPANY FOR ADMISSION OF ADDITIONAL GROUND NO.1 ON 5 TH SEPTEMBER, 2007 FOR A Y 1999-00 IS ENCLOSED HEREWITH AND MARKED ANN EXURE 'B'. ADDITIONAL GROUND NO.2 FOR A Y 1999-00: '2. WITHOUT PREJUDICE TO THE CLAIM OF THE APPELLAN T THAT EXPENDITURE INCURRED ON ASSETS NOT OWNED IS ALLOWABLE AS REVENU E EXPENSES IN THE YEAR IN WHICH IT IS INCURRED, AS IT IS HELD BY HON' BLE ITA T IN A Y 1995-96 THAT SUCH EXPENDITURE IS CAPITAL IN NATURE, THE APP ELLANT CLAIMS THAT EXPENDITURE BE ADDED TO THE COST OF FIXED ASSETS AN D DEPRECIATION ON THE SAME BE ALLOWED. THE LEARNED AO BE DIRECTED TO ALLO W CLAIM CONSEQUENTIAL DEPRECIATION ON THE SAID EXPENDITURE OF RS 9,96,08,134 (8,49,.13,250 AND 1,19,94,884) AND REDUCED THE TOTA L INCOME ACCORDINGLY. 3 MA NO.135/MUM/2014 ARISING OUT OF ITA NO.6669/MUM/2003 (ASSESSMENT YEAR: 99-00) 3.1 THE ORDER DATED 12/08/2011 IS A COMPOSITE ORDER WHEREBY TWO SETS OF CROSS APPEALS AS WELL AS CROSS OBJECTIONS FOR ASSES SMENT YEARS 1998-99 AND 1999-2000 ARE DECIDED. 4. WE NOTE THAT THESE TWO ADDITIONAL GROUNDS REMAIN ED UN-ADJUDICATED FOR THE ASSESSMENT YEAR 1999-00. THE LD. SR. COUNSEL HA S POINTED OUT THAT THE ADDITIONAL GROUND NO.1 IS COMMON TO THE ADDITIONAL GROUND ONE FOR THE ASSESSMENT YEAR 1998-99 THEREFORE, NO SEPARATE ADJU DICATION IS REQUIRED AS AN IDENTICAL ISSUE HAS BEEN DECIDED IN THE SAME ORDER FOR THE ASSESSMENT YEAR 1998-99. WE FIND THAT AN IDENTICAL ISSUE HAS BEEN A DJUDICATED BY THE TRIBUNAL IN PARA 27 OF THE IMPUGNED ORDER AND THE MATTER IS RESTORED TO THE RECORD OF THE ASSESSING OFFICER TO EXAMINE THE ADDITIONAL EVIDENC E FILED BY THE ASSESSEE AND THEN DECIDE THE ISSUE AS PER LAW. SINCE THE ISSUE I S IDENTICAL FOR BOTH THE YEARS, THEREFORE, ADDITIONAL GROUND NO.1 RAISED FOR THE AS SESSMENT YEAR 1999-00 ALSO STANDS DISPOSED OFF IN THE SAME TERMS AND DIRECTION S TO AO AS GIVEN IN PARA 27 TO 27.2 OF THE IMPUGNED ORDER. ACCORDINGLY THE ADDI TIONAL GROUND NO.1 STANDS DISPOSED OFF. 5. AS REGARDS THE ADDITIONAL GROUND NO.2 THE LD. S R, COUNSEL HAS POINTED OUT THAT AN IDENTICAL ISSUE HAS BEEN DECIDE D BY THE TRIBUNAL FOR THE ASSESSMENT YEAR 1995-96 AND BY FOLLOWING THE ORDER OF THIS TRIBUNAL THE AO HAS ALLOWED THE CLAIM OF THE ASSESSEE WHILE PASSING THE ORDER GIVING EFFECT TO THE ORDER OF THIS TRIBUNAL. WE FIND THAT AO HAS ALR EADY ALLOWED THE CLAIM OF THE ASSESSEE AS RAISED IN ADDITIONAL GROUND NO.2 FOR TH E ASSESSMENT YEAR 1999-00 WHILE PASSING THE GIVING EFFECT ORDER DATED 28/03/2 013. THEREFORE, THE ADDITIONAL GROUND NO.2 RAISED FOR THE ASSESSMENT YE AR 1999-00 BECOMES INFRUCTUOUS AS AO HAS ALLOWED THE SAME BEING CONSEQ UENTIAL TO THE ASSESSMENT YEAR 1995-96 IN WHICH THE SAID CLAIM WAS ALLOWED BY THIS TRIBUNAL. 4 MA NO.135/MUM/2014 ARISING OUT OF ITA NO.6669/MUM/2003 (ASSESSMENT YEAR: 99-00) 5.1 HENCE THE IMPUGNED ORDER OF THE TRIBUNAL DATED 12/08/2011 STANDS MODIFIED ACCORDINGLY. 6. IN THE RESULT, THE MISCELLANEOUS APPLICATION OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 18 TH JULY, 2014. SD/- SD/- (P.M. JAGTAP) ACCOUNTANT MEMBER (VIJAY PAL RAO ) JUDICIAL MEMBER MUMBAI, DATED: 18/07/2014 JV. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR BENCH TRUE COPY BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.