M/s New India Maritime Agencies P. Ltd., CHENNAI V. ACIT, CHENNAI

MA 155/CHNY/2010

• Counselvise Citation: [2010] 123 COUNSELVISE.COM (IT) 5891 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 7 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 03-12-2010
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 03-12-2010
• Assessment Year: 2006-2007
• Appeal Filed On: 26-08-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Capital asset; Depreciation; Cost of acquisition
• Section: 32

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BENCH B CHENNAI (BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER) M.A. NO. 155/MDS/2010 (IN I.T.A. NO. 79/MDS/2009) ASSESSMENT YEAR : 2006-07 M/S NEW INDIA MARITIME AGENCIES P. LTD., 113, ARMENIAN STREET, CHENNAI - 600 001. PAN : AAACN0928M (APPLICANT) V. THE ASSISTANT COMMISSIONER OF INCOME TAX, COMPANY CIRCLE IV(4), CHENNAI - 600 034. (RESPONDENT) APPLICANT BY: NONE RESPONDENT BY: SHRI SHAJI P. JACOB O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER : IN THIS MISCELLANEOUS APPLICATION FILED BY THE ASS ESSEE, ITS GRIEVANCE IS THAT GROUND NO.2 OF ITS APPEAL REGARDI NG APPLICATION OF SECTION 50A OF THE INCOME-TAX ACT, 1961 (HEREINAFTE R REFERRED THE ACT) AND GROUND NO.3 REGARDING DENIAL OF BENEFIT O F COST OF ACQUISITION AND INDEXATION WERE NOT CONSIDERED BY T HE TRIBUNAL IN THEIR ORDER DATED 7 TH MAY, 2010. 2. THERE IS A REQUEST FROM THE COUNSEL OF THE ASSES SEE FOR AN ADJOURNMENT. WE FIND THAT THIS MISCELLANEOUS APPLI CATION HAS BEEN M.A. NO. 155/MDS/10 2 ADJOURNED ON 8.10.2010 AT THE REQUEST OF THE AUTHOR IZED REPRESENTATIVE. THERE IS NO PROPER REASON SHOWN BY THE AUTHORIZED REPRESENTATIVE EXCEPT CITING PERSONAL INCONVENIENCE IN HIS ADJOURNMENT PETITION. WE ARE NOT INCLINED TO GRANT THE ADJOURNMENT SOUGHT FOR AND IT IS REJECTED. LEARNED D.R. STRONG LY OPPOSED THE AVERMENTS OF THE ASSESSEE IN THE PETITION. 3. SHORT FACTS APROPOS ARE THAT THE TRIBUNAL WAS DI SPOSING OF CROSS APPEALS FILED BY THE REVENUE AND ASSESSEE WITH REGA RD TO THE TREATMENT OF SURPLUS ARISING OUT OF SALE OF CERTAIN ASSETS BY THE ASSESSEE. REVENUES APPEAL WAS DISMISSED BASED ON THE FINDING THAT NO DEPRECIATION WAS CLAIMED BY THE ASSESSEE ON THE ASSETS AFTER ASSESSMENT YEAR 1993-94 AND THEREFORE, SUCH ASSETS WOULD NOT FORM PART OF THE BLOCK ASSETS. IT WAS HELD BY THE TRIBU NAL THAT ASSESSEE WAS WELL WITHIN ITS RIGHTS TO TREAT THE ASSETS AS L ONG TERM CAPITAL ASSETS AND CONSIDER THE SURPLUS ARISING OUT OF SALE AS LONG TERM CAPITAL GAINS. ASSESSEE IN ITS CROSS APPEAL WAS AG GRIEVED THAT THE CIT(APPEALS) FELL IN ERROR WHILE DIRECTING THE A.O. TO APPLY SECTION 50A OF THE ACT FOR COMPUTING THE LONG TERM CAPITAL GAIN S. ASSESSEE WAS OF THE OPINION THAT THE PROPERTY WAS TO BE TREATED AS A LONG TERM CAPITAL ASSET AND COST OF ACQUISITION AS ON 1.4.81 WITH IND EXATION HAD TO BE CONSIDERED WHILE COMPUTING THE CAPITAL GAINS. IT W AS HELD BY THE TRIBUNAL AT PARA 13 AS UNDER:- M.A. NO. 155/MDS/10 3 13. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE ORDERS. SECTION 50A OF THE ACT RUNS AS FOLLOWS: WHERE THE CAPITAL ASSET IS AN ASSET IN RESPECT OF WHICH A DEDUCTION ON ACCOUNT OF DEPRECIATION UNDER CLAUSE ( I) OF SUB- SECTION (1) OF SECTION 32 HAS BEEN OBTAINED BY THE ASSESSEE IN ANY PREVIOUS YEAR, THE PROVISIONS OF SECTION 48 AND 49 SHALL APPLY SUBJECT TO THE MODIFICATION THAT THE WRITTEN DOWN V ALUE AS DEFINED IN CLAUSE (6) OF SECTION 43, OF THE ASSET, AS ADJUSTED, SHALL BE TAKEN AS THE COST OF ACQUISITION OF THE AS SET. THUS THERE COULD BE NO DOUBT THAT ONCE AN ASSESSEE WAS GRANTED DEDUCTION OF DEPRECIATION FOR ANY PREVIOUS YEAR, THEN THE COST OF ACQUISITION OF SUCH ASSET HAS TO BE CONSIDE RED AS THE WRITTEN DOWN VALUE, AS DEFINED IN SECTION 43(6) OF THE ACT. THERE IS NO DISPUTE HERE THAT ASSESSEE HAD IN THE YEARS P RIOR TO ASSESSMENT YEAR 1993-94 CLAIMED DEPRECIATION ON THE PROPERTIES WHICH WERE DISPOSED OF. HENCE WE DO NOT FIND ANY E RROR IN THE ORDER OF THE LD. CIT(A) IN DIRECTING THE ASSESSING OFFICER TO COMPUTE THE COST OF ACQUISITION IN ACCORDANCE WITH SECTION 50A OF THE ACT. WE, THEREFORE, FIND NO MERITS IN THESE GROUNDS TAKEN BY THE ASSESSEE. GROUND NOS. 2 TO 6 THEREFORE, STA ND DISMISSED. 4. IT WAS THUS CLEARLY HELD BY THIS TRIBUNAL THAT C OST OF ACQUISITION OF THE ASSET HAD TO BE CONSIDERED AS THE WRITTEN DO WN VALUE AS DEFINED IN SECTION 43(6) OF THE ACT. THEREFORE, TH ERE WAS NO QUESTION OF ANY OF SUCH COST AS ON 1.4.81 BEING CONSIDERED F OR THE PURPOSE OF COMPUTING THE CAPITAL GAINS. VIS--VIS THE ISSUE O F INDEXATION, WE ARE OF THE OPINION THAT ONCE THE COST IS SUBSTITUTED BY THE WRITTEN DOWN VALUE AS DEFINED IN SECTION 43(6) OF THE ACT, ANY I NDEXATION ALLOWED THEREON WOULD DEFEAT THE VERY PURPOSE OF DEEMING TH E COST OF ACQUISITION AS THE WRITTEN DOWN VALUE. THEREFORE, THE MISCELLANEOUS APPLICATION FILED BY THE ASSESSEE DOES NOT HAVE ANY MERIT. WE FIND M.A. NO. 155/MDS/10 4 NO ERROR IN THE ORDER OF THIS TRIBUNAL MUCH LESS AN Y ERROR APPARENT FROM THE RECORDS SINCE ALL THE GROUNDS OF THE ASSES SEE WERE WELL CONSIDERED BY THE TRIBUNAL IN ITS ORDER. 5. IN THE RESULT, MISCELLANEOUS APPLICATION OF THE ASSESSEE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT AFTER CONCLUSION OF HEARING ON THE THIRD DAY OF DECEMBER, 2010. SD/- SD/- (HARI OM MARATHA) (ABRAHAM P . GEORGE) JUDICIAL MEMBER ACCOUNTANT MEM BER CHENNAI. DATED THE 3 RD DECEMBER, 2010. KRI. COPY TO: (1) APPLICANT (2) RESPONDENT (3) CIT(A) (4) CIT (5) D.R. (6) GUARD FILE