ACIT, Trichy V. The Lakshmi Vilas Bank Ltd., Karur

MA 181/CHNY/2014

• Counselvise Citation: [2015] 124 COUNSELVISE.COM (IT) 3732 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 1 month(s) 29 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 09-12-2015
• Appeal Filed By: Department
• Bench Allotted: C
• Next Hearing Date: 30-10-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 10-10-2014
• Court: TRIBUNAL
• Department Lawyers: V VIVEKANANDAN
• Assessee Lawyers: G SEETHARAMAN
• Keywords: Reopening of assessment; Reassessment proceedings; Capital expenditure
• Section: 143(3); 12

Judgement Text

, , IN THE INCOME - TAX APPELLATE TRIBUNAL C BENCH, CHENNAI . , . , BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER & SHRI DUVVURU RL REDDY , JUDICIAL MEMBER M .P. NOS. 180 AND 18 1/MDS/2014 [IN I.T.A.NO S . 12 62 AND 12 28/MDS/2013 ASSESSMENT YEAR S :20 0 3 - 0 4 AND 200 5 - 06 THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE I(1), TRICHY. VS. THE LAKSHMI VILAS BANK LTD., KATHAPARAI, KARUR. [PAN: AAACT4291P] ( / APPELLANT ) ( / RESPONDENT ) / APPELLANT BY : SHRI V. V I V E KANANDAN, CIT / RESPONDENT BY : SHRI G. SEETHARAMAN, C.A. / DATE OF HEARING : 30 . 1 0 .201 5 / D ATE OF P RONOUNCEMENT : 09 .1 2 .201 5 / O R D E R PER DUVVURU RL REDDY , JUDICIAL MEMBER : BY MEANS OF TWO MISCELLANEOUS PETITION S FILED BY THE REVENUE, THE LD. DR HAS SUBMITTED THAT, WHILE PASSING THE CONSOLIDATED ORDER DATED 30.04.2014 IN I.T.A. N OS. 938, 939, 940, 1228 AND 1262/MDS/2013 , THE TRIBUNAL HAS NOT ADJUDICATED THE GROUNDS RAISED IN ITS APPEALS. IN M.P. NO. 180/MDS/2014, THE LD. DR HAS SUBMITTED THAT THE FOLLOWING GROUNDS WERE NOT ADJUDICATED IN I.T.A. NO. 1262/MDS/2013: M .P. NO S . 180 & 18 1 /M/ 15 2 THE CIT(A) FAIL ED TO APPRECIATE THE FACTS THAT AS PER SECTION 36(1)(VIIA), IF THE ASSESSEE IS EXCISING THE OPTION OF CLAIMING DEDUCTION IN RESPECT OF ANY PROVISION MADE BY THE ASSESSEE FOR ANY ASSETS CLASSIFIED BY THE RBI HAS DOUBTFUL OR LOSS ASSETS AS PER FIRST PROVISO TO SECTION 36(1)(VIIA), HE IS NOT ENTITLED FOR DEDUCTION OF 10% OF AGGREGATE AVERAGE ADVANCES MADE BY THE RURAL BRANCHES OF THE ASSESSEE. THE CIT(A) FAILED TO APPRECIATE THE FACT THAT THE SOFTWARE IS HAVING ENDURING BENEFIT AND EXPENSES ON SOFTWARE SHOULD BE TREATED AS CAPITAL EXPENDITURE. THE CIT(A) FAILED TO APPRECIATE THE FACT THAT THE ASSESSEE IS CLAIMING THE AMOUNT TO PAID TO M/S. KARUR ROTARY CLUB AS BUSINESS PROMOTION EXPENDITURE ONLY BEFORE CIT(A) AND NO REMAND REPORT WAS CALLED FOR AND RULE 46(1) WAS VIOLATED. THE CIT(A) FAILED TO APPRECIATE THE FACT THAT THE EXPENSE OF SUBSCRIPTION PAID TO SEBI IS IN CONNECTION WITH PURCHASE OF SALE OF INVESTMENTS AND SHOULD BE TREATED AS CAPITAL EXPENDITURE . 2. THE ABOVE GROUNDS RAISED BY THE REVENUE IN IT S APPEAL BEFORE THE TRIBUNAL IN I.T.A. NO. 1262/MDS/2013 FOR THE ASSESSMENT YEAR 2003 - 04 ARE AGAINST THE ORDER OF THE LD. CIT(A), TRICHY, DATED 22.01.2013 PASSED UNDER SECTION 143(3) R.W.S. 147 OF THE INCOME TAX ACT, 1961 [ ACT IN SHORT]. 3. WE HAVE CO NSIDERED THE RIVAL SUBMISSIONS AND FIND THAT AGAINST THE ORDER OF THE ASSESSING OFFICER PASSED UNDER SECTION 143(3) R.W.S. 147 OF THE ACT, THE ASSESSEE HAS ALSO PREFERRED AN APPEAL BEFORE THE TRIBUNAL AND CHALLENGED THE VALIDITY OF REOPENING OF ASSESSMENT IN I.T.A. NO. 939/MDS/2013, AGAINST WHICH, THE TRIBUNAL HAS CONSIDERED THE ISSUE AND DEALT WITH IN ITS ORDER FROM PAGE 15 TO 18 AT PARA 11 AND THE CONCLUDING FINDINGS OF THE TRIBUNAL ARE REPRODUCED AS UNDER: M .P. NO S . 180 & 18 1 /M/ 15 3 IN VIEW OF THE FACTS OF THE CASE AND THE LAW LA ID DOWN BY THE HON BLE JURISDICTIONAL HIGH COURT, WE ARE OF THE OPINION THAT THE REASSESSMENT PROCEEDINGS INITIATED AGAINST THE ASSESSEE ARE BAD IN LAW AND ARE THUS LIABLE TO BE SET ASIDE. THE APPEAL OF THE ASSESSEE IS ALLOWED ON THE ISSUE OF RE - OPENING AN D THE CROSS - APPEAL OF THE REVENUE I.E., ITA NO.1262/MDS/2013 IS DISMISSED ACCORDINGLY . 4. SINCE THE TRIBUNAL HAS HELD THAT THE REOPENING OF ASSESSMENT UNDER SECTION 147 OF THE ACT WAS BAD IN LAW, SET ASIDE AND ALLOWED THE APPEAL FILED BY THE ASSESSEE, T HE APPEAL FILED BY THE REVENUE IN I.T.A. NO. 1262/MDS/2013 WAS DISMISSED ACCORDINGLY. ONCE THE REOPENING OF ASSESSMENT WAS QUASHED BY THE TRIBUNAL, ADJUDICATION OF GROUNDS RAISED IN THE APPEAL OF THE REVENUE DOES NOT ARISE AND ACCORDINGLY, THE MISCELLANEOU S PETITION FILED BY THE REVENUE STANDS DISMISSED. 5. WITH REGARD TO THE MISCELLANEOUS PETITION IN M.P. NO. 181/MDS/2014 IN I.T.A. NO. 1228/MDS/2013 FOR THE ASSESSMENT YEAR 2005 - 06, IT WAS SUBMITTED AS UNDER: 5. I SUBMIT THAT THE GROUNDS FILED ALONG WI TH THE APPEAL IS COMMON GROUNDS OF APPEAL FOR TWO APPEALS I.E. ONE FOR THE A.Y. 2003 - 04 (ITA NO. 1262/2013) AND ANOTHER FOR 2005 - 06 (ITA NO. 1228/2013) WHICH WAS FILED IN BOTH THE APPEALS. IT IS TRUE THAT MOST OF THE GROUNDS RELATE TO 2003 - 04 BUT THE FOLLO WING GROUND RELATES TO 2005 - 06 WHICH WAS OMITTED TO BE ADJUDICATED BY THE HON BLE ITAT MISTAKENLY. THE CIT(A) FAILED TO APPRECIATE THE FACT THAT THE ASSESSEE IS CLAIMING THE DEBTS WRITTEN OFF AS URBAN DEBTS ONLY BEFORE CIT(A) AND NO REMAND REPORT WAS CAL LED FOR AND RULE 46(1) M .P. NO S . 180 & 18 1 /M/ 15 4 WAS VIOLATED AND ALSO FAILED TO APPRECIATE THE FACT THAT THE LIST OF DEBTS WRITTEN OFF FILED BY THE ASSESSEE CONTAINS SOME RURAL DEBTS ALSO . 6. AGAINST THE APPEAL FILED BY THE REVENUE IN I.T.A. NO. 1228/MDS/2013 FOR THE ASSESSMEN T YEAR 2005 - 06, THE TRIBUNAL, WHILE PASSING ITS ORDER, DEALT WITH THE APPEAL FROM PAGE 18 TO 20 AT PARA 12 AND REPRODUCED ALL THE GROUNDS RAISED BY THE REVENUE IN ITS APPEAL . THE TRIBUNAL HAS HELD AS UNDER: WE FIND THAT THE GROUNDS RAISED BY THE REVENUE I N THE PRESENT APPEAL WERE NOT IN APPEAL BEFORE CIT(APPEALS). EVEN THE CIT(APPEALS) HAS NOT GIVEN ITS FINDING ON THE SAID ISSUES FOR THE AY.2005 - 06. THEREFORE, THE PRESENT APPEAL OF THE REVENUE IS LIABLE TO BE DISMISSED. 7. WE FIND THAT T HE ABOVE GROUND AS STATED TO HAVE NOT BEEN ADJUDICATED BY THE TRIBUNAL WAS NOT THE ONLY GROUND RAISED IN THE APPEAL OF THE REVENUE. ALL THE GROUNDS RAISED IN THE APPEAL OF THE REVENUE WERE REPRODUCED IN THE ORDER OF THE TRIBUNAL AT PAGES 18 AND 19 AND AFTER CONSIDERING THE MATERIALS ON RECORD, THE TRIBUNAL AT PAGE 20 HAS HELD THAT THE ALL GROUNDS RAISED IN THE APPEAL OF THE REVENUE ARE NOT EMANATE FROM THE ORDER OF THE LD. CIT(A). THEREFORE, THE STAND OF THE REVENUE THAT THE ABOVE ONLY GROUND WAS OMITTED TO BE ADJUDICATED OUT OF FIVE EFFECTIVE GROUNDS RAISED IN THE APPEAL OF THE REVENUE IS FOUND TO BE FACTUALLY INCORRECT. ACCORDINGLY, THE MISCELLANEOUS PETITION FILED BY THE REVENUE IS DISMISSED. M .P. NO S . 180 & 18 1 /M/ 15 5 8. IN THE RESULT, BOTH THE MISCELLANEOUS PETITIONS FILED BY T HE REVENUE ARE DISMISSED. ORDER PRONOUNCED ON THE 9 TH DEC EMBER , 2015 AT CHENNAI. SD/ - SD/ - (A. MOHAN ALANKAMONY ) ACCOUNTANT MEMBER ( DUVVURU RL REDDY ) JUDICIAL MEMBER CHENNAI, DATED, THE 09 . 1 2 .201 5 VM/ - / COPY TO: 1. / APPELLANT , 2. / RESPONDENT , 3. ( ) / CIT(A) , 4. / CIT , 5. / DR & 6. / GF.