Tyco Valves & Controls (India) Pvt. Ltd., Baroda V. The ACIT, Baroda Cir- 4, Baroda

MA 182/AHD/2011

• Counselvise Citation: [2012] 123 COUNSELVISE.COM (IT) 7663 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 month(s) 17 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 02-03-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2003-2004
• Appeal Filed On: 15-11-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: J P SHAH
• Keywords: Period of limitation; Time period of passing order
• Section: 10B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH AHMEDABAD (BEFORE SHRI MUKUL KUMAR SHRAWAT, JM AND SHRI A. MO HAN ALANKAMONY, AM) M. A. NO.182/AHD/2011 ((IN ITA NO.2981/AHD/2008 AY: 2003-04) M/S. TYCON VALVES & CONTROLS INDIA ()) LTD., 302-A, IVORY TERRACE, R. C. DUTT ROAD, ALKAPURI BARODA PA NO. AAACK 8809 L VS THE D. C. I. T., CIR-4, BARODA (APPLICANT) (RESPONDENT) APPLICANT BY SHRI J. P. SHAH, AR RESPONDENT BY SHRI SAMIR TEKRIWAL, SR. DR DATE OF HEARING: 02-03-2012 DATE OF PRONOUNCEMENT: 02-03-2012 ORDER PER A. MOHAN ALANKAMONY : THIS MISC. APPLICATION IS FILED BY THE ASSESSEE BEING AGGRIEVED BY THE ORD ER OF THE TRIBUNAL DATED 04-02-2011 IN ITA NO.2981/AHD/2008, FOR ASSES SMENT YEAR 2003-04. 2. THE ASSESSEE THROUGH ITS MISC. PETITION SUBMITTE D AS UNDER: 1. AHMEDABAD BENCH 'D' OF THE TRIBUNAL PASSED AN OR DER IN ITA NO.2981/AHD/2008 FOR ASST. YEAR 2003-04 DATED 04.02 .2011 IN RESPECT OF FOLLOWING GROUND NO.2 OF THE ABOVE REVENUE'S APPEAL . '(2) THE ID. CIT(A) ERRED ON FACTS AND IN LAW IN AL LOWING DEDUCTION U/S.LOB OBSERVING THAT THE ASSESSEE HAD PURCHASED T HE MACHINERIES, COMPLETELY DISREGARDING THE FACT THAT THE ASSESSEE HAD EMPLOYED USED MACHINERY VALUE OF WHICH EXCEEDED 20% OF THE TOTAL VALUE OF THE MACHINERY EMPLOYED BY THE ASSESS EE.' MA NO.182/AHD/2011 (IN ITA NO. 2981/AHD/2008 AY: 2004-05) M/S. TYCO VALVES & CONTROLS INDIA (P.) LTD. VS DC IT, SURAT 2 APPARENT ERROR NO.L: IN PARA 8 OF THE ORDER, THE FOLLOWING IS RECORDED: 'THE ID. DR SUBMITTED THAT THE DECISION IN THE CASE OF SAKHI RAJIMONDI VALVES (INDIA) LTD, IS NOT FINAL. THE MAT TER IS PENDING BEFORE THE TRIBUNAL.' THIS STATEMENT WAS NOT CORRECT WHEN MADE; BECAUSE T HE TRIBUNAL HAD DISPOSED OFF APPEAL IN THE MATTER OF M/S. SAKHI RAI MONDI VALVES (INDIA) LTD. FOR THE ASST. YEAR 2003-04 ON 23.03.2010; WHER EAS THE ABOVE STATEMENT WAS MADE ON 27.01.2011 AND THE ORDER OF T HE TRIBUNAL IN ASSESSEE'S CASE I.E., TYCO VALVES & CONTROLS INDIA (P.) LTD. IS DATED 04.02.2011. THE ASSESSEE PRAYS THAT THIS APPARENT M ISTAKE BE KINDLY RECTIFIED BY AN APPROPRIATE ORDER. THE SAID ORDER I N THE MATTER OF SAKHI RAIMONDI VALVES (INDIA) LTD. IS ANNEXED HEREWITH MA RKED EXHIBIT-A. APPARENT ERROR NO.2: 2. THE TRIBUNAL RECORDED A VERY IMPO RTANT CONTENTION OF THE ASSESSEE IN PARA 9, AS FOLLOWS: '9. ON THE OTHER HAND, THE ID. AR S UBMITTED THAT ONCE DEDUCTION UNDER SECTION 10B HAS BEEN ALLOWED IN THE PAST AND THIS BEING FIFTH YEAR THEN THERE IS NO REASON TO DISALLO W THE SAME THIS YEAR. ' THIS IMPORTANT CONTENTION HAS REMAINED UNDECIDED, W HICH IS AN APPARENT ERROR AND MAY KINDLY BE RECTIFIED. AS RECORDED BY T HE TRIBUNAL IN PARA 5, THE APPLICANT'S RELIEF UNDER SECTION 10B UPTO ASST. YEAR 2002-03 AS GIVEN BY THE OFFICER IS KEPT IN TACT BY THE HON'BLE GUJAR AT HIGH COURT. IN FACT THIS POINT IS NO MORE RES INTEGRA IN VIEW OF THE FACT TH AT IT IS COVERED BY A DIRECT DECISION OF GUJARAT HIGH COURT IN 123 ITR 669 BEING CIT VS. SAURASHTRA CEMENT AND CHEMICAL INDUSTRIES LTD. AS ALSO THE AHM EDABAD TRIBUNAL'S DECISION IN GATEWAY TECHNOLABS PVT. LTD. VS. I.T.O. IN I.T.A. NO.2473 & 2519/AHD/2006 FOR ASST. YEAR 2003-04. COPIES OF THE DECISIONS ARE ENCLOSED HEREWITH MARKED EXHIBIT-B AND C RESPECTIVE LY. FURTHER APPARENT ERRORS; 3. THEREAFTER, THE TRIBUNAL IN PARA 10 STATED AS FOLLOWS: MA NO.182/AHD/2011 (IN ITA NO. 2981/AHD/2008 AY: 2004-05) M/S. TYCO VALVES & CONTROLS INDIA (P.) LTD. VS DC IT, SURAT 3 '10. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND CAREFULLY PERUSED THE MATERIAL ON RECORD. IN OUR CONSIDERED VIEW, THE FINDING OF THE HIGHER COURT IN THE CASE OF SAKHI RAIMONDI V ALVES (INDIA) LTD. WILL HAVE SERIOUS REPERCUSSION ON THE FINDING IN THE CASE OF THIS ASSESSES FOR CONCLUDING THAT ASSESSEE HAS MADE OUTR IGHT PURCHASE OR IT WAS MERELY A LEASE TRANSACTION FOR A LIMITED PERIOD. FURTHER THE LEASE AGREEMENT BETWEEN THE ASSESSEE AND SAKHI RAIM ONDI VALVES (INDIA) LTD. HAS NOT BEEN CONSIDERED SO AS T O FIND OUT WHETHER SUCH LEASE ARRANGEMENT WAS EQUIVALENT TO SA LE AND PURCHASE. IF FOR THE REMAINING LIFE OF PLANT AND MA CHINERY THEY HAVE BEEN LEASED OUT TO ASSESSEE IT WILL BE EQUIVALENT T O OUT-RIGHT SALE/PURCHASE AND, THEREFORE, IT WILL BE RELEVANT FACTOR TO TAKE INTO ACCOUNT WHILE COMPUTING 20% VALUE. ACCORDINGLY, WE RESTORE THE MATTER TO THE FILE OF AQ TO DECIDE THE ISSUE AFRESH AFTER TAKING INTO ACCOUNT ALL THE FACTS AS DISCUSSED ABOVE INCLUDING DECISION OF TRIBUNAL IN THE CASE OF M/S. SAKHI RAIMONDI. AS A R ESULT, THIS GROUND OF REVENUE IS ALLOWED BUT FOR STATISTICAL PU RPOSES.' THIS PARA IN THE HUMBLE SUBMISSION OF THE ASSESSEE SUFFERS FROM FOLLOWING APPARENT ERRORS: (I) AS STATED ABOVE, CONTRARY TO WHAT THE ID. DR SUBMITTED REGARDING THE PENDENCY OF THE APPEAL OF SAKHI RAIMO NDI VALVES (INDIA) LTD., THE TRIBUNAL HAD ALREADY DISPOSED OFF THE MAT TER OF SAKHI RAIMONDI VALVES (INDIA) LTD. AND DECIDED THE APPEAL IN FAVOU R OF THE ASSESSEE AND THEREFORE THE APPEAL OF SAKHI RAIMONDI WAS NOTPENDI NG. THE MOST STRIKING FEATURE OF THE MATTER OF SAKHI RAIMONDI VALVES (IND IA) LTD. BEFORE THE TRIBUNAL IS THAT THE POINT OF PURCHASE OR LEASE OF MACHINERY WAS NOT THERE BEFORE THE TRIBUNAL AT ALL. BESIDES, AT PAGES 128 A ND 131 ARE THE COPIES OF THE RENTAL AGREEMENT BETWEEN SAKHI RAIMONDI VALVE ( INDIA) LTD. AND THE ASSESSEE DATED 02.01.2002 AND IT CLEARLY STATED THE RE THAT THE AGREEMENT IS FOR A PERIOD OF 2 YEARS ONLY. IN THE CONTEXT OF THESE FACTS, APART FROM THE REASON, THAT THE POINT IS COVERED IN FAVOUR OF ASSE SSEE BY VIRTUE OF THE ABOVE DIRECT DECISION OF THE GUJARAT HIGH COURT IN CIT VS. SAURASHTRA CEMENT AND CHEMICAL INDUSTRIES LTD. AS ALSO THE AHM EDABAD TRIBUNAL'S DECISION IN GATEWAY TECHNOLABS PVT. LTD. VS. I.T.O. (SUPRA), THE ENTIRE SENDING BACK OF THE MATTER TO THE ASSESSING OFFICER IS AN APPARENT ERROR. IT IS WORTH NOTING THAT THE C.I.T.(APPEALS) IN APPEAL OF SAKHI RAIMONDI VALVES (INDIA) LTD. DECIDED THAT IT IS NOT A CASE O F SALE OF MACHINERY AND AS IS EVIDENT FROM THE GROUNDS OF APPEAL OF DEPARTMENT IN THE MATTER OF SAKHI RAIMONDI VALVES (INDIA) LTD. FOR ASST. YEAR 2003-04 AT EXHIBIT-A HERETO, THE DEPARTMENT ACCEPTED THIS FINDING AND HAD NOT PR EFERRED AN APPEAL TO THE TRIBUNAL BECAUSE THE DEPARTMENT'S ONLY GROUNDS OF APPEAL BEFORE THE TRIBUNAL AS RECORDED IN THE ORDER WERE, MA NO.182/AHD/2011 (IN ITA NO. 2981/AHD/2008 AY: 2004-05) M/S. TYCO VALVES & CONTROLS INDIA (P.) LTD. VS DC IT, SURAT 4 N 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AS WELL AS IN LAW, THE LEARNED CIT(A) HAS ERRED IN ESTIMATING THE ANNU AL VALUE OF THE PROPERTY AT RS.9 LAKHS WITHOUT CONSIDERING THAT LEASE AGREEMENT WAS COLLUSIVE AND BETWEEN THE RELATED PERSONS AND HAS FAILED TO TAKE INTO CONSIDERATION THE ACTUAL RENT OF THE SIMILAR PROPERTIES IN THE SAME LOCALITI ES WHILE ESTIMATING ANNUAL VALUE OF THE LEASED PROPERTY. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AS WELL AS IN LAW, THE LEARNED CIT(A) HAS ERRED IN HOLDING THAT REMISS ION OF LIABILITY TO THE EXTENT OF RS.88,75,245/- CANNOT BE TAXED U/S.41(L) AS IT HAS NOT BEEN CLAIMED AS AN EXPENSES IN ANY OF THE EARLIER YEARS IGNORING THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF T.V. SUNDARAM LYENGAR LTD. (222 ITR 344) IN WHICH IT WAS HELD THAT EVEN DEPOSITS WH ICH ARE CAPITAL IN NATURE WILL BE TREATED AS INCOME OF THE RECIPIENTS IF SUFFICIENT TIME HAS LAPSED OR ON EXPIRY OF LIMITATION PERIOD.' 4. THE ASSESSEE HUMBLY PRAYS THAT THE ABOVE AP PARENT ERRORS BE IDLY RECTIFIED IN THE INTEREST OF JUSTICE FOR WHICH ACT OF KINDNESS, THE ASSESSEE SHALL FOREVER PRAY AND REMAIN GRATEFUL. 3. ON PERUSAL OF THE RECORDS, IT IS APPARENT THAT C ERTAIN MISTAKES HAVE CREPT IN THE ORDER OF THE TRIBUNAL. THEREFORE, FOR THE LIMITED PURPOSE WE RECALL THE ABOVE ORDER OF THE TRIBUNAL A ND DIRECT THE REGISTRY TO POST IF FOR HEARING ON 11-04-2012. SINC E BOTH THE PARTIES WERE INTIMATED IN THE OPEN COURT, NO NOTICE IS REQU IRED TO BE ISSUED. 4. IN THE RESULT, THE MISC. APPLICATION FILED BY TH E ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 02-03-2012. SD/- SD/- (MUKUL KUMAR SHRAWAT) JUDICIAL MEMBER (A. MOHAN ALANKAMONY) ACCOUNTANT MEMBER LAKSHMIKANT DEKA/ LAKSHMIKANT DEKA/ LAKSHMIKANT DEKA/ LAKSHMIKANT DEKA/- -- - MA NO.182/AHD/2011 (IN ITA NO. 2981/AHD/2008 AY: 2004-05) M/S. TYCO VALVES & CONTROLS INDIA (P.) LTD. VS DC IT, SURAT 5 COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER D Y. REGISTRAR, ITAT, AHMEDABAD