Joint Venture of MCL & MMCL (AOP), Baroda V. The ACITCircle-2, Baroda

MA 43/AHD/2010

• Counselvise Citation: [2012] 123 COUNSELVISE.COM (IT) 7627 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 11 month(s) 7 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 09-02-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2001-2002
• Appeal Filed On: 02-03-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Depreciation; Opportunity of being heard; Unabsorbed depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, D BENCH, AHMEDABAD BEFORE SHRI D. K. TYAGI, JUDICIAL MEMBER AND SHRI A. K. GARODIA, ACCOUNTANT MEMBER M.A.NO.43/AHD/2010 IN I.T.A. NO.2414/AHD/2004/ AHD/20 (ASSESSMENT YEAR 2001-02) JOINT VENTURE OF MCL & MMCL CREATIVE CASTLE, 70, SAMPATRAO COLONY, PRODUCTIVE ROAD, BARODA VS. ACIT, CIRCLE 2, BARODA PAN/GIR NO. : AAAAJ0288L (APPELLANT) .. (RESPONDENT) APPELLANT BY: MS. URVASHI SHODHAN, AR RESPONDENT BY: SHRI SAMIR TEKRIWAL, SR. DR DATE OF HEARING: 03.02.2012 DATE OF PRONOUNCEMENT: 09.02.2012 O R D E R PER SHRI A. K. GARODIA, AM:- THIS MISCELLANEOUS APPLICATION IS FILED BY THE ASS ESSEE CONTENDING THAT THERE IS A MISTAKE IN THE TRIBUNAL ORDER, WHIC H SHOULD BE RECTIFIED OR THE ORDER SHOULD BE RECALLED. THE FIRST MISTAKE PO INTED OUT BY THE ASSESSEE IS THAT IT IS NOTED BY THE TRIBUNAL IN PAR A 3 & 4 IN THE TRIBUNAL ORDER THAT IT WAS SUBMITTED BY THE LD. A.R. THAT TH E ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY ORDER DATED 23.05.2009 OF THE TRIBUNAL FOR ASSESSMENT YEAR 1995-96 IN I.T.A.NO. 1953/AHD/2001. THE LD. D.R. ALSO AGREED WITH THESE SUBMISSIONS. IT IS SUBMITTED THA T EVEN THEREAFTER, THE TRIBUNAL HAS DISPOSED OFF THE ISSUE BY RESTORING TH E MATTER BACK TO THE FILE OF LD. CIT(A) FOR A FRESH DECISION ON MERITS AFTER ALLOWING OPPORTUNITY OF M.A.NO.43 /AHD/2010 2 HEARING TO BOTH THE SIDES IN ACCORDANCE WITH LAW. THE 2 ND MISTAKE POINTED OUT IN THE MISCELLANEOUS APPLICATION IS THAT DEPREC ATION WAS ALLOWED IN THE EARLIER YEARS AND HENCE, THE SAME SHOULD BE ALL OWED IN THE PRESENT YEAR ALSO. 2. IN THE COURSE OF ARGUMENTS BEFORE US, IT WAS SUB MITTED BY THE LD. A.R. THAT LD. CIT(A) HAS NOT DECIDED THE FIRST ISSU E ON MERIT BECAUSE IT DID NOT HAVE THE BENEFIT OF THE TRIBUNAL ORDER IN T HE ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 1995-96. IT WAS ALSO SUBMI TTED THAT THIS TRIBUNAL ORDER WAS AVAILABLE BEFORE THE TRIBUNAL IN THE PRES ENT YEAR AND HENCE, INSTEAD OF RESTORING THE MATER BACK TO THE FILE OF LD. CIT(A) FOR A FRESH DECISION ON MERIT, THE ISSUE SHOULD HAVE BEEN DECID ED BY THE TRIBUNAL HERE ITSELF AND SINCE IT WAS NOT DONE, IT IS AN APP ARENT MISTAKE IN THE TRIBUNAL ORDER. REGARDING THE 2 ND ISSUE, I.E. NON ALLOWING OF THE DEPRECIATION, IT WAS SUBMITTED THAT HIS CLAIM OF TH E ASSESSEE WAS REJECTED ON THE BASIS THAT THE ASSESSEE AN AOP IS NOT ENTITL ED FOR DEPRECIATION AS THE ASSET WAS OWNED BY THE MEMBER COMPANY AND NOT B Y THE JOINT VENTURE. IT IS SUBMITTED THAT ON THE SAME ASSETS, DEPRECIATION WAS ALLOWED IN THE EARLIER YEARS AND HENCE, IN THE PRESENT YEAR ALSO, THE DEPRECIATION HAS TO BE ALLOWED AND BY NOT ALLOWING THE SAME, THE TRIBUNAL HAS COMMITTED A MISTAKE WHICH SHOULD BE RECTIFIED. 3. AS AGAINST THIS, IT WAS UNSUITED BY THE LD. A.R. THAT ON THE FIRST ISSUE, THE TRIBUNAL HAS SIMPLY RESTORED THE MATTER BACK TO THE FILE OF LD. CIT(A) FOR A FRESH DECISION ON MERIT AS PER LAW AND HENCE, THERE IS NO MISTAKE IN THE TRIBUNAL ORDER ON THIS ASPECT. REG ARDING THE 2 ND ISSUE, IT WAS SUBMITTED THAT WHEN THE ASSESSEE IS NOT THE OWN ER OF THE ASSET, DEPRECIATION CANNOT BE ALLOWED AND, THEREFORE, ON T HIS ISSUE ALSO, THERE IS NO APPARENT MISTAKE IN THE TRIBUNAL ORDER. M.A.NO.43 /AHD/2010 3 4. WE HAVE CONSIDERED THE RIVAL SUBMISSION, PERUSED THE MATERIAL ON RECORD AND HAVE GONE THROUGH THE IMPUGNED TRIBUNAL ORDER. WE FIND THAT IT IS OBSERVED BY THE TRIBUNAL IN PARS 5 THAT LD. C IT(A) HAS NOT DECIDED THIS APPEAL OF THE ASSESSEE ON MERIT AND DISMISSED THE APPEAL ON THIS BASIS THAT THE ASSESSEE WAS NOT HAVING ANY GRIEVANCE AGAI NST THE PROTECTIVE ASSESSMENT IN HIS HANDS BECAUSE THE ASSESSEE HIMSEL F HAS FILED RETURN OF INCOME IN THE STATUS OF AOP AND THE ISSUE REGARDING PROTECTIVE AND SUBSTANTIVE ASSESSMENT HAS TO BE DECIDED IN THE CAS E OF MEMBER COMPANIES OF AOP. SINCE THE ISSUE WAS NOT DECIDED ON MERIT BY THE LD. CIT(A), IT WAS THOUGHT PROPER BY THE TRIBUNAL TO RE STORE THE MATTER BACK TO THE FILE OF LD. CIT(A) FOR A FRESH DECISION ON MERI T AFTER ALLOWING REASONABLE OPPORTUNITY OF BEING HEARD TO BOTH THE P ARTIES IN ACCORDANCE WITH LAW. IN OUR CONSIDERED OPINION, EVEN IF AN EA RLIER TRIBUNAL ORDER IS AVAILABLE, THERE IS NO APPARENT MISTAKE IN THE PRES ENT TRIBUNAL ORDER AS PER WHICH THE ISSUE WAS RESTORED BACK TO THE FILE OF LD . CIT(A) FOR FRESH DECISION ON MERIT BECAUSE THE MATTER WAS NOT DECIDE D BY LD. CIT(A) AND, THEREFORE, IT IS ALWAYS DESIRABLE THAT THE TRIBUNAL SHOULD DECIDE THE MATTER AFTER THE DECISION OF LD. CIT(A). IN THIS VIEW OF THE MATTER, WE ARE OF THE CONSIDERED OPINION THAT THERE IS NO APPARENT MISTAK E IN THE TRIBUNAL ORDER WHICH CAN BE RECTIFIED U/S 254(2) ON THE FIRST ISSU E. 5. REGARDING THE 2 ND ISSUE, WE FIND THAT IT IS NOTED BY THE TRIBUNAL IN PARA 8 OF THE TRIBUNAL ORDER THAT THE AR OF THE ASS ESSEE COULD NOT EXPLAIN AS TO HOW, DEPRECIATION IS ALLOWABLE IN RESPECT OF THE ASSETS OF WHICH THE ASSESSEE JOINT VENTURE IS NOT THE OWNER. IT IS ALS O OBSERVED BY THE TRIBUNAL THAT NO MATERIAL WAS BROUGHT ON RECORD BEF ORE THE TRIBUNAL TO CONTROVERT THE FINDING OF LD. CIT(A) THAT DEPRECIAT ION IS NOT ALLOWABLE IN THE HANDS OF THIS ASSESSEE EVEN IF TREATED AS AN AO P BECAUSE, THE ASSETS M.A.NO.43 /AHD/2010 4 WAS OWNED BY THE MEMBER COMPANY AND NOT BY THE ALLE GED JOINT VENTURE. IN VIEW OF THIS CLEAR FINDING OF THE TRIBUNAL, IT C ANNOT BE SAID THAT THERE IS APPARENT MISTAKE IN THE TRIBUNAL ORDER. REGARDING THIS SUBMISSIONS THAT DEPRECIATION WAS ALLOWED ON THOSE ASSET IN ALL THE EARLIER YEARS, WE FIND THAT THE ASSESSEE HAS GIVEN A CHART ON PAGE 4 OF TH E PAPER BOOK, WHERE IT IS STATED BY THE ASSESSEE THAT DEPRECIATION WAS ALLOWE D BY THE A.O. OR IN APPEAL FOR ASSESSMENT YEAR 1995-96, 1996-97 AND 199 7-98 BUT THERE IS NO MENTION REGARDING THE INTERVENING THREE ASSESSMENT YEARS I.E. ASSESSMENT YEAR 1998-99, 1999-2000 AND 2000-01 AS TO WHETHER I N THOSE THREE YEARS, DEPRECIATION WAS ALLOWED OR NOT. WE ALSO FIND THAT ON PAGE 7 OF THE PAPER BOOK, THE ASSESSEE HAS GIVEN A CHART REGARDING CARR Y FORWARD OF BUSINESS LOSS AND DEPRECIATION FOR THE ASSESSMENT YEARS 1997 -98 TO 2001-02. AS PER THIS CHART, IN ASSESSMENT YEAR 1998-99, THE ASS ESSEE HAS CARRY FORWARD BUSINESS LOSS OF RS.1,78,344/- AND THE ASSESSEE ALS O HAD UNABSORBED DEPRECIATION OF RS.11,77,721/-. SINCE THERE WAS UN ABSORBED BUSINESS LOSS IN THIS YEAR, IT HAS TO BE ACCEPTED THAT THE ENTIRE DEPRECIATION CLAIMED BY THE ASSESSEE AND ALLOWED BY THE A.O. WAS TO BE CARR IED FORWARD AS UNABSORBED DEPRECIATION BECAUSE DEPRECIATION HAS TO BE ADJUSTED AGAINST BUSINESS PROFITS AND WHEN THERE IS BUSINESS LOSS, N O DEPRECIATION CAN BE ADJUSTED. IF THE DEPRECIATION ALLOWED IN THE EAR LIER YEAR I.E. 1998-99, WAS IN RESPECT OF THE SAME ASSETS ON WHICH DEPRECIA TION IS CLAIMED IN THE PRESENT YEAR, THEN HOW THE AMOUNT OF DEPRECIATION C AN BE RS.10.45 LACS IN THE PRESENT YEAR AND RS.11.78 LACS IN ASSESSMENT YE AR 1998-99 BECAUSE ON THE WDV AT THE END OF 1998-99, DEPRECIATION WAS AGA IN ALLOWED IN ASSESSMENT YEAR 1999-2000 TO 2000-01 AND THEREFORE, ON THOSE ASSETS, DEPRECIATION IN THE PRESENT YEAR CANNOT BE RS.10.45 LACS. HENCE, THESE FACTS DO NOT SUPPORT THE CLAIM OF THE ASSESSEE THAT ON THE SAME ASSETS, M.A.NO.43 /AHD/2010 5 DEPRECIATION WAS ALLOWED IN EARLIER YEARS. CONSIDE RING ALL THESE FACTS, WE DO NOT FIND ANY APPARENT MISTAKE IN THE TRIBUNAL OR DER ON THE 2 ND ISSUE ALSO. 6. IN THE RESULT, MISCELLANEOUS APPLICATION OF THE ASSESSEE IS DISMISSED. 7. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE M ENTIONED HEREINABOVE. SD./- SD./- (D. K. TYAGI) (A. K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER SP COPY OF THE ORDER FORWARDED TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT (APPEALS) 5. THE DR, AHMEDABAD BY ORDER 6. THE GUARD FILE AR,ITAT,AHMEDABAD 1. DATE OF DICTATION 03/2/12 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 06.2.12OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P .S./P.S. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 9/2 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S.9/2 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 09/02/2012 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK .. 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER . 9. DATE OF DESPATCH OF THE ORDER. .