DCIT, Corporate Circle-1(1), Bhubaneswar V. Industrial Development Corporation of Orissa Ltd, Bhubaneswar

MA 61/CTK/2017

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 4922 (ITAT-CUTTACK)
• Duration Of Justice: 4 year(s) 3 month(s) 2 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 28-03-2022
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 1996-1997
• Appeal Filed On: 26-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S.C.BHADRA
• Keywords: Depreciation
• Section: 43

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BEFORE S/ AND ARUN KHODPIA, ACCOUNTANT MEMBER Dy.CIT, Corporate Circle Bhubaneswar. PAN/GIR No. (Appellant Revenue Per C.M.Garg The revenue defect in the Tribunal order dated No.280/CTK/2001 for assessment year 1996 contentions and prayer: “5. In their present order dtd.28.07.2017 the Hon'ble ITAT, in para 9 of their order, while referring to Explanation 4A, inserted vide the Finan (No.2), 1996 w.e.f 01.10.1996 and observing that any amendment which increases the tax liability shall always be prospective in nature, further observed, "therefore Explanation 4 of section 43(1) shall apply to the assessee". With these observations disputed issue to the file of the AO to determine the WDV of the plant & machinery purchased by the assessee from OSEB, for the purpose of IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK S/SHRI CHANDRA MOHAN GARG, JUDICIAL AND ARUN KHODPIA, ACCOUNTANT MEMBER M.A.No.61/CTK/2017 ( in ITA No.280/CTK/2001 Assessment Year : 1996-97 Corporate Circle-1(1), Bhubaneswar. Vs. Industrial Development Corporation of Orissa Ltd., Bhubaneswar No.AAACI 4821 L (Appellant) .. ( Respondent Assessee by : Shri S.C. Bhadra Revenue by : Shri Sovech Chandra Mohanty, Addl. Date of Hearing : 25 /3/ 20 Date of Pronouncement : 29/ O R D E R g, JM The revenue has filed this miscellaneous petition by pointing out defect in the Tribunal order dated 28.7.2017 passed in ITA No.280/CTK/2001 for assessment year 1996-97 contentions and prayer: 5. In their present order dtd.28.07.2017 the Hon'ble ITAT, in para 9 of their order, while referring to Explanation 4A, inserted vide the Finan (No.2), 1996 w.e.f 01.10.1996 and observing that any amendment which increases the tax liability shall always be prospective in nature, further observed, "therefore Explanation 4 of section 43(1) shall apply to the assessee". With these observations the Hon'ble Tribunal remitted the entire disputed issue to the file of the AO to determine the WDV of the plant & machinery purchased by the assessee from OSEB, for the purpose of Page1 | 6 IN THE INCOME TAX APPELLATE TRIBUNAL, JUDICIAL MEMBER AND ARUN KHODPIA, ACCOUNTANT MEMBER /CTK/2001) Industrial Development Corporation of Orissa Ltd., Bhubaneswar Respondent) S.C. Bhadra, AR Sovech Chandra Mohanty, Addl. CIT (DR) / 2022 /3/2022 has filed this miscellaneous petition by pointing out 28.7.2017 passed in ITA with the following 5. In their present order dtd.28.07.2017 the Hon'ble ITAT, in para 9 of their order, while referring to Explanation 4A, inserted vide the Finance Act (No.2), 1996 w.e.f 01.10.1996 and observing that any amendment which increases the tax liability shall always be prospective in nature, further observed, "therefore Explanation 4 of section 43(1) shall apply to the the Hon'ble Tribunal remitted the entire disputed issue to the file of the AO to determine the WDV of the plant & machinery purchased by the assessee from OSEB, for the purpose of M.A.No.61/CTK/2017 ( in ITA No.280/CTK/2001) Assessment Year : 1996-97 Page2 | 6 determination of exact quantum of depreciation that will be admissible on the plant & machinery under Rule-5. Appendix I, Part III(3)(iii)B(a) of the Rules. 5.1 As may be noticed, in that order the Hon'ble ITAT have opined/directed the AO that Explanation 4 of section 43(1) shall apply to the case of the assessee in this case. However, after carefully going through the provisions of Explanation 4 as per the I.T. Act, 1961, it may kindly be noticed that the same i.e. Explanation 4, is not applicable to the present case of the assessee company, keeping in view the specific observation/direction of the Hon'ble Jurisdictional High Court, for determining WDV of the plant & machinery which was purchased by the assessee from OSEB. The provisions of Explanation 4 to section 43(1) read as under: Explanation 4 "Where any asset which had once belonged to the assessee and had been used by him for the purposes of his business or profession and thereafter ceased to be his property by reason of transfer or otherwise, is reacquired by him, the actual cost to the assessee shall be- (i) the actual cost to him when he first acquired the................ From the above it may be noticed the said Explanation 4 applies to case of an assessee who once owned an asset for his business purpose and latter the same ceased to his asset for any reason, and subsequently that assessee re-acquires such asset, and then how to determine the actual cost of such asset in 6. Keeping in view the specific issue i.e. determination of written Down value of the plant & machinery, which was purchased by the assessee company from OSEB, which was remanded by the Hon'ble Jurisdictional High Court to the Hon'ble ITAT, it may kindly be noticed that the said Explanation 4, referred to by the Hon'ble ITAT may not be applicable to the case of the assessee company, in the light of such specific observation made by the Hon'bie High Court. Thus, it may be noticed that s:a