The DCIT(OSD),Range-1, Ahmedabad V. Bosch Rexroth (India) Ltd., Ahmedabad

MA 84/AHD/2010

• Counselvise Citation: [2011] 123 COUNSELVISE.COM (IT) 6788 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 5 month(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 09-09-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2001-2002
• Appeal Filed On: 09-04-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S R SHAH
• Keywords: Retrospective amendment; Bad and doubtful debts; Revised return; Reason to believe; Reassessment proceedings
• Section: 115JB; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD BEFORE SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER MA NO.84/AHD/2010 [ IN I.T.A. NO.2564/AHD/2006 ] (ASSESSMENT YEAR : 2001-02 ) THE DCIT (OSD) RANGE-1 AHMEDABAD (ORIGINAL APPELLANT) VS. BOSCH REXROTH (INDIA) LTD. NEAR VATVA RAILWAY STATION VATVA AHMEDABAD 382 445 (ORIGINAL RESPONDENT) PAN/GIR NO. : AAACM 9898 F ( APPLICANT ) .. ( RESPONDENT ) REVENUE BY : SHRI VINOD TANWANI, SR. D.R. ASSESSEE BY : SHRI S.R. SHAH DATE OF HEARING : 26/08/2011 DATE OF PRONOUNCEMENT : 9/9/2011 O R D E R PER SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER : THIS MISCELLANEOUS PETITION RECEIVED ON 09/04/2010 AND THE REVENUE HAS SOUGHT RECTIFICATION ON THE FOLLOWING P OINTS:- 2. ON PERUSAL OF THE ORDER, IT IS NOTICED THAT TH E ASSESSING OFFICER HAS REOPENED THE ASSESSMENT U/S.147 AND ADDED BACK PROVISIONS FOR BAD AND DOUBTFUL DEBTS AMOUNTING TO RS.57,79,06 9/- IN BOOK PROFIT OF THE ASSESSEE. THE CIT(A)-V, AHMEDABAD DE LETED THE ADDITION MADE IN THE ASSESSMENT ORDER. THE ITAT VI DE ITS ORDER ITA NO.2546/AHD/2006. DTD.14.9.2007 CONFIRMED THE A CTION OF CIT(A) IN DELETING THE ADDITION. HOWEVER, THE FIN ANCE ACT, 2009 HAS INSERTED CLAUSE (I) BELOW EXPLANATION 1 W.E.F. 1.4-2001, WHICH PROVIDES THAT THE AMOUNT OR AMOUNTS SET ASIDE AS PROVISION FOR MA NO.84/AHD/2010 (IN ITA NO.2564/AHD/06) THE DCIT (OSD) VS. BOSCH REXROTH (I) LTD. ASST.YEAR 2001-02 - 2 - DIMINUTION IN THE VALUE OF ANY ASSETS, . THUS, THE RETROSPECTIVE AMENDMENT MADE IS DIRECTLY APPLICABLE TO THE FACTS OF THE CASE. 2. THE LEARNED DEPARTMENTAL REPRESENTATIVE MR.VINOD TANWANI HAS INFORMED THAT THE TRIBUNAL VIDE AN ORDER DATED 14/0 9/2007 HAS FOLLOWED A DECISION OF RESPECTED SPECIAL BENCH CALCUTTA IN THE CASE OF JT.CIT VS. USHA MARTINE INDUSTRIES LIMITED, 104 ITD 249[KOL.]( SB) AND HELD THAT IT WAS NOT JUSTIFIED IN MAKING THE ADDITION FOR PROVIS ION FOR DOUBTFUL DEBT TO BOOK PROFIT. HE HAS INFORMED THAT THE PROVISIONS O F SECTION 115JB STOOD AMENDED WITH RETROSPECTIVE EFFECT FROM 01/04/2001 A ND, THEREFORE, THE BOOK PROFIT HAS TO BE INCREASED BY THE AMOUNT OR AM OUNTS SET ASIDE AS PROVISIONS FOR DIMINUTION IN THE VALUE OF ANY ASSET . SINCE THE ASSESSMENT YEAR UNDER CONSIDERATION WAS A.Y. 2001-02, THEREFOR E, THE SAID AMENDMENT WAS APPLICABLE ON THE ASSESSEE, HOWEVER, THE RESPECTED TRIBUNAL HAS NOT CONSIDERED THE SAID AMENDMENT AND DECIDED THE ISSUE AGAINST THE REVENUE DEPARTMENT. LEARNED DEPARTMENT AL REPRESENTATIVE HAS ARGUED THAT SINCE THE AMENDED PROVISION WAS NOT TAKEN INTO ACCOUNT BY THE RESPECTED TRIBUNAL, THEREFORE, IT IS A MISTA KE APPARENT ON RECORD, HENCE, REVIEWABLE U/S.254(2) OF THE I.T.ACT. 3. FROM THE SIDE OF THE RESPONDENT-ASSESSEE, MR. S. R.SHAH APPEARED AND INFORMED THAT NO MISTAKE AT ALL WAS COMMITTED B Y THE RESPECTED TRIBUNAL BECAUSE THE SAID AMENDMENT WAS MADE VIDE F INANCE (NO.2) ACT, 2009, HOWEVER, THE TRIBUNAL HAS PASSED THE IMP UGNED ORDER ON 14/09/2007. ONCE THE SAID AMENDMENT WAS NOT INCORP ORATED WHEN THE JUDGEMENT WAS PASSED, THEREFORE, THERE WAS NO QUEST ION OF CONSIDERING MA NO.84/AHD/2010 (IN ITA NO.2564/AHD/06) THE DCIT (OSD) VS. BOSCH REXROTH (I) LTD. ASST.YEAR 2001-02 - 3 - THE AFOREMENTIONED AMENDED PROVISIONS OF SECTION 11 5JB. IN SUPPORT, THE FOLLOWING CASE LAWS ARE CITED:- SL.NO(S) DECISION IN THE CASE OF REPORTED IN 1. CIT VS. SUDHIR S. MEHTA 265 ITR 548 (BOM) 2. SHRIRAM CHITS (BANGALORE) LTD. 325 ITR 219 (KAR.) 4. HAVING HEARD THE SUBMISSIONS OF BOTH THE SIDES, WE ARE OF THE VIEW THAT THERE IS NO LEGAL FORCE IN THE MISCELLANEOUS A PPLICATION OF THE REVENUE DEPARTMENT. THE ADMITTED LEGAL POSITION IS THAT THE PROVISIONS OF SECTION 115JB(2) EXPLANATION-1 WERE AMENDED BY T HE FINANCE (NO.2) ACT, 2009, FURTHER WITH RETROSPECTIVE EFFECT FROM 0 1/04/2001 ACCORDING TO WHICH THE AMOUNT OR AMOUNTS SET ASIDE AS PROVISION FOR DIMINUTION IN THE LIGHT OF ANY ASSET. BUT THE FACT IS THAT THE SAID ORDER OF THE TRIBUNAL WAS PASSED ON 14/09/2007. MEANING THEREBY WHEN T HE IMPUGNED JUDGEMENT WAS PASSED IN THE YEAR 2007, THE REFERRED INSERTED CLAUSE WAS NOT AVAILABLE AS THE SAME CAME INTO STATUTE IN THE YEAR 2009. THE ISSUE WHETHER SUCH A RETROSPECTIVE AMENDMENT WOULD TANTAM OUNT TO A MISTAKE OF A JUDICIAL AUTHORITY WHICH IS POINTED OUT AT A L ATER STAGE. THE HONBLE BOMBAY HIGH COURT HAS HELD THAT WHEN THE APPEAL WAS DISPOSED OFF SINCE THE AMENDED PROVISION WAS NOT AVAILABLE, THEREFORE, THERE WAS NO MISTAKE COMMITTED WHILE PASSING THE JUDGEMENT. FOR REFERENCE, THE SAID PRECEDENT CITED AS CIT VS. SUDHIR S.MEHTA, 265 ITR 548 (BOM); RELEVANT PORTION REPRODUCED BELOW :- 4. IN THE PRESENT CASE, THE SHORT POINT WHICH ARI SES FOR CONSIDERATION IS WHETHER MISCELLANEOUS APPLICATION FILED BY THE MA NO.84/AHD/2010 (IN ITA NO.2564/AHD/06) THE DCIT (OSD) VS. BOSCH REXROTH (I) LTD. ASST.YEAR 2001-02 - 4 - DEPARTMENT WAS MAINTAINABLE UNDER S. 254(2) OF THE IT ACT WHICH STATES THAT MISTAKE APPARENT FROM THE RECORD CAN B E RECTIFIED BY THE TRIBUNAL WITHIN FOUR YEARS FROM THE DATE OF ITS ORDER. IN THIS CASE, THE REASSESSMENT PROCEEDINGS WERE INITIATED V IDE NOTICE DT. 7 TH NOV., 1990. UNDER THE PROVISIONS WHICH EXISTED ON THAT DATE, IT WAS PROVIDED UNDER S. 148(1) THAT IN CASES WHERE TH E AO HAD REASON TO BELIEVE THAT INCOME HAD ESCAPED ASSESSMEN T A NOTICE HAD TO BE ISSUED TO AN ASSESSEE FOR FILING RETURN OF IN COME WITHIN A SPECIFIED PERIOD, NOT BEING LESS THAN THIRTY DAYS. THE UNDERLINED PORTION (ITALICISED IN PRINT) BECAME SUBJECT-MATTER OF DISPUTE IN PROCEEDINGS PENDING BEFORE VARIOUS HIGH COURTS. IN CERTAIN CASES THESE NOTICES WERE HELD TO BE INVALID ON THE GROUND THAT WHERE THE ACT ALLOWS THE ASSESSEE TIME TO FILE REVISED RETURN S WITHIN A STIPULATED PERIOD UNDER THE ACT, IT WAS NOT OPEN TO THE AO TO CALL UPON THE ASSESSEE TO FILE THE RETURNS WITHIN THIRTY DAYS [SEE CIT VS. EKBAL & CO. (1945) 13 ITR 154 (BOM)]. IN VIEW OF T HESE CONFLICTING DECISIONS, THE LEGISLATURE BY VIRTUE OF TAX LAWS (AMENDMENT) ACT, 1996, DELETED THE ABOVE EXPRESSION NOT BEING LESS THAN THIRTY DAYS. HOWEVER, THE TAX LAW (AME NDMENT) ACT OF 1996 GOT THE PRESIDENTIAL ASSET ON 28 TH SEPT., 1996. NO DOUBT, THE AMENDING ACT OPERATED W.E.F. 1 ST APRIL, 1989. HOWEVER, THE AMENDING ACT GOT THE PRESIDENTIAL ASSET ONLY ON 28 TH SEPT., 1996, BY WHICH TIME THE ENTIRE, GAMUT OF REASSESSMENT PRO CEEDINGS, IN THIS CASE, GOT CONCLUDED BEFORE THE TRIBUNAL WHEN I T ALLOWED THE APPEAL OF THE ASSESSEE STRIKING DOWN INITIATION OF REASSESSMENT PROCEEDINGS UNDER THE THEN EXISTING LAW. THAT DECI SION OF THE TRIBUNAL WAS DELIVERED ON 26 TH JUNE, 1996, I.E., THREE MONTHS PRIOR TO THE AMENDING LAW RECEIVING THE PRESIDENTIAL ASSE NT. IN THE CIRCUMSTANCES, THE MISCELLANEOUS APPLICATION FILED BY THE DEPARTMENT WAS RIGHTLY REJECTED BY THE TRIBUNAL AS THERE WAS NO MISTAKE APPARENT FROM THE RECORD IN THE ORDER OF TH E TRIBUNAL DT. 26 TH JUNE, 1996. 5. RESPECTFULLY FOLLOWING THE VERDICT OF THE HONBL E COURT, WE HEREBY DISMISS THE MISCELLANEOUS APPLICATION FILED BY THE REVENUE. MA NO.84/AHD/2010 (IN ITA NO.2564/AHD/06) THE DCIT (OSD) VS. BOSCH REXROTH (I) LTD. ASST.YEAR 2001-02 - 5 - 6. IN THE RESULT, THE MISCELLANEOUS APPLICAT ION FILED BY THE REVENUE IS DISMISSED. ORDER SIGNED, DATED AND PRONOUNCED IN THE COURT ON 9/ 9 /2011. SD/- SD/- ( A.K. GARODIA ) ( MUKUL KR. SHRAWAT ) ACCOUNTANT MEMBER JUDICIAL MEM BER AHMEDABAD; DATED 9/ 9 /2011 T.C. NAIR, SR. PS COPY OF THE ORDER FORWARDED TO : 1. THE ASSESSEE. 2. THE DEPARTMENT. 3. THE CIT CONCERNED 4. THE LD. CIT(APPEALS)-V, AHMEDABAD 5. THE DR, AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT.REGISTRAR), ITAT, AHMEDABAD 1. DATE OF DICTATION..26/8/2011 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 30/8/2011 OTHER 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 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S9.9.2011 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 9.9.2011 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