ITO, CHENNAI V. Prou India Engineering Pvt. Ltd., CHENNAI

MA 9/CHNY/2017

• Counselvise Citation: [2017] 124 COUNSELVISE.COM (IT) 5561 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 7 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 13-04-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 05-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHIVA SRINIVAS
• Assessee Lawyers: VE PA KRISHNA
• Keywords: Depreciation; Audit objection; Tax effect; Unabsorbed depreciation
• Section: 143(3); 154

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI ... , . !'# ! ,% !& BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ' / M.P. NO.9/MDS/2017 (IN I.T.A. NO.1464/MDS/2016) ' (' / ASSESSMENT YEAR : 2009-10 THE INCOME TAX OFFICER, CORPORATE WARD 5(2), CHENNAI - 600 034. V. M/S PROU INDIA ENGINEERING PVT. LTD., BALI TOWERS, 3 RD FLOOR, NO.1, ABDUL RAZACK STREET, SAIDAPET, CHENNAI - 600 034. PAN : AAACI 6680 H (*+' /PETITIONER) (*,+-/ RESPONDENT) *+' / 0 /PETITIONER BY : SHRI SHIVA SRINIVAS, JCIT *,+- / 0 / RESPONDENT BY : SHRI VEPA KRISHNA, FCA 1 / 2% / DATE OF HEARING : 07.04.2017 3'( / 2% / DATE OF PRONOUNCEMENT : 13.04.2017 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THE REVENUE HAS FILED THE PRESENT MISCELLANEOUS P ETITION ON THE GROUND THAT CBDTS CIRCULAR NO.21 OF 2015 IS NO T APPLICABLE WHEREVER THERE WAS OBJECTION BY THE AUDIT PARTY. 2 M.P. NO.9/MDS/17 2. SHRI SHIVA SRINIVAS, THE LD. DEPARTMENTAL REPRES ENTATIVE, SUBMITTED THAT THIS TRIBUNAL DISMISSED THE APPEAL O F THE REVENUE ON THE GROUND THAT THE TAX EFFECT IS LESS THAN ` 10 LAKHS. THE LD. D.R. VERY FAIRLY SUBMITTED THAT THE TAX EFFECT IN THIS A PPEAL IS ONLY ` 1,30,410/-. HOWEVER, IN VIEW OF C&AGS AUDIT OBJEC TION, THE REVENUE HAS FILED THE MISCELLANEOUS PETITION BEFORE THIS TRIBUNAL, THEREFORE, ACCORDING TO THE LD. D.R., THE CIRCULAR ISSUED IN CIRCULAR NO.21 OF 2015 IS NOT APPLICABLE AT ALL. 3. ON THE CONTRARY, SHRI VEPA KRISHNA, THE LD. REPR ESENTATIVE FOR THE ASSESSEE, SUBMITTED THAT THE ASSESSING OFFI CER RECTIFIED THE ASSESSMENT ORDER UNDER SECTION 154 OF THE INCOME-TA X ACT, 1961 (IN SHORT 'THE ACT') FOR THE PURPOSE OF DEDUCTING B ROUGHT FORWARD LOSSES AND UNABSORBED DEPRECIATION WHILE COMPUTING DEDUCTION UNDER SECTION 10A OF THE ACT. NOW THE SUPREME COUR T IN CIT V. YOKOGAWA INDIA LTD. (2017) 291 CTR 1 FOUND THAT TRE ATMENT OF BROUGHT FORWARD LOSSES AND UNABSORBED DEPRECIATION HAS TO BE ALLOWED BEFORE ALLOWING DEDUCTION UNDER SECTION 10A OF THE ACT. THEREFORE, EVEN ON MERIT, THE ISSUE IS COVERED IN F AVOUR OF THE ASSESSEE BY THE JUDGMENT OF SUPREME COURT. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. ADMITTEDLY, THE 3 M.P. NO.9/MDS/17 ASSESSING OFFICER ALLOWED THE CLAIM OF THE ASSESSEE IN THE ORIGINAL ASSESSMENT ORDER PASSED UNDER SECTION 143(3) OF THE ACT ON 14.12.2011. NOW THE REVENUE CLAIMS THAT THERE WAS AUDIT OBJECTION BY C&AG, THEREFORE, THE ASSESSING OFFICER RECTIFIED THE ORDER BY DISALLOWING THE CLAIM OF THE ASSESSEE. THIS TRIBUN AL IS OF THE CONSIDERED OPINION THAT PROCEEDING BEFORE THE ASSES SING OFFICER IS A JUDICIAL PROCEEDING UNDER SECTION 136 OF THE ACT. WHEN THE PROCEEDING IS A QUASI-JUDICIAL IN NATURE AND FOR LI MITED PURPOSE, IT IS TREATED AS JUDICIAL PROCEEDING, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE ASSESSING OFFICER HAS TO INDEPENDE NTLY APPLY HIS MIND AND TAKE A DECISION. THE C&AG BEING A THIRD P ARTY TO THE ASSESSMENT PROCEEDING, THIS TRIBUNAL IS OF THE CONS IDERED OPINION THAT THE REPORT OF C&AG CANNOT BE A REASON FOR RECT IFYING THE ORDER OF THE ASSESSING OFFICER. AT THE BEST, THE C&AG RE PORT CAN BE A BASIS FOR INITIATING DISCIPLINARY PROCEEDING AGAINS T THE ASSESSING OFFICER OR ANY OTHER OFFICERS OF THE DEPARTMENT. H OWEVER, THE C&AG CANNOT BE ALLOWED TO INTERFERE WITH JUDICIAL PROCEE DING PENDING BEFORE THE ASSESSING OFFICER. 5. IN VIEW OF THE ABOVE, THIS TRIBUNAL IS OF THE CO NSIDERED OPINION THAT THERE IS NO MERIT IN THE MISCELLANEOUS PETITION FILED BY THE REVENUE. ACCORDINGLY, THE MISCELLANEOUS PETITI ON IS DISMISSED. 4 M.P. NO.9/MDS/17 ORDER PRONOUNCED COURT ON 13 TH APRIL, 2017 AT CHENNAI. SD/- SD/- (. !'# ! ) ( ... ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) % / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 5 /DATED, THE 13 TH APRIL, 2017. KRI. / *267 87(2 /COPY TO: 1. *+' / PETITIONER 2. *,+- /RESPONDENT 3. 1 92 () /CIT(A) 4. 1 92 /CIT 5. 7: *2 /DR 6. ;' < /GF.