The ITO, Bhopal v. Shri Rajendra Kumar Jain Through L/H.Smt.Shashi Bai Jain, Bhopal

ITA 500/IND/2009 | 2006-2007
Pronouncement Date: 26-05-2010 | Result: Dismissed

Appeal Details

RSA Number 50022714 RSA 2009
Bench Indore
Appeal Number ITA 500/IND/2009
Duration Of Justice 6 month(s) 29 day(s)
Appellant The ITO, Bhopal
Respondent Shri Rajendra Kumar Jain Through L/H.Smt.Shashi Bai Jain, Bhopal
Appeal Type Income Tax Appeal
Pronouncement Date 26-05-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 26-05-2010
Assessment Year 2006-2007
Appeal Filed On 28-10-2009
Judgment Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH INDORE BEFORE SHRI JOGINDER SINGH JUDICIAL MEMBER AND SHRI V.K. GUPTA ACCOUNTANT MEMBER ITA NO.500/IND/09 A.YS. 2006-07 INCOME TAX OFFICER 3(1) BHOPAL APPELLANT VS RAJENDRA KUMAR JAIN THROUGH L/H SMT. SHASHI BAI JAIN BHOPAL PAN ABVPJ 1284-B RESPONDENT APPELLANT BY : SMT. APARNA KARAN SR. DR RESPONDENT BY : SHRI H.P. VERMA ALONG WITH SHRI ASHISH GOYAL O R D E R PER JOGINDER SINGH JM THIS APPEAL IS BY THE REVENUE AGAINST THE ORDER OF THE LEARNED CIT(A) DATED 24.7.2009 ON THE GROUND THAT THE LEARN ED COMMISSIONER OF INCOME TAX (APPEALS) WAS NOT JUSTIFIED IN DELETING THE ADDITION OF RS. 6 00 000/- MADE BY THE ASSESSING OFFICER ON ACC OUNT OF UNPROVED/UNEXPLAINED GIFT. 2. DURING HEARING OF THIS APPEAL WE HAVE HEARD THE LEARNED COUNSELS FROM BOTH THE SIDES AND CONSIDERED THE ARG UMENTS ADVANCED 2 BY THEM. AT THE OUTSET THE LD. COUNSEL FOR THE AS SESSEE RAISED A PRELIMINARY OBJECTION THAT SINCE THE TAX EFFECT IS BELOW THE PRESCRIBED MONETARY LIMIT THEREFORE THE DEPARTMENT IS NOT PE RMITTED TO FILE THIS APPEAL AND THE SAME DESERVES TO BE DISMISSED ON THI S SHORT GROUND ITSELF. HOWEVER THE LEARNED SR. DR FAIRLY AGREED T HAT THE TAX EFFECT IS BELOW PRESCRIBED MONETARY LIMIT. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF LD. REPRESENTATIVES OF BOTH SIDES AND PERUSED THE MATER IAL AVAILABLE ON RECORD. IN VIEW OF THE ABOVE ASSERTION OF THE LEAR NED RESPECTIVE COUNSELS WE ARE OF THE CONSIDERED OPINION THAT SIN CE THE TAX EFFECT IS RS.1 80 000/- WHICH IS BELOW THE PRESCRIBED LIMIT OF RS. 2 LACS FOR FILING THE APPEAL BEFORE THE TRIBUNAL THEREFORE THIS APP EAL OF THE REVENUE DESERVES TO BE DISMISSED. OUR VIEW FINDS SUPPORT FR OM THE DECISION DATED 2 ND DECEMBER 2009 OF THE TRIBUNAL IN THE CASE OF HIMA NSHU FLOOR MILLS (ITA NO. 507/IND/2009). THE RELEVANT PORTION OF THE SAME IS REPRODUCED HEREUNDER :- THIS APPEAL IS BY THE REVENUE CHALLENGING THE ORDER OF THE CIT(A) DATED 26.8.2009. DURING HEARING OF THIS APPEAL I HAVE HEARD SMT. APARNA KARAN LEARNED SENIOR DR AND NO-BODY WAS PRESENT FOR THE ASSESSEE. REGISTERED NOTICE OF HEARING WAS SENT TO THE ASSESSEE ON 11.11.2009. THE ASSESSEE NEITHER PRESENTED ITSELF NOR MOVED 3 ANY APPLICATION FOR ADJOURNMENT THEREFORE I HAVE NO OPTION BUT TO PROCEED EX-PARTE QUA THE ASSESSEE AND DISPOSE OF THIS APPEAL ON THE BASIS OF MATERIAL AVAILABLE IN THE FILE. 2. THE FIRST GROUND RAISED IS THAT THE LEARNED FIRS T APPELLATE AUTHORITY ERRED IN DELETING THE ADDITION OF RS.4 26 936/- MADE ON ACCOUNT OF DISALLOWANCE OF DEPRECIATION ON THE FIXED ASSETS. ON QUESTIONIN G FROM THE BENCH ABOUT THE TAX EFFECT IT WAS FAIRLY POINTED OUT THAT THE TAX EFFECT IS BELOW THE PRESCRIBED MONETARY LIMIT. I HAVE CONSIDERED THE SUBMISSIONS PUT-FORTH BY THE LEARNED SENIOR DR AND PERUSED THE MATERIAL AVAILABLE ON RECORD. 3. BRIEF FACTS ARE THAT THE ASSESSEE CLAIMED DEPRECIATION OF RS. 8 53 871/- ON THE FIXED ASSETS. THE LEARNED ASSESSING OFFICER BASED UPON THE COMMENTS OF THE AUDITORS IN THE NOTES TO ACCOUNTS AND THE NATURE OF THE BUSINESS DISALLOWED 50% OF THE DEPRECIATION CLAIMED BY THE ASSESSEE WHICH WAS WORKED OUT AT RS.4 26 936/-. BEFORE THE LEARNED FIRST APPELLATE AUTHORITY THE SUBMISSION OF THE ASSESSEE WAS THAT THE FIXED ASSETS WERE DULY REFLECTED IN THE BALANCE SHEET DURING THE RELEVANT PERIOD AND THERE WAS NO NEW ADDITION IN THE ASSETS. THE DEPRECIATION ON ALL THE ASSETS WAS REGULARLY ALLOWED SINCE THE DATE OF INCLUSION IN THE BALANCE SHEET. EVEN IN THE IMPUGNED ORDER THERE IS A FACTUAL FINDING THAT THE ASSESSEE FROM THE DATE OF INCLUSION HAS NOT SHOWN IN ADDITION TO THE BLOCK OF ASSETS AS THE WDV AS ON 31.3.2002 WAS TAKEN AS BASIS AFTER REDUCING THE SALE OF SOME ASSETS FOR TH E CALCULATION OF ALLOWABLE DEPRECIATION FOR THE ASSESSMENT YEAR 2003-04 AND THE ASSESSEE WAS ALLOWED DEPRECIATION FOR THE ASSESSMENT YEAR 2002-03. THE REVENUE HAS NOT ADDUCED ANY EVIDENCE CONTROVERTING THE FACTUAL FINDING MENTIONED IN THE IMPUGNED ORDER THEREFORE THE DISALLOWANCE IS DESIRABLE IN THE IMPUGNED APPEAL. EVEN OTHERWISE ON THE TAX EFFECT THIS APPEAL OF THE REVENUE IS LIABLE TO BE DISMISSED. THIS VIEW FINDS SUPPORT FROM THE DECISION OF THE TRIBUNAL IN THE CASE OF R.K. HOTELS (ITA NO.383/IND/09). THE RELEVANT PORTION OF THE ORDER IS REPRODUCED 4 HEREUNDER :- THIS APPEAL IS BY THE REVENUE AGAINST THE ORDER OF LD. CIT-(A)-II BHOPAL DATED 31.3.2009 FOR THE AY 2005-06 ON THE GROUND THAT THE LD. FIRST APPELLATE AUTHORITY ERRED IN DELETING THE ADDITION OF 6 37 206/- MADE BY THE AO BY APPLYING THE PROVISIONS OF SEC. 154(3) ON ACCOUNT OF INCORRECTNESS AND INCOMPLETENESS OF BOOKS OF ACCOUNT.. 2. DURING HEARING OF THE APPEAL WE HAVE HEARD SMT. APARNA KARAN LD. SR. DR AND SHRI H.P. VERMA ALONG WITH SHRI ASHISH GOYAL LD. COUNSEL FOR ASSESSEE. AT THE OUTSET IT WAS POINTED OUT THAT THERE IS TYPOGRAPHICAL ERROR IN MENTIONING THE FIGURE OF RS.6 37 206/- IN THE GROUND OF APPEAL AS THE CORRECT FIGURE IS RS.3 94 732/-. THE ASSERTION OF THE ASSESSEE WAS CONSENTED TO BE CORRECT BY THE LD. SR. DR. FURTHER IT WAS POINTED OUT THAT THE TAX EFFECT IS ALSO BELOW MONETARY LIMIT THEREFORE THE APPEAL OF THE REVENUE MAY BE DISMISSED. THE LD. SR. DR FAIRLY AGREED TO THE SUBMISSION OF THE ASSESSEE TO THE EXTENT THAT THE TAX EFFECT IS BELOW PRESCRIBED MONETARY LIMIT FOR FILING THE APPEAL BEFORE THE TRIBUNAL. S.NO. AUTHORITY MONETARY LIMIT (IN RS.) 1 ITAT 2 00 000/ - 2 APPEAL UNDER SECTION 260A BEFORE HIGH COURT 4 00 000/ - 3 SUPREME COURT 10 00 000/ - THE BOARD FURTHER CLARIFIED THE TAX EFFECT WHICH MEANS THE DIFFERENCE BETWEEN THE TAX ON THE TOTAL INCOME ASSESSED AND THE TAX THAT WOULD HAVE BEEN CHARGEABLE HAD SUCH TOTAL INCOME BEEN REDUCED BY THE AMOUNT OF INCOME IN RESPECT OF THE ISSUE AGAINST WHICH APPEAL IS INTENDED TO BE FILED. HOWEVER THE TAX WILL NOT INCLUDE ANY INTEREST THEREON. IN CASES OF PENALTY ORDERS THE TAX EFFECT WILL MEAN QUANTUM OF PENALTY DELETED OR REDUCED IN THE ORDER TO BE APPEALED AGAINST. 5 IN THE PRESENT APPEAL THE TOTAL DISPUTED ADDITION IS RS.3 94 732/- THEREFORE AS AGREED/CANVASSED BY LD. REPRESENTATIVES FROM BOTH SIDES THE TAX EFFECT IS BELOW RS.2 LAKHS THE LIMIT PRESCRIBED FO R FILING APPEAL BEFORE THE TRIBUNAL THEREFORE APPEAL OF THE REVENUE DESERVES TO BE DISMISSED. OUR VIEW FINDS SUPPORT FROM THE DECISION OF THE CHANDIGARH BENCH OF THE TRIBUNAL IN THE CASES OF SHRI J.S. LUTHRA (ITA NO.712 TO 715/CHD/2009) AND ITO WARD 2(2) ROPAR VS. THE JHALLIAN KALAN PRI. COOP MILK PRODUCE SOCIETY LTD. JHALLIAN KALAN DISTT. ROPAR (ITA NO.721/CHD/2009). THEREFORE WITHOUT GOING INTO THE MERITS OF THE CASE FACTS AND THE JUDICIAL PRONOUNCEMENTS (SUPRA) THIS APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES OF BOTH SIDES ON 6.10.2009. IN THE LIGHT OF THE ABOVE THIS GROUND OF THE REVEN UE IS HAVING NO MERIT THEREFORE THE STAND OF THE LEARNED CIT(A) IS AFFIRMED CONSEQUENTLY THIS GROUND OF THE REVENUE IS DISMISSED. 4. THE NEXT GROUND RAISED IS THAT THE LEARNED FIRST APPELLATE AUTHORITY ERRED IN DIRECTING THE ASSESSIN G OFFICER TO ALLOW CARRY FORWARD OF BROUGHT FORWARD LOSSES OF EARLIER YEARS WITHOUT ANY BASIS. THE CONTENTION RAISED ON BEHALF OF THE REVENUE IS THAT IN COMING TO A PARTICULAR CONCLUSION NO BASIS HAS BEEN ADDUCED BY THE LEARNED FIRST APPELLATE AUTHORITY AND IT WAS RIGHTLY DISALLOWED BY THE ASSESSING OFFICER IN THE ABSENCE OF PROOF FURNISHED BY THE ASSESSEE. 5. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE STAND OF THE REVENUE IS THAT PROOF OF LAST YEARS LOSSES WAS NOT FURNISHED BY THE ASSESSEE CONSEQUENTLY THESE ARE NOT ALLOWABLE WHEREAS BEFORE THE LEARNED FIRST APPELLATE AUTHORITY THERE IS A FACTUAL FINDING THAT IN ALL PREVIOUS YEARS RETUR NS WERE DULY FILED BY THE ASSESSEE AND THE SAME WERE AVAILABLE ON RECORD OF THE ASSESSING OFFICER. IN TH E 6 IMPUGNED ORDER THE LEARNED FIRST APPELLATE AUTHORITY HAS DIRECTED THE ASSESSING OFFICER TO ALLOW CARRY FORWARD OF BROUGHT FORWARD LOSSES OF EARLIER YEARS WHICH WERE NOT SET OFF AFTER VERIFICATION OF RECORDS OF EARLIER YEARS. EVEN OTHERWISE IT IS A CASE OF ASSESSED LOSS WHICH HAS NOT BEEN SET OFF. CONSEQUENTLY WE ARE IN AGREEMENT THAT IN VIEW OF THE PROVISIONS OF SECTION 72 IT SHOULD BE ALLOWED. CONSEQUENTLY THERE IS NO GRIEVANCE TO THE REVENUE SINCE IT HAS BEEN REMANDED BACK TO THE FILE OF THE ASSESSING OFFICER TO DO THE NEEDFUL AFTER VERIFICATION OF RECORDS OF EARLIER YEARS. MY VIEW FINDS SUPPORT FROM THE RATI O LAID DOWN IN CIT V. J.H. GOTLA; 156 ITR 323 (SC); TARA DEVI BEHL V. CIT; 218 ITR 541 (P&H). THE HONBLE APEX COURT IN THE CASE OF CIT V. MAHALAXMI SUGAR MILLS CO. LTD.; 160 ITR 920 EVEN WENT TO THE EXTENT THAT ITO MUST ALLOW SET OFF EVEN IF IT IS NOT CLAIMED BY THE ASSESSEE BECAUSE A DUTY IS CAST UPON THE ITO TO APPLY THE RELEVANT PROVISIONS OF THE INDIAN INCOMETAX ACT FOR THE PURPOSE OF DETERMINING THE TRUE FIGURE OF ASSESSEES TAXABLE INCOME AND THE CONSEQUENTIAL TAX LIABILITY. MERELY BECAUSE THE ASSESSEE FAILS TO CLAIM THE BENEFIT OF SET OFF CANNOT RELIEVE THE ITO OF HIS DUTY TO APPLY SECTION 72 IN AN APPROPRIATE CASE. IN VIEW OF THESE FACTS AND JUDICIAL PRONOUNCEMENTS I HAVE FOUND NO INFIRMITY IN THE IMPUGNED ORDER CONSEQUENTLY THIS GROUND OF THE REVENUE ALSO FAILS. 6. IN THE RESULT THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT IN THE PRESENCE OF BOTH THE PARTIES AT THE CONCLUSION OF HEARING ON 1.12.2009. IN THE AFORESAID CASE THE TRIBUNAL HAS PASSED A DE TAILED ORDER THEREFORE WITHOUT GOING INTO THE MERITS OF THE CASE AND RESPE CTFULLY FOLLOWING THE AFORESAID DECISION THIS APPEAL OF THE REVENUE IS D ISMISSED. 7 ORDER PRONOUNCED IN OPEN COURT IN THE PRESENCE OF L EARNED REPRESENTATIVES OF BOTH THE SIDES AT THE CONCLUSION OF HEARING ON 26 TH MAY 2010. (V.K. GUPTA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MAY 26 2010 COPY TO: APPELLANT RESPONDENT CIT CIT(A) DR G UARD FILE *DBN/ ORDER PRONOUNCED IN OPEN COURT IN THE PRESENCE OF L EARNED REPRESENTATIVES OF BOTH THE SIDES AT THE CONCLUSION OF HEARING ON MAY 2010. SD/- SD/- (V.K. GUPTA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MAY 2010 COPY TO: APPELLANT RESPONDENT CIT CIT(A) DR G UARD FILE *DBN/ 8