Kar Mobiles Ltd, Bangalore v. DCIT, Ernakulam

ITA 290/COCH/2010 | 2005-2006
Pronouncement Date: 27-07-2012

Appeal Details

RSA Number 29021914 RSA 2010
Assessee PAN AAACK6764G
Bench Cochin
Appeal Number ITA 290/COCH/2010
Duration Of Justice 2 year(s) 2 month(s) 28 day(s)
Appellant Kar Mobiles Ltd, Bangalore
Respondent DCIT, Ernakulam
Appeal Type Income Tax Appeal
Pronouncement Date 27-07-2012
Appeal Filed By Assessee
Bench Allotted DB
Tribunal Order Date 27-07-2012
Date Of Final Hearing 21-06-2012
Next Hearing Date 21-06-2012
Assessment Year 2005-2006
Appeal Filed On 29-04-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH COCHIN BEFORE S/SHRI N.R.S.GANESAN JM AND B.R.BASKAR AN AM I.T.A. NO. 290/COCH/2010 ASSESSMENT YEAR: 2005-06 KAR MOBILES LTD. NO. 26 1 ST PHASE PEENYA INDUSTRIAL AREA III MAIN ROAD BANGALORE-560058. [PAN:AAACK 6764G] VS. THE DEPUTY COMMISSIONER OF INCOME-TAX CIRCLE-2(1) RANGE-2 ERNAKULAM. (ASSESSEE -APPELLANT) (REVENUE- RESPONDENT) ASSESSEE BY SHRI V.SATHYANARAYANAN CA REVENUE BY SMT. S. VIJAYAPRABHA JR. DR DATE OF HEARING 21/06/2012 DATE OF PRONOUNCEMENT 27/07/2012 O R D E R PER B.R.BASKARAN ACCOUNTANT MEMBER: THE APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 16-03-2010 PASSED BY THE LD. CIT KOCHI U/S. 263 OF THE ACT AND IT RE LATES TO THE ASSESSMENT YEAR 2005-06. THE ASSESSEE IS QUESTIONING THE VALIDITY OF THE REV ISION ORDER PASSED BY THE LD. CIT. 3. THE FACTS RELATING TO THE CASE ARE STATED IN BRI EF. THE ASSESSMENT IN THE HANDS OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2005-06 WAS CO MPLETED U/S. 143(3) OF THE ACT BY THE ASSESSING OFFICER ON 31-12-2007. THE LD. CIT ON EXAMINATION OF THE RECORDS FOUND THAT THE ASSESSMENT ORDER IS ERRONEOUS AND PR EJUDICIAL TO THE INTERESTS OF THE REVENUE ON THE FOLLOWING ISSUES: (I) SINCE THE ASSESSEE HAS NOT FILED A COPY OF C OST AUDIT REPORT THE RETURN FILED OUGHT TO HAVE BEEN TREATED AS DEFECTIVE AND INVALI D AS PROVIDED IN SECTION 139(9) OF THE ACT. I.T.A. NO./290/COCH/2010 2 (II) IN THE COMPUTATION THE ASSESSING OFFICER STARTED WITH THE TOTAL INCOME AS RETURNED BY THE ASSESSEE AT RS. 6 52 02 038/- WHIC H WAS AFTER DEDUCTION OF RS. 2 500/- UNDER CHAPTER VIA. HOWEVER THE AO HAS AG AIN ALLOWED RS. 2500/-. THE EXCESS DEDUCTION HAS TO BE WITHDRAWN. (III) AS PER SCHEDULE 10 (OPERATING REVENUE) TO T HE ANNUAL REPORT THE ASSESSEE HAS RECEIVED RS. 49 77 000/- FROM SALE O F SCRAP. HOWEVER NO TCS AS REQUIRED U/S. 206C(1) HAS BEEN REPORTED. (IV) DEPRECIATION @ 60% HAS BEEN ALLOWED ON THE COMPUTER ACCESSORIES AS AGAINST @ 25%. EXCESS DEPRECIATION HAS TO BE WITHD RAWN. (V) IT IS ALSO SEEN THAT DEPRECIATION @ 100% H AS BEEN ALLOWED ON THE OPENING WDV OF RS. 28 705/- ON PRECISION MACHINERY WHICH IS NOT LISTED AMONG THE PLANT & MACHINERY QUALIFYING FOR DEPRECIATION @ 10 0% IN THE IT RULES. THE ELIGIBLE RATE OF DEPRECIATION IS @ 25%. EXCESS DE PRECIATION ALLOWED HAS TO BE WITHDRAWN. (VI) AS PER ANNEXURE VI TO THE AUDIT REPORT A TOTAL AMOUNT OF RS. 96 42 651/- HAS BEEN PAID UNDER VARIOUS HEADS OF EXPENSES WITHO UT COMPLYING WITH THE RELEVANT TDS PROVISIONS. (VII) AS PER SCHEDULE 13 TO THE ANNUAL REPORT EX PENSES INCURRED BY THE ASSESSEE INCLUDE SALARIES ADVERTISEMENT & SALES PR OMOTION AND JOB CHARGES. HOWEVER THE ASSESSING OFFICER HAS NOT EXAMINED WHE THER THE RELEVANT TDS PROVISIONS HAVE BEEN COMPLIED WITH OR NOT. (VII) THE DEDUCTION OF RS. 53 72 566/- ALLOWED U/ S. 35DDA AS 1/5 TH OF THE VOLUNTARY RETIREMENT SCHEME PAYMENT WHICH IS IRREGU LAR SINCE IT IS NOT INDICATED WHETHER THE EXPENDITURE HAS BEEN INCURRED IN ACCORD ANCE WITH ANY SCHEME OR SCHEMES OF VOLUNTARY RETIREMENT AND ALSO IN VIEW OF PROHIBITION IN SECTION 35DD(6). (IX) THERE IS SHORT LEVY OF INTEREST U/S. 234D ON THE EXCESS FUND GRANTED TO THE ASSESSEE. (X) LOAN/DEPOSIT REPAYMENTS OF RS. 50 000 AND R S. 25 000 WERE MADE OTHER THAN BY ACCOUNT PAYEE BANK DRAFT FOR WHICH NO PENAL TY PROCEEDINGS U/S. 271E HAVE BEEN INITIATED. ACCORDINGLY SHE ISSUED NOTICE TO THE ASSESSEE PROP OSING TO REVISE THE ASSESSMENT ORDER U/S 263 OF THE ACT. AFTER DULY CONSIDERING THE SUBM ISSIONS MADE BY THE ASSESSEE SHE I.T.A. NO./290/COCH/2010 3 HELD THAT THE ASSESSMENT ORDER IS ERRONEOUS IN SO F AR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. ACCORDINGLY SHE SET ASIDE THE ASS ESSMENT ORDER WITH A DIRECTION TO THE ASSESSING OFFICER TO RE-DO THE SAME AFRESH ON THE P OINTS EXAMINED BY HER. AGGRIEVED BY THE ORDER PASSED BY LD CIT THE ASSESSEE IS IN A PPEAL BEFORE US. 4. AT THE TIME OF HEARING THE LD COUNSEL FOR T HE ASSESSEE DID NOT PRESS THE GROUNDS RELATING TO ITEMS (I) (III) (VI) (VII) AND (X) S TATED IN PARAGRAPH 3 SUPRA. ACCORDINGLY THOSE GROUNDS ARE DISMISSED AS NOT PRESSED. THE GR OUNDS NUMBERED AS 1 AND 12 ARE GENERAL IN NATURE. THE REMAINING GROUNDS RELATE TO THE ITEMS (II) (IV) (V) (VIII) AND (IX) STATED IN PARAGRAPH 3 SUPRA. 5. WE HAVE HEARD THE RIVAL CONTENTIONS ON THE ISSUE S PRESSED BEFORE US AND ALSO PERUSED THE RECORD. ADMITTEDLY THE ASSESSMENT ORD ER DID NOT DISCUSS ANYTHING ABOUT THE ISSUES THAT WERE POINTED OUT BY THE LD. CIT. I T WAS ALSO NOT SHOWN TO US THAT THE ASSESSING OFFICER DID EXAMINE THESE ISSUES APPLIED HIS MIND AND HAS TAKEN ONE OF THE POSSIBLE VIEWS. ONLY IF THE VIEW TAKEN BY THE AO O N A PARTICULAR ISSUE FALLS IN THE CATEGORY OF ONE OF THE POSSIBLE VIEWS THEN IT WOUL D FALL OUTSIDE THE SCOPE OF REVISION PROCEEDINGS AS HELD BY HONBLE SUPREME COURT IN THE CASE OF MALABAR INDUSTRIAL CO. LTD (243 ITR 83). IT WAS ALSO NOT SHOWN TO US THAT THE VIEW EXPRESSED BY LD CIT IS NOT SUSTAINABLE UNDER THE PROVISIONS OF THE ACT. UNDER THESE CIRCUMSTANCES WE DO NOT HAVE ANY OTHER OPTION BUT TO CONFIRM THE REVISION O RDER PASSED BY LD CIT. 6. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. PRONOUNCED ACCORDINGLY ON 27-07-2012 SD/- SD/- (N.R.S.GANESAN) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: KOCHI DATED: 27TH JULY 2012 GJ COPY TO: I.T.A. NO./290/COCH/2010 4 1. KAR MOBILES LTD. NO. 26 1 ST PHASE PEENYA INDUSTRIAL AREA III MAIN ROAD BANGALORE-560058. 2.THE DEPUTY COMMISSIONER OF INCOME-TAX CIRCLE-2(1 ) RANGE-2 ERNAKULAM. 3.THE COMMISSIONER OF INCOME-TAX KOCHI 4. D.R. I.T.A.T. COCHIN BENCH COCHIN. 5. GUARD FILE. BY ORDER (ASSISTANT REGISTRAR) I.T.A.T COCHIN