Smt K Sathyvani, L/R of KV Rammohan Rao, Narasapuram v. The DCIT, Central Circle-1, Rajahmundry

ITA 336/VIZ/2010 | 2003-2004
Pronouncement Date: 29-09-2010 | Result: Dismissed

Appeal Details

RSA Number 33625314 RSA 2010
Assessee PAN ALOPK5787D
Bench Visakhapatnam
Appeal Number ITA 336/VIZ/2010
Duration Of Justice 3 month(s) 26 day(s)
Appellant Smt K Sathyvani, L/R of KV Rammohan Rao, Narasapuram
Respondent The DCIT, Central Circle-1, Rajahmundry
Appeal Type Income Tax Appeal
Pronouncement Date 29-09-2010
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 29-09-2010
Date Of Final Hearing 22-09-2010
Next Hearing Date 22-09-2010
Assessment Year 2003-2004
Appeal Filed On 03-06-2010
Judgment Text
ITA NOS.333 TO 339 OF 2010 OF SMT. K. SATYAVANI PAGE 1 OF 6 IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH VISAKHAPATNAM BEFORE: SHRI SUNIL KUMAR YADAV JUDICIAL MEMBER AND SHRI BR BASKARAN ACCOUNTANT MEMBER ITA NO. 333 TO 339/VIZAG/2010 ASSESSMENT YEAR: 2000-01 TO 2006-07 K. SATHYVANI L/R OF KV RAMMOHAN RAO NARASAPURAM VS. CIT CENTRAL CIRCLE-1 HYDERABAD (APPELLANT) PAN NO:ALOPK 5787 D (RESPONDENT) APPELLANT BY: SHRI G.V.N. HARI CA RESPONDENT BY: SHRI SUBRATA SARKAR CIT(DR) ORDER PER BENCH: ALL THESE APPEALS FILED BY THE ASSESSEE ARE DIRECT ED AGAINST THE SEPARATE ORDERS PASSED BY LEARNED CIT U/S 263 OF TH E ACT AND THEY RELATE TO THE ASSESSMENT YEARS 2000-01 TO 2006-07. SINCE THE ISSUES URGED IN THESE APPEALS ARE IDENTICAL IN NATURE WE HAVE HEARD THEM TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF C ONVENIENCE. 2. THOUGH THE ASSESSEE HAS RAISED MANY GROUNDS THE ARGUMENTS TOOK PLACE IN RESPECT OF THE MAIN ISSUE VIZ. THE VALID ITY OF INITIATION OF THE PROCEEDINGS U/S 263 OF THE ACT. THE ASSESSEE IS CO NTESTING THAT THAT THE ASSESSMENT ORDER HAS GOT MERGED WITH THE ORDER OF L EARNED CIT(A) MAKING THE IMPUGNED ASSESSMENT ORDER OUTSIDE THE PURVIEW O F REVISION PROCEEDING. 3. THE FACTS RELATING TO THE SAID ISSUE ARE STATED IN BRIEF. THE ASSESSMENTS IN THE HANDS OF THE ASSESSEE FOR THE AS SESSMENT YEARS 2000-01 TO 2005-06 WERE COMPLETED U/S 143(3) R.W.S.153A OF THE ACT AND THE ASSESSMENT FOR THE ASSESSMENT YEAR 2006-07 WAS COMP LETED U/S 143(3) OF ITA NOS.333 TO 339 OF 2010 OF SMT. K. SATYAVANI PAGE 2 OF 6 THE ACT. THE ASSESSEE WAS HAVING INCOME FROM VARIOU S SOURCES SUCH AS INCOME FROM CONTRACT WORKS INCOME FROM LORRIES IN COME FROM EXCAVATOR INCOME FROM PARTNERSHIP FIRMS INCOME FROM AQUA ETC . THE ASSESSING OFFICER ESTIMATED THE INCOME FROM CONTRACT BUSINESS AT 8% CLEAR OFF DEPRECIATION AND OTHER EXPENDITURE. THE INCOME FROM PLYING OF LORRIES WAS ESTIMATED U/S 44AE OF THE ACT. THE INCOME FROM EXCA VATOR WAS ESTIMATED AT RS.5000/- P.M. INCOME DECLARED BY THE ASSESSEE FROM ALL OTHER SOURCES HAS BEEN ACCEPTED BY THE ASSESSING OFFICER. THE AS SESSEE HAD ALSO CLAIMED DEPRECIATION ON A CAR OWNED BY HIM. WHILE COMPUTING THE TOTAL INCOME THE ASSESSING OFFICER AGGREGATED THE INCOME FROM VARIOU S SOURCES AND THEREAFTER DEDUCTED DEPRECIATION ON CAR FROM THE GR OSS TOTAL INCOME IN ALL THE YEARS UNDER CONSIDERATION. THE DEPRECIATION SO ALLOWED BY THE ASSESSING OFFICER IN ALL THESE YEARS IS GIVEN BELOW: ASSESSMENT YEAR DEPRECIATION ALLOWED (RS.) 2000-01 78 400 2001-02 62 720 2002-03 50 176 2003 - 04 40 141 2003-04 32 113 2004-05 1 67 887 2006-07 1 00 732 THE LEARNED CIT WAS OF THE VIEW THAT THE ASSESSING OFFICER IS NOT CORRECT IN ALLOWING DEPRECIATION ON CAR SINCE HE HAS ESTIMATE D THE INCOME FROM CONTRACT BUSINESS AT 8% CLEAR OFF DEPRECIATION WHI CH MEANS THAT THE DEPRECIATION ON CAR ALSO IS ALSO DEEMED TO HAVE BEE N ALLOWED. ACCORDINGLY THE LEARNED CIT FELT THAT THE ASSESSMENT ORDERS UND ER CONSIDERATION ARE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE RE VENUE AND HENCE INITIATED THE PROCEEDINGS U/S 263 OF THE ACT FOR ALL THE YEAR S UNDER CONSIDERATION. BEFORE LEARNED CIT THE ASSESSEE SUBMITTED THAT THE DEPRECIATION ON CAR WAS RELATED TO THE INCOME FROM AQUA CULTURE. THE L EARNED CIT REJECTED THE SAID PLEA WITH THE FOLLOWING OBSERVATIONS: 6.2 I HAVE EXAMINED THE ABOVE OBJECTION WITH REFER ENCE TO THE RECORD. IN THE RECORD THE ASSESSEE HAS MENTION ED CERTAIN ITA NOS.333 TO 339 OF 2010 OF SMT. K. SATYAVANI PAGE 3 OF 6 INCOME FROM AQUA BUSINESS. IT IS NOT CLEAR FROM THE RECORDS WHETHER THE AQUA BUSINESS WAS CARRIED ON AS A PROPR IETARY CONCERN OR AS A PARTNERSHIP FIRM. THERE IS NO EVIDE NCE WHETHER SUCH BUSINESS WAS CARRIED ON BY THE ASSESSE E. THE A.O HAS ACCEPTED THE ASSESSEES CLAIM WITHOUT PLACI NG ANY MATERIAL ON RECORD AND WITHOUT MAKING ANY INQUIRY. EVEN IF IT IS ACCEPTED THAT THE ASSESSEE HAS DONE AQUA BUSINES S NO DETAILS ARE AVAILABLE ON RECORD TO SHOW THAT THE CA R WAS ONLY USED FOR AQUA-BUSINESS AND NOT FOR CONTRACT BUSINE SS. THE A.O HAS NOT EXAMINED THESE ASPECTS IN COURSE OF ASS ESSMENT PROCEEDINGS. THEREFORE THERE IS NO JUSTIFICATION F OR ALLOWING SUCH DEPRECIATION ON CAR. THE ASSESSEE ALSO CONTENDED THAT THE IMPUGNED ASSES SMENT ORDERS GOT MERGED WITH THE ORDERS PASSED BY LEARNED CIT(A) AND HENCE THE REVISION PROCEEDINGS ARE BEYOND THE SCOPE OF SECTION 263 OF THE ACT. THE LEARNED CIT REJECTED THE SAID OBJECTION ALSO WITH THE FOLLO WING OBSERVATIONS: 6.4 I HAVE CAREFULLY CONSIDERED THE ABOVE OBJECTIO N AND FIND NO MERIT IN THE ABOVE CLAIM OF THE ASSESSEE. THE IS SUE OF CLAIM AND ALLOWANCE OF DEPRECIATION ON MOTOR CAR WAS NOT BEFORE THE LEARNED CIT (A). THERE ARE A NUMBER OF DECISIONS WH ERE IT HAS BEEN HELD THAT THE DOCTRINE OF MERGER WOULD APPLY O NLY TO MATTERS WHICH WERE THE SUBJECT MATTER OF DECISION B Y THE FIRST APPELLATE AUTHORITY AND THAT THE SAID DOCTRINE HAS NO APPLICATION TO MATTERS WHICH HAVE NOT BEEN TOUCHED BY THAT FIRST APPELLATE AUTHORITY. SUCH UNTOUCHED MATTERS C AN BE SUBJECTED TO THE ORDER U/S 263. RELIANCE IS PLACED ON THE FOLLOWING DECISIONS: (I) CIT VS. EAST COAST MARINE PRODUCTS (P) LTD.-181 ITR 318 (A.P) (II) HINDUSTAN ALUMINIUM CORPORATION LTD. VS. CIT-(178 ITR 74-CAL) & (III) TRAVANCORE TEA ESTATE CD. LTD. (142 ITR 733-KER). SINCE IN THE INSTANT CASE THE DEPRECIATION WAS NOT CONSIDERED BY THE LEARNED CIT (A) IT CAN BE THE SUBJECT MATTE R OF REVISION U/S 263. ACCORDINGLY THE LEARNED CIT SET ASIDE THE ASSESSME NT ORDERS UNDER CONSIDERATION ON THE ISSUE OF DEPRECIATION AND DIRE CTED THE ASSESSING OFFICER TO PASS ORDERS AFRESH AFTER COLLECTING NECESSARY EV IDENCE. AGGRIEVED THE ITA NOS.333 TO 339 OF 2010 OF SMT. K. SATYAVANI PAGE 4 OF 6 ASSESSEE IS IN APPEAL BEFORE US IN RESPECT OF THESE YEARS QUESTIONING THE VALIDITY OF INITIATION OF REVISION PROCEEDINGS. 4. THE LEARNED AUTHORISED REPRESENTATIVE SUBMIT TED THAT THE ASSESSEE HAS FILED THE APPEALS AGAINST THE IMPUGNED ASSESSME NT ORDERS BEFORE LEARNED CIT(A) AND THEREAFTER BEFORE HON'BLE ITAT A ND THE TRIBUNAL HAS ALREADY DISPOSED OF THE APPEALS BY ITS ORDER DATED 27-07-2010 BY ACCEPTING THE METHOD OF COMPUTATION FOLLOWED BY THE ASSESSEE. ACCORDINGLY HE CONTENDED THAT THE IMPUGNED ASSESSMENT ORDER IS BEY OND THE SCOPE OF REVISION PROCEEDINGS U/S 263 SINCE IT HAS GOT MERGE D WITH THE ORDER OF LEARNED CIT(A). HE FURTHER SUBMITTED THAT THE DEPR ECIATION WAS ALLOWED IN THE FIRST YEAR I.E. ASSESSMENT YEAR 2000-01 EVEN T HOUGH THERE WAS NO INCOME FROM AQUA BUSINESS IN THAT YEAR MEANING THE REBY THE DEPRECIATION ON CAR IS NOT LINKED TO THE AQUA BUSINESS. HE FURT HER SUBMITTED THAT THE ASSESSEE HAS ERRONEOUSLY SUBMITTED BEFORE LEARNED C IT THAT THE DEPRECIATION IS CLAIMED AGAINST THE AQUA BUSINESS. 5. ON THE CONTRARY THE LEARNED DEPARTMENTAL REP RESENTATIVE SUBMITTED THAT THE ASSESSING OFFICER HAS ACCEPTED THE INCOME DECLARED BY THE ASSESSEE FROM AQUA BUSINESS WHICH SHOWS THAT THE A SSESSEE DID NOT CLAIM DEPRECIATION ON CAR AGAINST THE SAID BUSINESS. SINC E THE DEPRECIATION ON CAR HAD BEEN ALLOWED IN THE ASSESSMENT YEAR 2000-01 WH EREIN THERE WAS NO INCOME FROM AQUA BUSINESS IT IS PROVED THAT THE AS SESSEE HAD CLAIMED THE DEPRECIATION ONLY AGAINST THE CONTRACT BUSINESS. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND CAREFULL Y PERUSED THE RECORD. THE ISSUE BEFORE US IS THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE WHETHER THE IMPUGNED ASSESSMENT ORDER CAN BE SAID TO BE ERRONEOUS IN SO FAR IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. WE NOTICE FROM THE ASSESSMENT ORDERS THAT THE ASSESSING OFFICER HAS DE DUCTED THE DEPRECIATION ON CAR FROM THE GROSS TOTAL INCOME INSTEAD OF ALLO WING THE DEDUCTION OF THE ITA NOS.333 TO 339 OF 2010 OF SMT. K. SATYAVANI PAGE 5 OF 6 SAME AGAINST ANY PARTICULAR SOURCE OF INCOME. THUS THE METHOD OF COMPUTATION ADOPTED BY THE ASSESSING OFFICER IS ERR ONEOUS AND IS NOT IN ACCORDANCE WITH THE SCHEME OF THE ACT. 6.2 WE HAVE ALREADY NOTICED THAT THE ASSESSING OFFICER DID NOT DISTURB THE INCOME DECLARED BY THE ASSESSEE FROM THE AQUA B USINESS WHILE COMPLETING THE ASSESSMENT. IT IS ALSO NOT IN DISPUT E THAT THE ASSESSEE HAS CLAIMED DEPRECIATION ON CAR IN THE FIRST YEAR I.E. ASSESSMENT YEAR 2000-01 EVEN THOUGH THERE WAS NO INCOME FROM AQUA BUSINESS. THUS IT IS PROVED THAT THE DEPRECIATION ON CAR CLAIMED BY THE ASSESSE E IS NOT LINKED TO THE AQUA BUSINESS. THE ASSESSMENT ORDER PERTAINING TO T HE ASSESSMENT YEAR 2000-01 SHOWS THAT THE ASSESSEE COULD HAVE CLAIMED DEPRECIATION ON CAR ONLY AGAINST THE INCOME FROM CONTRACT BUSINESS. AS POINTED OUT BY LEARNED CIT THE ASSESSING OFFICER HAS ESTIMATED THE INCOME FROM CONTRACT BUSINESS CLEAR OF DEPRECIATION WHICH MEANS THAT THE ALL DEP RECIATION INCLUDING THE DEPRECIATION ON THE CAR IS DEEMED TO HAVE BEEN ALL OWED. IN ANY CASE THE ASSESSMENT ORDER DO NOT SPELT OUT ANY REASON FOR AL LOWING THE DEPRECIATION ON CAR SEPARATELY. HENCE THE SAID ACTION OF THE AS SESSING OFFICER RENDERS THE ASSESSMENT ORDER ERRONEOUS AS WELL AS PREJUDICI AL TO THE INTERESTS OF THE REVENUE. 7. WITH REGARD TO THE CLAIM OF THE ASSESSEE THA T THE ASSESSMENT ORDER HAS GOT MERGED WITH THE ORDER OF LEARNED CIT(A) WE NOTICE THAT THE LEARNED CIT HAS ADDRESSED THE SAID ISSUE AND HIS OB SERVATIONS ARE EXTRACTED IN PARA 3 (SUPRA). WE HAVE GONE THROUGH THE SAID OBSERVATIONS OF LEARNED CIT AND WE DO NOT FIND ANY INFIRMITY IN IT. IN ANY CASE IT WAS NOT SHOWN TO US THAT THE LEARNED CIT (A) HAD DEALT WITH THE CLAIM OF DEPRECIATION OF CAR. THE LEARNED AUTHORISED REPRES ENTATIVE ALSO INVITED OUR ATTENTION TO THE ORDER DATED 27-07-2010 PASSED BY T HE TRIBUNAL IN THE HANDS OF THE ASSESSEE IN THE QUANTUM PROCEEDINGS. HOWEVER WE FIND IT NOT NECESSARY TO TAKE COGNIZANCE OF THE SAME FOR THE RE ASON THAT WE ARE ITA NOS.333 TO 339 OF 2010 OF SMT. K. SATYAVANI PAGE 6 OF 6 DEALING HEREWITH ONLY ABOUT THE VALIDITY OF THE INI TIATION OF THE REVISION PROCEEDINGS ON THE BASIS OF FACTS AVAILABLE ON RECO RD ON THE DATE OF INITIATION OF THE SAID PROCEEDINGS. AS PER THE DIS CUSSIONS MADE EARLIER WE ARE CONVINCED THAT THE IMPUGNED ASSESSMENT ORDERS A RE ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE. ACCOR DINGLY WE DO NOT FIND ANY INFIRMITY IN THE ORDERS PASSED BY LEARNED CIT. 8. IN THE RESULT ALL THE APPEALS FILED BY THE ASSES SEE ARE DISMISSED. PRONOUNCED IN THE OPEN COURT ON 29 TH SEPTEMBER 2010. SD/- SD/- (SUNIL KUMAR YADAV) (B R BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PVV/SPS VISAKHAPATNAM DATE: 29-09-2010 COPY TO 1 SMT. K. SATHYAVANI L/R K.V. RAM MOHAN RAO 4-45-4 KONDALAMMA TEMPLE ARCH Y.N. COLLEGE ROAD NARASAPURAM WEST G ODAVARI DISTT. 2 THE COMMISSIONER OF INCOME TAX (CENTRAL CIRCLE) BASHIRBAGH HYDERABAD 3 4 THE DY.COMMISSIONER OF INCOME TAX CENTRAL CIRCLE R AJAHMUNDRY THE ADDL. CIT CENTRAL RANGE VISAKHAPATNAM 5 THE DR ITAT VISAKHAPATNAM. 6 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM