ACIT, New Delhi v. M/s. Banaras House Ltd., New Delhi

ITA 4020/DEL/2012 | 2003-2004
Pronouncement Date: 14-11-2014 | Result: Allowed

Appeal Details

RSA Number 402020114 RSA 2012
Assessee PAN AAACB3398P
Bench Delhi
Appeal Number ITA 4020/DEL/2012
Duration Of Justice 2 year(s) 3 month(s) 15 day(s)
Appellant ACIT, New Delhi
Respondent M/s. Banaras House Ltd., New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 14-11-2014
Appeal Filed By Department
Order Result Allowed
Bench Allotted A
Tribunal Order Date 14-11-2014
Date Of Final Hearing 29-10-2014
Next Hearing Date 29-10-2014
Assessment Year 2003-2004
Appeal Filed On 30-07-2012
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B NEW DELHI BEFORE SHRI S.V. MEHROTRA : ACCOUNTANT MEMBER AND SHRI A.T. VARKEY : JUDICIAL MEMBER ITA NO. 4020/DEL/2012 ASSTT. YR: 2003-04 ACIT CIRCLE 2(1) VS. M/S BANARAS HOUSE (P) LTD. NEW DELHI. (FORMERLY BANARAS HOUSE LTD.) 1/42 GURU RAVI DASS MARG KALKAJI NEW DELHI. PAN: AAACB 3398 P ( APPELLANT ) ( RESPONDENT ) APPELLANT BY : SHRI GAURAV PUOEJA DR RESPONDENT BY : NONE DATE OF HEARING : 29-10-2014 DATE OF ORDER : 14-11-2014. O R D E R PER S.V. MEHROTRA A.M:- THIS APPEAL PREFERRED BY THE DEPARTMENT IS DIRE CTED AGAINST THE ORDER OF CIT(APPEALS)-V NEW DELHI DATED 8-5-2012 I N APPEAL NO. 15/11-12 FOR A.Y. 2003-04. 2. NONE PUT IN APPEARANCE ON BEHALF OF THE ASSESSEE DESPITE SERVICE OF NOTICE OF HEARING AS IS EVIDENT FROM THE ACKNOWLEDG EMENT RECEIPT AVAILABLE ON RECORD. ACCORDINGLY WE PROCEED TO DISPOSE OF TH E APPEAL EX PARTE QUA THE ASSESSEE ON MERITS. 2 ITA 4020/DEL/12 BANARAS HOUSE LTD. 3. BRIEF FACTS OF THE CASE ARE THAT IN THIS CASE TH E RETURN OF INCOME DECLARING INCOME AT RS. 30 68 380/- WAS FILED BY TH E ASSESSEE AND THE ASSESSMENT HAD BEEN MADE U/S 143(3) AT AN INCOME OF RS. 3 34 93 170/-. THE AO NOTICED THAT FROM THE ASSESSMENT RECORD IT WAS REVEALED THAT THE TAXABLE INCOME OF THE ASSESSEE COMPANY HAD PRIMA FACIE ESCA PED ASSESSMENT ON THE ISSUE OF BROUGHT FORWARD DEPRECIATION AMOUNTING TO RS. 77 42 425/- AGAINST THE INCOME FOR A.Y. 2003-04. HE HAS RECORDED FOLLOW ING REASONS. THE AO HAS RECORDED FOLLOWING REASONS FOR ISSUE OF NOTICE U/S 148: 2.1. THE REASONS TO BELIEVE RECORDED WITHIN THE ME ANING OF SECTION 147 OF THE I.T. ACT FOR ISSUE OF NOTICE U/S 148 OF THE I.T. ACT ARE REPRODUCED BELOW: THE RETURN OF INCOME FOR THE AY 2003-04 WAS FILED ON 28-11- 2003 DECLARING INCOME AT RS. 30 68 380/- AND SUBSEQ UENTLY ASSESSED U/S 143(3) DATED 22-02-2006 AT RS. 3 34 93 170/-. ON PERUSAL OF ASSESSMENT RECORDS AND COMPUTATION OF INCOME IT REVEALS THAT THE ASSESSEE WAS ALLOWED BROUGHT FORWA RD DEPRECIATION AMOUNTING TO RS. 77 42 425/- AGAINST T HE INCOME FOR THE ASSESSMENT YEAR 2003-04. HOWEVER FROM THE PERUSAL OF ASSESSMENT RECORDS FOR THE ASSESSMENT YEAR 2002-03 IT IS SEEN THAT THE ASSESSEE HAD POSITIVE INCOME IN THE ASSESS MENT YEAR 2002-03 AND THE ENTIRE BROUGHT FORWARD DEPRECIATION SHOULD HAVE BEEN SET OFF AGAINST THE INCOME FOR THE ASSESS MENT YEAR 2002-03 ONLY AND NO BROUGHT FORWARD DEPRECIATION LE FT THEREAFTER FOR SET OFF. IN VIEW OF THE ABOVE I HAVE REASONS TO BELIEVE THA T AN AMOUNT TO THE EXTENT MENTIONED ABOVE CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR THE ASSESSMENT YEAR 2003-04 AND NEED FURTHER INVESTIGATION HENCE CLEARLY ATTRACTS THE PROVISION S OF CLAUSE (C) OF EXPLANATION 2 TO SECTION 147 OF THE I.T. ACT. TH EREFORE NOTICE 3 ITA 4020/DEL/12 BANARAS HOUSE LTD. U/S 148 IS TO BE ISSUED. PUT UP FOR STATUTORY APPRO VAL OF LD. CIT DELHI-I NEW DELHI U/S 151 OF THE IT ACT. 3.1. THE REASONS WERE FURNISHED TO THE ASSESSEE AND THE ASSESSEE COMPANY HAD FILED ITS OBJECTIONS AGAINST THE REOPENING. THE ASSESSEE HAD PREFERRED A WRIT PETITION BEFORE THE HONBLE HIGH COURT OF DELH I VIDE WRIT PETITION NO. 6321/DEL/2010. THE AO HAS REPRODUCED THE DECISION O F HONBLE DELHI HIGH COURT AND IN COMPLIANCE TO THE SAID ORDER OPPORTUN ITY OF BEING HEARD WAS PROVIDED TO THE ASSESSEE ON 18-4-2011 AS PARA 4.2 O F HIS ORDER. AFTER CONSIDERING THE ASSESSEES SUBMISSIONS ON MERITS T HE AO INTER ALIA OBSERVED AS UNDER: I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS MADE B Y THE ASSESSEE AND FOUND THEM CORRECT TO A CERTAIN EXTENT . IT IS PERTINENT TO MENTION HERE THAT VIDE ORDER DATED 16- 05-2011 FOR THE AY 2002-03 THE BROUGHT FORWARD DEPRECIATION HA S BEEN ADJUSTED IN THE INCOME OF AY 2002-03 LEAVING NOTHI NG TO BE CARRIED FORWARD. THE SAID ORDER IS ANNEXED HEREWITH AS PART OF THIS ASSESSMENT ORDER. AS A RESULT THERE IS NO B/F DEPRECIATION AVAILABLE TO THE ASSESSEE TO BE ADJUSTED FROM THE I NCOME OF AY 2003-04. IN VIEW OF THE ABOVE THE BENEFIT OF BROUGHT FORWAR D DEPRECIATION OF RS. 77 42 425/- IS HEREBY WITHDRAWN RESULTING IN ENHANCEMENT OF RS. 77 42 425/- IN THE TAXABLE INCOM E OF ASSESSEE COMPANY. 3.2. LD. CIT(A) ALLOWED THE ASSESSEES APPEAL FOR T HE FOLLOWING TWO REASONS: 4 ITA 4020/DEL/12 BANARAS HOUSE LTD. (I) IT IS SETTLED LEGAL PROPOSITION THAT ON THE SAME FA CTS ASSESSMENT COMPLETED EARLIER CANNOT BE REOPENED ON REAPPRECIAT ION OF FACTS BECAUSE THAT IS ONLY CHANGE OF OPINION NOT PERMISS IBLE FOR THE PURPOSE OF SECTION 147. HE POINTED OUT THAT THE ORI GINAL ASSESSMENT ORDER WAS PASSED U/S 143(3) ON 220202006 IN WHICH T HE ISSUE OF BROUGHT FORWARD OF BUSINESS LOSS AND DEPRECIATION W ERE DULY CONSIDERED BY THE AO. RATHER THE AO HAD HIMSELF WO RKED OUT THE UNABSORBED DEPRECIATION IN PARA 3 OF THE ASSESSMENT ORDER. (II) NOTICE HAD BEEN ISSUED AFTER FOUR YEARS AND THEREF ORE PROVISO TO SECTION 147 WAS APPLICABLE. 3.3. HE POINTED OUT THAT AO HAD NOT ESTABLISHED THA T THE INCOME HAD ESCAPED ASSESSMENT BECAUSE OF THE FAILURE ON THE PA RT OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESS ARY FOR THE ASSESSMENT OF THE ASSESSEE. 3.4. AGGRIEVED THE DEPARTMENT IS IN APPEAL BEFORE US AND HAS TAKEN FOLLOWING GROUND OF APPEAL. THE LD. CIT(A) HAS ERRED ON FACT IN LAW IN CANCELL ING THE ASSESSMENT ORDER DATED 16-05-2011 PASSED U/S 148/14 3(3) OF THE IT ACT. 4. LD. DR SUBMITTED THAT CHANGE OF OPINION COMES TO RESCUE OF ASSESSEE ONLY WHEN THE ASSESSEE HAS TAKEN ONE OF THE PERMIS SIBLE VIEWS AT THE TIME OF ORIGINAL PROCEEDINGS. A WRONG APPLICATION OF LAW CANNOT BE HELD AS PERMISSIBLE VIEW AND THAT CAN ALWAYS BE CHANGED FOR APPRECIATING LAW. HE 5 ITA 4020/DEL/12 BANARAS HOUSE LTD. RELIED ON THE ORDER OF ITAT IN THE CASE OF SOM DU TT BUILDERS (P) LTD. VS. DCIT 98 ITD 78 (KOL.). 5. WE HAVE CONSIDERED THE SUBMISSIONS OF LD. DR AND FIND CONSIDERABLE FORCE IN THE SAME BECAUSE IF NO AMOUNT WAS LEFT UN ABSORBED IN AY 2002-03 THEN THERE COULD NOT BE ANY SET OFF OF THAT INCOME . THE AO HAS GIVEN A SPECIFIC FINDING THAT BROUGHT FORWARD DEPRECIATION HAD BEEN ADJUSTED IN THE INCOME OF ASSESSMENT YEAR LEAVING NOTHING TO BE CA RRIED FORWARD. THUS THIS IS CLEARLY A CASE OF MISTAKE OF LAW COMMITTED BY TH E AO AND IT WAS NOT A CASE OF CHANGE OF OPINION. WE ACCORDINGLY SET ASI DE THE ORDER OF LD. CIT(A). 6. IN THE RESULT DEPARTMENTS APPEAL IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 14-11-2014. SD/- SD/- ( A.T. VARKEY ) ( S.V. MEHROTRA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 14-11-2014. MP COPY TO : 1. ASSESSEE 2. AO 3. CIT 4. CIT(A) 5. DR