ST-CLI COAL WASHERIES LTD ( FORMERLY KNOWN AS ST BSES COAL WASHERIES LTD.) ( NOW KNOWN AS SPECTRU, COAL & POWER LTD), HYDERABAD v. JCIT (OSD) RG 1(3), MUMBAI

ITA 427/MUM/2009 | 2003-2004
Pronouncement Date: 04-02-2010 | Result: Partly Allowed

Appeal Details

RSA Number 42719914 RSA 2009
Bench Mumbai
Appeal Number ITA 427/MUM/2009
Duration Of Justice 1 year(s) 15 day(s)
Appellant ST-CLI COAL WASHERIES LTD ( FORMERLY KNOWN AS ST BSES COAL WASHERIES LTD.) ( NOW KNOWN AS SPECTRU, COAL & POWER LTD), HYDERABAD
Respondent JCIT (OSD) RG 1(3), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 04-02-2010
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted E
Tribunal Order Date 04-02-2010
Assessment Year 2003-2004
Appeal Filed On 20-01-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH E : MUMBAI BEFORE SHRI D.K. AGARWAL (JM) AND SHRI RAJENDRA SINGH (AM) S.NO. ITA NO. APPELLANT RESPONDENT A.Y. 1. 426/MUM/2009 M/S. ST-CLI COAL WASHERIES LTD. (FORMERLY KNOWN AS ST BSES COAL WASHERIES LTD.) (NOW KNOWN AS SPECTRUM COAL & POWER LTD.) 202 CYBER HEIGHTS ROAD #2; BANJARA HILLS; HYDERABAD-500 033. P.A. NO.(AABCS860J) ASSTT. COMMISSIONER OF INCOME TAX -1(3) MUMBAI. 2002-03 2. 427/MUM/2009 M/S. ST-CLI COAL WASHERIES LTD. (FORMERLY KNOWN AS ST BSES COAL WASHERIES LTD.) (NOW KNOWN AS SPECTRUM COAL & POWER LTD.) 202 CYBER HEIGHTS ROAD #2 BANJARA HILLS HYDERABAD- 500 033. JT. COMMISSIONER OF INCOME TAX (OSD) RANGE 1(3) MUMBAI. 2003-04 APPELLANT BY : SHRI SAL IL KAPOOR RESPONDENT BY : SHR I SATISH SHARMA O R D E R PER D.K. AGARWAL (JM). THESE TWO APPEALS PREFERRED BY THE ASSESSEE ARE DIRECTED AGAINST THE SEPARATE ORDERS DATED 26.11.2008 PASSED BY THE LD. CIT(A) FOR THE ASSESSMENT YEARS 2002-03 AND 2003-04 BOTH THESE APPEALS ARE DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONV ENIENCE. ITA NO.426 & 427/M/09 A.Y: 02-03 & 03-04 2 ITA NO.426/M/09 ASSESSMENT YEAR 2002-03 : 2. THE GROUND TAKEN BY THE ASSESSEE READS AS UNDER : 1. THE LD. CIT(A) ERRED IN UPHOLDING THE PENALTY OF RS.1 18 15 282/- WITHOUT APPRECIATING THE FACT THAT THE QUANTUM IN RESPECT OF WHICH THE PENALTY IS LEVI ED IS THE SUBJECT MATTER OF INTERPRETATION OF THE AGREEME NT OF CONDITION GRANTED. 3. AT THE TIME OF HEARING THE LD. COUNSEL FOR THE ASSE SSEE SUBMITS THAT IN THIS CASE THE TRIBUNAL IN THE QUANTUM APPEAL I N ST-CTL COAL WASHERIES LTD. VS. ACIT IN ITA NOS.2066 2067 & 2068/M/ 06 FOR THE ASSESSMENT YEARS 2000-01 2001-02 AND 2002-03 VIDE CONSOLI DATED ORDER DATED 19.12.2008 HAS SET ASIDE THE ORDER PASSED BY THE ASSESSING OFFICER AND RESTORED THE SAME TO THE FILE OF T HE ASSESSING OFFICER. HE FURTHER SUBMITS THAT THE ASSESSING OFFICER IN PURSUANCE TO THE ORDER OF THE TRIBUNAL HAS PASSED THE ASSESSMENT ORDER DATED 25.8.2009 U/S.143(3) R.W.S. 254 OF THE I.T. ACT 1961 (THE ACT) AND IMPOSED PENALTY U/S.271(1)(C) RS.57 51 449/- VIDE ORDE R DATED 31.8.2009 THEREFORE THE PRESENT APPEAL AGAINST THE SUSTENANCE OF PENALTY IMPOSED ORIGINALLY IS LIABLE TO BE CANCELLED. HE ALSO PLACED ON RECORD THE COPY OF THE SAID ORDER OF THE TRIBUNAL ASSESSM ENT ORDER DATED 25.8.2009 PASSED U/S.143(3) R.W.S. 254 OF THE ACT AND COPY OF PENALTY ORDER DATED 31.8.2009 PASSED U/S. 271(1)(C) OF THE ACT. ITA NO.426 & 427/M/09 A.Y: 02-03 & 03-04 3 4. ON THE OTHER HAND LD. DR WHILE AGREEING WITH THE PLEA TAKEN BY THE LD. COUNSEL FOR THE ASSESSEE SUBMITS THAT IN VIEW OF T HE SUBSEQUENT ORDER PASSED BY THE ASSESSING OFFICER U/S. 271(1) (C) OF THE ACT THE PENALTY IMPOSED BY THE ASSESSING OFFICER AND SUSTAI NED BY THE LD. CIT(A) IS LIABLE TO BE DELETED. 5. HAVING CAREFULLY HEARD THE SUBMISSIONS OF THE RIVAL P ARTIES AND PERUSING THE MATERIAL AVAILABLE ON RECORD WE FIND THA T THERE IS NO DISPUTE THAT PURSUANT TO THE ORDER OF THE TRIBUNAL SUP RA THE SET ASIDE ASSESSMENT WAS COMPLETED VIDE ORDER PASSED U/S. 143(3) R.W. S. 254 OF THE ACT ON 25.8.2009 DETERMINING THE TOTAL INCOME AT RS.3 30 96 030/- IN WHICH PENALTY PROCEEDINGS U/S.271(1 )(C) WERE ALSO INITIATED AND THE ASSESSING OFFICER AFTER CONSIDERING THE ASSESSEES EXPLANATION IMPOSED PENALTY OF RS.57 51 449/- VIDE O RDER DATED 31.8.2009 PASSED U/S.271(1)(C) OF THE ACT. THIS BEING SO WE ARE OF THE VIEW THAT THE IMPUGNED PENALTY IMPOSED BY THE A SSESSING OFFICER ON THE BASIS OF ORIGINAL ASSESSMENT ORDER AND SUSTAINED BY THE LD. CIT(A) DOES NOT SURVIVE AND ACCORDINGLY THE SAME IS DELET ED. THE GROUNDS TAKEN BY THE ASSESSEE ARE THEREFORE ALLOWED. ITA NO.427/M/09 (ASSESSMENT YEAR :2003-04) : 6. THE GROUND TAKEN BY THE ASSESSEE READS AS UNDER: ITA NO.426 & 427/M/09 A.Y: 02-03 & 03-04 4 1. THE LD. CIT(A) ERRED IN UPHOLDING THE ACTION OF THE ASSESSING OFFICER IN REDUCING THE WRITTEN DO WN VALUE OF PLANT & MACHINERY FOR THE PURPOSE OF CALC ULATING DEPRECIATION ALLOWABLE UNDER THE ACT BY TREATING T HE SAME AS THE COST BORNE BY ANY OTHER PERSON OR AUTHORITY WHEREAS THE SAID AMOUNT IS A LOAN REPAY ABLE AT 200% UNDER THE PACER AGREEMENT. 7. THE ADDITIONAL GROUND TAKEN BY THE ASSESSEE READS AS UNDER : WITHOUT PREJUDICE THE PART OF THE LEASE RENT AMOUNTING TO RS.62 27 354/- RELATING TO PREVIOUS YE AR RELEVANT TO ASSESSMENT YEAR 2003-04 PAID TO M/S.SE CL LTD. IS AN ALLOWABLE EXPENSE FOR ASSESSMENT YEAR 20 03-04 AND THE INCOME ASSESSED IS LIABLE TO REDUCE TO THAT EXTENT. 8. AT THE TIME OF HEARING THE LD. COUNSEL FOR THE ASSE SSEE SUBMITS THAT THE APPELLANT HAD CLAIMED A LEASE RENT OF RS.93 0 0 009/- IN ASSESSMENT YEAR 2004-05. HOWEVER THE AO DISALLOWED THE SAME HOLDING THAT THE SAME RELATES TO THE PRIOR PERIODS AN D HENCE NOT ALLOWABLE. HE FURTHER SUBMITS THAT OUT OF RS.93 00 009 /- AN AMOUNT OF RS.62 27 354/- RELATES TO THE ASSESSMENT YEAR 2002-03 THEREFORE THE ASSESSEE HAS TAKEN THE ABOVE ADDITIONAL GROUND. HE F URTHER SUBMITS THAT THE ADDITIONAL GROUND IS PURELY A LEGAL GROUND AND IN SUPPORT HE PLACED ON RECORD COPY OF ASSESSMENT ORDER AND NOTICE OF DEMAND FOR THE ASSESSMENT YEAR 2004-05 DATED 27.12.200 6. THE RELIANCE WAS ALSO PLACED ON THE DECISION IN DCM BENETTON INDIA LTD. VS. CIT (2008) 9 DTR (DEL.) 303 WHEREIN IT HAS BEEN HEL D THAT THE ASSESSEE IS ENTITLED TO RAISE AN ADDITIONAL GROUND OF APP EAL IN ITA NO.426 & 427/M/09 A.Y: 02-03 & 03-04 5 ASSESSMENT YEAR 2001-02 WHICH WAS NOT RAISED BEFORE THE LD . CIT(A) ON THE BASIS OF THE EXPENDITURE SHOWN IN THE BALANCE SHEET FOR THE ASSESSMENT YEAR 2003-04 AS PRIOR PERIOD EXPENSES PERTAINI NG TO THE ASSESSMENT YEAR 2001-02. HE THEREFORE SUBMITS THAT THE A DDITIONAL GROUND RAISED BY THE ASSESSEE BE ADMITTED AND THE ISSUE MA Y BE SET ASIDE TO THE FILE OF THE ASSESSING OFFICER ALONG WITH THE ISSUE RAISED IN GROUND NO.1 PERTAINING TO DISALLOWANCE OF DEPRECIATIO N WHICH HAS BEEN SET ASIDE BY THE TRIBUNAL SUPRA TO THE FILE OF T HE ASSESSING OFFICER FOR THE EARLIER ASSESSMENT YEARS I.E. 2000-01 20 01-02 AND 2002-03. 9. ON THE OTHER HAND THE LD. DR WHILE OBJECTING TO T HE ADMISSION OF ADDITIONAL GROUND OF APPEAL SUBMITS THAT HE HAS NO OB JECTION THAT IF THE ISSUE PERTAINING TO THE CLAIM OF DEPRECIATION BE SET ASID E TO THE FILE OF THE ASSESSING OFFICER FOLLOWING THE EARLIER ORDER OF THE TRIBUNAL . 10. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE R IVAL PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIN D THAT THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF COAL BENEFICIA TION. WITH REGARD TO THE ADMISSION OF ADDITIONAL GROUND WE FIND THAT THERE IS NO DISPUTE THAT THE CLAIM OF LEASE RENT RS.62 27 354/- OUT OF TOTAL CLAIM OF LEASE RENT OF RS.93 00 009/- CLAIMED BY THE ASSE SSEE IN ASSESSMENT YEAR 2004-05 WHICH ACCORDING TO THE ASSESSEE PERT AINING ITA NO.426 & 427/M/09 A.Y: 02-03 & 03-04 6 TO THE ASSESSMENT YEAR 2003-04 DOES NOT BORNE OUT FROM THE ASSESSMENT ORDER AND THE ORDER OF THE LD. CIT(A) FOR TH E IMPUGNED ASSESSMENT YEAR 2003-04. HOWEVER WE FIND THAT WHILE MA KING THE ASSESSMENT FOR THE ASSESSMENT YEAR 2004-05 THAT IT HAS BEEN INTERALIA OBSERVED BY THE ASSESSING OFFICER THAT THE ASSESSEE WAS QUIT E AWARE OF THE FACT THAT HE WAS SUPPOSED TO PAY RS.116.73 LACS AS O N 11.8.01. IN OTHER WORDS THE SAID EXPENSES ARE RELATING TO THE PERIOD PRIOR TO THE CURRENT ASSESSMENT YEAR I.E. 2004-05. 11. IN DCM BENETTON INDIA LTD.(SUPRA) RELIED ON BY THE LD. COUNSEL FOR THE ASSESSEE ON THE FOLLOWING SUBSTANTIAL QUESTION O F LAW :- WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE TRIBUNAL ERRED IN LAW IN NOT ADMITTIN G THE ADDITIONAL GROUND RAISED BY THE ASSESSEE IN RESPECT OF THE EXPENDITURE INCURRED TO THE EXTENT OF RS.13 10 566/ - SHOWN IN THE BALANCE SHEET FOR THE ASSESSMENT YEAR 2003-04 AS PRIOR PERIOD EXPENSES PERTAINING TO THE ASSESSMENT YEAR 2001-02 ? IT HAS BEEN OBSERVED AND HELD VIDE PARA 9 AND 10 OF T HE JUDGEMENT AS UNDER : 9. LD. COUNSEL FOR THE ASSESSEE RELIED UPON CIT VS. KERALA STATE CO-OPERATIVE MARKETING FEDERATION LTD.(1991) 100 CTR (KER.) 230: (1992) 193 ITR 624(K ER.) WHEREIN IT HAS BEEN HELD BY THE KERALA HIGH COURT T HAT IN THE EVENT RELEVANT FACTS ARE NOT ON RECORD THE TRI BUNAL CAN ALWAYS REMAND THE MATTER TO THE FILE OF THE ASS ESSING OFFICER TO INVESTIGATE AND DETERMINE THE FACTS. IT IS SUBMITTED THAT THE TRIBUNAL OUGHT TO HAVE REMANDED THE MATTER TO THE FILE OF THE ASSESSING OFFICER RATHER THAN ITA NO.426 & 427/M/09 A.Y: 02-03 & 03-04 7 DECLINE TO PERMIT THE ASSESSEE TO RAISE THE ADDITIO NAL GROUND. 10. FOLLOWING THE VIEW EXPRESSED BY THE KERALA HIGH COURT WITH WHICH WE HAVE NO REASON TO DISAGREE PARTICULARLY SINCE IT RELIES UPON A DECISION OF THE MADRAS HIGH COURT IN CED VS. R. BRAHADEESWARAN (1986) 57 CT R (MAD.) 162: (1987) 163 ITR 680(MAD.) WHICH IN TURN RELIES UPON THREE DECISIONS OF THE SUPREME COURT IN CIT VS. MCMILLAN & CO.(1958) 33 ITR 182(SC) HUKAMCHAND MILLS LTD. VS. CIT (1967) 63 ITR 232(SC) AND CIT VS . MAHALAKSHMI TEXTILE MILLS LTD.(1967) 66 ITR 710(SC) WE ANSWER THE QUESTION OF LAW IN THE AFFIRMATIVE IN F AVOUR OF THE ASSESSEE AND AGAINST THE REVENUE AND REMAND THE MATTER TO THE FILE OF THE ASSESSING OFFICER TO DETE RMINE THE CLAIM OF THE ASSESSEE ON MERITS. RESPECTFULLY FOLLOWING THE ABOVE DECISION AND KEEPING V IEW THE FINDING OF FACT AS MENTIONED ABOVE RECORDED BY THE ASSESSING OFFI CER IN THE ASSESSMENT ORDER FOR THE ASSESSMENT YEAR 2004-05 AND ALSO I N THE INTEREST OF JUSTICE WE ADMIT THE ADDITIONAL GROUND R AISED BY THE ASSESSEE AT THIS STAGE AND SEND BACK THE MATTER TO THE FIL E OF THE ASSESSING OFFICER TO DETERMINE THE CLAIM OF THE ASSESSEE ON MERITS AFTER PROVIDING REASONABLE OPPORTUNITY OF BEING HEAR D TO THE ASSESSEE. 12. WITH REGARD TO THE CLAIM OF DEPRECIATION RAISED IN ORIGINAL GROUND NO.1 SUPRA WE FIND THAT THERE IS NO DISPUTE THAT THE TRIBUNAL IN ASSESSEES OWN CASE SUPRA HAS SENT BACK THE MATTER TO THE FI LE OF THE ASSESSING OFFICER TO DECIDE THE SAME AFRESH. RESPECTFULLY FO LLOWING THE SAME AND KEEPING IN VIEW THE RULE OF CONSISTENCY WE ARE OF THE VIEW THAT THE MATTER SHOULD GO BACK TO THE FILE OF THE ASSESSI NG OFFICER AND ACCORDINGLY WE SET ASIDE THE ORDER PASSED BY THE REVENUE AUTHORITIES ITA NO.426 & 427/M/09 A.Y: 02-03 & 03-04 8 ON THIS ACCOUNT AND SEND BACK THE MATTER TO THE FILE OF THE ASSESSING OFFICER WHO SHALL DECIDE THE SAME AFRESH IN THE LIGHT OF THE DIRECTION GIVEN BY THE TRIBUNAL SUPRA AND ACCORDING TO LAW AFTE R PROVIDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE GROUNDS TAKEN BY THE ASSESSEE ARE THEREFORE PARTLY ALLOWED FOR STATISTICAL PURPOSES. 13. IN THE RESULT ASSESSEES APPEAL IN ITA NO.426/M/09 FOR THE ASSESSMENT YEAR 2002-03 IS ALLOWED AND THE APPEAL IN ITA NO.427/M/09 FOR ASSESSMENT YEAR 2003-04 IS PARTLY ALLOWE D FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 4.2.2010. SD/- SD/- (RAJENDRA SINGH) ( D.K. AGARWAL ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI DATED: 4.2.2010. JV. COPY TO: THE APPELLANT THE RESPONDENT THE CIT CONCERNED MUMBAI THE CIT(A) CONCERNED MUMBAI THE DR BENCH TRUE COPY BY ORDER DY/ASSTT. REGISTRAR ITAT MUMBAI. ITA NO.426 & 427/M/09 A.Y: 02-03 & 03-04 9 DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON 19.1.10 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 20.1.10 SR.PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON 4.2.10 SR.PS/PS 7. FILE SENT TO THE BENCH CLERK 4.2.10 SR.PS/PS 8 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER