M/s Naraingarh Sugar Mills Ltd.,, Chandigarh v. DCIT, New Delhi

ITA 5104/DEL/2013 | 2008-2009
Pronouncement Date: 21-11-2014 | Result: Dismissed

Appeal Details

RSA Number 510420114 RSA 2013
Assessee PAN AAACN0454G
Bench Delhi
Appeal Number ITA 5104/DEL/2013
Duration Of Justice 1 year(s) 2 month(s) 17 day(s)
Appellant M/s Naraingarh Sugar Mills Ltd.,, Chandigarh
Respondent DCIT, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 21-11-2014
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted E
Tribunal Order Date 21-11-2014
Date Of Final Hearing 12-11-2014
Next Hearing Date 12-11-2014
Assessment Year 2008-2009
Appeal Filed On 04-09-2013
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E NEW DELHI BEFORE SHRI S.V. MEHROTRA : ACCOUNTANT MEMBER AND SHRI A.T. VARKEY : JUDICIAL MEMBER ITA NO. 5104/DEL/2013 ASSTT. YR: 2008-09 M/S NARAINGARH SUGAR MILLS LTD. VS. DCIT CIRCLE 13 (1) C/O HARRY RIKHY (ADVOCATE) NEW DELHI. R/O H.NO. 1573 SECTOR 180D CHANDIGARH. PAN: AAACN 0454 G ( APPELLANT ) ( RESPONDENT ) APPELLANT BY : SHRI HARRY RIKHY ADV. RESPONDENT BY : SHRI J.P. CHANDRAKAR SR. DR DATE OF HEARING : 12-11-2014 DATE OF ORDER : 21-11-2014. O R D E R PER S.V. MEHROTRA A.M:- THIS APPEAL PREFERRED BY THE ASSESSEE IS DIRECT ED AGAINST THE ORDER OF CIT(APPEALS)-XVI NEW DELHI DATED 09-07-2013 IN APP EAL NO. 44/2010-112 FOR A.Y. 2008-09. 2. BRIEF FACTS OF THE CASE ARE THAT DURING THE YEA R UNDER CONSIDERATION THE ASSESSEE COMPANY WAS ENGAGED IN T HE BUSINESS OF PRODUCTION OF SUGAR MOLASSES AND BAGASSE. THE ASSE SSEE HAD FILED ITS RETURN OF INCOME DECLARING NIL INCOME AFTER ADJUSTING THE CURRENT YEARS INCOME OF RS. 4 59 36 456/- WITH BROUGHT FORWARD LOSSES OF EARLIER YEARS. HOWEVER BOOK PROFIT OF RS. 1 26 07 490/- WAS DECLARED U/S 1 15JB. IN COURSE OF 2 ITA NO. 5104/DEL/2013 M/S NARAIN GARH SUGAR MILLS LTD. ASSESSMENT PROCEEDINGS THE AO EXAMINED THE ASSESSE ES CLAIM OF ALLOWABILITY OF DEPRECIATION ON ADDITION MADE TO FI XED ASSETS BEING 50% OF THE INTEREST ON LOAN TRANSFERRED TO FIXED ASSETS IN A.Y. 2003-04. HE NOTICED THAT ASSESSEE HAD NOT MADE ANY ADDITION TO THE FIXE D ASSETS OR NO NEW INVESTMENT HAD BEEN MADE DURING THE YEAR UNDER CONS IDERATION. MERELY THE EXPENSES INCURRED IN EARLIER YEAR ON ACCOUNT OF INT EREST WERE CAPITALIZED AND TREATED AS ASSET ON WHICH DEPRECIATION WAS CLAIMED. CONSIDERING THE SAME WITH DEFERRED EXPENSES RELEVANT TO THE EARLIER ASSE SSMENT YEARS FOLLOWING THE ASSESSMENT ORDERS FOR A.Y. 2004-05 2005-06 20 06-07 AND 2007-08 AND IN ABSENCE OF ANY JUSTIFICATION FOR CLAIMING DEPREC IATION ON RS. 16 05 306/- BEING WITH REFERENCE TO THESE DEFERRED EXPENSES TH E AO DISALLOWED THE CLAIM OF DEPRECIATION OF INTEREST TRANSFERRED TO FIXED ASSETS. LD. CIT(A) CONFIRMED THE ADDITION. 3. AT THE OUTSET LD. COUNSEL FOR THE ASSESSEE S UBMITTED THAT THIS ISSUE HAD BEEN EXAMINED BY THE HONBLE HIGH COURT WHICH P ERMITTED THE ASSESSEE TO APPROACH THE AO FOR ALLOWING THE ENTIRE AMOUNT I N AY 2003-04 ITSELF AS PER LAW. IN AY 2007-08 THE TRIBUNAL HAS OBSERVED A S UNDER: 6. WE HAVE HEARD RIVAL PARTIES AND HAVE GONE THROUG H THE MATERIAL PLACED ON RECORD WE FIND THAT THE ASSESSE E HAD INCURRED CERTAIN EXPENDITURE IN ASSESSMENT YEAR 200 3-04 AND IT HAD CLAIMED AS 1/5 TH IN THAT YEAR AND BALANCE WAS CARRIED FORWARD TO THE NEXT YEARS FOR CLAIMING IN THE NEXT YEARS @ 1/5 TH IN EACH YEAR. THE ASSESSING OFFICER HAD MADE THE A DDITIONS ON ACCOUNT OF DISALLOWANCE OF DEFERRED REVENUE EXPENDI TURE WHICH WAS CONFIRMED BY HON'BLE DELHI HIGH COURT. HOWEVER THE HON'BLE HIGH COURT PERMITTED THE ASSESSEE TO APPROA CH ASSESSING OFFICER FOR ALLOWING THE ENTIRE AMOUNT IN ASSESSMENT YEAR 2003-04 ITSELF AS PER LAW. THE HON'BLE HIGH C OURT VIDE PARA 11-14 HAS HELD AS UNDER: 3 ITA NO. 5104/DEL/2013 M/S NARAIN GARH SUGAR MILLS LTD. 11. IN FACT MR. AGGARWAL AT THE TIME OF ARGUING THESE APPEALS AFTER PUTTING A FEEBLE ATTEMPT IN QUESTIONING THE WISDOM OF THE TRIBUNAL ADOPTING THE AFORESAID APPROACH LAID EMPHASIS ON ALTOGETHER DIFFERENT ASPECT AND THE EFFECT THEREOF WOULD BE ONLY ON ITA 57/2011. HIS PLEA WAS THAT IF THE COURSE OF ACTION ADOPTED BY THE REVENUE AUTHORITIES IS TO BE ACCEPTED THAT WOULD MEAN THAT IT WAS NOT OPEN FOR THE ASSESSEE TO SPREAD OVER THE SAID EXPENDITURE IN THE FORM OF INTEREST ETC. OVER A PERIOD OF FIVE YEARS WHICH WOULD MEAN THAT THE ASSESSEE COULD HAVE CLAIMED THE ENTIRE EXPENDITURE IN THE YEAR IN QUESTION I.E. IN THE ASSESSMENT YEARS 2003-04. ON THIS PREMISE HIS SUBMISSION WAS THAT IN THAT EVENTUALLY THAT THE EXPENDITURE WAS IN FACT INCURRED IN THE SAID ASSESSMENT YEAR EXPENDITURE OF RS.6 23 73 947/- SHOULD BE ALLOWED TO THE ASSESSEE IN THE ASSESSMENT YEAR 2003-04. 12. MS. SURUCHI AGGARWAL LEARNED COUNSEL APPEARING FOR THE REVENUE ON THE OTHER HAND SUBMITTED THAT WHEN NO SUCH CLAIM WAS EVER MADE BY THE ASSESSEE IN THE YEAR IN QUESTION IT SHOULD NOT BE ALLOWED. SHE FURTHER SUBMITTED THAT FOR THE FIRST TIME THIS PLEA WAS RAISED IN THE INSTANT APPE AL AND EVEN BEFORE THE TRIBUNAL NO SUCH CASE WAS SET UP. SHE ARGUED THAT UNLESS THE CLAIM IS MADE EITHER IN THE RETURN OR AT LEAST IN THE REVISED RETURN THE ASSESSEE WILL NOT PERMITTED TO PUSH THAT CLAIM. 13. TECHNICALLY MS. SURUCHI AGGARWAL MAY BE CORRECT IN HER SUBMISSIONS. AT THE SAME TIME THAT WOULD AMOUNT TO NOT ALLOWING THE APPELLANT/ASSESSEE THE CLAIM THE EXPENDITURE INCURRED ON INTEREST ETC. EVEN IN THE ASSESSMENT 4 ITA NO. 5104/DEL/2013 M/S NARAIN GARH SUGAR MILLS LTD. YEAR 2003-04 THOUGH THE ASSESSEE WAS ADMITTEDLY ENTITLED TO CLAIM THE SAME IN THAT YEAR WE MAKE THIS OBSERVATION HAVING REGARD TO THE FACT THAT THERE IS NO DISPUTE ABOUT THE GENUINENESS OF THE SAID EXPENDITURE INCURRED IN THE ASSESSMENT YEAR IN QUESTION. 14. IN THESE CIRCUMSTANCES : WE PERMIT THE ASSESSEE TO RAISE SUCH A CLAIM IN THE YEAR IN QUESTION BY APPROACHING THE ASSESSING OFFICER IN ACCORDANCE WITH LAW. 7. FROM THE ABOVE FINDINGS OF HON'BLE HIGH COURT W E FIND THAT THE HON'BLE HIGH COURT HAS DISMISSED THE APPEA L OF THE ASSESSEE. HOVERER IT HAS PERMITTED THE ASSESSEE T O APPROACH THE ASSESSING OFFICER FOR THE CLAIM OF ENTIRE AMOUN T IN ASSESSMENT YEAR 2003-04. WE OBSERVE THAT THE CLAIM IN THIS YEAR HAS ALSO SPILLED OVER FROM ASSESSMENT YEAR 200 3-04 FOR WHICH THE HON'BLE HIGH COURT HAD PERMITTED THE ASSE SSEE TO APPROACH THE ASSESSING OFFICER. IN VIEW OF THE ABO VE THE APPEAL FILED BY THE ASSESSEE DOES NOT HOLD ANY GROU ND AS HON'BLE DELHI HIGH COURT HAS IN FACT DISMISSED THE APPEALS OF ASSESSEE ON SIMILAR GROUNDS WITH A LIBERTY GRANTED TO ASSESSEE TO APPROACH ASSESSING OFFICER FOR ALLOWANCE OF ENTI RE CLAIM IN THE YEAR 2003-04 ITSELF. SINCE HON'BLE COURT HAS ALREADY PERMITTED ASSESSEE TO APPROACH ASSESSING OFFICER G ROUND NO.4 BEFORE US DO NOT HELD ANY MERIT. GROUND NO.1 IS GE NERAL AND DOES NOT REQUIRE ANY ADJUDICATION. GROUNDS NO.2 & 3 ARE NOT ALLOWABLE AS PER HON'BLE HIGH COURT ORDER. 4. THEREFORE GROUND NO. 1 BY THE ASSESSEE DOES NOT SURVIVE ANY MORE AND IS ACCORDINGLY DISMISSED. 5. APROPOS GROUND NO. 2 WE FIND THAT THERE IS NO D ISCUSSION IN THE ASSESSMENT ORDER. HOWEVER LD. CIT(A) AFTER CONSID ERING THE DECISION OF ITAT IN ASSESSEES OWN CASE FOR AY 2003-04 TO 2006- 07 (ITA NOS. 472 550 551 & 3038/DEL/2009 DATED 8-1-2010); AND THE D ECISION OF THE HONBLE 5 ITA NO. 5104/DEL/2013 M/S NARAIN GARH SUGAR MILLS LTD. DELHI HIGH COURT DATED 30-9-2011 IN ITA NO. 57 OF 2011 IN PARA 5.3 OF ITS ORDER HAS OBSERVED AS UNDER: 5.3. THE ISSUE RAISED IN THIS GROUND OF APPEAL DOE S NOT PERTAIN TO INSTANT AY 2008-09 BUT PERTAINS TO AY 2003-04 TO AY 2006- 07 WHICH WAS ALREADY DECIDED BY HONBLE ITAT & HON BLE HIGH COURT. THEREFORE NO ADJUDICATION IS CALLED FO R ON THIS GROUND. 6. WE ARE IN AGREEMENT WITH LD. CIT(A) THAT THE CAR RY FORWARD OF LOSS AFTER ALLOWING THE ENTIRE EXPENDITURE AS REVENUE EX PENDITURE U/S 37(1) IN AY 2003-04 DOES NOT ARISE IN THE CURRENT ASSESSMENT YE AR AND PERTAINS TO AY 2003-04 IN WHICH HONBLE HIGH COURT HAS ALREADY DE CIDED THE ISSUE. THEREFORE THE GROUND RAISED BY THE ASSESSEE IS MIS CONCEIVED. 7. IN THE RESULT ASSESSEES APPEAL IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 21-11-2014. SD/- SD/- ( A.T. VARKEY ) ( S.V. MEHROTRA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 21-11-2014. MP COPY TO : 1. ASSESSEE 2. AO 3. CIT 4. CIT(A) 5. DR