DCIT, Kollam v. Punalur Paper Mills Ltd, Kolkotta

ITA 556/COCH/2009 | 2004-2005
Pronouncement Date: 19-07-2011

Appeal Details

RSA Number 55621914 RSA 2009
Assessee PAN AADCP2570Q
Bench Cochin
Appeal Number ITA 556/COCH/2009
Duration Of Justice 1 year(s) 7 month(s) 25 day(s)
Appellant DCIT, Kollam
Respondent Punalur Paper Mills Ltd, Kolkotta
Appeal Type Income Tax Appeal
Pronouncement Date 19-07-2011
Appeal Filed By Department
Bench Allotted DB
Tribunal Order Date 19-07-2011
Date Of Final Hearing 16-06-2011
Next Hearing Date 16-06-2011
Assessment Year 2004-2005
Appeal Filed On 24-11-2009
Judgment Text
ITA NO. 556/COCH/2009 (FOR AY 2004- 05) 1 IN THE INCOME TAX APPELLAT E TRIBUNAL COCHIN BEN CH COCHIN BEFORE S/SHRI N.VIJAYAKUMARAN JM AND SANJAY AR ORA AM I.T.A. NO. 556/COCH/2009 ASSESSMENT YEAR:2004-05 THE DEPUTY COMMISSIONER OF INCOME TAX CIRCLE-1 KOLLAM. VS. PUNALUR PAPER MILLS LTD. LINDSAY TOWERS 9 TH FLOOR 13 NELLIE SENGUPTA SARANI KOLKOTTA. [PAN:AADCP 2570Q] (REVENUE -APPELLANT) (ASSESSEE - RESPONDENT) REVENUE BY MS. VIJAYAPRABHA DR ASSESSEE BY SHRI R.RAJASEKHARAN CA-AR O R D E R PER SANJAY ARORA AM: THIS AN APPEAL BY THE REVENUE AGAINST THE ORDER BY THE COMMISSIONER OF INCOME- TAX (APPEALS)-I TRIVANDRUM (CIT(A) FOR SHORT) DA TED 27.8.2009 AND THE ASSESSMENT YEAR UNDER REFERENCE IS 2004-05. 2. OPENING THE ARGUMENTS ON BEHALF OF THE REVENUE IT WAS CONTENDED BY THE LD. DR THAT THE ASSESSEE IS A PUBLIC LIMITED COMPANY WHIC H IS CLOSED AND NOT OPERATIONAL FOR THE LAST 20 YEARS. IT DID NOT ADMITTEDLY DO ANY BUSINES S DURING THE RELEVANT PREVIOUS YEAR AS WELL. AS SUCH ITS CLAIM IN RESPECT OF ADMINISTRAT IVE EXPENSES WHICH LED TO IT REPORTING A HUGE LOSS OF ` 23.52 LAKHS FOR THE YEAR IS NOT ADMISSIBLE. CONSE QUENTLY THE ASSESSMENT FRAMED BY BRINGING THE ENTIRE INCOME RETURNED UNDER THE HEAD INCOME FROM OTHER SOURCES AT ` 15.43 LAKHS IS VALID IN LAW AND MERITS BEING SUSTA INED. THE LD. CIT(A) HAS ALLOWED THE ASSESSEES CLAIM BY FOLLOWING THE DECIS ION BY THE TRIBUNAL IN THE ASSESSEES OWN CASE FOR THE EARLIER YEARS NOTWITHSTANDING THE FACT THAT THE REVENUE HAS NOT ACCEPTED THE SAME AND IS IN APPEAL BEFORE THE HONBLE JURIS DICTIONAL HIGH COURT. ITA NO. 556/COCH/2009 (FOR AY 2004- 05) 2 THE LD. AR WOULD SUBMIT THAT THE ORDER BY THE TRIBUNAL FOR THE EARLIER YEARS WAS BINDING ON THE FIRST APPELLATE AUTHORITY AND CONSE QUENTLY STOOD RIGHTLY FOLLOWED BY HIM PLACING ON RECORD ORDER/S COVERING TWO ASSESSMENT Y EARS ON RECORD. FURTHER HE ADDED THAT THE PRODUCTION IN THE PAPER MILL HAS SINCE COM MENCED GIVING CREDENCE TO THE FINDINGS OF THE TRIBUNAL THAT THE CLOSURE OF THE PA PER MILL AND THE STOPPAGE OF ITS ACTIVITIES WAS ONLY A TEMPORARY LULL. 3. WE HAVE HEARD THE PARTIES AND PERUSED THE MATER IAL ON RECORD. 3.1 THE REVENUES CASE IS THAT THE BUSINESS OF WHICH THE INCOME IS TO BE DETERMINED U/S. 28(I) OF THE ACT IS ONLY THAT WHICH IS CARRIE D ON BY THE ASSESSEE DURING THE RELEVANT YEAR. ADMITTEDLY NO SUCH BUSINESS ACTIVITY WAS CAR RIED ON BY THE ASSESSEE AT ANY TIME DURING THE RELEVANT PREVIOUS YEAR. IN FACT THE BUS INESS STOPPED YEARS AGO SO THAT IT WOULD NOT QUALIFY TO BE TERMED AS EITHER A SLOWING DOWN O R A TEMPORARY SUSPENSION OF BUSINESS WHICH IS ESSENTIALLY A MATTER OF FACT. EFFORTS TO R EVIVE PRODUCTION OR BUSINESS WHICH WOULD AGAIN NEED TO BE EXHIBITED ITSELF IMPLIES A CESSATION OF BUSINESS. AS SUCH THE DEDUCTION UNDER ANY OF THE PROVISIONS OF SS. 30 TO 37 WHICH ARE IN TERMS OF S. 29 ONLY FOR COMPUTING THE INCOME ASSESSABLE U/S. 28 COULD NOT BE TAKEN INTO RECKONING. PUT DIFFERENTLY THE EXPENDITURE CLAIMED HAS NOT BEEN O R RATHER COULD NOT BE SHOWN TO BE TOWARD ANY BUSINESS SO AS TO QUALIFY AS BUSINESS E XPENDITURE DEDUCTIBLE IN THE COMPUTATION OF BUSINESS INCOME; THERE BEING NO BUSI NESS QUA WHICH THE SAID EXPENDITURE COULD BE SAID TO HAVE BEEN INCURRED. THE ASSESSEES CASE ON THE OTHER HAND I S THAT THERE IS NO CHANGE IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND THAT THE FIRST APPEL LATE AUTHORITY HAS ONLY FOLLOWED THE CONSISTENT VIEW IN THE MATTER BY THE TRIBUNAL WHIC H IS BINDING ON IT NOTWITHSTANDING THE SAME BEING UNDER CHALLENGE BEFORE A HIGHER FORUM. 3.2 WE FIND MERIT IN THE REVENUES CASE; THE AS SESSEE HAVING NOT BROUGHT ANY MATERIAL ON RECORD TO SHOW AS TO HOW THE EXPENDITURE IS ADMI SSIBLE EITHER UNDER SS.30 TO 37 OR EVEN U/S.57 OF THE ACT. AS OBSERVED BY THE ASSESSIN G OFFICER A PERIOD OF 20 YEARS COULD BY NO STRETCH OF IMAGINATION BE CONSIDERED AS A LUL L PERIOD. AT THE SAME TIME IT IS ITA NO. 556/COCH/2009 (FOR AY 2004- 05) 3 UNDISPUTED THAT THERE IS NO CHANGE IN THE FACTS AND CIRCUMSTANCES OF THE CASE I.E. FROM THAT OBTAINING FOR THE EARLIER YEARS WHEREAT THE A SSESSEES CLAIM FOR SUCH EXPENSES CLAIMED AS ADMINISTRATIVE EXPENSES HAS BEEN CONSIS TENTLY ALLOWED BY THE TRIBUNAL. ACCORDINGLY WE FIND NO INFIRMITY IN THE IMPUGNED O RDER PASSED FOLLOWING THE ORDER BY THE TRIBUNAL IN THE ASSESSEES OWN CASE WHICH IS E VEN OTHERWISE BINDING ON IT. THE HONBLE JURISDICTIONAL HIGH COURT HAS IN THE CASE O F CIT V. TRAVANCORE TITANIUM PRODUCTS LTD . 265 ITR 526 (KER) HELD THAT EVEN WHERE THE TRIBU NAL HAS TAKEN A WRONG DECISION THE CO-ORDINATE BENCH OUGHT TO ORDINARILY FOLLOW THE SA ME WHILE IN THE PRESENT CASE WE FIND THE IMPUGNED ORDER AS ONLY FOLLOWING THE CONSISTENT STAND BY THE TRIBUNAL IN THE MATTER IN THE ASSESSEES OWN CASE. UNDER THE CIRCUMSTANCES I T BECOMES INCUMBENT ON THE REVENUE TO DISTINGUISH THE EARLIER ORDER/S BY THE TRIBUNAL EITHER ON FACTS OR IN LAW OR BOTH OR OF A DIFFERENT STAND BY THE TRIBUNAL AT LEAST FOR SOME O F THE EARLIER YEARS AND WHICH IT HAS NOT. THE DECISION BY THE APEX COURT IN THE CASE OF UNION OF INDIA V. RAGHUBIR SINGH (1989) 178 ITR 548 (SC) WOULD ALSO SUGGEST THE SAME COURSE OF ACTION BY US. WE ACCORDINGLY ENDORSING THE CONSISTENT STAND BY THE TRIBUNAL IN T HE MATTER UPHOLD THE IMPUGNED ORDER. WE DECIDE ACCORDINGLY. 4. IN THE RESULT THE REVENUES APPEAL IS DISMISSED . SD/- S D/- (N.VIJAYAKUMARAN) (SANJAY ARORA) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: ERNAKULAM DATED: 19TH JULY 2011 GJ COPY TO: 1. PUNALUR PAPER MILLS LTD. LINDSAY TOWERS 9 TH FLOOR 13 NELLIE SENGUPTA SARANI KOLKOTTA. 2. THE DEPUTY COMMISSIONER OF INCOME TAX CIRCLE-1 KOLLAM. 3. THE COMMISSIONER OF INCOME-TAX (APPEALS)-I TRIV ANDRUM. 4. THE COMMISSIONER OF INCOME-TAX TRIVANDRUM. 5. D.R. I.T.A.T. COCHIN BENCH COCHIN. 6. GUARD FILE. ITA NO. 556/COCH/2009 (FOR AY 2004- 05) 4