DCIT, Circle - 1, Kolkata, Kolkata v. M/s. Mechanical & Electrical Engineering Company Pvt. Ltd., Kolkata

ITA 57/KOL/2011 | 2007-2008
Pronouncement Date: 13-07-2011

Appeal Details

RSA Number 5723514 RSA 2011
Assessee PAN AABCM9924B
Bench Kolkata
Appeal Number ITA 57/KOL/2011
Duration Of Justice 6 month(s) 1 day(s)
Appellant DCIT, Circle - 1, Kolkata, Kolkata
Respondent M/s. Mechanical & Electrical Engineering Company Pvt. Ltd., Kolkata
Appeal Type Income Tax Appeal
Pronouncement Date 13-07-2011
Appeal Filed By Department
Bench Allotted C
Tribunal Order Date 13-07-2011
Assessment Year 2007-2008
Appeal Filed On 11-01-2011
Judgment Text
C IN THE INCOME TAX APPELLATE TRIBUNAL BENCH- C CALCUTTA () BEFORE SHRI MAHAVIR SINGH JUDICIAL MEMBER. /AND . .. . ! ! ! !. .. . '# SHRI C.D. RAO ACCOUNTANT MEMBER. $ $ $ $ / ITA NO. 57/ KOL/2011 %& '(/ ASSESSMENT YEAR: 2007-08 DEPUTY COMMISSIONER OF INCOME-TAX CIRCLE-1 KOLKATA M/S. MECHANICAL & ELECTRICAL ENGINEERING CO. PVT. LTD. PAN: AABCM 9924B (*+ / APPELLANT ) - % - - VERSUS -. (-.*+/ RESPONDENT ) *+ / 0 '/ FOR THE APPELLANT: / SHRI R.K.SAHA DR -.*+ / 0 '/ FOR THE RESPONDENT: SMT. SHREYA LOYALKA AR '1 / ORDER . .. . ! ! ! !. .. . '# SHRI C.D.RAO ACCOUNTANT MEMBER.: REVENUE HAS FILED THIS APPEAL AGAINST ORDER DATED 20-09-2010 OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) FOR THE ASSES SMENT YEAR 2007-08. 2. IN THIS APPEAL THE REVENUE HAS RAISED THE FOLLOW ING EFFECTIVE GROUNDS OF APPEAL:- 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS. 4 81 8 53/- AS SHORT TERM CAPITAL GAIN ON SALE OF ENTIRE PLANT & MACHINERY WI TH OUT APPRECIATING THE FACT THAT THE RELEVANT BLOCK OF ASSETS CEASED T O EXIST ON SALE ENTAILING THE APPLICABILITY OF THE PROVISION OF SECTION 50 OF THE I.T. ACT 1961. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE THE LD. CIT(A) ERRED IN ALLOWING SET OFF OF BROUGHT FORWARD ED UNABSORBED DEPRECIATION AND BUSINESS LOSS OF EARLIER YEARS AMO UNT OF RS. 33 40 286/- WHICH WAS NOT ALLOWED IN ASSESSMENT BAS ED ON THE TAX AUDIT REPORT. ITA NO.57/KOL/2011-C-CDR 2 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE THE LD. CIT(A) WAS NOT JUSTIFIED IN ALLOWING SET OFF OF BRO UGHT FORWARDED UNABSORBED DEPRECIATION & BUSINESS LOSS OF EARLIER YEARS BY ACCEPTING A CERTIFICATE FROM TAX AUDITOR AS NEW EVIDENCE WHICH WAS CONTRARY TO THE FACTS BROUGHT OUT IN THE STATUTORY TAX AUDIT REPORT . 3. BRIEF FACTS OF GROUND NO.1 ARE THAT WHILE DOIN G THE SCRUTINY ASSESSMENT THE ASSESSING OFFICER HAS CALCULATED THE SHORT TERM CAPITAL GAIN S [STCG] ON SALE OF PLANT AND MACHINERY AT RS.4 81 853 BY OBSERVING AS UNDER:- STCG FROM THE ABOVE IT IS ALSO SEEN THAT THE TOTAL BLOCK OF PLANT & MACHINERY CEASED TO EXIST DURING THE PREVIOUS YEAR . THE SALE CONSIDERATION OF RS.8 26 020/- RECEIVED BY THE ASSE SSEE COMPANY IS MORE THAN THE WDV [WRITTEN DOWN VALUE] OF THE BLOCK AS IN THE BEGINNING OF THE YEAR. THUS THE PROFIT IS TAXABLE U/S.50(2) WHICH IS CALCULATED AS UNDER AND ADDED TO THE TOTAL INCOME O F THE ASSESSEE. SALE CONSIDERATION RS.8 26 020/- LESS: WDV AS ON 01.04.06 RS.3 44 167/- STCG RS.4 81 853/- 4. ON APPEAL THE LEARNED COMMISSIONER OF INCOME-T AX (APPEALS) HAS DELETED THE SAME BY OBSERVING THAT:- I HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS AND THE DEFINITION OF BLOCK OF ASSETS IN SEC 2(11) OF THE I NCOME TAX ACT. AS PER SEC 2(11) THE FOLLOWING ASSETS WILL FORM ONE BLOCK UNDER THE BROAD HEADING OF PLANT AND MACHINERY. PLANT & MACHINERY DRILL MACHINE BOARDING MACHINE PAY LOADER PRINTER AND VEHICLE AS THE RATE OF DEPRECIA TION FOR ALL THESE ASSETS IS 15%. SINCE THE PLANT AND MACHINERY BLOCK EXISTS AND HAS NOT BECOME ZERO NO SHORT TERM CAPITAL GAIN U/S.50 SHALL ARISE . AS SUCH THE AO THE ADDITION OF RS.481 853/- UNDER THE HEAD CAPITAL GAI N IS DELETED. 5. AGGRIEVED BY THIS NOW THE REVENUE IS IN APPEAL BEF ORE US. 6. AT THE TIME OF HEARING BEFORE US THE LEARNED D EPARTMENTAL REPRESENTATIVE FOR THE REVENUE HAS RELIED ON THE ORDER OF THE ASSESSING OF FICER. ON THE OTHER HAND THE LEARNED COUNSEL FOR THE ASSESSEE HAS RELIED ON THE ORDER OF THE LE ARNED COMMISSIONER OF INCOME-TAX (APPEALS) ITA NO.57/KOL/2011-C-CDR 3 AND CONTENDED THAT THE LEARNED COMMISSIONER OF INCO ME-TAX(APPEALS) WAS RIGHT IN ALLOWING THE APPEAL OF THE ASSESSEE. 7. AFTER HEARING THE RIVAL SUBMISSIONS AND ON CAREFUL PERUSAL OF MATERIAL AVAILABLE ON RECORD AND THE OBSERVATIONS MADE BY THE LEARNED ASS ESSING OFFICER AND THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) WE FIND THAT THE OBSERVATIONS MADE BY THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ARE FAIR AND J UST IN THE FACTS AND CIRCUMSTANCES OF THE CASE. THEREFORE WE FIND NO INFIRMITY IN THE IMPUGN ED ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS) AND CONFIRM THE SAME. GROUND N O.1 RAISED BY THE REVENUE IS DISMISSED. GROUND NOS. 2 & 3 OF THE REVENUE 8. AFTER HEARING THE RIVAL SUBMISSIONS IT IS OBSE RVED THAT THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS SET ASIDE THIS ISSUE TO TH E FILE OF THE ASSESSING OFFICER BY OBSERVING AS UNDER:- I HAVE CONSIDERED THE SUBMISSIONS AND THE ASSESS MENT ORDER. THE AO IS DIRECTED TO VERIFY THE CLAIM OF THE ASSESSEE AND ALLOW THE BROUGHT FORWARD LOSES AS PER THE PROVISIONS OF THE ACT. IT IS NEEDLESS TO MENTION THAT THE LOSS INDICATED IN THE INTIMATION CANNOT BE IGNORED ON THE GROUND THAT NO REGULAR ASSESSMENT U/S.143(3) HAS BE EN MADE. 9.. SINCE THE LEARNED COMMISSIONER OF INCOME-TAX (A PPEALS) HAS GIVEN DIRECTION AS PER PROVISIONS OF THE I.T. ACT61 WE FIND NO MERIT IN THE REVENUES GROUND NOS. 2 & 3. GROUND NOS. 2 & 3 OF THE REVENUE ARE DISMISSED. 10. IN THE RESULT THE APPEAL OF THE REVENUE IS D ISMISSED. '1 #2' 3 2% 4 5 THIS ORDER IS PRONOUNCED IN OPEN COURT ON DT.13- 07-2011 SD/- SD/- ( ) (SHRI MAHAVIR SINGH) JUDICIAL MEMBER) ( . .. . ! ! ! !. .. . ) '# '# '# '# ) (C.D. RAO) ACCOUNTANT MEMBER ) ( (( (!# !# !# !#) )) ) DATE: 13-07-2011 '1 / -6 7'6'8 / COPY OF THE ORDER FORWARDED TO: *PRADIP* 9: %;< = ITA NO.57/KOL/2011-C-CDR 4 1. . *+ / THE APPELLANT : DCIT CIR-1 7 TH FL. AAYKAR BHAWAN KOL-69. 2 -.*+ / THE RESPONDENT- M/S MECHANICAL & ELECTRICAL ENG G CO. PVT. LTD 8 WATERLOO ST (1 ST FL) KOL-69. 3. 1% / THE CIT 4. 1% ( )/ THE CIT(A) 5 . >4 -% / DR KOLKATA BENCH 6 . GUARD FILE . .6 -/ TRUE COPY '1%2/ BY ORDER < /ASSTT REGISTRAR .