BLOOM PACKAGING P. LTD, MUMBAI v. DCIT CEN CIR-38, MUMBAI

ITA 7129/MUM/2008 | 2003-2004
Pronouncement Date: 17-05-2010 | Result: Partly Allowed

Appeal Details

RSA Number 712919914 RSA 2008
Assessee PAN AAACB1928K
Bench Mumbai
Appeal Number ITA 7129/MUM/2008
Duration Of Justice 1 year(s) 5 month(s) 1 day(s)
Appellant BLOOM PACKAGING P. LTD, MUMBAI
Respondent DCIT CEN CIR-38, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 17-05-2010
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted F
Tribunal Order Date 17-05-2010
Date Of Final Hearing 05-05-2010
Next Hearing Date 05-05-2010
Assessment Year 2003-2004
Appeal Filed On 16-12-2008
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL F BENCH: MUMBAI BEFORE SHRI R S PADVEKAR JUDICIAL MEMBER AND SHRI B RAMAKOTAIAH ACCOUNTANT MEMBER ITA NO 7129/MUM/2008 (ASSESSMENT YEAR: 2003-04) BLOOM PACKAGING PRIVATE LIMITED READY MONEY TERRACE 4TH FLOOR DR A B ROAD WORLI MUMBAI -400 052 PAN : AAACB 1928 K VS DCIT CENTRAL CIRCLE 38 AAYAKAR BHAVAN M K ROAD NEW MARINE LINES MUMBAI -400 020 APPELLANT RESPONDENT APPELLANT BY: SHRI KIRIT R KAMDAR/ MS SAISUDHA MULTANI RESPONDENT BY: SHRI A P SINGH ORDER PER B RAMAKOTAIAH AM THIS IS AN ASSESSEES APPEAL AGAINST THE ORDER OF THE CIT (A)-CENTRAL VI MUMBAI DATED 10.10.2008. THE ASSESSEE HAS RAISED F OUR GROUNDS. THE LEARNED COUNSEL AND THE LEARNED DEPARTMENTAL REPRESENTATIVE WERE HEARD IN DETAIL. 2. GROUND NO.1 IS AS UNDER:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN NOT D IRECTING THE DEPUTY COMMISSIONER OF INCOME-TAX TO GRANT DEPRECIATION UN DER SECTION 32 ON THE BASIS OF THE WRITTEN DOWN VALUE OF THE VARIOUS BLOC K OF ASSETS AS FINALLY DETERMINED IN THE EARLIER YEAR CONSEQUENT TO THE AP PELLATE ORDERS FOR THE EARLIER ASSESSMENT YEARS. 3. IT IS THE PRAYER OF THE ASSESSEE THAT THE DEPREC IATION GRANTED U/S 32 SHOULD BE ON THE BASIS OF THE WRITTEN DOWN VALUE OF VARIOUS B LOCK OF ASSETS AS FINALLY DETERMINED IN THE EARLIER YEAR CONSEQUENT TO THE AP PELLATE ORDER FOR THE EARLIER YEARS. IT WAS POINTED OUT THAT GRANT OF DEPRECIATION CONSE QUENT TO EARLIER YEARS ORDER IS A ROUTINE PROCEDURE AND THERE ARE VARIOUS OTHER ALTER NATIVE PROVISIONS OF GRANTING THE ITA 7129/M/08 BLOOM PACKAGING PRIVATE LIMITED 2 DEPRECIATION ON THE BASIS OF THE WDV OF THE EARLIER YEARS. IN VIEW OF THIS THE LEARNED COUNSEL HAS NOT PRESSED THE GROUND AND ACCO RDINGLY TREATED AS WITHDRAWN. 4. GROUND NO.2 IS AS UNDER:- 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW THE COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN UPHOL DING THE ACTION OF THE DEPUTY COMMISSIONER OF INCOME-TAX IN NOT EXCLUDING FROM THE TOTAL INCOME AN AMOUNT OF RS 2 91 51 000/- IN RESPECT OF INTEREST W RITTEN BACK WHICH HAD NOT BEEN ALLOWED AS A DEDUCTION IN THE EARLIER YEARS. 5. THE FACTS IN THIS GROUND ARE THAT THE ASSESSEE H AD WRITTEN BACK AN AMOUNT OF RS 18 38 10 750/- U/S 41(1) OF THE INCOME-TAX ACT C ONSEQUENT TO THE AMALGAMATION OF VARIOUS GROUP COMPANIES AND SETTLEMENT OF THEIR LOANS TAKEN FROM M/S FAIRGROWTH FINANCIAL SERVICES LTD (FFSL) WHICH WAS NOTIFIED P ARTY UNDER THE SPECIAL COURT (TRIAL AND OFFENCES RELATING TO TRANSACTIONS IN SECURITIES ) ORDINANCE 1992 AND INTEREST. THE INTEREST DEBITED IN THE RESPECTIVE AMALGAMATING COMPANIES WAS WITHDRAWN AND OFFERED TO TAX IN THE ASSESSEES HANDS. WHILE DOIN G SO THE ASSESSEE CLAIMED THAT INTEREST AMOUNT OF RS 2 52 78 000/- PERTAINING TO M /S RAKSHAK CHEMICALS PVT LTD AND INTEREST OF RS 38 73 000/- PERTAINING TO M/S SH IVPADA HOLDINGS PVT LTD HAS NOT BEEN ALLOWED IN RESPECTIVE CASES FOR THE ASSESSMENT YEAR 1997-98 AND AMOUNT TO THE EXTENT OF RS 2 91 51 000/- SHOULD BE EXCLUDED U/S 4 1(1). SINCE THE CLAIM IN THOSE INDIVIDUAL CASES IN THAT YEAR HAS CONTESTED UP TO T HE ITAT ASSESSING OFFICER DID NOT EXCLUDE THE ABOVE AMOUNT. THE CIT (A) HAS ALSO CON FIRMED THE ACTION OF THE ASSESSING OFFICER EVEN THOUGH HE EXTRACTED THE ORD ER OF THE ITAT IN THE CASE OF RAKSHAK CHEMICALS PVT LTD IN PARA 11.8 WHEREIN THE ISSUE WAS RESTORED TO THE ASSESSING OFFICER TO RE-ADJUDICATE AFRESH. LIKEWIS E IN THE CASE OF M/S SHIVPADA HOLDINGS P LTD ALSO THE ITAT ALSO RESTORED THE ISSU E OF ALLOWANCE OF INTEREST IN AY 1997-98 TO THE FILE OF THE ASSESSING OFFICER. SINC E THE DECISION WAS PENDING WITH THE ASSESSING OFFICER THE CIT (A) HOWEVER CONFIRMED THE DISALLOWANCE WITH THE DIRECTION THAT IF THE DISALLOWANCE OF INTEREST IN T HOSE CASES IS CONFIRMED THE SAME SHOULD BE EXCLUDED IN THE ASSESSEES CASE. ITA 7129/M/08 BLOOM PACKAGING PRIVATE LIMITED 3 6. IT WAS THE CONTENTION OF THE LEARNED COUNSEL THA T ITAT ORDERS GIVEN IN SEPTEMBER 2004 IN THE CASE OF M/S RAKSHAK CHEMICALS PVT LTD AND IN AUGUST 2006 IN THE CASE OF M/S SHIVPADA HOLDINGS PVT LTD HAVE NOT YET BEEN IMPLEMENTED AND THERE IS DISALLOWANCE OF THE AMOUNT IN THOSE CASES AND FU RTHER BRINGING TO TAX IN THE ASSESSEES CASE AS OF NOW RESULTS IN DOUBLE ADDITI ON. IT WAS SUBMITTED THAT THE AMOUNT CAN BE EXCLUDED AND THE GROUND MAY BE ALLOWE D. THE LEARNED DEPARTMENTAL REPRESENTATIVE HOWEVER SUBMITTED THAT SINCE THE I SSUE WAS RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR FRESH EXAMINATION THIS I SSUE CAN ALSO BE RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER FOR NECESSARY EXA MINATION AND ALLOWANCE ACCORDINGLY. WE ARE HOWEVER NOT CONVINCED WITH THE ARGUMENT OF LEARNED DEPARTMENTAL REPRESENTATIVE. WE NOTICE THAT THE ORDERS BY THE IT AT IN THE CASE OF RAKSHAK CHEMICALS PVT LTD IN ITA 1527/AHD/2001 AND 1514 & 1 743/AHD/2002 FOR ASSESSMENT YEARS 1997-98 1995-96 & 1996-97 DATED 16.9.2004 HA VE NOT YET BEEN GIVEN EFFECT TO. LIKEWISE THE ORDERS OF THE ITAT IN ITA 169/AH D/2001 DATED 8.9.2006 WAS ALSO NOT GIVEN EFFECT TO. IF THE ASSESSING OFFICER TAKE S CONSIDERABLE TIME IN DECIDING THE ISSUE THE ASSESSEE CANNOT PUT TO INCONVENIENCE BEC AUSE OF THE INACTION OF THE ASSESSING OFFICER. WE ARE OF THE OPINION THAT SINCE THE AMOUNT WAS DISALLOWED IN THOSE TWO CASES BY THE ASSESSING OFFICER AND THOSE CASES CONSEQUENTIAL ORDERS HAVE NOT BEEN GIVEN EFFECT TO WE ARE OF THE OPINION THA T THERE IS NO NEED TO BRING THIS AMOUNT TO TAX IN THIS ASSESSMENT YEAR. IF WE RESTO RE THE MATTER BACK TO THE ASSESSING OFFICER WITHOUT DECIDING THE ISSUE AS RE QUESTED BY THE DEPARTMENTAL REPRESENTATIVE THE FATE OF THIS ORDER WILL ALSO BE SAME IE. KEEPING IT IN COLD STORAGE WITHOUT DECIDING THE ISSUE AT ALL. WE DO NOT WANT THAT RISK / FATE TO THIS ORDER THEREFORE WE DIRECT THE ASSESSING OFFICER TO EXCLU DE THE AMOUNT OF RS 2 91 51 000/- IN THIS ASSESSMENT YEAR. IN CASE THE ASSESSEE SUC CEEDS IN CLAIMING THE AMOUNTS IN THE RESPECTIVE ASSESSMENT YEARS IN THE CONSEQUENTIA L ORDERS PENDING BEFORE THE ASSESSING OFFICER IN THOSE CASES THEN ONLY THE ASS ESSING OFFICER IS DIRECTED TO BRING THE AMOUNT TO TAX IN THIS ASSESSMENT YEAR AS A CONS EQUENCE TO THE ALLOWANCE OF AMOUNTS IN AY 1997-98. IN CASE THE ASSESSING OFFIC ER DISALLOWS THE AMOUNTS IN AY 1997-98 IN THE RESPECTIVE ASSESSEES CASES THEN TH ERE IS NO NEED TO BRING IT TO TAX THIS YEAR. WITH THESE DIRECTIONS WE DIRECT THE AS SESSING OFFICER TO EXCLUDE THE ITA 7129/M/08 BLOOM PACKAGING PRIVATE LIMITED 4 AMOUNT OF RS 2 91 51 000/- FOR ASSESSMENT YEAR 2003 -04. GROUND IS CONSIDERED ALLOWED. 7. GROUND NO.3 IS AS UNDER:- 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN UPHOL DING THE ACTION OF DEPUTY COMMISSIONER OF INCOME-TAX IN NOT ALLOWING DEDUCTIO N IN RESPECT OF CAPITAL ADVANCES WRITTEN OFF AMOUNTING TO RS 10 53 587/-. BRIEFLY STATED THE ASSESSEE HAS WRITTEN OFF AN AM OUNT OF RS 22 52 170/- IN THE BOOKS OF ACCOUNT OUT OF WHICH AN AMOUNT OF RS 10 5 3 537/- WAS TOWARDS WRITE OFF OF CAPITAL ADVANCES FOR PURCHASE OF MACHINERY. OUT OF ABUNDANT PRECAUTION THE SAME AMOUNT WAS DISALLOWED AND ADDED BACK IN THE COMPUTA TION OF INCOME FILED BY THE ASSESSEE. HOWEVER VIDE NOTE NO.3 OF THE NOTE TO T HE COMPUTATION OF TOTAL INCOME THE ASSESSEES SEEMS TO HAVE MADE A CLAIM FOR ALLOW ING THE ABOVE AMOUNT EVEN THOUGH THE AMOUNT WAS ADDED BACK IN COMPUTATION OF INCOME. THERE WAS NO DISCUSSION IN THE ASSESSMENT ORDER ABOUT THE DISALL OWANCE / CLAIM OF THIS AMOUNT. BEFORE THE CIT (A) IN THE STATEMENT OF FACTS THE ASSESSEE HAS SUBMITTED THAT THIS CLAIM WAS NOT CONSIDERED BY THE ASSESSING OFFICER EVEN THOUGH VIDE THE LETTER DATED 27.1.2005 THE ASSESSEE GAVE DETAILED SUBMISSION IN RESPECT OF THE SAID ISSUE. DURING THE ASSESSMENT PROCEEDINGS THIS ISSUE WAS RAISED A S A GROUND BEFORE THE CIT (A). THE CIT (A) REJECTED THE ASSESSEES CONTENTIONS VID E PARA 12.3 BY STATING AS UNDER:- I HAVE CONSIDERED THE FACTS OF THE CASE AND THE SU BMISSIONS MADE BY THE APPELLANT BUT DO NOT FIND MERIT IN THEM. THE CASE LAWS QUOTED BY THE APPELLANT ARE DISTINGUISHABLE ON FACTS. IN THIS CASE THE DIS ALLOWANCE MADE BY THE ASSESSING OFFICER IS IN RESPECT OF ADVANCES MADE IN THE CAPITAL FIELD AND NOT IN RESPECT OF BAD DEBTS. THE DISALLOWANCE MADE BY THE AO IS THEREFORE CONFIRMED. 8. AFTER HEARING THE LEARNED COUNSEL IN DETAIL AND LEARNED DEPARTMENTAL REPRESENTATIVE WHO RELIED ON THE THIRD MEMBER DECIS ION IN THE CASE OF DCIT VS PASUPATI NEW TECH LTD 7 SOT 107 (DEL) TM WE ARE OF THE OPINION THAT THE MATTER SHOULD BE EXAMINED BY THE ASSESSING OFFICER AFRESH. EVEN THOUGH THE ASSESSEE HAS ADDED THE SAME AMOUNT IN THE COMPUTATION OF TOTAL I NCOME THERE WAS CLAIM BY THE ASSESSEE VIDE NOTE NO.3 TO THE COMPUTATION OF TOTAL INCOME AND ALSO BY A SEPARATE LETTER FILED BEFORE THE ASSESSING OFFICER IN THE CO URSE OF ASSESSMENT PROCEEDINGS. ITA 7129/M/08 BLOOM PACKAGING PRIVATE LIMITED 5 THERE IS NO DISCUSSION AT ALL IN THE ASSESSMENT ORD ER ABOUT THE ALLOWANCE / REJECTION OF THE CLAIM BY THE ASSESSING OFFICER. BEFORE THE CIT ASSESSEE REITERATED THE SAME SUBMISSIONS AND VIDE PARA 12.1 AND 12.2 THE CIT (A ) EXTRACTED THE FACTS AND SUBMISSIONS. HOWEVER HE HAS NOT CONSIDERED THE ISS UE IN ITS CORRECT PERSPECTIVE AS CAN BE SEEN FROM THE ORDER OF THE CIT (A) EXTRACTED ABOVE. THE CIT (A) WAS OF THE OPINION THAT IN THIS CASE THE DISALLOWANCE MADE BY THE ASSESSING OFFICER IS IN RESPECT OF ADVANCES MADE IN THE CAPITAL FIELD AND NOT IN RE SPECT OF BAD DEBTS. THIS FINDING OF THE CIT (A) IS NOT CORRECT IN THE SENSE THAT ASSES SING OFFICER HAD NOT MADE ANY DISALLOWANCE AT ALL IN THE ORDER NOR THERE WAS DISC USSION WITH REFERENCE TO THE AMOUNT WRITTEN OFF WHETHER IN THE CAPITAL FIELD OR REVENU E FIELD OR EVEN WHETHER IT CAN BE ALLOWED U/S 36(1)(VII) OR U/S 37(1). THEREFORE WE ARE OF THE OPINION THAT CIT (A)S FINDING IS NOT BASED ON RECORD NOR THERE WAS ANY DI SCUSSION BY HIM IN HIS ORDER ABOUT EXAMINING THE ISSUE. IN VIEW OF THIS WE ARE OF THE OPINION THAT THE ISSUE IS TO BE EXAMINED AFRESH BY THE ASSESSING OFFICER AND SO THE GROUND IS CONSIDERED ALLOWED FOR STATISTICAL PURPOSES. THE CLAIM OF WRITE OFF RS 10 53 587/- IS RESTORED TO THE FILE OF THE ASSESSING OFFICER WHO IS DIRECTED TO EXAMINE TH E CLAIM AND CONSIDER THE SAME AS PER THE PROVISIONS OF THE ACT. NEEDLESS TO MENTION THE ASSESSEE SHOULD BE GIVEN ADEQUATE OPPORTUNITY TO JUSTIFY THE CLAIM. 9. GROUND NO.4 READS AS UNDER: 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN UPHOL DING THE ACTION OF DEPUTY COMMISSIONER OF INCOME-TAX IN DETERMINING THE ASSES SED INCOME AT RS 3 73 32 930/- AS PER THE RETURN OF INCOME SINCE THE ASSESSED INCOME AS COMPUTED BY HIM WAS LOWER THAN THE RETURNED INCOME. THE ISSUE IN THIS GROUND IS PECULIAR IN THE SENSE THAT THE ASSESSING OFFICER HAS SELECTED THE CASE FOR SCRUTINY AND DETERMINED THE T OTAL INCOME AT RS 2 39 83 053/- BY MAKING VARIOUS DISALLOWANCES IN THE ORDER. THE ULTIMATE DETERMINATION OF THE TOTAL INCOME IS LESS THAN THE RETURNED INCOME AT RS 3 72 32 930/-. CONSEQUENTLY INSTEAD OF ACCEPTING THE TOTAL INCOME AS DETERMINED BY HIM IN THE ASSESSMENT ORDER THE ASSESSING OFFICER STATED THAT THE TOTAL INCOME BEING ASSESSED AT LOWER THAN THE RETURNED INCOME TOTAL INCOME FILED BY THE ASSESSE E AT RS 3 72 32 930/- WAS ITA 7129/M/08 BLOOM PACKAGING PRIVATE LIMITED 6 ACCEPTED. BEFORE THE CIT (A) IT WAS CONTENDED THA T THE VARIATION IN THE TOTAL INCOME WAS NOT BECAUSE OF ANY CLAIM BY THE ASSESSEE BUT BE CAUSE OF THRUSTING THE DEPRECIATION IN THE EARLIER YEARS BY THE REVENUE T HE ACTION OF WHICH RESULTED IN CARRY FORWARD OF HIGHER BROUGHT FORWARD LOSSES INCLUDING THE DEPRECIATION AT RS 12 13 63 431/- WHICH WAS SET OFF BY THE ASSESSING OFFICER WHILE ARRIVING AT THE TOTAL INCOME AS AGAINST RS 9 58 64 595/- CLAIMED BY THE A SSESSEE. IT WAS THE ASSESSEES CONTENTION THAT THE DEPARTMENT ITSELF HAS SUO MOTU ALLOWED DEPRECIATION IN EARLIER YEARS AND ALLOWED HIGHER CARRY FORWARD LOSSES WHICH RESULTED IN TOTAL INCOME BEING LESS THAN THE RETURNED INCOME AND ASSESSEE SHOULD N OT BE MADE TO SUFFER BECAUSE OF SET OFF OF HIGHER CARRY FORWARD LOSSES. THE ASSESS EE RELIED ON THE DECISION OF THE A P HIGH COURT IN THE CASE OF CIT VS BAKELITE HYLAM LTD 237 ITR 392 AND THE DECISION OF GUJARAT HIGH COURT IN THE CASE OF GUJARAT GAS CO LT D VS JCIT 245 ITR 84. THE LEARNED CIT (A) HAS REJECTED THE ASSESSEES CLAIM S TATING AS UNDER:- I HAVE GONE THROUGH THE SUBMISSIONS MADE BY THE AR BUT DO NOT FIND MERIT IN THEM. THE FACTS OF THE CASE LAWS QUOTED BY THE APP ELLANT ARE DISTINGUISHABLE. INFACT THE MATTER IS COVERED BY THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF LML LTD VS M K VENKATARAMAN ACIT (1994 ) 205 ITR 585 (BOM). IN THIS CASE THE HONBLE BOMBAY HIGH COURT HAD THE OCCASION TO EXAMINE THE SCOPE OF SEC 143(3) OF THE ACT IN THE LIGHT OF CIRC ULAR ISSUED ON THE SUBJECT BY THE CBDT (CIRCULAR NO.549 QUOTED IN 182 ITR(ST.) 1) AND HELD THAT NO REFUND COULD BE GRANTED TO THE ASSESSEE WHILE COMPUTING TH E ASSESSMENT UNDER SEC. 143(3). IN VIEW OF THE DECISION OF THE JURISDICTIO NAL HIGH COURT THE ACTION OF THE A.O IN THIS REGARD IS CONFIRMED. 10. THE LEARNED COUNSEL SUBMITTED THE FACTS AND IT WAS HIS CONTENTION THAT THE REVENUES ACTION IN EARLIER YEARS ONLY HAS RESULTED IN INCREASE IN BROUGHT FORWARD LOSSES WHICH HAVE BEEN SET OFF TO THE GROSS TOTAL INCOME THEREBY TOTAL INCOME ASSESSED RESULTED IN LESS THAN THE RETURNED INCOME. IT WAS HIS SUBMISSION THAT THE ASSESSING OFFICER IS BOUND BY HIS ACTION IN RE-DETE RMINING THE TOTAL INCOME BASED ON THE ASSESSEES OWN RECORD AND IS NOT CORRECT IN ARR IVING AT THE TOTAL INCOME ON THE BASIS OF THE RETURNED INCOME WHEN THE TOTAL INCOME AS COMPUTED UNDER THE LAW IS LESS THAN THE RETURNED INCOME. HE REFERRED TO THE JUDGMENTS OF A P HIGH COURT AND GUJARAT HIGH COURT RELIED UPON BEFORE THE CIT (A) AND ALSO DISTINGUISHED THE DECISIONS RELIED UPON BY THE LEARNED CIT (A). THE LEARNED DEPARTMENTAL REPRESENTATIVE RELIED ON THE DECISION OF HONBLE SU PREME COURT IN THE CASE OF SHELLY ITA 7129/M/08 BLOOM PACKAGING PRIVATE LIMITED 7 PRODUCTS TO SUBMIT THAT THERE MAY NOT BE ANY REFUND SINCE THE RETURNED INCOME IS MORE AND NO SCRUTINY AFTER INTRODUCTION OF NEW ASSE SSMENT PROCEDURE CAN RESULT IN THE REFUND AS ISSUANCE OF NOTICE U/S 143(2) IS ONL Y WITH REFERENCE TO UNDER ASSESSMENT. CONSEQUENTLY THE ASSESSING OFFICERS A CTION IS SUPPORTED BY THE DEPARTMENTAL REPRESENTATIVE. 11. WE HAVE EXAMINED THE ISSUE. IN THE CASE OF CIT VS SHELLY PRODUCTS 129 TAXMAN 271 OF HONBLE SUPREME COURT HAS HELD THAT T AX DEPOSITED BY THE ASSESSEE BY WAY OF ADVANCE TAX OR SELF-ASSESSMENT TAX ON RE TURNED INCOME CANNOT BE REFUNDED JUST BECAUSE VARIATION FRAMED TO REGULAR A SSESSMENT AFTER EARLIER ASSESSMENT IS SET ASIDE OR NULLIFIED. IT WAS HELD I N THAT CASE THAT FAILURE OR INABILITY OF THE REVENU E TO FRAME A FRESH ASSESSMENT SHOULD NOT PLACE THE ASSESSEE IN A MORE DIS-ADVANTAGEOUS POSIT ION THAN HE WOULD HAVE BEEN IN IF A FRESH ASSESSMENT WERE MADE. IN A CASE WHERE T HE ASSESSEE CHOOSES TO DEPOSIT BY WAY OF ABUNDANT CAUTION ADVANCE TAX OR TAX ON S ELF-ASSESSMENT WHICH IS IN EXCESS OF HIS LIABILITY ON THE BASIS OF THE RETURN FURNISHED OR IF THERE IS AN ARITHMETICAL ERROR OR INACCURACY IT IS OPEN TO THE ASSESSEE TO CLAIM REFUND OF THE EXCESS TAX PAID IN THE COURSE OF THE ASSESSMENT PRO CEEDINGS. HE CAN CERTAINLY MAKE SUCH A CLAIM BEFORE THE CONCERNED AUTHORITY CALCULA TING THE REFUND. SIMILARLY IF THE ASSESSEE HAS BY MISTAKE INADVERTENCE OR ON ACCOUNT OF IGNORANCE INCLUDED IN HIS INCOME ANY AMOUNT WHICH IS EXEMPTED FROM PAYMENT OF INCOME-TAX OR IS NOT INCOME WITHIN THE CONTEMPLATION OF LAW HE MAY LIKEWISE BR ING THIS TO THE NOTICE OF THE ASSESSING AUTHORITY WHICH IF SATISFIED MAY GRANT HIM RELIEF AND REFUND THE TAX PAID IN EXCESS IF ANY. SUCH MATTERS CAN BE BROUGHT TO THE NOTICE OF THE CONCERNED AUTHORITY IN A CASE WHERE A REFUND IS DUE AND PAYAB LE AND THE AUTHORITY CONCERNED ON BEING SATISFIED SHALL GRANT APPROPRIATE RELIEF. IN CASES GOVERNED BY SECTION 240 OF THE ACT AN OBLIGATION IS CAST UPON THE REVENUE TO REFUND THE AMOUNT TO THE ASSESSEE WITHOUT HAVING TO MAKE ANY CLAIM IN THAT BEHALF. I N APPROPRIATE CASES THEREFORE IT IS OPEN TO THE ASSESSEE TO BRING THE FACTS TO THE N OTICE OF THE CONCERNED AUTHORITY ON THE BASIS OF THE RETURN FURNISHED WHICH MAY HAVE A BEARING ON THE QUANTUM OF REFUND. AND THE CONCERNED AUTHORITY FOR THE LIMIT ED PURPOSE OF CALCULATING THE AMOUNT OF REFUND UNDER SECTION 240 MAY TAKE ALL SU CH FACTS INTO CONSIDERATION AND CALCULATE THE AMOUNT TO BE REFUNDED. AS CAN BE SEEN IN FACT THE DECISION SUPPORTS THE C LAIM OF ASSESSEE . WHERE THE TOTAL INCOME WAS RE-DETERMINED ACCORDING TO THE PROVISION S OF THE ACT CONSEQUENT TO THE ORDERS PASSED IN EARLIER YEARS THE ASSESSEE CAN CER TAINLY CLAIM BENEFIT. THE ISSUE BEFORE HONBLE BOMBAY HIGH COURT RELIED UPON BY THE CIT (A) IN THE CASE OF LML LTD VS VENKATARAMAN 205 ITR 585 (BOM) WAS WITH REFERENC E TO NOT GIVING CREDIT TO THE ITA 7129/M/08 BLOOM PACKAGING PRIVATE LIMITED 8 ASSESSEE IN EITHER OF THE ASSESSMENT YEARS. ON THE CLAIM OF THE ASSESSEE IN WRIT PETITION THE HONBLE BOMBAY HIGH COURT EXAMINED TH E SCHEME THE FACTS AND HELD AS UNDER:- HELD THAT ON THE FACTS NEITHER FOR THE ASSESSM ENT YEAR 1989-90 NOR FOR THE ASSESSMENT YEAR 1990-91 HAD THE PETITIONERS BEEN G IVEN ANY CREDIT FOR THE TAX OF RS 49 65 878 ON INTEREST RECEIVED BY THE PET ITIONERS FROM TWO COMPANIES WHICH HAD BEEN DEDUCTED AT SOURCE AND PAI D INTO TREASURY BY THE TWO COMPANIES. IN ADDITION THE PETITIONERS HAD BE EN REQUIRED TO PAY THIS TAX OF RS 49 65 878 FOR THE ASSESSMENT YEAR 1989-90 BY ADJUSTING THIS AMOUNT AGAINST THE REFUND DUE TO THE PETITIONERS FOR THAT ASSESSMENT YEAR. FOR THE ASSESSMENT YEAR 1990-91 ALSO THE REFUND HAD BEEN R EFUSED BY ADJUSTING THIS AMOUNT AGAINST THE REFUND DUE TO THE PETITIONERS. THE INCOME-TAX AUTHORITIES COULD NOT RETAIN THE SAID SUM OF RS 49 65 878 TWICE OVER. 12. THE ISSUE WAS EXAMINED BY THE HONBLE BOMBAY HI GH COURT IN THE CONTEXT OF NOT GIVING CREDIT OF TAX DEDUCTED AT SOURCE EITHER IN ASSESSMENT YEAR 1989-90 OR IN ASSESSMENT YEAR 1990-91 AND ON THIS FACTS THE COUR T HAS DIRECTED THE REVENUE TO GRANT REFUND AT THE STAGE OF 143(1)(A) AND WRIT PET ITION WAS ALLOWED SUBJECT TO THE DIRECTIONS. HOWEVER THERE IS NO PRINCIPLE LAID DO WN THAT NO REFUND CAN BE GRANTED AFTER COMPLETION OF ASSESSMENT U/S 143(3). THIS JU DGMENT OF THE HONBLE BOMBAY HIGH COURT HAS BEEN CONSIDERED BY THE A P HIGH COUR T IN THE CASE OF CIT VS BAKELITE HYLAM LTD 237 ITR 392 WHEREIN IT WAS HELD:- (I) THAT UNDER CLAUSE (B) OF SUB-SECTION (3) OF SE CTION 143 OF THE INCOME-TAX ACT 1961 BEFORE ITS AMENDMENT WITH EFFECT FROM AP RIL 1 1989 THE ASSESSING OFFICER HAD POWER TO DETERMINE THE TAX LIABILITY AN D ALSO TO REFUND THE EXCESS AMOUNT TO THE ASSESSEE. HOWEVER AFTER AMENDMENT WITH EFFECT FROM APRIL 1 1989 THE LANGUAGE EMPLOYED BY THE LEGISLATURE UNDE R SECTION 143(3) OF THE ACT DOES NOT IMPLICITLY SAY THAT THE ASSESSING OFFI CER IS ENTITLED TO GRANT REFUND ALSO. HOWEVER THIS DOES NOT MEAN THAT THE LEGISLA TURE HAS WITHDRAWN THE POWERS OF THE ASSESSING AUTHORITY TO GRANT REFUND T O THE ASSESSEE IN APPROPRIATE CASES. THE PROVISIONS UNDER SUB-SECTIO N (3) OF SECTION 143 OF THE ACT CANNOT BE READ IN ISOLATION. HAD IT BEEN THE I NTENTION OF THE LEGISLATURE TO PREVENT THE ASSESSING AUTHORITY FROM GRANTING REFUN D TO THE ASSESSEE THEN THE INSERTION OF SUB-SECTION (4) TO SECTION 143 OF THE ACT WOULD LOSE ITS SIGNIFICANCE. (II) THAT ON A READING OF CLAUSE (B) OF SUB-SECTION (4) OF SECTION 143 OF THE ACT IT IS CLEAR THAT ON AN ASSESSMENT MADE UNDER S ECTION 143(1)(A) OF THE ACT AND SUCH ASSESSMENT RESULTS IN A REFUND IF SUCH RE FUND EXCEEDS THE AMOUNT REFUNDABLE ON REGULAR ASSESSMENT MADE UNDER SECTION 143(3) OF THE ACT THE WHOLE OR THE EXCESS AMOUNT SO REFUNDED SHALL BE DEE MED TO BE THE TAX PAYABLE BY THE ASSESSEE. IN OTHER WORDS IN THE RE GULAR ASSESSMENT THE TAX LIABILITY IS DETERMINED ON THE BASIS OF GIVING CRED IT TO ALL THE DEDUCTIONS THE ITA 7129/M/08 BLOOM PACKAGING PRIVATE LIMITED 9 ASSESSEE IS ENTITLED TO NOTWITHSTANDING THE FACT TH AT THE ASSESSMENT IS MADE UNDER SECTION 143(1)(A) OF THE ACT. UNDER CLAUSE ( B) OF SECTION (4) OF SECTION 143 IT CANNOT BE SAID THAT THE LEGISLATURE DID NOT VISUALISE A SITUATION PERMITTING THE ASSESSING AUTHORITY TO GRANT REFUND ALSO UNDER REGULAR ASSESSMENT IN FAVOUR OF AN ASSESSEE. (III) THAT THEREFORE THE ASSESSING AUTHORITY IS E NTITLED TO DETERMINE THE QUANTUM OF REFUND ALSO IN A REGULAR ASSESSMENT MADE UNDER SECTION 143(3) OF THE ACT WITH EFFECT FROM APRIL 1 1989. NO QUESTIO N OF LAW AROSE FOR REFERENCE. 13. FURTHER HONBLE GUJARAT HIGH COURT IN THE CASE OF GUJARAT GAS CO LTD VS JCIT 245 ITR 84 HAVE NOT ONLY CONSIDERED THE ABOVE TWO J UDGMENTS BUT ALSO EXAMINED THE POWERS OF CBDT IN ISSUING INSTRUCTIONS AND HELD AS UNDER: THAT THE CIRCULAR IN QUESTION REFERS TO ASSESSMENT S WHICH ARE TO BE MADE UNDER SECTION 143(3) OF THE ACT. THE CIRCULAR DIRE CTS THAT IN A PARTICULAR TYPE OF CASES I.E. IN SCRUTINY CASES AND UNDER SECTION 143 (3) OF THE ACT THE INCOME CAN NEITHER BE ASSESSED AT A FIGURE LOWER THAN THE RETU RNED INCOME NOR THE LOSS ASSESSED AT A FIGURE HIGHER THAN THE LOSS NOR FURTHER REFUND GIVEN EXCEPT WHAT WAS DUE ON THE BASIS OF THE RETURNED INCOME. THUS BY ISSUANCE OF CIRCULAR THE QUASI-JUDICIAL OFFICER IS DIRECTED TO ASSESSEE CASES OF PARTICULAR NATURE IN A PARTICULAR MANNER. THE ASSESSING OFFICER BEING BOUND BY IT HAD ABDICATED H IS FUNCTION AND DID NOT ACT INDEPENDENTLY AND THEREFORE THERE WAS NO QUESTION OF ALTERNATIVE REMEDY WHICH WAS A FUTILE REMEDY. IN FACT THE JURISDICTION HAD BEE N EXERCISED BY THE CENTRAL BOARD OF DIRECT TAXES BY ISSUING THE CIRCULAR AND THEREFORE THE ORDER OF THE ASSESSING OFFICER WAS WITHOUT JURISDICTION. THE COURT HAD TO EXERCIS E ITS JURISDICTION UNDER ARTICLE 226. THE ORDER OF THE ASSESSING OFFICER TO THE EXTENT IT STATED THAT THE TOTAL INCOME WOULD BE THE RETURNED INCOME WAS TO BE SET ASIDE WITH A DIRECTION TO THE ASSESSING OFFICER TO MAKE ASSESSMENT WITHOUT KEEPING IN MIND THE CENT RAL BOARD OF DIRECT TAXES CIRCULAR DATED OCTOBER 31 1989. 14. AS CAN BE SEEN FROM THE SERIES OF JUDGMENTS ON THE ISSUE WE ARE OF THE OPINION THAT THE ASSESSING OFFICER HAS POWERS UNDER IT ACT TO RE-DETERMINE THE TOTAL INCOME ACCORDING TO THE PROVISIONS OF LAW WHICH MA Y SOME TIMES RESULT IN BEING LESS THAN THE RETURNED INCOME DUE TO VARIOUS CLAIMS AND ALLOWANCES. IN THIS CASE AS ALREADY STATED IT IS THE REVENUE WHICH HAS THRUSTE D THE DEPRECIATION ON THE ASSESSEE IN EARLIER YEARS AND CONSEQUENT TO THAT THE ASSESSE ES CLAIM OF DEPRECIATION AND CARRY FORWARD OF LOSSES HAS VARIED SUBSTANTIALLY. THE ISS UE OF THRUSTING THE DEPRECIATION IN ITA 7129/M/08 BLOOM PACKAGING PRIVATE LIMITED 10 EARLIER YEARS IS PENDING IN VARIOUS HIGHER FORUMS BUT ON RECORD THE ASSESSEE WAS ENTITLED FOR SET OFF OF HIGHER AMOUNT WHICH THE AS SESSING OFFICER HAS ALLOWED CORRECTLY AND DETERMINED THE TOTAL INCOME WHICH IN CIDENTALLY BECAME LESS THAN THE RETURNED INCOME. EVEN IN THIS ORDER WE HAVE RESTO RED SOME OF THE CLAIMS BACK TO THE ASSESSING OFFICER FOR FRESH CONSIDERATION WHIC H MAY RESULT IN VARYING THE TOTAL INCOME THAN WHAT WAS EARLIER DETERMINED. JUST BECA USE THE TOTAL INCOME DETERMINED CONSEQUENT TO VARIOUS ORDERS OF HIGHER AUTHORITIES / CLAIMS LEGALLY ALLOWABLE RESULTS IN BEING LESS THAN RETURNED INCOME IT DOES NOT MEAN THAT THE ASSESSING OFFICER HAS TO ACCEPT THE RETURNED INCOME IGNORING THE PROVISIONS OF THE IT ACT. EVEN IF THE RETURNED INCOME WAS ACCEPTED UNDER THE PROVISIONS O F SECTION 143(1) WITHOUT THERE BEING ANY SCRUTINY THERE ARE VARIOUS OTHER PROVISI ONS OF SECTIONS 154 155 ETC WHEREIN CONSEQUENT TO THE ORDERS IN EARLIER YEARS THE TOTAL INCOME CAN BE VARIED AS PER THE PROVISIONS OF THE ACT. THEREFORE WE ARE OF THE OPINION THAT THE FINDING GIVEN BY THE ASSESSING OFFICER IN DETERMINING THE TOTAL I NCOME ON THE BASIS OF THE RETURNED INCOME RATHER THAN ASSESSED INCOME IS NOT CORRECT AND THEREFORE IS LIABLE TO BE SET ASIDE. THE ASSESSING OFFICER IS DIRECTED TO DETERM INE THE TOTAL INCOME ACCORDING TO THE PROVISIONS OF THE ACT AFTER GIVING EFFECT TO V ARIOUS ORDERS OF HIGHER AUTHORITIES OF EARLIER YEARS AND ALSO TO THIS ORDER. THE ASSESSIN G OFFICER IS DIRECTED ACCORDINGLY. THE GROUND IS CONSIDERED ALLOWED. 15. IN THE RESULT APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED ON 17TH DAY OF MAY 2010. SD/- (R S PADVEKAR) JUDICIAL MEMBER SD/- (B RAMAKOTAIAH) ACCOUNTANT MEMBER MUMBAI DATE: 17TH MAY 2010 COPY TO:- 1) THE APPELLANT. 2) THE RESPONDENT. 3) THE CIT (A) CENTRAL-VI MUMBAI. 4) THE CIT CENTRAL III MUMBAI. 5) THE D.R. F BENCH ITAT MUMBAI. BY ORDER / / TRUE COPY / / ASSTT. REGISTRAR CHAVAN* I.T.A.T. MUMBAI ITA 7129/M/08 BLOOM PACKAGING PRIVATE LIMITED 11 SR.N. EPISODE OF AN ORDER DATE INITIALS CONCERNED 1 DRAFT DICTATED ON 5.5.2010 SR.PS 2 DRAFT PLACED BEFORE AUTHOR 6.5.2010 SR.PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/A M 5 APPROVED DRAFT COMES TO THE SR.PS SR.PS 6 KEPT FOR PRONOUNCEMENT ON SR.PS 7 FILE SENT TO THE BENCH CLERK SR.PS 8 DATE ON WHICH FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER