SALASAR BALAJI SHIP BREAKERS P. LTD, MUMBAI v. ITO 7(2)(2), MUMBAI

ITA 8241/MUM/2010 | 2002-2003
Pronouncement Date: 31-01-2011 | Result: Allowed

Appeal Details

RSA Number 824119914 RSA 2010
Assessee PAN AAECS5872M
Bench Mumbai
Appeal Number ITA 8241/MUM/2010
Duration Of Justice 2 month(s) 1 day(s)
Appellant SALASAR BALAJI SHIP BREAKERS P. LTD, MUMBAI
Respondent ITO 7(2)(2), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 31-01-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted E
Tribunal Order Date 31-01-2011
Assessment Year 2002-2003
Appeal Filed On 29-11-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH E MUMBAI BEFORE SHRI P.M. JAGTAP AM AND SHRI N.V. VASUDEV AN JM I.T.A.NO. 8241/MUM/2010 ASSESSMENT YEAR : 2002-03 M/S. SALASAR BALAJI SHIP BREAKERS P.LTD. 34 QUAY STREET NEW DARUKHANA MUMBAI 400 010. PAN: AAECS 5872 M VS. THE INCOME-TAX OFFICER WARD 7(2)(2) MUMBAI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI C.V. JAIN RESPONDENT BY : SHRI D. SONGATE O R D E R PER P.M. JAGTAP AM: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS)-13 MUMBAI DA TED 19.08.2010 FOR THE ASSESSMENT YEAR 2002-03 2. THE ASSESSEE IN THE PRESENT CASE IS A COMPANY WH ICH IS ENGAGED IN THE BUSINESS OF SHIP BREAKING AND DEALING IN IRON AND S TEEL. THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS FILED BY IT ON 21. 10.2002 DECLARING TOTAL INCOME OF RS. 3 77 410/-. IN THE SAID RETURN DEPRECIATIO N AMOUNTING TO RS. 17 90 429/- WAS CLAIMED BY THE ASSESSEE IN RESPECT OF LICENSE T O USE THE PLOT OF LAND OBTAINED FROM GMB. IN THE ASSESSMENT ORIGINALLY COMPLETED U NDER SECTION 143(3) VIDE ORDER DATED 12.10.2004 THE INCOME RETURNED BY THE ASSESSEE WAS ACCEPTED BY THE ASSESSING OFFICER THEREBY ALLOWING THE CLAIM OF THE ASSESSEE FOR THE SAID DEPRECIATION. IN THE ASSESSMENT COMPLETED UNDER SEC TION 143(3) FOR THE IMMEDIATELY PRECEDING YEAR I.E. A.Y. 2001-02 VIDE O RDER DATED 09.01.2004 SIMILAR CLAIM OF THE ASSESSEE FOR DEPRECIATION ON LICENSE T O USE OF THE PLOT OF LAND WAS ALLOWED BY THE ASSESSING OFFICER. THE SAID ASSESSME NT HOWEVER HAD SUBSEQUENTLY BEEN REOPENED BY ISSUING NOTICE UNDER SECTION 148 ON 29.6.2007 I.E. AFTER A PERIOD OF FOUR YEARS AND IN THE REASSESSMENT COMPLE TED UNDER SECTION 147 READ ITA NO.8241/M/2010 M/S.SALASAR BALAJI SHIP BREAKERS P.LTD. . . 2 WITH SECTION 143(3) BY AN ORDER DATED 29.12.2008 T HE CLAIM OF THE ASSESSEE FOR THE SAID DEPRECIATION ALLOWED IN THE ORIGINAL ASSES SMENT WAS WITHDRAWN BY THE ASSESSING OFFICER. RELYING ON THE SAID ORDER PASSED UNDER SECTION 147 READ WITH SECTION 143(3) FOR THE ASST.YEAR 2001-02 THE ASSES SMENT COMPLETED ORIGINALLY UNDER SECTION 143(3) FOR THE YEAR UNDER CONSIDERATI ON WAS ALSO REOPENED BY THE ASSESSING OFFICER BY ISSUING NOTICE UNDER SECTION 1 48 ON 30.03.2009 I.E. AFTER A PERIOD OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR. DURING THE COURSE OF REASSESSMENT PROCEEDINGS THE VALIDITY OF REOPENING WAS CHALLENGED BY THE ASSESSEE. THE ASSESSING OFFICER HOWEVER DID NOT FIND MERIT IN THE STAND TAKEN BY THE ASSESSEE ON THE SAID ISSUE AND REJECTE D THE SAME. HE ALSO DISALLOWED THE CLAIM OF THE ASSESSEE FOR DEPRECIATI ON IN RESPECT OF LICENSE TO USE THE PLOT OF LAND IN THE ASSESSMENT COMPLETED U/S.14 7 READ WITH SECTION 143(3) VIDE ORDER DATED 24.12.2009. 3. AGAINST THE ORDER PASSED BY THE ASSESSING OFFICE R UNDER SECTION 147 READ WITH SECTION 143(3) FOR THE YEAR UNDER CONSIDERATIO N AN APPEAL WAS FILED BY THE ASSESSEE BEFORE THE LEARNED CIT(A) CHALLENGING THER EIN THE VALIDITY OF REASSESSMENT MADE BY THE ASSESSING OFFICER AS WELL AS DISPUTING THE DISALLOWANCE MADE THEREIN ON ACCOUNT OF ITS CLAIM FOR DEPRECIATI ON IN RESPECT OF LICENSE TO USE THE PLOT OF LAND. THE LEARNED CIT(A) FOUND NO MERIT IN THE SUBMISSION MADE ON BEHALF OF THE ASSESSEE ON BOTH THESE ISSUES AND DIS MISSED THE APPEAL FILED BY THE ASSESSEE VIDE HIS APPELLATE ORDER DATED 19.08.2010 UPHOLDING THE ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 147 READ WITH S ECTION 143(3) OF THE ACT. AGGRIEVED BY THE ORDER OF THE LEARNED CIT(A) THE A SSESSEE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. 4. IN GROUND NO. 1 THE ASSESSEE HAS RAISED THE PR ELIMINARY ISSUE CHALLENGING THE VALIDITY OF THE ASSESSMENT MADE BY THE ASSESSING OFFICER UNDER SECTION 147 READ WITH SECTION 143(3) ON THE GROUND THAT THE INITIATION OF RE- ITA NO.8241/M/2010 M/S.SALASAR BALAJI SHIP BREAKERS P.LTD. . . 3 ASSESSMENT PROCEEDINGS AFTER A PERIOD OF 4 YEARS FR OM THE END OF THE RELEVANT ASSESSMENT YEAR ITSELF WAS BAD IN LAW AS THERE WAS NO FAILURE ON ITS PART TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR A SSESSMENT FOR THE YEAR UNDER CONSIDERATION. 5. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE MATERIALS ON RECORD. AS SUBMITTED BY THE LEARNED C OUNSEL FOR THE ASSESSEE A SIMILAR ISSUE HAD COME UP FOR CONSIDERATION BEFORE THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE IMMEDIATELY PRECEDING YEAR I.E. ASSESS MENT YEAR 2001-02 WHEREIN THE ASSESSMENT ORIGINALLY COMPLETED UNDER SECTION 1 43(3) WAS REOPENED AFTER A PERIOD OF FOUR YEARS IN IDENTICAL FATS AND CIRCUMS TANCES AND THE TRIBUNAL VIDE ITS ORDER DATED 30 TH APRIL 2010 PASSED IN I.T.A. NO. 3271/MUM/2009 HAS HELD THAT THE INITIATION OF RE-ASSESSMENT PROCEEDINGS AFTER A PER IOD OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR WAS BARRED BY LIMITATI ON FOR THE FOLLOWING REASONS GIVEN IN PARA NO.7 : WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUS ED THE RECORD OF THE CASE. THE FACTS ARE NOT DISPUTED. ADMITTED LY THE AO IN THE COURSE OF ASSESSMENT PROCEEDINGS HAD MADE SPECIFIC QUERY IN REGARD TO DEPRECIATION BEING CHARGED IN RESPECT OF THE LAND AND AFTER DETAILED EXAMINATION OF FACTS ALLOWED THE ASSESSEE S CLAIM. VIDE LETTER DATED 4.7.2003 THE ASSESSEE HAD CLEARLY GIV EN THE CONTENT OF THE NOC LETTER FROM GMB IN WHICH IT WAS INTER A LIA STATED THAT THE PAYMENT THROUGH DEMAND DRAFT WAS RS.16 38 954 AND B ANK GUARANTEE RS.9 10 000/-. THE ASSESSEE HAD ALSO FIL ED COPY OF AGREEMENT OF LICENSE OF PLOT VIDE LETTER DATED 16.5 .2003. IT WAS ALSO POINTED OUT THAT THE LICENSE HAD BEEN ACQUIRED TO U SE THE PLOT AND SAME BEING INTANGIBLE PROPERTY DEPRECIATION @ 25% WAS CLAIMED. THEREFORE ALL THE RELEVANT FACTS NECESSARY FOR ASS ESSMENT WERE BEFORE THE AO AND HE ARRIVED AT THE CONCLUSION AFTE R DUE APPLICATION OF MIND TO ALL THE FACTS. THE ASSESSEE HAD FULLY A ND TRULY DISCLOSED ALL MATERIAL FACTS NECESSARY FOR ASSESSMENT. WE DO NOT FIND MUCH SUBSTANCE IN THE SUBMISSIONS OF LD D.R. THAT ALL TH E DETAILS SHOULD HAVE BEEN DISCLOSED AT THE TIME OF FILING OF RETURN . THE REQUIREMENT OF PROVISO IS THAT THE ASSESSEE SHOULD HAVE FULLY A ND TRULY DISCLOSED ALL MATERIAL FACTS NECESSARY FOR THE PURPOSES OF AS SESSMENT. THESE DETAILS MAY BE FILED IN COURSE OF ASSESSMENT PROCEE DINGS ALSO IN REPLY TO VARIOUS QUERIES OF THE AO. THE REQUIREMEN T OF PROVISO PRIMARILY IS THAT BEFORE ASSESSMENT PROCEEDINGS CUL MINATE IN THE PASSING OF ASSESSMENT ORDER ALL MATERIAL DETAILS N ECESSARY FOR ASSESSMENT SHOULD BE AVAILABLE WITH AO. THE PRIMAR Y OBJECTIVE OF THIS PROVISO IS TO BRING FINALITY TO THE PROCEEDING S IF THERE IS NO FAILURE ON THE PART OF THE ASSESSEE. ACCORDINGLY THE REAS SESSMENT ITA NO.8241/M/2010 M/S.SALASAR BALAJI SHIP BREAKERS P.LTD. . . 4 PROCEEDINGS INITIATED AFTER FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR WERE BARRED BY LIMITATION AND ACCO RDINGLY WE QUASH THE SAME. 6. AS THE ISSUE INVOLVED IN THE YEAR UNDER CONSIDER ATION AS WELL AS ALL THE MATERIAL FACTS RELEVANT THERETO ARE IDENTICALLY SIM ILAR AS THAT OF ASSESSMENT YEAR 20010-02 WE RESPECTFULLY FOLLOWING THE ORDER OF TH E TRIBUNAL PASSED IN THE ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2001-02 QUASH THE ASSESSMENT MADE BY THE A.O. UNDER SECTION 147 READ WITH SECTIO N 143(3) ON THE GROUND THAT THE INITIATION OF RE-ASSESSMENT PROCEEDINGS BEYOND THE PERIOD OF FOUR YEARS FROM THE END OF THE ASSESSMENT YEAR ITSELF WAS BAD IN LA W. GROUND NO. 1 OF THE ASSESSEES APPEAL IS ACCORDINGLY ALLOWED. 7. AS A RESULT OF OUR DECISION RENDERED ON THE PREL IMINARY ISSUE RAISED IN GROUND NO.1 HOLDING THE ASSESSMENT MADE BY THE ASS ESSING OFFICER UNDER SECTION 147 READ WITH SECTION 143(3) TO BE BAD IN LAW AND Q UASHING THE SAME GROUND NOS. 2 AND 3 RAISED BY THE ASSESSEE IN THIS APPEAL CHALLENGING THE DISALLOWANCE MADE ON ACCOUNT OF DEPRECIATION IN RESPECT OF LICEN SE TO USE THE PLOT OF LAND MADE IN THE SAID ASSESSMENT HAVE BECOME ACADEMIC. WE TH EREFORE DO NOT DEEM IT NECESSARY OR EXPEDIENT TO ADJUDICATE UPON THE SAME. 8. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 3 1ST DAY OF JANUARY 2011. SD. SD. (N.V. VASUDEVAN) (P.M. JAGTAP) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI DATED THE 31 ST JANUARY 2011. KN COPY TO: 1. THE ASSESSEE 2. THE REVENUE 3. THE CIT-7 MUMBAI 4. THE CIT(A)-13 MUMBAI 5. THE DR E BENCH MUMBAI BY ORDER /TRUE COPY/ ASST. REGISTRAR ITAT MUMBAI