Income Tax Appellate Tribunal - Mumbai
Hawkins Cookers Ltd, Mumbai vs Department Of Income Tax on 25 February, 2014
ुं ई यायपीठ "एच" मब
आयकर अपील य अ धकरण, मब ुं ई
IN THE INCOME TAX APPELLATE TRIBUNAL "H" BENCH, MUMBAI
BEFORE S/SHRI B.R.MITTAL,(JM) AND B.R.BHASKARAN (AM)
सव ी बी.आर. म तल, या यक सद य एवं बी.आर. भा करन, लेखा सद य के सम
आयकर अपील सं./I.T.A. No.7405/Mum/2012
( नधारण वष / Assessment Year : 2004-05)
The Assistant Commissioner of बनाम/ M/s Hawkins Cookers Ltd,
Income Tax, 3(1), Vs. F-101, Maker Tower,
Room No.607, 6th Floor, Cuff Parade,
Aayakar Bhavan, Colaba,
Mumbai-400020 Mumbai-400005
(अपीलाथ /Appellant) .. ( यथ / Respondent)
थायी ले ख ा सं . /जीआइआर सं . /PAN/GIR No. : AAACH1784M
अपीलाथ ओर से / Appellant by : Shri Surendra Kumar
यथ क ओर से/Respondent by : Shri Bhavin Shah and
Ms.Vaibhavi Patel
सन
ु वाई क तार ख / Date of Hearing : 25.2.2014
घोषणा क तार ख /Date of Pronouncement : 28.2.2014
आदे श / O R D E R
Per B.R.Mittal, JM:
The department has filed this appeal for assessment year 2004-05 against the order of ld. CIT(A) dated 17.8.2012 on the following grounds :
"1. Whether on the facts and circumstances of the case and in law, the ld. CIT(A) was justified in annulling the reopening of the assessment u/s 147 of the Act, by placing reliance on the Hon'ble Apex Court decision in the case of Kelvinator of India Ltd (320 ITR 561) without appreciating the fact that there was no change of opinion in this case and there is only one opinion possible on available facts, that the assessee's claim of setting off long term capital loss of AY 2002-03, against the short term capital gain on sale of depreciable assets of AY 2004-05, is lawfully not allowable as per the provisions of the IT Act, 1961,
2. On the facts and circumstances of the case and in law, the CIT(A) has failed to appreciate the fact that reopening of the assessment was not done in view of the Revenue Audit Objection per se but in view of the clear position of law regarding the taxability of capital gain on sale of depreciable assets;
I.T.A. No.7405/Mum/2012 2
3. Without prejudice to the above, on the facts and in the circumstances of the case and in law, the ld. CIT(A) failed to appreciate that reopening of the assessment was done for the purposes of taking remedial action in accordance with the instructions laid down by the CBDT instruction No.9/2006 dated 7.11.2006"
2. We have heard ld. Representatives of the parties and have perused the orders of authorities below. We observe that the assessee filed original return of income of Rs.20,69,310/- as per provisions of section 115JB of the Income Tax act, 1961(the Act). Assessment was made u/s 143(3) of the Act on 6.12.2006 assessing total income at Rs.20,69,558/- as under :
A. Business income Rs.1,07,13,073
Less : Set off of unabsorbed business loss Rs.1,07,13,073
Total business income NIL
B. Capital gain on sale of depreciable assets Rs.30,65,000
Less: Brought forward long term capital loss Rs.9,95,442
Total income assessed Rs.20,69,558
The ld. CIT(A) vide order dated 4.9.2008 revised total income of the assessee at Rs.1,02,45,178/- and the same was set off against the brought forward unabsorbed business loss of equal amount resulting into NIL business income. In further appeal to the Tribunal, the ITAT vide its order dated 23.4.2010 revised business income at Rs.97,11,174/- and the same was set off against bought forward business loss of equal amount resulting into NIL business income for the assessment year under consideration. Subsequently, AO initiated re-assessment proceedings and issued notice u/s 148 of the Act on 28.3.2011 after recording following reasons:
"On perusal of the records, it is observed that in the case of the assessee, according to section 70(3) of the IT Act, 1961, loss relating to long term capital assets was to be set off only against long term capital gain from any of the long term capital assets in the same assessment year. According to section 74(1)(b) of the IT Act effective from 2002-04 onwards, unabsorbed loss relating to long term capital gain and not against STCG.
Further, it was observed, that capital loss pertaining to AY 2002-03 was set off against the STCG of AY-2004-05) as follows :
Capital gain on sale of depreciable asset Rs.30,65,000/-
Less : brought forward long term capital loss
of assessment year 2002-03 Rs.9,95,442/-
Taxable income Rs.20,69,558/-
I.T.A. No.7405/Mum/2012
3
The Long term capital loss of AY 2002-03 was incorrectly set off against the STCG of the AY 2004-05, which had resulted into under statement of income of Rs.9,95,442/- and short levy of Rs,.4,75,758/- including interest u/s 234B of the IT Act Thus, I have a reason to believe that the assessee had not made a full and true discloser in the return of income. As such I have reason to believe that the income of Rs.9,95,442/- chargeable to tax under the provisions of the ITAct, 1961 had escaped assessment for AY 2004-05"
AO completed the assessment u/s 143(3) r.w.s.147 of the Act on 26.8.2011. Being aggrieved, assessee filed appeal before the First Appellate Authority disputing the validity of initiation of re-assessment proceedings. Ld. CIT(A) annulled the assessment after observing that the reasons enumerated by AO for his action of re- opening of assessment are not tenable and justified in view of the decision of the Hon'ble Jurisdictional High Court in the case of M/s ICICI Home Finance Co.Ltd V/s ACIT in Writ Petition No.430/2012 and also the judgment of the Hon'ble Apex Court in the case of CIT V/s Kelvinator (India) Ltd (320 ITR 561). Hence, department is in appeal before the Tribunal.
3. At the time of hearing, ld. DR relied on the order of AO and whereas the ld AR supported the order of ld. CIT(A) and also submitted that initiation of reassessment proceedings is barred by limitation in view of proviso to section 147 of the Act as the assessment proceedings has been initiated after expiry of four years from the end of the relevant assessment year. He submitted that the AO has relied on his own record and stated that there was failure on the part of the assessee in disclosing fully and truly all material which is not factually correct.
4. On perusal of the reasons recorded by AO (supra) and also the facts that in the original assessment proceedings, the very same issue has been considered by AO as well as by ld. CIT(A) and the Tribunal when the assessment was made u/s 143(3) of the Act. We agree with the ld. AR that the AO has initiated re-assessment proceedings on the basis of the same facts which has been considered in the original assessment proceedings. There is no new facts which has come to the knowledge of AO for initiation of re-assessment proceedings. Moreover, re-assessment proceedings has been initiated after expiry of more than four years, as is evident from the notice issued u/s 148 dated 28.3.2011, which is admittedly after expiry of four years from the end of the relevant assessment year under consideration. Hence, we agree with the ld. CIT(A) that the action of AO was not justified. Therefore, we uphold the order of ld.
I.T.A. No.7405/Mum/2012 4 CIT(A) in annulling the assessment by rejecting the ground of appeal taken by department.
5. In the result, the appeal of the department is dismissed.
The above order was pronounced in the open court on 28th February, 2014.
घोषणा खुले यायालय म दनांकः 28th February, 2014 को क गई ।
Sd sd
(बी.आर. भा करन/ B.R. BASKARAN) (बी.आर. म तल/B.R.MITTAL)
लेखा सद य / ACCOUNTANT MEMBER या यक सद य / JUDICIAL MEMBER
मब
ुं ई Mumbai: on this 28th day of Febrary,2014
व. न.स./ SRL , Sr. PS
आदे श क त ल प अ े षत/Copy of the Order forwarded to :
1. अपीलाथ / The Appellant
2. यथ / The Respondent.
3. आयकर आयु त(अपील) / The CIT(A)- concerned
4. आयकर आयु त / CIT concerned
5. वभागीय त न ध, आयकर अपील य अ धकरण, मब
ुं ई /
DR, ITAT, Mumbai concerned
6. गाड फाईल / Guard file.
आदे शानस
ु ार/ BY ORDER,
True copy
सहायक पंजीकार (Asstt. Registrar)
आयकर अपील य अ धकरण, मुंबई /ITAT, Mumbai