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25-10-2019,BPL, Section 158BB, 144, 147, 139, Tribunal Bangalore

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1 week 4 days ago #11264 by amit
Section - 158BB, 144, 147, 139, 245D
Order Date - 25-10.2019
Favouring - Assessee Partly
Court - Tribunal Bangalore
Appellant - BPL Limited
Respondent - DCIT
Justice - ARUN KUMAR GARODIA AM & PAVAN KUMAR GADALE JM
Citation - 1119Taxpundit6
Appeal No. - IT(SS)A No. 39/Bang/2008
Asstt. Year - 1989-90 to 1999-2000

Order

PER : A.K. Garodia

These are cross appeals filed by the assessee and revenue and these are directed against the order of ld. CIT(A)-V, Bangalore dated 28.03.2008 for the Block Assessment period from 1989-90 to 1999-2000 till the date of search.

2. The grounds raised by the revenue in its appeal are as under.

“1. The order of the CIT(A) in so far as it is prejudicial to the Revenue, is opposed to law and circumstances of the case.

2. The learned CIT(A) was not justified in deleting the additions of Rs.45,05,821/-and Rs.35,92,358/- made by the Assessing Officer by disallowing the excess depreciation claimed, in the facts and circumstances of the case.

3. The CIT(A) erred in deleting the above mentioned additions without appreciating the facts stated in detail in the relevant assessment order and the Departmental Valuation Officer's report and without appreciating the provisions of section 158BB and the provisions of section 158B(b), as amended by the Finance Act, 2002, with retrospective effect from 1.7.1995.

4. The CIT(A) failed to take into consideration the ratio of the decision of the Hon'ble Rajasthan High Court in the case of CIT Vs. Ajay Kumar Sharma reported in 259 ITR 240.

5. The CIT(A) was not justified in deleting the addition of Rs.6,34,480/- made by the Assessing Officer by restricting the depreciation claimed on the commercial vehicles to 50%, on the ground that the vehic es were put to use for a period of less than 180 days.

6. The CIT(A) erred in allowing relief on the ground of beneficial ownership of the vehicles, without appreciating that apart from ownership, the period for which the vehicles were put to use was relevant and it was clear from the Assessment Order that the commercial vehicles were registered after 30.9.1994 and put to use for a period of less than 180 days.

7. For these and such other grounds that may be urged at the time of hearing, it is humbly prayed that the order of the CIT(A) be set aside and that of the A.0 restored.

8. The appellant c aves leave to add, to alter, to amend or to delete any of the grounds that may be urged at the time of hearing of the appeal.”

3. Similarly, the grounds raised by the assessee are as under.

“1. In law and on the facts and circumstances of the case, the order of the learned CIT(A) to the extent the disallowances as made by the AO are sustained, is bad and ought to be set aside.

2. Without prejudice, the learned CIT(A) ought to have appreciated that the assessment as framed is bad in law and therefore liable to be set aside.

3. The learned CIT(A) ought to have appreciated that the lease transaction itself having been held to be sham by the AO, no further enhancement was possible of the lease amount much less any interest related thereto.

4. The learned CIT(A) ought to have appreciated that the Act provides limitation to frame an assessment order and therefore, what is not assessed within the time limit as provided under the statute cannot be sought to be assessed under the guise of enhancement and brought to tax in an appellate proceedings which only makes the provision in the statute redundant.

5. In law and on facts and circumstances of the case, the learned CIT(A) ought not to have disallowed the business loss amounting to Rs.1,81,25,000/- as claimed by the Appellant as the same was incidental to and during the course of business of the Appellant.

6. The learned CIT(A) ought to have appreciated that the proposal as forwarded by the Addl.CIT did not constitute any sanction to assess anything that could not be done within the time limitation as laid down under the Act and moreover, it is not provided in the Act that the CIT(A) should heed to the proposals of any officer other than the AO, and therefore enhancement as done was illegal, without sanction of law, thus suffers from legal infirmity.

7. Without prejudice, the learned CIT(A) ought to have appreciated that the agreement itself provided for adjustment as against the actual payment, and even the adjustment was an outgo in the hands of the Appellant, therefore, no enhancement was required to be made.

8. For these and such other grounds that are urged at the time of hearing, the Appellant prays that the appeal may be allowed by deleting the disallowances as confirmed by the CIT(A).”

4. The relevant brief facts as noted by the AO in the assessment order are that a search was conducted in the assessee’s premises on 27.08.1998 simultaneously at Palakkad and Bangalore. The search at Palakkad was finally concluded on the same day i.e. on 27.08.1998 but the search at Bangalore was temporarily concluded on the said date and was resumed subsequently and the last panchnama was drawn on 08.10.1998. In para 1.4 of the assessment order, it is noted by the AO that during post-search proceedings, the assessee company filed a declaration u/s. 132(4) of the IT Act dated 24.09.1998 before the Addl. Director of Income-tax (Inv.), Unit-I, Bangalore. The gist of said declaration is reproduced by the AO in para 1.4 of the assessment order as per which, it is stated that with an intention to buy peace and avoid litigation, the assessee declared the sum of Rs. 725 Lakhs being the claim of depreciation made for the Assessment Year 1995-96 as income liable to be computed under the provisions of Chapter -XIV B of the IT Act. In the same para, it is also noted that this is also submitted by assessee in the said declaration that department is requested to allow all eligible deductions such as loss arising on account of transaction, on

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