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Income Tax Appellate Tribunal, COCHIN BENCH, COCHIN
Per CHANDRA POOJARI, AM:
This appeal filed by the assessee is directed against the order of the CIT(A),
Kottayam dated 03/09/2018 and pertains to the assessment year 2009-10.
The assessee has raised the following grounds of appeal:
The learned Commissioner of Income Tax (Appeals), Kottayam erred in law and as well as on facts in not considering the ground that the reopening of assessment and the assessment made u/s 143(3) r.w.s. 147 of the Income Tax Act 1961 (the Act) are bad in law and unsustainable and also erred in not considering the detailed submissions made on the said ground that re-opening of the assessment u/s 147 was time barred as per the provisions of First proviso to section 147 as the notice u/s 148 dtd. 27/03/15
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was issued beyond 4 years from the end of the assessment year 2009-when the regular assessment u/s 143(3) was already completed .
2.The learned assessing officer had erred in law and on facts in issuing notice under section 148 of the Act dtd. 27/03/15 on the basis of a decision of the Hon'ble High Court of Kerala after the expiry of 4 years from the end of Assessment Year 2009-10 for re-opening of the assessment already made u/s 143(3) and making assessment u/s 143(3) read with section 147 of the Act in terms of first proviso to section 147of the Act and the learned Commissioner of Income Tax (Appeals) erred in law as well as on facts in confirming the said order of the Assistant Commissioner Circle I, Kottayam, passed under section 143(3) read with section 147 of the Act for the assessment year 2009-10.
Without prejudice to the grounds No. 1 and 2 above, the learned Commissioner of Income Tax (Appeals) erred in confirming the order of the assessing officer disallowing the replantation allowance of rubber claimed by the appellant under Rule 7A(2) of the Income Tax Rules 1962 for a total amount of Rs.35,93,275/- (limited to Rs.12,57,646/- being 35% of Rs.35,93,275/- claimed as per Rule 7A(1)) holding that decision of Hon'ble High Court of Kerala in the case M/s. Rehabilitation Plantation Ltd. 251 CTR 343 covered the case of the assesse. The learned assessing officer and the Hon'ble Commissioner of income tax (appeals) ought to have appreciated that the allowance provided under Rule 7A(2) is an allowance in lieu of depreciation similar to the allowance provided in Rule 8(2) and the legislature intended to give full deduction of cost of replantation by linking Rule 7A (2) and section 10 (31) of the Act.
The commissioner of Income Tax (Appeals) erred in not considering the ground relating to the addition made by the learned assessing officer in respect of short term capital gain of Rs.3,86,401/- without setting off the same against short term capital loss of Rs.16,64,800/- when the matter was already concluded in favour of the assesse in first appeal vide appellate order in appeal No. ITA 44/KTM/CIT(A)-IV/2011-12 dtd. 28/08/2013 and the then Assessing Officer had already given the appeal effect to the said order vide order dated 15/10/2013.
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The main contention of the Ld. AR is that the assessee had raised the ground
with regard to validity of re-assessment before the CIT(A) as Ground No. 2 which
was not adjudicated by the CIT(A). However, he decided the issue of
disallowance of replantation allowance against the assessee by placing reliance
on the judgment of the jurisdictional High Court in the case of Rehabilitation
Plantation Ltd. (251 CTR 343). According to the Ld. AR, the CIT(A) must have
quashed the reassessment order as the reassessment notice was issued beyond
four years from the end of the assessment year 2009-10 when the regular
assessment u/s. 143(3) of the Act was already completed and there was no
failure on the part of the assessee to disclose all material facts fully and truly for
the purpose of assessment.
On the other hand, the Ld. DR submitted that since the issue is covered
against the assessee by the judgement of the Jurisdictional High Court cited
supra, the order of the CIT(A) is to be upheld.
We have heard the rival contentions and perused the record. Admittedly, the
assessee had raised the issue of validity of re-assessment before the CIT(A) as
follows:
“2. The learned Assessing Officer had erred in law and on facts in issuing notice u/s. 148 of the Act dated 27/03/2015 on the bassis of a decision of the Hon’ble High Court of Kerala after the expiry of 4 years from the end of the assessment year 2009-10 for re-opening of the assessment already made u/s. 143(3) and making assessment u/s. 143(3) read with section 147 of the Act in terms of first proviso to section 147 of the Act and the
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learned Commissioner of Income-tax(Appeals) erred in law as well as on facts in confirming the said order of the Assistant Commissioner, Circle 1, Kottayam, passed u/s. 143(3) read with section 147 of the Act for the assessment year 2009-10.”
This ground was overlooked by the CIT(A) and not at all adjudicated by him.
Further, he directly adjudicated the issue relating to the disallowance of
replantation allowance. In our opinion, he ought to have adjudicated the issue
relating to validity of reassessment and thereafter, if required, he should have
adjudicated the issue relating to disallowance of replantation allowance. In our
considered opinion, there is lapse on the part of the CIT(A). Hence, we vacate
the findings of the CIT(A) on merits of disallowance of replantation allowance
and remit the entire issue in dispute to the file of the CIT(A) to adjudicate the
issue relating to validity of reopening of assessment. Then, if required, he has to
adjudicate the issue relating to disallowance of replantation allowance. We also
make it clear that if the assessee wants to file any additional grounds or place
any additional evidence, he is at liberty to file the same before the authorities
below.
In the result, the appeal of the assessee is partly allowed for statistical
purposes. Order pronounced in the open Court on this 18th February, 2019
sd/- sd/- (GEORGE GEORGE K.) (CHANDRA POOJARI) JUDICIAL MEMBER ACCOUNTANT MEMBER
I.T.A. No.544/Coch/2018
Place: Kochi Dated: 18th February, 2019 GJ Copy to: 1. Malankara Plantations Limited, Malankara Buildings, Kodimatha, Kottayam-686 013. 2. The Assistant Commissioner of Income-tax, Circle-1, Kottayam. 3. The Commissioner of Income-tax(Appeals), Kottayam. 4. The Pr. Commissioner of Income-tax, Kottayam. 5. D.R., I.T.A.T., Cochin Bench, Cochin. 6. Guard File. By Order
(ASSISTANT REGISTRAR) I.T.A.T., Cochin