9911796707
TMI Blog2022 (2) TMI 482X X X X Extracts X X X X X X X X Extracts X X X X ..... e is arising out of order of Commissioner of Income Tax (Appeals)-1, Coimbatore in Appeal No. 178/14-15, vide order dated 26.05.2015. The original assessment was framed by the Income ACIT, Circle-12(1), Bangalore for the assessment year 2006-07 vide order dated 25.03.2008 u/s. 143(3) of the Income Tax Act, 1961 (hereinafter the 'Act'). Subsequently, the assessment was reopened and reassessment was framed by ACIT, Company Circle 1(2), Coimbatore vide order dated 31.03.2014 u/s. 143(3) r.w.s. 147 of the Act. 2. The assessee, M/s. Maheswara Sugars Ltd., is a company engaged in the manufacture and sale of sugar till the year 2006. The said company was existing as an independent corporate entity. However on 01.01.2007 the assessee company namely Maheswara Sugars Ltd., was amalgamated with M/s. Bannari Amman Sugars Limited, Coimbatore, as scheme of amalgamation was approved by Hon'ble Madras High Court in Company Petition Nos. 187 and 188 of 2007, vide order dated 06.11.2007 w.e.f. 01.01.2007. 3. At the outset, the ld. counsel for the assessee stated that the AO reopened the assessment by issuing notice u/s. 148 of the Act and reassessment order was passed u/s. 143(3) r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loss and Depreciation respectively from the A.Y. 1999-2000 to 2006-07, and allowed to be carried forward for set off from future income. The assessee company originally incorporated as a sugar mill in the cooperative sector, which become unviable changed hands to M/s. Khoday's Group, then M/s. Nagarjun Fertilizers Group and finally, it was taken over by M/s. Bannari Amman Group on 07.02.2006 and the name of the sugar mill was changed from M./s Madeshwara Sugars to M/s. Maheswara Sugars Mills Ltd. Later it was seen from the records that the factor/was not in operation for more than 5 years. The assessee company has claimed unabsorbed depreciation loss from A.Y. 1999-2000 to 2005-06. As per the computation statement of the assessee enclosed to the return of income. For the A.Y. 2003-03 to- 2005-06, it appears that the company was not operative during these years, except for sale of sugars by Tahsildar in terms of the Government order. As per Sec 32(1) of the income tax Act, depreciation on plant and machinery etc to be allowed where owned wholly or partially by the assessee used for the purpose of business. But in this case as the factory was not in operation for 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The details of the losses to be carried forward are as under: Sl. No. A.Y. Business Loss Unabsorbed depreciation Total 1 1999-2000 2,45,328 2,57,50,250 2,59,95,578 2 2000-2001 4,43,68,809 2,99,95,355 7,43,64,164 3 2000-02 - 4,28,90,292 4,28,90,292 4 2002-03 - 3,30,61,263 3,30,61,263 5 2003-04 - 2,56,06,140 2,56,06,140 6 2004-05 - 1,99,11,022 1,99,11,022 7 2005-06 - 1,55,70,567 1,55,70,567 8 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. We have also gone through the reasons recorded as well as original assessment order. We noted that the reasons for reopening and the issue examined by the AO in original assessment proceedings are exactly the same. There is no difference. As we have already extracted the reasons recorded as well as the finding of the AO in original assessment proceedings, we could not point out what is the failure of the assessee to disclose fully and truly the material facts for completion of assessment of the assessee. We have gone through the decision of Hon'ble Supreme Court in the case of CIT vs. Foramer France, (2003) 264 ITR 566, wherein the Supreme Court has affirmed the decision of Hon'ble Allahabad High Court in the case of Foramer France vs. CIT, (2001) 247 ITR 436. The Hon'ble Supreme Court affirming the decision of Hon'ble Allahabad High Court in the case of Foramer France, supra held that 14. Having heard learned counsel for the parties, we are of the view that these petitions deserve to be allowed. 15. It may be mentioned that a new Section substituted Section 147 of the Income-tax Act by the Direct Tax Laws (Amendment) Act, 1987, with effect from April ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sent case. In the present case, there was admittedly no failure on the part of the assessee to make a return or to disclose fully and truly all material facts necessary for the assessment. Hence, the proviso to the new Section 147 squarely applies, and the impugned notices were barred by limitation mentioned in the proviso. 7.1. Furthermore, the Hon'ble Madras High Court in the case of CIT vs. RPG Transmissions Ltd., [2014] 48 taxmann.com 57, held as under:- 22. We find from the reasons set out in the assessment orders that the assessee has explained an disclosed the entire facts which would constitute a full disclosure and, therefore, we have no hesitation to hold that the reopening of assessment is barred by the proviso to section 147. Further, the facts which emerge from the assessment order as well as the order of Commissioner of Income-tax(Appeals) are well founded and in terms of the principles laid down by the apex court. For the aforesaid reasons, we find that the Tribunal has correctly appreciated the facts in holding that the reopening of the assessment orders are barred by limitation. We find that the Commissioner of Income-tax (Appeals) as well as the Trib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Vayithri Plantations Ltd. [1981] 128 ITR 675 (MAD), it has been held that, so long as the machinery is kept for use, it could be stated that the machinery should be used for the purpose of business. Any forced idleness of the machinery cannot disentitle the assessee from getting the relief. The appellant also relied on the decision of the jurisdictional High Court in the case of CIT Vs Chennai Petroleum Corporation Ltd. 37 taxmann.com 332 (MAD). The Jurisdictional High Court held that by so long as the assessee's business was a going concern and the plant got ready for use but due to certain extraneous circumstances it could not be put to use, the said fact could not stand in the way of granting relief under Section 32 . Considering all the judicial decisions, it is evident that the sugar factory in the case of the appellant was closed due to circumstances beyond the control of the assessee. However, subsequently after re-opening from 24.12.2006, the appellant company started production using the same machinery and is regularly doing the business operation. In view of this, the Assessing Officer is directed to allow the claim of carried forward unabsorbed depreciation for the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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