In the present case, the first show cause notice for initiation of proceedings was issued by the AO on 25.03.2003 and was served on the assessee on 27.03.2003. Obviously, the later period also expired on 30.09.2003 when six months expired from the end of the month in which the action for imposing the penalty was initiated. The order as passed by the Joint Commissioner of Income Tax for the penalty under Section 271D on 28.05.2004 was clearly hit by the bar of limitation and has rightly been set aside in the orders impugned.
It will be relevant to record that the primary objection noticed by the assessing authority while serving notice upon the assessee as provided U/s 148 of the Act, 1961 was in regard to dis-allowance of salary of Rs.1,50,000/- to the Managing Director of the assessee company on 30th March, 2002 in cash and Rs.5 Lacs towards advance salary for the assessment year 2002-03 in cash on 10.04.2002 and since it was payment of salary in cash exceeding Rs.20,000/-, the above expenses were dis-allowable as provided U/s 40A(3) of the Act, 1961.
In Hukamchand Mills Ltd. v. CIT [1978] 114 ITR 870 (Bom.), the roads laid out within factory premises were regarded as part of factory buildings and were entitled to depreciation. In the case of CIT v. Lucas TVS Ltd. [1977] 110 ITR 346 (Mad.), the word ‘building’ was held to include roads laid in the proximity of factory for the purpose of providing access to factory and other buildings within compound and they were entitled to depreciation.
So far the question of benefit under s. 10B of the Act is concerned, the learned counsel for the appellant-assessee has submitted that the view as taken by the Tribunal cannot be sustained for the authoritative pronouncement of the Hon’ble Supreme Court in the case of ITO v. Arihant Tiles & Marbles (P.) Ltd. [2010] 186 Taxman 439 (SC) holding, inter alia, that step-wise activity of cutting marble blocks and converting into the polished slabs and tiles constituted manufacture or production in terms of s. 80-IA of the Act while distinguishing the decision in Aman Marble’s case (supra), and while observing, inter alia, held as under:
Various objections raised by AO as mentioned above have been verified by ld. CIT(A) and found that land and building and machineries are new. Capitals introduced by the Directors are from their own sources and not by transferring from M/s. Shagun. Out of 70 employees employed by assessee company, only 8 employees were related to M/s Shagun and this is not a reason that for employing the ex-employees of any other company curtails the benefit allowable to the assessee.
It is noticed that the appellant-assess sold the agricultural land, which was mutated in his name, for a sale consideration of Rs. 1,61,09,100/-. Thereafter out of the selling price, the appellant-assessee purchased land in the name of his son and daughter-in-law for a total consideration of Rs. 1,22,71,440/-. It is relevant to note that the land sold was in the name of appellant-assessee, while the land purchased was in the name of his son and daughter-in-law.7. A bare reading of Section 54B of the Income Tax Act does not suggest that assessee would be entitled to get exemption for the land purchased by him in the name of his son and daughter-in-law.
The only dispute by the Revenue is that the amount of remuneration has not been quantified in the partnership deed. It is mentioned in clause 8 of the partnership deed that remuneration will be payable as per norms fixed by the relevant provisions of the Income-tax Act. Thus the quantification of the remuneration is apparent from the clause 8 of the partnership deed.
In the instant case, the questions as to whether the assessee was entitled to get the current year depreciation even if it had not been claimed; or as to whether amendment to section 32 in year 2002-03 had a prospective effect or a retrospective effect on the application of current year’s depreciation and unabsorbed business losses and depreciation for the purpose of computation of Income tax, had been the disputable issues and had been of such questions of law which required further deliberation and discussion. Such aspects did not fall in the category of mistake apparent from the record and, therefore, could not have been dealt with under section 154.
CIT v. Hindustan Zinc Ltd. Amendment in the clause (a) of section 251(1) has been made so as to provide that the Commissioner (Appeals) may not set aside the assessment and refer the case back to the Assessing Officer for making fresh assessment with a view to help bringing an early finalization of the assessment, it cannot be assumed that the Commissioner (Appeals) is divested of the power to annul the assessment and then to pass appropriate consequential order. In the instant case, the factual aspect has been that the order as passed by the Assessing Officer which was subject of appeal before the Commissioner (Appeals), was not an original order of assessment but was an order of assessment passed after remand by the Tribunal. The directions in remand order having not been complied with, the course as adopted by the Commissioner (Appeals) cannot be said to be de hors the powers available to him under the statute.
Ordinarily, it is not incumbent on the part of the Tribunal to adjourn the case again when a last opportunity had already been granted to the Counsel for assessee, however, there may be number of circumstances where adjournment becomes necessary, in the interest of justice.
