AHMEDABAD MALIYA TOLLWAY LTD.,CHENNAI V. ITO, CORPORATE WARD-1(1), CHENNAI

ITA 538/CHNY/2025

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The case involves Ahmedabad Maliya Tollway Limited, which appealed against the rectification order passed by the Assessing Officer under section 154 read with section 143(3) of the Income Tax Act, 1961. The rectification pertained to the computation of book profit under section 115JB of the Act, specifically regarding the disallowance of a provision for major maintenance and repairs (MMR) expenditure. The assessee argued that the rectification was not a 'mistake apparent on record' but a technical addition, which should not be rectified under section 154. The Income Tax Appellate Tribunal (ITAT) found that one of the grounds raised by the assessee was not adjudicated by the ld.CIT(A) and thus remitted the case back for a comprehensive decision on that ground.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 787257 (ITAT-CHENNAI)
• Duration Of Justice: 8 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-11-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2018-2019
• Appeal Filed On: 24-02-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: E.PAVUNA SUNDARI; C.I.T
• Assessee Lawyers: N.V. BALAJI
• Keywords: Rectification of order; Maximum Marginal Rate
• Section: 143(3); 115JB

Judgement Text

" आयकर अपील य अ धकरण, ‘ए’ \u000eयायपीठ, चे\u000eनई IN THE INCOME TAX APPELLATE TRIBUNAL ‘A’ BENCH, CHENNAI \u0015ी एबी ट वक\u0019, \u000eया\u001aयक सद य एवं \u0015ी एस. आर. रघुनाथा, लेखा सद य क े सम$ BEFORE SHRI ABY T VARKEY, JUDICIAL MEMBER AND SHRI S. R. RAGHUNATHA, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.:538/Chny/2025 \u001aनधा%रण वष% / Assessment Year: 2018-19 Ahmedabad Maliya Tollway Limited, 4th Floor, Tower B, Commerzone IT Park, Mount Poonamallee Road, Chennai – 600 116. vs. ITO, Corporate Ward -1(1), Chennai. [PAN: AABCL-5219-N] (अपीलाथ'/Appellant) (()यथ'/Respondent) अपीलाथ' क* ओर से/Appellant by : Shri. N.V. Balaji, Advocate ()यथ' क* ओर से/Respondent by : Ms. E. Pavuna Sundari, C.I.T. सुनवाई क* तार ख/Date of Hearing : 06.10.2025 घोषणा क* तार ख/Date of Pronouncement : 20.11.2025 आदेश /O R D E R PER S. R. RAGHUNATHA, AM : The present appeal is filed by the assessee against the order dated 03.12.2024 passed by the Commissioner of Income Tax (Appeals) (hereinafter referred to as “ld.CIT(A)”) for the Assessment year (A.Y) 2018-19, dismissing the appeal filed by the assessee against the rectification order dated 29.09.2022 passed u/s.154 read with section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as the “Act”). 2. The brief facts of the case are that the assessee is a SPV (Special Purpose Vehicle), whose business is development and maintenance of a specific portion of a Printed from counselvise.com :-2-: ITA. No:538/Chny/2025 road as per the concession agreement entered into with Gujarat State Road Development Corporation (GSRDC), on a build-operate-transfer (BOT) model. In respect of the Assessment Year 2018-19, the impugned assessment year under appeal, the appellant had filed its return of income on 06.10.2018, declaring a net loss of Rs.72,47,13,769 under the normal provisions of the Act and a deemed book loss of Rs.33,65,49,614/- as per the provisions of section 115 JB of the Act. 3. The return of income of the assessee was processed and an intimation u/s.143(1) of the Act was passed on 04.11.2019 determining the loss at Rs.69,87,75,504/-. Thereafter, the case of the assessee was selected for scrutiny under CASS and an order u/s.143(3) r.w.s.144B of the Act was passed on 29.04.2021 determining the loss at Rs.42,18,19,510/-. While framing the assessment, the Assessing Officer had disallowed a sum of Rs.17,99,45,458/- claimed as a deduction u/s.37 of the Act. This sum was debited by the assessee under the head, ‘Major Maintenance of Road or Resurfacing Expenses’ (MMR) as a provision. The Assessing Officer, disallowed it for the reason that it is only a provision and there is no ascertained liability. Thereafter, the Assessing Officer sought to rectify the assessment order and issued a notice dated 11.06.2022. According to the Assessing Officer, in the assessment order, disallowance of MMR was made while computing the income /loss under the normal provisions of the Act and a rectification is required to consider the item (MMR) in computing the book profit u/s.115JB of the Act. The assessee resisted the rectification by arguing that the proposed rectification is not in the nature of a ‘mistake apparent on record’ as envisaged u/s.154 of the Act, rather, it is a technical addition. Thereafter, the rectification order came to be passed u/s.154 of the Act, rejecting the plea of the assessee. Printed from counselvise.com :-3-: ITA. No:538/Chny/2025 4. Aggrieved by the order u/s.154 of the Act, passed by the Assessing Officer, the assessee filed an appeal before the ld.CIT(A) raising various grounds. The appeal came to be dismissed and aggrieved by the same, the assessee is in appeal before us. 5. Before us, the Ld.AR of the assessee submitted that the ld.CIT(A) had committed an error in dismissing the appeal. It was further argued that the rectification ought not to be done, when the issue sought to be rectified is debatable in nature. Only mistakes apparent on record could be rectified u/s.154 of the Act and that in the instant case, the rectification that was done did not qualify to be termed as a ‘mistake apparent on record’. It was prayed that the appeal be allowed by holding that the rectification done by the Assessing Officer is erroneous. 6. Per contra, the Ld.DR supported the orders of the authorities below and prayed that the appeal be dismissed. 7. We have heard the rival submissions and perused the materials on record and gone through the orders of the authorities below. We find that, while passing the appellate order, the ld.CIT(A) had not adjudicated one of the grounds raised before him, that being, “Issue 2: Disallowance of provision for major maintenance and repairs (‘MMR’) expenditure – jurisdiction – ground 3 – The learned AO has failed to appreciate that the disallowance of MMR computation for the purpose of section 115JB of the Act, is debatable in nature and is hence not a ‘mistake’ amenable to ‘rectification’ ”. 8. Since one of the grounds raised by the assessee is not adjudicated by the ld.CIT(A), we deem it fit to remit the case back to the file of the ld.CIT(A), for him to Printed from counselvise.com :-4-: ITA. No:538/Chny/2025 adjudicate the said grounds and pass the speaking order, after giving reasonable opportunity to the assessee to present its case. 9. In the result the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 20th November, 2025 at Chennai. Sd/- Sd/- (एबी ट वक\u0019 ) (ABY T VARKEY) \u000eया\u001aयक सद य/Judicial Member (एस. आर. रघुनाथा) (S. R. RAGHUNATHA) लेखासद य/Accountant Member चे\u000eनई/Chennai, .दनांक/Dated, the 20th November, 2025 SP आदेश क* (\u001aत0ल1प अ2े1षत/Copy to: 1. अपीलाथ'/Appellant 2. ()यथ'/Respondent 3.आयकर आयु3त/CIT – Coimbatore 4. 1वभागीय (\u001aत\u001aन ध/DR 5. गाड% फाईल/GF Printed from counselvise.com "