GUJARAT URJA VIKAS NIGAM LIMITED,VADODARA V. THE DY.CIT, CIRCLE-1(1)(1), VADODARA

ITA 507/AHD/2023

AI Insights

The case involves Gujarat Urja Vikas Nigam Ltd., the appellant, contesting the decision of the Deputy Commissioner of Income Tax, Vadodara, regarding the computation of book profits under Section 115JB of the Income Tax Act, 1961, for the Assessment Year 2012-13. The primary contention was the non-allowance of relief for prior period income amounting to Rs. 61,97,000, which the appellant argued should not have been added to the book profits. The Tribunal considered previous rulings and the specific circumstances of the case, ultimately deciding in favor of the appellant by directing the Assessing Officer to adjust the book profits as per the assessee's return.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 24959 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Other Referred Cases: CIT vs. Adani Enterprises Ltd. (Gujarat High Court) Tax Appeal No. 573/Ahd/2016
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B.P. SRIVASTAVA
• Assessee Lawyers: MANISH J SHAH; JIMI PATEL; A.RS
• Section: 143(3); 143(1); 115JB

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, AHMEDABAD BEFORE DR. BRR KUMAR, VICE PRESIDENT & MS. SUCHITRA KAMBLE, JUDICIAL MEMBER I.T.A. No. 507/Ahd/2023 (Assessment Year: 2012-13) Gujarat Urja Vikas Nigam Ltd., Sardar Patel Vidyut Bhavan, Race Course, Vadodara-390007 Vs. Deputy Commissioner of Income Tax, Circle-1(1)(1), Vadodara [PAN No.AACCG2861L] (Appellant) .. (Respondent) Appellant by : Shri Manish J Shah & Shri Jimi Patel, A.Rs. Respondent by : Shri B. P. Srivastava, Sr. D.R. Date of Hearing 13.03.2025 Date of Pronouncement 02.04.2025 O R D E R PER SUCHITRA KAMBLE, JUDICIAL MEMBER: The appeal filed by the assessee is against the order passed by the Ld. Commissioner of Income Tax (Appeals), (in short “Ld. CIT(A)”), National Faceless Appeal Centre (in short “NFAC”), Delhi on 21.04.2023 for A.Y. 2012-13. 2. The grounds of appeal raised by the assessee are as under: “1.0 The learned Commissioner of Income Tax (Appeals) erred in law and on facts has confirmed the action of the Assessing Officer in not allowing any relief whatsoever in respect of the Prior Period Income amounting to Rs.61,97,000/- while computing the Book Profits under section 115JB of the I T Act, 1961. The learned Commissioner of Income Tax (Appeals) ought to have appreciated additions made to the Book Profits under section 115JB of the I T Act had been deleted as a whole and not item-wise additions were directed to be deleted. ITA No. 507/Ahd/2023 Gujarat Urja Vikas Nigam Ltd. vs. DCIT Asst. Year–2012-13 - 2 - 2.0 The appellant craves leave to add to, alter, delete or modify the ground of appeal either before or at the time of hearing of this appeal.” 3. The assessee engaged in the business of generation and transmission of distribution of electricity in the Gujarat State. The assessee is regularly assessed to tax for the Financial Year relevant to the Assessment Year 2012-13 the assessee voluntary filed return of income on 27.09.2012 declaring total income at Rs. 1,32,97,70,000/- under Section 115JB of the Income Tax Act,1961. The return was processed and accepted under Section 143(1) of the Act. The return was selected for scrutiny under Section 143(3) of the Income Tax Act and the assessment was completed vide order dated 27.02.2015 thereby making certain additions and/or disallowances. The total income was enhanced before set off of business losses of earlier years in normal courses of income as well as book profit computed under Section 115JB of the Act. 4. Aggrieved by the assessment order and the consequent additions made to the total income of the assessee, the assessee preferred appeal before the CIT(A). The CIT(A) allowed certain additions and/or disallowance subject to verification of the facts by the Assessing Officer. In response to the notice issued by the Ld. AO for giving effect to this appellate order, the assessee submitted all documentary evidences and other information vide its various loss. After detailed verification and examination of the same, the Assessing Officer passed the order giving effect to the order of the CIT(A) vide order dated 25.11.2016. However, while computing the book profits under Section 115JB of the Act, the AO has not given the proper effect to the CIT(A) directions as per the assessee in respect of disallowances under the head prior period items. The AO enhance the book profits on account of the dividend income which is exempted under Section 10(34) of the Income Tax Act. Being aggrieved by the order dated 25.11.2016 passed by the AO, the assessee ITA No. 507/Ahd/2023 Gujarat Urja Vikas Nigam Ltd. vs. DCIT Asst. Year–2012-13 - 3 - filed appeal before the CIT(A). The CIT(A) partly allowed the appeal of the assessee. 5. The Ld. A.R. submitted that the CIT(A) erred in law while confirming the action of the AO in not allowing in the relief whatsoever in respect of the prior period income amounting to Rs. 61,97,000/- while computing the book profits under Section 115JB of the Income Tax Act, 1961. The Ld. A.R. submitted that the Revenue Authorities ought to have appreciated that the additions made to the book profits under Section 115JB of the Income Tax Act had been deleted as a whole and not item-wise additions. 6. The Ld. D.R. relied upon the assessment order and the order of the CIT(A) and also that of order of the assessment order dated 25.11.2016 which is passed in respect of order giving effect to the earlier order dated 21.09.2015 passed by the CIT(A). 7. We have heard both the parties and perused all the relevant materials available on record. The Ld. A.R. relied upon the order of the Tribunal in assessee’s own case for A.Y. 2012-13 (ITA No. 3359/Ahd/2015, ITA No. 3428/Ahd/2015 and ITA No. 3439/Ahd/2015) order dated 26.04.2019. The Tribunal has restored the issue relevant this to disallowance of prior period expenses to the file of the AO for deciding de-novo after verification/examination of the complete details with specific findings/reasons after affording adequate opportunities to the assessee. The Tribunal also directed to consider the decision in case of CIT vs. Adani Enterprises Ltd. (Gujarat High Court) Tax Appeal No. 573/Ahd/2016 order dated 20.07.2016. The contention of the Ld. A.R. that the additions made by the AO tantamount to double taxation as the prior period expenditure should have been allowed in ITA No. 507/Ahd/2023 Gujarat Urja Vikas Nigam Ltd. vs. DCIT Asst. Year–2012-13 - 4 - consonance with the return filed by the assessee in respect of 115JB of the Act. Therefore, the AO is directed to allow in consonance with the view taken by the Hon’ble High Court in case of Adani Enterprises Ltd. (supra), the appeal of the assessee is allowed. 8. In result, the appeal of the assessee is allowed. This Order pronounced in Open Court on 02/04/2025 Sd/- Sd/- (DR. BRR KUMAR) VICE PRESIDENT (SUCHITRA KAMBLE) JUDICIAL MEMBER Ahmedabad; Dated 02/04/2025 TANMAY, Sr. PS TRUE COPY आदेश की Ůितिलिप अŤेिषत/Copy of the Order forwarded to : 1. अपीलाथŎ / The Appellant 2. ŮȑथŎ / The Respondent. 3. संबंिधत आयकर आयुƅ / Concerned CIT 4. आयकर आयुƅ(अपील) / The CIT(A)- 5. िवभागीय Ůितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाडŊ फाईल / Guard file. आदेशानुसार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad 1. Date of dictation 01.04.2025 2. Date on which the type draft is placed before the Dictating Member 01.04.2025 3. Other Member………………… 4. Date on which the approved draft comes to the Sr.P.S./P.S .04.2025 5. Date on which the fair order is placed before the Dictating Member for pronouncement .04.2025 6. Date on which the fair order comes back to the Sr.P.S./P.S 02.04.2025 7. Date on which the file goes to the Bench Clerk 02.04.2025 8. Date on which the file goes to the Head Clerk…………………………………... 9. The date on which the file goes to the Assistant Registrar for signature on the order…………………….. Date of Dispatch of the Order…………………………………… "