KSEB, Trivandrum V. The ACIT, Trivandrum

ITA 124/COCH/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 77466 (ITAT-COCHIN)
• Duration Of Justice: 3 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-07-2014
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 01-07-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 19-03-2014
• Court: TRIBUNAL
• Department Lawyers: M ANIL KUMAR
• Assessee Lawyers: PANKAJAKSHAN C GOVIND
• Keywords: Depreciation
• Section: 143(3); 148; 263; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE S/SHRI N.R.S.GANESAN, JM AND CHANDRA POOJ ARI, AM I.T.A. NO. 124/COCH/2014 ASSESSMENT YEARS : 2007-08 KERALA STATE ELECTRICITY BOARD LIMITED, PATTOM, TRIVANDRUM. [PAN:AABCK 5896J] VS. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE-1(1), TRIVANDRUM. (ASSESSEE -APPELLANT) (REVENUE-RESPONDEN T) ASSESSEE BY SHRI PANKAJAKSHAN C. GOVIND, CA REVENUE BY SHRI M. ANIL KUMAR, CIT(DR) DATE OF HEARING 01/07/2014 DATE OF PRONOUNCEMENT 04/07/2014 O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 13-01- 2014 PASSED BY THE CIT(A), TRIVANDRUM FOR THE ASSES SMENT YEAR 2007-08. 2. IN THIS APPEAL, THE ASSESSEE HAS RAISED THE FOLL OWING GROUNDS: 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) , TRIVANDRUM HAS ERRED IN CONFIRMING THE ORDER OF THE ASST. COMMISSI ONER OF INCOME TAX, CIRCLE-1(1), TRIVANDRUM REDUCING THE CUMULATIVE SUBSIDY/GRANTS/CONTRIBUTIONS RECEIVED FOR ACQUISITI ON OF FIXED ASSETS AMOUNTING TO RS. 1678,97,65,098 FROM THE WRITTEN DO WN VALUE (WDV) OF THE BLOCK OF ASSETS FOR THE PURPOSES OF COMPUTING D EPRECIATION U/S. 32(2) OF THE INCOME-TAX ACT, 1961.2. THE LEARNED CIT(A) OUGH T TO HAVE NOTED THAT IN TERMS OF THE PROVISIONS OF SEC. 43(6)(C) OF THE I.T . ACT, ONLY ADJUSTMENTS PERMITTED ARE THE ADDITIONS ON ACCOUNT OF ASSETS AC QUIRED DURING THE YEAR AND THE SALE/ADJUSTMENT IN RESPECT OF WDV ASSETS SO LD/DISPOSED DURING THE I.T.A. NO.124/COCH/2014 2 YEAR AND ONLY SUBSIDY RECEIVED DURING THE YEAR COUL D BE REDUCED FROM THE ACTUAL COST OF ASSETS ACQUIRED DURING THE YEAR AS P ER THE PROVISIONS OF SUB- SEC(1) OF SEC. 43 OF THE INCOME TAX ACT, 1961. IT IS THEREFORE, HUMBLY PRAYED THAT DIRECTION BE ISSUED TO WITHDRAW THE ADJ USTMENT MADE REDUCING THE CUMULATIVE SUBSIDY RECEIVED UPTO THE BEGINNING OF THE YEAR AMOUNTING TO RS. 1678,97,65,098/- FROM THE WDV OF ASSETS FOR THE PURPOSES OF COMPUTING DEPRECIATION FOR THE YEAR. 2. THE LEARNED CIT(A) OUGHT TO HAVE NOTED THAT IN TERMS OF THE PROVISIONS OF SEC. 43(6)(C) OF THE I.T. ACT, ONLY ADJUSTMENTS PERMITTED ARE THE ADDITIONS ON ACCOUNT OF ASSETS ACQUIRED DURING THE YEAR AND T HE SALE/ADJUSTMENT IN RESPECT OF WDV ASSETS SOLD/DISPOSED DURING THE YEAR AND ONLY SUBSIDY RECEIVED DURING THE YEAR COULD BE REDUCED FROM THE ACTUAL COST OF ASSETS ACQUIRED DURING THE YEAR AS PER THE PROVISIONS OF S UB-SEC(1) OF SEC. 43 OF THE INCOME TAX ACT, 1961. IT IS THEREFORE, HUMBLY PRAYED THAT DIRECTION BE ISSUED TO WITHDRAW THE ADJUSTMENT MADE REDUCING THE CUMULATIVE SUBSIDY UPTO THE BEGINNING OF THE YEAR AMOUNTING TO R.1678, 97,65,098 FROM THE WDV OF ASSETS FOR THE PURPOSES OF COMPUTING DEPRECI ATION FOR THE YEAR. 3. THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE ADDITION/DISALLOWANCE ON ACCOUNT OF ELECTRICITY DUTY U/S. 3(1) OF THE ELECTRICITY DUTY ACT, 1963 AMOUNTING TO RS.71,77,92, 000 ON THE GROUND THAT THE COMMISSIONER OF INCOME TAX, TRIVANDRUM IS EMPOW ERED TO DIRECT TO MAKE ANY ADJUSTMENT U/S. 263 OF THE INCOME TAX ACT, 1961 INVOLVING AN ERROR AND HAVING AN ADVERSE EFFECT ON THE INTEREST OF REVENUE. THE LEARNED CIT(A) OUGHT TO HAVE NOTED THAT THE ABOVE SAID MATT ER IS NOT DEALT WITH OR COVERED BY THE ORDER OF COMMISSIONER OF INCOME-TAX, TRIVANDRUM U/S. 263 OF THE ACT DATED 01-02-2012 AND YOUR APPELLANT HAS NOT BEEN SERVED A NOTICE U/S. 154 OR 148 OF THE ACT FOR MAKING SUBMIS SIONS BEFORE MAKING THE ADDITION OF THE AMOUNT AS ABOVE. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ORIGINA L ASSESSMENT ORDER WAS PASSED U/S. 143(3) ON 17-12-2009 DETERMINING THE IN COME OF THE ASSESSEE AT RS. 44,20,13,027/-. THIS CASE WAS THE SUBJECT MATTER O F REVISION BY CIT U/S. 263 OF THE I.T. ACT VIDE ORDER DATED 01-02-2012. AGAINST THIS, THE ASSESSEE WENT IN APPEAL BEFORE THE TRIBUNAL AND THE TRIBUNAL VIDE OR DER DATED 11-12-2013 IN I.T.A. NO. 648/COCH/2010 DATED 09-03-2010 UPHELD TH E ORDER OF THE CIT ON THE REASONING THAT THERE IS NON APPLICATION OF MIND BY THE ASSESSING OFFICER TO THE ISSUE RAISED BY THE CIT WITH REGARD TO CARRY FORWAR D OF LOSSES AND DEPRECIATION IN HIS ASSESSMENT ORDER AND IT IS AN ERROR WITHIN THE MEANING OF SEC. 263 OF THE ACT. I.T.A. NO.124/COCH/2014 3 CONSEQUENT TO THIS ORDER, THE ASSESSING OFFICER PAS SED THE ORDER U/S. 143(3) R.W.S. 263 OF THE I.T. ACT DATED 31-03-2013 AND MAD E FOLLOWING ADDITIONS: 1. CLAIM OF EXCESS DEPRECIATION ON ACCOUNT OF NON DEDUCTION OF THE SUBSIDY RECEIVED TO THE TUNE OF RS. 18,95,09,66,56 9 FROM THE WDV RS. 284,26,44,985/- 2. ELECTRICITY DUTY (TREATED AS INCOME) PAYABLE U/S. 3(1) OF THE ELECTRICITY DUTY ACT, 1963, 71,77,92,000/- 4. ON APPEAL TO THE CIT(A), THE CIT(A) VIDE ORDER DATED 13-01-2014, CONFIRMED THE ABOVE ADDITIONS. AGAINST THIS, THE A SSESSEE IS IN APPEAL BEFORE US. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ECORD. REGARDING THE CLAIM OF NON DEDUCTION OF SUBSIDY RECEIVED TO THE T UNE OF RS.18,95,09,66,569/- FROM THE WDV, AND THEREAFTER REDUCING HE DEPRECIATI ON CLAIM, WE ARE OF THE OPINION THAT THIS ISSUE HAS ALREADY BEEN DECIDED BY THE TRIBUNAL AGAINST THE ASSESSEE VIDE ORDER DATED 11-10-2013 IN I.T.A. NO. 148/COCH/2012. BEING SO, AS THE ISSUE HAS REACHED FINALITY, WE ARE NOT IN A POS ITION TO UPHOLD THE ARGUMENT OF THE ASSESSEES COUNSEL AND ACCORDINGLY, WE ARE OF T HE OPINION THAT THE ORDER OF THE CIT(A) ON THIS ISSUE IS UPHELD. ACCORDINGLY, T HE FIRST TWO GROUNDS RAISED BY THE ASSESSEE ARE DISMISSED. 6. COMING TO THE NEXT GROUND, WITH REGARD TO THE EL ECTRICITY DUTY PAYABLE U/S. 3(1) OF THE ELECTRICITY DUTY ACT, 1963, RS. 71,77,92 ,000/-, IT IS NOT THE GROUND DEALT BY THE CIT IN HIS ORDER PASSED U/S. 263 OF T HE ACT DATED 01-02-2012. THE ASSESSING OFFICER/CIT(A) CANNOT SIT ON THE JUDGMENT OF THE ORDER OF THE CIT/TRIBUNAL WHILE GIVING EFFECT TO THE ORDER OF HI GHER FORUM. BEING SO, WHEN THE ISSUE WAS NOT THE SUBJECT MATTER OF THE ORDER P ASSED U/S. 263 PASSED BY THE ADMINISTRATIVE COMMISSIONER, THE LOWER AUTHORITIES CANNOT TAKE A NEW ISSUE I.T.A. NO.124/COCH/2014 4 WHILE PASSING THE CONSEQUENTIAL ORDER. AS SUCH, WE ARE INCLINED TO ALLOW THIS GROUND IN FAVOUR OF THE ASSESSEE. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. PRONOUNCED ACCORDINGLY O N 04-07-2014. SD/- SD/- (N.R.S.GANESAN) (CHANDRA POOJARI) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: KOCHI DATED: 4TH JULY, 2014 GJ COPY TO: 1. KERALA STATE ELECTRICITY BOARD LIMITED, PATTOM, T RIVANDRUM. 2. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CIRC LE-1(1), TRIVANDRUM. 3. THE COMMISSIONER OF INCOME-TAX(APPEALS), TRIVAND RUM 4. THE COMMISSIONER OF INCOME-TAX, TRIVANDRUM. 5. D.R., I.T.A.T., COCHIN BENCH, COCHIN. 6. GUARD FILE. BY ORDER (ASSISTANT REGISTRAR) I.T.A.T, COCHIN