The ACIT.GNR Circle, Gandhinagar V. GSPC Gas Co.Ltd., Gandhinagar

ITA 1300/AHD/2012

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 9315 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 8 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-02-2016
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 11-02-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 14-06-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: S N SOPARKAR
• Keywords: Depreciation; Capital receipt

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD , (BEFORE SHRI ANIL CHATURVEDI, A.M. & SHRI S . S. GODARA, J.M.) ( , !'# ' $' $%& , ! '( ) ITA NO: 1300/AHD/2012 (ASSESSMENT YEAR: 2008-09) ASSTT. COMMISSIOER OF INCOME TAX, GANDHINAGAR CIRCLE, BLOCK NO.14, 4 TH FLOOR, UDYOG BHAVAN, SECTOR-11, GANDHINAGAR - 382007 VS GSPC GAS CO. LTD., 101, TOWER-1, INFOCITY, GH-0, CIRCLE, GANDHINAGAR - 382007 PAN: AABCG1813F (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ANIL KUMAR BHARDWAJ, SR . D.R. RESPONDENT BY : SHRI S. N. SOPARKAR DATE OF HEARING : 11-02-201 6 DATE OF PRONOUNCEMENT : 16-02-2016 ( )/ ORDER PER ANIL CHATURVEDI, ACCOUNTANT MEMBER THIS APPEAL FILED BY REVENUE IS AGAINST THE ORDER OF CIT(A), GANDHINAGA R, DATED 28.03.2012 FOR THE ASSESSMENT YEAR 2008-09. ITA NO .1300/AHD/2012 . A.Y . 2008-09 (ACIT VS. GSPC GAS CO. LTD.) 2 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERI ALS ON RECORD ARE AS UNDER: 3. THE ASSESSEE IS A COMPANY WHICH WAS ORIGINALLY I NCORPORATED AS GUJARAT STATE FUEL MANAGEMENT CO. LTD. SUBSEQUENTLY, THE COMPANY S NAME WAS CHANGED TO GSPC GAS CO. LTD. ON 14.12.2005. THE ASSESSEE ELECTRONI CALLY FILED ITS RETURN OF INCOME FOR A.Y. 2008-09 ON 25.09.2008 DECLARING TOTAL INCOME O F RS.28,63,39,340/-. THE CASE WAS SELECTED FOR SCRUTINY AND THEREAFTER ASSESSMENT WAS FRAMED U/S.143(3) VIDE ORDER DATED 14.12.2010 AND THE TOTAL TAXABLE INCOME WAS DETERMI NED AT RS.47,11,62,073/-. AGGRIEVED BY THE ORDER OF ASSESSING OFFICER, ASSESS EE CARRIED THE MATTER BEFORE THE LD. CIT(A) WHO VIDE ORDER DATED 28.03.2012 GRANTED PART IAL RELIEF TO THE ASSESSEE. AGGRIEVED BY THE ORDER OF LD. CIT(A), ASSESSEE AND REVENUE BOTH PREFERRED THE APPEAL BEFORE THE HONBLE TRIBUNAL. HONBLE TRIBUNAL BY C ONSOLIDATED ORDER PASSED ON 11.04.2004 IN ITA NOS. 3117, 2958/AHD/2010 & ORS., PARTLY ALLOWED THE APPEAL FOR STATISTICAL PURPOSES. SUBSEQUENTLY, REVENUE PREFER RED THE MISCELLANEOUS APPLICATION FOR THE REASON THAT ASSESSEES APPEAL IN ITA NO.139 0/AHD/2012 FOR A.Y. 2008-09 ON THE GROUND OF TAXABILITY RELATED TO LIQUIDATED DAMAGES WAS DECIDED IN FAVOUR OF ASSESSEE AND THE REVENUES GROUND NO.2 WAS DISMISSED. IT WAS SU BMITTED THAT THE DISMISSAL OF REVENUES GROUND HAD RESULTED INTO GIVING DOUBLE BE NEFIT TO THE ASSESSEE, WHICH WAS IN CONTRADICTION OF SECTION 43 OF THE ACT. THE CO-ORD INATE BENCH OF TRIBUNAL IN M.A. NO.153/AHD/2014 ORDER DATED 13.02.2015 RECALLED THE TRIBUNALS ORDER DATED11.04.2014 IN ITA NO.1390/AHD/2012 TO DECIDE THE GROUND NO.2 W HICH IS WITH RESPECT TO DEPRECIATION OF RS.26,48,101/-. THE RELEVANT PORTI ON OF THE AFORESAID M.A. ORDER DATED 13/02/2015 READS AS UNDER: 2. THE LD.SR.DR SUBMITTED THAT THE TRIBUNAL VIDE O RDER DATED 11/04/2014(SUPRA) HAS DISMISSED THE GROUND NO.2 OF REVENUES APPEAL. HE SUBMITTED THAT WHILE DOING SO, THE HONBLE TRIBUNAL FAILED TO TAKE NOTE OF THE FAC T THAT IN ASSESSEES APPEAL (ITA NO.1390/AHD/2012 FOR AY 2008-09), THE GROUND OF TAX ABILITY RELATED TO LIQUIDATED DAMAGES HAS BEEN DECIDED IN FAVOUR OF ASSESSEE. THE REFORE, BY ALLOWING THE DEPRECIATION, THE ASSESSEE HAS BEEN GIVEN DOUBLE BE NEFIT WHICH IS CONTRADICTORY TO SECTION 43 OF THE I.T.ACT, 1961. ON BEHALF OF THE A SSESSEE, LD.SR.COUNSEL SHRI S.N.SOPARKAR APPEARED AND DID NOT CONTROVERT THE SU BMISSIONS OF THE LD.SR.DR. ITA NO .1300/AHD/2012 . A.Y . 2008-09 (ACIT VS. GSPC GAS CO. LTD.) 3 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDER OF THE TRIBUNAL DATED 11/04/2014(SUPRA). WE FIND FORCE IN THE CONTE NTION OF THE LD.SR.DR, AS THE ASSESSEE IN ITS APPEAL ITA NO.1390/AHD/2012 PERTAIN ING TO AY 2008-09 HAS SUCCEEDED ON THE ISSUE OF TAXABILITY OF LIQUIDATED DAMAGES. H ENCE, WE ARE OF THE CONSIDERED VIEW THAT A MISTAKE HAS CREPT INTO THE TRIBUNALS ORDER DATED 11/04/2014, SAME NEEDS TO BE RECTIFIED. THEREFORE, WE RECALL THE TRIBUNALS ORDE R DATED 11/04/2014 ON GROUND NO.2 RAISED IN REVENUES APPEAL FOR AY 2008-09 AND FIX THE APPEAL FOR DECISION AFRESH ON GROUND NO.2. ACCORDINGLY, THE REGISTRY IS DIRECTED TO FIX THE R EVENUES APPEAL (ITA NO.1300/AHD/2012 FOR AY 2008-09 ON GROUND NO.2) FOR HEARING IN DUE COURSE, AFTER ISSUING NOTICE OF HEARING TO BOTH THE PARTIES. 4. IN VIEW OF THE AFORESAID ORDER OF TRIBUNAL, THE GROUND NO.2 WHICH NEEDS TO BE DECIDED, READS AS UNDER: 2. THE LEARNED CIT(APPEALS) HAS ERRED IN LAW AND O N FACTS IN DELETING THE ADDITION MADE BY THE AO IN RESPECT OF DEPRECIATION (REDUCED COST) AMOUNTING TO RS.26,48,101/-. 5. BEFORE US, AT THE OUTSET, LD. A.R. FAIRLY CONCED ED THAT THE GROUND NEEDS TO BE DECIDED IN FAVOUR OF THE REVENUE AS LIQUIDATED DAMA GES RECEIVED ON ACCOUNT OF DELAY OF SUPPLY OF MACHINERY HAS BEEN HELD TO BE A CAPITAL R ECEIPT BY CO-ORDINATE BENCH OF TRIBUNAL AND THEREFORE, GRANTING OF THE DEPRECIATIO N ON THE APPLICABLE RATE TO THE AMOUNT OF LIQUIDATED DAMAGES DOES NOT ARISE. LD. D.R. DID NOT OBJECT TO THE SUBMISSIONS MADE BY LD. A.R. 6. WE HAVE HEARD THE LD. D.R. AND PERUSED THE MATER IAL ON RECORD. THE ASSESSEE HAD RECEIVED LIQUIDATED DAMAGES OF RS.2,25,88,566/- AND HAD TREATED IT AS CAPITAL RECEIPT BUT A.O. CONSIDERED IT TO BE A REVENUE REC EIPT. IN APPEAL, LD. CIT(A) UPHELD THE ORDER OF A.O. OF TREATING THE RECEIPT AS REVENU E IN NATURE, BUT HOWEVER, DIRECTED THE A.O. TO REDUCE THE COMPENSATION FROM THE COST FOR W ORKING OUT THE DEPRECIATION. IN SECOND APPEAL, THE CO-ORDINATE BENCH OF TRIBUNAL HE LD THE DAMAGES RECEIVED BY THE ASSESSEE TO BE OF CAPITAL IN NATURE. IN SUCH A SIT UATION AND IN VIEW OF LD. A.R.S SUBMISSIONS BEFORE US, WE AGREE WITH THE CONTENTION S OF REVENUE THAT GRANTING OF ITA NO .1300/AHD/2012 . A.Y . 2008-09 (ACIT VS. GSPC GAS CO. LTD.) 4 DEPRECIATION AMOUNTS TO DOUBLE BENEFIT. WE, THUS, ALLOW THE GROUND OF REVENUE. THUS, THIS GROUND OF REVENUE IS ALLOWED. 7. IN THE RESULT, THIS GROUND OF REVENUES APPEA L IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 16 -02- 2016. SD/- SD/- (S. S. GODARA) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: DATED. 16/02/2016 TRUE COPY S K SINHA COPY OF THE ORDER FORWARDED TO:- 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHMEDABAD