Dy. Commissioner of Income Tax , Circle-3(1), Hyderabad V. Sathavahana Ispat Limited , Hyderabad

ITA 1467/Hyd/2018

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 7452 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-01-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB-A
• Assessment Year: 2010-2011
• Appeal Filed On: 05-07-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: FACTS OF CASE ON FACTS
• Keywords: Depreciation; Set aside
• Section: 143(3); 115JB; 143(1); 201; 13; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A : HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI LAXMI PRASAD SAHU , ACCOUNTANT MEMBER (THROUGH VIRTUAL CONFERENCE) S. NO. ITA NO. AY APPELLANT RESPONDENT 1 1467/H/2018 2010 - 11 DY. COMMISSION ER OF INCOME - TAX, CIRCLE 3(1), HYDERABAD. SATHAVAHANA ISPAT LTD., HYDERABAD. PAN - AACCS8982 L DATE OF HEARING : 1 2 - 0 1 - 20 2 1 DATE OF PRONOUNCEMENT : 20 - 01 - 20 2 1 O R D E R PER LAXMI PRASAD SAHU, A .M. : T H IS IS AN APPEAL FILED BY THE REVENUE DIRECTED AGAINST THE ORDER OF CIT(A) 2 , HYDERABAD, DATED 18 / 0 4 / 201 8 RELATING TO AY 20 1 0 - 1 1 ON THE FOLLOWING GROUNDS OF APPEAL: FOR REVENUE : SHRI SUNIL KUMAR PANDEY FOR ASSESSEE : SHR I S. RAMA RAO ITA NO. 1467 /HYD/1 8 SATHAVAHANA ISPAT LTD.,HYD. : - 2 - : 1. LD. CIT (A) ERRED ON BOTH LAW AND FACTS OF THE CASE. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) ERRED IN DELETING THE ADDITION MADE U/S. 80LA AMOUNTING TO RS.1,34,86,500/ - WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE COMPANY IS NOT ELIGIBLE FOR DEDUCTION U/S. 80LA ON PRIOR PERIOD INCOME OF RS.1,34,86,500/ - WHICH WAS DERIVED IN THE FY 2008 - 09 (A . Y 2009 - 10) WHEN THE ASSESSEE WAS NOT OPTING TO CLAIM DEDUCTION U/S. 801A. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) ERRED IN DELETING THE EXCESS CLAIM OF DEPRECIATION MADE BY THE ASSESSEE AMOUNTING TO RS.7,20,016/ - WITHOUT CONSIDERING THE FACT THAT THE AMOUNT OF REDUCTION IN THE LIABILITY WITH RESPECT TO THE COST OF ASSETS DUE TO FOREIGN EXCHANGE FLUCTUATION WAS NOT REDUCED BY THE ASSESSEE COMPANY AS REQUIRED BY THE SECTION 43A. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) ERRED IN DELETING THE ADDITION MADE ON ACCOUNT OF FOREIGN EXCHANGE GAIN ON RESTATEMENT OF TERM LOAN WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE COMPANY HAD VIOLATED THE PROVISIONS OF SECTION 43A AND THE ADDITION MADE BY THE AO IS CORRECT AS PER THE PROVISIONS OF SECTION 43A. 5. ANY OTHER GROUND(S) THAT MAY BE URGED AT THE TIME OF HEARING. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE , ENGAGED IN THE BUSINESS OF MANUFACTURING AND SALE OF PIG IRON AND METALLURGICAL COKE WITH COGENERATION POWER, E - FILED ITS RETURN OF INCOME FOR THE AY 2010 - 11 ON 30/09/2010 ADMITTING A TOTAL INCOME OF RS. 10,62,25,530/ - ITA NO. 1467 /HYD/1 8 SATHAVAHANA ISPAT LTD.,HYD. : - 3 - : AFTER CLAIMING DEDUCTION U/S 80 IA O F RS. 12,66,65,220/ - UNDER NORMAL PROVISIONS AND BOOK PROFIT U/S 115JB AT RS. 40,81,57,590/ - , WHICH WAS PROCESSED U/S 143(1) OF THE IT ACT ON 30/08/2011. SUBSEQUENTLY, ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT ASSESSING THE TAXABLE INCOME AT RS. 10,62 ,25,530/ - . 2.1 THEREAFTER, THE PR. CIT 3, HYDERABAD EXERCISING HIS JURISDICTION U/S 263 SET ASIDE THE ASSESSMENT BY PASSING AN ORDER DATED 25/02/2013 DIRECTING THE AO TO REDO THE ASSESSMENT DENOVO. 2.2 ACCORDINGLY, THE AO COMPLETED THE ASSESSMENT ON 31/03/2016 ASSESSING THE TOTAL INCOME OF THE ASSESSEE AT RS. 12,70,00,414/ - BY MAKING VARIOUS ADDITIONS/ DISALLOWANCES. 2.3 THE ASSESSEE CHALLENGED THE REVISIONARY POWERS EXERCISED BY THE PR. CIT U/S 263 BEFORE THE TRIBUNAL, AND THE TRIBUNAL VIDE ITS ORD ER IN ITA NO. 934/HYD/2015, DATED ITA NO. 1467 /HYD/1 8 SATHAVAHANA ISPAT LTD.,HYD. : - 4 - : 30/11/2016 SET ASIDE THE ORDER PASSED BY THE PR. CIT AND RESTORED THE ORDER OF THE AO ORIGINALLY MADE U/S 143 ( 3) ON 04/01/2013. 2.4 THE ASSESSEE FILED AN APPEAL ALSO AGAINST THE ORDER PASSED U/S 143(3)/263 OF THE ACT BEF ORE THE CIT(A), AND THE CIT(A) FOLLOWING THE ORDER OF THE TRIBUNAL DATED 30/11/2016 (SUPRA) ALLOWED THE APPEAL OF THE ASSESSEE. 3. AGAINST THE SAID ORDER OF THE CIT(A), THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 4. BEFORE US, THE LD. CIT - DR RELIED O N THE ORDER OF THE AO PASSED U/S 143(3)/263 OF THE ACT AND SUBMITTED THAT WITHOUT GOING INTO THE MERITS OF THE FACTS OF THE CASE, THE CIT(A) ALLOWED THE APPEAL OF THE ASSESSEE, WHICH IS NOT JUSTIFIED. HE, THEREFORE, PRAYED THAT THE ORDER OF THE AO SHOULD B E RESTORED. ITA NO. 1467 /HYD/1 8 SATHAVAHANA ISPAT LTD.,HYD. : - 5 - : 5. THE LD. AR, ON THE OTHER HAND, HAS FILED WRITTEN SUBMISSIONS, WHICH READ AS UNDER: IT IS SUBMITTED THAT THE ABOVE MENTIONED DEPARTMENTAL APPEAL IS FILED BY THE DY. COMMISSIONER OF INCOME TAX, CIRCLE - 3(1), HYDERABAD AGAINST THE ORDER OF T HE CIT (A) - 3, HYDERABAD DATED 18.04.2018. THE SAID APPEAL BEFORE THE CIT (A) - 3, HYDERABAD WAS FILED FROM AN ORDER U / S 143(3) RWS 263 OF THE I.T. ACT DATED 31.03.2016. IN THIS CASE, THE ORIGINAL ASSESSMENT WAS MADE U / S 143(3) OF THE I.T. ACT ON 04.01.20 13 ASSESSING THE TAXABLE INCOME AT RS.10,62,25,530J - . THE HON'BLE PR.CIT - 3, HYDERABAD VIDE ORDER DATED 25.02.2015 SET ASIDE THE ORDER OF ASSESSMENT MADE U / S 143(3) DATED 04.01.2013 AND DIRECTED THE ASSESSING OFFICER TO MAKE A FRESH ORDER. IN CONSEQUENCE TH ERETO, THE ORDER U / S 143(3) RWS 263 WAS PASSED ON 31.03.2016 DETERMINING THE TOTAL INCOME AT RS.12,70,00,414 / - ON APPEAL FILED AGAINST THE ORDER U / S 263, THE HON'BLE ITAT VIDE ORDER IN ITA NO.934 / HYD / 2015 DATED 30.11.2016 SET ASIDE THE ORDER PASSED BY THE HON'BLE PR.CIT AND RESTORED THE ORDER OF THE ASSESSING OFFICER ORIGINALLY MADE U / S 143(3) ON 04.01.2013. AS THE ASSESSMENT ORDER BASED ON WHICH THE PRESENT APPEAL WAS FILED BY THE ASSESSING OFFICER IS NON - EST IN VIEW OF THE ORDER OF THE HON'BLE ITAT, THE PRESENT APPEAL DOES NOT SURVIVE. THE SAME MAY PLEASE BE DISMISSED AS REDUNDANT. 6. AFTER CONSIDERING THE SUBMISSIONS OF BOTH THE PARTIES AND PERUSING THE MATERIAL ON RECORD AS WELL AS THE ORDERS OF T HE REVENUE AUTHORITIES, WE FIND THAT THE CIT(A) WHILE ITA NO. 1467 /HYD/1 8 SATHAVAHANA ISPAT LTD.,HYD. : - 6 - : DEALING WITH THE ISSUE AND ALLOWING THE APPEAL OF THE ASSESSEE HAS OBSERVED THAT THE ITAT, HYDERABAD IN ITA NO. 934/HYD/2015, ORDER DATED 30/11/2016 HAS ANNULLED THE ORDER PASSED BY THE PR. CIT U/S 263 OF THE ACT. ACCORDINGLY, THE SUBSEQUENT ASSESSMENT ORDER PASSED U/S 143(3)/263 DATED 31/03/2016 DOES NOT HAVE LEGS TO STAND IN THE EYES OF LAW. THEREFORE, WE UPHOLD THE ORDER OF THE CIT(A) AND DISMISS THE APPEAL OF THE REVENUE. 7. IN THE RESULT, APPEAL O F THE REVENUE IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 20 TH JANUARY, 2021 SD/ - SD/ - ( P. MADHAVI DEVI ) ( LAXMI PRASAD SAHU) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDE RABAD, DATED : 20 TH JANUARY, 20 2 1 K V ITA NO. 1467 /HYD/1 8 SATHAVAHANA ISPAT LTD.,HYD. : - 7 - : C OPY TO : ` 1 DCIT, CIRCLE 3 ( 1 ), ROOM NO. 714, 7 TH FLOOR, SIGNATURE TOWERS, OPP. BOTANICAL GARDEN, KONDAPUR, HYDERABAD. 2 M/S SATHAVAHANA ISPAT LTD., 505, 5 TH FLOOR, BLOCK 1, DIVYASHAKTI COMPLEX, AMEERPET, HYDERABD 500 016. 3 CIT(A) 3 , HYDERABAD. 4 PR. CIT - 3 , HYDERABAD 5 ITAT, DR, HYDERABAD. 6 GUARD FILE.