West Bengal Industrial Infrastructure Development Corporation, Kolkata V. DCIT, CIR-10, KOLKATA, Kolkata

ITA 1467/KOL/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 1927 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 9 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-04-2017
• Appeal Filed By: Assessee
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 30-06-2014
• Court: TRIBUNAL
• Keywords: Revised return
• Section: 143(3); 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A, BENC H KOLKATA BEFORE SHRI N.V.VASUDEVAN, JM & DR. A.L.SAINI, AM ./ ITA NO.1467/KOL/2014 ( / ASSESSMENT YEAR:2010-2011) WEST BENGAL INDUSTRIAL INFRASTRUCTURE DEVELOPMENT CORPORATION, 5, COUNCIL HOUSE STREET (3 RD FLOOR), KOLKATA-700001 VS. DCIT, CIRCLE-10, KOLKATA, AAYAKAR BHAWAN, P-7, CHOWRINGHEE SQUARE, KOLKATA-700069 ./ ./PAN/GIR NO.: AAACW 3073 C ( /APPELLANT ) .. ( / RESPONDENT ) ASSESSEE BY : SHRI SANJAY BHATTACHARYA, FCA REVENUE BY : NONE / DATE OF HEARING : 02/03/2017 /DATE OF PRONOUNCEMENT 05/04/2017 / O R D E R PER DR. ARJUN LAL SAINI, AM THE CAPTIONED APPEAL FILED BY THE ASSESSEE, PERTAIN ING TO THE ASSESSMENT YEAR 2010-2011, IS DIRECTED AGAINST THE ORDER PASSED BY LD. COMMISSIONER OF INCOME TAX (APPEALS)-XII, KOLKATA, IN APPEAL NO.140/XII/CIR-10/13-14, DATED 14.02.2014, WHICH IN TURN ARISES OUT OF AN ORDER PASSED BY THE ASSESSING OFFICER (AO) UNDER SE CTION 143(3) OF THE INCOME TAX ACT 1961, (HEREINAFTER REFERRED TO AS TH E ACT), DATED 21.03.2013. 2. BRIEF FACTS OF THE CASE QUA THE ASSESSEE ARE THA T ASSESSEE FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2010-2011 ON 13.10.2010 DISCLOSING TOTAL INCOME OF RS.6,59,11,015/-. SUBSEQ UENTLY THE ASSESSEE FILED REVISED RETURN OF INCOME FOR ASSESSMENT YEAR 2010-2011 ON 31.3.2012 DISCLOSING TOTAL INCOME OF RS.6,49,27,168 /-. ASSESSEES CASE WAS PROCESSED U/S.143(1) ON 24.05.2011 ACCEPTING TH E RETURN OF INCOME. ITA NO.1467/14 WEST BENGAL INDUSTRIAL INFRASTRUCTURE DEV.CORP 2 LATER ON ASSESSEES CASE WAS SELECTED FOR SCRUTINY U/S.143(3) OF THE ACT AND THE AO COMPLETED THE ASSESSMENT BY MAKING VARIO US ADDITIONS. 3. AGGRIEVED FROM THE ORDER OF AO, THE ASSESSEE FIL ED AN APPEAL BEFORE THE LD. CIT(A), WHO HAS PARTLY ALLOWED THE A PPEAL OF ASSESSEE OBSERVING THE FOLLOWINGS :- 5.2.3 DECISION: I HAVE CAREFULLY CONSIDERED THE SUBMISSION PUT FORT H ON BEHALF THE APPELLANT ALONG WITH THE SUPPORTING DOCUMENTS FURNI SHED AND THE JUDGEMENTS OF THE CASES RELIED UPON, PERUSED THE FA CTS OF THE CASE- INCLUDING THE FINDINGS OF .THE AO IN THE ASSESSMENT ORDER AND OTHER MATERIALS BROUGHT ON RECORD. AS ALREADY DISCUSSED, THE ASSESSING OFFICER HAS FOUND THAT THE APPELLANT HAS CLAIMED DEDUCTION ON THE FOLLOWING RECEIPT WHICH ARE NOT GENERATED DUE TO THE ACTIVITY OF ELIGIBLE BUSINESS: A) INTEREST INCOME FROM BANKS 113020369.33 B) RECOVERY OF FINE FROM CONTRACTORS 247059.00 C) OTHER SOURCE 284365.00 D) HIRE CHARGES FOR TOOLS AND PLANTS 138120.00 ACCORDING TO THE ASSESSING OFFICER, INTEREST INCOME GENERATED JUST BECAUSE ASSESSEE MADE SOME FIXED DEPOSIT SO IT IS N OT DERIVED DUE TO ANY DEVELOPMENT ACTIVITY AND THUS NOT ELIGIBLE FOR DEDUCTION U/S 80-LA OF THE IT ACT. SIMILARLY CHARGING ANY FINE OR HIRING T HE PLANTS IS NOT BUSINESS OF ASSESSEE SO RECEIPT DUE TO THESE ACTIVITY NO WAY QUALIFY THE ELIGIBILITY FOR 80-LA DEDUCTION. IN THIS REGARD, HE HAS PLACED RELIANCE ON THE DECISION OF THE HON' BLE APEX COURT IN THE CASE OF- PANDIAN CHEMICALS LTD. VS CIT (262 ITR 278) WHEREIN IT HAS HELD THAT INTEREST INC OME EARNED ON DEPOSIT WITH ELECTRICITY BOARD, NOT BEING INCOME DERIVED FR OM INDUSTRIAL UNDERTAKING, COULD NOT BE CONSIDERED FOR DEDUCTION U/S 80HH. RELIANCE HAS ALSO BEEN PLACED ON THE DECISION OF THE HON'BLE MADRAS HIGH COURT IN THE CASE OF CLT VS TRIBALOGY INDIA LTD. (335 ITR 12 ), WHEREIN IT IS HELD THAT THE INCOME EARNED BY WAY OF INTEREST ON FDRS WAS NO T ENTITLED TO SPECIAL DEDUCTION SINCE IT WAS NOT DERIVED FROM INDUSTRIAL UNIT. THE ASSESSING OFFICER ALSO HELD THAT THE INCOMES SHOWN UNDER OTHE R HEADS ARE NOT FROM ELIGIBLE BUSINESS. IT IS IN THIS BACK-GROUND, THAT THE PROFITS/LOSSES FROM THE DIFFERENT UNITS HAVE BEEN GROSS UP AND ELIGIBLE PRO FIT FOR DEDUCTION UNDER SECT.80IA WORKED OUT AT NIL AS GIVEN IN THE CHART R EPRODUCED AGAIN FOR THE SAKE OF CLARITY. PARTICULARS AMOUNT(RS.) TOTAL PROFIT AS PER THE INCOME AND EXPENDITURE ACCOUNT 201019284.98 LESS: INCOMES DISALLOWED NOT BEING RECEIPT DERIVED FROM DEVELOPMENT ACTIVITY E) HIRE CHARGES FOR TOOLS AND PLANTS 138120.00 F) RECOVERY OF FINE FROM CONTRACTORS 247059.00 G) OTHER SOURCE 2,84,365 H) INTEREST INCOME FROM BANKS 113020369.33 ITA NO.1467/14 WEST BENGAL INDUSTRIAL INFRASTRUCTURE DEV.CORP 3 TOTAL INCOME FOR 80-IA 8,73,29,372 LESS: TOTAL EXPENSES 13,47,56,143 NET INCOME/LOSS (4,74,26,771) AS REGARDS THE ISSUE WHETHER INTEREST INCOME IS TO BE SEPARATED FOR DEDUCTION UNDER SEC. 80LA IT HAS BEEN HELD IN JT. C LT \/S. BETA NEPTHOL LTD. (2006) 6 IT J 135 (TRIBUNAL: INDORE) THAT IN VIEW O F VARIOUS DECISION WHICH ARE AGAINST THE ASSESSEE, THE ISSUE IS DECIDED IN F AVOUR OF THE REVENUE. FOR SIMILAR REASON, I AM OF THE VIEW THAT THE INTER EST INCOME FROM BANKS WOULD NOT CONSTITUTE INCOME OF THE ELIGIBLE BUSINES S. AS REGARDS THE MISCELLANEOUS INCOME UNDER VARIOUS HEADS THE SAME C ANNOT BE ATTRIBUTED TO THE ELIGIBLE ACTIVITY OF INFRASTRUCTURE DEVELOPM ENT. THEREFORE, IN MY VIEW THE ASSESSING OFFICER WAS JUSTIFIED IN HOLDING THAT THOSE INCOMES DO NOT FORM PART OF THE UNDERTAKING. COMING TO THE GROSSING UP OF TOTAL INCOME FOR DEDU CTION UNDER SEC.80IA IN RESPECT OF ELIGIBLE AND NON-ELIGIBLE UN ITS IN SYNCO INDUSTRIES LTD. VS. AO (2008) 299 ITR 444; (2008) 215 CTR 385 (SC), WHERE THE GROSS TOTAL INCOME AFTER SET-OFF OF BROUGHT FORWARD LOSSES WAS NIL, AND THE ASSESSEE CLAIMED DEDUCTION U/S.80I FOR UNIT IN PROF IT WITHOUT SET-OFF OF LOSSES FROM ELIGIBLE UNIT, THE AO HELD THAT DEDUCTI ON U/S.80I IS ALLOWED ONLY AFTER SET-OFF OF LOSSES OF ELIGIBLE UNIT, AND DEDUCTION UNDER SEC.80I CANNOT EXCEED GROSS TOTAL INCOME, THE AO DISALLOWED THE DEDUCTOR UNDER SEC.80I, THE HONBLE APEX COURT HAS HELD THAT UNDER SEC.80A, DEDUCTION UNDER CHAPTER VIA CANNOT EXCEED GROSS TOTAL INCOME. SECTION 80I(6) WHICH STATES THAT THE INCOME SHALL BE COMPUTED TREA TING THE UNIT AS INDEPENDENT UNIT, DEALS ONLY WITH COMPUTATION-SAME DOES NOT RESTRICT THE SCOPE OF SECTION 80A-DEDUCTION UNDER SEC.80I SHALL BE ALLOWED ONLY AFTER SET OFF OF LOSSES OF NON-ELIGIBLE UNIT WITH ELIGIBL E UNIT AND IF GROSS TOTAL INCOME IS NIL, NO DEDUCTION SHALL BE ALLOWED. THE S AMPLE PRINCIPLE OF LAW HAS BEEN LAID DOWN BY THE HONBLE MP HIGH COURT IN THE CASE OF CIT VS. SHREE SYNTHETICS LTD. (2010) 228 CTR 228 : (2010) 1 88 TAXMAN 197. HOWEVER, IN MY VIEW, THERE IS MERIT IN THE SUBMISSI ON OF THE APPELLANT COMPANY THAT IN THE EVENT OF HOLDING THAT WBIIDC WO ULD NOT BE ELIGIBLE FOR DEDUCTION U/S.80-IA FOR RS.5,06,33,236, THE ASSESSI NG OFFICER MAY BE DIRECTED TO ALLOCATE THE EXPENSES INCLUDING INTERES T AS DEBITED IN THE INDIVIDUAL INCOME AND EXPENDITURE ACCOUNTS OF ALL T HE -UNITS OF WBIIDC AGAINST WBIIDC'S GROSS INCOME. FROM BUSINESS OF INF RASTRUCTURE DEVELOPMENT AND OTHER SOURCES COMPRISING OF INTERES T, HIRE CHARGES FOR TOOLS OF PLANTS. RECOVERY OF FINES FROM CONTRACTORS AND OTHER SOURCES AND TO ALLOW DEDUCTION U/S 80-LA IN RESPECT OF THE RESULTANT PROFIT RELATING TO WBIIDC'S BUSINESS OF INFRASTRUCTURE DEVELOPMENT. OPERATION AND MAINTENANCE. THE ASSESSING OFFICER IS DIRECTED TO W ORK OUT THE ELIGIBLE PROFIT/LOSS IN RESPECT OF EACH UNIT, THEN GROSS UP THE INCOME/LOSS OF THE INDIVIDUAL UNITS AND ALLOW ADMISSIBLE DEDUCTION, IF ANY, IN ACCORDANCE WITH LAW WHILE GIVING EFFECT TO THIS ORDER. THESE GROUND S OF APPEAL ARE DECIDED ACCORDINGLY. 5.3 GROUND NO.7 THIS GROUND OF APPEAL OF THE APPELLANT IS DIRECTED AGAINST THE ACTION OF THE AO IN NOT ALLOWING CREDIT FOR TDS FOR AN AGGREGATE SUM OF RS.1,70,951/- AS REFLECTED IN FORM NO.26AS. THE AO IS DIRECTED TO ALLOW THE CREDIT FOR TDS AS CLAIMED BY THE APPELLANT AFTE R DUE VERIFICATION AND DILIGENCE. ITA NO.1467/14 WEST BENGAL INDUSTRIAL INFRASTRUCTURE DEV.CORP 4 5.4 GROUND NO.8 THIS GROUND OF APPEAL RELATES TO THE NON ALLOWING O F CREDIT FOR TAX PAYMENT OF RS.40,00,000 ON 06-04-2010 AS CLAIMED BY THE APPELLANT IN ITS RETURN. THE AO IS DIRECTED TO VERIFY THE CLAIM OF T HE APPELLANT AND ALLOW CREDIT FOR THE PAYMENT OF TAX OF RS. 40,00,000/- AC CORDINGLY AS PER LAW. 5.5 GROUND NOS.9 & 10 THESE GROUNDS OF APPEAL RELATE TO THE CHARGING OF I NTEREST OF RS.77,29,196 U/S 234B AND RS.5,57,239 U/S 234C OF THE ACT BY THE AO . THESE GROUNDS OF APPEAL BEING CONSEQUENTIAL IN NATURE, THE AO IS DIRECTED TO RECALCULATE THE INTEREST CHARGEABLE UNDER THESE SECTIONS WHILE GIVING EFFECT TO THIS APPELLATE ORDER. 4. NOT BEING SATISFIED WITH THE ORDER OF LD. CIT(A) , THE ASSESSEE IS IN APPEAL BEFORE US AND HAS TAKEN THE FOLLOWING GROUND S OF APPEAL :- 1) THAT THE COMMISSIONER OF INCOME-TAX (APPEALS) W AS WRONG IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN D ENYING THE DEDUCTION U/S 80-IA IN RELATION TO THE APPELLANT'S BUSINESS OF DEVELOPMENT, MAINTENANCE AND OPERATION OF INFRASTRU CTURE FACILITIES. 2) THAT THE COMMISSIONER OF INCOME-TAX/APPEALS) ER RED IN NOT APPRECIATING THE FACT THAT THE ASSESSING OFFICER HA D WRONGLY CONSIDERED THE SET OFF OF ALL THE EXPENSES AGAINST THE APPELLANT'S INCOME FROM THE APPELLANT'S BUSINESS OF DEVELOPMENT, MAINTENANCE AND OPERATION OF INFRASTRU CTURE FACILITIES WITHOUT MAKING ANY ALLOCATION OF EXPENDI TURE AGAINST THE INCOME FROM INTEREST AND OTHER SOURCES NOT CONS IDERED BY THE ASSESSING OFFICER TO BE PART OF THE APPELLANT'S ELIGIBLE BUSINESS U/S 80-1A. 3) THAT THE COMMISSIONER OF INCOME-TAX(APPEALS) FA ILED TO APPRECIATE THAT THE ASSESSING OFFICER HAD BEEN REQU IRED TO CHECK THE ELIGIBILITY OF THE APPELLANT TO THE DEDUC TION U/S 80-IA SEPARATELY FOR EACH OF THE UNITS THROUGH WHICH THE APPELLANT HAD CARRIED ON THE APPELLANT'S BUSINESS OF DEVELOPMENT, MAINTENANCE AND OPERATION OF INFRASTRUCTURE FACILIT IES. 4) THAT THE APPELLANT CRAVES LEAVE TO ADD, ALTER O R WITHDRAW ANY GROUND OR GROUNDS OF APPEAL BEFORE OR AT THE HEARIN G OF THE APPEAL. 5. ALTHOUGH IN THIS APPEAL, THE ASSESSEE HAS RAISED FOUR GROUNDS OF APPEAL BUT AT THE TIME OF HEARING THE SOLITARY GRIE VANCE OF THE ASSESSEE HAS BEEN CONFINED TO THE ISSUE THAT THE AO HAS NOT GIVEN THE APPEAL EFFECT OF THE ORDER PASSED BY LD. CIT(A) -XII, KOLKATA. ITA NO.1467/14 WEST BENGAL INDUSTRIAL INFRASTRUCTURE DEV.CORP 5 5.1 THE LD. CIT(A) HAS PASSED AN ORDER DATED 14-2-2 014 IN APPEAL NO.140/XII/CIR-10/13-14,KOLKATA, AND THE APPEAL EFF ECT OF THE SAID ORDER HAS NOT BEEN GIVEN YET BY THE AO. THE LD. CIT(A) IN THE SAID ORDER HAS GIVEN PARTLY RELIEF TO THE ASSESSEE BASED ON CERTAI N CONDITIONS. THE LD. CIT(A) HAS DIRECTED THE AO TO VERIFY/EXAMINE THE CL AIM OF THE ASSESSEE AND AFTER VERIFICATION AND EXAMINATION, THE AO SHOU LD GIVE RELIEF TO THE ASSESSEE. THEREFORE, SOME OF THE GROUNDS OF APPEAL HAVE BEEN ALLOWED BY THE CIT(A) FOR STATISTICAL PURPOSES. BUT THE LD. AO HAS NOT GIVEN THE APPEAL EFFECT TILL DATE. THE LD. AR FOR THE ASSESSE E HAS EXPRESSED HIS WILLINGNESS THAT HE IS NOT GOING TO PRESS THE FOUR GROUNDS RAISED BY HIM BEFORE THE TRIBUNAL, THEREFORE, HE REQUESTED TO TRE AT THE FOUR GROUNDS RAISED BY THE ASSESSEE BEFORE THE TRIBUNAL AS NOT P RESSED. 5.2 EVEN LD. DR FOR THE REVENUE HAS ALSO AGREED WI TH THE PROPOSITION CANVASSED BY THE LD. AR FOR THE ASSESSEE. 5.3 HAVING HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL ON RECORD, WE ARE OF THE VIEW THAT THE ORDER OF CIT(A) HAS TO BE CONFIRMED AS NOTHING HAS BEEN BROUGHT ON RECORD TO SHOW THAT THE CONCLUS ION OF THE CIT(A) ARE INCORRECT. WE ARE OF THE VIEW THAT THE AO SHOULD BE DIRECTED TO GIVE APPEAL EFFECT OF THE ORDER PASSED BY THE CIT(A)-XII , KOLKATA IN APPEAL NO.140/XII/CIR-10/13-14, DATED 14.02.2014, AND WE D O SO. WITH THE ABOVE OBSERVATIONS, WE DISMISS THE APPEAL OF THE AS SESSEE. 5.4. IN THE RESULT, THE APPEAL FILED BY THE ASSESS EE IS DISMISSED. ITA NO.1467/14 WEST BENGAL INDUSTRIAL INFRASTRUCTURE DEV.CORP 6 ORDER PRONOUNCED IN THE OPEN COURT ON THIS 05/0 4/2017. SD/ - (N.V.VASUDEVAN) S D/ - (DR. A.L.SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER /KOLKATA ; ! DATED 05/04/2017 '#$%& /PRAKASH#MISHRA ,SR.PS. / COPY OF THE ORDER FORWARDED TO : / BY ORDER, ( ASSTT. REGISTRAR) $ % , / ITAT, KOLKATA 1. / THE APPELLANT-WEST BENGAL INDUSTRIAL INFRASTRUCTURE DEV.CORP 2. / THE RESPONDENT.- DCIT, CIRLCE-10, KOLKATA-79 3. 0 ( ) / THE CIT(A), KOLKATA. 4. 0 / CIT 5. 12 3 4456 , 56 , / DR, ITAT, KOLKATA 6. 3 78 / GUARD FILE. 1 4 //TRUE COPY//