ACIT, CHENNAI V. V A Tech Wabag Limited, CHENNAI

ITA 1517/CHNY/2016

• Counselvise Citation: [2021] 104 COUNSELVISE.COM (IT) 7119 (ITAT-CHENNAI)
• Duration Of Justice: 5 year(s) 6 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-12-2021
• Appeal Filed By: Department
• Order Result: PartlyAllowed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 26-05-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: VENKATRAMAN; LAKSHMI; S R
• Keywords: Set aside
• Section: 148; 143(3); 143(1); 80IA; 201

Judgement Text

आयकर अपीलीय अिधकरण, ’बी’ Ɋायपीठ, चेɄई IN THE INCOME-TAX APPELLATE TRIBUNAL ‘B’ BENCH, CHENNAI ŵी धुʫुŜ आर.एल रेǭी, Ɋाियक सद˟ एवं ŵी जी. मऺजुनाथा, लेखा सद˟ के समƗ Before Shri Duvvuru RL Reddy, Judicial Member & Shri G. Manjunatha, Accountant Member आयकर अपील सं./I.T.A. No. 1377/Chny/2016 िनधाŊरण वषŊ/Assessment Year: 2006-07 M/s. VA Tech Wabag Limited, No. 17, “Wabag House”, 200 Feet Thoraipakkam – Pallavaram Main Road, Sunnambu Kolathur, Chennai 600 117. [PAN:AABCV0225G] Vs. The Assistant Commissioner of Income Tax, Company Circle III(4), Chennai. (अपीलाथŎ/Appellant) (ŮȑथŎ/Respondent) आयकर अपील सं./I.T.A. No. 1517/Chny/2016 िनधाŊरण वषŊ/Assessment Year: 2006-07 The Assistant Commissioner of Income Tax, Company Circle III(4), Chennai Vs. M/s. VA Tech Wabag Limited, No. 17, “Wabag House”, 200 Feet Thoraipakkam – Pallavaram Main Road, Sunnambu Kolathur, Chennai 600 117. (अपीलाथŎ/Appellant) (ŮȑथŎ/Respondent) अपीलाथŎ की ओर से / Appellant by : S/Shri R, Venkatraman, Lakshmi Sriram & B. Sivaraman, Advocates ŮȑथŎ की ओर से/Respondent by : Ms. R. Anita, Addl. CIT सुनवाई की तारीख/ Date of hearing : 27.10.2021 घोषणा की तारीख /Date of Pronouncement : 02.12.2021 आदेश /O R D E R PER DUVVURU RL REDDY, JUDICIAL MEMBER: The cross appeals filed by the assessee as well as Revenue are directed against the order of the ld. Commissioner of Income Tax (Appeals) - 11, Chennai dated 29.02.2016 relevant to the assessment year 2006-07. I.T.A. Nos.1377 & 1517/Chny/16 2 The assessee has challenged confirmation of the disallowance of deduction claimed of ₹.3,06,39,429/- under section 80IA of the Income Tax Act, 1961 [“Act” in short] and the Revenue has challenged deletion of addition of ₹.26,85,871/- made towards foreign exchange fluctuation claimed by the assessee. 2. Brief facts of the case are that the assessee filed its return of income for the assessment year 2006-07 on 20.11.2006 admitting an income of ₹.1,92,24,966/-. The return was processed under section 143(1) of the Act. Subsequently, the case was selected for scrutiny under CASS and assessment was completed on 26.12.2008. From the records, the Assessing Officer noticed that the assessee has claimed excess deduction by including income which would not qualify for deduction under section 80IA of the Act. While giving effect to CIT(A)’s order dated 24.02.2012, the total income was determined as ₹.2,60,29,075/-. The case has been reopened under section 147 of the Act and notice under section 148 of the Act has been issued to the assessee. After considering the submissions of the assessee, the assessment under section 143(3) r.w.s. 147 of the Act was completed by disallowing the excess claim of deduction of ₹.3,33,25,300/- under section 80IA of the Act and brought to tax after excluding interest income of ₹.4,78,929/-. On appeal, the ld. CIT(A) confirmed the disallowances to the I.T.A. Nos.1377 & 1517/Chny/16 3 extent of ₹.3,06,39,429/- after directing the Assessing Officer to exclude the claim of deduction of foreign exchange fluctuation of ₹.26,85,871/- from the total disallowances made under section 80IA of the Act. 3. On being aggrieved, the assessee is in appeal against the confirmation of disallowances of deduction claimed under section 80IA of the Act of ₹.3,06,39,429/-, whereas, in the cross appeal, the Revenue has challenged the directions of the ld. CIT(A) that the Assessing Officer is directed to exclude the income towards foreign exchange fluctuation from the disallowances made under section 80IA of the Act. 4. We have heard both the sides, perused the materials available on record and gone through the orders of authorities below. Before us, by filing petition for admission of additional grounds of appeal filed under Rule 11 of Income Tax (Appellate Tribunal) Rules, 1963, the ld. Counsel for the assessee has submitted that the assessee is challenging the legal issue of jurisdiction under section 147 of the Act, since, against the original assessment order dated 26.12.2008, the assessee preferred an appeal and vide order dated 24.02.2012, the ld.CIT(A) has allowed deduction under section 80IA of the Act to the extent of ₹.14,11,72,786/- as against the claim of ₹.14,28,54,064/-, which was confirmed by the ITAT in an appeal filed by the Revenue in I.T.A. No. 1225/Mds/2012 dated 25.01.2017 as well as the I.T.A. Nos.1377 & 1517/Chny/16 4 Hon’ble Jurisdictional High Court vide T.C.A. No. 196 to 201 of 2019 dated 07.03.2019 on further appeal, thereby the issue of eligibility of 80IA relief attained finality. It was further contended that no reason was stated by the Assessing Officer while issuing notice under section 148 of the Act and thus, the reassessment proceedings is bad in law and prayed for suitable directions. The petition filed under Rule 11 of Income Tax (Appellate Tribunal) Rules, 1963 has been admitted. Since the assessee has not raised the legal issue before the ld. CIT(A), we set aside the appellate order and remit the matter back to the file of the ld. CIT(A) to decide the legal issue and thereafter the claim of deductions under section 80IA of the Act, if any, afresh in accordance with law after affording a meaningful opportunity of being heard to the assessee. 5. In the result, both the appeals filed by the assessee as well as Revenue are allowed for statistical purposes. Order pronounced on the 02 nd December, 2021 in Chennai. Sd/- Sd/- (G. MANJUNATHA) ACCOUNTANT MEMBER (DUVVURU RL REDDY) JUDICIAL MEMBER Chennai, Dated, 02.12.2021 Vm/- आदेश की Ůितिलिप अŤेिषत/Copy to: 1. अपीलाथŎ/Appellant, 2.ŮȑथŎ/ Respondent, 3. आयकर आयुƅ (अपील)/CIT(A), 4. आयकर आयुƅ/CIT, 5. िवभागीय Ůितिनिध/DR & 6. गाडŊ फाईल/GF.