ITO 26(2)(5), MUMBAI V. RAVINDER SINGH LAMBA, MUMBAI

ITA 1541/MUM/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 9880 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-03-2018
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2009-2010
• Appeal Filed On: 18-03-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ABHIJIT PATANKAR
• Keywords: Depreciation; Period of limitation; Capital receipt; Revised return
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL J BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBER AND SHRI MANOJ KUMAR AGGARWAL , ACCOUNTANT MEMBER ITA NO . 1541 /MUM. /2016 ( ASSESSMENT YEAR : 2011 12 ) DY. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 3(2) RANGE 3, MUMBAI . APPELLANT V/S M/S. JSW STEEL LTD. (FORMERLY M/S. ISPAT INDUSTRIES LTD.) JSW CENTRE, BANDRA KURLA COMPLEX BANDRA (E), MUMBAI 400 051 PAN AAACJ4323N . RESPONDENT ASSESSE E BY : SHR I RAKESH JOSHI REVENUE BY : SHR I ABHIJIT PATANKAR DATE OF HEARING 01.03.2018 DATE OF ORDER 07.03.2018 O R D E R PER SAKTIJIT DEY, J.M. THIS IS AN APPEAL BY THE REVENUE DIRECTED AGAINST ORDER DATED 18 TH DECEMBER 2015, PASSED BY THE LEARNED COMMISSIONER (APPEALS) 51, MUMBAI, FOR THE ASSESSMENT YEAR 2011 12. 2 . THE REGISTRY HAS POINTED OUT A DELAY OF 656 DAYS IN FILING THE PRESENT APPEAL. THE LEARNED DEPARTMENTAL REPRESENTATIVE DRAWING OUR ATTENTION TO THE AUTHORISATION MEMO OF THE PRINCIPAL CIT, CENTRAL 2, MUMBAI, SUBMITTED THAT THE DATE OF COMMUNICATION OF THE APPEAL ORDER 2 M/S. JSW STEEL LTD. IN COL. NO.9 OF FORM NO.36, HAS BEEN WRONGLY MENTIONED AS 31 ST MARCH 2014, INSTEAD OF 20 TH JANUARY 2016, WHICH HAS BEEN CORRECTLY STATE D IN THE AUTHORISATION MEMO. THEREFORE, THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE APPEAL HAVING BEEN FILED ON 16 TH MARCH 2016, IS WITHIN LIMITATION PROVIDED UNDER THE STATUTE. 3 . AFTER PERUSING THE MATERIAL ON RECORD, WE AGREE WITH THE SUBMI SSIONS OF THE LEARNED DEPARTMENTAL REPRESENTATIVE THAT THE DATE OF COMMUNICATION OF APPEAL ORDER HAS BEEN WRONGLY MENTIONED AS 31 ST MARCH 2014, IN THE APPEAL MEMO. THIS IS VERY MUCH CLEAR FROM THE FACT THAT THE IMPUGNED APPEAL ORDER WAS PASSED BY THE LEARNED COMMISSIONER (APPEALS) ON 18 TH DECEMBER 2015, AND AS PER AUTHORISATION MEMO OF THE PRINCIPAL CIT, THE APPEAL ORDER WAS SERVED ON THE DEPARTMENT ON 20 TH JANUARY 2016. IN THE AFORESAID VIEW OF THE MATTER, THE INSTANT APPEAL HAVING BEEN FILED BY THE DEPARTMENT WITHIN THE PERIOD OF LIMITATION , THE DELAY POINTED OUT BY TH E REGISTRY IS IGNORED. 4 . THE GROUNDS RAISED BY THE REVENUE ARE AS U NDER: I ) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED COMMISSIONER (APPEALS) ERRED IN HOLDING THAT GAIN ON PRE PAYMENT OF DEFERRED VAT / SALES TAX ON NET PRESENT VALUE (NPV) BASIS AS CAPITAL RECEIPT INSTEAD OF REVENUE RECEIPT. II ) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED COMMISSIONER (APPEALS) ERRED IN IGNORING THAT THE ADDITION WAS MADE AS CESSATION OF VAT LIABILITY U/S 41(1) IN M/S. SULZER INDIA LTD., WHEREAS IT WAS ADDED A REVENUE RECEIPT IN THE PRESENT CAS E . 3 M/S. JSW STEEL LTD. 5 . BRIEF FACTS ARE, THE ASSESSEE A COMPANY IS ENGAGED IN MANUFACTURE AND SALE OF IRON & STEEL PRODUCTS. FOR THE ASSESSMENT YEAR UNDER DISPUTE, THE ASSESSEE FILED ITS RETURN OF INCOME ON 29 TH SEPTEMBER 2011, DECLARING LOSS OF ` 1098,47,11,129. S UBSEQUENTLY, ASSESSEE FILED A REVISED RETURN OF INCOME ON 29 TH MARCH 2012, SHOWING LOSS AT ` 1090,99,86,534. ASSESSMENT IN CASE OF ASSESSEE WAS COMPLETED UNDER SECTION 143(3) OF THE ACT VIDE ORDER DATED 28 TH FEBRUARY 2013, DETERMINING TOTAL INCOME AT ` 91 CRORE AFTER DISALLOWING THE LOSS CLAIMED BY THE ASSESSEE. BEING AGGRIEVED OF THE ASSESSMENT ORDER SO PASSED, THE ASSESSEE PREFERRED APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. THE COMMISSIONER (APPEALS) DISPOSED OFF THE APPEAL FILED BY THE ASSESSEE BY DIR ECTING THE ASSESSING OFFICER TO EXAMINE ASSESSEES CLAIM OF CARRY FORWARD OF UNABSORBED LOSS AND DEPRECIATION OF EARLIER YEARS AS PER LAW. IN PURSUANCE TO THE DIRECTIONS OF THE FIRST APPELLATE AUTHORITY, THE ASSESSING OFFICER EXAMINED THE ISSUE AND IN THE ORDER PASSED GIVING EFFECT TO THE ORDER DATED 31 ST MARCH 2014, OF THE COMMISSIONER (APPEALS) THE ASSESSING OFFICER DETERMINED THE LOSS AT ` 966,02,61,142. SUCH REVISION IN LOSS CLAIMED BY THE ASSESSEE WAS ON ACCOUNT OF DISALLOWANCE OF MARKED TO MARKET LOSS AMOUNTING TO ` 13,34,25,573 AND PRE PAYMENT OF SALES TAX AMOUNTING TO ` 127,71,96,656. SO FAR AS PRE PAYMENT OF SALES TAX IS CONCERNED, THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAS CREDITED AN AMOUNT OF ` 127,71,96,656 TO THE PROFIT & LOSS ACCOUNT ON ACCOUNT 4 M/S. JSW STEEL LTD. OF GAIN ON PRE PAYMENT OF DEFERRED VAT / SALES TAX ON NPV BASIS. HOWEVER, THE ASSESSEE HAS TREATED THE AMOUNT IN QUESTION AS A CAPITAL RECEIPT. IN THIS CONTEXT, THE ASSESSEE REFERRED TO THE DECISION OF THE TRIBUNAL, MUMBAI, SPECIAL BENCH, IN CASE OF SULZER INDIA LTD. V/S JCIT, [2010] TIOL 670. THE ASSESSING OFFICER, HOWEVER, DID NOT ACCEPT THE CLAIM OF THE ASSESSEE ON THE REASONING THAT IN ASSESSMENT YEAR 2010 11, SIMILAR CLAIM MADE BY THE ASSESSEE WAS DISALLOWED AND FURTHER , DEPART MENT HAS FILED APPEAL AGAINST THE DECISION OF THE TRIBUNAL IN CASE OF SULZER INDIA LTD. (SUPRA). BEING AGGRIEVED WITH THE AFORESAID DECISION OF THE ASSESSING OFFICER, THE ASSESSEE PREFERRED APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 6 . THE LEARNED COMMISS IONER (APPEALS) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND NOTICING THAT THE DECISION OF THE TRIBUNAL, MUMBAI SPECIAL BENCH IN SULZER INDIA LTD. (SUPRA), IN THE MEANWHILE, HAS BEEN CONFIRMED BY THE HON'BLE JURISDICTIONAL HIGH COURT IN CIT V/S SU LZER INDIA LTD., [2014] 369 ITR 717 (BOM.), DIRECTED THE ASSESSING OFFICER TO DELETE THE ADDITION. 7 . WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED MATERIAL ON RECORD. LEARNED COUNSELS APPEARING FOR BOTH THE PARTIES HAVE AGREED BEFORE US THAT THE ISSUE IN DISP UTE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT IN SULZER INDIA LTD. (SUPRA). HAVING PERUSED THE AFORESAID DECISION OF THE HON'BLE 5 M/S. JSW STEEL LTD. JURISDICTIONAL HIGH COURT, WE FIND THAT WHILE DECIDING THE DEPARTMENTS APP EAL, THE HON'BLE JURISDICTIONAL HIGH COURT ON EXAMINING THE NATURE AND CHARACTER OF THE GAIN ACCRUING TO THE ASSESSEE ON PRE MATURE PAYMENT OF DEFERRED SALES TAX / VAT ON NET PRESENT VALUE (NPV) HAS APPROVED THE DECISION OF THE TRIBUNAL, MUMBAI, SPECIAL BENCH, HOLDING SUCH RECEIPT TO BE IN THE NATURE OF A CAPITAL RECEIPT, HENCE, CANNOT BE TREATED AS REMISSION / CESSATION OF TRADING LIABILITY IN TERMS OF SECTION 41(1) OF THE ACT. IN VIEW OF THE BINDING DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT AS REFERRED TO ABOVE, WE FIND NOT REASON TO INTERFERE WITH THE ORDER OF THE LEARNED COMMISSIONER (APPEALS) ON THIS ISSUE. GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 8 . IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT O N 07.03.2018 SD/ - MANOJ KUMAR AGGARWAL ACCOUNTANT MEMBER SD/ - SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED : 07.03.2018 COPY OF THE ORDER FORWARDED TO : ( 1 ) THE ASSESSEE; ( 2 ) THE REVENUE; ( 3 ) THE CIT(A); ( 4 ) THE CIT, MUMBAI CITY CONCERNED; ( 5 ) THE DR, ITAT, MUMBAI; ( 6 ) GUARD FILE . TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY (DY./ASSTT. REGISTRAR) ITAT, MUMBAI