M/s. Hardy Exploration & Production (India) Inc, CHENNAI V. ADIT, CHENNAI

ITA 1890/CHNY/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 57988 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-02-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2008-2009
• Appeal Filed On: 23-11-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: OMKARESHWAR CHIDRA
• Assessee Lawyers: R VIJAYARAGHAVAN
• Keywords: Depreciation; Revised return; Unabsorbed depreciation
• Section: 115JB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BENCH C CHENNAI BEFORE SHRI N. S. SAINI, ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, JUDICIAL MEMBER .. I.T.A. NO. 1890/MDS/2011 ASSESSMENT YEAR : 2008-09 M/S. HARDY EXPLORATION & PRODUCTION (INDIA) INC.,FLOOR NO.5, WEST MINISTER BUILDING, 108, DR. RADHAKRISHNAN SALAI, CHENNAI-600 004. V. THE ASSISTANT DIRECTOR OF INCOME TAX, INTERNATIONAL TAXATION, CHENNAI. (PAN: AAACV2469H) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI R. VIJAYARAGHAVAN, ADVOCATE RESPONDENT BY : SHRI OMKARESHWAR CHIDRA, CIT-DR DATE OF HEARING : 16-02-2012 DATE OF PRONOUNCEMENT : 2 4/02/2012 O R D E R PER GEORGE MATHAN, JUDICIAL MEMBER : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF THE LEARNED DISPUTE RESOLUTION PANEL (DRP), CHENNAI IN F. NO. D RP/CHENNAI/SECTT./30/2011 DATED 18-08-2011 FOR THE ASSESSMENT YEAR 2008-09. I.T.A. NO.1890/MDS/2011 2 2. SHRI R. VIJAYARAGHAVAN, ADVOCATE REPRESENTED ON BEHALF OF THE ASSESSEE AND SHRI OMKARESHWAR CHIDRA, LEARNED CIT-DR REPRESE NTED ON BEHALF OF THE REVENUE. 3. IN THE ASSESSEES APPEAL, THE ASSESSEE HAS RAISE D THE FOLLOWING GROUNDS : THE GROUNDS OF APPEAL STATED HEREIN ARE WITHOUT PR EJUDICE TO ONE ANOTHER. 1. THE ORDER OF THE ASSISTANT DIRECTOR OF INCOME-T AX-I, INTERNATIONAL TAXATION, CHENNAI (AO) PASSED PUR SUANT TO THE DIRECTIONS ISSUED BY THE DISPUTE RESOLUTION PANEL (HON'BLE DRP) TO THE EXTENT PREJUDICIAL TO APPELLANT IS ERRONEOUS, BAD IN LAW AND CONTRARY TO THE FACTS AND CIRCUMSTANCES OF THE CA SE. 2. THE HON'BLE DRP AND LEARNED AO ERRED IN QUESTIO NING THE VALIDITY OF REVISED RETURN FILED BY THE APPELLANT . 3. THE HON'BLE DRP AND LEARNED AO ERRED IN COMPUTI NG BOOK PROFITS UNDER SECTION 115JB OF THE ACT WHEN THE P ROVISIONS OF SECTION 115JB OF THE ACT ARE NOT APPLICABLE TO TH E APPELLANT PURSUANT TO PRODUCTION SHARING CONTRACT (PSC) E NTERED WITH GOVERNMENT OF INDIA (GOI). 4. THE HON'BLE DRP AND LEARNED AO HAVE ERRED, IN L AW AND IN FACTS, BY HOLDING THAT DEPLETION OF CAPITALIZED D EVELOPMENT EXPENDITURE IS NOT DEPRECIATION FOR THE PURPOSE O F GIVING EFFECT TO CLAUSE (III) TO EXPLANATION (1) OF SECTION 115JB(2 ) IN COMPUTING BOOK PROFIT UNDER SECTION 115JB OF THE ACT. FURTHER, THE HON'BLE DRP AND LEARNED AO HAVE ALSO ERRED IN NOT CONSIDERING THE RULING OF CHENNAI TRIBUNAL IN THE APPELLANTS OWN CASE FOR EARLIER ASSESSMENT YEARS. I.T.A. NO.1890/MDS/2011 3 5. THE HON'BLE DRP AND LEARNED AO HAVE INCORRECTLY COMPUTED THE LOWER OF BROUGHT FORWARD LOSS AND UNABSORBED DEPRECIATION, WHICHEVER IS LESS AS PER BOOKS OF ACCOUNT WHILE C OMPUTING THE BOOK PROFIT UNDER SECTION 115JB OF THE ACT. 6. THE HON'BLE DRP AND LEARNED AO HAVE ERRED IN LA W AND IN FACT, BY ADDING BACK SITE RESTORATION COST AS AN UNASCERTAINED LIABILITY WHILE COMPUTING BOOK PROFIT UNDER SECTI ON 115JB OF THE ACT. THE HON'BLE DRP AND LEARNED AO HAVE ALSO ERRED IN NOT CONSIDERING THE RULING OF CHENNAI TRIBUNAL IN APP ELLANTS OWN CASE FOR EARLIER ASSESSMENT YEARS. 7. WITHOUT PREJUDICE TO THE ABOVE GROUNDS, THE HON 'BLE DRP AND LEARNED AO HAVE ERRED IN LEVYING INTEREST UND ER SECTIN234C OF THE ACT ON ASSESSED INCOME AND NOT ON THE RETURNE D INCOME. 8. WITHOUT PREJUDICE TO THE ABOVE GROUNDS, THE HON 'BLE DRP AND LEARNED AO HAVE ERRED IN LEVYING INTEREST UND ER SECTIN234B OF THE ACT. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, VARY, OM IT, AMEND OR DELETE ONE OR MORE OF THE ABOVE GROUNDS OF APPEAL AT ANY TIME BEFORE, OR AT THE TIME OF, HEARING OF THE APPEAL, SO AS TO ENABLE THE ITAT TO DECIDE THIS APPEAL ACCORDING TO LAW. 4. IT WAS SUBMITTED BY THE LEARNED AUTHORISED REPRE SENTATIVE THAT IN REGARD TO GROUNDS 1 & 2 THE GROUNDS WERE GENERAL IN NATURE . IN REGARD TO GROUND NO.3 IN THE ASSESSEES APPEAL IT WAS SUBMITTED THAT THE ASSESSEE WAS NOT PRESSING THE SAID GROUND. CONSEQUENTLY, GROUNDS 1, 2 & 3 OF TH E ASSESSEES APPEAL STAND DISMISSED. I.T.A. NO.1890/MDS/2011 4 5. IN REGARD TO GROUND NO.4 IT WAS SUBMITTED BY THE LEARNED AUTHORISED REPRESENTATIVE THAT THE ISSUE WAS SQUARELY COVERED BY THE DECISION OF THE CO- ORDINATE BENCH OF THIS TRIBUNAL IN THE ASSESSEES O WN CASE DATED 09-06-2011 IN ITA NOS. 2154, 2155, 802, 803 & 1077/MDS/2010 FOR T HE ASSESSMENT YEARS 2002-03, 2003-04, 2005-06 AND 2006-07 WHEREIN THE I SSUE HAS BEEN RESTORED TO THE FILE OF THE ASSESSING OFFICER. IT WAS THE SUBM ISSION THAT HE HAD NO OBJECTION IF THE ISSUE IN THIS GROUND WAS ALSO RESTORED TO TH E FILE OF THE ASSESSING OFFICER ON IDENTICAL DIRECTIONS AS IN THE ASSESSEES OWN CASE FOR THE ASSESSMENT YEARS 2002- 03, 2003-04, 2005-06 AND 2006-07, MENTIONED EARLIER . 6. IN REPLY, THE LEARNED DR FAIRLY AGREED THAT THE ISSUE MAY BE RESTORED IN LINE WITH THE DIRECTIONS OF THE CO-ORDINATE BENCH O F THIS TRIBUNAL IN THE ASSESSEES OWN CASE. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PER USAL OF THE ORDER OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL SHOWS THAT THIS ISSUE HAS BEEN DISCUSSED AND RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR R E-ADJUDICATION VIDE PARA 13 OF THE SAID ORDER AT PAGES 49 TO 52. IN THE CIRCUMSTA NCES, RESPECTFULLY FOLLOWING THE DECISION OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE ASSESSEES OWN CASE, REFERRED TO SUPRA, THE ISSUE IN THIS GROUND IS REST ORED TO THE FILE OF THE ASSESSING OFFICER FOR RE-ADJUDICATION ON THE SAME DIRECTIONS AS GIVEN IN THE ASSESSEES OWN CASE IN ITA NOS. 2154, 2155, 802, 803 & 1077/MDS/20 10 DATED 09-06-2011. I.T.A. NO.1890/MDS/2011 5 8. IN REGARD TO GROUND NO.5 IT WAS FAIRLY AGREED BY BOTH THE SIDES THAT THE ISSUE WAS CONSEQUENTIAL TO THE DECISION IN REGARD T O GROUND NO.4 WHICH HAS BEEN RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR R E-ADJUDICATION. IN THE CIRCUMSTANCES, THE ISSUE IN GROUND NO.5 IS ALSO RES TORED TO THE FILE OF THE ASSESSING OFFICER FOR RE-ADJUDICATION AND GRANTING THE CONSEQUENTIAL BENEFIT, IF ANY. 9. IN REGARD TO GROUND NO.6, THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED THAT THE ISSUE WAS SQUARELY COVERED BY THE DECISION OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE ASSESSEES OWN CASE, REFERRED TO SUPRA, WHEREIN VIDE PARA 14 THE SITE RESTORATION EXPENDITURE HAS BEEN HELD TO B E AN ASCERTAINED LIABILITY AND IS TO BE CONSIDERED AS AN ALLOWABLE EXPENDITURE WHEN C OMPUTING THE BOOK PROFIT UNDER SEC. 115JB OF THE ACT. 10. IN REPLY, THE LEARNED DR VEHEMENTLY SUPPORTED T HE ORDERS OF THE LEARNED DRP AND THE ASSESSING OFFICER. 11. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. AS IT IS NOTICED THAT THE ISSUE IN THIS GROUND IS SQUARELY COVERED BY THE DECISION OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE ASSESSEES OWN CASE, RESPECTFULLY F OLLOWING THE DECISION OF THE CO- ORDINATE BENCH OF THIS TRIBUNAL, THE ASSESSING OFFI CER IS DIRECTED TO GRANT THE ASSESSEE THE ALLOWANCE OF EXPENDITURE BEING THE SIT E RESTORATION EXPENDITURE WHEN COMPUTING THE BOOK PROFITS U/S 115J B OF THE A CT. I.T.A. NO.1890/MDS/2011 6 12. NO OTHER GROUNDS HAVE BEEN SERIOUSLY CONTESTED. CONSEQUENTLY, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATIS TICAL PURPOSES. 13. THE ORDER WAS PRONOUNCED IN THE COURT ON 24/02/ 2012. SD/- SD/- (N. S. SAINI) (GEORGE MATHAN) ACCOUNTANT MEMBER JUDICIAL MEMBER CHENNAI, DATED THE 24 TH FEBRUARY, 2012. H. COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE