DCIT, Cir-11(1), Kolkata, Kolkata V. M/s Haldia Petrochemicals Ltd., Kolkata

ITA 2044/KOL/2016

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 2057 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 10 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-09-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2004-2005
• Appeal Filed On: 24-10-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ROBIN CHOUDHUR Y
• Keywords: Depreciation; Maximum Marginal Rate; TDS
• Section: 143(3)

Judgement Text

, C , IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH C KOLKATA BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND DR. A.L. SAINI, ACCOUNTANT MEMBER ITA NO. 2044 / KOL / 2016 ASSESSMENT YEAR :2004-05 DCIT, CIRCLE-11(1) P-7, CHOWRINGHEE SQUARE, KOLKTA-69 V/S . M/S HALDIA PETROCHEMICALS LTD., BENGAL ECO INTELLIPENT PARK(TECHNA), TOWER-I, SALT LAKE CITY, SECTOR-V, 3 RD FLOOR, KOLKAT-700 091 [ PAN NO.AAACH 7360 R ] /APPELLANT .. / RESPONDENT /BY APPELLANT SHRI ROBIN CHOUDHURY, ADDL. CIT-DR /BY RESPONDENT SHRI HARAKMAL CHAKRAVORTY, SENIOR GENERAL MANAGER, FINANCE ACCOUNTS /DATE OF HEARING 28-06-2019 /DATE OF PRONOUNCEMENT 06-09-2019 / O R D E R PER S.S.GODARA, JUDICIAL MEMBER:- THIS REVENUES APPEAL FOR ASSESSMENT YEAR 2004-05 A RISES AGAINST THE COMMISSIONER OF INCOME TAX (APPEALS)-16 KOLKATAS O RDER DATED 24.08.2018 PASSED IN CASE NO.398/CIT(A)-16/KOL/2014-15/C-11(1)/KOL, I NVOLVING PROCEEDINGS U/S 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. HEARD BOTH THE PARTIES. THE ASSESSEES DETAILED PA PER BOOK INDICATES ` RUNNING INTO 137 PAGES STANDS PERUSED. 2. THE REVENUES FIST GRIEVANCE IS THAT THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN REVERSING THE ASSESSING OFFICERS ACTION DISALLO WING ASSESSEES PAYMENT MADE TO M/S NUOVO PIGNONE AMOUNTING TO 1,82,20,420/-. WE FIND THAT THE CIT(A) HOLDS THE IMPUGNED DISALLOWANCE TO BE AN INSTANCE OF DOUBLE A DDITION. THE REVENUES CASE ON THE OTHER HAND DISPUTES CORRECTNESS OF THE CIT(A)S FINDINGS TO THIS EFFECT. WE SEE NO ITA NO.2044/KOL/2016 A.Y.2004-05 DCIT CIR-11(1), KOL. VS. M/S HALDIA P ETROCHEMICALS LTD. PAGE 2 MERIT IN REVENUES INSTANT GRIEVANCE. CASE FILE SUG GEST THAT THE ASSESSEE HAD CREATED PROVISION OF 1,91,41,757/- QUA THE VERY PAYEE IN PRECEDING ASSESSMENT YEAR 2003-04. LEARNED AUTHORIZED REPRESENTATIVE TAK ES US TO PAGE 28 IN THE PAPER BOOK CONTAINING THE CORRESPONDENCE ASSESSMENT ORDER FRAMED IN THE SAID EARLIER ASSESSMENT YEAR DISALLOWING THE CLAIM OF 1,91,41,757/- TO THIS EFFECT. THE ASSESSEE THEN RAISED THE VERY CLAIM IN THE IMPUGNED ASSESSME NT YEAR AFTER TDS DEDUCTION. IT IS IN THIS BACKDROP OF FACTS THAT THE CIT(A) HAS HE LD THE IMPUGNED DISALLOWANCE TO BE A CASE OF DOUBLE ADDITION. WE MAKE IT CLEAR THAT TH E ASSESSEE HAD ITSELF NOT PRESSED ITS GRIEVANCE REGARDING BALANCE DISALLOWANCE AMOUNT OF 9,21,337/- ( 1,91,41,757 1,82,20,420 ) BEFORE THE CIT(A). WE ACCORDINGLY AFFIRM THE CIT( A)S FINDINGS UNDER CHALLENGE ON THIS CLINCHING ASPECT. 3. THE REVENUES SECOND SUBSTANTIVE GROUND SEEKS TO REVIVE PRIOR PERIOD OPERATION AND MAINTENANCE AND DISALLOWANCE OF 34,20,986/- AS OIL FUEL AMOUNT CLAIMS OF 65,96,955/- STATED TO BE PERTAINING TO THE FINANCIA L YEAR 2001-02. SUFFICE TO SAY, THERE IS NO DISPUTE THAT THE ASSESSEE HAS B EEN ASSESSED AT THE MAXIMUM MARGINAL RATE IN THESE TWO ASSESSMENT YEAR(S). HON' BLE GUJARAT HIGH COURTS DECISION IN PCIT VS. ADANI ENTERPRISES IN TAX APPEAL NO. 566/2016 HOLDS THAT SUCH A PRIOR PERIOD EXPENDITURE DISALLOWANCE IN A CASE OF MAXIMU M MARGINAL RELATING IN THE TWO ASSESSMENT YEAR(S) IS A REVENUE INSTANCE AND THEREF ORE, THE REVENUES GRIEVANCE HAS NO MERIT. WE AFFIRM THE CIT(A)S FINDINGS FOR T HIS PRECISE REASON ALONE. 4. THE REVENUES THIRD SUBSTANTIVE GRIEVANCE PLEADS THAT THE CIT(A) HAS ERRED IN ALLOWING PRIOR PERIOD R & D CESS OF 34,02,525/- EVEN IN ABSENCE OF CORROBORATING DETAILS. WE NOTICE HEREIN AS WELL FORM A PERUSAL OF ASSESSEES TAX AUDIT REPORT ANNEXURE-A (CLAUSE-21(I)A) IN ANNEXURE-7 AS WELL AS ANNEXURE-8 THAT THE SAME INDICATE ITS UNPAID R&D FOR FINANCIAL YEAR(S) 2001- 02 TO 2003-04. LEARNED DEPARTMENTAL REPRESENTATIVE FAILS TO REBUT THE CLIN CHING FACT THAT THE CORRESPONDING FIGURE(S) INVOLVED IN ASSESSMENT YEAR(S) 2001-02 AN D 2002-03 RELEVANT TO THE ASSESSMENT YEAR(S) 2002-03 AND 2003-04 READ AMOUNTS OF 1209617 AND 21,92,854/- RELEVANT TO THE IMPUGNED ASSESSMENT YEA R. ALL THESE CLINCHING FACTS HAVES GONE UNREBUTTED FROM THE REVENUES SIDE. WE T HEREFORE HOLD THAT THE CIT(A) HAS RIGHTLY TREATED THE IMPUGNED DISALLOWANCE AS AN INSTANCE OF DOUBLE ADDITION. ITA NO.2044/KOL/2016 A.Y.2004-05 DCIT CIR-11(1), KOL. VS. M/S HALDIA P ETROCHEMICALS LTD. PAGE 3 5. LASTLY COMES THE REVENUES SIXTH SUBSTANTIVE GRI EVANCE SEEKING TO REVIVE EXCESS DEPRECIATION AMOUNT OF 90,87,890/- DISALLOWED BY THE ASSESSING OFFICER AND REVERSED IN THE CIT(A)S ORDER. CASE FILE SUGGESTS THAT THE ASSESSEE HAD LODGED A DAMAGES CLAIM REGARDING ITS GENERATOR (PLANT & MACH INERY) BEFORE THE INSURER ON 05.04.2003. THE SAID INSURANCE COMPANY PAID AD HOC AMOUNT OF 325 CRORES AGAINST THE SAME IN SEPTEMBER, 2003. THE ASSESSEE THEREFORE CHOSE TO CREDIT THE IMPUGNED CLAIM IN THE ASSET BLOCK IN THE RELEVANT PREVIOUS Y EAR WHICH WAS LESS THAN 180 DAYS AFTER CRYSTALLIZATION OF ITS DAMAGE CLAIM IN SEPTEM BER, 2003 AND CALCULATED DEPRECIATION ACCORDINGLY. IT THEREFORE CHOSE TO CLA IM THE IMPUGNED DEPRECIATION FOR 180 DAYS ONLY IN THE RELEVANT FIXED ASSET BLOCK. WE CONCLUDE IN THESE PECULIAR FACT THAT CIT(A) HAS RIGHTLY REVERSED ASSESSMENT FINDING S DISALLOWING THE DEPRECIATION CLAIM ( EXCESS ) OF 90,87,890/-. THE CIT(A)S FINDINGS UNDER CHALLENGE ARE UPHELD ACCORDINGLY. 6. THIS REVENUES APPEAL IS DISMISSED IN ABOVE TERM S. ORDER PRONOUNCED IN THE OPEN COURT 06/ 09/2019 SD/- SD/- ( %) (' %) ( A.L.SAINI) (S.S.GODARA) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) KOLKATA, *DKP (- 06 / 09 /201 9 / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-DCIT, CIR-11(1), P-7, CHOWRINGHEE SQUARE , KOLKATA-71 2. /RESPONDENT-M/S HALDIA PETROCHEMICALS LTD.BENGAL EC O INTELLIPENT PARK (TECHNA) TOWER-I, BLOCK- EM, PLOT NO.3,SALT LAKE CITY, SECTOR-V, 3 RD FL KOL-19 3. 3 4 / CONCERNED CIT KOLKATA 4. 4- / CIT (A) KOLKATA 5. 7 ''3, 3, / DR, ITAT, KOLKATA 6. < / GUARD FILE. BY ORDER/ , /TRUE COPY/ 3,