The Deputy Commissioner of Income Tax Circle-1(1)(2), Bangalore V. M/s Bangalore Electricity Supply Co.Ltd , Bangalore

ITA 211/BANG/2018

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 4666 (ITAT-BANGALORE)
• Duration Of Justice: 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-06-2018
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 23-01-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: C H SUNDAR RAO
• Keywords: Revised return
• Section: 143(3); 115JB; 154; 2; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH A BEFORE S HRI N.V. VASUDEVAN , JUDICIAL MEMBER AND SHRI INTURI RAMA RAO , ACCOUNTANT MEMBER I.T . A. NO S . 211 & 212 /BANG/20 18 (ASSESSMENT YEAR : 20 12 - 13 ) DY. COMMISSIONER OF INCOME TAX, CIRCLE 1(1 )(2), BANGALORE. . APPELLANT. VS. M/S. BANGALORE ELECTRICITY SUPPLY CO. LTD., CORPORATE OFFICE, 4 TH FLOOR, K.R. CIRCLE, BANGALORE - 560 001 . .. RESPONDENT. APPELLANT BY : SHRI C. H. SUNDAR RAO, CIT (D.R) R E SPONDENT BY : SHRI V. SRIDHAR, CA DATE OF H EARING : 24.05.2018. DATE OF P RONOUNCEMENT : 0 8 .06 .201 8 . O R D E R PER SHRI INTURI RAMA RAO , A .M . : ITA NO.211/BANG/2018 THIS IS AN APPEAL FILED BY THE REVENUE COMPANY DIRECTED AGAINST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 1 , BANGALORE DT.26.09.2017 FOR THE ASSESSMENT YEAR 2012 - 13. 2 IT A NO S . 211 & 212 /BANG/201 8 2. THE REVENUE RAISED THE FOLLOWING GROUNDS OF APPEAL : 3 IT A NO S . 211 & 212 /BANG/201 8 3. BRIEFLY THE FACTS OF THE CASE ARE THAT THE RESPONDENT - ASSESSEE IS A COMPANY OF KARNATAKA STATE GOVERNMENT UNDERTAKING ENGAGED IN THE BUSINESS OF DISTRIBUTION OF POWER IN KARNATAKA STATE. THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2012 - 13 WAS FILED ON 28.09.2012. SUBSEQUENTLY, THE ASSESSEE FILED REVISED RETURN ON 12.3.2013. AGAINST THE SAID RETURN OF INCOME, THE ASSESSMENT WAS COMPLETED BY THE ASSESSING OFFICER UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT 'THE ACT') VIDE ORDER DT.24.2.2015 AND NIL INCOME. HOWEVER WHILE COMPLETING THE ASSESSMENT UNDER SECTION 115J B OF THE ACT, THE ASSESSING OFFICER DISALLOWED TH E PROVISION MADE IN THE EROSION IN THE VALUE OF FIXED ASSETS OF RS.3,73,02,330. BEING AGGRIEVED BY THE ASSESSMENT ORDER, AN APPEAL PREFERRED BEFORE THE LEARNED CIT (APPEALS), THE LEARNED CIT (APPEALS) FOLLOWING THE ORDER OF THIS TRIBUNAL IN ASSESSEE'S OWN CASE FOR THE ASSESSMENT YEARS 2003 - 04 AND 2008 - 09 HELD THAT THE ADDITION TO BOOK PROFIT ON ACCOUNT OF THESE ACCOUNTS CANNOT BE HELD TO BE A PROVISION AND ACCORDINGLY DELETED. BEING AGGRIEVED THE REVENUE IS IN APPEAL BEFORE US. 4 IT A NO S . 211 & 212 /BANG/201 8 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT APPEAL IS NO LONGER RES INTEGRA AS THE PROVISION MADE IN THE VALUE OF ASSETS CAN BE ADDED TO THE BOOK PROFIT FOR THE PURPOSE OF COMPUTING THE TAX LIABILITY UNDER SECTION 11 5JB OF THE ACT BY VIRTUE OF PROVISIONS IN CLAUSE (I) OF EXPLANATION (1) TO SECTION 115JB OF THE ACT . IT CLEARLY MANDATES THAT ANY PROVISION MADE FOR DIMINUTION OF VALUE OF THE ASSETS WHICH IS DEBITED TO P&L ACCOUNT SHOULD BE ADDED BACK TO THE BOOK PROFIT S FOR THE PURPOSE OF COMPUTING THE TAX LIABILITY. FURTHERMORE THE HON'BLE KARNATAKA HIGH COURT IN ASSESSEE'S OWN CASE FOR THE ASSESSMENT YEAR 2003 - 04 FOLLOWING ITS EARLIER DECISION IN THE CASE OF CIT VS . WEIZMANN HOMES LTD. REPORTED IN 357 ITR 74 (KAR ) AS HELD THAT THIS KIND OF PROVISION SHOULD BE ADDED BACK TO THE P&L ACCOUNT. THUS THE LEARNED CIT (APPEALS) OUGHT NOT HAVE GRANTED THE RELIEF BLINDLY PLACING RELIANCE ON THE ORDERS OF TRIBUNAL FOR EARLIER YEAR S WITHOUT EXAMINING THE RELEVANT PROVISION O F STATUTE. THUS THE APPEAL FILED BY THE REVENUE IS ALLOWED. ITA NO.212/BANG/2018 5 . THE REVENUE RAISED THE FOLLOWING GROUNDS OF APPEAL : 5 IT A NO S . 211 & 212 /BANG/201 8 6 . THIS IS AN APPEAL FILED BY THE REVENUE DIRECTED AGAINST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS), BANGALORE DT.26.09.2017 PASSED AGAINST THE ORDER UNDER SECTION 154 DT.24.3.2015. 7 . BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSESSMENT FOR THE ASSESSMENT YEAR 2012 - 13 WAS COMPLETED BY THE ASSESSING OFFICER UNDER SECTION 143( 3) OF THE ACT VIDE ORDER DT.24.3.2015. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER DIRECTED THE ASSESSEE TO FILE FORM NO.29B FOR THE PURPOSE OF COMPUTING THE TAX LIABILITY UNDER SECTION 115JB OF THE ACT. THE ASSESSEE SOUGHT TIME T O FILE THE SAME. THE ASSESSING OFFICER WITHOUT CONSIDERING THE REPLY FILED BY THE ASSESSEE 6 IT A NO S . 211 & 212 /BANG/201 8 HAD PROCEEDED WITH COMPUTATION OF TAX LIABILITY UNDER SECTION 154 OF THE ACT. AGAINST THE SAID ORDER, AN APPEAL WAS PREFERRED BEFORE THE LEARNED CIT (APPEALS), WHO VIDE THE IMPUGNED ORDER HAS SET ASIDE THE ORDER UNDER SECTION 154 OF THE ACT AND DIRECTED THE ASSESSING OFFICER TO CONSIDER THE FORM 29B FILED ON 23.3.2015 AND COMPUTE THE TAX LIABILITY UNDER SECTION 115JB OF THE ACT CONSIDERING THE FORM 29B. BEING AGGRI EVED BY THE ORDER OF LEARNED CIT (APPEALS), THE REVENUE IS IN APPEAL BEFORE US. 8 . WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. SINCE THE LEARNED CIT (APPEALS) SET ASIDE THE ORDER UNDER SECTION 154 OF THE ACT TO COMPUTE THE TAX LIABILITY UNDER SECTION 115 JB TAKING INTO CONSIDERATION THE FORM NO.29B FILED BY THE ASSESSEE. CONSIDERING REASON FOR DELAY IN FILING THE FORM 29B BY THE ASSESSEE . WE FIND THAT THE DIRECTION OF THE LEARNED CIT (APPEALS) DOES NOT CAUSE A NY PREJUDICE TO THE REVENUE AND HENCE APPEAL FILED BY THE REVENUE IS DISMISSED. 9 . IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSED. 7 IT A NO S . 211 & 212 /BANG/201 8 9. TO SUM UP, THE REVENUE APPEAL IN ITA NO.211/BANG/2018 IS ALLOWED AND IN ITA NO.212/BANG/2018 IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 8 TH DAY OF JUNE, 201 8 . SD/ - (N.V. VASUDEVAN) JUDICIAL MEMBER SD/ - ( INTURI RAMA RAO ) ACCOUNTANT MEMBER BANGALORE, DT. 08 .06.2018. *REDDY GP COPY TO : 1 APPELLANT 4 CIT(A) 2 RESPONDENT 5 DR. ITAT, BA NGALORE 3 CIT 6 GUARD FILE SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL BANGALORE.