ACIT, Dehradun V. M/s Uttarakhand Peyjal Sansadhan Vikas, Dehradun

ITA 2291/DEL/2009

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 5596 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-01-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 20-01-2010
• Assessment Year: 2006-2007
• Appeal Filed On: 27-05-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V K TIWARI
• Assessee Lawyers: O P SAPRA; MOHI T GARG
• Keywords: Capital receipt

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : H : NEW DELHI BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI K.G. BANSAL, ACCOUNTANT MEMBER ITA NO. 2291/DEL/2009 ASSESSMENT YEAR : 2006-07 ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE-2, DEHRADUN. VS. M/S UTTARAKHAND PEYJAL SANSADHAN VIKAS EVAM NIRMAN NIGAM, 11, MOHINI ROAD, DEHRADUN. PAN : AAALU0118M (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI O.P. SAPRA, ADVOCATE & SHRI MOHI T GARG, CA REVENUE BY : SHRI V.K. TIWARI, CIT, DR ORDER PER : I.P. BANSAL, JUDICIAL MEMBER THIS IS AN APPEAL FILED BY THE REVENUE. IT IS DIRE CTED AGAINST THE ORDER OF THE CIT (A) DATED 27 TH FEBRUARY, 2009 FOR ASSESSMENT YEAR 2006-07. GROUN D OF APPEAL READS AS UNDER:- THAT THE LD. CIT (A)-1, DEHRADUN HAS ERRED IN LAW AND ON FACTS BY DELETING THE ADDITION OF RS.1,66,84,11,985 /- IN RESPECT OF GRANT RECEIVED DURING THE YEAR AND DIRECTLY TAKE N TO THE BALANCE SHEET TREATING THE SAME AS CAPITAL RECEIPT BECAUSE, THE EVIDENCE PRODUCED BY THE ASSESSEE DURING APPELL ATE PROCEEDINGS DOES NOT CLARIFY WHETHER GRANT IS REVEN UE OR CAPITAL NATURE 2. THE ASSESSEE IN THE PRESENT CASE IS A PUBLIC SEC TOR UNDERTAKING OWNED BY STATE GOVERNMENT. AT THE OUTSET, LD. AR OF THE ASSESSEE SUBMITTED BEFORE US A COPY OF THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF OIL AND NATURAL ITA NO.2291/DEL/2009 2 GAS CORPORATION LTD. VS. CITY & INDUSTRIES DEVELOPM ENT CORPORATION, MAHARASHTRA AND OTHERS (2009) 13 ITJ 334 (SC). A C OPY WAS ALSO GIVEN TO LD. DR IN WHICH THE HEAD NOTES AND THE HELD PORTION WA S DESCRIBED AS UNDER:- HEAD NOTES: APPEAL APPROVAL OF COMMITTEE OF DISPUTES (COD) APPELLANT WAS CENTRAL GOVT. ENTITY AND DEFENDANT WAS STATE EN TITY WHETHER BEFORE FILING APPEAL OR WRIT, APPROVAL OF COD WAS R EQUIRED HELD COMMITTEE OF DISPUTES SHALL BE CONSTITUTED TO APP ROVE LITIGATION BETWEEN CENTRAL GOVERNMENT AND STATE GOVERNMENT ENT ITIES APPROVAL OF SUCH COMMITTEE SHALL BE REQUIRED. HELD VARIOUS DEPARTMENTS OF THE GOVERNMENT ARE ITS LIMBS AND, THEREFORE, THEY MUST ACT IN COORDINATION AND NOT IN CONFRONTATION. FILING OF A WRIT PETITION BY ONE DEPARTMENT AGAINST THE OTHER BY INVOKING THE EXTRAORDINARY JURISDICTION OF THE HIGH COURT IS NOT ONLY AGAINST THE PROPRIETY AND POLITY AS IT SMACKS OF I NDISCIPLINE BUT IS ALSO CONTRARY TO THE BASIC CONCEPT OF LAW WHICH REQ UIRES THAT FOR SUING OR BEING SUED, THERE MUST BE EITHER A NATURAL OR A JURISTIC PERSON. THE STATES/UNION OF INDIA MUST EVOLVE A ME CHANISM TO SET AT REST ALL INTERDEPARTMENTAL CONTROVERSIES AT THE LEVEL OF THE GOVERNMENT AND SUCH MATTERS SHOULD NOT BE CARRIED T O A COURT OF LAW FOR RESOLUTION OF THE CONTROVERSY. COMMITTEES SHOULD BE FORMED TO ENSURE THAT NO LITIGATION COMES TO COURT OR TO A TRIBUNAL WITHOUT THE MATTER HAVING BEEN FIRST EXAMINED BY THE COMMIT TEE AND ITS CLEARANCE FOR LITIGATION (IN PARA 7). CONSIDERING THE NATURE OF THE CONTROVERSY WHICH IS A RECURRING FEATURE WE DIRECT THAT A COMMITTEE BE FORMED TO SOR T OUT THE DIFFERENCES BETWEEN THE CENTRAL GOVERNMENT AND THE STATE GOVERNMENT ENTITIES. THE COMPOSITION OF SUCH COMMI TTEE SHALL BE AS FOLLOWS:- (1) THE CABINET SECRETARY OF THE UNION; (2) CHIEF SECRETARY OF THE STATE; (3) SECRETARIES OF THE CONCERNED DEPARTMENTS O F UNION AND THE STATE; AND (4) CHIEF EXECUTIVE OFFICER OF THE CONCERNED U NDERTAKINGS. AS THE MATTER IS PENDING SINCE LONG, WE DIRECT THAT THE COMMITTEE SHALL BE CONSTITUTED FORTHWITH TO TAKE A DECISION W ITHIN 4 MONTHS FROM THE DATE OF RECEIPT OF COPY OF JUDGMENT (IN PA RA 10 & 11) ITA NO.2291/DEL/2009 3 3. IT WAS SUBMITTED THAT THIS DECISION OF HONBLE S UPREME COURT IS DATED 20 TH JULY, 2007 AND PERIOD OF FOUR MONTHS AS GIVEN IN T HE DECISION HAS EXPIRED LONG BACK. THUS, IT WAS SUBMITTED THAT DEPARTMENTAL APPE AL COULD NOT BE HEARD AND SHOULD BE DISMISSED IN THE ABSENCE OF COD APPROVAL. 4. ON THE OTHER HAND, LD. DR SUBMITTED THAT PERMISS ION OF COD IS NOT REQUIRED TO BE OBTAINED WHERE ONE OF THE SIDES REPR ESENT A PUBLIC SECTOR UNDERTAKING OWNED BY STATE GOVERNMENT. HOWEVER, HE SUBMITTED THAT THE DEPARTMENT IS SEEKING CLARIFICATION FROM GOVERNMENT AND FURTHER TIME MAY BE ALLOWED. 5. AFTER CONSIDERING THE SUBMISSIONS OF BOTH THE PA RTIES, WE ARE OF THE OPINION THAT DEPARTMENTAL APPEAL CANNOT BE KEPT PEN DING FOR A LONG TIME AT THE REQUEST OF THE REVENUE FOR SEEKING SUCH CLARIFICATI ON AS EARLIER ALSO THIS APPEAL WAS ADJOURNED ON VARIOUS DATES. THEREFORE, WE DISMI SS THE PRESENT APPEAL FILED BY THE DEPARTMENT WITH A LIBERTY GIVEN TO THE DEPAR TMENT TO SEEK REVIVAL OF THIS APPEAL IF DEPARTMENT IS ABLE TO SATISFY THE TRIBUNA L THAT NO SUCH COD APPROVAL IS REQUIRED DESPITE THE AFOREMENTIONED DECISION OF HON BLE SUPREME COURT AND ALSO ON THE GROUND THAT COD APPROVAL AS DESCRIBED IN THE AFOREMENTIONED ORDER HAS BEEN OBTAINED. WITH THESE OBSERVATIONS, WE DISMISS THE APPEAL FILED BY THE REVENUE. 6. IN THE RESULT, THE APPEAL FILED BY THE DEPARTMEN T IS DISMISSED IN THE MANNER AFORESAID. 7. THE ORDER PRONOUNCED IN THE OPEN COURT ON 22.01. 2010. SD/- SD/- [K.G. BANSAL] [I.P. BANSAL] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED, 22.01.2010. DK ITA NO.2291/DEL/2009 4 COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT, DELHI BENCHES