NISKALP ENERGY LIMITED (FORMERLY KNOWN JAS NISKALP INVESTMENT & TRADING CO. LTD), MUMBAI V. ITO 10(2)(3), MUMBAI

ITA 3243/MUM/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 48395 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-04-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2004-2005
• Appeal Filed On: 26-04-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A K NAYAK PER R K
• Assessee Lawyers: DINESH VYASSHRIBAN IYER
• Keywords: Depreciation; Retrospective amendment; Unabsorbed depreciation
• Section: 244A; 14A; 154

Judgement Text

1 ITA NO.3243/MUM/2010 IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI MUMBAI MUMBAI MUMBAI G GG G BENCH BENCH BENCH BENCH MUMBAI BENCHES, MUMBAI MUMBAI BENCHES, MUMBAI MUMBAI BENCHES, MUMBAI MUMBAI BENCHES, MUMBAI BEFORE BEFORE BEFORE BEFORE SHRI D MANMOHAN, VP & SHRI D MANMOHAN, VP & SHRI D MANMOHAN, VP & SHRI D MANMOHAN, VP & SHRI R K PANDA, AM SHRI R K PANDA, AM SHRI R K PANDA, AM SHRI R K PANDA, AM ITA NO. ITA NO. ITA NO. ITA NO. 3243/MUM/2010 3243/MUM/2010 3243/MUM/2010 3243/MUM/2010 (ASST YEAR (ASST YEAR (ASST YEAR (ASST YEAR 2004 2004 2004 2004- -- -05 0505 05) )) ) NISKALP ENERGY LTD ( FORMERLY KNOWN AS NISKALP INVESTMENT & FORMERLY KNOWN AS NISKALP INVESTMENT & FORMERLY KNOWN AS NISKALP INVESTMENT & FORMERLY KNOWN AS NISKALP INVESTMENT & TRADING CO LTD) TRADING CO LTD) TRADING CO LTD) TRADING CO LTD) DG HOUSE, 4 TH FLOOR OLD PRABHADEVI ROAD MUMBAI 25 VS THE INCOME TAX OFFICER WARD 10(2)(3), MUMBAI ( (( (APPELLANT APPELLANT APPELLANT APPELLANT) )) ) (RESPONDENT) (RESPONDENT) (RESPONDENT) (RESPONDENT) PAN NO. PAN NO. PAN NO. PAN NO.AABCN9239J AABCN9239J AABCN9239J AABCN9239J A SSESSEE BY SHRI DINESH VYAS/SHRIBAN IYER REVENUE BY SHRI A K NAYAK PER R K PANDA, AM PER R K PANDA, AM PER R K PANDA, AM PER R K PANDA, AM THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER DATED 24.2.2010 OF THE CIT(A)-22, MUMBAI RELATING TO ASSE SSMENT YEAR 2004-05. 2 GROUNDS OF APPEAL NO.1 BY THE ASSESSEE RELATES TO THE ORDER OF THE CIT(A) IN CONFIRMING THE ADDITION OF RS.5,96,45,556/-MADE BY THE ASSESSING OFFICER ON ACCOUNT OF PROVISION OF DIMINUTION IN VALUE OF INV ESTMENTS. 2.1 THE LD COUNSEL FOR THE ASSESSEE FAIRLY SUBMITT ED THAT THE ABOVE GROUND IS COVERED AGAINST THE ASSESSEE BY THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF SOUTHERN TECHNOLOGIES LTD VS JCIT REPO RTED IN 320 ITR 577.IN VIEW OF THE ABOVE SUBMISSION OF THE LD COUNSEL FOR THE ASSE SSEE, THE GROUNDS OF APPEAL NO.1 BY THE ASSESSEE IS DISMISSED. 2 ITA NO.3243/MUM/2010 3 GROUNDS OF APPEAL NO.2 RELATES TO THE ORDER OF T HE CIT(A) IN CONFIRMING THE DISALLOWANCE OF RS. 16,10,662/- U/S 14A OF THE I T ACT AND FURTHER HOLDING THAT RULE 8D IS APPLICABLE WITH RETROSPECTIVE EFFECT. 4 THE LD COUNSEL FOR THE ASSESSEE SUBMITTED THAT IN VIEW OF THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF GODREJ & BOYCE MFG CO LTD VS DCIT REPORTED IN 328 ITR 81, RULE 8D IS NOT RETROSPECTIV E AND PROSPECTIVE. SINCE THE ASSESSMENT YEAR INVOLVED IS 2004-05; THEREFORE, RU LE 8D IS NOT APPLICABLE TO THE ASSESSEE COMPANY FOR THIS YEAR. HE, HOWEVER, SUBMIT TED THAT THE DISALLOWANCE OF RS.16,10.662/- MADE BY THE ASSESSING OFFICER U/S 14 A OF THE I T ACT HAS TO BE CONFIRMED. 4.1 THE LD DR HAS NO OBJECTION ON THE ABOVE SUBMISS ION OF THE LD COUNSEL FOR THE ASSESSEE. 5 IN VIEW OF THE ABOVE, WE UPHOLD THE ORDER OF THE CIT(A) IN SUSTAINING THE DISALLOWANCE OF RS. 16,10,662/- U/S 14A OF THE I T ACT. AT THE SAME TIME, WE ALSO HOLD THAT SINCE THE ASSESSMENT YEAR INVOLVED IN THE INSTANT CASE IS 2004-05; THEREFORE, RULE 8D IS NOT APPLICABLE TO THE ASSESSE E COMPANY FOR THIS YEAR. THE GROUND OF APPEAL NO.2 IS ACCORDINGLY PARTLY ALLOWED . 6 GROUNDS OF APPEAL NO.3 RELATES TO THE ORDER OF TH E CIT(A) IN NOT ALLOWING DEDUCTION ON PRINCIPAL COMPONENT OF RS. 20,449/- EM BEDDED IN LEASE RENTALS. 6.1 THE LD COUNSEL FOR THE ASSESSEE, AT THE TIME OF HEARING SUBMITTED THAT THE ASSESSEE IS NOT PRESSING THIS GROUND DUE TO SMALLNE SS OF THE AMOUNT. THE LD DR HAS NO OBJECTION FOR THE SAME. 3 ITA NO.3243/MUM/2010 7 IN VIEW OF THE ABOVE SUBMISSION OF THE LD COUNSEL FOR THE ASSESSEE, THE GROUNDS OF APPEAL NO.3 BY THE ASSESSEE IS DISMISSED AS NOT PRESSED. 8 GROUNDS OF APPEAL NO.4 RELATES TO NON-EXCLUSION O F RS. 81,23,659/- BEING PARTIALLY WITHDRAWN INTEREST OUT OF 244A GRANTED EA RLIER FROM THE CURRENT TOTAL INCOME. 8.1 GROUNDS OF APPEAL NO.5 RELATES TO NON DETERMINA TION OF CORRECT UNABSORBED DEPRECIATION/LOSSES TO BE CARRIED FORWAR D FOR SET OFF AGAINST INCOME OF SUBSEQUENT YEARS. 8.2 GROUNDS OF APPEAL NO.6 RELATES TO NON GRANTING OF CREDIT FOR TAXES DEDUCTED AT SOURCES OF RS.20,99,662/- 8.3 GROUNDS OF APPEAL NO.7 RELATES TO NON COMPUTATI ON OF CORRECT INTEREST U/S 244A ON THE REFUND OF TAXES. 9 THE LD COUNSEL FOR THE ASSESSEE, WHILE ARGUING AL L THE ABOVE GROUNDS TOGETHER SUBMITTED THAT A DIRECTION SHOULD BE GIVEN TO THE ASSESSING OFFICER FOR ADJUDICATION OF ALL THE ISSUES ON MERIT AND INDEPEN DENT OF APPLICATION DATED 19.2.2010 U/S 154 F THE I T ACT. HE SUBMITTED THAT THE ASSESSING OFFICER, IN THE BODY OF THE ASSESSMENT ORDER HAS NOT DISCUSSED THE ABOVE ISSUES. WHEN THE MATTER TRAVELLED UP TO THE CIT(A), HE SIMPLY DIREC TED THE ASSESSING OFFICER TO PASS NECESSARY ORDER ON THE BASIS OF THE PETITION F ILED BEFORE HIM U/S 154 OF THE I T ACT. THE LD COUNSEL FOR THE ASSESSEE SUBMITTE D THAT A DIRECTION SHOULD BE 4 ITA NO.3243/MUM/2010 GIVEN TO THE ASSESSING OFFICER TO PASS A SPEAKING O RDER ON ALL THE FOUR ISSUES I.E. GROUNDS OF APPEALS 4 TO 7. 9.1 THE LD DR, FAIRLY AGREED THAT HE HAS NO OBJECTI ON, IF THE ISSUES ARE SET ASIDE TO THE FILE OF THE ASSESSING OFFICER FOR FRES H ADJUDICATION AND PASS A SPEAKING ORDER. 10 IN VIEW OF THE ABOVE SUBMISSIONS OF BOTH THE PAR TIES AND CONSIDERING THE FACT THAT THE ASSESSING OFFICER HAS NOT DISCUSSED T HE ISSUES AND SINCE THE CIT(A) HAS MERELY DIRECTED THE ASSESSING OFFICER TO CONSID ER THE RECTIFICATION APPLICATION FILED BY THE ASSESSEE U/S 154A AND PASS NECESSARY O RDER, WE DIRECT THE ASSESSING OFFICER TO PASS A SPEAKING ORDER ON THE ABOVE FOUR ISSUES. NEEDLESS TO SAY, THE ASSESSING OFFICER SHALL GIVE DUE OPPORTUNITY OF BEI NG HEARD TO THE ASSESSEE AND DECIDE THE ISSUES IN ACCORDANCE WITH LAW. WE HOLD AND DIRECT ACCORDINGLY. THE GROUNDS RAISED BY THE ASSESSEE ARE ACCORDINGLY ALLO WED FOR STATISTICAL PURPOSE. 11 IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ORDER PRONOUNCED ORDER PRONOUNCED ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ITSELF I. E. ON6TH APRIL IN THE OPEN COURT AT THE TIME OF HEARING ITSELF I.E . ON6TH APRIL IN THE OPEN COURT AT THE TIME OF HEARING ITSELF I.E . ON6TH APRIL IN THE OPEN COURT AT THE TIME OF HEARING ITSELF I.E . ON6TH APRIL 2011 2011 2011 2011. .. . SD/- SD/- ( (( ( D MANMOHAN D MANMOHAN D MANMOHAN D MANMOHAN ) )) ) VICE PRESIDENT ( (( ( R K PANDA R K PANDA R K PANDA R K PANDA ) )) ) ACCOUNTANT MEMBER PLACE: MUMBAI : DATED: 6 TH , APRIL 2011 RAJ* 5 ITA NO.3243/MUM/2010 COPY FORWARDED TO: 1 APPELLANT 2 RESPONDENT 3 CIT 4 CIT(A) 5 DR /TRUE COPY/ BY ORDER DY /AR, ITAT, MUMBAI