ACIT. CIR.23(1), MUMBAI V. NATHPA JHAKRI JOINT VENTURE, MUMBAI

ITA 3305/MUM/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 100724 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 3 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-08-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 18-08-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 26-04-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: H P MAHAJANI
• Keywords: Bad and doubtful debts; Revised return

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B, MUMBAI , , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA NO.3305 //MUM/2010 ASSESSMENT YEAR: 2005-06 ACIT, CRICLE-23(1), BLDG. C-10, 1 ST FLOOR, ROOM NO.108, PRATAYAKSHKAR BHAVAN, BANDRA KURLA COMPLEX, BANDRA (E), MUMBAI-400051 / VS. M/S NATHPA JHAKRI JOINT VENTURE, HINCON HOUSE, LBS MARG, VIKHROLI (WEST), MUMBAI-400083 ( / REVENUE) ( !'# $ /ASSESSEE) P.A. NO. AAAAN1127C / REVENUE BY SHRI C.P. PATHA-DR !'# $ / ASSESSEE BY SHRI H.P.MAHAJANI % & $ ' / DATE OF HEAR ING : 18/08/2015 & $ ' / DATE OF ORDER: 16/09/2015 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE REVENUE IS AGGRIEVED BY THE IMPUGNED ORDER DAT ED 25/02/2011 OF THE LD. FIRST APPELLATE AUTHORITY, MU MBAI, ON THE GROUND THAT LD. COMMISSIONER OF INCOME TAX (APP EALS) NATHPA JHAKRI JOINT VENTURE ITA NO.3305/M/2011 2 ERRED IN ALLOWING THE TOTAL EXPENDITURE OF RS.1,57, 06,739/- DISALLOWED BY THE ASSESSING OFFICER IGNORING THE FA CT THAT THE WORK OF M/S NATHPA JHAKRI POWER CORP. (NJPC) PERTAI NING TO HIMACHAL PRADESH GOVT. HAD ALREADY BEEN COMPLETED A ND THE CONTRACTEE HAD ISSUED COMPLETION CERTIFICATE TO THE ASSESSEE. THE ASSESSEE HAS SHOWN ONLY OTHER INCOME AT RS.39.6 0 LAKSH AND THEREFORE, THE ONLY EXPENSES WHICH ARE ALLOWABL E AS PER PROVISIONS OF SECTION 57 OF THE INCOME TAX ACT. 2. DURING HEARING OF THIS APPEAL, WE HAVE HEARD SH RI C.P. PATHA, LD. DR, AND SHRI H.P. MAHAJANI, LD. COU NSEL FOR THE ASSESSEE. THE CRUX OF ARGUMENT ON BEHALF OF THE REVENUE, WHICH IS IDENTICAL TO THE GROUND RAISED BY SUBMITTI NG THAT THE ASSESSEE HAS SHOWN ONLY OTHER INCOME AT RS.39.60 LA KHS, THEREFORE, THE ONLY EXPENSES WHICH ARE ALLOWABLE AS PER THE PROVISIONS OF SECTION 57 OF THE ACT. 2.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. BEFORE CO MING TO ANY CONCLUSION, WE ARE REPRODUCING HEREUNDER THE OBSERVATION MADE IN THE IMPUGNED ORDER FOR READY RE FERENCE:- 7.5. I HAVE GONE THROUGH RETURNS FILED FOR SUBSEQU ENT ASSESSMENT YEARS TO VERIFY IF APPELLANT HAS CLAIMED THE SAME BY REVISING RETURN OF INCOME TO CLAIM THE AMOUNT UNDER THE HEAD BAD DEBTS OR ALTERNATIVELY AS BUSINESS LOSS AS CLAIMED BY THEM. IT IS SEEN THAT NO SUCH CLAIM OF BAD DEBTS OR BUSINESS LO SS HAS BEEN CLAIMED BY THE APPELLANT FOR THE AMOUNT IN ANY OF T HESE ASSESSMENT YEARS BY WAY OF REVISED RETURN OF INCOME . HAVING ASCERTAINED THAT FACT THE ONLY ISSUE REMAINS IF THE SAME SHOULD BE ADMISSIBLE FOR ASSESSMENT YEAR 2005-06 WHEN APPE LLANT RECEIVED REJECTION LETTER FROM DGFT. IT IS NOT DISP UTED THAT APPELLANT IS STILL FILING RETURN OF INCOME AND ASSE SSMENT IS NATHPA JHAKRI JOINT VENTURE ITA NO.3305/M/2011 3 PENDING. IN FACT TIME TO FILE REVISED RETURN IS STI LL AVAILABLE FOR ASSESSMENT YEAR 2009-10. INCIDENTALLY ON THIS ISSUE ONLY OF A CLAIM RAISED DURING THE PROCEEDING HAS ALSO BEEN DE ALT BY HON'BLE TTAT, MUMBAI 111 APPELLANT'S OWN CASE. THE APPELLANT HAS FILED COPY OF HON'BLE TRIBUNAL ORDER IN ITS OWN CASE 2010- (037)-SOT-0160-TBOM 2010-(131)-TIJ-0702-TBOM. THE R ELEVANT PORTIONS OF THE JUDGMENT ARE REPRODUCED AS UNDER:- 'CONSEQUENTLY THE ASSESSEE MADE A CLAIM DURING THE COURSE OF ASSESSMENT PROCEEDINGS FOR THE CURRENT YEAR THAT TH E BALANCE AMOUNT, NOT ALLOWED IN THE PRECEDING YEAR TO THE TU NE OF RS.1.04 CRORES , BE ALLOWED IN THIS YEAR BECAUSE THE PROJEC T WAS NOW FULLY COMPLETED. THE ASSESSING OFFICER DID NOT ACCEPT THE CLAIM OF THE ASSESSEE FOR THE REASON THAT IN THE ABSENCE OF THE ASSESSEE FILING ANY REVISED RETURN, IT WAS NOT OPEN TO MAKE ANY CLA IM FOR DEDUCTION. IN SUPPORT OF THE ASSESSING OFFICER'S ST AND, THE LEARNED DEPARTMENT AL REPRESENTATIVE HAS RELIED ON THE JUDGMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF GOETZE (INDIA) LTD. V. CIT (2006) 284 ITR 323 (157 TAXMAN I) WE FIND THAT THE RELIANCE OF THE REVENUE ON THIS JUDGMENT IS PARTLY CORRECT. IT IS TRUE THAT IT HAS BEEN HELD IN THIS CASE THAT THE ASSESSING OFFIC ER CANNOT ENTERTAIN THE CLAIM FOR DEDUCTION OTHERWISE THAN BY - FILING THE REVISED RETURN. HOWEVER, IT IS NOT THE END OF THE M ATTER. THE HON'BLE SUPREME COURT HAS CLARIFIED THE POSITION FU RTHER IN PARA 4 OF THRS JUDGMENT WHICH MAKES IT EXPLICITLY CLEAR TH AT THE MANDATE OF THIS JUDGMENT IS LIMITED TO THE POWER OF THE ASS ESSING AUTHORITIES AND DOES NOT IMPINGE ON THE POWER OF TH E TRIBUNAL U/S.254 OF THE ACT. IN THIS VIEW OF THE MATTER THER E REMAINS NO DOUBT WHATSOEVER THAT IF THE ASSESSEE HAS FAILED TO CLAIM DEDUCTION IN THE RETURN FILED BY IT, WHICH IS OTHER WISE AVAILABLE TO IT AS PER LAW, THE DOORS OF JUSTICE CANNOT BE CLOSE D TO THE ASSESSEE SIMPLY FOR THE REASON THAT NO REVISED RETU RN WAS FILED MAKING SUCH A CLAIM FOR DEDUCTION. IT IS SIMPLE AND PLAIN THAT THE PURPOSE OF MAKING ASSESSMENT IS TO COLLECT THE RIGH TFUL TAX DUE FROM THE ASSESSEE. FILING OF REVISED RETURN BY THE ASSESSEE MAY BE A VALID MODE OF CLAIMING DEDUCTION WHICH WAS OMI TTED TO BE CLAIMED IN THE ORIGINAL RETURN. BUT IT IS NOT THAT IF REVISED RETURN IS NOT FILED OR THE TIME LIMIT FOR THE FILING .OF THE REVISED RETURN HAS EXPIRED BUT THE ASSESSMENT IS STILL PENDING, THAT T HE ASSESSEE SHOULD BE PROHIBITED FOR MAKING SUCH A CLAIM. TECHN ICALITIES CANNOT BE ALLOWED TO WORK AS SPEED BREAKERS IN THE COURSE OF DISPENSATION OF JUSTICE. IF AN AMOUNT IS LEGALLY DE DUCTIBLE, NOTHING CAN PREVENT THE TRIBUNAL FROM ACCEPTING SUCH A PLEA . 7.6. IN VIEW OF THIS IT IS CLEAR THAT CA CLAIM CAN BE CLAIMED BY THE APPELLANT EITHER BY FILING THE REVISED RETURN IF IT REMAINED TO BE CLAIMED IN THE ORIGINAL RETURN. HOWEVER, IF REVISED RETURN WAS NOT FILED OR THE TIME LIMIT FOR FILING THE RETURN HAS E XPIRED BUT NATHPA JHAKRI JOINT VENTURE ITA NO.3305/M/2011 4 ASSESSMENT IS STILL PENDING SUCH CLAIM CAN BE MADE BEFORE ASSESSING OFFICER. I FIND THAT THE APPELLANT HAS FI LED RETURN OF INCOME FOR ASSESSMENT YEAR (2009-10) (2010-11) WHER E SUCH CLAIM HAS NOT BEEN MADE AND STILL THERE IS TIME TO REVISE RETURN FOR INCOME AND HENCE IT IS OBVIOUS THAT CLAIM OF BAD DE BTS OR BUSINESS LOSS AS IS DEEMED FIT BY THE APPELLANT CAN BE MADE BY FILING REVISED RETURN FOR ASSESSMENT YEAR WHERE STI LL THE TIME FOR FILING REVISED RETURN IS NOT OVER. ALTERNATIVELY CL AIM CAN BE MADE WHERE ASSESSMENT IS STILL PENDING. IN VIEW OF THIS THE ADDITIONAL GROUND TAKEN BY THE APPELLANT IS DISMISSED. 8. IN THE RESULT, THE APPEAL IS PARTY ALLOWED. 2.2. IF THE OBSERVATION MADE IN THE ASSESSMENT ORD ER, LEADING TO ADDITION MADE TO THE TOTAL INCOME, CONCL USION DRAWN IN THE IMPUGNED ORDER, MATERIAL AVAILABLE ON RECORD, ASSERTIONS MADE BY THE LD. RESPECTIVE COUNSEL, IF K EPT IN JUXTAPOSITION AND ANALYZED, WE FIND THAT THERE IS C ATEGORICAL FINDING IN THE IMPUGNED ORDER THAT THERE WAS TIME LEFT/AVAILABLE FOR FILING THE APPEAL AS THE ASSESSM ENT WAS STILL PENDING. THE ORDER OF THE TRIBUNAL WAS DULY CONSIDE RED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) AND TH E RELEVANT PORTION OF WHICH HAS BEEN REPRODUCED. THE DECISION FROM HONBLE APEX COURT GOETZE ((INDIA) LTD. VS CIT (2006) 284 ITR 323 HAS ALREADY BEEN RELIED UPON BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS). THE ASSESSIN G OFFICER IS DIRECTED TO EXAMINE THE PAPER BOOK AVAIL ABLE ON RECORD ALONG WITH ORDER OF THE TRIBUNAL FOR AY. 200 4-05 AND ASSESSMENT FRAMED FOR OTHER ASSESSMENT YEARS ALONG WITH COMPUTATION OF INCOME, WHICH IS NECESSARY TO DECIDE THE ISSUE IN HAND. THE MANDATE OF THE CONSTITUTION IS TO LEVY AND COLLECT DUE TAXES, THEREFORE, ON THE PRINCIPLE OF NATURAL NATHPA JHAKRI JOINT VENTURE ITA NO.3305/M/2011 5 JUSTICE, WE REMAND THIS APPEAL TO THE FILE OF THE L D. ASSESSING OFFICER TO EXAMINE THE CLAIM OF THE ASSESSEE AND DE CIDE IN ACCORDANCE WITH LAW. THE ASSESSEE BE GIVEN OPPORTUN ITY OF BEING HEARD WITH FURTHER LIBERTY TO FURNISH EVIDENC E, IF ANY, IN SUPPORT OF ITS CLAIM. THE APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. FINALLY, THE APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 18/08/2015. SD/ - (RAJESH KUMAR) SD/ - (JOGINDER SINGH) '# / ACCOUNTANT MEMBER $# / JUDICIAL MEMBER % MUMBAI; ( DATED : 16/09/2015 F{X~{T? P.S/. . . %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. *+,- / THE APPELLANT 2. ./,- / THE RESPONDENT. 3. 0 0 1$ ( *+ ) / THE CIT, MUMBAI. 4. 0 0 1$ / CIT(A)- , MUMBAI 5. 34 .$ ! , 0 *+' *! 5 , % / DR, ITAT, MUMBAI 6. 6' 7% / GUARD FILE. / BY ORDER, /3+$ .$ //TRUE COPY// / (DY./ASSTT. REGISTRAR) , % / ITAT, MUMBAI