Gujarat Elecricity Board(Now kown as Gujarat Urja Vikas Nigam Ltd.), Petlad V. The Dy.CIT.,Spl.Range-2, Baroda

ITA 3313/AHD/2009

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 9724 (ITAT-AHMEDABAD)
• Duration Of Justice: 7 year(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-12-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 18-11-2016
• Assessment Year: 1991-1992
• Appeal Filed On: 14-12-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAGDISH T HE
• Assessee Lawyers: J P SHAH
• Keywords: Depreciation; Condonation of delay
• Section: 154

Judgement Text

ITA NO.3313 /AHD/20 09 ASSESSMENT Y EAR: 1991 - 92 PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH, AHMEDABAD [CORAM: PRAMOD KUMAR AM AND S.S. GODARA JM ] ITA NO. 3313 /AHD/20 09 ASSESSMENT YEAR: 1991 - 92 GUJARAT ELECTRICITY BOARD, .... ... .. APPELLANT (NOW KNOWN AS GUJARAT URJA V IKAS NIGAM LTD.), PETLAD O & M DIVISION, NEAR RAILWAY CROSSING, PETLAD , [P AN: AACCG 2861 L] VS. DY. COMMISSIONER OF INCOME TAX, SP. RANGE 2, BARODA. .... ... .. RESPONDENT APPEARANCES BY: J.P. SHAH FOR THE APP ELLANT JAGDISH FOR T HE RESPONDENT DATE OF CONCLUDING THE HEARING : 16 . 1 2 .2016 DATE OF PRONOUNC ING THE ORDER : 19 . 1 2 . 2016 O R D E R PER PRAMOD KUMAR , AM : 1. THE APPEAL IS TIME BARRED BY 791 DAYS, AND, VIDE ORDER DATED 31 ST MARCH 2011 PASSED BY THIS T RIBUNAL, THE APPEAL WAS DISMISSED AS TIME BARED. HOWEVER, HON BLE GUJARAT HIGH COURT, VIDE JUDGEMENT DATED 22 ND OCTOBER 2012, DID NOT APPROVE THE STAND OF THE TRIBUNAL IN SO REJECTING THE APPEAL AS TIME B ARRED. THEIR LORDSHIPS WERE OF THE CONSIDERED VIEW THAT IT WAS A FIT CASE FOR CONDONATION OF DELAY BY T HE TRIBUNAL. ACCORDINGLY , THE DELAY WAS CONDONED AND THE MATTER WAS REMITTED TO THE TRIBUNAL FOR ADJ UDICATION ON MERITS. THAT IS HOW WE HAVE COME TO BE IN SEISIN OF THE MATTER ONCE AGAIN . ITA NO.3313 /AHD/20 09 ASSESSMENT Y EAR: 1991 - 92 PAGE 2 OF 4 2. THIS APPEAL CHALLENGES LEARNED CI T(A) S ORDER DATED 27 TH JULY, 2007, IN THE MATTER OF ORDER UNDER SECTION 154 R.W.S. 143(1A) OF THE INCOME TAX ACT, 1961, FOR THE ASSESSMENT YEAR 1991 - 92. GRIEVANCE RAISED BY THE ASSESSEE IS AS FOLLOWS : - THE LEARNED COMMISSIONER OF INCOME TA X (APPEALS) ERRED IN LAW AND FACTS HAS UPHELD THE ORDER DATED 19.08.1994 PASSED BY THE ASSESSING OFFICER UNDER SECTION 154 OF THE ACT AND HAS THEREBY CONFIRMED THE LEVY OF ADDITIONAL TAX OF RS.15,37,21,690/ - UNDER SECTION 143(1A) OF THE INCOME TAX AT, 1961. 3. TO AD JUDICATE ON THIS APPEAL, ONLY A FEW MATERIAL FACTS NEED TO BE TAKEN NOTE OF. THE RETURN FILED BY THE ASSESSEE WAS SUBJECTED TO PROCESSING UNDER SECTION 143(1)(A) ON 24.07.1992 AND ADDITIONAL TA X UNDER SECTION 143(1A) WAS LEVIED. THE ADDITIONAL TAX SO LEV IED AMOUNTED TO RS.1,51,66,713/ - . SUBSEQUENTLY, HOWEVER , IN THE COURSE OF SCRUTINY ASSESSMENT PROCEEDINGS , THE A SSESSING OFFICER NOTED THAT THE CLAIM OF DEPRECIATION MADE BY THE ASSESSEE IS INCORRECT INASMUCH AS THE ASSESSEE OUGHT TO HAVE RESTRICTED THE C LAIM TO 75% IN A ACCORDANCE WITH THE LAW. IT WAS ALSO NOTED THAT ADDITIONAL TAX WAS LEVIED UNDER SECTION 143(1A) IN RESPECT OF THE DEPRECIATION DISALLOWANCE, AND THE QUANTUM HAS ENHANCED. ON THESE FACTS , THE ASSESSING O FFICER LEVIED FURTHER ADDITIONAL TAX BY OBSERV ING AS UNDER : - 4. IN THIS CONNECTION, THE PROVISIONS OF SECTION 143(1A)(B) ARE VERY CLEAR WHEREIN IT HAS BEEN LAID DOWN THAT WHERE AS A RESULT OF AN ORDER U/S.143(3) THE AMOUNT OF WHICH ADDITIONAL TA X WAS PAYABLE UNDER CLAUSE (B) HAD BEEN INCRE ASED OR REDUCED AS THE CASE MAY BE, THE ADDITIONAL INCOME T A X S HALL BE INCREASED OR REDUCED ACCORDINGLY. ONCE IT HAD BEEN FOUND OUT THAT THE ACTUAL DEPRECIATION AVAILABLE TO THE ASSESSEE FOR A .Y. 1991 - 92 WAS ONLY RS.2,06,36,01,403/ - , INCREASE IN ADDITIONA L TAX WOULD HAVE TO BE MADE. HOWEVER, REDUCTION, IF ANY, OF ADDITIONAL TAX ON THE BASIS OF ORDERS U/S. 250 BY THE CIT(A) WOULD BE GIVEN IMMEDIATELY ON RECEIPT OF SUCH ORDERS. THE CONTENTION PUT FORTH BY THE ASSESSEE IN REPLY TO NOTICE U/S. 154 HAVE ALREAD Y BEEN DEALT WITH BY THE ASSESSING O FFICER IN ASSESSMENT ORDER U/S. 143(3). THE FURTHER LEVY OF ADDITIONAL TAX OF RS.59,97,41,165/ - IS, THEREFORE, ORDERED. ITA NO.3313 /AHD/20 09 ASSESSMENT Y EAR: 1991 - 92 PAGE 3 OF 4 4. AGGRIEVED, ASSESSEE CARRIED THE MA T TER IN APPEAL BEFORE THE LEARNED CIT (A) BUT WITHOUT ANY SUC CESS. THE ASSESSEE CARRIED THE MATTER FURTHER IN APPEAL TO THE TRIBUNAL BUT THE MATTER WAS AGAIN REMITTED TO THE FILE OF THE LEARNED CIT(A) FOR F RESH ADJUDICATION BY A SPEAKING ORDER . THE ASSESSEE DID NOT SUCCEED IN THIS ROUND EITHER . ONCE AGAIN, THE AS SESSEE IS IN APPEAL BEFORE US. 5 . WE HAVE HEARD THE RIVAL CONTENTIONS , PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF THE APPLICABLE LEGAL POSITION 6. WE FIND THAT HON BLE SUPREME COURT, IN THE CASE OF CIT VS. SATI OIL UDYOG LIMITED [(2015) 372 ITR 746 (S C )], HAS INTER ALI A OBSERVED AS FOLLOWS : - TAKING A CUE FROM THE VARGHESE CASE, WE THEREFORE, HOLD THAT SECTION 143(1A) CAN ONLY BE INVOKED WHERE IT IS FOUND ON FACTS THAT THE LESSER AMOUNT STATED IN THE RETURN FI LED BY THE ASSESSEE IS A RESULT OF AN ATTEMPT TO EVADE TAX LAWFULLY PAYABLE BY THE ASSESSEE. THE BURDEN OF PROVING THAT THE ASSESSEE HAS SO ATTEMPTED TO EVA D E TAX IS ON T HE REVENUE WHICH MAY BE DISCHARGED BY THE REVENUE BY ESTABLISHING FACTS AND CIRCUMSTA NCES FROM WHICH A REASONABLE INFERENCE CAN BE DR A WN THA T THE ASSESSEE HAS, IN FACT, ATTEMPTED TO EVADE TAX LAWFULLY PAYABLE BY IT. 7. IN THE PRESENT CA SE, IT IS AN ACCEPTED POSITION THAT THE ASSESSEE, A S TATE G OVERNMENT UNDERTAKING, IS RUNNING INTO HUGE LOSSES FROM YEAR TO YEAR AND THE PARTIAL DISALLOWANCE OF DEPRECIATION IN ONE YE A R THUS DOES NOT RESULT IN ANY TAX EVASION BECAUSE IT WILL ANYWAY BE ALLOWED IN SUBSEQUENT PERIOD, AND, IN THI S CASE, MUCH BEFORE ANY TAX BENEFIT IS AVAILED FORM THE SAME. THE DEPRECIATION DISALLOWANCE THU S IS ONLY A TIMING DIFFERENCE, AND, GIVEN THE CONTINUOUS LOSSES BEING INCURRED BY THE ASSESSEE, IT IS WHOLLY T AX NEUTRAL. IN ANY EVENT, THERE IS NO MATERIAL ITA NO.3313 /AHD/20 09 ASSESSMENT Y EAR: 1991 - 92 PAGE 4 OF 4 BROUGHT ON RECORD BY THE REVENUE AUTHORITIES TO SHOW THAT THE ASSESSE E ATTEMPTED TO EVADE TAXES. 8. IN VIEW OF THE ABOVE DISCUSSIONS , AND RESPECTFULLY FOLLOWING THE LAW LAID DOWN BY THE HON BLE S UPREME COURT I N THE CA S E OF CIT VS. SATI OIL UDYOG LIMITED (SUPRA) , WE ARE OF THE CONSIDERED VIEW THAT ENHANCEMENT OF ADDITIONAL TAX UNDER S ECTION 143(1A) WAS NOT LEGALLY SUSTAINABLE. AS WE HOLD SO , W E MAKE IT CLEAR T HAT IN THE PRESENT APPEAL WE ARE ONLY CONCERNED ABOUT THE ADDITIONAL TAX ENHANCED IN THE IMPUGNED ORDER, AND OUT OBSERVATIONS SHOULD BE CONSTRUED IN THIS CONTEXT ONLY. THE ADDITIONAL TAX UNDER SECTION 143(1A), TO THE EXTENT IMPUGNED IN THIS APPEAL, STANDS DELETED . 9 . IN THE RESULT, THE APPEAL IS ALLOWED. PRONOUNCED IN THE OPEN COURT TODAY ON 19 TH DAY OF DECEMBER, 2016 . SD/ - SD/ - S.S. GODARA PRAMOD KUMAR (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) DATED: 19 TH DAY OF DECEMBER , 2016. COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD