DDIT, CHENNAI V. Cairn Energy India Pty Ltd., CHENNAI

ITA 39/CHNY/2013

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 4523 (ITAT-CHENNAI)
• Duration Of Justice: 8 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-10-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 01-10-2013
• Assessment Year: 1998-1999
• Appeal Filed On: 07-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T N BETGERI
• Assessee Lawyers: SANKARANARAYANA
• Keywords: Revised return

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : CHENNAI BEFORE DR. O.K. NARAYANAN, VICE PRESIDENT & SHRI VIKAS AWASTHY, JUDICIAL MEMBER I.T.A. NO. 39/MDS/2013 ASSESSMENT YEAR : 1998-99 DEPUTY DIRECTOR OF INCOME-TAX, INTERNATIONAL TAXATION-I, ANNEXE BUILDING, VII FLOOR, 121, N.H. ROAD, CHENNAI 34 (APPELLANT) VS CAIRN ENERGY INDIA P LTD., WELLINGTON PLAZA, 2 ND FLOOR, 90, ANNA SALAI, CHENNAI 600 002. [PAN: AAACC 3097 L] (RESPONDENT) REVENUE BY : SHRI T.N. BETGERI, JCIT ASSESSEE BY : SHRI SANKARANARAYANA, ADVOCATE DATE OF HEARING : 01-10-2013 DATE OF PRONOUNCEMENT : 01-10-2013 O R D E R PER VIKAS AWASTHY, JUDICIAL MEMBER: THE APPEAL HAS BEEN FILED BY THE REVENUE AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS)-IV, CHEN NAI DATED 03-08-2012 RELEVANT TO THE ASSESSMENT YEAR (AY) 199 8-99. I.T.A. NO. 39/MDS/2013 2 2. THE ASSESSEE IS ENGAGED IN EXPLORATION AND PRODU CTION OF PETROLEUM PRODUCTS. THE ASSESSEE FILED ITS RETURN OF INCOME FOR THE AY. 1998-99 ON 18-11-1998 DECLARING NIL INCOME. HOWEVER, BOOK PROFIT WAS COMPUTED UNDER THE PROVISIONS OF SE CTION 115JA OF THE INCOME TAX ACT, 1961 (HEREIN AFTER REFERRED TO AS THE ACT). THE ASSESSEE FILED REVISED RETURN OF INCOME ON 31-1 2-1999 DECLARING A LOSS OF ` 70,51,640/-. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY AND ASSESSMENT WAS COMPLETED VIDE ORDER 30-03-2001 BY ASSESSING THE INCOME AS ` 22,66,56,290/- U/S.115JA. AGGRIEVED AGAINST THE ASSESSMENT ORDER, THE ASSESS EE PREFERRED AN APPEAL BEFORE THE CIT(APPEALS)-V. CHEN NAI. THE CIT(APPEALS) VIDE ORDER DATED 22-01-2012, PARTLY AL LOWED THE APPEAL OF THE ASSESSEE. THE REVENUE AND THE ASSESS EE BOTH ASSAILED THE ORDER OF THE CIT(APPEALS) BEFORE THE T RIBUNAL IN ITA NOS. 490/MDS/2001 AND 1567/MDS/2000. THE TRIBUNAL VIDE ORDER DATED 28-07-2006, RESTORED THE FINDINGS OF THE ASSE SSING OFFICER ON THE ISSUE OF PROVISION FOR SITE RESTORATION FUN D/EXPENSES AND AS SUCH DIS-ALLOWED THE SAME. THE ASSESSING OFFICER W HILE GIVING EFFECT TO THE ABOVE ORDER OF THE TRIBUNAL, ADDED TH E PROVISION FOR SITE RESTORATION FUND/EXPENSES ` 1,01,63,385/- TO THE TOTAL INCOME AS PER THE REGULAR PROVISIONS OF THE ACT. THE ASSE SSING OFFICER I.T.A. NO. 39/MDS/2013 3 ALSO ADDED THE SAID AMOUNT TO DETERMINE BOOK PROFIT S UNDER THE PROVISIONS OF SECTION 115JA. AGGRIEVED AGAINST THE ADDITION OF THE PROVISION F OR SITE RESTORATION FUND/EXPENSES TO THE BOOK PROFIT U/S.1 15JA, IN PROCEEDINGS GIVING EFFECT TO THE ORDER OF THE TRIBU NAL, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(APPEALS). THE C IT(APPEALS) VIDE IMPUGNED ORDER DATED 03-08-2012, FOLLOWING THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE I.E., ITA NO. 1 181/MDS/2004 RELATING TO THE AY. 2000-01, DIRECTED THE ASSESSING OFFICER TO EXCLUDE THE PROVISION FOR SITE RESTORATION FUND/EX PENSES WHILE DETERMINING THE BOOK PROFITS U/S.115JA. AGGRIEVED BY THE ORDER OF THE CIT(APPEALS), THE RE VENUE HAS COME IN APPEAL BEFORE THE TRIBUNAL. 3. SHRI T.N. BETGERI, APPEARING ON BEHALF OF THE RE VENUE SUBMITTED THAT THE CIT(APPEALS) HAS ERRED IN DELETI NG THE DIS- ALLOWANCE OF PROVISION FOR SITE RESTORATION FUND/EX PENSES FOR THE PURPOSE OF COMPUTING BOOK PROFITS U/S.115JB. THE L D. DR FURTHER CONTENDED THAT THE DECISION OF THE TRIBUNAL IN ITA NO. 1181/MDS/2004 RELATING TO THE AY. 2000-01, HAS NOT BEEN ACCEPTED BY THE DEPARTMENT AND APPEAL HAS BEEN FILE D BEFORE THE I.T.A. NO. 39/MDS/2013 4 HONBLE JURISDICTIONAL HIGH COURT AGAINST THE SAID ORDER OF THE TRIBUNAL. 4. ON THE OTHER HAND, SHRI SANKARANARAYANA, ADVOCAT E APPEARING ON BEHALF OF THE ASSESSEE VEHEMENTLY SUPP ORTED THE ORDER OF THE CIT(APPEALS) AND PRAYED FOR DISMISSAL OF THE APPEAL OF THE REVENUE. 5. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESENTATIVES OF BOTH THE SIDES AND HAVE PERUSED THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THE ISSUE RELA TING TO ADDING BACK OF PROVISION FOR SITE RESTORATION FUND/EXPENS ES TO DETERMINE BOOK PROFIT U/S.115JA HAD COME UP FOR ADJUDICATION BEFORE THE CO-ORDINATE BENCH OF THE TRIBUNAL IN ASSESSES OWN CASE IN ITA NO. 1181/MDS/2004 DECIDED ON 04-06-2010. THE TRIBUNAL HELD THAT, PROVISION FOR SITE RESTORATION IS A RESULT OF PROFI T SHARING CONTRACT WITH GOVT. OF INDIA AND IS THUS AN ASCERTAINED LIAB ILITY, THEREFORE, CLAUSE-(C) OF EXPLANATION TO SECTION 115JA IS NOT A PPLICABLE TO THE FACTS OF THE ASSESSEE-COMPANY. THE DR HAS SUBMITTE D THAT THE APPEAL AGAINST THE ORDER OF THE TRIBUNAL HAS BEEN F ILED BEFORE THE HONBLE JURISDICTIONAL HIGH COURT, BUT HE HAS NOT B EEN ABLE TO I.T.A. NO. 39/MDS/2013 5 PLACE ON RECORD ANY ORDER STAYING THE OPERATION OF THE ORDER OF THE TRIBUNAL. 6. WE DO NOT FIND ANY MERIT IN THE APPEAL OF THE RE VENUE, THEREFORE, THE SAME IS DISMISSED BEING DEVOID OF ME RIT. THE ASSESSING OFFICER IS DIRECTED TO EXCLUDE A SUM OF ` 1,01,63,385/- IN RESPECT OF PROVISION FOR SITE RESTORATION FUND/EXPE NSES WHILE DETERMINING BOOK PROFIT U/S.115JA. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF H EARING ON TUESDAY, THE 1 ST OCTOBER, 2013 AT CHENNAI. SD/- SD/- (DR. O.K. NARAYANAN) (VIK AS AWASTHY) VICE PRESIDENT JUDICIAL MEMBER DATED: 1 ST OCTOBER, 2013 TNMM COPY TO: APPELLANT/RESPONDENT/CIT(A)/CIT/DR