DCIT 2(1), MUMBAI V. BHARAT PETROLEUM CORPORATION LTD, MUMBAI

ITA 4187/MUM/2013

• Counselvise Citation: 418719914 RSA 2013
• Duration Of Justice: 1 year(s) 3 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-09-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 24-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJUNATHA SWAMY
• Section: 37; 143(3); 80IB; 37(1); 80G

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI . . , , , BEFORE SHRI R.C. SHARMA , ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA, JUDICIAL MEM BER . / ITA NO. 4187 / MUM./ 2013 ( / ASSESSMENT YEAR : 20 07 08 ) DY. COMMISSIONER OF INCOME TAX CIRCLE 2(1), ROOM NO.561 AAYAKAR BHAVA, 101, M.K. ROAD MUMBAI 400 020 .. / APPELLANT V/S BHARAT PETROLEUM CORPORATION LTD. BHARAT BHAVAN, CURRIMBHOY LTD. BALLARD ESTATE, MUMBAI 400 001 .... / RESPONDENT . / PERMANENT ACCOUNT NUMBER AAACB2902M . / ITA NO. 4188 / MUM./ 2013 ( / ASSESSMENT YE AR : 20 08 09 ) DY. COMMISSIONER OF INCOME TAX CIRCLE 2(1), ROOM NO.561 AAYAKAR BHAVA, 101, M.K. ROAD MUMBAI 400 020 .. / APPELLANT V/S BHARAT PETROLEUM CORPORATION LTD. BHARAT BHAVAN, CURRIMBHOY LTD. BALLARD ESTATE, MUMBAI 400 001 .... / RESPONDENT . / PERMANENT ACCOUNT NUMBER AAACB2902M / REVENUE BY : SHRI MANJUNATHA SWAMY / ASSESSEE BY : NONE / DATE OF HEARING 06 .0 9 .2014 / DATE OF ORDER 12 .09.2014 BHARAT PETROLEUM CORPORATION LTD. 2 / ORDER , / PER AMIT SHUKLA , J.M. THE PRESENT APPEAL S HA VE BEEN PREFERRED BY THE REVENUE CHALLENGING THE IMPUGNED ORDER DATED 14 TH MARCH 2013, F OR THE ASSESSMENT YEAR 2007 08 AND ORDER DATED 15 TH MARCH 2013, FOR THE ASSESSMENT YEAR 2008 09, PASSED BY THE LEARNED COMMISSIONER (APPEALS) IV, MUMBAI, FOR THE QUANTUM OF ASSESSMENT PASSED UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT ). 2. SINCE BOTH THESE APPEALS PERTAIN TO THE SAME ASSESSEE INVOLVING COMMON ISSUES ARISING OUT OF IDENTICAL SET OF FACTS AND CIRCUMSTANCES , EXCEPT VARIATION IN FIGURES , THEREFORE, AS A MATTER OF CONVENIENCE, THESE APPEALS WERE HEARD TOGETHER AND ARE BEI NG DISPOSED OFF BY WAY OF THIS CONSOLIDATED ORDER. HOWEVER, IN ORDER TO UNDERSTAND THE IMPLICATION, IT WOULD BE NECESSARY TO TAKE NOTE OF THE FACTS OF ONE APPEAL. WE ARE, ACCORDINGLY, NARRATING THE FACTS, AS THEY APPEAR IN THE APPEAL IN ITA NO. 4187/ MUM./2 01 3 , FOR ASSESSMENT YEAR 200 7 08 . THE GROUNDS RAISED BY THE REVENUE, READ AS UNDER: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN ALLOWING RELIEF TO THE ASSESSEE TO THE EXTENT IMPUGNED IN THE GROUNDS ENUM ERATED BELOW: 1 . THE ORDER OF THE CIT(A) IS OPPOSED TO LAW AND FACTS OF THE CASE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN ALLOWING THE ASSESSEE CLAIM BHARAT PETROLEUM CORPORATION LTD. 3 OF DEDUCTION U/S.80IB OF THE ACT IN RESPECT OF L PG BOTTLING PLANT, IGNORING THAT THE DECISION OF THE HON BLE BOMBAY HIGH COURT IN THE CASE OF HINDUSTAN PETROLEUM CORPORATION LTD. IN ITA NO. 2131, 2133, 2134 AND 2135 OF 2012 ORDER DATED 07.03.2013 HAS NOT BEEN ACCEPTED BY THE DEPARTMENT AND SLP IS BEING FILED AGAINST THE SAID DECISION. 3(A) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) HAS ERRED IN ISSU I N G DIRECTION TO A. O . TO CONSIDER THE CLAIM AND ALLOW IT, IF THE CONDITIONS OF SECTION 80G ARE FULFILLED, OVERLOOKING TH E CRUCIAL FACT THAT WITH EFFECT FROM 01 . 06.2001, SETTING ASIDE AN ISSUE OR THE ORDER IS NOT PERMISSIBLE AS PER THE AMENDED PROVISION. (A) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) HAS ERRED IN SETTING ASIDE THE ISSUE REL ATING TO CLAIM OF DEDUCTION U/S.80G AFTER VERIFICATION AND SATISFACTION THAT REQUISITE CONDITIONED ARE FULFILLED, THEREBY IGNORING THE PROVISION OF SECTION 250(4) EMPOWERING HIM TO MAKE FURTHER ENQUIRIES BEFORE DISPOSAL OF APPEAL . 2. WHEN THE CASE WAS CALL ED FOR HEARING, NEITHER THE RESPONDENT ASSESSEE NOR ANY OF ITS AUTHORIZED REPRESENTATIVE APPEARED BEFORE US DESPITE SERVICE OF NOTICE THROUGH REGISTERED POST WHICH IS EVIDENT FROM THE ACKNOWLEDGEMENT ON RECORD. 3. BEFORE US, THE LEARNED DEPARTMENTAL REPRESE NTATIVE SUBMITTED THAT INSOFAR AS THE ISSUE INVOLVED IN GROUND NO.2 IS CONCERNED, THE SAME IS COVERED BY THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT IN HINDUSTAN PETROLEUM CORPORATION LTD. (SUPRA) , HOWEVER, THE DEPARTMENT HAS NOT ACCEPTED THE SAI D DECISION AND SPECIAL LEAVE PETITION HAS BEEN FILED. THE MATTER IS BEING AGITATED BY THE DEPARTMENT ONLY TO KEEP THE ISSUE ALIVE. BHARAT PETROLEUM CORPORATION LTD. 4 4. BRIEF FACTS, QUA THE ISSUE INVOLVED IN GROUND NO.2, ARE THAT THE ASSESSEE HAS CLAIMED DEDUCTION UNDER SECTION 80IB OF ` 1,4 5,84,376, IN RESPECT OF PROFITS MADE BY FOLLOWING LPG PLANTS: SULTANPUR LPG PLANT ` 1,05,21,109 MICRO GONDA LPT PLANT ` 40,60,266 ` 1,45,84,376 5. THE ASSESSING OFFICER DENIED THE DEDUCTION UNDER SECTION 80IB, ON THE GROUND THAT THE ACTIVITY OF FIL LING OF GAS INTO CYLINDER DOES NOT CONSTITUTE MANUFACTURING AND THE LPG BOTTLING PLANTS ARE PART OF REFINING ACTIVITIES. IN SUPPORT OF HIS CONCLUSION, HE RELIED UPON THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN KOSAN GAS CO., 87 STC 236, AND THE DECIS ION OF THE TRIBUNAL, IN INDIAN OIL CORPORATION LTD. VS IAC, ITA NO.3272/BOM./1988, ORDER DATED 19 TH OCTOBER 1995. 6. BEFORE THE LEARNED COMMISSIONER (APPEALS), IT WAS SUBMITTED THAT THE TRIBUNAL, MUMBAI BENCHES, IN HINDUSTAN PETROLEUM CORPORATION LTD., ITA N O.2124/MUM./2009 AND ITA NO.5856 5858/ MUM.1999, ORDER DATED 31 ST JULY 2012 AND 26 TH SEPTEMBER 2012, HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE AFTER DISCUSSING THE ENTIRE ISSUE IN DETAIL. FURTHER, THE HON'BLE JURISDICTIONAL HIGH COURT IN CIT V/S HIND USTAN PETROLEUM CORPORATION LTD., ITA NO.2131 TO 2135 OF 2012, VIDE JUDGMENT AND ORDER DATED 17 TH MARCH 2013, HAS ALSO DECIDED THIS ISSUE IN FAVOUR OF THE ASSESSEE AFTER DISMISSING THE REVENUES APPEAL. THE BHARAT PETROLEUM CORPORATION LTD. 5 LEARNED COMMISSIONER (APPEALS) HAS INCORPORATED T HE SAID DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT AT PAGE 10 TO 12 OF THE APPELLATE ORDER AND DIRECTED THE ASSESSING OFFICER TO ALLOW THE CLAIM UNDER SECTION 80IB TO THE ASSESSEE AFTER OBSERVING AND HOLDING AS UNDER: IN EARLIER YEARS, A.Y. 05 - 06 AND EARLIER, SIMILAR CLAIM WAS DISALLOWED BY THE A.O . AND CONFIRMED BY MY LD. PREDECESSORS ON THE BASIS OF THE DECISION OF HON'BLE ITAT IN THE CASE OF INDIAN OIL CORPORATION LTD. AND IN THE CASE OF COSAN GAS OF HON'BLE GUJARAT HIGH COURT, BUT AT PRESENT T HE DECISION OF HON'BLE ITAT, MUMBAI, IN THE CASE OF HPCL (SUPRA) IS AVAILABLE, IN WHICH BOTH THE EARLIER DECISIONS HAVE BEEN CONSIDERED AND BOTTLING OF GAS CYLINDERS IS FOUND ELIGIBLE FOR DEDUCTION U/S. 80IA. IN ANY CASE, NOW THE ISSUE HAS BEEN DECIDED BY HON'BLE JURISDICTIONAL HIGH COURT OF BOMBAY IN THE CASE OF HPCL (SUPRA) AND BOTTLING OF GAS CYLINDERS IS HELD AS PRODUCTION AND ELIGIBLE FOR DEDUCTION U/S. 80IA. THEREFORE, RESPECTFULLY FOLLOWING THE DECISION OF HON'BLE BOMBAY HIGH COURT IN THE CASE OF HPC L (SUPRA) IT IS HELD THAT BOTTLING OF GAS CYLINDER IS ALSO A PRODUCTION ACTIVITY AND, THEREFORE, ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S. 80IB ON THE INCOME FROM SUCH ACTIVITY. THEREFORE, A.O. IS DIRECTED TO ALLOW THE CLAIM OF THE ASSESSEE WS. 80IB OF ` 1,4 5,84,376/ - . IN RESULT, THE GROUND OF APPEAL IS ALLOWED. 7. IN VIEW OF THE AFORESAID DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT IN HINDUSTAN PETROLEUM CORPORATION LTD. (SUPRA), WHICH IS APPLICABLE MUTATIS MUTANDIS IN ASSESSEES CASE ALSO, WE AFFIRM THE ORDER OF THE LEARNED COMMISSIONER (APPEALS). ACCORDINGLY, GROUND NO.2, RAISED BY THE DEPARTMENT IS DISMISSED. 8. REGARDING GROUND NO.3, THE REVENUE IS AGGRIEVED BY THE DIRECTION OF THE LEARNED COMMISSIONER (APPEALS) TO THE ASSESSING OFFICER TO CONSIDER THE CLAIM OF THE ASSESSEE UNDER SECTION 80G FOR THE PAYMENT BHARAT PETROLEUM CORPORATION LTD. 6 TOWARDS CONTRIBUTION TO RAJIV GANDHI INSTITUTE OF PETROLEUM TECHNOLOGY OF ` 1.57 CRORES. 9. THE ASSESSEE HAS CLAIMED TO HAVE MADE DONATION TO RAJIV GANDHI INSTITUTE OF PETROLEUM TECHNOLOGY OF ` 1.57 CRORES FOR WHICH IT HAS CLAIMED DEDUCTION UNDER SECTION 37(1) ON THE GROUND THAT EDUCATION PROVIDED BY THE INSTITUTION IS GOING TO HELP IN THE OVERALL DEVELOPMENT OF THE COMPANY AS A PETROLEUM COMPANY. THE ASSESSING OFFICER REJECTED THE CLAIM ON THE GROUN D THAT THE ASSESSEE COULD NOT FILE THE EVIDENCE. 10. BEFORE THE LEARNED COMMISSIONER (APPEALS), THE ASSESSEE FILED A COPY OF RECEIPT ALONG WITH ITS SUBMISSION BEARING RECEIPT NO.010 DATED 22 ND MARCH 2007, FOR ` 1.55 CRORES, WHEREBY THE PAYMENT WAS MADE THROUG H CHEQUE DATED 6 TH MARCH 2007. THE SUBMISSIONS OF THE ASSESSEE BEFORE THE LEARNED COMMISSIONER (APPEALS) WERE AS UNDER: 6.1 DURING THE YEAR APPELLANT CLAIMED RS.1,57,00,000 AS CONTRIBUTION TO RAJIV GANDHI INSTITUTE OF PETROLEUM INSTITUTE. 6.2 APPELLANT CLAIMED ABOVE EXPENDITURE AS ALLOWABLE U/S 37 OF INCOME TAX ACT, 1961 AS RSJIV GANDHI INSTITUTE OF PETROLEUM TECHNOLOGY IS AN ASSOCIATION PROMOTED BY ALL EMINENT PETROLEUM COMPANIES INCLUDING THE APPELLANT FOR IMPARTING EDUCATION IN THE FIELD OF PETROLEUM TECHNOLOGY. 6.3 THE INSTITUTE TRAINS PETROLEUM ENGINEERS WHO ARE THEREAFTER CONSIDERED FOR APPOINTMENT AT VARIOUS LOCATIONS OF APPELLANT INCLUDING REFINERIES. 6.4 THE EDUCATION IMPARTED ON THE SUBJECT IS GOING TO BE HELPFUL IN THE OVERALL DEVELOPMENT O F THE COMPANY AND THE INSTITUTE PRODUCES SUFFICIENT NUMBER OF PETROLEUM ENGINEERS TO FEED THE FUTURE REQUIREMENT OF THE APPELLANT'S INDUSTRY . 6.5 LD. AO HAD DISALLOWED A SUM OF RS. 1 ,57,00,000 / - STATING THAT ASSESSEE FAILED TO FURNISH ANY EVIDENCE IN BHARAT PETROLEUM CORPORATION LTD. 7 RESP ECT OF ITS CLAIM OF PAYMENT TO RGPIT. 6.6 WE ARE ATTACHING THE CHARTER OF THE INSTITUTE WHICH IS DOWNLOADED FROM THEIR OFFICIAL WEBSITE ALONG WITH A COPY OF THE RECEIPT EVIDENCING PAYMENT OF THE CONTRIBUTION MADE AS 'ANNEXURE 18 ' AND 'ANNEXURE - 19' . 6.7 SINCE THE CONTRIBUTION 18 SUPPORTED! EVIDENCED BY A RECEIPT, THE AO MAY BE DIRECTED TO ALLOW THE DEDUCTION . 11. THE LEARNED COMMISSIONER (APPEALS) HELD THAT THE DONATION TO SUCH INSTITUTION CAN BE ALLOWED ONLY WHEN SUCH INSTITUTION OR CONTRIBUTION IS SPEC IFICALLY APPROVED BY THE GOVERNMENT FOR DEDUCTION UNDER ANY SPECIFIC SECTION OF THE INCOME TAX ACT, 1961. SUCH DONATION CAN BE ALLOWED AS DEDUCTION UNDER SECTION 80G, IF REQUIRED CONDITIONS ARE FULFILLED. HE REJECTED THE ASSESSEES CLAIM FOR DEDUCTION UNDE R ANY OTHER PROVISIONS , BECAUSE THE INSTITUTION WAS NOT REGISTERED UNDER FOR ANY OTHER SPECIFIC SECTION OF THE ACT. HOWEVER, HE HELD THAT THE CLAIM CAN BE ENTERTAINED BY THE ASSESSING OFFICER FOR DEDUCTION UNDER SECTION 80G, IF THE CONDITIONS ARE FULFILLED . HE DIRECTED THE ASSESSEE TO FILE NECESSARY CERTIFICATE / DOCUMENT FOR CLAIM OF DEDUCTION UNDER SECTION 80G, BEFORE THE ASSESSING OFFICER. THE REVENUE IS AGGRIEVED THAT THE LEARNED COMMISSIONER (APPEALS) COULD NOT SET ASIDE THE ISSUE TO THE FILE OF THE AS SESSING OFFICER. 12. AFTER HEARING THE LEARNED DEPARTMENTAL REPRESENTATIVE, WE FIND THAT THE LEARNED COMMISSIONER (APPEALS) HAS MERELY ASKED THE ASSESSING OFFICER TO EXAMINE THE CLAIM OF DEDUCTION UNDER SECTION 80G, AFTER VERIFYING THE NECESSARY DOCUMENTS / C ERTIFICATE FOR THE CLAIM. WE BHARAT PETROLEUM CORPORATION LTD. 8 DO NOT FIND ANY VIOLATION OF PROVISION OF SECTION 250(4), WHILE GIVING SUCH DIRECTION AS HE HAS NOT SET ASIDE THE MATTER FOR FRESH ADJUDICATION BUT ONLY FOR VERIFICATION WHICH HE EMPOWERED TO DO SO WHILE DISPOSING OFF THE APPEA L. THUS, WE DO NOT FIND ANY MERIT IN GROUND NO.3, RAISED BY THE REVENUE AND THE SAME IS DISMISSED. 13. 2007 08 13. IN THE RESULT, REVENUES APPEAL IS DISMISSED. WE NOW TAKE UP REVENUES APPEAL BEING ITA NO. 4188/MUM./ 2013, FOR THE ASSESSMENT YEAR 2008 09 . 14. AFTER HEARING THE LEARNED DEPARTMENTAL REPRESEN TATIVE, WE FIND THAT THE GROUND RAISED BY THE REVENUE IN THIS YEAR ARE SIMILAR TO THE GROUND NO.2, RAISED BY THE REVENUE IN THE A.Y. 2007 08 , WHICH WE HAV E DISMISSED IN VIEW OF OUR FINDINGS GIVEN ABOVE. CONSEQUENTLY, THE GROUNDS RAISED BY THE REVENUE IN THIS APPEAL ARE ALSO DISMISSED. 15. 2007-08 2008 09 15. IN THE RESULT, REVENUES APPEAL S FOR THE ASSESSMENT YEAR 2007 08 AND 2008 09 ARE DISMISSED. 12 TH SEPTEMBER 2014 ORDER PRONOUNCE D IN THE OPEN COURT O N 12 TH SEPTEMBER 2014 SD/ - . . R.C. SHARMA ACCOUNTANT MEMBER SD/ - AMIT SHUKLA JUDICIAL MEMBER MUMBAI, DATED : 12 TH SEPTEMBER 2014 BHARAT PETROLEUM CORPORATION LTD. 9 / COPY OF THE ORDER FORWARDED TO : (1) / THE ASSESSEE ; (2) / THE REVENUE; (3) ( ) / THE CIT(A ) ; (4) / THE CIT, MUMBAI CITY CONCERNED ; (5) , , / THE DR, ITAT, MUMBAI ; (6) / GUARD FILE . / TRUE COPY / BY ORDER . / PRADEEP J. CHOWDHURY / SR. PRIVATE SECRETARY / / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI