ACIT, New Delhi V. M/s. Sasan Power Ltd., Navi Mumbai

ITA 4254/DEL/2015

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 6155 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 6 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-01-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2012-2013
• Appeal Filed On: 02-07-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NAINA SOIN KAPILA
• Assessee Lawyers: AJAY KUMAR AGARWAL
• Keywords: Capital receipt

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES: BENCH D, NEW DELHI BEFORE SMT. BEENA A PILLAI, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO. 4254/DEL/2015 AY: 2012-13 ACIT CIRCLE 22(2), ROOM NO. 226, 2 ND FLOOR, C.R. BLDG., I.P. ESTATE, NEW DELHI. VS . SASAN POWER LTD. H BLOCK, 1 ST FLOOR, DHRUBHAI AMBANI KNOWLEDGE CITY, KOPARKHAIRNE, NAVI MUMBAI. AAKCS0723M (APPELLANT) (RESPONDENT) APPELLANT BY : SMT. NAINA SOIN KAPILA, SR. DR RESPONDENT BY : SH. AJAY KUMAR AGARWAL, CA DATE OF HEARING : 22/01/2019 DATE OF PRONOUNCEMENT : 24/01/2019 ORDER PER BEENA A PILLAI, JUDICIAL MEMBER PRESENT APPEAL HAS BEEN FILED BY REVENUE AGAINST OR DER DATED 29/04/15 PASSED BY LD. CIT (A)-8 ON FOLLOWING GROUN DS OF APPEAL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD.CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 4,59,51,001/- MADE ON ACCOUNT OF INTEREST INCOME TR EATED AS REVENUE RECEIPTS INSTEAD OF CAPITAL RECEIPTS CLA IMED BY THE ASSESSEE. 2. THE APPELLANT CRAVES TO AMEND, MODIFY, ALTER, ADD O R FOREGO ANY GROUNDS OF APPEAL AT ANY TIME BEFORE OR DURING THE HEARING OF THIS APPEAL. BRIEF FACTS OF THE CASE ARE AS UNDER : 2. APPELLANT HAD FILED ITS RETURN OF INCOME FOR AY 2012-13 ON 29.09.2012 DECLARING TOTAL INCOME OF RS. 2,10,14,28 0/-. CASE WAS ITA NO. 4254/DEL/2015 2 SELECTED FOR SCRUTINY. DURING THE SCRUTINY PROCEED ING, LD. AO OBSERVED THAT, AMOUNT OF INTEREST EARNED RS. 4,59,51,001/- W AS CONSIDERED AS CAPITAL RECEIPT AND NOT OFFERED FOR TAXATION. ASSE SSEE EXPLAINED BEFORE LD. AO THAT THIS ISSUE HAS ALREADY DECIDED BY THE HONBLE DELHI HIGH COURT IN FAVOUR OF ASSESSEE. HOWEVER, LD. AO MADE ADDITION ON THE GROUND THAT DEPARTMENT HAS FILED SLP BEFORE THE HONBLE SUPREME COURT ON THIS ISSUE FOR AY 2007-08. 3. AGGRIEVED BY ORDER OF LD.AO, ASSESSEE PREFERRED APPEAL BEFORE LD. CIT (A), WHO DELETED THE ADDITION. 4. AGGRIEVED BY ORDER OF LD.CIT (A) REVENUE IS IN A PPEAL BEFORE US NOW. 5. AT THE OUTSET, LD.AR SUBMITTED THAT IDENTICAL IS SUE WAS RAISED IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2007-08, 20 08-09 AND 2010-11. HE SUBMITTED THAT THIS ISSUE NOW STANDS SETTLED WIT H ORDER PASSED BY HONBLE DELHI HIGH COURT IN ASSESSEES OWN CASE, AGAINST WHICH REVENUE FILED SLP BEFORE HONBLE SUPREME COURT . 6. ON THE CONTRARY LD.DR PLACED RELIANCE UPON OBSER VATIONS OF LD.AO. 7. WE HAVE PERUSED SUBMISSIONS ADVANCED BY BOTH SID ES AND THE LIGHT OF THE RECORDS PLACED BEFORE US. 7.1 IT IS OBSERVED THAT HONBLE DELHI HIGH COURT IN ASSESSEES OWN CASE REPORTED IN (2012) 18 TAXMANN.COM 182 HAS DECIDED THIS ISSUE AS UNDER: 14. IT IS CLEAR FROM THE FACTS STATED ABOVE THAT C OMMISSIONER OF INCOME TAX (APPEALS) AND TRIBUNAL HAVE SPECIFICALLY HELD THAT THE INTEREST INCOME WAS ON CAPITAL ACCOUNT. WE HAVE GONE THROUGH THE GROUNDS O F APPEAL AND DO NOT FIND ANY REASON OR JUSTIFICATION TO UPSET THE SAID : FINDING. THE FACTUAL FINDINGS RECORDED BY THE CIT(APPEALS) AND TRIBUNAL ARE NOT UNDER CHALLEN GE. THE CIT(APPEALS) AND THE TRIBUNAL HAVE HELD THAT IN VIEW OF THE FACTUAL POSI TION QUOTED ABOVE THE DECISION OF THE SUPREME COURT IN CIT V. BOKARO STEEL LTD. [1999] 236 ITR 315 / 102 TAXMAN 94 WAS APPLICABLE AS THE COMMITMENT ADVANCE, WHICH HA D BEEN PAID TO PFC. THIS IS NOT A CASE OF SURPLUS FUNDS, WHICH WERE AVA ILABLE AND INVESTMENT WERE MADE IN FIXED DEPOSITS TO EARN INTEREST. THE INTERE ST PAID TO THE POWER PROCUREMENT UTILITIES ON COMMITMENT ADVANCES WAS CA PITALIZED. INTEREST PAID AND INTEREST RECEIVED WERE INEXTRICABLY, LINKED AND HAV E A COMMONALITY ABOUT THEIR ITA NO. 4254/DEL/2015 3 NATURE AND CHARACTER. THE APPELLANT CANNOT TREAT TH EM DIFFERENTLY. COMMITMENT ADVANCES AND INTEREST PAID AND RECEIVED HAD REFEREN CE TO BIDDING PROCESS AND LINKED TO THE PROJECT/PURPOSE FOR WHICH THE RESPOND ENT WAS SET UP. IN VIEW OF THE FACTUAL MATRIX, INTEREST RECEIVED ON UNUTILIZED COM MITMENT ADVANCES CANNOT BE TAXED AS REVENUE INCOME AND INTEREST PAID ON COMMIT MENT ADVANCE TREATED AS A CAPITAL EXPENSE. THIS WILL BE CONTRADICTORY. THE EN TIRE EXPENDITURE FOR INVITING BIDS ETC. AND EVEN DOCUMENTATION WAS PAID TO PFC. THE AM OUNTS RECEIVED FROM THE PROSPECTIVE BIDDERS ON ACCOUNT OF SALE OF TENDER DO CUMENTS WAS ALSO TRANSFERRED TO PFC. AS NOTICED ABOVE, REVENUE HAS NOT CHALLENGE D AND HAS ACCEPTED THE ORDER OF THE TRIBUNAL DELETING ADDITION OF RS. L,35 ,81,234/-PAID BY THE RESPONDENT- ASSESSEE TO PFC FOR PREPARATION OF TENDER DOCUMENTS . IN VIEW OF THE FACTUAL MATRIX, THE TRIBUNAL HAS RIGHTLY FOLLOWED THE RATIO IN INDIAN OIL PANIPAT POWER CONSORTIUM LTD. 'S CASE (SUPRA). 8. IT IS OBSERVED THAT LD.CIT (A) UPON FOLLOWING AB OVE OBSERVATIONS BY HONBLE DELHI HIGH COURT AND SUBSEQUENT ORDERS PASSED BY THIS TRIBUNAL IN ASSESSEES OWN CASE, DELETED ADDITION MADE BY LD .AO. 8.1 LD. CIT(A) FURTHER RECORDED THAT, ASSESSING OFF ICER SIMPLY FOLLOWED ORDERS OF EARLIER YEARS AND ADDED AMOUNT ON THE RE ASON THAT DEPARTMENT FILED SLP BEFORE HONBLE SUPREME COURT . AS THE ISSUE AS ON DATE STANDS SETTLED IN FAVOUR OF ASSESSEE BY DECISI ON OF HONBLE DELHI HIGH COURT IN ASSESSEES OWN CASE (SUPRA) WE DO NOT FIND ANY INFIRMITY IN ORDER PASSED BY LD.CIT (A). ACCORDINGLY, THE GROUNDS RAISED BY REVENUE STANDS D ISMISSED. IN THE RESULT APPEAL FILED BY REVENUE STANDS DISMIS SED. ORDER PRONOUNCED IN THE OPEN COURT ON 24/01/2019 SD/- SD/- (PRASHANT MAHARISHI) (B EENA A PILLAI) ACCOUNTANT MEMBER JUDIC IAL MEMBER DATED: 24.01.2019 *KAVITA ARORA ITA NO. 4254/DEL/2015 4 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT TRUE COPY ASSISTANT REGISTRAR ITAT NEW DELHI DATE OF DICTATION 22 .01.2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 23 .01.2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P S/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 2 4 / 0 1 DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS 2 4 / 0 1 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WE BSITE OF ITAT 2 4 / 0 1 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 2 4 / 0 1 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER