INCOME TAX OFFICE, WARD 1(1)(4), MUMBAI V. GAS AND POWER INVESTMENT CO. LTD., MUMBAI

ITA 4467/MUM/2017

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 3445 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 4 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-11-2020
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2007-2008
• Appeal Filed On: 16-06-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: NIKHIL CHOUDHARY
• Keywords: Opportunity of being heard; Set aside
• Section: 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBER AND SHRI M. BALAGANESH, ACCOUNTANT MEMBER ITA NO. 4467/MUM./2017 ( ASSESSMENT YEAR : 2 007 08 ) ITA NO. 4468/MUM./2017 ( ASSESSMENT YEAR : 2 008 09 ) ITA NO. 4469/MUM./2017 ( ASSESSMENT YEAR : 2 009 10 ) INCOME TAX OFFICER WARD 1(1)(4), MUMBAI . APPELLANT V/S GAS AND POWER INVESTMENT CO. LTD. ASIAN BUILDING, GROUND FLOOR 17, R.KAMANI MARG, BALLARD ESTATE MUMBAI 400 001 PAN AACCG3843J . RESPONDENT ITA NO. 5238/MUM./2017 ( ASSESSMENT YEAR : 2 012 13 ) ITA NO. 5239/MUM./2017 ( ASSESSMENT YEAR : 2 013 14 ) DY. COMMISSIONER OF INCOME TAX CIRCLE 1(1)(2 ), MUMBAI . APPELLANT V/S GAS AND POWER INVESTMENT CO. LTD. ASIAN BUILDING, GROUND FLOOR 17, R.KAMANI MARG, BALLARD ESTATE MUMBAI 400 001 PAN AACCG3843J . RESPONDENT REVENUE BY : SHRI NIKHIL CHOUDHARY ASSESSEE BY : NONE DATE OF HEARING 29 . 10 .2020 DATE OF ORDER 06.11.2020 2 GAS AND POWER INVESTMENT CO. LTD. O R D E R PER SAKTIJIT DEY, J.M. THESE APPEALS BY THE REVENUE RELATING TO THE SAME ASSESSEE ARISE OUT OF FIVE SEPARATE ORDERS PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) 2 AND 6, MUMBAI, PERTAINING TO THE ASSESSMENT YEAR S 2007 08, 2008 09, 2009 10, 2012 13 AND 2013 14. 2. THE GROUNDS RAISED IN ALL THESE APPEALS ARE IDENTICAL EXCEPT VARIATION IN FIGURES. 3. AS COULD BE SEEN FROM THE GROUNDS RAISED, THE DISPUTE IS WITH REGARD TO DELETION OF DISALLOWANCE OF INTEREST PAYMENT. 4. WHEN THE APP EAL S WERE CALLED FOR HEARING NO ONE WAS PRES ENT ON BEHALF OF THE ASSESSEE TO REPRESENT THE CASE. THERE IS NO APPLICATION SEEKING ADJOURNMENT EITHER. ON A PERUSAL OF THE ORDER SHEET ENTRIES, IT IS NOTICED THAT FROM THE VERY FIRST DATE OF HEARING ITSELF I.E., 8 TH NOVEMBER 2018, NO ONE APPEARED ON BEHA LF OF THE ASSESSEE EACH TIME T HE APPEAL WAS FIXED FOR HEARING D ESPITE THE FACT THAT SEVERAL NOTICES WERE ISSUED THROUGH REGISTERED POST AS WELL AS THROUGH THE O/O THE LEARNED DEPARTMENTAL REPRESENTATIVE. IN VIEW OF THE ABOVE AND C ONSIDERING THE NATURE OF D ISPUTE, WE PROCEED TO DISPOSE OFF THE 3 GAS AND POWER INVESTMENT CO. LTD. APPEAL S EX PARTE QUA THE ASSESSEE AFTER HEARING THE LEARNED DEPARTMENTAL REPRESENTATIVE AND ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. 5. BRIEF FACTS A RE, THE ASSESSEE, AS IT APPEARS FROM THE FACTS ON RECORD , WAS INCORPORATED ON 15 TH FEBRUARY 2005, AS A SPECIAL PURPOSE VEHICLE (SPV) BY VARIOUS FINANCIAL INSTITUTIONS FOR THE PURPOSE OF SETTLEMENT OF CLAIM OF OFF SHORE LENDERS OF DABHOL POWER COMPANY (DPC). DURING THE ASSESSMENT PROCEEDINGS, FOR THE ASSESSMENT Y EAR S UNDER APPEAL, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAD CLAIMED INTEREST EXPENDITURE OF VARIOUS AMOUNT S IN THE RELEVANT ASSESSMENT YEAR S . THE ASSESSING OFFICER OBSERVED THAT THE ACCOUNTING POLICY FOLLOWED BY THE ASSESSEE WAS SIMILAR TO THE P AST ASSESSMENT YEAR S . FURTHER HE OBSERVED THAT LIKE THE PAST ASSESSMENT YEAR S , THE ASSESSEE HAS NOT CLAIMED THE INTEREST EXPENDITURE ON ACTUAL PAYMENT BASIS. ACCORDINGLY, HE HELD THAT IN TERMS OF PROVISION CONTAINED UNDER SECTION 43B(E ) OF THE ACT, THE INT EREST EXPENDITURE CANNOT BE ALLOWED TO THE ASSESSEE. ACCORDINGLY, HE DISALLOWED THE INTEREST EXPENDITURE CLAIMED BY THE ASSESSEE IN ALL THE ASSESSMENT YEARS UNDER DISPUTE. BEING AGGRIEVED WITH THE AFORESAID DECISION OF THE ASSESSING OFFICER, THE ASSESSEE P REFERRED APPEALS BEFORE THE FIRST APPELLATE AUTHORITY. 6. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE IN THE CONTEXT OF THE F ACTS AND MATERIAL ON RECORD, LEARNED COMMISSIONER (APPEALS) 4 GAS AND POWER INVESTMENT CO. LTD. FOUND THAT WHILE CONSIDERING IDENTICAL NATURE OF DISPUTE IN ASSESSE ES OWN CASE IN ASSESS MENT YEAR 2011 12, HIS PREDECESSOR IN OFFICE HAD ALLOWED ASSESSEES CLAIM OF DEDUCTION IN RESPECT OF INTEREST EXPENDITURE. THUS, FOLLOWING THE SAID DECISION O F HIS PREDECESSOR IN OFFICE, LEARNED COMMISSIONER (APPEALS) DELETED THE DISA LLOWANCE OF INTEREST EXPENDITURE MADE BY THE ASSESSING OFFICER IN ALL THE ASSESSMENT YEARS UNDER DISPUTE. 7. THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED , WHILE DECIDING IDENTICAL ISSUE IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2011 12, THE TRIBUNA L HAS RESTORED THE ISSUE TO THE ASSESSING OFFICER FOR DE NOVO ADJUDICATION. HE ALSO FURNISHED A COPY OF THE ORDER PASSED BY THE TRIBUNAL IN ITA NO.4414/MUM./2016, DATED 25 TH APRIL 2018. THUS, HE SUBMITTED , THE ISSUE MAY BE RESTORED BACK TO THE ASSESSING OF FICER WITH SIMILAR DIRECTION. 8. WE HAVE HEARD THE LEARNED DEPARTMENTAL REPRESENTATIVE AND PERUSED THE MATERIAL ON RECORD. UNDISPUTEDLY, WHILE COMPLETING THE ASSESSMENT FOR THE IMPUGNED ASSESSMENT YEARS, THE ASSESSING OFFICER HAD NOTICED THAT THE ASSESSEE H AD NOT ACTUALLY PAID THE INTEREST DURING THE RELEVANT PREVIOUS YEAR S. THEREFORE , INVOKING THE PROVISIONS OF 43B(E) OF THE ACT, HE HAS DISALLOWED THE IN TEREST EXPENDITURE. HOWEVER, LEARNED COMMISSIONER (APPEALS) HAS ALLOWED ASSESSEES 5 GAS AND POWER INVESTMENT CO. LTD. CLAIM BY RELYING UPON THE DECISION OF HIS PREDECESSOR IN OFFICE IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2011 12. 9. A CAREFUL PERU SAL OF THE IMPUGNED ORDER S OF LEARNE D COMMISSIONER (APPEALS) REVEAL THAT WHILE DISPOSING OFF THE APPEAL FOR THE ASSESSMENT YEAR 2011 12, LEARNED COMMISSIONER (APPEALS) HAS FOLLOWED HIS ORDER OF THE ASSESSMENT YEAR 2010 11. HOWEVER, T HE TRIBUNAL , WHILE DECIDING REVENUES APPEAL IN ITA NO.3128/MUM./2018, DATED 3 RD JANUARY 2 018, HAS RESTORED THE ISSUE TO THE FILE OF THE LEARNED COMMISSIONER (APPEALS) FOR FRESH ADJUDICATION. FOLLOWING THE AFORESAID DECISION OF THE BENCH, THE TRIBUNAL , WHILE DECIDING REVENUES APPEAL IN ASSESSMENT YEAR 2011 12, IN THE ORDER CITED BY LEARNED DEP ARTMENTAL REPRESENTATIVE HAS RESTORED THE ISSUE BACK TO THE ASSESSING OFFICER FOR FRESH ADJUDICATION. THUS, AS COULD BE S EEN, THE VERY BASIS ON WHICH LEARNED COMMISSIONER (APPEALS) ALLOWED ASSESSEES CLAIM OF DEDUCTION TOWARDS INTEREST EXPENDITURE IN THE I MPUGNED ASSESSMENT YEAR, NO LONGER EXIST S AS THE ORDERS PASSED BY THE LEARNED COMMISSIONER (APPEALS) IN ASSESSMENT YEAR 2010 11 AND 2011 12 HAVE BEEN RESTORED BACK TO LEARNED COMMISSIONER (APPEALS) AND THE ASSESSING OFFICER RESPECTIVELY , FOR FRESH ADJUDICA TION. THEREFORE, CONSISTENT WITH THE VIEW OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR S 2010 11 AND 2011 12, WE ARE INCLINED TO RESTORE THE ISSUE RAISED IN THE PRESENT APPEAL S TO THE ASSESSING 6 GAS AND POWER INVESTMENT CO. LTD. OFFICER FOR DECIDING AFRESH KEEPING IN VIEW T HE DIRECTION S OF THE TRIBUNAL IN ASSESSMENT YEAR 2010 11 AND 2011 12 AS NOTED ABOVE. IT GOES WITHOUT SAYING, THE ASSESSING OFFICER WHILE DECIDING THE ISSUE MUST PROVIDE REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. WITH THE AFORESAID OBSERVAT IONS, THE IMPUGNED ORDERS OF LEARNED COMMISSIONER (APPEALS) ARE SET ASIDE. GROUNDS RAISED BY THE REVENUE ARE ALLOWED FOR STATISTICAL PURPOSES. 10. IN THE RESULT, APPEALS ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN C OURT ON 06.11.2020 SD/ - M. BALAGANESH ACCOUNTANT MEMBER SD/ - SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED: 06.11.2020 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 ASSISTANT REGISTRAR ITAT, MUMBAI