INDBANK MERCHANT BANKING SERVICES LIMITED, CHENNAI V. DCIT CORP CIRCLE 2 (3), CHENNAI

ITA 463/CHNY/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 9531 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 7 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-09-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Assessment Year: 2010-2011
• Appeal Filed On: 09-02-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R ANITHA IRS
• Assessee Lawyers: SANJEEV ADITYA M C A
• Keywords: Business income; Earning of tax free income; Question of law; Set aside; Capital Gains
• Section: 143(3); 80IA

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH : CHENNAI . . . , , [BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ] ./I.T.A. NO.463/CHNY/2018 ! / ASSESSMENT YEAR : 2010-2011. INDBANK MERCHANT BANKING SERVICES LIMITED, 1 ST FLOOR, KHIVRAJ COMPLEX, NO.480, ANNA SALAI, NANDANAM, CHENNAI 600 035. VS. THE DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE II(3) CHENNAI. [PAN AAACI 2107B] ( / APPELLANT) ( /RESPONDENT) '# $ % / APPELLANT BY : SHRI. SANJEEV ADITYA M. C.A. &' '# $ % /RESPONDENT BY : MS. R. ANITHA, IRS, JCIT. ( ) $ * /DATE OF HEARING : 29-08-2019 +,! $ * /DATE OF PRONOUNCEMENT : 26-09-2019 / O R D E R PER INTURI RAMA RAO, ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED AG AINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-1 3, CHENNAI (CIT(A) FOR SHORT) DATED 09.11.2017 FOR THE ASSE SSMENT YEAR (AY) 2010-2011. ITA NO.463/2018 :- 2 -: 2. THE ASSESSEE RAISED THE FOLLOWING GROUNDS OF APPEAL : 1. THE ORDER OF THE COMMISSIONER OF INCOME TAX ( APPEALS)-13, CHENNAI, CONFIRMING THE DISALLOWANCES AND ADDITIONS MADE BY THE ASSESSING OFFICER, IS AGAINST THE PROVISIONS OF LAW AND CONTRARY TO THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED I N CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN TREATING THE PRO FIT EARNED ON SALE OF SHARES (BOTH SHORT TERM AND LONG TERM GAINS) AS BUS INESS INCOME, REJECTING THE APPELLANTS CLAIM FOR EXEMPTION UNDER SECTION 10(38) OF THE INCOMETAX ACT. THE COMMISSIONER OF INCOME TAX ( APPEALS) OUGHT TO HAVE HELD THAT PROVISION FOR DIMINUTION IN VALUE OF INVESTMENTS IS MADE ONLY FOR BOOK PURPOSES AND NOT CLAIMED IN THE RETURN AND THE LONG TERM INVESTMENTS, NOT BEING STOCK-IN-TRADE, TH E PROFIT ON SALE IS ELIGIBLE FOR EXEMPTION UNDER SECTION 10(38). 3. THE COMMISSIONER OF INCOME TAX (APPEALS) IS NOT JUSTIFIED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN R EJECTING THE CLAIM OF THE APPELLANT TO SET-OFF THE LOSS OF RS.4,15,95,000 /- INCURRED ON SALE OF SHARES OF M/S KAMALA TEA COMPANY LIMITED AND M/S KARNATAKA MALLADI BIOTICS LIMITED, AS NOT HAVING BEEN MADE IN THE RETURN, RELYING ON THE DECISION OF THE SUPREME COURT IN GOETZE (IND IA) LIMITED (284 ITR 323). THE COMMISSIONER OF INCOME TAX (APPEALS) OUGHT TO HAVE HELD THAT THE APPELLANT COULD NOT HAVE MADE THE CLA IM IN THE RETURN AND THE CAPITAL GAINS HAVING BEEN ASSESSED AS BUSIN ESS INCOME, THE LOSS I ELIGIBLE FOR THE SAME TREATMENT AS BUSINESS LOSS. 4. THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED I N CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN NOT ALLOWING THE REVERSAL OF PROVISIONS MADE FOR NPAS AMOUNTING TO RS.3,39,28,64 7/- IN THE P&L A/C FOR WANT OF DETAILS. HE OUGHT TO HAVE HELD THAT THE PROVISION MADE FOR NPAS WERE NOT ALLOWED IN THE EARLIER YEARS OF A SSESSMENT AND RELYING ON THE STATEMENTS/DETAILS FURNISHED DURING ASSESSMENT AND APPELLATE PROCEEDINGS, AND ALLOW THE CLAIM. 5. THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED I N CONFIRMING THE ADDITION OF F68,25,052/- AND OUGHT TO HAVE HELD THA T THE ASSESSING OFFICERS HAS NOT STATED ANY CLEAR REASONING FOR MA KING THE ADDITION. FOR THESE REASONS AND FOR ANY OTHER REASON THAT MAY BE ADDUCED AT THE TIME OF HEARING, IT IS PRAYED THAT THE HONBLE TRIBUNAL MAY BE PLEASED TO ALLOW THE APPEAL . ITA NO.463/2018 :- 3 -: 3. THE BRIEF FACTS OF THE CASE ARE AS UNDER: THE APPELLANT NAMELY INDBANK MERCHANT BANKING SERV ICES LIMITED IS A COMPANY INCORPORATED UNDER THE PROVISI ONS OF THE COMPANIES ACT, 1956. IT IS ENGAGED IN THE BUSINES S OF MERCHANT BANKING, STOCK BROKING AND ALLIED FINANCIAL SERVICE S. THE RETURN OF INCOME FOR THE AY 2010-11 WAS FILED ON 29.09.2010 D ISCLOSING LOSS OF RS. 9,56,66,648/-. AGAINST THE SAID RETURN OF INCOM E, THE ASSESSMENT WAS COMPLETED BY THE DY. CIT, COMPANY CIRCLE-II(3) , CHENNAI (HEREINAFTER CALLED AO) VIDE ORDER DATED 26.03.20 13 PASSED U/S. 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) AT TOTAL LOSS OF F2,24,82,614/-. WHILE DOING SO, THE AO TREATED THE GAIN ARISING ON SALE OF SHARES OF F3,24,30,335/- AS INCOME FROM B USINESS AS AGAINST THE CLAIM THAT IT IS LONG TERM CAPITAL GAIN EXEMPT FROM U/.10(38) OF THE ACT. THE ASSESSING OFFICER ALSO NOT ALLOWED THE CL AIM OF DEDUCTION OF REVERSAL OF PROVISION MADE ON NON PERFORMING ASSET S CREDITED TO THE PROFIT AND LOSS ACCOUNT FOR REASON OF ASSESSEE S FAILURE TO SUBSTANTIATE THE CLAIM THAT IN THE YEAR OF CREATION OF PROVISION, NO DEDUCTION WAS ALLOWED. 4. BEING AGGRIEVED BY THE ABOVE ADDITIONS, THE ASSESSE E- COMPANY PREFERRED AN APPEAL BEFORE LD. CIT(A) AND CONTENDED THAT SHARES WHICH WERE SOLD DURING THE YEAR ARE HELD AS INVESTMENTS AND AN ALTERNATIVE CLAIM WAS MADE THAT LOSS ARISING ON ACCOUNT OF SALE OF ITA NO.463/2018 :- 4 -: SHARES OF M/S. KAMALA TEA COMPANY AND M/S. KARNATAK A MALLADI OF 4,15,95,000/- SHOULD BE SET OFF AGAINST THE PROFIT MADE. IT IS FURTHER CONTENDED THAT THE PROVISIONS ON NPA ACCOUNTS OF 3,39,28,647/- CREDITED TO PROFIT AND LOSS ACCOUNT SHOULD BE ALLOW ED AS DEDUCTION IN THE YEAR OF REVERSAL OF PROVISION AS THE SAME WAS NOT ALLOWED AS DEDUCTION IN THE YEAR OF CREATION OF PROVISION. THE LD. CIT(A) CONSIDERING THE SUBMISSIONS MADE BY THE ASSESSEE DI SMISSED THE APPEAL. 5. BEING AGGRIEVED BY THE ORDER OF THE LD. CIT(A), TH E APPELLANT IS IN APPEAL BEFORE US IN THE PRESENT APPEAL. IT IS CONTENDED THAT PROFIT ARISING ON SALE OF SHARES SHOULD BE ASSESSED UNDER THE HEAD CAPITAL GAINS IN VIEW OF CIRCULAR NO.6/2016 OF CENTRAL BOA RD OF DIRECT TAXES DATED 29.02.2016. IT IS FURTHER CONTENDED THAT THE RE IS NO BAR TO MAKE A CLAIM OTHERWISE THAN BY WAY OF FILING OF RET URN, THEREFORE LOSS ARISING ON SALE OF SHARES OF M/S. KAMALA TEA COMPAN Y AND M/S. KARNATAKA MALLADI SHOULD BE ALLOWED AS DEDUCTION. F URTHER, IT IS SUBMITTED REVERSAL OF PROVISION MADE FOR NPA OF F3 ,39,28,647/-, THE SAME SHOULD BE ALLOWED AS DEDUCTION. 6. ON THE OTHER HAND, THE LD. SR. DEPARTMENTAL REPRESE NTATIVE PLACED RELIANCE ON THE ORDERS OF LOWER AUTHORITIES. ITA NO.463/2018 :- 5 -: 7. WE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATE RIAL ON RECORD. GROUND NO.1 IS GENERAL IN NATURE THEREFOR E, DOES NOT REQUIRE ANY ADJUDICATION. 8. GROUND NO.2 CHALLENGES THE DECISION OF THE LOWER AU THORITIES TO TREAT THE INCOME ARISING ON SALE OF SHARES AS BU SINESS INCOME AS AGAINST THE CLAIM OF LONG TERM CAPITAL GAINS. ADMIT TEDLY, THE TRANSACTION OF PURCHASE OF SHARES WAS SHOWN AS STO CK IN TRADE IN THE BOOKS OF ACCOUNTS. THIS IS DEMONSTRATED BY THE FAC T THAT ASSESSEE HAD SHOWN DIMINUTION AND APPRECIATION IN THE VALUE OF SHARES IN THE PROFIT AND LOSS ACCOUNT. THEREFORE, EVEN THE CBDT CIRCULAR NO.6/2016, DATED 29.02.2016 DOES NOT COME TO THE RESCUE OF THE ASSE SSEE AS THE CBDT CIRCULAR SPECIFICALLY EXCLUDED INVESTMENT PORTFOLI O WHICH ARE TREATED AS STOCK IN TRADE IN THE BOOKS OF ACCOUNT. THEREFOR E THE DECISION OF CO-ORDINATE BENCH IN ASSESSEES OWN CASE IN ITA NO .2654/CHNY/2017 FOR ASSESSMENT YEAR 2009-2010, DATED 05.04.2018 HO LDS THE FIELD WHICH IS HELD AS UNDER:- 4. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND PERUSE D THE ORDERS OF THE AUTHORITIES BELOW. ON THE QUESTION A S TO TREATMENT OF SURPLUS ARISING TO THE ASSESSEE ON SALE OF INVES TMENTS, WHETHER TO BE TREATED AS CAPITAL GAINS OR BUSINESS PROFITS, WHAT WAS HELD BY THIS TRIBUNAL IN ITS ORDER DATED 17.04.2012 IN I TA NOS.72 & 73/MDS/2012, FOR ASSESSMENT YEARS 2007-08 AND 2008- 09 IS REPRODUCED HEREUNDER :- 11.WE CONSIDERED THE MATTER IN DETAIL. WE ALSO CONSIDERED THE DECISION RELIED ON BY THE COUNSEL APPEARING FOR THE ASSESSEE IN THE CASE OF ACIT V. ITA NO.463/2018 :- 6 -: STARGATE INVESTMENTS (P) LTD. (10 ITR (TRIB) 211) (CHENNAI). THE COMMISSIONER OF INCOME-TAX(APPEALS) IN HIS ORDER HAS GIVEN A DIRECTION TO THE ASSESSING OFFICER TO EXAMINE WHETHER THE SHARES SOLD BY THE ASSESSEE WERE SUBJECT MATTER OF REVALUATION ON ACCOUNT OF DEPLETION IN THE VALUE OF THOSE SHARES A ND TO DECIDE THE EXACT NATURE OF SHARES HELD BY THE ASSESSEE, TO FIND OUT WHETHER THE SHARES WERE HELD AS INVESTMENTS OR STOCK-IN-TRADE. AMONG OTHER THINGS, IT IS NECESSARY FOR THE ASSESSING OFFICER TO LOOK INTO THE LENGTH OF PERIOD THE ASSESSEE HAS HELD THE SHARES, THE FREQUENCY OF TRANSACTIONS IN SHARES CARRIED OUT BY THE ASSESSEE, THE NATURE OF FUNDS UTILIZED BY THEASSES SEE TO ACQUIRE THE SHARES, WHETHER THE FUND IS OWN FUND S OR INTEREST BEARING BORROWED FUNDS, THE MARKET TENDENCY OF THE SHARES HELD BY THE ASSESSEE, ETC. THEREFORE, IT IS NOT FAIR TO SUGGEST THAT THE NATUR E OF THE SHARES HELD BY THE ASSESSEE COMPANY SHOULD BE DECIDED ON A SINGULAR TEST. 12. APART FROM THE ABOVE, WHAT ARE THE FACTS AVAILABLE IN THE PRESENT CASE? AS STATED BY THE ASSESSING OFFICER, THE ASSESSEE ITSELF HAS SUBMITT ED BEFORE THE ASSESSING AUTHORITY IN ONE OF ITS LETTER S THAT THE SHARES ARE HELD BY THE ASSESSEE COMPANY AS PART OF ITS BUSINESS STOCK AND, THEREFORE, ANY SURPLUS ARISING ON SALE OF THOSE SHARES WOULD BE IN THE NAT URE OF BUSINESS INCOME. THIS SUBMISSION MADE BY THE ASSESSEE COMPANY IS MORE EXPLICITLY REFLECTED IN SCHEDULE K. SCHEDULE K CONTAINS NOTES ON ACCOUNTS. ITEM E OF SCHEDULE K READS AS UNDER : E INVESTMENTS THE INVESTMENTS HELD BY THE COMPANY ARE ALL LONG- TERM INVESTMENTS. LONG TERMS INVESTMENTS ARE CARRIED AT COST LESS PROVISION FOR DIMINUTION, OTHE R THAN TEMPORARY IN NATURE. THE COMPANY HAS RECKONED DIMINUTION IN VALUE OF SHARES/DEBENTURES AS PERMANENT IN NATURE BY RELYING ON MARKET VALUE O F QUOTED SHARES AND BOOK VALUE/FAIR VALUE WHICHEVER I S HIGHER IN RESPECT OF UNQUOTED SHARES. 13. THIS DISCLOSURE MAKES IT CLEAR THAT EVEN LONG TERM CAPITAL INVESTMENTS HELD BY THE ASSESSEE ARE VALUED AT THE END OF EVERY PREVIOUS YEAR SO AS TO PROVIDE FOR THE DIMINUTION IN VALUE WHEN COMPARED T O THE MARKET VALUE OF THE SHARES AS ON THAT DATE. IT MEANS THAT EVEN IN THE CASE OF LONG TERM INVESTMENT S, THE ASSESSEE HAS CLAIMED THE DEPLETION IN VALUE OF SHARES AS LOSS IN THOSE CONCERNED ASSESSMENT YEARS. IT MEANS EVEN IN THE CASE OF SHARES HELD BY THE ITA NO.463/2018 :- 7 -: ASSESSEE FOR A LONG TIME AND CHARACTERIZED AS LONG TERM INVESTMENTS, ANNUAL VALUATION OF STOCK HAS BEE N DONE AND FUNCTIONALLY THE ASSESSEE HAS TREATED ALL THOSE INVESTMENTS AS STOCK-IN-TRADE, PARTICULARLY F OR THE PURPOSE OF COMPUTING ITS INCOME AND THEREBY FOR THE PURPOSE OF TAXATION AS WELL. IT IS, THEREFORE, TO BE SEEN THAT WHAT IS LONG TERM INVESTMENT AND WHAT IS SHORT TERM INVESTMENT, WHAT IS STOCK-IN-TRADE IN THE HAND SOF THE ASSESSEE ARE ALL MATTERS OF ITS OWN BUSINESS PRUDENCE. THE ASSESSEE MIGHT CLASSIFY THE SHARES A S LONG TERM INVESTMENTS ON THE BASIS OF LENGTH OF PER IOD FOR WHICH THOSE SHARES WERE HELD BY THE ASSESSEE. BUT THAT IS NOT THE MATTER TO BE CONSIDERED FOR COMPUTING THE INCOME FOR INCOME-TAX PURPOSE. FOR INCOME-TAX PURPOSE, THE QUESTION IS WHETHER SURPLUS IS CAPITAL GAINS OR BUSINESS INCOME. THE SURPLUS CAN BE TREATED AS CAPITAL GAINS ONLY IF THE ASSESSEE HAS NOT VALUED THE SHARES YEAR AFTER YEAR TO ACCOUNT FOR TH E DEPLETION IN THE VALUE OF THOSE SHARES. WHEREVER T HE ASSESSEE PROVIDES FOR SUCH DEPLETION IN THE VALUE OF SHARES IN THE ASSESSMENT AFTER ASSESSMENT, THOSE SHARES HAVE TO BE TREATED AS STOCK-IN-TRADE FOR THE PURPOSE OF INCOME-TAX. THERE IS NOTHING ON RECORD TO SHOW THAT THE SHARES OF PUNJ LLOYD LTD. AND NUMERIC POWER SYSTEMS LTD. WAS DIFFERENT FROM THE ABOVE STATED POSITION. THEREFORE, IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND THAT THE ASSESSI NG OFFICER HAS RIGHTLY TREATED THE SURPLUS AS BUSINESS INCOME. THE ORDERS OF THE COMMISSIONER OF INCOME- TAX(APPEALS) ON THIS ISSUE ARE SET ASIDE. WHAT WE CAN UNDERSTAND FROM THE ABOVE ORDER OF THE TRIBUNAL IS THAT EVEN THE LONG TERM CAPITAL INVESTMENTS HELD W ERE VALUED BY THE ASSESSEE AT THE END OF EVERY PREVIOUS YEAR, AFT ER PROVIDING FOR THE DEPLENISHMENT IN VALUE THEREOF, VIS--VIS I TS MARKET VALUE. IT IS ALSO OBSERVED THAT SHARES HELD BY THE ASSESS EE, THOUGH CHARACTERIZED AS LONG TERM INVESTMENTS, ITS ANNUAL VALUATION WAS DONE BY TREATING IT AS STOCK IN TRADE FOR THE PURP OSE OF COMPUTING INCOME. ONCE THE ASSESSEE HAD VALUED THE INVESTMEN TS AFTER PROVIDING FOR DIMINUTION OF ITS VALUE, WHEN COMPAR ED TO THE MARKET VALUE OF SUCH INVESTMENTS EFFECTIVELY THE ST OCK IN TRADE STOOD VALUED AT NET REALIZABLE VALUE. THIS BEING T HE CASE, WE ARE OF THE OPINION THAT SUBMISSIONS MADE BY THE LD. AU THORISED REPRESENTATIVE FOR VALUING THE CLOSING STOCK OF SHA RES, AT COST OR AT NET REALIZABLE VALUE IS ILL CONCEIVED. WE THU S DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LD. CIT(A ). ITA NO.463/2018 :- 8 -: ACCORDINGLY, THE GROUNDS OF APPEAL NO.2 RAISED BY THE ASSESSEE STANDS DISMISSED. 9. GROUND NO.3 CHALLENGES THE DECISION OF LD. CIT(A) DISALLOWING THE CLAIM FOR LOSS ON ACCOUNT OF SALE O F SHARES OF M/S. KAMALA TEA COMPANY AND M/S. KARNATAKA MALLADI. ADMI TTEDLY, THE CLAIM WAS NOT MADE BEFORE THE ASSESSING OFFICER AND THE ISSUE HAD NOT GONE THE PROCESS OF ASSESSMENT BY THE ASSESSING OFFICER AND THEREFORE NO SUCH NEW CLAIM CAN BE ENTERTAINED BY T HE LD. CIT(A) WHICH HAS NOT UNDERGONE THE PROCESS OF ASSESSMENT BY THE ASSESSING OFFICER. THIS VIEW WAS AFFIRMED BY THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF ULTRATECH CEMENTS VS. ADDL. CIT, IN ITA NO.1060 OF 2014, DATED 18 TH APRIL, 2017 AFTER REFERRING TO THE DECISION OF THE APEX COURT IN THE CASE OF NATIONAL THERMAL POWER CO. LTD VS. CIT, 229 ITR 383, WHEREIN IT WAS HELD AS FOLLOWS: 23] THEREFORE, BEFORE AN ADDITIONAL GROUND IS ALL OWED TO BE RAISED, THE APPELLATE AUTHORITY MUST BE SATISFIED THAT THE GROUND RAISED COULD NOT HAVE BEEN RAISED EARLIER FOR GOOD REASONS . THE UNDERLYING BASIS FOR ALLOWING THE RAISING THE ADDITIONAL GROUN D IN THE CASE OF AHMEDABAD ELECTRICITY CO.LTD. (SUPRA) WAS THE SUBSE QUENT DECISION RENDERED BY THIS COURT IN AMALGAMATED ELECTRICITY C O.LTD. (SUPRA) WHEN APPEAL WAS PENDING. AS HELD BY THE SUBSEQUENT DECISIONS OF THE APEX COURT IN NTPC LTD. (SUPRA), A JUDICIAL DEC ISION WHEN AN APPEAL IS PENDING WILL ENTITLE RAISING OF ADDITIONA L GROUND. 24] IN ANY VIEW OF THE MATTER, THE AFORESAID DECISI ON DOES NOT DEAL WITH THE SITUATION WHICH ARISES FOR CONSIDERATION I N THIS CASE VIZ. RELYING UDAY S. JAGTAP 22 OF 28 IT APPEAL 1060/14 U PON THE EVIDENCE ON RECORD FOR A SUBSEQUENT ASSESSMENT YEAR TO HOLD THAT ITA NO.463/2018 :- 9 -: THE ASSESSEE IS ENTITLED TO A BENEFIT OF DEDUCTION U/S 80IA OF THE ACT FOR AN EARLIER ASSESSMENT YEAR. A DEDUCTION UNDER C HAPTER VIA OF THE ACT UNDER WHICH SECTION 80IA OF THE ACT FALLS WOULD DEPEND, AS POINTED OUT ABOVE, UPON THE SATISFACTION OF THE FAC TS NECESSARY FOR CLAIMING A DEDUCTION. THE ALLOWING OF A DEDUCTION I N A SUBSEQUENT YEAR'S ASSESSMENT ORDER CANNOT DETERMINE THE FACTS AS EXISTING IN THE EARLIER ASSESSMENT YEAR, SUCH AS IN THIS CASE S O AS TO ALLOW THE DEDUCTION. 25] IN FACT, THE ISSUE WITH REGARD TO THE RAISING O F NEW GROUNDS IN THE ABSENCE OF ANY EVIDENCE ON RECORD IS NO LONGER RES INTEGRA IN VIEW OF DECISION OF THE APEX COURT IN ADDL. COMMISS IONER OF INCOME TAX VS. GURJARGRAVURES PVT. LTD.,(SUPRA). IN THE AB OVE CASE, IT HAS BEEN HELD THAT AN ADDITIONAL GROUND CANNOT BE RAISE D BEFORE THE APPELLATE AUTHORITY WHEN NO CLAIM FOR A PARTICULAR DEDUCTION WAS MADE BEFORE THE ORIGINAL AUTHORITY NOR UDAY S. JAGT AP 23 OF 28 IT APPEAL 1060/14 WAS THERE ANY MATERIAL ON RECORD TO SUPPORT SUCH A CLAIM. FURTHER THE COURT HELD THAT MERELY BY ALLOWI NG THE DEDUCTION FOR A SUBSEQUENT ASSESSMENT YEAR, IT COULD NOT BE H ELD THAT CONDITIONS FOR AVAILING THE DEDUCTION IN THE SUBJEC T ASSESSMENT WERE ALSO SATISFIED. IN THE PRESENT FACTS ALSO, THE CLAIM FOR DEDUCTION UNDER SECTION 80IA OF THE ACT WAS NOT MADE BEFORE THE ASSESSING OFFICER OR THE CIT(A) BUT WAS MADE FOR TH E FIRST TIME ONLY BEFORE THE TRIBUNAL NOR WAS THERE ANY EVIDENCE IN S UPPORT OF THE CLAIM FOR THE SUBJECT ASSESSMENT YEAR ON RECORD. TH US IT STANDS COVERED BY THE ABOVE DECISION IN GURJARGRAVURES PVT . LTD. (SUPRA). THE AFORESAID DECISION OF THE APEX COURT WAS SUBJEC T MATTER OF CONSIDERATION IN JUTE CORPORATION OF INDIA LTD.(SUP RA) WHEREIN THE COURT WHILE DISTINGUISHING GURJARGRAVURES PVT. LTD. (SUPRA) HELD THAT THE ADDITIONAL GROUND COULD ALSO BE RAISED BEFORE T HE APPELLATE AUTHORITY IF SUCH GROUND COULD NOT HAVE BEEN RAISED AT THE EARLIER STAGE I.E. WHEN THE RETURN OF INCOME WAS FILED. THI S IS ONLY WHEN THE ASSESSEE IS ABLE TO SATISFY THE APPELLATE AUTHO RITY UDAY S. JAGTAP 24 OF 28 IT APPEAL 1060/14 THAT THE GROUND N OW RAISED WAS BONA FIDE AND THE SAME COULD NOT HAVE BEEN RAISED E ARLIER FOR GOOD REASONS. IN SUCH CASES, THE RAISING OF ADDITIONAL G ROUND COULD BE ALLOWED. IN THIS CASE, THERE IS NOTHING ON RECORD T O INDICATE AS TO WHAT WAS THE REASON WHICH PREVENTED THE APPELLANT A SSESSEE FROM RAISING A CLAIM FOR DEDUCTION UNDER SECTION 80IA OF THE ACT FOR SUBJECT ASSESSMENT YEAR DURING THE PROCEEDINGS BEFO RE THE ASSESSING OFFICER AND THE CIT(A). THEREFORE, IN THE ABOVE FACTS , THE VIEW TAKEN BY THE TRIBUNAL IN NOT ALLOWING THE APPELLANT TO RAISE ADDITIONAL GROUND IN APPEAL IS IN LINE WITH THE DEC ISION OF THE APEX COURT IN GURJARGRAVURES PVT.LTD. (SUPRA), NTPC LTD. (SUPRA) AND JUTE CORPORATION OF INDIA LTD. 26] NONE OF THE DECISIONS CITED BY THE APPELLANT WO ULD RENDER THE DECISION OF THE SUPREME COURT IN GURJARGRAVURES PVT .LTD. (SUPRA), ITA NO.463/2018 :- 10 -: READ WITH JUTE CORPORATION OF INDIA LTD. AND NTPC L TD. (SUPRA) INAPPLICABLE TO THE PRESENT FACTS. 27] THERE CAN BE NO DISPUTE THAT WHETHER OR NOT T O ALLOW AN ADDITIONAL GROUND TO BE RAISED BEFORE THE APPELLATE AUTHORITY IS TO BE DECIDED BY THE APPELLATE AUTHORITY IN EXERCISE O F ITS DISCRETION CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE BEFORE IT. WHERE ONLY A PURE QUESTION OF LAW ARISES FROM FACTS WHICH ARE ALREADY ON RECORD, THEN THERE IS NO REASON WHY THE APPELLATE AUTHORITY SHOULD NOT CONSIDER THE QUESTION OF LAW S O AS TO DETERMINE THE CORRECT TAX LIABILITY OF AN ASSESSEE IN ACCORDANCE WITH LAW. HOWEVER, WHERE EVIDENCE IS TO BE EXAMINED AND THAT IS NOT ON RECORD, THEN IT WILL BE CONSIDERED ONLY IF THE PART IES SEEKING TO RAISE THE ADDITIONAL GROUND SATISFIES THE AUTHORITY CONCE RNED THAT FOR GOOD AND SUFFICIENT REASONS, THE GROUND COULD NOT B E RAISED BEFORE THE LOWER AUTHORITIES. IN THE PRESENT FACTS, NO SUC H GROUND HAS BEEN MADE OUT BY THE ASSESSEE BEFORE THE TRIBUNAL. IN THE PRESENT FACTS, AS POINTED OUT ABOVE AND BEING REITERATED ON CE MORE, THE ADDITIONAL GROUND, WHICH IS RAISED, IS NOT A PURE Q UESTION OF LAW, BUT WOULD DEPEND UPON THE SATISFACTION OF THE AUTHORITY AS TO UDAY S. JAGTAP 26 OF 28 IT APPEAL 1060/14 THE FACTS EXISTIN G IN THE SUBJECT ASSESSMENT YEAR FOR ALLOWING THE BENEFIT OF SECTION 80IA OF THE ACT. THE ADDITIONAL GROUND IS BEING RAISED FOR THE FIRST TIME BEFORE THE TRIBUNAL WITHOUT RELEVANT EVIDENCE BEING ON RECORD. IN THE LIGHT OF THE ABOVE JUDGMENT, THE CLAIM MADE BY THE ASSESSEE CANNOT BE ALLOWED AS DEDUCTION. ACCORDINGLY, THE GR OUNDS OF APPEAL NO.3 RAISED BY THE ASSESSEE STANDS DISMISSED. 10. GROUND NO.4 CHALLENGES THE DECISION OF LOWER AUTHOR ITIES CONFIRMING THE ADDITION OF F3,39,28,647/- MADE ON ACCOUNT OF PROVISION ON NPAS. THE ASSESSING OFFICER HAD DISALL OWED THE CLAIM ON THE GROUND THAT ASSESSEE HAD FAILED TO DEMONSTRATE WITH EVIDENCE THAT IN THE YEAR OF CREATION OF PROVISION OF NPA ACCO UNT, THE SAME WAS NOT ALLOWED AS DEDUCTION. EVEN BEFORE US, NO EVIDE NCE WAS FILED ITA NO.463/2018 :- 11 -: DEMONSTRATING THIS CONTENTION. HENCE, WE AFFIRM TH E ORDERS OF THE LOWER AUTHORITIES. THE GROUNDS OF APPEAL NO.4 FILED BY THE ASSESSEE STANDS DISMISSED. 11. GROUND NO.5 CHALLENGES THE ADDITION OF F68,25,052/ -. THIS ADDITION WAS MADE BY THE ASSESSING OFFICER ON ACCOU NT OF DIFFERENCE IN THE AMOUNT OF EXEMPT INCOME. NOTHING WAS SHOWN TO US THAT THE FINDING OF THE ASSESSING OFFICER IS ERRONEOUS AND T HEREFORE WE CONFIRM THE ORDER OF THE LOWER AUTHORITIES. THE GROUNDS OF APPEAL NO.5 FILED BY THE ASSESSEE ALSO STANDS DISMISSED. 12. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STA NDS DISMISSED. ORDER PRONOUNCED ON 26TH DAY OF SEPTEMBER, 2019, AT CHENNAI. SD/- SD/- ( . . . ) (N.R.S. GANESAN) /JUDICIAL MEMBER ( ) (INTURI RAMA RAO) /ACCOUNTANT MEMBER - ) / CHENNAI . / DATED:26TH SEPTEMBER, 2019 KV $ &*01 21!* / COPY TO: 1 . '# / APPELLANT 3. ( 3* () / CIT(A) 5. 16 &*7 / DR 2. &' '# / RESPONDENT 4. ( 3* / CIT 6. 8 9) / GF