ACIT, New Delhi V. M/s Quippo Telecom Infrastructure Ltd., New Delhi

ITA 4759/DEL/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 3580 (ITAT-DELHI)
• Duration Of Justice: 8 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-07-2011
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 10-06-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 01-11-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: B KISHORE
• Assessee Lawyers: N O N E
• Keywords: Depreciation; Unabsorbed depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL [ DELHI BENCH F DELHI ] BEFORE SHRI RAJPAL YADAV, JM AND SHRI K. D. RAN JAN, AM I. T. APPEAL NO. 4759 (DEL) OF 2010 ASSESSMENT YEAR : 2007-08. ASSTT. COMMISSIONER OF INCOME-TAX, M/S. QUIPPO TELECOM INFRASTRUCTURE LTD., C I R C L E : 14 (1), VS. D 2, 5 TH FLOOR, SOUTHERN PARK, N E W D E L H I. S A K E T, N E W D E L H I. P A N / G I R NO. AAA CQ 1279 N. ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY : N O N E; DEPARTMENT BY : SHRI B. KISHORE, SR. D. R.; O R D E R. PER K. D. RANJAN, AM : THIS APPEAL BY THE REVENUE FOR ASSESSMENT YEAR 200 7-08 ARISES OUT OF ORDER OF THE LD. CIT (APPEALS)-XVII, NEW DELHI. 2. THE GROUNDS OF APPEAL RAISED BY THE REVENUE READ AS FOLLOWS :- 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CAS E AND IN LAW THE LD. CIT (APPEALS) ERRED IN DIRECTING THE AO TO ALLOW DEDUCT ION IN RESPECT OF PROVISION FOR LEAVE ENCASHMENT OF RS.11,21,227/- IGNORING THE FACT THAT THE ASSESSEE ITSELF HAS ADDED THE AMOUNT OF PROVISIONS IN ITS COMPUTATI ON OF INCOME AND HAS NOT MADE ANY CLAIM IN THIS REGARD IN ITS RETURN OF INCO ME; 2 I. T. APPEAL NO. 4759 (DEL) OF 2010 2. THAT ON THE FACTS AND CIRCUMSTANCES OF T HE CASE AND IN LAW THE LD. CIT (APPEALS) ERRED IN DIRECTING THE AO TO ALLOW THE DE DUCTION OF RS.1,47,159/- IN RESPECT OF EMPLOYEE CONTRIBUTION TO PF PAID AFTE R THE DUE DATE OF SUCH PAYMENT IGNORING THE SPECIFIC PROVISION OF LAW AS CONTENDED IN SECTION 36(1)(VA) OF THE I. T. ACT, 1961. 3. AT THE TIME OF HEARING, NONE APPEARED ON BEHALF OF THE ASSESSEE. HAVING REGARD TO ISSUE INVOLVED, THE APPEAL IS DECIDED AFTER HEARING THE L D. SR. DR. 4. THE ISSUES INVOLVED IN THE GROUNDS OF APPEAL FOR OUR CONSIDERATION RELATES TO DISALLOWANCE OF RS.11,21,227/- ON ACCOUNT OF PROVISION FOR LEAVE ENCASHMENT AND CONFIRMING THE ADDITION OF RS 1,47,159 ON ACCOUNT OF EMPLOYEES PROVIDENT FUND. THE FACTS OF THE CASE STATED IN BRIEF ARE THAT THE ASSESSEE FILED RETURN OF INCOME DECLARING NIL INCOME. THE RETURN OF INCOME WAS PROCESSED UNDER SECTION 143(1) OF THE ACT. DURING THE COURSE OF ASSESSMENT THE ASSESSING OFFICER MADE ENQUIRIES WITH REFERENCE TO INVESTMENT OF RS.1 0,50,00,000/- IN SHARES AND MUTUAL FUND INCOME FROM WHICH WAS EXEMPT. SINCE THE INCOME DID NOT FORM PART OF TOTAL INCOME, THE ASSESSEE WAS REQUIRED AS TO WHY EXPENSES RELATING T O EARNING OF THE INCOME SHOULD NOT BE DISALLOWED. THE ASSESSING OFFICER WORKED OUT THE D ISALLOWANCE IN RESPECT OF SECTION 14-A. HE ADDED THE DISALLOWANCE UNDER SECTION 14-A BOTH UNDE R NORMAL PROVISIONS OF THE ACT AS WELL AS COMPUTATION OF BOOK PROFITS UNDER SECTION 115-JB OF THE ACT. THE ASSESSING OFFICER HAD NOT MADE ANY ADDITION IN RESPECT OF ANY OTHER AMOUNT IN CLUDING DISALLOWANCE OF RS.11,21,227/- ON ACCOUNT OF PROVISION FOR LEAVE ENCASHMENT AND OF R S 1,47,159 ON ACCOUNT OF EMPLOYEES PROVIDENT FUND.. 5. AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER THE ASSESSEE FILED APPEAL AGAINST THE ADDITION MADE UNDER SECTION 14-A OF THE ACT AND OTH ER CONSEQUENTIAL CLAIMS OF THE ASSESSEE LIKE CHARGING OF INTEREST UNDER SECTION 234-B, NON-GRANT OF TDS CREDIT, NON-QUANTIFICATION OF UNABSORBED DEPRECIATION TO BE CARRIED FORWARD, ETC. DURING THE COURSE OF APPELLATE PROCEEDINGS, THE ASSESSEE RAISED ADDITIONAL GROUNDS IN RESPECT O F PROVISION FOR LEAVE ENCASHMENT ON PROVISION BASIS INSTEAD OF PAYMENT BASIS UNDER NORMAL PROVISI ONS OF THE ACT AND DEDUCTION OF EMPLOYEES CONTRIBUTION TO PROVIDENT FUND PAID BEFORE THE DUE DATE OF FILING THE RETURN OF INCOME UNDER 3 I. T. APPEAL NO. 4759 (DEL) OF 2010 NORMAL PROVISIONS OF THE ACT. IT WAS SUBMITTED THA T THESE ISSUES WERE NOT RAISED BY THE ASSESSEE IN THE ORIGINAL APPEAL FILED BY THE ASSESSEE. THE LD. CIT (A), HOWEVER, ADMITTED THE ADDITIONAL GROUNDS AND DECIDED THE ISSUE IN FAVOUR OF THE ASSE SSEE. 6. WE HAVE HEARD THE LD. SR. DR. IN THE RETURN OF INCOME THE ASSESSEE HAD NOT MADE ANY CLAIM FOR DEDUCTION IN RESPECT OF DEDUCTION ON ACCO UNT OF LEAVE ENCASHMENT AND PROVIDENT FUND. THE ASSESSING OFFICER HAD ACCEPTED THE RETURNED LOS S EXCEPT MAKING ADDITION UNDER SECTION 14-A OF THE ACT. THEREFORE, WHEN THE ASSESSING OFFICER HAS ACCEPTED THE RETURN OF INCOME AND THE ASSESSEE HAD NOT CLAIMED ANY DEDUCTION IN RESPECT O F THESE ITEMS, THE ASSESSEE CANNOT BE SAID TO HAVE BEEN AGGRIEVED BY THE ASSESSMENT ORDER. THERE FORE, THERE WAS NO QUESTION OF RAISING OF ADDITIONAL GROUND IN RESPECT OF THESE ITEMS. THE L D. CIT (A), THEREFORE, WAS NOT JUSTIFIED IN DIRECTING THE ASSESSING OFFICER TO ALLOW CLAIM OF T HE ASSESSEE AND ASSESS THE INCOME BELOW RETURNED LOSS PARTICULARLY IN VIEW OF THE FACT WHEN NO SUCH CLAIM WAS MADE IN THE RETURN OF INCOME 7. OUR VIEW IS SUPPORTED BY THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. SHAPOORJI PALOONJI MISTRI 44 ITR 891 (SC) WHEREIN T HE HONBLE SUPREME COURT OBSERVED THAT THE APPELLATE ASSISTANT COMMISSIONER HAS UNDOUBTEDL Y POWER TO ENHANCE ASSESSMENT, BUT WITHIN THE FOUR CORNERS OF THE SOURCES PROCESSED BY THE IN COME-TAX OFFICER. HE HAS NO POWER TO TRAVEL OUTSIDE THE RECORD, I.E. TO SAY, THE RETURN MADE BY THE ASSESSEE AND THE ASSESSMENT ORDER PASSED BY THE INCOME-TAX OFFICER WITH A VIEW TO FINDING OUT N EW SOURCE OF INCOME NOR DISCLOSED IN EITHER. IN THE CASE BEFORE US THE ASSESSEE HAD NEITHER CLAI MED THE DEDUCTION IN THE RETURN OF INCOME NOR WAS ADJUDICATED UPON BY THE ASSESSING OFFICER. IF THE RATIO OF THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. SHAPOORJI PALOONJI MIS TRI (SUPRA) IS APPLIED TO THE FACTS OF THE ASSESSEES CASE, THE LD. CIT (A) CANNOT ALLOW RELIE F TO THE ASSESSEE, WHICH HAS NEITHER BEEN CLAIMED BY THE ASSESSEE NOR DISCUSSED BY THE ASSESS ING OFFICER. 4 I. T. APPEAL NO. 4759 (DEL) OF 2010 8. ACCORDINGLY, IN OUR CONSIDERED OPINION, THE LD. CIT (A) TRAVELLED BEYOND HIS JURISDICTION TO ADMIT THE CLAIM OF THE ASSESSEE, WHICH WAS NOT M ADE EITHER IN THE RETURN OF INCOME OR BY WAY OF WRITTEN SUBMISSIONS BEFORE THE COMPLETION OF ASS ESSMENT. HENCE, WE SET ASIDE THE ORDER OF THE LD. CIT (A) AND RESTORE THAT OF THE AO. 9. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S ALLOWED. THE ORDER PRONOUNCED IN THE OPEN COURT ON : 15 TH JULY, 2011. SD/- SD/- [ RAJPAL YADAV ] [ K. D. RANJAN ] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 15 TH JULY, 2011. *MEHTA * COPY OF THE ORDER FORWARDED TO : - 1. APPELLANT. 2. RESPONDENT. 3. CIT, 4. CIT (APPEALS), 5. DR, ITAT, NEW DELHI. TRUE COPY. BY ORDER. ASSISTANT REGISTRAR, ITAT.