NSJ Wind Power Company (Satara) Private Limited, Hyderabad V. Dy. Commissioner of Income Tax , Circle-16(1), Hyderabad

ITA 479/Hyd/2018

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 3147 (ITAT-HYDERABAD)
• Duration Of Justice: 3 year(s) 3 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-06-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-A
• Assessment Year: 2013-2014
• Appeal Filed On: 07-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation; Business expenditure; Carry forward of business losses; Unabsorbed depreciation; Revenue expenditure
• Section: 143(3); 251; 72; 13; 15

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD (THROUGH VIRTUAL HEARING) BEFORE SHRI S.S. GODARA, JUDICIAL MEMBER AND SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER ITA NO. 479/HYD/2018 A.Y. 2013 - 14 NSL WIND POWER COMPANY (SATARA) PRIVATE LIMITED, HYDERABAD. PAN: AAJCS 4220 J VS. DCIT, CIRCLE - 16(1), HYDERABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY: SHRI PRATIK SHAH REVENUE BY: SHRI SUNIL KUMAR PANDEY, DR DATE OF HEARING: 17/05/2021 DATE OF PRONOUNCEMENT: 09 /06/2021 ORDER PER S.S. GODARA, J.M: THIS ASSESSEES APPEAL FOR A.Y. 2013 - 14 HAS ARISEN AGAINST THE CIT(A) - 4, HYDERABADS ORDER DATED 11/12/2017 PASSED IN CASE NO.0337/2015 - 16/DCIT, CIR.16(1)/CIT(A) - 4/HYD/17 - 18, INVOLVING PROCEEDINGS U/S. 143(3) R.W.S 250(6) OF THE INCOME TAX ACT, 1961 (THE A CT). HEARD BOTH THE PARTIES, CASE FILES PERUSED. 2 2 . THE ASSESSEE HAS RAISED THE FOLLOWING SUBSTANTIVE GROUNDS IN THE INSTANT APPEAL: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) AND THE LD. A.O., ERRED IN DISALLOWING TH E REVENUE EXPENDITURE OF RS. 2,54,86,417/ - INCURRED DURING THE FY 2012 - 13 BY CONCLUDING THAT THE APPELLANTS BUSINESS WAS NEITHER SET - UP NOR COMMENCED DURING THE A.Y. 2013 - 14. THE APPELLANT HUMBLY PRAYS THAT SINCE THE BUSINESS OF THE APPELLANT WAS ALREADY SET UP, ENTIRE EXPENDITURE OF RS. 2,54,86,417/ - BE ALLOWED AS A DEDUCTION U/S. 371(1) OF THE INCOME TAX ACT, 19651 MORE SO WHEN SIMILAR EXPENDITURE WAS ALLOWED BY THE A.O. IN THE A.Y. 2012 - 13. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW , THE LD. CIT(A) ERRED IN DIRECTING THE LD. A.O. TO TAKE NECESSARY ACTION TO RECTIFY THE ASSESSMENT ORDER PASSED U/S. 143(3) OF THE ACT FOR THE A.Y. 2012 - 13, DISREGARDING THE FACT THAT THE LD. CIT(A) HAS NO POWER UNDER SECTION 251 OF THE ACT TO GIVE DIRECT ION FOR DIFFERENCE ASSESSMENT YEARS. THE APPELLANT HUMBLY PRAYS THAT THE DIRECTION GIVEN BY THE LD. CIT(A) TO LD. A.O. FOR DIFFERENT ASSESSMENT YEARS I.E A.Y. 2012 - 13 BE TREATED AS BAD IN LAW. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DIRECTING THE LD. A.O. TO NOT ALLOW THE CARRY FORWARD OF BUSINESS LOSS FOR A.Y. 2011 - 12 TO A.Y. 2013 - 14 ON THE PREMISE THAT BUSINESS HAS NOT BEEN COMMENCED DURING THE YEAR, EVEN THOUGH THE EXPENDITURE WAS ALLOWED AND LOSS WAS A SSESSED BY THE A.O. IN A.Y. 2012 - 13. THE APPELLANT PRAYS THAT THE BUSINESS LOSS FOR A.Y. 2011 - 12 TO A.Y. 2013 - 14 SHOULD BE CARRIED FORWARD TO A.Y. 2014 - 15 AS PER SECTION 72 OF THE ACT. 3 . BOTH THE PARTIES AT THE OUTSET TOOK US TO THE LD. CIT(A)S DETAILED DIRECTIONS, DIRECTING THE LD. ASSESSING OFFICER TO TAKE NECESSARY ACTION IN A.Y.: 2012 - 13 AS UNDER: - 6. DURING THE COURSE OF APPEAL PROCEEDINGS, WITH REGARD TO THE ABOVE GROUNDS, THE APPELLANT SUBMITTED THAT IN THE ASSESSMENT ORDER PASSED U/S. 1 43(3), THE ASSESSING OFFICER HAS NOT ALLOWED BUSINESS EXPENDITURE AND CARRY FORWARD OF BUSINESS LOSSES / UNABSORBED DEPRECIATION ON THE GROUND THAT THE 3 BUSINESS OF THE APPELLANT COMPANY HAD YET COMMENCED. IN THIS REGARD, IT WAS STATED THAT THE LD. ASSESSI NG OFFICER DURING PRECEDING ASSESSMENT YEAR 2012 - 13 HAD ALLOWED BUSINESS EXPENDITURE AND CARRY FORWARD LOSSES TO FUTURE YEARS WHICH REITERATES THE FACT THAT THE BUSINESS OF THE ASSESSEE COMPANY HAD COMMENCED AND THEREFORE CARRY FORWARD OF BUSINESS LOSSES S HOULD BE ALLOWED. 7. I HAVE CAREFULLY CONSIDERED THE ASSESSMENT ORDER AND SUBMISSIONS OF THE APPELLANT. IN THIS CASE MAINLY, THE ASSESSING OFFICER DECIDED THE ISSUE BASED ON THE FINANCIAL ACCOUNTS THAT THERE IS NO BUSINESS STARTED. THE COMPANY IS IN THE PROCESS OF COMMENCING OF POWER PROJECT AND SO SECTION 70 AND 71 OF THE ACT ARE NOT APPLICABLE AND SO LOS NOT TO BE SET OFF. AFTER VERIFYING THE DETAILS, P & L ACCOUNT, BALANCE SHEET, I AM IN AGREEMENT WITH THE ASSESSING OFFICER. THEREFORE, THE SUBMISSIO NS OF THE APPELLANT REJECTED. IN THIS CASE, THE APPELLANTS SUBMISSIONS THAT THE A.Y. 2012 - 13, THE ASSESSING OFFICER HAS TREATED THERE IS BUSINESS EVEN THOUGH BUSINESS WAS NOT YET COMMENCED. HENCE, THE ASSESSING OFFICER IS DIRECTED TO TAKE NECESSARY ACTI ON FOR THE A.Y. 2012 - 13. KEEPING IN VIEW OF THE ABOVE FACTS THE INCOME ASSESSED AT NIL CONFIRMED. 4 . WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO RIVAL SUBMISSIONS IN RESPECT OF THE CORRECTNESS OF THE CIT(A) S IMPUGNED DIRECTIONS TO THE ASSESSING OFFICER. IT IS NOT IN DISPUTE THAT THE ASSESSING OFFICER HAD HIMSELF ACCEPTED THE ASSESSEES BUSINESS LOSS IN A.Y. 2012 - 13. THE QUESTION AS TO WHETHER THE SAME COULD BE ALLOWED TO BE CARRIED FORWARD AND SET OFF IN A .Y. 2013 - 14 OR ITS CORRECTNESS COULD BE DOUBTED IN THE IMPUGNED LATER ASSESSMENT YEAR IS NO MORE RES INTEGRA IN VIEW OF THE H ONBLE A PEX C OURTS DECISION CIT VS. MANMOHAN DAS (1966) 59 ITR 699 (SC) HOLDING THAT WHETHER OR NOT A LOSS IS ALLOWED TO BE CARRI ED FORWARD IN LATER ASSESSMENT YEAR OR WHETHER IT HAD BEEN RIGHTLY COMPUTED IN THE FORMER ASSESSMENT YEAR , CANNOT BE PUT TO CHALLENGE BY THE CORRESPONDING ASSESSING OFFICERS O F THE TWIN ASSESSMENT YEARS CONCERNED; RESPECTIVELY. WE ADOPT THE VERY LOGIC HE REIN - AS - WELL AND 4 HOLD THAT ONCE THE ASSESSING OFFICER HAD HIMSELF ACCEPTED THE LOSS FIGURES IN A.Y. 2012 - 13, THE SAME COULD NOT FORM SUBJECT MATTER OF DISPUTE IN A.Y. 2013 - 14 AS PER THE CIT(A)S DIRECTION S IN 251(1) PROCEEDINGS. WE, THEREFORE, REVERSE THE SAID IMPUGNED DIRECTIONS FOR THIS PRECISE REASON ALONE. 5 . T HIS ASSESSEES APPEAL IS ALLOWED IN ABOVE TERMS. ORDER PRONOUNCED IN THE OPEN COURT ON 09 TH JUNE, 2021. SD/ - SD/ - (L.P. SAHU) ( S.S. GODARA ) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED: 09 TH JUNE , 2021. OKK COPY TO: - 1) NSL WIND POWER COMPANY (SATARA) PRIVATE LIMITED, 8 - 2 - 684/2/A, NSL ICON ROAD NO.12, BANJARA HILLS, HYDERABAD - 500 034. 2) THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE - 16(1), IT TOWERS, AC GUARDS, HYDERABAD. 3) THE CIT(A) - 4, HYDERABAD . 4) THE PR. CIT - 4, HYDERABAD. 5) THE DR, ITAT, HYDERABAD 6) GUARD FILE