M/s Mysore Mercantile Co. Ltd., Bangalore V. CIT, Bangalore

ITA 489/BANG/2014

• Counselvise Citation: 48921114 RSA 2014
• Duration Of Justice: 1 year(s) 6 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-11-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 27-10-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 10-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: BALARAM R RAO
• Keywords: Gift; Capital receipt
• Section: 143(3); 263; 28

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER AND SHRI JASON P. BOAZ, ACCOUNTANT MEMBER ITA NO.489/BANG/2014 ASSESSMENT YEAR : 2009-10 M/S. MYSORE MERCANTILE CO. LTD., # 201 & 202, SHRESTHA BUMI, NO.87, K.R. ROAD, BASAVANGUDI, BANGALORE 560 004. PAN: AACCM 1216H VS. THE COMMISSIONER OF INCOME-TAX, BENGALURU-III, BANGALORE. APPELLANT RESPONDENT APPELLANT BY : SHRI BALARAM R. RAO, ADVOCATE RESPONDENT BY : SMT. NEERA MALHOTRA, CIT(DR) DATE OF HEARING : 27.10.2015 DATE OF PRONOUNCEMENT : 04.11.2015 O R D E R PER ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER DATED 27.03.2014 OF THE COMMISSIONER OF INCOME-TAX-III, B ANGALORE [HEREINAFTER REFERRED TO AS THE CIT] PERTAINING TO ASSESSMENT YEAR 2009-10. 2. THE ASSESSEE IS A COMPANY WHICH FILED ITS RETURN OF INCOME FOR THE AY 2009-10 ON 30.09.2009 DECLARING TOTAL INCOME AT RS.1,38,91,871 AFTER ITA NO. 489/BANG/2014 PAGE 2 OF 11 CLAIMING DEDUCTION RS. 2,66,58,412 U/S. 80IA OF THE INCOME-TAX ACT, 1961 [THE ACT]. THE SCRUTINY ASSESSMENT IN THE CASE W AS CONCLUDED U/S 143(3) OF THE O N 05.04.2011 ASSESSING TOTAL INCOME AT RS. 2,80,61,251 ALLOWING DEDUCTION U/S. 80IA OF THE ACT CLAIMED BY THE ASSES SEE. 3. THE LD. CIT NOTICED THAT THE ASSESSEE HAD MAINTA INED SEPARATE BOOKS OF ACCOUNT FOR WIND MILL DIVISION AND CLAIMED DEDUCTION U/S 80IA. ON PERUSAL OF PROFIT AND LOSS ACCOUNT OF WIND MILL DIVISION, IT WAS OBSERVED THAT THE ASSESSEE HAS OFFERED AN INCOME OF RS.4,52, 06,243 FROM SALE OF ELECTRICITY AND SALE OF VOLUNTARY EMISSION REDUCTIO N CERTIFICATE (VERS) AND AS PER THE NOTES ON ACCOUNTS APPENDED TO THE FINANC IAL STATEMENTS ENCLOSED TO THE RETURN, THE ASSESSEE HAS CLAIMED TO HAVE RECEIVED TOTAL RECEIPT OF RS 1,23,84,226 ON SALE OF VERS FROM ITS RUNNING WIND MILL AND CLAIMED THE CONSIDERATION ON SALE OF VERS AS PART O F SALE OF POWER RECEIPT AND HAD CLAIMED DEDUCTION U/S 80IA ON THIS UNIT ALS O. THE RECEIPT RECEIVED FROM SALE OF VERS IS FOR REDUCING EMISSIONS OF GREE N HOUSE GASES (GHGS). 4. THE LD. CIT OBSERVED THAT THE INCOME RECEIVED O N SALE OF VERS IS NOT DERIVED FROM THE ELIGIBLE BUSINESS AND THE ASSE SSEE IS NOT ENTITLED FOR DEDUCTION U/S 80IA OF THE ACT. HE WAS THEREFORE OF THE VIEW THAT DEDUCTION ALLOWED U/S. 8OIA ON THIS INCOME ALSO RESULTED IN A LLOWING OF EXCESS CLAIM OF DEDUCTION TO THE TUNE OF RS. 1,23,84,226/-. IN, VIEW OF THE ABOVE, PROCEEDING U/S 263 OF THE ACT WAS INITIATED AND SHO W CAUSE NOTICE WAS ISSUED. ITA NO. 489/BANG/2014 PAGE 3 OF 11 5. IN REPLY TO THE SHOW CAUSE NOTICE ISSUED BY THE CIT, THE ASSESSEE SUBMITTED AS FOLLOWS:- (A) IT HAS BUILT AND IS OPERATING GREEN ENERGY PRO JECTS SUCH AS WIND FARM AND HYDRA ELECTRICAL POWER PLANT AND IS PRESEN TLY ENGAGED IN BUILDING A BIOGAS PLNT BY USING FARM PRODUCES, FAR M REFUSES, THEREBY CONTRIBUTING TO THE CAUSE OF GREENER INDIA AND CLEA NER GLOBE, CLIMATE CHANGE IS MAJOR THREAT FOR GLOBAL SOCIOECONOMIC AND ECOLOGICAL SYSTEM BASED ON SCIENTIFIC EVIDENCE CONCERNING THE EXISTENCE OF GLOBAL WARMING CAUSED BY GREEN HOUSE GASES GENERATE D BY HUMAN ACTIVITY. EMISSION REDUCTIONS [VERS] ARE CERTIFICAT ES/CREDITS ISSUED IN PURSUANCE TO THE UNITED NATION FRAMEWORK CONVENTION ON CLIMATE CHANGE [UNFCCC], KYOTO PROTOCOL AND IT INDICATES TH E ACHIEVEMENT MADE BY THE ASSESSEE COMPANY IN EMITTING LESSER QUA NTITY OF GASES THAN THE ASSIGNED QUANTITY. THE WORLD IS COMING TOG ETHER TO REVERSE THE DANGEROUS TREND AND THE ASSESSEE COMMITTED TO R EDUCE GLOBAL CARBON DIOXIED EMISSIONS THROUGH ITS EFFORTS IN INV ESTING IN RENEWABLE ENERGY AND DEVELOPING PROJECTS WITHIN THE SPHERE OF KYOTO PROTOCOL. IN PURSUANCE TO ITS CONTINUED EFFORT IN GREEN ENERGY P ROJECTS, THE ASSESSEE HAS EARNED CERTIFICATE IN RESPECT OF ITS W IND MILL PROJECTS AND THE ASSESSEE HAS TRANSFERRED THE VER CERTIFICAT E FROM ITS RUNNING WIND MILL AMOUNTING TO RS. 123.84 LAKHS DURING THE IMPUGNED ASSESSMENT YEAR. (B) THE SALE OF VERS ARE DERIVED FROM THE ACTIVITI ES OF THE INDUSTRIAL UNDERTAKING VIZ., POWER GENERATION AND HENCE NEED T O BE ALLOWED FOR THE PURPOSES OF DEDUCTION AND IT IS DIRECTLY RELATE D TO NUMBER OF ELECTRICITY UNITS GENERATED FROM THE PROJECTS. ITA NO. 489/BANG/2014 PAGE 4 OF 11 (C) AN UNDERTAKING SET UP IN ANY PART OF INDIA FO R THE GENERATION OR GENERATION AND DISTRIBUTION OF POWER IS ELIGIBLE FO R CLAIMING DEDUCTION U/S 80IA OF THE ACT. (D) VER CERTIFICATE RECEIVED IN PURSUANCE TO ITS WIND MILL PROJECTS, THE SALE RECEIPTS COME WITHIN THE PURVIEW OF AMOUNT THA T QUALIFIES FOR DEDUCTION U/S 8OIA OF THE ACT. (E) PROCEEDS FROM THE SALE OF VER CERTIFICATE ARE ELIGIBLE FOR CLAIM OF DEDUCTION U/S 801A OF ACT. (F) EVEN IF THE RECEIPT ON ACCOUNT OF SALE OF VER S IS NOT ELIGIBLE FOR DEDUCTION U/S 80IA, EVEN THEN THE SAME CANNOT BE BR OUGHT TO TAX AS IT IS A CAPITAL RECEIPT AND HENCE NOT CHARGEABLE TO TA X UNDER SECTION 4 OF THE ACT. (G) VERS ISSUED PURSUANT TO THE UNFCCC AND KYOTO P ROTOCOL INDICATES RECOGNITION OF THE ACHIEVEMENT MADE BY THE ASSESSEE IN REDUCTION OF EMISSION OF QUANTITY OF GASES BELOW THE ASSIGNED QU ANTITY. (H) ENTIRE SCHEME OF GENERATION OF VER CERTIFICAT ES AND TRANSFER THEREOF IS NON-COMMERCIAL AND TOTALLY IN PURSUANCE OF THE CAUS E OF EMISSION REDUCTION AND TOWARDS PRESERVING THE ECO-SYSTEM. (I) RECEIPT IN THE HANDS OF THE ASSESSEE HAS TO BE DETERMINED WITH RESPECT TO THE PURPOSE FOR WHICH THE SUBSIDY IS GIV EN. FURTHER THE SUM RECEIVED ON TRANSFER OF VERS BEING TOWARDS THE NOBL E CAUSE OF CONSERVING THE ECO-SYSTEM BY REDUCING THE CARBON DI OXIDE EMISSION, THE SAME DOES NOT PARTAKE THE CHARACTER OF INCOME U NDER THE PROVISIONS OF THE ACT. THE ASSESSEE IN THIS REGARD RELIED ON THE FOLLOWING DECISIONS:- ITA NO. 489/BANG/2014 PAGE 5 OF 11 SAHNEY STEEL & PRESS WORKS LTD. VS CIT 228 ITR 25 3 (SC) CIT, MADRAS VS PONNI SUGAR AND CHEMICAL LIMITED 3 06 ITR 392 (SC) CIT VS DUSAD INDUSTRIES REPORTED IN 162 ITR 784 [ MP] CIT VS PLASTICHEM REPORTED IN 174 ITR 546 [MP] CIT VS RASOI LTD., 335 ITR 438 [CAL] CLT-3, MUMBAI VS RELIANCE INDUSTRIES LTD., 339 IT R 632 (BOM) SHREE BALAJI ALLOYS VS CIT 333 ITR 335 (J&K) (J) VERS ARE NOT DEPENDENT ONLY ON PRODUCTION, IT IS ENTIRELY DEPENDENT ON THE CONTRIBUTION OF THE ASSESSEE TO THE ENVIRONM ENT AT LARGE BY WAY OF REDUCTION OF EMISSIONS IN THE FORM OF GENERATING ELECTRICITY USING RENEWABLE ENERGY SOURCES. (K) THE VERS ARE ISSUED IN THE INTEREST OF INTERNA TIONAL COMMUNITY AND NOT IN THE INTEREST OF INDUSTRY. THE AMOUNT IS A SO RT OF GIFT GIVEN BY THE UNFCCC FOR THE DISTINCTION ACHIEVED BY THE ASSESSEE COMPANY IN ACHIEVING EMISSION OF LESSER AMOUNT OF GASES THAN T HE ASSIGNED AMOUNT. IT CANNOT THEREFORE BE AN INCOME WITHIN THE MEANING OF SECTION 2(24) OR SECTION 28 OF THE INCOME TAX ACT 1 961. (L) CARBON CREDIT IS NOT IN THE NATURE OF A PROFI T OR IN THE NATURE OF AN INCOME AND ACCORDINGLY DOES NOT ENTAIL TAXATION. TH E ENTIRE SCHEME BEING ONLY TO FACILITATE CLIMATE PROTECTION, RECEIP TS ARISING THEREFROM CANNOT BE BROUGHT UNDER THE GAMUT OF TAXATION UNDER THE ACT. LN THIS REGARD ASSESSEE PLACED RELIANCE ON THE FOLLOWING DE CISIONS:- MY HOME POWER LTD., VS DCIT 151 TTJ 616 (HYD]-TRI BUNAL CIT VS MAHESHWARI DEVI JUTE MILLS LTD., (1965) 57 ITR 36 (SC) (M) DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO HAS CALLED FOR BOOKS OF ACCOUNTS AND DOCUMENTS AND AFTER EXAMINING THE ISSUE ALLOWED THE DEDUCTION U/S 80IA AND HENCE REVISION P ROCEEDINGS ARE NOT VALID IN LAW. ITA NO. 489/BANG/2014 PAGE 6 OF 11 (N) THE ASSESSEE STATES THAT AS PER SECTION 263 OF THE ACT, TO EXERCISE JURISDICTION, THE COMMISSIONER HAS TO BE SATISFIED OF THE FOLLOWING TWO CONDITIONS: A. THE ORDER OF THE AC SOUGHT TO BE REVISED IS ERRO NEOUS, AND B. IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE . (O) THE POWERS U/S. SECTION 263 CAN BE INVOKED ONL Y IF THE ORDER OF THE AO SOUGHT TO BE REVISED IS ERRONEOUS AND BY VIRTUE OF BEING ERRONEOUS, PREJUDICE HAS BEEN CAUSED TO THE INTERES T OF THE REVENUE. FURTHER, THE ORDER OF THE ASSESSING OFFICER SHOULD NOT BE INTERFERED ONLY BECAUSE ANOTHER VIEW IS POSSIBLE. THE PROVISIO NS OF SECTION 263 CANNOT BE APPLIED ON THE FACTS OF ITS CASE AS NO ER ROR EXISTS IN THE ORDER OF ASSESSMENT. RELIANCE WAS PLACED ON THE FO LLOWING DECISIONS. CIT VS MAX INDIA LTD., 295 ITR 282 MALABAR INDUSTRIAL CO., LTD., VS CIT 243 ITR 83 S C CIT. VS. SUN BEAM AUTO LTD., 332 ITR 167 CIT VS GABRIEL INDIA LTD., 203 ITR 108 [1993] CIT VS HONDA SIEL POWER PRODUCTS LTD., 235 CTR 33 6 CIT VS D G GOPALA GOWDA IN ITA NO. 1422/2006 (KAR ) 6. THE LD. CIT REJECTED THE ASSESSEES CLAIM THAT R ECEIPTS ON ACCOUNT OF SALE OF VERS QUALIFIES FOR DEDUCTION U/S 80IA. HE WAS OF THE VIEW THAT SECTION 80IA PROVIDES FOR DEDUCTION IN RESPECT OF P ROFITS AND GAINS DERIVED BY AN UNDERTAKING OR ENTERPRISE FROM ELIGIBLE BUSIN ESS WHICH INCLUDE, INTER ALIA , GENERATION OF POWER. THE LD. CIT HELD THAT THE I NCOME FROM SALE OF CARBON CREDITS IS NOT DERIVED FROM THE ELIGIBLE BUS INESS. HE OBSERVED THAT THE HONBLE SUPREME COURT IN THE CASES OF M/S. LIBE RTY INDIA V. CIT ITA NO. 489/BANG/2014 PAGE 7 OF 11 REPORTED IN 317 ITR 218 AND M/S. STERLING FOODS V. CIT REPORTED IN 237 ITR 579 HAS EXCLUDED ANY ANCILLARY PROFITS FROM THE MEANI NG OF PROFITS DERIVED FROM ELIGIBLE BUSINESS. 7. THE LD. CIT ALSO REJECTED THE ASSESSEES ALTERNA TIVE CLAIM THAT IF THE RECEIPT ON ACCOUNT OF SALE OF VERS IS HELD AS NOT E LIGIBLE FOR DEDUCTION U/S 80IA, EVEN THEN THE SAME CANNOT BE BROUGHT TO TAX A S IT IS A CAPITAL RECEIPT. THE LD .CIT OBSERVED THAT THE ASSESSEE IN THE RETUR N OF INCOME HAS CONSIDERED RECEIPTS FROM SALE OF VERS AS INCOME AND CLAIMED THE SAME AS ELIGIBLE FOR DEDUCTION U/S 80IA. THE LD. CIT WAS O F THE VIEW THAT THE ASSESSEE CLAIM THAT RECEIPT FROM SALE OF VERS IS A CAPITAL RECEIPT CANNOT BE CONSIDERED DURING THE PROCEEDINGS U/S 263 OF THE AC T. IN THIS CONNECTION, RELIANCE WAS PLACED BY THE LD. CIT ON THE APEX COUR T DECISION IN GOETZE (INDIA) LTD. V. CIT, 284 ITR 323 (SC) . 8. IN VIEW OF THE ABOVE, THE LD. CIT HELD THAT THE AO ERRONEOUSLY ALLOWED DEDUCTION U/S 80IA ON SALE OF RECEIPTS OF V ERS. ACCORDINGLY, THE AO WAS DIRECTED TO WITHDRAW THE EXCESS DEDUCTION OF RS.1,23,84,226 ALLOWED U/S. 80IA OF THE ACT. THE LD. CIT HELD THE ORDER PASSED BY THE AO AS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF TH E REVENUE WITHIN THE MEANING OF SECTION 263 OF THE ACT AND DIRECTED THE AO TO MODIFY THE ORDER. 9. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. ITA NO. 489/BANG/2014 PAGE 8 OF 11 10. THE MAIN ARGUMENTS OF THE ASSESSEE ARE THAT VER CERTIFICATE RECEIVED IN PURSUANCE TO ITS WIND MILL PROJECTS AND THE SALE RECEIPTS ARE WITHIN THE PURVIEW OF AMOUNT THAT QUALIFIES FOR DED UCTION U/S 80IA OF THE ACT. FURTHER IT WAS ARGUED THAT IF THE RECEIPT ON ACCOUN T OF SALE OF VERS IS HELD AS NOT ELIGIBLE FOR DEDUCTION U/S 8OIA, STILL THE S AME CANNOT BE BROUGHT TO TAX AS IT IS A CAPITAL RECEIPT. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSING OFFICER DURING THE COURSE OF ASSESSME NT PROCEEDINGS HAS EXAMINED THE ISSUE AND ALLOWED DEDUCTION U/S 80IA AND HENCE THE PROCEEDINGS INITIATED U/S 263 ARE NOT VALID. 11. THE LD. DR, ON THE OTHER HAND, STATED THAT BEFO RE THE AO THE ASSESSEE COMMITTED AN ERROR BY CLAIMING THE VERS AS REVENUE RECEIPT AND THE AO HAS NOT APPLIED HIS MIND TO THE SAME. 12. IN THE REJOINDER, THE LD. AR POINTED TO THE COM PUTATION OF NORMAL TAX PAYABLE AT PAGE 37 OF THE PAPERBOOK WHEREIN IT IS C LEARLY MENTIONED AS FOLLOWS:- LESS: DEDUCTION UNDER CHAPTER VI U/S 80IA INFRASTRUCTURE FACILITY RS.27,347,287.6 5 13. AGAIN AT PAGE NO.40 OF THE PAPERBOK IN THE PROF IT & LOSS ACCOUNT FOR THE PERIOD ENDED 31.3.2009, UNDER THE HEAD INCOME , THE AMOUNT OF SALE OF VERS IS MENTIONED AS RS.12,384,226.00. HENC E IT WAS CONTENDED BY THE LD. COUNSEL FOR THE ASSESSEE THAT THE AO HAS AP PLIED HIS MIND AND GONE THROUGH THE FACTS BEFORE PASSING THE ORDER AND HENC E THE ORDER U/S. 263 IS TO BE QUASHED. ITA NO. 489/BANG/2014 PAGE 9 OF 11 14. WE HAVE HEARD BOTH THE PARTIES. THOUGH, IT MA Y BE A FACT THAT THE ENQUIRY CONDUCTED BY THE AO ON DIFFERENT ISSUES MIG HT NOT HAVE BEEN REFLECTED IN THE BODY OF THE ASSESSMENT ORDER, BUT, THAT DOES NOT MEAN THAT THE AO HAS NEITHER CONDUCTED ANY ENQUIRY NOR APPLIE D HIS MIND TO THE FACTS AND MATERIALS BROUGHT ON RECORD. NON-MENTIONING OF ALL THE ISSUES ON WHICH ENQUIRY WAS MADE BY THE AO IN THE BODY OF THE ASSESSMENT ORDER DOES NOT INDICATE LACK OF ENQUIRY OR NON-APPLICATIO N OF MIND. IT IS QUITE POSSIBLE THAT THE AO AFTER CONSIDERING ASSESSEES R EPLY AND OTHER DOCUMENTARY EVIDENCES WAS SATISFIED WITH THE SAME, HENCE, HE FELT IT UNNECESSARY TO DEAL WITH THEM IN THE ASSESSMENT ORD ER. HOWEVER, NON- MENTIONING OF SUCH FACTS IN THE ASSESSMENT ORDER WO ULD NOT MAKE IT ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE R EVENUE. CERTAINLY, ASSESSEE CANNOT BE CONSIDERED TO BE AT FAULT FOR NO N-MENTIONING OF ALL THE ISSUES IN THE ASSESSMENT ORDER WHEN THERE IS NO DEN YING THE FACT THAT THE AO HAS CONDUCTED NECESSARY ENQUIRY AND ASSESSEE HAS FURNISHED ALL THE INFORMATION WITH DOCUMENTARY EVIDENCE IN COURSE OF SCRUTINY ASSESSMENT PROCEEDINGS. ASSESSEE NEITHER HAS ANY CONTROL NOR C AN INSTRUCT THE AO WHAT TO WRITE AND WHAT NOT TO WRITE IN THE ASSESSME NT ORDER. PERUSAL OF MATERIALS ON RECORD AS WELL AS OBSERVATIONS MADE BY THE CIT IN THE IMPUGNED ORDER PASSED U/S 263 OF THE ACT WOULD MAKE IT CLEAR THAT THE AO HAS CONSIDERED ALL THE ISSUES DURING ASSESSMENT PRO CEEDING ON WHICH THE CIT HAS REVISED THE ASSESSMENT ORDER. IN OUR VIEW, THE AO HAVING CONDUCTED NECESSARY ENQUIRY AND COMPLETED THE ASSES SMENT AFTER APPLYING ITA NO. 489/BANG/2014 PAGE 10 OF 11 HIS MIND TO THE FACTS AND MATERIALS ON RECORD, ASSE SSMENT ORDER PASSED CANNOT BE CONSIDERED TO BE ERRONEOUS AND PREJUDICIA L TO THE INTERESTS OF THE REVENUE AS THE CONDITION PRECEDENT FOR INVOKING JUR ISDICTION U/S 263 IS NOT SATISFIED. 15. SO FAR AS THE ISSUE OF TAXABILITY OF GAIN DERI VED FROM SALE OF VERS IS CONCERNED, IT IS A FACT ON RECORD THAT THE ASSESSEE HAS TREATED IT AS REVENUE RECEIPT IN THE BOOKS OF ACCOUNT, BUT, HAS CLAIMED D EDUCTION U/S 80IA OF THE ACT. THE CIT IN THE ORDER PASSED U/S 263 HAS HELD T HAT GAIN FROM SALE OF VERS HAVING NO DIRECT NEXUS WITH ELIGIBLE BUSINESS OF THE ASSESSEE, IT CANNOT BE PART OF THE BUSINESS PROFIT SO AS TO ALLO W DEDUCTION U/S 80IA OF THE ACT. IT IS THE CONTENTION OF THE LEARNED AR BEF ORE US THAT THE HYDERABAD BENCH OF THE TRIBUNAL IN CASE OF MY HOMES PVT. LTD. VS. DCIT [2014] 63 SOT 227 (HYD. TRIB) WHILE CONSIDERING THIS ISSUE H AS HELD THAT GAIN DERIVED FROM SALE OF CERCS BEING IN THE NATURE OF CAPITAL R ECEIPT CANNOT BE CONSIDERED AS INCOME. THEREFORE, IT IS THE CONTENTI ON OF THE LEARNED AR THAT WHEN THE RECEIPT ITSELF IS NOT TAXABLE AS INCOME TH E CLAIM OF DEDUCTION U/S 80IA OF THE ACT IN ANY WAY WOULD HAVE NO IMPACT ON THE REVENUE. 16. HAVING CONSIDERED THE SUBMISSIONS OF THE PARTIE S, WE ARE OF THE VIEW THAT THE AMOUNT RECEIVED ON SALE OF VERS BEING CAPI TAL IN NATURE AS PER THE DECISION OF THE HYDERABAD BENCH OF THE TRIBUNAL IN CASE OF MY HOMES PVT. LTD., (SUPRA) WHICH HAS BEEN UPHELD BY THE HONBLE ANDHRA PRADES H HIGH COURT IN JUDGMENT REPORTED IN 365 ITR 82, IT CANNO T BE TREATED AS INCOME ITA NO. 489/BANG/2014 PAGE 11 OF 11 OF THE ASSESSEE IN THE FIRST PLACE. THOUGH, THE ASS ESSEE HAS TREATED IT AS REVENUE RECEIPT, RECEIPT BEING IN THE NATURE OF CAP ITAL CANNOT BE TREATED AS INCOME. THEREFORE, EVEN IF AO HAS ALLOWED THE DEDUC TION ON THE AMOUNT U/S 80IA TREATING IT AS REVENUE INCOME, NO PREJUDIC E WAS CAUSED TO THE REVENUE, AND THUS, ONE OF THE CONDITION FOR INVOKIN G JURISDICTION U/S 263 NAMELY, PREJUDICIAL TO THE INTEREST OF REVENUE WAS NOT SATISFIED. 17. IN VIEW OF THE ABOVE, WE QUASH THE IMPUGNED ORD ER OF THE LD. CIT PASSED U/S. 263 OF THE ACT. 18. IN THE RESULT, THE APPEAL BY THE ASSESSEE IS AL LOWED. PRONOUNCED IN THE OPEN COURT ON THIS 4 TH DAY OF NOVEMBER, 2015. SD/- SD/- ( JASON P. BOAZ ) (ASHA VIJAYARAGHAVAN ) ACCOUNTANT MEMBER JUDICIAL M EMBER BANGALORE, DATED, THE 4 TH NOVEMBER, 2015. /D S/ COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE.