M/s. Greenko Power P. Ltd, Hyderabad V. The ITO Ward-2(2), Hyderabad

ITA 50/HYD/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 61898 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 4 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-05-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 10-05-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 10-01-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: M H NAIK

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD BEFORE SHRI D.KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO.50/HYD/2011 : ASSESSMENT YEAR 2007-08 M/S. GREENKO POWER PVT. LTD., HYDERABAD ( PAN - AAFCS 7123 L ) V/S INCOME TAX OFFICER, WARD - 2(2), HYDERABAD (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI C.SUBRAHMANYAM RESPONDENT BY : SHRI M.H.NAIK DATE OF HEARING 10.5.2012 DATE OF PRONOUNCEMENT 18.5.2012 O R D E R PER D.KARUNAKARA RAO, ACCOUNTANT MEMBER: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS) III, HYDERA BAD DATED 10.10.10 FOR THE ASSESSMENT YEAR 2007-08. 2. GROUNDS RAISED BY THE ASSESSEE READ AS UNDER- 1.0 THE ORDERS PASSED BY THE ASSESSING OFFICER AND CONFIRMED BY THE LEARNED CIT(A) ARE AGAINST THE LAW, FACTS AND CIRCU MSTANCES OF THE CASE. 1.1 THE LOWER AUTHORITIES GROSSLY ERRED IN TAXING THE F OREIGN EXCHANGE GAIN UNDER THE HEAD INCOME FROM OTHER SOURCES WIT HOUT UNDERSTANDING THE PROVISIONS OF INCOME TAX LAW IN T HE RIGHT PERSPECTIVE. 1.2 THE LEARNED ASSESSING OFFICER FAILED TO CONSIDER TH E SET OFF OF LOSSES UNDER INTER-HEAD ADJUSTMENT. 1.3 THE LEARNED CIT(A) DID NOT CONSIDER THE FOLLOWING G ROUNDS WHILE PASSING THE ORDER: (A) ASSESSING OFFICER ERRED IN CONDUCTING THE ASSESSME NT ON THE APPELLANT COMPANY, AS DURING THE FINANCIAL YEAR IN QUESTION AND AS ON THE DATE OF PASSING OF THE ORDER , THE COMPANY AS NOT EXISTENT HAVING BEEN MERGED WITH M/S . SRI ITA NO.50/HYD/2011 M/S. GREENKO POWR P.LTD., HYDERABAD 2 BALAJI BIO MASS POWER PRIVATE LIMITED BY VIRTUE OF HIGH COURT ORDER. (B) THE ASSESSING OFFICER FAILED TO TAKE NOTE OF THE F ACT THAT THE SAID INCOME AND EXPENDITURE WAS ALREADY OFFERED TO TAX IN THE HANDS OF THE AMALGAMATED COMPANY I.E. M/S. SRI BALAJI BIO MASS POWER PRIVATE LIMITED AND THE ASSESSMENT OF THE SAME INCOME IN THE HANDS OF APPELLANT COMPANY AMOUN TS TO DOUBLE TAXATION. 1.4 THE LEARNED CIT(A) HAVING NOT DISPOSED OFF THE ABOV E GROUNDS, THEREBY CAUSING INJUSTICE, THE ORDERS PASSED THERET O ARE NULLITY IN LAW AND AGAINST THE PRINCIPLES OF JUSTICE. 1.5 FOR THESE AND OTHER REASONS THAT ARE TO BE URGED AT THE TIME OF HEARING OF THE CASE, THE APPELLANT PRAYS THAT THE O RDERS PASSED BY LOWER AUTHORITIES ARE AGAINST THE FACTS OF THE CASE AND LAW, THEREFORE, SAME NEEDS TO BE QUASHED IN THE INTEREST OF JUSTICE. 3. REFERRING TO THE ABOVE GROUNDS, LEARNED COUNSEL FOR THE ASSESSEE MENTIONED THAT GROUND AT SL. NO.1.3 IS LEG AL IN NATURE. IN CASE THE SAID GROUND IS DECIDED IN FAVOUR OF THE ASSESSE E, ADJUDICATION OF REST OF THE GROUNDS BECOMES MERELY AN ACADEMIC EXERCISE. FURTHER REFERRING TO THE SAID GROUND AT 1.3 ABOVE, LEARNED COUNSEL ME NTIONED THAT THE ASSESSMENT MADE IN THE CASE OF GREENKO POWER PVT. L TD. BY THE ASSESSING OFFICER, HAS BEEN QUASHED CONSIDERING THE FACT THAT THE ASSESSMENT ORDER FOR THE ASSESSMENT YEAR 2007-08 HAS TO BE MADE IN T HE HANDS OF GREENKO ENERGIES P. LTD., CONSIDERING THE HIGH COURT ORDER RELATING TO MERGER APPLICATION FILED ON 1.10.2007 AND PASSED ON 19.2.2 008, COPY OF WHICH WAS ALREADY AVAILABLE TO THE LOWER AUTHORITIES. 4. THE LEARNED COUNSEL FOR THE ASSESSEE REFERRED TO THE DETAILED LETTER WRITTEN TO THE CIT(A) DATED 14.10.2010 AND REFERRING SPECIFICALLY TO PARA 7 THEREOF, LEARNED COUNSEL MENTIONED THAT THE ASSESSEE HAS RAISED LEGAL GROUNDS BEFORE THE CIT(A), WHICH WERE NOT ADJ UDICATED BY THE COMMISSIONER(APPEALS). IN SUMMARY, LEARNED COUNSEL ARGUED STATING THAT THE ASSESSMENT MADE IN THE CASE OF GREENKO POW ER PVT. LTD. HAS TO BE QUASHED CONSIDERING THE JUDGMENT OF THE DELHI HI GH COURT IN THE CASE OF SPICE INFOTAINMENT LTD. V/S. CIT (247 CTR (DEL) 500) DATED 3 RD AUGUST, ITA NO.50/HYD/2011 M/S. GREENKO POWR P.LTD., HYDERABAD 3 2011. REFERRING TO THE HEAD-NOTE OF THE SAID DECIS ION, LEARNED COUNSEL ARGUED THAT IN CASE THE ASSESSMENT HAS TO BE MADE O N THE RETURN IN QUESTION, IT IS PERMISSIBLE TO MAKE ASSESSMENT ON T HE BASIS OF THE RETURN, AFTER SUBSTITUTING THE NAME OF THE APPELLANT IN THE PLACE OF GREENKO POWER PVT LTD. AND HAVING THE PROCEEDINGS AFRESH, FROM T HE STAGE OF ISSUANCE OF NOTICE UNDER S.143(2) OF THE ACT, IF IT IS STILL PE RMISSIBLE AS PER LAW. HE ALSO MENTIONED THAT THE ASSESSMENT WAS ALREADY MADE IN THE NAME OF GREENKO ENERGIES PVT. LTD. AND FILED COPY OF THE SA ME FOR THE RECORDS. 5. PER CONTRA, LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE RELIED HEAVILY ON THE ORDERS OF THE REVENUE . 6. WE HEARD BOTH THE PARTIES AND PERUSED THE ORDER S OF THE REVENUE AS WELL AS THE OTHER DOCUMENTS AVAILABLE BE FORE US, INCLUDING THE IMPUGNED LETTER DATED 14.10.2010 AND THE HIGH COURT ORDER ETC. IT IS AN ADMITTED FACT THAT THE ASSESSEE FILED AN APPLICATIO N BEFORE THE HIGH COURT ON 1.10.2007. THE EFFECTIVE DATE OF MERGER IS 1.4. 2006. THEREFORE, THE ASSESSMENT UNDER CONSIDERATION BEING 2007-08 IS COV ERED BY THE SAID EFFECTIVE DATE OF MERGER. FURTHER, THIS IS ALSO A F ACT THAT THE ASSESSEE RAISED A LEGAL GROUND BEFORE THE FIRST APPELLATE AU THORITY, BUT THE SAID LEGAL GROUND/ISSUES WERE NOT ADJUDICATED BY THE COM MISSIONER (APPEALS) BY WAY OF PASSING A SPEAKING ORDER IN ACCORDANCE WI TH PROVISIONS OF S.250(6) OF THE ACT AS TO THE VALIDITY OF THE ORDER OF ASSESSMENT IN THE NAME OF GREENKO POWER (P) LTD. FURTHER, A PERUSAL OF SAID ORDER OF THE DELHI HIGH COURT IN THE CASE OF SPICE INFOTAINMENT LTD. (SUPRA), REVEALS THAT IN PRINCIPLE, THE SAID ISSUES STAND COVERED IN FAVOUR OF ASSESSEE.. CONSIDERING THE ABOVE POSITION, WE ARE OF THE VIEW THAT THE ASSESSEE HAS A FAIR CHANCE OF WINNING THE CASE, IF THE FACTS OF THE CITED CASE ARE IDENTICAL TO THE ONE IN THE INSTANT CASE. ALL THE F ACTS ARE NOT AVAILABLE BEFORE US. THEREFORE, CONSIDERING THE POSITION THAT THE CIT(A) HAS NOT ADJUDICATED UPON THE LEGAL ISSUES RAISED BEFORE HIM , VIDE LETTER DATED ITA NO.50/HYD/2011 M/S. GREENKO POWR P.LTD., HYDERABAD 4 14.10.2010, REFERRED TO ABOVE, WE ARE OF THE OPINIO N THAT THIS ISSUE MUST BE SENT TO THE FILE OF THE CIT(A) FOR PASSING A FRE SH SPEAKING ORDER ADJUDICATING UPON THE LEGAL ISSUES RAISED BEFORE HI M. IN THE PROCESS, WE DIRECT THE CIT(A) TO PERUSE THE SAID ORDER OF THE DELHI HIGH COURT IN THE CASE OF SPACE INFOTAINMENT (SUPRA) AND DECIDE THE I MPUGNED LEGAL ISSUE AFRESH AFTER GIVING REASONABLE OPPORTUNITY OF HEARI NG TO THE ASSESSEE. ACCORDINGLY, THE GROUND NO.3 OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. 7. SINCE ON THE GROUND NO.1.3 RELATING TO THE LEG AL ISSUES, WE SET ASIDE THE ISSUE TO THE FILE OF THE CIT(A), THE ADJU DICATION OF OTHER GROUNDS RAISED IN THIS APPEAL BECOMES ACADEMIC AT THIS STA GE, AND THEY ARE ACCORDINGLY DISMISSED AS SUCH. 8. IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALLO WED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 18/05/2012 SD/- SD/- (SAKTIJIT DEY) (D.KARUNAKARA RAO) JUDICIAL MEMBER. ACCOUNTANT MEMBER. DT/- 18TH MAY, 2012 COPY FORWARDED TO: 1. 2. 3 M/S.GREENKO POWER PVT. LTD. PLOT NO.1071, ROAD NO.4 4, JUBILLEE HILLS, HYDERABAD 500 033. INCOME TAX OFFICER, WARD 2(2), HYDERABAD COMMISSIONER OF INCOME-TAX(APPEALS) III, HYDERABAD 4. COMMISSIONER OF INCOME - TAX I I , HYDERABAD 5. DEPARTMENTAL REPRESENTATIVE, ITAT, HYDERABAD B.V.S.