The Dy. CIT, Gandhinagar Circle, Gandhinagar V. Gujarat Water Supply & Sewerage Board, Gandhinagar

ITA 51/AHD/2014

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 9093 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 1 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-02-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 21-02-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 08-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAGADISH
• Assessee Lawyers: M G PATEL
• Keywords: Revised return
• Section: 115JB

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD . . , , BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER AND SHRI MAHAVI R PRASAD, JUDICIAL MEMBER . / I.T.A. NO . 51/AHD/2014 ( / ASSESSMENT YEAR : 2010 - 11 ) COMMISSIONER OF INCOME - TAX, GANDHINAGAR CICLE, 4 TH FLOOR, 14 TH BLOCK, UDHYOG BHAVAN, SECTOR - 11, GANDHINAGAR / VS. GUJARAT WATER SUPPLY & SEWERAGE BOARD JALSEVA BHAVAN, SECTOR - 10A, GANDHINAGAR - 382010 ./ ./ PAN/GIR NO. : AACCG 3119 R ( / APPELLANT ) .. ( / RE H SPONDENT ) / APPELLANT BY : SHRI JAGADISH, CIT D.R. / RESPONDENT BY : SHRI M. G. PATEL, A.R. / DATE OF HEARING 21/02/2017 / DATE OF PRONOUNCEMENT 23 / 02 /201 7 / O R D E R PER SHRI MAHAVIR PRASAD, JUDICIAL MEMBER : THIS APPEAL HAS BEEN PREFERRED BY THE DEPARTMENT IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS ), AHMEDABAD, DATED 11 / 10/2013 F OR THE ASSESSMENT YEAR (AY) 20 10 - 11 AND FOLLOWING GROUND HAS BEEN TAKEN: THE LEARNED CIT(APPEAL)HAS ERRED IN LAW AND ON FACTS IN DELETING THE DETERMINED BOOK PROFIT U/S. 115JB OF THE IT ACT OF RS.77,54,01,000/ - ITA NO. 51/AHD/2014 COMMISSIONER OF INCOME - TAX VS. GUJARAT WATER SUPPLY & SEWERAGE ASST.YEAR 2010 - 11 - 2 - 2. THE FACTS OF THE CASE ARE THAT IN THIS CASE ASSESSEE ITSELF HAS OPTED ITS STATUS AS COMPANY; IT WAS REQUIRED TO PAY TAX ON THE BOOK PROFIT UND ER SECTION 115JB OF THE ACT. THE ASSESSEE COMPANY FILED ORIGINAL RETURN OF INCOME SHOWING LOSS OF RS.93,08,13,706/ - . A REVISED RETURN WAS FILED BY THE ASSESSEE ON 31/03/2012 DECLARING NIL INCOME AFTER SET OFF OF EARLIER YEAR LOSSES. 3. THE ASSESSEE WAS TH EREFORE ASKED TO EXPLAIN WHY TAX MAY NOT BE LEVIED ON THE BOOK PROFIT. THE ASSESSEE REPLIED AS UNDER: IT IS A FACT THAT THE BOARD HAD TAKEN PAN IN THE NATURE OF COMPANY. THE BOARD IS FILING ITS INCOME TAX RETURN IN THE NATURE OF A COMPANY BUT IT IS NOT PREPARING ITS ANNUAL ACCOUNTS AS PER REVISED SCHEDULE VI OF COMPANIES ACT . 4. THUS THE MAJOR GROUND O N THE BASIS OF WHICH ASSESSEE WAS ARGUING THAT MAT IS NOT APPLICABLE TO ITS CASE IS THAT ITS ACCOUNTS ARE NOT PREPARED AS PER SCHEDULE - VI OF COMPANY AC T. TH EREFORE CONTENTION RAISED BY THE ASSESSEE WAS NOT FOUND ACCEPTABLE. THE STATUS OF THE ASSESSEE AS ACCEPTED BY THE ASSESSEE IS TREATED AS COMPANY BY ASSESSEE ITSELF. HENCE THERE IS NO DEBATE ON THE STATUS OF THE ASSESSEE. 5. IN THIS CASE THOUGH THERE IS STATUTORY REQUIREMENT THAT ACCOUNTS WERE REQUIRED TO BE PREPARED AS PER SCHEDULE - VI OF COMPANIES ACT, THE ASSESSEE HAS NOT PREPARED ACCOUNTS ACCORDINGLY, WHEN ACCOUNTS ARE NOT PREPARED ACCORDING TO, STATUTORY REQUIREMENT BOOK PROFIT CAN BE DETERMINED O N THE BASIS OF ACCOUNTS PREPARED BY THE ASSESSEE IN ANY OT HER ITA NO. 51/AHD/2014 COMMISSIONER OF INCOME - TAX VS. GUJARAT WATER SUPPLY & SEWERAGE ASST.YEAR 2010 - 11 - 3 - FORM. JUST BECAUSE ACCOUNT IS NOT PREPARED IN SCHEDULE VI OF COMPANIES, ACT ASSESSEE CANNOT BE SPARED FROM ITS TAX LIABILITIES. IT MAY BE THE PLANNING OF ASSESSEE OF NOT PRE PARING ACCOUNTS AS PE R SCHEDULE - VI OF COMPANIES ACT TO GET RID OF SECTION 115JB. 6. SINCE ASSESSEE HAS NOT PR EPARED ACCOUNTS AS PER SCHEDULE - VI OF COMPANIES ACT NO OTHER OPTION IS LEFT BUT TO ACCEPT THE SURPLUS DETERMINED BY THE ASSESSEE ON THE BASIS OF INCOME AND EXPENDITURE ACCOUNT OF RS.77,54,01,000/ - AS BOOK PROFIT U/S. 115JB. CONSIDERING THE ABOVE FACTS OF THE CASE THE INCOME OF ASSESSEE IS ASSESSED AT THE BOOK PROFIT OF RS.77,54,01,000/ - U/S. 115JB OF THE IT ACT. 7. AGAINST THE SAID ORDER ASSESSEE CHALLENGED THE MATTER BEFORE THE FIRST APPELLATE AUTHORITY AND LD. CIT(A) GAVE THE RELIEF TO THE ASSESSEE AND ALLOWED THE APPEAL OF THE APPELLANT. 8. AFTER CONSIDERATION OF ENTIRE FACTS AND DETAILS AND DECISION DISCUSSED HEREINABOVE, IT IS FOUND THAT APPELLANT IN GUJARAT GOVE RNMENT UNDERTAKING ESTABLISHMENT UNDER GWSSB ACT, 1978 OF THE LOCAL AUTHORITY AND NOT A COMPANY AS PER PROVIS ION OF COMPANIES ACT, 1956 . IT IS NOT REQUIRED TO FILE ITS ARTICLE & MEMORANDUM OF ASSOCIATION WITH ROC AND ALSO NOT REQUIRED TO PREPARE ITS ACCOUN TS AS PER SCHEDULE - VI OF THE COMPANIES ACT. THE APPELLANT HAS PREPARED ITS ACCOUNTS INCLUDING INCOME & EXPENDITURE ACCOUNT AS PER RELEVANT SECTION OF GWSSB ACT. EVEN THOUGH IT HAS FILED RETURNS IN ITR - 6 APPLICABLE TO COMPANY AS IT IS ITA NO. 51/AHD/2014 COMMISSIONER OF INCOME - TAX VS. GUJARAT WATER SUPPLY & SEWERAGE ASST.YEAR 2010 - 11 - 4 - LIABLE TO TAX AS SUCH UNDER NORMAL PROVISIONS OF THE ACT, BUT DEEMING PROVISIONS OF SECTION 115JB WHICH PROVIDES FOR SPECIAL TAXATION ARE NOT APPLICABLE TO THE PRESENT CASE, AS DISCUSSED HEREIN ABOVE. 9. LD. AR HAS FILED AN ORDER OF THE CO - ORDINATING BENCH IN ITA NO.2159/AHD/ 2006, IN THE MATTER OF ITO VS. GUJARAT STATE ROAD TRANSPORT CORPORATION LTD. IN SIMILAR MATTER APPEAL WAS ALLOWED BY THE HON BLE MEMBERS HOLDING THAT IN THESE SIMILAR MATTERS HON BLE KARNATKA HIGH COURT IN THE CASE KERALA STATE ELECTRICITY BOARD VS. DCIT [ 2010] 329 ITR 91 (KER) , IN VIEW OF THE DECISION, CASE WAS DECIDED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. 10. IN SUPPORT OF ITS CONTENTION ASSESSEE HAS ALSO FILED A COPY OF JUDGMENT DAMODAR VALLEY CORPORATION VS. ACIT [2016] 157 ITD 415/66 TAXMANN.COM25(KOLKATA - TRIB) IN SIMILAR CIRCUMSTANCES, THE CASE WAS ALLOWED IN FAVOUR OF THE ASSESSEE. 11. IT WAS HOLD THAT THE ASSESSEE IS A STATUTORY CORPORATION NOT REGISTERED UNDER THE COMPANIES ACT SECTION 115JB O F THE ACT ARE NOT APPLICABLE TO THE ASSESSEE CORPORATION; 12. WE ARE OF THE CONSIDERED OPINION AND R ESPECTFULLY FOLLOWING THE ORDER OF THE HON BLE TRIBUNAL AND JUDGMENT OF KERALA HIGH COURT. WE DISMISSED THE APPEAL OF THE DEPARTMENT. ITA NO. 51/AHD/2014 COMMISSIONER OF INCOME - TAX VS. GUJARAT WATER SUPPLY & SEWERAGE ASST.YEAR 2010 - 11 - 5 - 13. IN THE RESULT, APPEAL FILED BY THE DEPARTMENT IS DISMISSED. THIS ORDER PRONOUNCED IN OPEN COURT ON 23 / 0 2 /201 7 SD/ - SD/ - . . ( ) ( ) ( N.K. BILLAIYA ) ( MAHAVIR PRASAD ) ACCOUNTANT MEMBER JUDICIAL MEMBER A HMEDABAD; DATED 23 / 0 2 /20 17 PRIIT YADAV, SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) AHMEDABAD 5. , , / DR, ITAT, AHMEDABAD 6. / GUARD FILE . / BY ORDER, //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD TRUE COPY 1. DATE OF DICTATION 21/02/2017 (DICTATION - PAD 3 PAGES ATTACHED AT THE END OF THIS APPEAL - FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 23/02/2017 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P.S./P.S .. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P.S./P.S . 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE