ACIT, New Delhi V. M/s. Neolite ZKW Lightings Pvt. Ltd., New Delhi

ITA 5698/DEL/2011

• Counselvise Citation: 569820114 RSA 2011
• Duration Of Justice: 2 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-03-2012
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 22-02-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 20-12-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RA J TANDON
• Assessee Lawyers: V SACHDEV
• Keywords: Opportunity of being heard; Question of law
• Section: 115JB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E NEW DELHI. BEFORE SHRI A.D. JAIN AND SHRI K.G. BANSAL I.T.A. NO.5698(DEL)/2011 ASSESSMENT YEAR: 2008-09 ASSTT. COMMISSIONER OF INCOME NEOLIT E ZKW LIGHTINGS PVT. LTD., TAX, CIRCLE 13(1), NEW DELHI. VS. B-24, MAYAPURI INDL. AREA, PHASE-I, NEW DELHI. PAN: AABCN 4157F (APPLICANT) (RESPONDENT) APPELLANT BY : SHRI RAJ TANDON, CIT, DR RESPONDENT BY : SH RI V. SACHDEV, C.A. DATE OF HEARIN G: 22.02.2012 DATE OF PRONOUN CEMENT: 02.03.2012. ORDER PER K.G. BANSAL : A.M THE ONLY GROUND TAKEN BY THE REVENUE IN THIS CASE IS THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT( APPEALS) ERRED IN DELETING THE INCOME OF RS. 2,33,21,233/- WHILE COMPUTING ADJUSTED BOOK PROFIT U/S 115JB OF THE INCOME-TAX ACT, 1961. IT IS MENTIONED THAT THIS INCOME PERTAINS TO A UNIT IN SEZ AREA. RELIANCE HAS ALSO BEEN PLACED ON THE DECISION IN THE CASE OF GOETZE (INDIA) LTD. VS. CIT, (2006) 284 ITR 323. ITA NO. 5698(DEL)/2011 2 1.1 THE FACTS OF THE CASE ARE THAT THE RETURN WA S FILED ON 30.09.2008 DECLARING LOSS OF RS. 27,41,280/-. THIS RETURN WA S PROCESSED U/S 143(1) ON 18.03.2010. THEREAFTER, ASSESSMENT PROCEEDINGS W ERE INITIATED BY SERVING A NOTICE U/S 143(2) DATED 25.09.2009. IN THE COURSE OF ASSESSMENT THE ASSESSEE FILED A LETTER DATED 30.11.2010 CLAIMI NG THAT EXCESS TAX HAS BEEN PAID BY IT IN RESPECT OF ITS UNIT SITUATED IN SEZ AREA. THIS CLAIM WAS DENIED BY MENTIONING THAT THERE IS NO PROVISIO N UNDER THE ACT FOR A ASSESSEE TO REVISE THE CLAIM THROUGH A LETTER. FOR THIS PURPOSE, RELIANCE WAS PLACED IN THE CASE OF GOETZE (INDIA) LTD. ( SUPRA). 1.2 BEFORE THE CIT(APPEALS)-XVI, NEW DELHI, IT W AS SUBMITTED THAT THE UNIT WAS SITUATED IN SEZ AREA, I.E., IN NO IDA, U.P. THE INCOME OF RS. 2,33,21,233/- FROM THIS UNIT WAS NOT CONSIDERED FOR ADJUSTMENT AS PER PROVISION CONTAINED IN SECTION 115JB. THE INCOME HAS BEEN DULY CERTIFIED BY THE AUDITOR IN ITS REPORT FURNISHED U/S 115J B. THUS, IT WAS ARGUED THAT THE AFORESAID AMOUNT SHOULD BE REDUCED FROM THE N ET PROFIT SHOWN IN THE PROFIT AND LOSS ACCOUNT. THE LD. CIT(APPEALS) ACCEPTED THE CONTENTION OF THE ASSESSEE BY RELYING ON THE DECISION IN THE CASE OF CIT VS. RAMCO INTERNATIONAL, (2011) 332 ITR 306 (P&H). THUS, THE AO WAS DIRECTED TO ITA NO. 5698(DEL)/2011 3 EXCLUDE THE PROFITS OF THE UNIT IN SEZ AREA FR OM THE BOOK PROFIT FOR LEVY OF TAX U/S 115JB. 2. BEFORE US, THE LD. CIT, DR REFERRED TO THE FI NDINGS OF THE AO AND THE LD. CIT(APPEALS). HE RELIED ON THE ASSESSMENT O RDER AND IN PARTICULAR ON THE DECISION IN THE CASE OF GOETZE (INDIA) LTD. IT WAS ARGUED THAT SINCE THE POWERS OF THE CIT(APPEALS) ARE CO-TERMINUS WITH THE POWERS OF THE AO AND THE ASSESSEE CANNOT MAKE A CLAIM BY WAY OF A LETTER ONLY, EVEN THE CIT(APPEALS) COULD NOT HAVE ACCEPTED THE CLAIM OF THE ASSESSEE. HOWEVER, HE FAIRLY SUBMITTED THAT THE DECISION IN THE CA SE OF GOETZE (INDIA) LTD. ITSELF STATES THAT THERE ARE NO FETTERS ON THE POWERS OF THE TRIBUNAL TO ADMIT ANY NEW GROUND AND, THEREFORE, THIS DECISION DOES NOT DEROGATE THE POWERS OF THE TRIBUNAL IN THIS BEHALF. IT WAS ALSO ARGUED THAT THE LD. CIT(APPEALS) ALLOWED THE DEDUCTION WITHOUT VERIF YING THE FACTS OF THE CASE. EITHER SHE SHOULD HAVE VERIFIED THE CLAI M IN TERMS OF STATUTORY LANGUAGE OR SHOULD HAVE RESTORED THE MATTER TO THE FILE OF THE AO FOR SUCH VERIFICATION. 2.1 IN REPLY, THE LD. COUNSEL FOR THE ASSESSEE SUBMITS THAT THE ASSESSEE CAN RAISE ANY QUESTION OF LAW AT ANY TIME WHICH A N APPELLATE AUTHORITY WILL ITA NO. 5698(DEL)/2011 4 BE BOUND TO CONSIDER IF NO NEW FACTS ARE REQU IRED. IN THIS CONNECTION, RELIANCE HAS BEEN PLACED ON THE DECISION IN THE CASE OF NATIONAL THERMAL POWER CORPORATION LTD. VS. CIT, (1998) 229 ITR 383 (SC). FURTHER, RELIANCE HAS BEEN PLACED ON THE DECISION OF HON BLE DELHI HIGH COURT IN THE CASE OF CIT VS. BHARAT ALUMINIUM CO. LTD. (2 008) 303 ITR 256. IN THIS CASE, THE ASSESSEE HAD FILED A REVISED CO MPUTATION OF INCOME IN WHICH FURTHER EXPENSES WERE CLAIMED. THEREAFTER, ANOTHE R REVISED COMPUTATION WAS FILED CLAIMING SOME MORE EXPENSES. THE AO AL LOWED EXPENSES CLAIMED IN FIRST REVISED COMPUTATION BUT DISALL OWED THE EXPENSES CLAIMED IN SECOND REVISED COMPUTATION HOLDING THEM TO BE CAPITAL IN NATURE. THE CIT SET ASIDE THE ORDER ON THE GROUND THAT THE CLA IM WAS ALLOWED ON THE BASIS OF A REVISED COMPUTATION AND NO REVISED RE TURN HAD BEEN FILED U/S 139(5). THE HONBLE COURT MENTIONED THAT FOR PA SSING AN ORDER U/S 263, TWO CONDITIONS HAVE TO BE SATISFIED CUMULATIVEL Y, I.E., THE ORDER IS ERRONEOUS, AND IT IS PREJUDICIAL TO THE INTEREST OF REVENUE. THE CIT HAS NOT SHOWN HOW CLAIM OF A LEGITIMATE EXPENDITURE C OULD LEAD TO PREJUDICE TO THE REVENUE. 3. WE HAVE CONSIDERED THE FACTS OF THE CASE AND SUBMISSIONS MADE BEFORE US. IN THE CASE OF GOETZE (INDIA) LTD., IT HAS BEEN HELD THAT THE ITA NO. 5698(DEL)/2011 5 TRIBUNAL HAS POWER TO ADMIT ANY ADDITIONAL QUESTI ON OF LAW PROVIDED IT IS BONA FIDE. THE LD. CIT, DR HAS NOT POINTED OUT HOW THE CLAIM IS NOT BONA FIDE AND, THEREFORE, HOW THE ASSESSEE IS PRECLUD ED FROM RAISING SUCH AN ISSUE BEFORE THE TRIBUNAL. THEREFORE, EVEN IF THE LD. CIT(APPEALS) ERRED IN ENTERTAINING THE CLAIM, WE DO SO AND THEREBY RE MOVE PROCEDURAL DEFECT, IF ANY. COMING TO THE MERITS, THE SUBMISSION OF THE LD. COUNSEL IS THAT THE CLAIM IS MADE ON THE BASIS OF AUDITORS REPORT AN D SEPARATE ACCOUNTS HAVE BEEN MAINTAINED FOR THIS UNIT. WE ARE OF THE V IEW THAT THESE MATTERS HAVE TO BE VERIFIED BY THE AO BOTH IN TERMS OF ADMISS IBILITY OF THE CLAIM AS WELL AS QUANTUM THEREOF. THE LD. CIT(APPEALS) HA S NOT APPLIED HER OWN MIND IN THIS BEHALF. THEREFORE, WE THINK IT FI T TO RESTORE THE MATTER TO THE FILE OF THE AO FOR CONSIDERING THE CLAIM OF THE A SSESSEE AND DECIDE THE MATTER AS PER LAW AFTER GIVING IT A REASONABLE OPPORTUNITY OF BEING HEARD. 4. IN THE RESULT, THE APPEAL IS TREATED AS ALLOWE D FOR STATISTICAL PURPOSE. SD/- SD/- (A.D. JAIN) (K.G. BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER SP SATIA COPY OF THE ORDER FORWARDED TO:- NEOLITE ZKW LIGHTINGS PVT. LTD., NEW DELHI. ITA NO. 5698(DEL)/2011 6 ACIT, CIRCLE 13(1), NEW DELHI. CIT(A) CIT, THE D.R., ITAT, NEW DELHI. ASSISTANT REGISTRAR.