DCIT 8(3), MUMBAI V. SUN-N-SAND HOTELS P.LTD, MUMBAI

ITA 6225/MUM/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 100883 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-09-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 15-09-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 24-10-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: PRAKASH K JOTWANI
• Keywords: Capital receipt
• Section: 147

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE SHRI N.K . BILLAIYA, ACCOUNTANT MEMBER AND RAM L AL NEGI, JUDICIAL MEMBER / I .T.A. NO. 6225/MUM/2013 ( / ASSESSMENT YEAR :2008 - 09 THE DCIT - 8(3), AAYAKAR BHAVAN, MUMBAI - 400 020 / VS. M/S. SUN - N - SAND HOTELS PVT. LTD., 39, JUHU BEACH, MUMBAI - 400 049 C.O. NO. 10/MUM/2015 ARISING OUT OF I .T.A. NO. 6225/MUM/2013 ( / ASSESSMENT YEAR : 2008 - 09 M/S. SUN - N - SAND HOTELS PVT. LTD., 39, JUHU BEACH, MUMBAI - 400 049 / VS. THE DCIT - 8(3), AAYAKAR BHAVAN, MUMBAI - 400 020 ./ ./ PAN/GIR NO. : AAACS 5517P ( / APPELLANT ) .. ( / RESPONDENT ) / REVENUE BY: SHRI AJAY MODI / ASSESSEE BY: SHRI PRAKASH K. JOTWANI / DATE OF HEARING : 1 5 .0 9 .2015 / DATE OF PRONOUNCEMENT : 1 5 .0 9 .2015 / O R D E R PER N.K. BILLAIYA, AM: THIS APPEAL BY THE REVENUE AND THE CROSS OBJECTION BY THE ASSESSEE ARE PREFERRED AGAINST THE ORDER OF THE LD. CIT(A) - 18 , MUMBAI D ATED 2 . 8 .201 3 PERTAINING TO ASSESSMENT YEAR 2008 - 09. ITA. NO. 6225/M/13 C.O. NO. 10/M/2015 2 2. THE SOLE GRIEVANCE OF THE REVENUE IS THAT THE LD. CIT(A) ERRED IN QUASHING THE PROCEEDINGS U/S. 147 OF THE ACT. THE CLAIM OF THE REVENUE IS THAT THE ASSESSING OFFICER WAS JUSTIFIED IN INVOKING SEC. 147 OF THE ACT AS EXCESSIVE DEDUCTION WAS ALLOWED BY THE AO U/S. 80IA WHICH IS IN C ONTRAVENTION OF THE RATIO OF THE DECISION IN THE CASE OF LIBERTY INDIA VS CIT 317 ITR 218. 3. AT THE VERY OUTSET, THE LD. COUNSEL FOR THE ASSESSEE POINTED OUT THAT AN IDENTICAL CASE WAS HEARD BY THE SAME COMBINATION OF AM & JM IN ITA NO. 4266/M/2013 WHERE IN THE TRIBUNAL HAS UPHELD THE FINDINGS OF THE LD. CIT(A), THEREFORE ON THE SAME SET OF FACTS, THE TRIBUNAL SHOULD FOLLOW ITS OWN ORDER. 4. PER CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE STRONGLY OBJECTED TO THIS. 5. IT IS THE SAY OF THE LD. DR THAT I N ITA NO. 4266/M/13, THE REOPENING WAS MADE AFTER 4 YEARS. THEREFORE, THE PROVISO TO SEC. 147 OF THE ACT WAS APPLICABLE. HOWEVER, IN THE PRESENT YEAR, THE REOPENING IS LESS THAN 4 YEARS AND THEREFORE THE PROVISO IS NOT APPLICABLE. 6. HAVING HEARD THE R IVAL SUBMISSIONS, WE HAVE CAREFULLY PERUSED THE ORDERS OF THE AUTHORITIES BELOW. WE FIND FORCE IN THE CLAIM OF THE DR THAT IN THE YEAR UNDER CONSIDERATION, THE REOPENING WAS WITHIN 4 YEARS. HOWEVER, IN THE LIGHT OF THE FACTUAL MATRIX OF THE CASE IN HAND , WHEREIN , THE REOPENING HAS BEEN DONE FOR THE FOLLOWING REASONS: ITA. NO. 6225/M/13 C.O. NO. 10/M/2015 3 THE ASSESSEE WAS IN RECEIPT OF RS. 2,02,04,360/ - AS SALES TAX BENEFIT UNDER THE POWER POLICY OF THE STATE GOVERNMENT FOR INSTALLING WINDMILLS IN THE MAHARASHTRA STATE. ALTHOUGH, THE ASSES SEE CLAIMED IT AS NOT TAXABLE BEING CAPITAL RECEIPTS. THE AO REJECTED THE ASSESSEES CLAIM AS CAPITAL RECEIPT AND TREATED THE SAME AS REVENUE IN NATURE. HOWEVER, THE AO HAS ALLOWED DEDUCTION U/S. 80IA OF RS. 5,33,78,478 / - . THE SALES TAX BENEFIT IS NOT AN INCOME DERIVED FROM THE BUSINESS OF THE INDUSTRIAL UNDERTAKING, ALLOWING THE SAME RESULTED IN EXCESS DEDUCTION U/S. 80IA OF RS. 2,02,04,360/ - WHICH IN TURN RESULTED IN SHORT LEVY OF TAX BY RS. 68,67,460/ - . THUS, A SUM OF RS. 2,02,04,360/ - HAS ESCAPED A SSESSMENT. 7. THE AFORESAID REASONS FOR THE REOPENING OF THE COMPLETED ASSESSMENT HAVE BEEN DULY CONSIDERED BY THE AO WHILE MAKING THE ORIGINAL ASSESSMENT ORDER. THEREFORE, IT IS CLEAR THAT NO NEW FACTS HAVE COME TO THE NOTICE OF THE AO FOR REOPENING A COMPLETED ASSESS MENT. 8. IN SO FAR AS THE CLAIM OF THE REVENUE THAT SALES TAX SUBSIDY HAS NO DIRECT NEXUS WITH THE BUSINESS OF THE ASSESSEE H AS ALREADY BEEN DECIDED BY THE TRIBUNAL IN ASSESSEES OWN CASE IN ITA NOS. 7125/M/2007, 2218/M/08, 3833/M/08 AND 772/M/09 ORDER D ATED 8.1.2014 WHEREIN THE TRIBUNAL HAS HELD THAT THE AMOUNT OF SALES TAX SUBSIDY IS DIRECTLY ARISING FROM THE BUSINESS OF THE ASSESSEE, THEREFORE, THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS KELVINATOR OF INDIA LTD. 320 ITR 561 AND THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE O F CIT VS ICICI BANK LTD. 349 ITR 482 HAVE BEEN CORRECTLY RELIED UPON BY THE LD. CIT(A). WE, ITA. NO. 6225/M/13 C.O. NO. 10/M/2015 4 THEREFORE, DO NOT FIND ANY REASON TO INTERFERE WITH THE FINDINGS OF THE LD. CIT(A). 9. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED AND THE CROSS OBJECTION FILED BY THE ASSESSEE BECOME OTIOSE. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ON 1 5 TH SEPTEMBER , 2015 SD/ - SD/ - ( RAM L AL NEGI ) (N.K. BILLAIYA) /JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED : 1 5 TH SEPTEMBER , 2015 . . ./ RJ , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI