DODSON LINDBLOM HYDRO POWER P.LTD, MUMBAI V. DCIT RG 9(3)(1), MUMBAI

ITA 6601/MUM/2016

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 6923 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 1 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-01-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 10-11-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: CHAITANYA ANJARIA
• Assessee Lawyers: PANKAJ JAIN
• Keywords: Capital receipt
• Section: 115JB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE SHRI SHAMIM YAHYA, AM AND SHRI RAVISH SOOD, JM ITA NO. 6601 /MUM/ 2016 (ASSESSMENT YEAR: 2012 - 13 ) DODSON LINDBLOM HYDRO POWER PVT. LTD. 6 - SHIV VASTU, TEJPAL SCHEME ROAD NO.5, VILE PARLE (E), MUMBAI - 400 057 VS. DCIT - 9(3)(1), AAYAKAR BHAVAN, M. K. MARG, MUMBAI - 400 020 PAN/GIR NO. AAACD 7612 A ( APPELLANT ) : ( RESPONDENT ) APPELLANT BY : SHRI PANKAJ JAIN RESPONDENT BY : SHRI CHAITANYA ANJARIA DATE OF HEARING : 29.10.2018 DATE OF PRONOUNCEMENT : 03.01 .2019 O R D E R PER SHAMIM YAHYA, A. M.: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 16, MUMBAI (LD.CIT(A) FOR SHORT) DATED 24.08.2016 AND PERTAINS TO THE ASSESSMENT YEAR (A.Y.) 2012 - 13. 2. THE GROUNDS OF APPEAL READ AS UNDER: 1) THE COMMISSIONER OF INCOME TAX (APPEALS) - 16, MUMBAI [HEREINAFTER REFERRED TO AS THE CIT(A)], DESPITE HOLDING THAT CARBON CREDITS ARE A CAPITAL RECEIPT WHICH ARE NOT LIABLE FOR TAX, ERRED IN NOT ACCEPTING THE APPELLANTS CONTENTION THAT THE SAME SHOULD CONSEQUENTIALLY BE EXCLUDED IN THE COMPUTING THE 'BOOK PROFITS' UNDER SECTION 115JB OF THE ACT. THE APPELLANTS PRAY THAT THE DEPUTY COMMISSIONER OF INCOME TAX, RANGE - 9(3)(L), MUMBAI (DC IT) BE DIRECTED TO EXCLUDE THE RECEIPTS ON ACCOUNT OF TRANSFER OF CARBON CREDITS OF RS.3,15,75,011 IN COMPUTING THE BOOK PROFIT UNDER SECTION 115JB OF THE ACT. 3. B RIEF FACTS OF THE CASE ARE THAT IN THE ASSESSMENT ORDER , THE ASSESSING OFFICER (A.O. FOR SHORT) HAD TREATED THE CARBON CREDIT RECEIPTS AS TAXABLE INCOME. HOWEVER IN THE APPELLATE ORDER , THE LEARNED CIT - A DELETED THE ADDITION. 4. BEFORE THE LEARNED CIT - A , THE ASSESSEE RAISED ANOTHER GROUND THAT THE CARBON CREDIT RECEIPTS ALREADY CREDITED IN T HE PROFIT AND LOSS ACCOUNT SHOULD ALSO BE NOT 2 ITA NO. 6601/MUM/2016 CONSIDERED FOR COMPUTATION OF BOOK PROFIT U /S. 115JB. HENCE, IT WAS REQUESTED THAT BOOK PROFIT BE RECOMPUTED. HOWEVER , THE LEARNED CIT - A DID NOT ACCEPT THIS. HE HELD AS UNDER : 6.4 DURING THE COURSE OF APPELLATE PROCEEDINGS, THE APPELLANT HAS RAISED AN ADDITIONAL GROUND AND REQUESTED TO RE - COMPUTE THE BOOK PROFIT U/S.115JB BY TREATING THE CARBON CREDIT RECEIVED AT A CAPITAL RECEIPT. THE BOOK PROFIT WAS OFFERED BY THE APPELLANT ITSELF AS PER THE ACCOUNTS MAINTAINE D AS PER THE COMPANIES ACT. SINCE THE ACCOUNTS WERE PREPARED BY THE APPELLANT ITSELF, ACCORDING TO THE PRESCRIBED NORMS, IT IS NOT POSSIBLE AT THIS STAGE TO DISTURB THE BOOK PROFIT COMPUTED BY THE APPELLANT AS PER PRESCRIBED NORMS OF THE COMPANIES ACT. 5. A GAINST THE ABOVE ORDER , THE ASSESSEE IS IN APPEAL BEFORE US . 6. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. THE L EARNED COUNSEL OF THE ASSESSEE SUBMITTED THAT THE CARBON CREDIT RECEIPTS ALREADY ACCOUNTED TO THE PROFIT AND LOSS ACCOUNT SHOUL D NOT BE CONSIDERED FOR COMPUTATION OF BOOK PROFIT U/S.115JB INASMUCH AS IT IS CAPITAL RECEIPT. IN THIS REGARD , HE REFERRED TO A FEW TRIBUNAL DECISIONS. HENCE, HE PLEADED THAT BOOK PROFIT SHOULD BE RECOMPUTED. 7. PER CONTRA , THE LD. DEPARTMENTAL REPRESENTATIVE (LD. DR FOR SHORT) SUBMITTED THAT THE IMPUGNED AMOUNT IS ALREADY CREDITED INTO THE PROFIT AND LOSS ACCOUNT. IN SUCH CIRCUMSTANCES , HE SUBMITTED THAT THE ACCOUNTS WHICH HAVE BEEN DULY AUDITED AND ADOPTED IN THE ANNUAL G ENERAL MEETING CANNOT BE REWORKED. IN THIS REGARD , HE PLACED RE LIANCE UPON FOLLOWING CASE LAWS: 1. APOLLO TYRES LTD. VS. CIT [2002] 122 TAXMAN 562 (SC); 2. CIT VS. ADBHUT TRADING CO. (P.) LTD. [2011] 33 8 ITR 94 (BOM); 3. CIT VS. AKSHAY TEXTILES TRADING AGENCIES (P. ) LTD. [2008] 304 ITR 401 (BOM) 4. PR. CIT VS. BHAGWAN INDUSTRIES LTD. (IN INCOME TAX APPEAL NO. 436 OF 2015 VIDE ORDER DATED 18.07.2017). 8. ON CAREFUL CONSIDERATION , WE NOTE THAT THE IMPUGNED AMOUNT IS ALREADY CONSIDERED INTO THE PROFIT AND LOSS ACCOUNT. THE SAID ACCOUNT HAS ALREADY BEEN AUDITED AND ADOPTED IN 3 ITA NO. 6601/MUM/2016 THE ANNUAL GENERAL MEETING . IN THIS VIEW OF THE MATTER, THE REWORKING OF PROFIT AND LOSS ACCOUNT IS NOT PERMITTED. FOR THIS PROPOSITION, THE CASE LAW S FROM THE HONBLE APEX COURT AN D HON'BLE JURISDICTIONAL HIGH COURT ARE DULY APPLICABLE. IT IS NOT THE CASE THAT THE IMPUGNED AMOUNT HAS BEEN CREDITED TO THE CAPITAL RESERVE AND NOT TAKEN INTO PROFIT AND LOSS ACCOUNT. IN THIS VIEW OF THE MATER, THE TRIBUNALS DECISION RELIED BY THE LD. C OUNSEL OF THE ASSESSEE CANNOT HELP THE ASSESSEE. HENCE , WE UPHOLD THE ORDER OF THE LD. C IT(A). 9. IN THE RESULT, THIS APPEAL BY THE ASSESSEE S TANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 0 3 . 0 1 . 2 0 1 9 S D / - S D / - ( RAVISH SOOD ) (SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED : 0 3 . 0 1 . 2 0 1 9 ROSHANI , SR. PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT - CONCERNED 5. DR, ITAT, MUMBAI 6. GUARD FILE BY ORDER, (DY./ASSTT. REGISTRAR) ITAT, MUMBAI