Deputy Commissioner of Income Tax, Pune V. Sakal Papers Ltd, Pune

ITA 695/PUN/2017

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 3302 (ITAT-PUNE)
• Duration Of Justice: 4 year(s) 6 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-10-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 20-10-2021
• Assessment Year: 2012-2013
• Appeal Filed On: 23-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PASSED; ARISE OUT OF SEPARA TE S DATED
• Keywords: Revised return
• Section: 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH, A PUNE BEFORE SHRI R.S. SYAL, VICE PRESIDENT AND SHRI S.S.VISWANETHRA RAVI, JUDICIAL MEMBER . / ITA NOS.695 & 1356/PUN/2017 / ASSESSMENT YEARS : 2012-13 & 2013-14 DCIT, CIRCLE-6, PUNE VS. SAKAL PAPERS LTD., 595, BUDHWAR PETH, PUNE 411 002 PAN : AACCS7605Q APPELLANT RESPONDENT / ORDER PER R.S.SYAL, VP : THESE TWO APPEALS BY THE REVENUE ARISE OUT OF THE SEPARA TE ORDERS DATED 28-10-2016 & 10-01-2017 PASSED BY THE CI T(A)-4, PUNE IN RELATION TO THE ASSESSMENT YEARS 2012-13 AND 2013- 14 RESPECTIVELY. SINCE THE ISSUES RAISED IN THESE APPEALS ARE CO MMON, WE ARE, THEREFORE, PROCEEDING TO DISPOSE THEM OFF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. A.Y.2012-13 : 2. THE FIRST ISSUE RAISED BY THE REVENUE IN THIS APPEAL IS AG AINST THE DELETION OF DISALLOWANCE OF DEDUCTION U/S.80IA OF THE INC OME- TAX ACT, 1961 (HEREINAFTER ALSO CALLED `THE ACT). ASSESSEE BY SHRI ASHOK N. KOTHARY REVENUE BY SHRI DEEPAK GARG DATE OF HEARING 20-10-2021 DATE OF PRONOUNCEMENT 21-10-2021 ITA NOS.695 & 1356/PUN/2017 SAKAL PAPERS LTD., 2 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSE E CLAIMED DEDUCTION U/S.80IA(4) AMOUNTING TO RS.52,97,053/- . THE ASSESSING OFFICER (AO) OBSERVED THAT THE ASSESSEE SUFFER ED LOSSES IN THE ELIGIBLE WIND MILL UNIT IN EARLIER YEARS. SINCE THE AMOUNT OF S UCH AGGREGATE LOSSES WAS MORE THAN THE CLAIM OF DEDUCTION U/S.8 0IA(4) FOR THE YEAR AT RS.52.97 LAKH, THE AO DISALLOWED THE DEDUC TION. THE LD. CIT(A) REVERSED THE ASSESSMENT ORDER ON THIS POINT, A GAINST WHICH THE REVENUE HAS COME UP IN APPEAL BEFORE THE TRIBU NAL. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND SCANNED THROUG H THE MATERIAL PLACED BEFORE US. IT IS SEEN THAT THE LOSSES PERTAININ G TO THE EARLIER YEARS, REFERRED TO BY THE AO FOR SETTING OFF AGAINS T THE CURRENT YEARS QUALIFYING INCOME FROM THE ELIGIBLE UNIT, RELATE TO THE Y EARS PRIOR TO THE INITIAL YEAR. OBVIOUSLY, SUCH LOSSES CANNOT BE SE T OFF AGAINST THE INCOME FROM THE WIND MILL ON OR AFTER THE INITIAL YEAR . SIMILAR ISSUE CAME UP FOR CONSIDERATION BEFORE THE TRIBUNAL IN THE CASE OF THE ASSESSEE FOR EARLIER YEARS. VIDE ORDER DATE D 25-06-2019, THE TRIBUNAL IN ITA NO. 1364/PUN/2011 ETC. FOR THE ASSESSME NT YEARS 2007-08, 2009-10, 2010-11 & 2011-12, HAS ACC EPTED THE ASSESSEES CLAIM. THE LD. DR FAIRLY ACCEPTED THE POSITION. IN VIEW OF THE FOREGOING DISCUSSION AND RESPECTFULLY FOLLOWING THE PRECEDENT, WE UPHOLD THE IMPUGNED ORDER ON THIS SCORE. ITA NOS.695 & 1356/PUN/2017 SAKAL PAPERS LTD., 3 5. THE ONLY OTHER GROUND RAISED IN THIS APPEAL IS AGAINST THE DELETION OF THE ADDITION MADE BY THE AO RELATING TO LIABILITY ON ACCOUNT OF REVISED WAGES. 6. THE FACTS APROPOS THIS ISSUE ARE THAT THE ASSESSEE CLAIM ED RS.6,26,21,766/- AS DEDUCTION ON ACCOUNT OF WAGE BOARD REVISION BY FILING A REVISED RETURN. THE AO DID NOT DISPUTE THE FILING O F THE REVISED RETURN. ON BEING CALLED UPON TO EXPLAIN THE REASONS FOR CLAIMING SUCH DEDUCTION, THE ASSESSEE SUBMITTED THAT CONSEQUE NT UPON NOTIFICATION OF THE CENTRAL GOVERNMENT IN TERMS OF SECTIO N 12 OF WAGE ACT DATED 11-11-2011, THE ASSESSEE REVISED ITS CLAIM PERTAINING TO THE YEAR UNDER CONSIDERATION. THE AO OBSERVE D THAT NO CORRESPONDING PAYMENT WAS MADE DURING THE F.Y. 2011-1 2. THOUGH SUCH PAYMENT WAS CLAIMED TO HAVE BEEN MADE IN THE PERIOD RELEVANT TO THE A.Y. 2014-15, THE AO DISALLOWED THE SAME. TH E LD. FIRST APPELLATE AUTHORITY OVERTURNED THE IMPUGNED ORDER ON TH IS GROUND. 7. HAVING HEARD BOTH THE SIDES AND GONE THROUGH THE RELEV ANT MATERIAL ON RECORD, IT IS SEEN THAT CENTRAL GOVT. SET UP WAGE BOARD FOR THE WORKING JOURNALISTS AND OTHER NEWSPAPER EMPLOYEES. THE BOARD SUBMITTED ITS REPORT ON 31-12-2010. THE CENTRAL G OVT. ISSUED CONSEQUENTIAL NOTIFICATION ON 11-11-2011 ACCEPTING THE ITA NOS.695 & 1356/PUN/2017 SAKAL PAPERS LTD., 4 RECOMMENDATIONS, WHICH WAS CHALLENGED IN THE COURTS OF LAW AND EVENTUALLY GOT NOD IN A LATER YEAR. IN TERMS OF THE NOTIFICATIO N OF THE CENTRAL GOVT., THE ASSESSEE RECOMPUTED THE AMOUNT OF WAGES PERTAINING TO THE YEAR UNDER CONSIDERATION AND CLAIMED DEDUC TION FOR THE SAME BY MEANS OF THE REVISED RETURN. THE ASSESSEE IS ADMITTEDLY FOLLOWING THE MERCANTILE SYSTEM OF ACCOUNTING. SINCE THE AMOUN T OF ADDITIONAL WAGES PURSUANT TO THE CENTRAL GOVT. NOTIFYING THE RECOMMENDATIONS OF THE WAGS BOARD PERTAINING TO THE YEAR UN DER CONSIDERATION AMOUNTED TO RS.6.26 CRORE, IN OUR CONSIDERED OPINION, THE SAME HAS TO BE ALLOWED UNDER THE MERCANTILE SYSTEM OF AC COUNT FOLLOWED BY THE ASSESSEE. THE FACT THAT THE PAYMENT WAS MA DE IN SUBSEQUENT YEARS CANNOT MAR THE DEDUCTIBILITY OF THE AMOUNT WH ICH PERTAINS TO AND BECAME PAYABLE DURING THE YEAR. WE, THERE FORE, UPHOLD THE IMPUGNED ORDER DELETING THE LIABILITY ON ACCOUNT OF REVISED WAGES FOR THE YEAR UNDER CONSIDERATION . A.Y. 2013-14 : 8. BOTH THE SIDES ARE IN AGREEMENT THAT THE FACTS AND CIRCUMSTANCES OF THE APPEAL UNDER CONSIDERATION ARE MUTATIS MUTANDIS SIMILAR TO THOSE FOR THE ASSESSMENT YEAR 2012-13. 9. THE FIRST GROUND IS AGAINST THE DISALLOWANCE OF CLAIM OF RS.40,14,201/- U/S.80IA OF THE ACT. FOLLOWING THE VIEW TAKE N ITA NOS.695 & 1356/PUN/2017 SAKAL PAPERS LTD., 5 HEREINABOVE FOR THE IMMEDIATELY PRECEDING ASSESSMENT YEAR , WE UPHOLD THE IMPUGNED ORDER. 10. THE SECOND GROUND IS AGAINST THE DELETION OF ADDITION OF RS.8,52,95,539/- ON ACCOUNT OF LIABILITY FOR PAYMENT OF WA GES UNDER THE RECOMMENDATIONS OF THE WAGE BOARD. HERE AGAIN, W E FOLLOW OUR VIEW TAKEN HEREINABOVE AND UPHOLD THE IMPUGNED ORDER IN DELETING THE DISALLOWANCE TOWARDS ADDITIONAL LIABILITY FOR PAYMENT OF WAGES PERTAINING TO THE YEAR IN QUESTION. 11. IN THE RESULT, BOTH THE APPEALS ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST OCTOBER, 2021. SD/- SD/- ( S.S. VISWANETHRA RAVI ) (R.S.SYAL) JUDICIAL MEMBER VIC E PRESIDENT PUNE; DATED : 21 ST OCTOBER, 2021 / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT; 2. / THE RESPONDENT; 3. THE CIT(A)-4, PUNE 4. 5. 6. THE PCIT-3, PUNE DR, ITAT, A BENCH, PUNE / GUARD FILE. / BY ORDER, // TRUE COPY // SENIOR P RIVATE SECRETARY , / ITAT, PUNE ITA NOS.695 & 1356/PUN/2017 SAKAL PAPERS LTD., 6 DATE 1. DRAFT DICTATED ON 20-10-2021 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 21-10-2021 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS 6. KEPT FOR PRONOUNCEMENT ON SR.PS 7. DATE OF UPLOADING ORDER SR.PS 8. FILE SENT TO THE BENCH CLERK SR.PS 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK 10. DATE ON WHICH FILE GOES TO THE A.R. 11. DATE OF DISPATCH OF ORDER. *