Paradeep Phosphates Limited, Bhubaneswar V. Principal CIT-1, Bhubaneswar

ITA 76/CTK/2021

AI Insights

The case involves Paradeep Phosphates Limited, which appealed against the order of the Principal Commissioner of Income Tax (Pr. CIT), Bhubaneswar-1, passed under section 263 of the Income Tax Act. The original dispute arose from the assessee's claim for deductions under sections 32AC and 35AD, and the additional depreciation for the assessment year 2016-17. Initially, the Assessing Officer allowed the claims in the revised return filed by the assessee. However, the Pr. CIT later found the assessment to be erroneous and prejudicial to the interest of the revenue, leading to the revision of the assessment order and withdrawal of the deductions granted. The Tribunal's decision to dismiss the appeal was based on the fact that the assessee was already contesting the consequential order before the CIT(A).

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 300317 (ITAT-CUTTACK)
• Duration Of Justice: 1 year(s) 7 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-02-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 14-02-2023
• Assessment Year: 2016-2017
• Appeal Filed On: 04-07-2021
• Other Referred Cases: Dhampur Sugar Mills Ltd vs CIT, Goetze (India) Ltd vs CIT
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Depreciation; Additional depreciation; Revised return

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BEFORE AND ARUN KHODPIA, ACCOUNTANT MEMBER Paradeep Phosphates Limited, 5 th Bhawan, J.N.Road, Kharvel Nagar, Bhubaneswar. PAN/GIR No. (Appellant Per Bench This is an appeal filed by the assessee ag CIT, Bhubaneswar No.ITBA/REV/F/REV5/2020 2016-17. 2. Shri B.K.Mahapatra, CA appeared for the assessee and Shri M.K.Gautam, ld CIT DR appeared for the revenue. IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE S/SHRI GEORGE MATHAN, JUDICIAL AND ARUN KHODPIA, ACCOUNTANT MEMBER ITA No.76/CTK/2021 Assessment Year : 2016-17 Paradeep Phosphates th floor, Bayan Bhawan, J.N.Road, Kharvel Nagar, Bhubaneswar. Vs. PCIT, Bhubaneswar PAN/GIR No.AABCP 3276 D (Appellant) .. ( Respondent Assessee by : Shri B.K.Mahapatra, CA Revenue by : Shri M.K.Gautam, Date of Hearing : 15/0 Date of Pronouncement : 15/0 O R D E R This is an appeal filed by the assessee against the order of the ld Pr. CIT, Bhubaneswar-1, passed u/s.263 of the Act dated ITBA/REV/F/REV5/2020-21/1031487216(1) for the assessment year Shri B.K.Mahapatra, CA appeared for the assessee and Shri M.K.Gautam, ld CIT DR appeared for the revenue. Page1 | 5 IN THE INCOME TAX APPELLATE TRIBUNAL, JUDICIAL MEMBER AND ARUN KHODPIA, ACCOUNTANT MEMBER PCIT, Bhubaneswar-1 Respondent) B.K.Mahapatra, CA M.K.Gautam, CIT DR 02/2023 /02/2023 ainst the order of the ld Pr. dated 15.3.2021 in Appeal for the assessment year Shri B.K.Mahapatra, CA appeared for the assessee and Shri ITA No.76/CTK/2021 Assessment Year : 2016-17 Page2 | 5 3. It was submitted by ld AR that the assessee company had started a new unit for manufacture of fertilizers. It was the submission that the original return of income was filed on 29.11.2016, wherein, the assessee had claimed investment allowance u/s 32AC and the additional depreciation. It was the submission that subsequently, it was noticed that the assessee is entitled to the benefit of deduction u/s.35AD and consequently, the assessee had filed the revised return, wherein, the assessee had made its claim u/s.35AD instead of investment allowance u/s.32AC and the additional depreciation. It was the submission that the Assessing Officer while completing the assessment considered the revised return and denied the assessee the claim of deduction u/s.35AD. It was the submission that however, the Assessing Officer allowed the assessee the claim of deduction in respect of investment allowance u/s.32AC and the additional depreciation. It was the submission that the assessment order passed u/s.143(3) on 18.12.2018 was revised by the Pr. CIT by invoking his powers u/s.263 by holding that the assessment order passed by the Assessing Officer on 18.12.2018 was erroneous and prejudicial to the interest of the Revenue insofar as the Assessing Officer considered the revised return when completing the assessment, wherein, there was no claim of deduction of investment allowance u/s.32AC nor the claim of additional depreciation. It was the submission that consequently granting of the investment allowance and the additional depreciation was held to be erroneous and ITA No.76/CTK/2021 Assessment Year : 2016-17 Page3 | 5 prejudicial to the interest of the revenue. It was the submission that the assessee had, in the course of assessment proceedings, made an alternate claim of deduction u/s.32AC and the additional depreciation, as the assessee’s claim for deduction u/s.35AD had been denied by the Assessing Officer. It was the submission that the assessee was entitled to the deduction u/s.32AC and the additional depreciation insofar as the assessee had complied with the requirements for the said claim. It was the submission that the order passed u/s.263 is liable to be quashed. On a specific query by the Bench, what has happened to the consequential order passed as a consequence to the revisionary order u/s.263 of the Act, it was submitted that the Assessing Officer has completed the consequential order withdrawing the benefit of section u/s.32AC and the additional depreciation granted to the assessee. It was the submission that the assessee is in appeal against the said consequential order before the ld CIT(A). 4. In reply, ld CIT DR submitted that in view of the decision of the Hon’ble Allahabad High Court in the case of Dhampur Sugar Mills Ltd vs CIT (1973) 90 ITR 236 (All), wherein, it has been held that when a revised return has been filed, the effective return for the purpose of assessment is revised return and the original return stands effaced, the assessee though entitled to the claim of deduction u/s.32AC and the additional depreciation, could not be granted the same, as the assessee has not claimed deduction in its return which was considered for the purpose of assessment. He ITA No.76/CTK/2021 Assessment Year : 2016-17 Page4 | 5 vehemently supported the order of the Pr. CIT. It was the submission that the order passed u/s.263 of the Act is liable to be confirmed. 5. We have considered the rival submissions. Without going into the merits of the allowance of deduction u/s.32AC and the additional depreciation as also without going into the merits as to whether it is revised return that is to be considered or whether it is original return that is to be considered, nor going into the principles of the decision of the Hon’ble Supreme Court in the case of Goetze (India) Ltd. vs CIT, 284 ITR 323 (SC), as it is noticed that the consequential order to the order passed u/s.263 has already been passed and the assessee is in appeal against the said order, we are of the view that our findings here could prejudice the mind of the ld CIT(A) and consequently, we decline to interfere with the order passed u/s.263 by the Pr. CIT. 6. In the result, appeal filed by the assessee stands dismissed. Order dictated and pronounced in the open court on 15/02/2023. Sd/- sd/- (Arun Khodpia) (George Mathan) ACCOUNTANT MEMBER JUDICIAL MEMBER Cuttack; Dated 15/02/2023 B.K.Parida, SPS (OS) ITA No.76/CTK/2021 Assessment Year : 2016-17 Page5 | 5 Copy of the Order forwarded to : By order Sr.Pvt.secretary ITAT, Cuttack 1. The Appellant : Paradeep Phosphates Limited, 5 th floor, Bayan Bhawan, J.N.Road, Kharvel Nagar, Bhubaneswar. 2. The Respondent: PCIT, Bhubaneswar-1 3. The CIT(A)-1, Bhubaneswar 4. DR, ITAT, Cuttack 5. Guard file. //True Copy//