The ACIT,(OSD)-I,Range-4, Ahmedabad V. J.H. Kharawala Pvt. Ltd., Ahmedabad

ITA 770/AHD/2012

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 1182 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 4 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-08-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 13-08-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 04-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHIVA SEWAK
• Assessee Lawyers: NIMESH VAYAWALA AR

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD , , BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER ./ I.T.A. NO. 770/AHD/2012 ( / ASSESSMENT YEAR : 2008-09) THE ACIT (OSD)-I RANGE-4 AHMEDABAD / VS. M/S.J.H. KHARAWALA PVT.LTD. JAY HOUSE, PANCHAVATI CIRCLE AMBAWADI AHMEDABAD ./ ./ PAN/GIR NO. : AAACJ 5528 P ( ' / APPELLANT ) .. ( #' / RESPONDENT ) ' $ / APPELLANT BY : SHRI SHIVA SEWAK, SR.DR #' % $ / RESPONDENT BY : SHRI NIMESH VAYAWALA, AR &'( % ) / DATE OF HEARING 14/08/2015 *+, % ) / DATE OF PRONOUNCEMENT 21/08/2015 / O R D E R PER SHRI KUL BHARAT, JUDICIAL MEMBER : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST TH E ORDER OF THE LD.COMMISSIONER OF INCOME TAX(APPEALS)-VIII, AHMEDA BAD [CIT(A) IN SHORT] DATED 31/01/2012 PERTAINING TO ASSESSMEN T YEAR (AY) 2008-09. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APP EAL:- 1. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN DEL ETING ADDITION OF RS.4,35,396/- ON ACCOUNT OF PAYMENT MADE TO PERSON COVERED UNDER SECTION 40A(2) WITHOUT APPRECIATING THE FACT THAT T HE ASSESSEE FAILED ITA NO.770/AHD/ 2012 ACIT(OSD)-I VS. M/S.J.H. KHARAWALA PVT.LTD. ASST.YEAR 2008-09 - 2 - TO SUBMIT INFORMATION REGARD THE EXPENSES EVEN THOU GH THE ONUS WAS ON THE ASSESSEE TO PROVE THE REASONABLENESS OF THE PAYMENT MADE TO SISTER CONCERN, I.E. JAY INFRA TRADE PVT.LTD. 2. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN DIRE CTING THE A.O. TO INCLUDE VALUE OF STEAM FOR PURPOSE OF CALCULATION O F DEDUCTION U/S.80IA(IV) WITHOUT APPRECIATING THE FACT THAT THE STEAM ENERGY WAS USED FOR CAPTIVE CONSUMPTION ONLY. IT WAS NOT AN E NERGY OR SOURCE OF POWER WHICH IS TRANSMITTABLE OR CAN BE FED INTO GRID. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFF ICER. 4. IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE LD.C IT(A) MAY BE SET ASIDE AND THAT OF THE ASSESSING OFFICER MAY BE REST ORED TO THE ABOVE EXTENT. 2. BRIEFLY STATED FACTS ARE THAT THE CASE OF THE A SSESSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT AND THE ASSESSMENT U/S.143( 3) OF THE INCOME TAX ACT,1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS FRAMED VIDE ORDER DATED 27/12/2010, THEREBY THE ASSESSING OFFICER (AO IN SHORT) MADE DISALLOWANCE U/S.40A(2)(B) OF THE ACT OF RS.4,35,39 6/- AND DISALLOWANCE OF DEDUCTION U/S.80IA(IV)(A) OF THE ACT OF RS.19,99 ,473/-. AGAINST THE SAID ASSESSMENT ORDER, ASSESSEE PREFERRED AN APPEAL BEFORE THE LD.CIT(A), WHO AFTER CONSIDERING THE SUBMISSIONS, DELETED BOTH THE ADDITIONS BY RELYING ON THE DECISION OF THE TRIBUNAL (ITAT B B ENCH, AHMEDABAD) RENDERED IN THE CASE OF ACIT VS. J.H. KHARAWAL PVT. LTD. IN ITA NO.1233/AHD/2011 FOR AY 2007-08. THE REVENUE FEELI NG AGGRIEVED BY THE ORDER OF THE LD.CIT(A) IS NOW IN APPEAL BEFORE US. ITA NO.770/AHD/ 2012 ACIT(OSD)-I VS. M/S.J.H. KHARAWALA PVT.LTD. ASST.YEAR 2008-09 - 3 - 3. AT THE OUTSET, THE LD.COUNSEL FOR THE ASSESSEE S UBMITTED THAT BOTH THE GROUNDS ARE COVERED IN FAVOUR OF ASSESSEE. 3.1. ON THE CONTRARY, LD.SR.DR SUPPORTED THE ORDER OF THE AO. 4. APROPOS TO GROUND NO.1, THE CONTENTION OF THE AS SESSEE IS THAT THE SIMILAR DISALLOWANCE WAS MADE IN EARLIER YEAR ALSO ON THE SAME BASIS AND THE ISSUE HAS BEEN DECIDED IN FAVOUR OF ASSESSEE BY THE DECISION OF HONBLE ITAT(SUPRA) IN ITA NO.1233/AHD/2011 AND TH E APPEAL PREFERRED BY THE REVENUE AGAINST THE ORDER OF THE T RIBUNAL HAS BEEN DISMISSED BY THE HONBLE GUJARAT HIGH COURT IN TAX APPEAL NO.340 OF 2011 (WITH TAX APPEAL NO.344 OF 2011) IN THE CASE O F CIT VS. J.H. KHARAWALA PVT.LTD. VIDE ORDER DATED 21/12/2011. T HIS FACT IS NOT CONTROVERTED BY THE REVENUE BY PLACING ANY CONTRARY MATERIAL ON RECORD, THEREFORE WE DO NOT SEE ANY REASON TO INTERFERE WIT H THE ORDER OF THE LD.CIT(A), SAME IS HEREBY UPHELD. THUS, GROUND NO. 1 OF REVENUES APPEAL IS REJECTED. 5. APROPOS TO GROUND NO.2, THE CONTENTION OF THE LD .COUNSEL FOR THE ASSESSEE IS THAT THE ISSUE IS COVERED IN FAVOUR OF ASSESSEE BY THE JUDGEMENT OF HONBLE MADRAS HIGH COURT. THE APPEAL PREFERRED AGAINST THE JUDGEMENT OF THE HONBLE MADRAS HIGH COURT HAS BEEN REJECTED BY THE HONBLE APEX COURT. ITA NO.770/AHD/ 2012 ACIT(OSD)-I VS. M/S.J.H. KHARAWALA PVT.LTD. ASST.YEAR 2008-09 - 4 - 6. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED TH E MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE LD.CIT(A) HAS DECIDED THIS ISSUE IN PARA-3.4 OF HIS ORDER, BY OBSERVING AS UNDER:- 3.4). I HAVE GONE THROUGH THE ASSESSMENT ORDER AND THE SUBMISSION OF THE APPELLANT. I FIND THAT THE ASSES SEE HAS GIVEN THE CERTIFICATE FROM M/S.DEV CONSULTANT TO WORK OUT THE VALUE OF STEAM AND ON THAT BASIS THE VALUE OF STEAM IS INCLUDED IN WORKING OUT THE ELIGIBLE INCOME. THE STEAM IS LIKE ELECTRICITY IN ONE FORM OF POWER (ENERGY) WITH THE FORCE OF STEAM ENGINE CAN BE RUN. IN THE SCIENCE, STEAM IS RECOGNIZED AS ONE FORM OF POWER. THE ASSE SSEES CASE IS COVERED BY MY PREDECESSORS ORDER. THAT APART THE I.T.A.T. BENCHES HAVE ALSO HELD THAT STEAM IS A FORM OF POWE R AND ACCORDINGLY GRANTED THE DEDUCTION. THE MADRAS H.C. IN TAMILNADU PETRO PRODUCTS CASE HAS REFERRED TO UNREP ORTED DECISION OF C.I.T. V/S. TANFAC IND.LTD., WHEREIN TH E DEDUCTION IN RESPECT OF CAPTIVE POWER PLANT WAS ALLOWED WITH REF ERENCE TO THE VALUE OF STEAM. IT IS BROUGHT TO THE NOTICE THAT T HE SLP FROM THE SAID DECISION HAS BEEN DISMISSED. RESPECTFULLY FOL LOWING THE DECISIONS OF MY PREDECESSOR AND ALSO THE ABOVE DECI SIONS OF MADRAS HIGH COURT, THE ADDITION RS.19,99,473/- IS D ELETED. IN VIEW OF THIS THE ASSESSEE SUCCEEDS AND THE GROUND S TANDS ALLOWED. 6.1. THE AFORESAID FINDING OF THE LD.CIT(A) IS NOT CONTROVERTED BY THE REVENUE BY PLACING ANY CONTRARY MATERIAL ON RECORD. THEREFORE, WE DO NOT SEE ANY REASON TO INTERFERE WITH THE ORDER OF T HE LD.CIT(A), SAME IS HEREBY UPHELD. THUS, GROUND NO.2 OF REVENUES APPE AL IS ALSO REJECTED. 7. GROUND NOS.3 & 4 ARE GENERAL IN NATURE WHICH REQ UIRE NO INDEPENDENT ADJUDICATION. ITA NO.770/AHD/ 2012 ACIT(OSD)-I VS. M/S.J.H. KHARAWALA PVT.LTD. ASST.YEAR 2008-09 - 5 - 8. IN THE RESULT, REVENUES APPEAL STANDS DISMISSED . ORDER PRONOUNCED IN THE COURT ON FRIDAY, THE 21 ST DAY OF AUGUST, 2015 AT AHMEDABAD. SD/- SD/- ( ) ( ) ( PRAMOD KUMAR ) ( KUL BHARAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 21/ 08 /2015 0)..& , '.&../ T.C. NAIR, SR. PS !'#$%&%# / COPY OF THE ORDER FORWARDED TO : 1. ' / THE APPELLANT 2. #' / THE RESPONDENT. 3. 123 4 / CONCERNED CIT 4. 4 ( ) / THE CIT(A)-VIII, AHMEDABAD 5. 5'6 &23 , ) 23 , , 1 / DR, ITAT, AHMEDABAD 6. 689 :( / GUARD FILE. / BY ORDER, #5 //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION .. 14.8.15 (DICTATION-PAD 4+ P AGES ATTACHED AT THE END OF THIS FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER ..19.8.15 3. OTHER MEMBER... 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S.21.8.15 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 21.8.15 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER