ASCENT HYDRO PROJECTS LTD, MUMBAI V. ITO 8(1)(1), MUMBAI

ITA 7717/MUM/2011

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 70605 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-08-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 05-08-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 15-11-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R M MADHAVI
• Assessee Lawyers: PANKAJ K JAIN
• Keywords: Revised return
• Section: 115JB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'A' BENCH, MUMBAI BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI SANJAY ARORA, ACCOUNTANT MEMBER ITA NO. 7717/MUM/2011 (ASSESSMENT YEAR: 2008-09) M/S. ASCENT HYDRO PROJECTS LTD. INCOME TAX OFFICER - 8(1)(1) 6-SHIV VASTU, TEJPAL SCHEME AAYAKAR BHAVAN, M.K. RO AD ROAD NO. 5, VILE PARLE (E) VS. MUMBAI 400020 MUMBAI 400057 PAN - AAFCA1454N APPELLANT RESPONDENT APPELLANT BY: SHRI PANKAJ K. JAIN RESPONDENT BY: MS. R.M. MADHAVI DATE OF HEARING: 05.08.2013 DATE OF PRONOUNCEMENT: 05.08.2013 O R D E R PER D. MANMOHAN, V.P. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A)-16, MUMBAI AND IT PERTAINS TO A.Y. 2008-09. 2. THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF POWER GENERATION. FOR THE YEAR UNDER CONSIDERATION IT DECLARED NIL IN COME BY WAY OF REVISED RETURN ON 01.12.2008. THE RETURN WAS ORIGINALLY PRO CESSED UNDER SECTION 143(1) OF THE ACT. LATER ON THE SAME WAS TAKEN UP F OR SCRUTINY ASSESSMENT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AO NOTICED THAT THE ASSESSEE EARNED INTEREST INCOME OF ` 6,63,640/-, WHICH HAS BEEN CONSIDERED FOR THE CLAIM OF DEDUCTION UNDER SECTION 80IA OF TH E ACT. IN THE OPINION OF THE AO THE SAME SHOULD BE ASSESSED TO TAX UNDER THE HEAD OTHER SOURCES. WHEN CALLED UPON TO EXPLAIN AS TO WHY SUCH INCOME S HOULD NOT BE CONSIDERED FOR THE CLAIM OF DEDUCTION UNDER SECTION 80IA THE ASSESSEE SUBMITTED THAT THE INTEREST HAS BEEN EARNED OUT OF BUSINESS PROFITS WHICH WERE KEPT IN THE BANK AND THEREFORE IT SHOULD QUALI FY FOR DEDUCTION. HOWEVER, IN THE LIGHT OF THE DECISION OF THE APEX C OURT IN THE CASE OF LIBERTY ITA NO. 7717/MUM/2011 M/S. ASCENT HYDRO PROJECTS LTD. 2 INDIA THE AO REJECTED THE CONTENTION OF THE ASSESSE E. THE ASSESSEE ALSO CONTENDED THAT IT IS ENTITLED FOR DEDUCTION OF FRIN GE BENEFIT TAX (FBT) FOR CALCULATION OF BOOK PROFIT. THE REQUEST OF THE ASSE SSEE WAS REJECTED BY THE AO. ACCORDINGLY THE AO ARRIVED AT A BOOK PROFIT OF ` 1,06,44,178/- UNDER SECTION 115JB OF THE ACT. SINCE THE BOOK PROFIT IS MORE THAN THE TAX PAYABLE UNDER NORMAL PROVISIONS, TAX WAS DETERMINED UNDER S ECTION 115JB OF THE ACT. 3. AGGRIEVED ASSESSEE CONTENDED BEFORE THE CIT(A) THAT THE AO ERRED IN NOT ALLOWING DEDUCTION OF PROVISION MADE FOR THE YE AR TOWARDS FBT ( ` 2,77,656/-) WHILE COMPUTING THE BOOK PROFIT UNDER S ECTION 115JB OF THE ACT MAINLY ON THE GROUND THAT THE SAME HAS NOT BEEN CLAIMED BY THE ASSESSEE IN THE RETURN OF INCOME. RELIANCE WAS PLAC ED UPON THE CIRCULAR OF CBDT IN SUPPORT OF ITS CONTENTION THAT SUCH DEDUCTI ON IS ADMISSIBLE. THE LEARNED CIT(A) REJECTED THE CONTENTION OF THE ASSES SEE BY OBSERVING AS UNDER:- SINCE THE APPELLANT HAS NOT CLAIMED THE SAID EXPEN DITURE IN ITS COMPUTATION OF INCOME, THE SAME CANNOT BE ALLOWED A S IT TANTAMOUNT TO REVISION OF THE RETURN OF INCOME WHICH IS NOT PE RMISSIBLE. AGGRIEVED ASSESSEE IS IN APPEAL BEFORE US. 4. THE LEARNED COUNSEL FOR THE ASSESSEE RELIED UPON TH E FOLLOWING DECISIONS OF THE ITAT IN SUPPORT OF ITS CONTENTION THAT THE POWERS OF THE CIT(A) ARE CO-TERMINUS WITH THAT OF THE AO AND ANY CLAIM MADE BEFORE THE CIT(A) OUGHT TO BE CONSIDERED INDEPENDENTLY AND MER ELY BECAUSE IT WAS NOT RAISED BEFORE THE AO IT CANNOT BE REJECTED: - I. PARMESHWAR COLD STORAGE (P) LTD. VS. ACIT 8 ITR (TR IB) 173 (AHD) II. JCT VS. HERO HONDA FINLEASE LTD. 115 TTJ (DEL) (TM) 752 THE LEARNED COUNSEL FOR THE ASSESSEE ALSO RELIED U PON CIRCULAR NO. 8 DATED 29 TH AUGUST, 2004 ISSUED BY THE CBDT AND QUESTION NO. 1 03 THEREOF TO HIGHLIGHT THAT FBT IS ADMISSIBLE AS DEDUCTION WHILE COMPUTING BOOK PROFIT. THE LEARNED COUNSEL FOR THE ASSESSEE, THEREFORE SUB MITTED THAT THE LEARNED CIT(A) ERRED IN NOT TAKING INTO CONSIDERATION THE C LAIM OF THE ASSESSEE WHICH IS ADMISSIBLE BEFORE LAW. ITA NO. 7717/MUM/2011 M/S. ASCENT HYDRO PROJECTS LTD. 3 5. ON THE OTHER HAND, THE LEARNED D.R. RELIED UPON THE ORDER PASSED BY THE LEARNED CIT(A) AND SUBMITTED THAT IN THE LIGHT OF THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF GOETZE INDIA 2 84 ITR 323 NO FRESH CLAIM CAN BE MADE BEFORE THE AO IN THE FORM OF REVI SED RETURN. 6. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE RECORD. ADMITTEDLY THE ASSESSEE NOT ONLY RAISED THE ISSUE BEFORE THE AO DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEEDING S BUT THE ISSUE WAS ALSO RAISED BEFORE THE CIT(A) AND HIS POWERS BEING CO-TE RMINUS WITH THAT OF THE AO THE SAME OUGHT TO HAVE BEEN TAKEN INTO CONSIDERA TION BUT THE LEARNED CIT(A) RELIED UPON THE DECISION OF THE HON'BLE SUPR EME COURT TO COME TO THE CONCLUSION THAT HE IS NOT COMPETENT TO ADJUDICATE T HE ISSUE OF DEDUCTION OF FBT. THOUGH THE COUNSEL APPEARING ON BEHALF OF THE ASSESSEE RELIED UPON THE DECISION OF THE ITAT (THIRD MEMBER) DELHI, THE LEARNED D.R. COULD NOT PLACE BEFORE US ANY DECISION WHERE A CONTRARY VIEW WAS TAKEN. IN FACT THE ITAT DELHI BENCH (THIRD MEMBER) HAD REFERRED TO THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF GOETZE INDIA (SUPRA) T O ANALYSE THE ISSUE BEFORE COMING TO THE CONCLUSION THAT THE POWERS OF THE LEARNED CIT(A) ARE INDEPENDENT AND THE CIT(A) CAN TAKE INTO CONSIDERAT ION ANY CLAIM MADE BEFORE HIM FOR THE FIRST TIME. IN THE LIGHT OF THE AFORECITED DECISION WE ARE OF THE CONFIRMED VIEW THAT THE CIT(A) COMMITTED AN ERR OR IN LAW IN NOT ADJUDICATING THE ISSUE ON MERITS. WE, THEREFORE, SE T ASIDE THE ISSUE TO THE FILE OF THE LEARNED CIT(A) WHO IS DIRECTED TO RECONSIDER THE MATTER IN ACCORDANCE WITH LAW. 7. IN THE RESULT, AS PRONOUNCED IN THE OPEN COURT, THE APPEAL FILED BY THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURP OSE. ORDER PRONOUNCED IN THE OPEN COURT ON 5 TH AUGUST, 2013. SD/- SD/- (SANJAY ARORA) (D. MANMOHAN) ACCOUNTANT MEMBER VICE PRESIDENT MUMBAI, DATED: 5 TH AUGUST, 2013 ITA NO. 7717/MUM/2011 M/S. ASCENT HYDRO PROJECTS LTD. 4 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 16, MUMBAI 4. THE CIT 8, MUMBAI CITY 5. THE DR, A BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.