DCIT, Madurai V. M/s. The Metal Powder Company Ltd., Tirumangalam

ITA 873/CHNY/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 0800 (ITAT-CHENNAI)
• Duration Of Justice: 10 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-02-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 06-02-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 20-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR S MOHARANA
• Assessee Lawyers: S SRIDHAR
• Keywords: Depreciation; Additional depreciation; Revised return; Unabsorbed depreciation
• Section: 80HHC; 14A; 139(5)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AND SHRI V. DURGA RAO, JUDICIAL MEMBER I.T.A. NOS. 782, 783, 784, 785, 786 & 787/MDS/2012 (ASSESSMENT YEARS : 2002-03, 2003-04 & 2005-06 TO 2008-09) THE METAL POWDER COMPANY LIMITED, MARAVANKULAM, THIRUMANGALAM 625 706. PAN : AAACT 4262 E (APPELLANT) V. THE ASSISTANT COMMISSIONER OF INCOME TAX, COMPANY CIRCLE I, MADURAI. JT. COMMISSIONER OF INCOME TAX, RANGE I, MADURAI. ADDL. COMMISSIONER OF INCOME TAX, RANGE I, MADURAI. (RESPONDENT) I.T.A. NOS. 869, 870, 871, 872, 873 & 874/MDS/2012 (ASSESSMENT YEARS : 2002-03, 2003-04, 2005-06 TO 2008-09) THE DY. COMMISSIONER OF INCOME TAX, CIRCLE I(1), MADURAI. (APPELLANT) V. THE METAL POWDER COMPANY LIMITED, MARAVANKULAM, THIRUMANGALAM 625 706. (RESPONDENT) ASSESSEE BY : SHRI S. SRIDHAR, ADVOCATE REVENUE BY : DR. S. MOHARANA, CIT-DR DATE OF HEARING : 06.02.2013 DATE OF PRONOUNCEMENT : 21.02.2013 O R D E R PER BENCH : THESE ARE CROSS-APPEALS FILED BY THE ASSESSEE AND REVENUE RESPECTIVELY, DIRECTED AGAINST THE ORDERS OF COMMIS SIONER OF INCOME I.T.A. NOS. 782 TO 787/MDS/12 I.T.A. NOS. 869 TO 874/MDS/12 2 TAX (APPEALS)-I, MADURAI, FOR RESPECTIVE ASSESSMENT YEARS. APPEALS OF REVENUE ARE TAKEN UP FIRST FOR DISPOSAL. 2. THERE IS ONLY ONE EFFECTIVE GROUND TAKEN BY THE REVENUE FOR ALL THESE YEARS. SUCH GROUND FOR ASSESSMENT YEARS 2002 -03, 2003-04, 2005-06 AND 2006-07 ASSAILS ALLOWANCE GIVEN TO ASSE SSEE UNDER SECTION 80-IB OF THE ACT, DESPITE ITS INCOME BEING IN THE NEGATIVE AFTER SET-OFF OF THE LOSSES OF OTHER UNITS. GROUND TAKEN BY THE REVENUE FOR ASSESSMENT YEAR 2007-08 AND 2008-09 ASSAILS THE DIR ECTION GIVEN BY THE CIT(APPEALS) TO ALLOW THE ASSESSEE DEDUCTION UN DER SECTION 80- IA ON WINDMILLS, TREATING IT AS ONLY SOURCE OF INCO ME, WITHOUT ADJUSTING EARLIER YEARS LOSSES. GROUND RELATING TO APPEALS FOR ASSESSMENT YEARS 2002-03, 2004-05 AND 2006-07 ARE TAKEN UP FIR ST. 3. FACTS APROPOS ARE THAT ASSESSING OFFICER DENIED THE ASSESSEE DEDUCTION CLAIMED UNDER SECTION 80-IA FOR A REASON THAT ONCE INTER SE ADJUSTMENT WITH LOSSES IN UNITS, ON WHICH THERE WAS NO 80-IA CLAIM WAS DONE, THERE WAS NOTHING LEFT FOR GRANTING SUCH DEDUCTION. THOUGH ASSESSEE RELIED ON THE DECISION OF HON'BLE A PEX COURT IN THE CASE OF CIT V. CANARA WORKS PRIVATE LIMITED (161 IT R 320), ASSESSING OFFICER WAS NOT IMPRESSED. ACCORDING TO ASSESSING OFFICER, ASSESSEE HAD INCURRED LOSS IN ALUMINIUM A LLOY INGOT PLANT I.T.A. NOS. 782 TO 787/MDS/12 I.T.A. NOS. 869 TO 874/MDS/12 3 AND SUCH LOSS HAD TO BE ADJUSTED AGAINST PROFITS OF PYROTECHNIC ALUMINIUM POWDER UNIT AND ONCE THE ADJUSTMENT WAS C ARRIED OUT, THE RESULT WAS STILL A LOSS AND HENCE DEDUCTION UNDER S ECTION 80-IA COULD NOT BE ALLOWED. 4. IN ITS APPEAL BEFORE CIT(APPEALS), ARGUMENT OF T HE ASSESSEE WAS THAT SEPARATE ACCOUNTS WERE MAINTAINED FOR VARI OUS UNITS AND, EACH UNIT HAD TO BE CONSIDERED AS A SEPARATE UNDERT AKING. ACCORDING TO ASSESSEE, DEDUCTION UNDER SECTION 80-IA AND 80-I B WERE AVAILABLE FOR THE UNDERTAKING AS A WHOLE AND THERE WAS NO REQ UIREMENT FOR SETTING OFF OF LOSSES WITH PROFITS OF VARIOUS UNITS . CIT(APPEALS) AGREED TO THIS SUBMISSION OF THE ASSESSEE. ACCORDING TO H IM, THOUGH THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CI T V. SUNDARAVEL MATCH INDUSTRIES (P) LTD. (245 ITR 605) HAD HELD TH AT LOSS IN ONE UNDERTAKING WAS TO BE ADJUSTED AGAINST PROFITS OF A NOTHER UNDERTAKING AND NET AMOUNT ALONE WAS TO BE CONSIDERED FOR DEDUC TION UNDER SECTION 80HH OF THE ACT, IN A LATER DECISION IN THE CASE OF CIT V. MEPCO INDUSTRIES LTD. (294 ITR 121) IT WAS HELD THA T SUCH DEDUCTION COULD BE WORKED OUT INDEPENDENTLY WITHOUT EFFECTING ANY INTER SE ADJUSTMENT OF LOSSES AND PROFIT, BETWEEN VARIOUS UN ITS. I.T.A. NOS. 782 TO 787/MDS/12 I.T.A. NOS. 869 TO 874/MDS/12 4 5. NOW BEFORE US, LEARNED D.R., ASSAILING THE ORDER S OF CIT(APPEALS) FOR THESE ASSESSMENT YEARS, SUBMITTED THAT DEDUCTION COULD BE ALLOWED ONLY AFTER SETTING OFF OF PROFITS AND LOSSES OF VARIOUS UNDERTAKINGS OF ASSESSEE. ACCORDING TO HIM, IF THE ASSESSEE HAD PROFITS IN AN UNDERTAKING, WHICH WAS ELIGIBLE FOR D EDUCTION UNDER SECTION 80-IA OR 80-IB OF THE ACT, THEN BEFORE ALLO WING SUCH DEDUCTION, LOSSES OF OTHER UNDERTAKINGS, IF ANY, HA D TO BE SET OFF AND ONLY IF THERE WAS ANY BALANCE PROFITS AVAILABLE, SU CH A DEDUCTION COULD BE CLAIMED. RELIANCE WAS PLACED ON THE DECIS ION OF HON'BLE APEX COURT IN THE CASE OF SYNCO INDUSTRIES LTD. V. ASSESSING OFFICER [2008] 299 ITR 444 (SC). 6. PER CONTRA, LEARNED A.R. SUPPORTED THE ORDERS OF CIT(APPEALS). 7. WE HAVE PERUSED THE ORDERS AND HEARD THE RIVAL SUBMISSIONS. FOR ALL THE IMPUGNED YEARS, WHAT WE NOTE SPECIFICAL LY FROM THE ORDERS OF LD. CIT(APPEALS) IS THAT GROSS TOTAL INCOME OF T HE ASSESSEE WAS POSITIVE. ASSESSEE HAD NO CARRIED FORWARD LOSS OF EARLIER YEARS AS WELL. THAT GROSS TOTAL INCOME FOR ALL THE IMPUGNED ASSESSMENT YEARS WAS POSITIVE, WAS NOT DISPUTED BY THE LEARNED D.R. FURTHER, ASSESSEE HAD RETURNED POSITIVE TOTAL INCOME FOR ALL THE IMPUGNED ASSESSMENT YEARS, AND THEREFORE, BY NECESSARY IMPLI CATION ITS GROSS I.T.A. NOS. 782 TO 787/MDS/12 I.T.A. NOS. 869 TO 874/MDS/12 5 TOTAL INCOME, BEFORE THE DEDUCTIONS CLAIMED UNDER C HAPTER VIA, WHATEVER BE THAT AMOUNT, WOULD HAVE ONLY BEEN POSIT IVE. SO, THE ONLY QUESTION THAT REMAINS IS, WHEN THE GROSS TOTAL INCOME IS POSITIVE, A DEDUCTION UNDER SECTIONS 80-IA AND 80-IB CAN BE W ORKED OUT INDEPENDENTLY WITHOUT SETTING OFF LOSSES OF UNITS O N WHICH SUCH DEDUCTION WAS NOT BEING CLAIMED. IN OUR OPINION, T HIS QUESTION STANDS ALREADY ANSWERED BY HON'BLE JURISDICTIONAL HIGH COU RT IN THEIR DECISION IN THE CASE OF CHAMUNDI TEXTILES (SILK MILLS) LTD. V. CIT (341 ITR 488). THERE THE QUESTION WAS REGARDING CLAIM OF DEDUCTION UNDER SECTION 80HHC AND WHETHER SUCH DEDUCTION COULD BE A LLOWED WITHOUT CONSIDERING THE RESULTS OF A UNIT, WHICH WAS NOT HA VING ANY PROFITS. IT WAS HELD BY THEIR LORDSHIPS THAT BY VIRTUE OF THE D ECISION OF HON'BLE APEX COURT IN THE CASE OF IPCA LABORATORIES LTD. V. CIT (266 ITR 521), UNDISPUTEDLY ONLY AN ASSESSEE HAVING POSITIVE PROFITS COULD CLAIM SUCH A DEDUCTION. THEIR LORDSHIP ALSO HELD T HAT FOR ARRIVING AT SUCH PROFIT, INCOME FROM VARIOUS UNITS HAD TO BE CA LCULATED AND IF ONE OF THE UNITS WAS RUNNING AT A LOSS, GROSS TOTAL INC OME HAD TO BE ARRIVED CONSIDERING SUCH LOSS ALSO. ULTIMATELY, IF THE GROSS TOTAL INCOME WAS A LOSS, CLAIM FOR DEDUCTION WAS TO BE RE JECTED. SECTIONS 80HHC OR 80-IA OR 80-IB FOR THAT MATTER, ARE ALL CO NTROLLED BY SECTION 80AB OF THE ACT. GROSS TOTAL INCOME MEANS GROSS TOTAL INCOME I.T.A. NOS. 782 TO 787/MDS/12 I.T.A. NOS. 869 TO 874/MDS/12 6 COMPUTED AS PER THE PROVISIONS OF THE ACT. THIS WA S CLEARLY REITERATED BY HON'BLE APEX COURT IN THE CASE OF SYNCO INDUSTRI ES LTD. (SUPRA). HON'BLE APEX COURT HELD THAT GROSS TOTAL INCOME HAD TO BE ARRIVED AT AFTER MAKING DEDUCTIONS AS PER APPROPRIATE COMPUTAT ION PROVISIONS, INCLUDING INCOME UNDER SECTIONS 60 TO 64, ADJUSTMEN T OF INTER SE LOSSES AND AFTER SETTING OFF BROUGHT FORWARD LOSSES AND UNABSORBED DEPRECIATION. ONLY IF RESULTANT GROSS TOTAL INCOME WAS POSITIVE, AN ASSESSEE WAS ENTITLED FOR DEDUCTION UNDER CHAPTER V IA OF THE ACT. HOWEVER, WHERE ASSESSEE IS HAVING MORE THAN ONE UNI T, WHERE ONE UNIT IS ELIGIBLE FOR DEDUCTION AND OTHER UNIT OR UN ITS ARE NOT ELIGIBLE FOR DEDUCTION AND IF THE GROSS TOTAL INCOME IS POSITIVE , DESPITE THE LOSS IN ONE OF SUCH UNITS, DECISIONS OF HON'BLE APEX COURT IN THE CASE OF IPCA LABORATORIES LTD. (SUPRA) AND SYNCO INDUSTRIES LTD. (SUPRA) WOULD HAVE NOT MUCH APPLICABILITY. IN SUCH CASES, WHERE AN ASSESSEE IS CARRYING ON VARIOUS ACTIVITIES, EVEN IF CENTRALIZED ACCOUNTS ARE MAINTAINED, SO LONG AS INTERLACING, IN TERCONNECTIVITY OR INTERDEPENDENCE OF VARIOUS UNITS WAS NOT THERE, VAR IOUS ACTIVITIES HAVE TO BE TREATED AS SEPARATE AND DISTINCT, AS HEL D BY HON'BLE APEX COURT IN THE CASE OF WATER FALL ESTATES LTD. V. CIT (219 ITR 563). HON'BLE APEX COURT IN THE CASE OF L.M. CHHABDA & SO NS. V. CIT (65 ITR 638) HAS ALSO HELD THAT WHERE AN ASSESSEE CARRI ED ON BUSINESS I.T.A. NOS. 782 TO 787/MDS/12 I.T.A. NOS. 869 TO 874/MDS/12 7 VENTURES AT DIFFERENT PLACES, THERE WAS NO GENERAL PRINCIPLE THAT THEY SHOULD ALL BE CONSIDERED AS PART OF SINGLE BUSINESS . THUS, IF AN ASSESSEE HAD DIFFERENT UNITS RESULTING IN POSITIVE GROSS TOTAL INCOME, IN VIEW OF DECISIONS OF HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT V. MACMILLAN INDIA LTD. (295 ITR 67), CIT V. RA THORE BROTHERS (254 ITR 656), CIT VS. SURESH B. MEHTA (291 ITR 462 ) AND CIT V. M. GANI AND CO. (301 ITR 381), EACH OF THE UNIT HAD TO BE SEPARATELY CONSIDERED FOR WORKING OUT DEDUCTION UNDER SECTION 80-IA OR 80-IB OR 80HHC OF THE ACT, ONCE SEPARATE ACCOUNTS WERE BEING MAINTAINED AND THERE WAS NO INTERLACING AND INTERDEPENDENCE. IN THE GIVEN CASE BEFORE US, ASSESSEE HAD POSITIVE GROSS TOTAL INCOME . THEREFORE, EACH UNDERTAKING HAD TO BE CONSIDERED SEPARATELY FOR WOR KING OUT DEDUCTION UNDER SECTION 80-IA OF THE ACT, SINCE THE GROSS TOTAL INCOME WAS POSITIVE. WE ARE OF THE OPINION THAT CI T(APPEALS) WAS JUSTIFIED IN GIVING SUCH DIRECTIONS. 8. GROUND RAISED BY THE REVENUE FOR ASSESSMENT YEAR 2007-08 AND 2008-09 IS WITH REGARD TO CIT(APPEALS) ALLOWING DEDUCTION UNDER SECTION 80-IA FOR WINDMILLS, WITHOUT ADJUSTING NOTI ONAL LOSSES OF YEARS PRIOR TO THE INITIAL YEAR OF SUCH CLAIM. ASSESSEE WAS CAPTIVELY CONSUMING THE ELECTRICITY GENERATED BY ITS OWN POWE R PLANT. I.T.A. NOS. 782 TO 787/MDS/12 I.T.A. NOS. 869 TO 874/MDS/12 8 ASSESSEE WAS ENGAGED IN MANUFACTURING AND SALE OF M ETAL POWDERS. A.O. HELD THAT ASSESSEE COULD NOT CLAIM DEDUCTION U NDER SECTION 80- IA OF THE ACT ON ELECTRICITY SUPPLIED BY ITS WINDMI LLS FOR CAPTIVE GENERATION. HOWEVER, THE CIT(APPEALS), ON ASSESSEE S APPEAL, HELD IN ITS FAVOUR, RELYING ON THE DECISION OF HON'BLE J URISDICTIONAL HIGH COURT IN THE CASE OF VELAYUDHASWAMY SPINNING MILLS V. ACIT (231 CTR 368). 9. NOW BEFORE US, LEARNED D.R. ADMITTED THAT THIS I SSUE STOOD DECIDED IN FAVOUR OF ASSESSEE. 10. LEARNED A.R. SUPPORTED THE ORDERS OF CIT(APPEAL S). 11. WE HAVE PERUSED THE ORDERS AND HEARD THE SUBMI SSIONS. CIT(APPEALS) HAD DIRECTED THE ASSESSING OFFICER TO TREAT THE WINDMILLS AS A SEPARATE UNDERTAKING FOR THE PURPOSE OF CALCUL ATING DEDUCTION UNDER SECTION 80-IA OF THE ACT THOUGH THE POWER GEN ERATED WAS CAPTIVELY CONSUMED. QUESTION OF SET-OFF NOTIONAL L OSSES PRIOR TO THE INITIAL YEAR OF CLAIM DOES NOT ARISE IN VIEW OF HON 'BLE JURISDICTIONAL HIGH COURTS DECISION IN THE CASE OF VELAYUDHASWAMY SPINNING MILLS (SUPRA). CIT(APPEALS) HAD RIGHTLY RELIED ON THIS D ECISION FOR TAKING A VIEW IN FAVOUR OF THE ASSESSEE. LEARNED D.R. WAS U NABLE TO PRODUCE I.T.A. NOS. 782 TO 787/MDS/12 I.T.A. NOS. 869 TO 874/MDS/12 9 ORDER OF ANY HIGHER AUTHORITY WHICH COULD DISTURB T HE VIEW TAKEN BY HON'BLE JURISDICTIONAL HIGH COURT. 12. IN THE RESULT, REVENUES APPEALS FOR ALL THE YE ARS ARE DISMISSED. 13. NOW WE TAKE UP CROSS-APPEALS OF THE ASSESSEE. IN ITS APPEALS FOR ASSESSMENT YEARS 2002-03 AND 2003-04, ONE OF TH E GRIEVANCES RAISED BY THE ASSESSEE IS REGARDING LEVY OF INTERES T UNDER SECTION 234 OF THE ACT. 14. ASSESSEES GRIEVANCE REGARDING LEVY OF INTEREST UNDER SECTION 234D CANNOT BE ACCEPTED IN VIEW OF HON'BLE JURISDIC TIONAL HIGH COURTS DECISION IN THE CASE OF CIT V. INFRASTRUCTU RE DEVELOPMENT FINANCE CO. LTD. (2012) 340 ITR 580, ASSESSMENTS HA VING BEEN COMPLETED AFTER FIRST OF JUNE, 2003. 15. IN ITS APPEALS FOR ASSESSMENT YEARS 2002-03, 20 05-06, 2006-07 AND 2007-08, ONE OF THE GRIEVANCES TAKEN BY THE ASS ESSEE IS ON DISALLOWANCE MADE BY THE ASSESSING OFFICER UNDER SE CTION 14A OF THE ACT, WHICH WAS CONFIRMED BY THE CIT(APPEALS). 16. LEARNED A.R. SUBMITTED THAT FOR IMPUGNED ASSESS MENT YEARS, RULE 8D WOULD NOT APPLY AT ALL. ASSESSING OFFICER HAD SIMPLY MADE I.T.A. NOS. 782 TO 787/MDS/12 I.T.A. NOS. 869 TO 874/MDS/12 10 AN ADDITION RELYING ON SECTION 14A WITHOUT GIVING A NY FINDING THAT ASSESSEE HAD INCURRED ANY EXPENDITURE IN RELATION T O DIVIDEND INCOME ON WHICH ASSESSEE HAD CLAIMED EXEMPTION. 17. LEARNED D.R. FAIRLY ADMITTED THAT THE MATTER SH OULD GO BACK TO THE FILE OF THE ASSESSING OFFICER FOR PROPER VERIFI CATION OF THE ISSUE. 18. WE HAVE PERUSED THE ORDERS AND HEARD THE SUBMI SSIONS. ASSESSING OFFICER HAD DISALLOWED 6% OF THE EXPENDIT URE INCURRED BY THE ASSESSEE UNDER THE HEAD PRINTING & STATIONERY, POSTAGE & TELEGRAM, PROFESSIONAL AND OTHER SERVICES AND PAYME NT TO AUDITORS, CONSIDERING IT TO BE EXPENSES INCURRED BY THE ASSES SEE FOR EARNING DIVIDEND INCOME. A.O. HAD MADE SUCH DISALLOWANCE SINCE ASSESSEE WAS HOLDING SHARES WHICH RESULTED IN SUBSTANTIAL DI VIDEND INCOME. ON APPEAL BY THE ASSESSEE, LD. CIT(APPEALS) CONFIRM ED SUCH DISALLOWANCE RELYING ON THE DECISION OF SPECIAL BEN CH OF THIS TRIBUNAL IN THE CASE OF ITO V. DAGA CAPITAL MANAGEMENT (P) L TD. (117 ITD 169) (SB) TAKING A VIEW THAT RULE 8D APPLIED RETROS PECTIVELY. NOW WE FIND THAT HONBLE BOMBAY HIGH COURT IN THE CASE OF GODREJ AND BOYCE MFG. CO. LTD VS. DY. CIT (328 ITR 81) HAS HELD THAT RULE 8D HAD NO RETROSPECTIVE APPLICABILITY. NEVERTHELESS, A DISAL LOWANCE UNDER SECTION 14A MIGHT STILL BE REQUIRED DEPENDING ON FA CTS AND I.T.A. NOS. 782 TO 787/MDS/12 I.T.A. NOS. 869 TO 874/MDS/12 11 CIRCUMSTANCES. HOWEVER, WE DO NOT FIND ANY DISCUSS ION ON ANY CLAIM MADE BY THE ASSESSEE WITH REGARD TO EXPENSES INCURR ED OR NOT INCURRED BY IT FOR EARNING THE DIVIDEND INCOME, IN THE ASSESSMENT ORDER. ASSESSING OFFICER HAD SIMPLY MADE A DISALLO WANCE TAKING 6% OF THE INCOME AS EXPENDITURE. WE ARE, THEREFORE, O F THE OPINION THAT THE MATTER REQUIRES A RE-VISIT BY THE ASSESSING OFF ICER. WE, THEREFORE, SET ASIDE THE ORDERS OF AUTHORITIES BELOW AND REMIT THE ISSUE REGARDING DISALLOWANCE UNDER SECTION 14A BACK TO TH E FILE OF THE A.O. FOR CONSIDERATION AFRESH AND DECIDE IN ACCORDANCE W ITH LAW. 19. FOR ASSESSMENT YEARS 2003-04 AND 2005-06, ASSES SEE HAS IN ONE OF ITS GROUNDS ASSAILED THE DISALLOWANCE OF ITS CLAIM FOR ADDITIONAL DEPRECIATION UNDER SECTION 32(I)(IIA) OF THE ACT. AS PER ASSESSEE, DECISION OF HON'BLE APEX COURT IN THE CASE OF GOETZE (INDIA) LTD . V . CIT [284ITR 323] PLACED RESTRICTIONS IN CONSIDERING A FRESH CLAIM OF THE ASSESSEE WITHOUT A REVISED RETURN, ONLY ON AN A SSESSING AUTHORITY AND NOT AN APPELLATE AUTHORITY. 20. FACTS APROPOS ARE THAT ASSESSEE IN ITS RETURNS FILED ORIGINALLY, HAD NOT CLAIMED ADDITIONAL DEPRECIATION ON WINDMILL S. HOWEVER, SUCH A CLAIM WAS MADE BEFORE THE ASSESSING OFFICER DURIN G THE COURSE OF ASSESSMENT PROCEEDINGS. THE MATTER HAD TRAVELLED U PTO THIS TRIBUNAL I.T.A. NOS. 782 TO 787/MDS/12 I.T.A. NOS. 869 TO 874/MDS/12 12 FOR ASSESSMENT YEAR 2003-04 AND THIS TRIBUNAL IN IT S ORDER DATED 30.12.2008 IN I.T.A. NO. 423/MDS/2007 HAD REMITTED THE ISSUE BACK TO CIT(APPEALS) FOR FRESH CONSIDERATION. IN SUCH FRES H PROCEEDINGS FOR ASSESSMENT YEAR 2003-04 AND ALSO THE REGULAR APPELL ATE PROCEEDINGS FOR ASSESSMENT YEAR 2005-06, CIT(APPEALS) AGAIN REJ ECTED THE CLAIM OF THE ASSESSEE CITING A REASON THAT ASSESSEE COULD NOT BE ALLOWED TO AMEND A RETURN FILED BY IT, OTHERWISE THAN THROUGH A REVISED RETURN. FOR THIS, ONCE AGAIN RELIANCE WAS PLACED ON THE DEC ISION OF HON'BLE APEX COURT IN THE CASE OF GOETZE (INDIA) LTD . (SUPRA). 21. NOW BEFORE US, LEARNED A.R. SUBMITTED THAT THE POWERS OF THE APPELLATE AUTHORITY WAS WIDE ENOUGH TO CONSIDER A F RESH CLAIM EVEN WHERE THE ASSESSEE HAD NOT FILED A REVISED RETURN. 22. LEARNED D.R. STRONGLY SUPPORTED THE ORDER OF CI T(APPEALS). 23. WE HAVE PERUSED THE ORDERS AND HEARD THE RIVAL SUBMISSIONS. THERE IS NO DISPUTE THAT ASSESSEE HAD NOT MADE ANY CLAIM FOR ADDITIONAL DEPRECIATION ON WINDMILLS UNDER SECTION 32(I)(IIA) IN ITS ORIGINAL RETURN. ASSESSEE HAD NOT EVEN FILED A REV ISED RETURN BUT HAD STAKED SUCH CLAIM DURING THE COURSE OF ASSESSMENT P ROCEEDINGS. ASSESSING OFFICER, RELYING ON THE DECISION OF HON'B LE APEX COURT IN I.T.A. NOS. 782 TO 787/MDS/12 I.T.A. NOS. 869 TO 874/MDS/12 13 THE CASE OF GOETZE (INDIA) LTD. (SUPRA), DENIED THE CLAIM OF THE ASSESSEE AND CIT(APPEALS) AFFIRMED THE VIEW OF THE ASSESSING OFFICER. BEFORE US ALSO, NOTHING WAS BROUGHT ON RE CORD BY LEARNED A.R. AS TO WHY THE FRESH CLAIM SHOULD BE CONSIDERED . HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT V. SHR IRAM INVESTMENTS [TC(A) NO.344 OF 2005 DATED 16.6.2012] HELD THAT SE CTION 139(5) OF THE ACT HAD PRESCRIBED A TIME LIMIT FOR REVISION OF RETURN. THEIR LORDSHIP OBSERVED THAT ANYTHING WHICH WAS DONE BEYO ND SUCH TIME LIMIT, LOST THE STATUTORY PROTECTION. IN THE CASE BEFORE THEIR LORDSHIP, ASSESSEE HAD FAILED TO CLAIM DEFERRED REVENUE EXPEN DITURE, BUT, HAD PREFERRED SUCH A CLAIM THROUGH A REVISED RETURN, WH ICH WAS FILED OUT OF TIME. TRIBUNAL HAD HELD IN FAVOUR OF THE ASSESSEE HOLDING THAT BY THE SCHEME OF THE ACT, ASSESSEE WAS ENTITLED TO CLAIM I T, THOUGH IT HAD OMITTED TO DO SO IN ORIGINAL RETURN. THEIR LORDSHI P HELD THAT RELIANCE PLACED BY THE TRIBUNAL ON THE DECISION OF HON'BLE A PEX COURT IN THE CASE OF CIT V. SHELLY PRODUCTS (261 ITR 367) WAS NOT CORREC T. IN THE LATTER CASE, IT WAS HELD THAT ASSESSEE, IF BY MISTA KE OR INADVERTENCE OR ON ACCOUNT OF IGNORANCE, INCLUDED IN ITS INCOME ANY AMOUNT, WHICH IS EXEMPT FROM PAYMENT OF TAX, WHEN SUCH TAX IS NOT PA YABLE, SUCH ASSESSEE IS ENTITLED TO BRING IT TO THE NOTICE OF A SSESSING OFFICER AND THE ASSESSING OFFICER WAS BOUND TO CONSIDER THE SAM E TO GRANT THE I.T.A. NOS. 782 TO 787/MDS/12 I.T.A. NOS. 869 TO 874/MDS/12 14 RELIEF. THEIR LORDSHIP APPLIED THE LAW LAID DOWN B Y HON'BLE APEX COURT IN GOETZE (INDIA) LTD.S CASE (SUPRA). IN TH E CASE BEFORE US ALSO, IT IS NOT THE QUESTION OF ANY AMOUNT BEING IN CLUDED AS INCOME BY INADVERTENCE. ASSESSEE HAD NOT CHOSEN TO MAKE ADDI TIONAL DEPRECIATION UNDER SECTION 32(I)(IIA) OF THE ACT. THEREFORE, IN OUR OPINION, IN THE GIVEN FACTS AND CIRCUMSTANCES, BY V IRTUE OF THE DECISION OF HON'BLE JURISDICTIONAL HIGH COURT IN TH E CASE OF SHRIRAM INVESTMENTS (SUPRA), CLAIM HAVING NOT BEEN MADE THR OUGH A REVISED RETURN CANNOT BE ACCEPTED. WE ARE, THEREFORE, OF T HE OPINION THAT THE CIT(APPEALS) WAS JUSTIFIED IN NOT CONSIDERING SUCH CLAIM RAISED BY THE ASSESSEE. 24. RELATED GROUND OF THE ASSESSEE IS DISMISSED. 25. FOR ASSESSMENT YEARS 2003-04 AND 2005-06, ONE O F THE GROUNDS RAISED BY THE ASSESSEE ASSAILS THE FINDING OF THE CIT(APPEALS) THAT IT HAD CLAIMED DEDUCTION UNDER SE CTION 80-IA FOR ASSESSMENT YEAR 2004-05 AND THE AUDIT REPORT FOR TH AT YEAR IN FORM NO.10CCB MENTIONED ASSESSMENT YEAR 2003-04 AS THE I NITIAL YEAR. AS PER ASSESSEE, THERE WAS NO CLAIM FOR DEDUCTION U NDER SECTION 80- IA FOR ASSESSMENT YEAR 2003-04. I.T.A. NOS. 782 TO 787/MDS/12 I.T.A. NOS. 869 TO 874/MDS/12 15 26. ASSESSEE HAD RAISED A CLAIM BEFORE LD. CIT(APPE ALS) THAT ASSESSMENT YEAR 2005-06 WAS INITIAL ASSESSMENT YEAR FOR CLAIMING DEDUCTION UNDER SECTION 80-IA IN RESPECT OF ITS WIN D FARM VESTAS. HOWEVER, CIT(APPEALS) DID NOT ACCEPT SUCH A CLAIM S INCE ACCORDING TO HIM, IN AUDIT REPORT IN FORM NO.10CCB, FILED ALO NG WITH THE RETURN FOR ASSESSMENT YEAR 2004-05, ASSESSEE HAD MENTIONED THE INTIAL ASSESSMENT YEAR AS 2003-04. AS PER CIT(APPEALS), O NCE THE CLAIM WAS BASED ON THE RETURN OF INCOME, IT COULD NOT BE CHANGED OR MODIFIED DURING THE ASSESSMENT PROCEEDINGS. 27. NOW BEFORE US, LEARNED A.R., ASSAILING THE ORDE R OF CIT(APPEALS), SUBMITTED THAT AN ERROR MADE IN ASSES SMENT YEAR 2004-05 COULD NOT BE A REASON FOR CHANGING THE INIT IAL ASSESSMENT YEAR. ACCORDING TO HIM, THERE WAS NO CLAIM WHATSOE VER UNDER SECTION 80-IA FOR WIND FARM VESTAS FOR ASSESSMENT Y EAR 2003-04. 28. PER CONTRA, LEARNED D.R. SUPPORTED THE ORDER OF CIT(APPEALS). 29. WE HAVE PERUSED THE ORDERS AND HEARD THE RIVAL SUBMISSIONS. IT IS NOT DISPUTED THAT ASSESSEE HAD FILED AUDIT RE PORT IN FORM NO.10CCB FOR ASSESSMENT YEAR 2004-05 IN WHICH THE I NITIAL ASSESSMENT YEAR WAS DECLARED AS ASSESSMENT YEAR 200 3-04. ONCE I.T.A. NOS. 782 TO 787/MDS/12 I.T.A. NOS. 869 TO 874/MDS/12 16 AN AUDIT REPORT IS FILED BY THE ASSESSEE, WHICH IS A REPORT SPECIFIED UNDER SECTION 80-IA OF THE ACT, ASSESSEE CANNOT TUR N BACK AND SAY THAT THE DATA FURNISHED THEREIN IS WRONG. WE CANNO T FIND ANY FAULT WITH LOWER AUTHORITIES RELYING ON THE AUDIT REPORT FILED AND CONSIDERING ASSESSMENT YEAR 2003-04 AS INITIAL ASSESSMENT YEAR FOR WIND FARM VESTAS. IN ANY CASE, NO SUCH GROUND WAS TAKEN BY T HE ASSESSEE BEFORE CIT(APPEALS) FOR ASSESSMENT YEAR 2005-06 AT ALL. WE, THEREFORE, DISMISS RELATED GROUNDS OF THE ASSESSEE FOR ASSESSMENT YEAR 2003-04 AND 2005-06. 30. NOW WE ARE LEFT WITH ONE GROUND TAKEN BY THE AS SESSEE FOR ASSESSMENT YEAR 2008-09, WHICH IS NON-EXCLUSION OF INTEREST RECEIVABLE FROM ITS MALAYSIAN SUBSIDIARY COMPANY. 31. FACTS APROPOS ARE THAT ASSESSEE, DURING THE COU RSE OF ASSESSMENT, CLAIMED THAT A SUM OF ` 7,33,190/- BEING INTEREST FROM STERLING METAL POWDER COMPANY, A SUBSIDIARY OF THE ASSESSEE, INCORPORATED AT MALAYSIA, WHICH WAS INCLUDED UNDER THE HEAD INTEREST RECEIPTS-OTHERS HAD TO BE EXCLUDED. AS PER THE ASSESSEE, SUCH SUM WAS SHOWN IN THE BOOKS OF ACCOUNTS ONLY AS PROVISION AND NOTHING WAS RECEIVED. EVEN IF THE AMOUNT WAS PAID BY THE MALAYSIAN COMPANY, THE SAID COMPANY WAS LIABLE TO DEDUCT WITH HOLDING TAX AND I.T.A. NOS. 782 TO 787/MDS/12 I.T.A. NOS. 869 TO 874/MDS/12 17 AS PER DOUBLE TAXATION AVOIDANCE AGREEMENT WITH MAL AYSIA, SUCH SUM COULD NOT BE CONSIDERED AS A PART OF INCOME IN INDIA. HOWEVER, ASSESSING OFFICER WAS NOT IMPRESSED. ACCORDING TO HIM, THIS CLAIM WAS A FRESH ONE PREFERRED BY THE ASSESSEE OTHERWISE THROUGH A REVISED RETURN. RELYING ON THE DECISION OF GOETZE (INDIA) LTD. (SUPRA), HE REJECTED THE CLAIM OF THE ASSESSEE. ASSESSEES APPEAL BEFORE CIT(APPEALS) WAS NOT SUCCESSFUL. 32. NOW BEFORE US, LEARNED A.R., ASSAILING THE ORDE RS OF AUTHORITIES BELOW, SUBMITTED THAT POWER OF APPELLATE AUTHORITY WOULD NOT BE CIRCUMSCRIBED BY THE DECISION OF HON'BLE APEX COURT IN THE CASE OF GOETZE (INDIA) LTD. (SUPRA). THEREFORE, ACCORDING TO HIM, THE CLAIM WAS UNDULY REJECTED BY THE LD. CIT(APPEALS). 33. PER CONTRA, LEARNED D.R. SUPPORTED THE ORDER OF CIT(APPEALS). 34. WE HAVE PERUSED THE ORDERS AND HEARD THE RIVAL SUBMISSIONS. WITHOUT DOUBT, ASSESSEE HAD INCLUDED IN ITS INCOME, INTEREST FROM ITS MALAYSIAN SUBSIDIARY. THE CLAIM THAT IT WAS NOT RE CEIVED AND IF RECEIVED WITHHOLDING TAX WOULD BE DEDUCTED BY THE M ALAYSIAN COMPANY, WERE ALL NEW PLEADINGS MADE DURING THE COU RSE OF ASSESSMENT PROCEEDINGS. ASSESSEE NEVER CARED TO F ILE A REVISED I.T.A. NOS. 782 TO 787/MDS/12 I.T.A. NOS. 869 TO 874/MDS/12 18 RETURN. IN OUR OPINION, FOR THE SAME REASONS, AS S AID BY US AT PARA 23 ABOVE, SUCH A CLAIM COULD NOT HAVE BEEN ACCEPTED. THIS WAS, THEREFORE, RIGHTLY REJECTED BY THE ASSESSING OFFICE R AND CONFIRMED BY LD. CIT(APPEALS). WE DO NOT FIND ANY REASON TO IN TERFERE WITH THE ORDER OF CIT(APPEALS). 35. IN THE RESULT, APPEALS OF THE ASSESSEE FOR ASSE SSMENT YEARS 2006-07 AND 2007-08 ARE ALLOWED FOR STATISTICAL PUR POSES, APPEALS FOR ASSESSMENT YEARS 2003-04 AND 2008-09 ARE DISMISSED, AND APPEALS FOR ASSESSMENT YEARS 2002-03 AND 2005-06 ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER WAS PRONOUNCED IN THE COURT ON THURSDAY, THE 21 ST OF FEBRUARY, 2013, AT CHENNAI. SD/- SD/- (V.DURGA RAO) (ABRAHAM P. GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 21 ST FEBRUARY, 2013. KRI. COPY TO: ASSESSEE/ASSESSING OFFICER/CIT(A)-I, MADU RAI/ CIT-I, MADURAI/D.R./GUARD FILE