Noida Power Company Ltd., Greater Noida V. Addl. CIT, Noida

ITA 999/DEL/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 58465 (ITAT-DELHI)
• Duration Of Justice: 10 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-01-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 19-01-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 22-02-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RA J TANDON
• Assessee Lawyers: SUBHASIS DE
• Section: 234B; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E NEW DELHI. BEFORE SHRI RAJPAL YADAV AND SHRI K.G. BANSAL I.T.A. NO.999(DEL)/2011 ASSESSMENT YEAR: 2007-08 NOIDA POWER COMPANY LTD., ADDI TIONAL COMMISSIONER OF COMMERCIAL COMPLEX, BLOCK-H, VS. INCOME-TA X, NOIDA RANGE, ALPHA II SECTOR, NOIDA. GREATER NOIDA CITY, GREATER NOIDA. PAN: AAACN 4984D (APPLICANT) (RESPONDENT) APPELLANT BY : SHRI SUBHASIS DE, C.A. RESPONDENT BY: SHR I RAJ TANDON, CIT, DR. DATE OF HEARIN G: 19.01.2012 DATE OF PRONOUN CEMENT: 19 .01.2012. ORDER PER K.G. BANSAL : A.M THE ASSESSEE HAS TAKEN UP THREE GROUNDS IN THIS APPEAL. GROUND NO. 1 CONTAINS A NUMBER OF SUB-GROUNDS. HOWEVER, TH E SUM AND SUBSTANCE OF THESE GROUNDS IS CONTAINED IN GROUND NO. 1(A) TH AT THE LD. CIT(APPEALS) ERRED IN CONFIRMING THE ACTION OF THE ASSESSING O FFICER WHO HAD DISALLOWED A SUM OF RS. 26,14,06,249/-, REPRESENTING ASSESSEE S CLAIM TOWARDS EXPENDITURE INCURRED ON POWER PURCHASE PAYABLE TO UPPCL. GROUND NOS. 2 AND 3 ARE IN RESPECT OF CHARGING OF INTEREST UND ER SECTIONS 234B AND 234C OF THE ACT. ITA NO. 999(DEL)/2011 2 2. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED BEFO RE US THAT THE QUESTION REGARDING THE EXPENDITURE INCURRED ON POWER PURCH ASED AROSE FOR THE FIRST TIME IN THE CASE OF THE ASSESSEE FOR ASSESSMENT YEAR 1994-95. THE TRIBUNAL DECIDED THE MATTER IN FAVOUR OF THE ASSE SSEE BY HOLDING THAT THE LIABILITY HAS BEEN CRYSTALLIZED IN THE YEAR ITSEL F. AS AND WHEN THE QUESTION OF RATE PAYABLE REACHES FINALITY, THE DEPARTMEN T IS AT LIBERTY TO BRING THE AMOUNT WHICH CEASED TO BECOME A LIABILITY TO TA X BY INVOKING THE PROVISION CONTAINED IN SECTION 41(1). 2.1 THE QUESTION AGAIN CAME UP FOR DISCUSSION BEFO RE THE TRIBUNAL IN THE PROCEEDINGS OF ASSESSMENT YEARS 1995-96 TO 199 9-00, FOR WHICH A CONSOLIDATED ORDER WAS PASSED ON 30.06.2008. IN T HIS ORDER, IT IS MENTIONED THAT THE QUESTION OF DIFFERENTIAL RATE, THAT IS THE DIFFERENCE BETWEEN THE RATE STIPULATED IN THE AGREEMENT AND CHARGED BY UPSEB IN THE BILLS AND THE RATE RECOMMENDED BY INDEPENDENT AUTHORITY WAS IN DISPUTE AND THE SAID DISPUTE WAS NOT RESOLVED DURING THE RELEVAN T YEAR. THEREFORE, THE CONTRACTUAL LIABILITY ON ACCOUNT OF SUCH DIFFEREN TIAL RATE IS NOT A LIABILITY IN PRAESENTI. THERE IS A POSSIBILITY OF REDUCTION O R EXTINCTION OF THE LIABILITY, THEREFORE, IT CANNOT BE REGARDED AS AN ASCERTAI NED LIABILITY. IN THIS VIEW, THE APPEALS WERE DECIDED IN FAVOUR OF THE REVE NUE. ITA NO. 999(DEL)/2011 3 2.2 IT IS ARGUED THAT THE ONLY DIFFERENCE IN FACTS IS THAT IN ASSESSMENT YEAR 1994-95 THE AMOUNT CHARGED BY UPSEB IN THE BILLS WAS DEBITED TO PROFIT AND LOSS ACCOUNT WHILE IN LATER YEARS ONLY A PART WAS DEBITED TO THE PROFIT AND LOSS ACCOUNT AND THE REMAINING WAS C LAIMED SEPARATELY IN THE STATEMENT OF INCOME. THIS DIFFERENCE IN TREATME NT DOES NOT LEAD TO ANY DIFFERENCE IN INFERENCE ABOUT ACCRUAL OF THE LIA BILITY AS HELD IN THE CASE OF KEDAR NATH JUTE MANUFACTURING CO. LTD. VS. CIT, 82 ITR 363 (SC) AND TUTICORIN ALKALI CHEMICALS & FERTILIZERS LTD. VS. CIT, 227 ITR 172 (SC). IT IS FURTHER ARGUED THAT IN VIEW OF THE DECISION OF SPECIAL BENCH IN THE CASE OF CIT VS. RELIANCE INDUSTRIES LTD., 88 ITD 273 (BOM.), THE SUBSEQUENT BENCH OF THE TRIBUNAL COULD NOT HAVE D IFFERED FROM THE DECISION OF THE EARLIER BENCH AND A PROPER COUR SE OF ACTION WOULD HAVE BEEN TO PLACE THE MATTER BEFORE THE PRESIDENT O F THE TRIBUNAL WITH A REQUEST TO CONSTITUTE SPECIAL BENCH CONSISTING OF THREE OR MORE MEMBERS. ACCORDINGLY, IT IS AGITATED THAT THE DECISION FO R ASSESSMENT YEAR 1994-95 MAY BE FOLLOWED AND THE MATER MAY BE DECIDED IN FAVOUR OF THE ASSESSEE. 3. IN REPLY, THE LD. CIT, DR REFERRED TO THE SUB SEQUENT DECISION OF THE TRIBUNAL AND SUBMITTED THAT IT HAS ALSO TAKEN INT O ACCOUNT THE RECOMMENDATION OF AN INDEPENDENT AUTHORITY, WHICH IS STILL IN FORCE. ITA NO. 999(DEL)/2011 4 THIS MATTER IS PENDING NOW BEFORE THE HONBLE SU PREME COURT. ACCORDINGLY, IT IS AGITATED THAT THE LATER DE CISION OF THE TRIBUNAL MAY BE FOLLOWED. 4. WE HAVE CONSIDERED THE FACTS OF THE CASE AND SUBMISSIONS MADE BEFORE US. WE ARE OF THE VIEW THAT THE SUBSEQU ENT DECISION OF THE TRIBUNAL TAKES INTO ACCOUNT ALL THE FACTS AVAILAB LE TILL THAT POINT OF TIME. IN THE FIRST DECISION, THE TRIBUNAL TOOK NOTE O F THE STIPULATION IN THE AGREEMENT THAT POWER PURCHASE RATE WAS TO BE STUDIED AND REVISED BY AN INDEPENDENT AUTHORITY, THEREFORE, NAIR COMMITT EE WAS APPOINTED ON 31.08.1994. THIS COMMITTEE DETERMINED THE RATE AT RS. 1.35 PER UNIT. HOWEVER, THE REPORT WAS SUBMITTED BY THE COMMITTEE MUCH AFTER THE CLOSE OF THE PREVIOUS YEAR. IT IS CLEAR FROM THIS OR DER THAT THE TRIBUNAL DID NOT TAKE INTO ACCOUNT THE FINDING OF THE NAIR COMMITT EE. THIS WAS DONE IN THE SUBSEQUENT ORDER. THEREFORE, WE ARE OF THE VIEW THAT THE SUBSEQUENT DECISION SHOULD BE FOLLOWED IN THIS CASE. ACCORD INGLY, FOLLOWING THIS DECISION, THE MATTER IS DECIDED IN FAVOUR OF THE R EVENUE. THUS, GROUND NO. 1 IS DISMISSED. ITA NO. 999(DEL)/2011 5 5. IN SO FAR AS CHARGING OF INTEREST UNDER SECT IONS 234B AND 234C IS CONCERNED, THE LD. CIT, DR RELIED ON THE DECISI ON IN THE CASE OF JCIT VS. ROLTA INDIA LTD, (2011) 330 ITR 470 (SC). IT HAS BEEN DECIDED THAT FOR THE PURPOSE OF LEVY OF INTEREST U/S 234B ASSES SED TAX MEANS THE TAX ASSESSED ON REGULAR ASSESSMENT. IT HAS BEEN FUR THER HELD THAT WHAT APPLICABLE IN RESPECT OF SECTION 234B IS ALSO AP PLICABLE IN RESPECT OF SECTION 234C EVEN WHEN ASSESSMENT IS MADE U/S 11 5JA. THIS CLEARLY LEADS TO AN INFERENCE THAT INTEREST UNDER SECTI ONS 234B AND 234C ARE CHARGEABLE. ACCORDINGLY, THESE GROUNDS ARE ALSO DISMISSED. 6. IN THE RESULT, THE APPEAL IS DISMISSED. SD/- SD/- (RAJPAL YADAV) (K.G. BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER 19/01/2012. SP SATIA COPY OF THE ORDER FORWARDED TO (I) NOIDA POWER COMPANY LTD., GREATER NOIDA. (II) ADDITIONAL CIT, NOIDA RANGE, NOIDA. (III) CIT(A) (IV) CIT, (V) THE D.R., ITAT, NEW DELHI. ASSISTANT REGISTRAR.