Alakananda Hydro Power Compnay Ltd., Sec'bad, Secunderabad V. DCIT, Circle-1(1), Hyd, Hyderabad

MA 12/HYD/2016

• Counselvise Citation: [2016] 124 COUNSELVISE.COM (IT) 4316 (ITAT-HYDERABAD)
• Duration Of Justice: 1 month(s) 18 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 07-04-2016
• Appeal Filed By: Assessee
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 19-02-2016
• Court: TRIBUNAL
• Department Lawyers: M SITARAM
• Assessee Lawyers: V SIVA KUMAR
• Keywords: Depreciation
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH ES A , HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER M .A. NO. 1 2 /H YD /201 6 ( ARISING OUT OF ITA NO. 1 57 3/HYD/2014) ASSESSMENT YEAR: 20 1 0 - 11 ALAKNA NDA HYDRO POWER COMPANY LIMITED, [PAN: A AFCA2081B ] VS DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE - 1(1), HYDERABAD (APPL IC ANT) (RESPONDENT) FOR ASSESSEE : SHRI V . SIVA KUMAR , AR FOR REVENUE : SHRI M. SITARAM , DR DATE OF HEARING : 04 - 0 3 - 201 6 DAT E OF PRONOUNCEMENT : 07 - 0 4 - 201 6 O R D E R PER B. RAMAKOTAIAH, A.M. : THIS MISCELLANEOUS APPLICATION IS PREFERRED BY ASSESSEE SEEKING REC TIFICATION O F MISTAKES APPARENT FROM RECORD, STATED TO HAVE CREPT INTO THE ORDER DT. 19 - 06 - 2015 BY THE IT AT IN ITA NO. 1573/HYD/ 2014. THE ISSUE IN APPEAL WAS WHETHER THE CIT(A) WAS CORRECT IN HOLDING THAT THE INTEREST DISALLOWED U/S. 14A OF THE INCOME TAX ACT [ACT] IS ENTITLED FOR CAPITALIZATION AND CONSEQUENTIAL DEPRECIATION IN SUBSEQUENT YEARS WHEN SUCH IS SUE IS NOT THERE BEFORE THE CIT(A)? THE ITAT HAS RECORDED THE DISPUTE IN PARA 7 OF ITS ORDER. M. A. NO. 12 / HYD / 201 6 : - 2 - : 2. IT WAS CONTENDED IN THIS MISCELLANEOUS APPLICATION THAT WHILE RECORDING THE DISPUTE, THE CRUCIAL WORDS WHEN SUCH ISSUE IS NOT THERE BEFORE HER WAS NOT CON SIDERED BY THE ITAT, CONSEQUENTIALLY ITAT HAS NOT CONSID ERED THE ISSUE FOR ADJUDICATION . FURTHER, IT WAS C ONTENDED THAT WHAT ITAT HAS RECORDED IN OUR VIEW ONCE THE EXPENDITURE CLAIMED IS DISALLOWED, THE SAME CA NNOT BE CAPITALIZED BY ASSESSEE WAS BEYOND TH E PURVIEW OF THE ITAT AS ASSESSEE NEITHER CLAIMED ANY EXPENDITURE NOR DID IT DRAW UP ANY P&L A/C. IT WAS SUBMITTED THAT ASSESSEE DID NOT RAISE ANY GROUND AS TO THE COR R ECTNESS OF THE AMOUNT TO BE CAPITALIZED, THEREFORE, RENDERING A DECISION ON ISSUES THAT WERE NOT BEFORE THE ITAT WOULD CONSTITUTE MISTAKE APPARENT FROM RECORD. 3 . WE HAVE HEARD THE LD. COUNSEL, WHO REITERATED THE OBJECTIONS AND LD. COUNSEL PLACED ON RECORD CO - ORDINATE BENCH DECISION OF A. RAM PRASAD VS. DCIT IN ITA NO. 261/H/2014 DT. 09 - 1 0 - 2015 WITH REFERENCE TO THE CONTENTION THAT CIT(A) IS NOT EMPOWERED TO TRAVERSE BEYOND THE YEAR IN CONSIDERATION IN APPEAL. LD. DR HOWEVER SUBMITTED THAT THERE IS NO MISTAKE IN THE ORDER OF ITAT. 4 . WE HAVE CONSIDERED THE ISSUE AND PERUSED THE OR DERS ON RECORD. F IRST OBJECTION OF ASSESSEE WAS T HAT CIT(A) DIRECTION THAT CERTAIN AMOUNT WA S NOT ENTITLED TO BE CAPITALIZED IN FUTURE AND ALSO WILL NOT BE ELIGIBLE FOR DEPRECIATION ON SUCH AMOUNT WAS NOT CORRECT WHEN SUCH ISSUE IS NOT THERE BEFORE HER . AS FAR AS THE POWERS OF CIT(A) ARE CONCERNED, LD. CIT(A) HAS CO - TERMINUS POWERS AS TH AT OF AN AO AND LD. CIT(A) CAN ALSO CONSIDER ALL OTHER CONNECTED ISSUES OR ANY OTHER NEW ISSUE WHICH MAY COME WITHIN THE K NOWLEDGE OF THE CIT(A). IT IS TRITE LAW THAT CIT(A) BY EXERCISING CO - TERMINUS POWERS VESTED IN HIM AS THAT OF AN AO CAN CONSIDER AN ISSUE WHICH M. A. NO. 12 / HYD / 201 6 : - 3 - : WAS NOT CONSIDERED BY THE AO. THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. KANPUR COAL SYNDICATE ( 53 ITR 225), JUTE CORPORATION OF INDIA VS. CIT (187 ITR 688) AND ALSO IN CIT VS. NIRBHERAM DALURAM (224 ITR 610) HAS REITERATED THE POWERS OF CIT(A) , WHICH ARE CO - TERMINUS WITH THAT OF AN AO. IT HAS BEEN HELD THAT FIRST APPELLATE AUTHORITY HAS VIDE POWERS, IN THAT HE CAN DO WHAT INCOME TAX OFFICER CAN DO AND CAN ALSO DIRECT HIM TO DO WHAT HE FAILED TO DO . IN VIEW OF THE PRINCIPLES LAID DOWN BY THE HON'BLE SUPREME COURT IN THE ABOVE SAID CASES, THE OBJECTION RAISED BY ASSESSEE HAS NO MERIT , WHICH WAS ACCORDINGLY CONSIDERED AND AGREED WITH THE DECISION OF THE CIT(A). F URTHER, WITH REFERENCE TO THE SECOND OBJECTION THAT ITAT EXCEEDED ITS JURISDICTION, WE ARE OF THE OPINION THAT THE DIRECTION GIVEN IS ACCORDING TO THE PRINCIPLES OF LAW AND ALSO ON FACTS. MOREOVER, IT WAS NOTICED BY THE ITAT THAT ASSESSEE HAS ALREADY REDU CED AN AMOUNT WHICH WAS DIRECTED TO BE EXCLUDED WHILE COMPUTING THE AMOUNT. UNDER SECTION 254(1) OF THE IT ACT 1961, ITAT MAY PASS SUCH ORDERS THEREON AS IT THINKS DEEM FIT AND IN THE CIRCUMSTANCES AND ON EXAMINATION OF THE FACTS PERTAINING TO THE YEAR , THE SAID DIRECTIONS/FINDINGS WERE GIVEN. WE DO NOT FIND ANY MERIT IN THE OBJECTIONS RAISED BY ASSESSEE. 5 . NOT ONLY THAT ASSESSEE HAS NO OBJECTION WITH LD. CIT(A) FINDING THAT THE DISALLOWANCE MADE BY THE AO DOES NO T BECOME PART OF TOTAL INCOME. THE D IRECTION OF THE CIT(A) THAT THE DISALLOWED AMOUNT CAN NOT BE CAPITALISED AND DEPRECIATION CAN NOT BE ALLOWED IN FUTURE IS A CONSEQUENTIAL DECISION TO BE TAKEN WHEN THE SAID DISALLOWANCE U/S. 14A WAS CONSIDERED . WE ARE OF THE OPINION THAT LD. CIT(A) HAS PO WERS TO DIRECT , ONCE THE AMOUNT WAS DISALLOWED. AS ALREADY STATED, ASSESSEE HAS NOT QUESTIONED THE QUANTUM OF DISALLOWANCE BUT ONLY THE DIRECTION GIVEN BY THE CIT(A) IN THE M. A. NO. 12 / HYD / 201 6 : - 4 - : APPEAL , CONSEQUENTIALLY AS THE DIRECTIONS ARE CONSEQUENTIAL TO THE DISALLOWANCE PE RTAINING TO THE SAME ASSESSMENT YEAR, WE ARE OF THE OPINION THAT NO MISTAKE HAS OCCURRED IN THE ORDER OF THE ITAT. 6 . ASSESSEE HAS RELIED ON THE CO - ORDINATE BENCH DECISION IN THE CASE OF A. RAM PRASAD VS. DCIT IN ITA NO. 261/H/2014 DT. 09 - 1 0 - 2015 (SUPRA), IN WHICH THE ISSUE WAS ENTIRELY DIFFERENT. LD. CIT(A) WHILE COMPUTING THE CAPITAL GAIN FOR THE IMPUGNED ASS ESSMENT YEAR ALSO ADJUDICATED THE COMPUTATION OF CAPITAL GAINS IN THE LATER ASSESSMENT YEARS AND DETERMINE D THE QUANTUM OF LONG TERM CAPITAL GAIN AS WELL AS THE SHORT TERM CAPITAL GAIN . WHEN IT WAS NOTICED THAT AO HAS NOT EVEN STARTED ANY PROCEEDINGS IN THOSE RESPECTIVE ASSESSMENT YEARS, THE ITAT HAS EXPRESSED OPINION THAT THE ORDER OF THE CIT(A) PRE - JUDGES THE ISSUE AND CIT(A) IS NOT EMPOWERED TO TRAVERSE BEYOND THE YEAR UNDER CONSIDERATION IN APPEAL. THE FACTS OF THAT CASE ARE ENTIRELY DIFFERENT FROM THE FACTS IN ASSESSEES CASE. THEREFORE, THE RELIANCE ON THE SAID JUDGMENT IS NOT CORRECT. 7 . IN THESE CIRCUMSTANCES, WE DO NOT SEE AN Y MERIT IN ASSESSEES CONTENTIONS RAISED IN THE APPLICATION, A CCORDINGLY, SAME IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 07 TH APRIL, 201 6 SD/ - SD/ - (P. MADHAVI DEVI) (B. RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMB ER HYDERABAD, DATED 07 TH APRIL , 2016 TNMM M. A. NO. 12 / HYD / 201 6 : - 5 - : COPY TO : 1. ALAKNANDA HYDRO POWER COMPANY LIMITED, 156 - 159, PAIGAH HOUSE, S.P. ROAD, SECUNDERABAD. 2 . DY. COMMISSIONER OF INCOME TAX , CIRCLE - 1(1) , HYDERABAD. 3 . CIT (APPEALS) - I I , HYDERABA D. 4. CIT - I , HYDERABAD. 5 . D.R. ITAT, HYDERABAD. 6 . GUARD FILE.