The Deputy Commissioner of Income Tax Circle-7(1)(1), Bangalore V. M/s Udupi Power Corporation Limited , Bangalore

MA 156/BANG/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 0482 (ITAT-BANGALORE)
• Duration Of Justice: 6 month(s) 14 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 19-06-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 05-12-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K N DHANDAPANI
• Assessee Lawyers: N O N E
• Section: 201; 254(2)

Judgement Text

M.P. NO.156/BANG/2019 UDUPI POWER CORPORATION LTD., BANGALORE IN THE INCOME TAX APPELLATE TRIBUNAL CBENCH: BANGALORE BEFORE SHRI N.V. VASUDEVAN, VICE PRESIDENTAND SHRI B.R. BASKARAN, ACCOUTANT MEMBER M.P. NO.156/BANG/2019 ARISING OUT OF (ITA NO.1202/BANG/2017) ASSESSMENTYEAR: 2012-13 THE DEPUTY COMMISSIONER OF INCOME-TAX CIRCLE-7(1)(1) BANGALORE VS. M/S. UDUPI POWER CORPORATION LTD. NO.34 FIRST FLOOR, LOTUS DEVARAJA URS ROAD RACE COURSE BENGALURU-560001 KARNATAKA APPELLANT RESPONDENT APPELLANT BY : SHRI K.N. DHANDAPANI, D.R. RESPONDENT BY : N O N E DATE OF HEARING : 19.06.2020 DATE OF PRONOUNCEMENT : 19.06.2020 O R D E R PER B.R. BASKARAN, ACCOUNTANT MEMBER: THE REVENUE HAS FILED THIS MISCELLANEOUS APPLICATI ON SEEKING RECTIFICATION OF THE ORDER DATED 26.6.2019 PASSED IN THE IMPUGNED CASE FOR ASSESSMENT YEAR 2012-13. 2. NONE APPEARED ON BEHALF OF THE ASSESSEE. WE NOT ICE FROM THE RECORD THAT THE NOTICES ISSUED HAVE BEEN M.P. NO.156/BANG/2019 UDUPI POWER CORPORATION LTD., BANGALORE PAGE 2 OF 6 RETURNED BACK WITH THE NOTING LEFT. ON ONE OCCAS ION, THE NOTICE WAS DIRECTED TO BE SERVED THROUGH D.R. SINC E THE CASE WAS POSTED FOR HEARING SEVERAL TIMES, WE PROCE ED TO DISPOSE OF THIS MISCELLANEOUS APPLICATION EX-PARTE, WITHOUT PRESENCE OF THE ASSESSEE. 3. THE MISCELLANEOUS APPLICATION FILED BY THE REV ENUE READS AS UNDER:- 1. THE HONBLE ITAT, VIDE ITS ORDER IN ITA NO.1202/BAN G/2017 DATED 26.6.2019 HAS REMANDED BACK THE ISSUE OF DISALLOWANCE OF CLAIM OF MARKED TO MARKET LOSSES ON FOREIGN EXCHANGE DERIVATIVE CONTRACTS TO THE FILE OF THE A. O. FOR FRESH EXAMINATION BY RELYING ON THE DECISION OF THE COORD INATE BENCH OF THE ITAT IN THE CASE OF QUALITY ENGINEERIN G & SOFTWARE TECHNOLOGIES PVT. LTD. 2. IT MAY BE OBSERVED THAT THE HONBLE TRIBUNAL HAS NO T APPRECIATED THE FACT THAT THE FACTS OF THIS CASE AR E ENTIRELY DIFFERENT FROM THE PRESENT CASE AND THE ISSUE IS CO VERED IN FAVOUR OF THE REVENUE BY THE DECISION OF ITAT BANGA LORE BENCH IN THE CASE OF SHANKARA INFRASTRUCTURE MATERI ALS LTD. (2015) 53 TAXMANN.COM 429 (BANG-TRIB) AND BY ITAT MUMBAI BENCH IN THE CASE OF S VINOD KUMAR DIAMONDS PVT. LTD. (2013) 35 TAXMANN.COM 337 (MUM-TRIB.) 3. IT IS PRAYED THAT THE SAME MAY BE CONSIDERED AND RE CTIFIED. 4. THE LD. D.R. SUBMITTED THAT THE ASSESSEE HAD CLAIMED LOSS ARISING ON REINSTATEMENT OF OUTSTANDIN G FORWARD CONTRACTS ON MARKED TO MARKET BASIS AS AT T HE M.P. NO.156/BANG/2019 UDUPI POWER CORPORATION LTD., BANGALORE PAGE 3 OF 6 YEAREND AS DEDUCTION. THE SAID CLAIM WAS DISALLOWE D BY THE A.O. FOLLOWING THE CBDT INSTRUCTION NO.3 OF 201 0 DATED 23.3.2010. THE LD. CIT(A) ALSO CONFIRMED THE SAID DISALLOWANCE. THE LD. D.R. FURTHER SUBMITTED THAT THE TRIBUNAL HAS, IN PRINCIPLE, HELD THAT THE CLAIM OF THE ASSESSEE IS ALLOWABLE. IN THIS REGARD, THE TRIBUNA L HAS FOLLOWED THE DECISION RENDERED BY THE CO-ORDINATE B ENCH IN THE CASE OF QUALITY ENGINEERING AND SOFTWARE TECHNO LOGIES PVT. LTD. VS. DEPUTY COMMISSIONER OF INCOME-TAX (20 14) 52 TAXMANN.COM 515. 5. THE LD. D.R. SUBMITTED THAT AN IDENTICAL ISSUE H AS BEEN DECIDED IN FAVOUR OF THE REVENUE BY THE COORDI NATE BENCH IN THE CASE OF SHANKARA INFRASTRUCTURE MATERI ALS LTD. (2015) 53 TAXMANN.COM 429 (BANG-TRIB.) AND BY ITAT MUMBAI BENCH IN THE CASE OF S VINOD KUMAR DIAMONDS PVT. LTD. (2013) TAXMANN.COM 337 (MUM TRIB). THE LD . D.R. SUBMITTED THAT FACTS PREVAILING IN THE CASE RE LIED UPON BY THE TRIBUNAL ARE DIFFERENT AND HENCE THE TR IBUNAL M.P. NO.156/BANG/2019 UDUPI POWER CORPORATION LTD., BANGALORE PAGE 4 OF 6 SHOULD HAVE FOLLOWED THE ABOVE SAID DECISIONS. HE SUBMITTED NON-FOLLOWING OF ABOVE DECISIONS HAS RESU LTED IN A MISTAKE APPARENT FROM RECORD. ACCORDINGLY, HE PRAYED FOR RECTIFICATION OF THE MISTAKE. 6. WE HEARD LD. D.R. AND PERUSED THE RECORD. IT IS A SETTLED PRINCIPLE OF LAW THAT THE TRIBUNAL IS EMPOW ERED TO RECTIFY MISTAKES APPARENT FROM RECORD UNDER THE POW ER GIVEN U/S 254(2) OF THE ACT, I.E., THE TRIBUNAL IS NOT EMPOWERED TO REVIEW ITS ORDER UNDER THE GARB OF RECTIFICATION. THE ADMITTED FACT IS THAT THE TRIBU NAL HAS FOLLOWED A COORDINATE BENCH DECISION RENDERED IN TH E CASE OF QUALITY ENGINEERING & SOFTWARE TECHNOLOGIES PVT. LTD (SUPRA) IN HOLDING THAT THE MARKED TO MARKET LOSS A RISING ON RESTATEMENT OF FOREIGN EXCHANGE FORWARD CONTRACT S AS AT THE YEAR END IS ALLOWABLE AS DEDUCTION. HOWEVER , ON BEING CONVINCED WITH THE CONTENTIONS OF THE LD. D.R . THAT THE ASSESSEE SHOULD ESTABLISH NEXUS BETWEEN THE OUTSTANDING FORWARD CONTRACTS AND IMPORT/EXPORT ACTIVITIES OF THE ASSESSEE, THE ISSUE WAS RESTORED TO THE FILE M.P. NO.156/BANG/2019 UDUPI POWER CORPORATION LTD., BANGALORE PAGE 5 OF 6 OF THE A.O. FOR EXAMINING THE NEXUS OF THE OUTSTAND ING FORWARD CONTRACTS WITH THE BUSINESS ACTIVITIES OF T HE ASSESSEE. THUS, IT CAN BE NOTICED THAT THE TRIBUNA L HAS TAKEN A PARTICULAR VIEW BY FOLLOWING A DECISION REN DERED BY COORDINATE BENCH. THE CLAIM OF THE REVENUE THA T THE TRIBUNAL SHOULD HAVE FOLLOWED SOME OTHER DECISIONS WOULD RESULT IN REVIEW OF THE ORDER. ACCORDINGLY WE ARE OF THE VIEW THAT THE PRESENT PETITION FILED BY THE REVENUE IS BEYOND THE SCOPE OF POWERS GRANTED TO THE TRIBUNAL U/S 254(2) OF THE INCOME-TAX ACT,1961 ['THE ACT' FOR SH ORT]. ACCORDINGLY, WE DO NOT FIND MERIT IN THE PETITION F ILED BY THE REVENUE. 7. IN THE RESULT, THE MISCELLANEOUS APPLICATION OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 19.06.2020 SD/- (N.V. VASUDEVAN) VICE PRESIDENT SD/- (B.R. BASKARAN) ACCOUNTANT MEMBER BANGALORE, DATED 19 TH JUNE, 2020. VG/SPS M.P. NO.156/BANG/2019 UDUPI POWER CORPORATION LTD., BANGALORE PAGE 6 OF 6 COPY TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASST. REGISTRAR, ITAT, BANGALORE.