M/s LK Power Corporation Limited , Bangalore V. Income Tax Officer, Ward 4(1)(1), Bangalore

MA 352/BANG/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 6136 (ITAT-BANGALORE)
• Duration Of Justice: 3 month(s) 1 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 25-01-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 24-10-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: DR P V PRADEEP KUMAR
• Assessee Lawyers: GANESH
• Keywords: Tax effect
• Section: 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER A ND SHRI LALIET KUMAR, JUDICIAL MEMBER M.P. NO. 352/BANG/2018 (IN ITA NO. 790 / BANG/201 7 ) ASSESSMENT YEAR : 20 1 2 - 1 3 M/S. L K POWER CORPORATION LTD., BREWERY HOUSE, KANAKAPURA ROAD, 7 TH MILE, BANGALORE 560 062. PAN: AAACL4951G VS. THE ITO, WARD 4 (1) (1), BANGALORE. APPELLANT RESPONDENT ASSESSEE BY : SHRI GANESH, ADVOCATE REVENUE BY : DR. P.V. PRADEEP KUMAR, ADDL. CIT (DR) DATE OF HEARING : 1 8 . 01 .201 9 DATE OF PRONOUNCEMENT : 25 . 01 .201 9 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER; THIS M.P. IS FILED BY THE ASSESSEEIN WHICH IT IS ST ATED THAT THERE ARE CERTAIN APPARENT MISTAKES WHICH SHOULD BE RECTIFIED U/S. 25 4 [2] OF IT ACT. 2. IN COURSE OF HEARING OF THE M.P., IT WAS SUBMITT ED BY LD. AR OF ASSESSEE THAT IN PARA 5.1 OF THE IMPUGNED TRIBUNAL ORDER, THIS AR GUMENT OF THE ASSESSEE WAS NOTED THAT THE ISSUE IN REVISION ARE TAX NEUTRA L AND THERE IS NO PREJUDICE TO THE INTERESTS OF THE REVENUE WARRANTING REVISION OF THE ASSESSMENT ORDER. HE ALSO DRAWN OUR ATTENTION TO GROUND NO. 8 RAISED BEFORE THE TRIBUNAL AND POINTED OUT THAT AS PER THIS GROUND, THIS IS THE CL AIM OF THE ASSESSEE THAT LD. PCIT ERRED IN NOT NOTICING THAT EVEN IN CASE, THE L OSS IS SET OFF AGAINST THE TOTAL INCOME, THE RESULTANT INCOME WILL BE ELIGIBLE FOR DEDUCTION U/S. 80IA AND ULTIMATE TAXABLE INCOME WILL STILL BE NIL AND THERE FORE, THIS IS REVENUE NEUTRAL. HE SUBMITTED THAT THIS ASPECT HAD NOT BEE N CONSIDERED BY THE TRIBUNAL WHILE DECIDING THE APPEAL IN PARA 6 OF THE IMPUGNED TRIBUNAL ORDER. HE SUBMITTED THAT THIS IS AN APPARENT MISTAKE WHICH SHOULD BE RECTIFIED. HE PLACED RELIANCE ON A TRIBUNAL ORDER RENDERED IN THE CASE OF PUNJAB WOOL SYNDICATE VS. ITO IN ITA NO. 559/CHD/2011 DATED 13. 01.2012. HE M.P. NO. 352/BANG/2018 (IN ITA NO. 790/BANG/2017) PAGE 2 OF 3 SUBMITTED A COPY OF THIS TRIBUNAL ORDER AND DRAWN O UR ATTENTION TO PARA NO. 12 OF THIS TRIBUNAL ORDER AND POINTED OUT THAT IN T HIS CASE, IT WAS HELD BY THE TRIBUNAL THAT WHERE THE TAX EFFECT BECAUSE OF AN OR DER PASSED BY THE AO IS NIL, SUCH ORDER EVEN IF ERRONEOUS BEING NOT PREJUDI CIAL TO THE INTEREST OF REVENUE, IS NOT OPEN TO REVISION UNDER SECTION 263 OF IT ACT. HE SUBMITTED THAT IN THE PRESENT CASE ALSO, EVEN IF THE BROUGHT FORWARD LOSS IS SET OFF AGAINST INCOME AND DEDUCTION U/S. 80IA IS ALLOWED O N THE REDUCED INCOME, THEN ALSO, THE TAXABLE INCOME WILL BE NIL AND HENCE , IN THE PRESENT CASE ALSO, THE LD. CIT CANNOT INVOKE HIS JURISDICTION FO R REVISION OF THIS ASSESSMENT ORDER U/S. 263 OF IT ACT. AT THIS JUNCTURE, THE BE NCH POINTED OUT THAT ALLOWING OF DEDUCTION U/S. 80IA OF IT ACT WITHOUT FIRST SETT ING OFF THE BROUGHT FORWARD LOSS RESULTS INTO CARRY FORWARD OF HIGHER AMOUNT OF BROUGHT FORWARD LOSS AND THIS ITSELF IS PREJUDICIAL TO THE INTEREST OF REVEN UE. THE BENCH WANTED TO KNOW AS TO WHETHER IN THE CASE OF PUNJAB WOOL SYNDI CATE VS. ITO (SUPRA) ALSO, THERE WAS ANY ISSUE REGARDING HIGHER AMOUNT O F CARRY FORWARD OF BROUGHT FORWARD LOSSES. IN REPLY, THE LD. AR OF AS SESSEE HAD NOTHING TO SAY AND HE COULD NOT SHOW THAT IN THE CASE OF PUNJAB WO OL SYNDICATE VS. ITO (SUPRA) ALSO, THERE WAS ANY ISSUE IN RESPECT OF CAR RY FORWARD OF BROUGHT FORWARD LOSSES OF HIGHER AMOUNT. THE LD. DR OF REVE NUE SUBMITTED THAT THERE IS NO APPARENT MISTAKE IN THE IMPUGNED TRIBUNAL ORD ER. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FI ND THAT THE ARGUMENTS OF THE ASSESSEE IS VERY MUCH NOTED BY THE TRIBUNAL IN PARA 5.1 OF THE IMPUGNED TRIBUNAL ORDER THAT THE POWER OF REVISION CANNOT BE EXERCISED BY CIT U/S. 263 OF IT ACT IN CASE WHERE IT IS TAX NEUT RAL. THEREAFTER, THE ISSUE WAS DECIDED AS PER PARA 3 OF THE TRIBUNAL ORDER AND HENCE, IT IS NOT CORRECT TO SAY THAT THIS ASPECT WAS NOT CONSIDERED BY THE T RIBUNAL. THIS IS TRUE THAT NO DISCUSSION IS MADE ON THIS ASPECT IN PARA NO. 6 OF THE IMPUGNED TRIBUNAL ORDER AS PER WHICH THE APPEAL OF THE ASSESSEE WAS D ECIDED BUT EVEN IF WE CONSIDER THIS ARGUMENT, WE FIND THAT IN THE FACTS O F PRESENT CASE, THE POWER EXERCISED BY CIT U/S. 263 IS PROPER BECAUSE ALLOWIN G OF DEDUCTION U/S. 80IA WITHOUT FIRST SETTING OFF OF BROUGHT FORWARD LOSSES RESULTS INTO CARRY FORWARD OF HIGHER AMOUNT OF BROUGHT FORWARD LOSSES AND HENCE, THIS ITSELF IS PREJUDICIAL TO THE INTEREST OF REVENUE BECAUSE IN SPITE OF THIS FACT THAT THE ULTIMATE M.P. NO. 352/BANG/2018 (IN ITA NO. 790/BANG/2017) PAGE 3 OF 3 TAXABLE INCOME WILL BE NIL. HENCE, IT CANNOT BE SAI D THAT THE ASSESSMENT ORDER IS NOT PREJUDICIAL IN THE INTEREST OF REVENUE . REGARDING THE TRIBUNAL ORDER CITED BY LD. AR OF ASSESSEE HAVING BEEN RENDE RED IN THE CASE OF PUNJAB WOOL SYNDICATE VS. ITO (SUPRA), WE FIND THAT IN THAT CASE, THERE WAS NO ISSUE IN RESPECT OF SET OFF OF BROUGHT FORWARD L OSSES. IN THAT CASE, THE DISPUTE WAS REGARDING ADJUSTMENT ON ACCOUNT OF EXCI SE DUTY IN THE VALUE OF OPENING STOCK AND CLOSING STOCK. THIS WAS THE CLAI M OF THE ASSESSEE IN THAT CASE THAT IN VIEW OF ANNEXURE 2 OF THE AUDIT REPO RT IN WHICH THE DETAILS OF ADJUSTMENT TO BE MADE U/S. 145A OF IT ACT ARE PROVI DED AND THE EFFECT IS NIL. HENCE IN OUR CONSIDERED OPINION, THIS TRIBUNAL ORDE R IS NOT RELEVANT IN THE PRESENT CASE BECAUSE IN THE PRESENT CASE, THE AO HA S ALLOWED CARRY FORWARD OF HIGHER AMOUNT OF BROUGHT FORWARD LOSSES BECAUSE THE SAME WERE NOT SET OFF BEFORE ALLOWING DEDUCTION U/S. 80IA OF IT ACT. 4. IN VIEW OF ABOVE DISCUSSION, WE FIND NO MISTAKE IN THE IMPUGNED TRIBUNAL ORDER. 5. IN THE RESULT, THE M.P. FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENT IONED ON THE CAPTION PAGE. SD/- SD/- (LALIET KUMAR) (ARUN KUMAR GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED, THE 25 TH JANUARY, 2019. /MS/ COPY TO: 1. APP ELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.