M/S GREEN STAR FERTILIZERS LIMITED, CHENNAI V. DCIT CC-2(1), CHENNAI

MA 74/CHNY/2023

AI Insights

The case involves M/s. Green Star Fertilizers Ltd., which filed a Miscellaneous Application against an earlier Tribunal order concerning the assessment year 2014-15. The application was based on alleged mistakes in the Tribunal's previous order regarding the capitalization of foreign exchange losses on ECB loans and the applicability of section 43A of the Income Tax Act. The Tribunal had previously directed the Commissioner of Income Tax (Appeals) to examine the issue in light of section 43A, which the assessee contested was not applicable. The Tribunal dismissed the application, stating that it did not find any mistake in the original order that warranted rectification under section 254(2).

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 130042 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 28 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 13-07-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 13-07-2023
• Assessment Year: 2014-2015
• Appeal Filed On: 15-03-2023
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Depreciation; Set aside
• Section: 147; 143(3); 14A; 254(2)

Judgement Text

Miscellaneous Application No.74/Chny/2023 (in ITA No.868/Chny/2020) िनधा रण वष /Assessment Year: 2014-15 M/s.Green Star Fertilizers Ltd., No.88, SPIC House, 7 th Floor, Mount Road, Guindy, Chennai-600 018. v. The Dy. Commissioner- of Income Tax, Corporate Circle-2(1), Chennai. [PAN: AADCG 9451 D] (अपीलाथ /Appellant) ( यथ /Respondent) अपीलाथ क ओर से/ Appellant by : Mr.Shrenik Chordia, CA यथ क ओर से /Respondent by : Mr.Sajit Kumar, JCIT सुनवाई क तारीख/Date of Hearing : 14.07.2023 घोषणा क तारीख /Date of Pronouncement : 14.07.2023 आदेश / O R D E R PER MANJUNATHA.G, ACCOUNTANT MEMBER: The assessee has filed present Miscellaneous Application u/s.254(2) of the Income Tax Act, 1961, against the order of the Tribunal in ITA No.868/Chny/2020 dated 31.01.2023, and pertains to assessment year 2014-15. 2. The assessee has narrated the facts of its case and mistakes stated to be apparent on record from the order of the Tribunal dated 31.01.2023, and relevant contents of Miscellaneous Application filed by the assessee for the AY 2014-15 in ITA No.868/Chny/2020, are reproduced as under: आयकर अपीलीय अिधकरण, ‘बी’ यायपीठ, चे ई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘B’ BENCH: CHENNAI ी वी. दुगा राव, माननीय ाियक सद एवं ी मंजूनाथा.जी, माननीय लेखा सद के सम BEFORE SHRI V. DURGA RAO, HON’BLE JUDICIAL MEMBER AND SHRI MANJUNATHA.G, HON’BLE ACCOUNTANT MEMBER MA No.74/Chny/2023 (in ITA No.868/Chny/2020) :: 2 :: 1. The appeal filed by revenue is directed against the order of the Commissioner of Income Tax (Appeals) - 6, Chennai dated 20.03.2020, for the Assessment Year 2014-15 which was disposed-off by the Hon'ble Income Tax Appellate Tribunal (hereinafter referred to as 'ITAT') vide Order dated 31.01.2023. 2. This application is being made to rectify the inadvertent mistake apparent on the face of the record that has crept in the order of the Hon'ble ITAT while deciding the issues before it. 3. The brief facts of the case are recorded in para 6 at Page 4 of the Order of Hon'ble ITAT dated 31.01.2023 which is reproduced as under: '6. The brief facts of the case are that, the assessee company is engaged in the business of manufacturing of fertilizers, filed its return of income for the assessment year 2014-15 on 25.11.2014, declaring a total income of Rs.10,45,230/-. The return has been subsequently revised on 24.08.2015 declaring the same income. The assessment has been completed u/s. 143(3) of the Income-tax Act, 1961 (hereinafter referred to as "the Act") on 30.12.2016 and determined total income of Rs.3,26,68,091/- by making various additions including disallowance u/s. 14A of the Act and set off of losses. The case has been subsequently reopened u/s. 147 of the Act, for the reasons recorded as per which income chargeable to tax had been escaped assessment on account of depreciation claimed on capitalization of foreign exchange losses towards ECB loans, obtained from holding company. In response to 148 notice, the assessee has filed its return of income on 19.12.2017, declaring total income of Rs.10,45,230/-. During the course of assessment proceedings, the Assessing Officer noticed that the assessee had incurred forex losses on ECB for the purpose of acquisition of assets in India and utilized for the purpose of capital projects. The assessee had capitalized forex losses on restatement of ECB loan and claimed depreciation in terms of section 43A of the Act. Therefore, the AO called upon the assessee to file necessary justifications for claim of depreciation. In response, the assessee submitted that since assets has been acquired in India out of ECB loans, provisions of section 43A of the Act has no application. The AO, after considering relevant submissions of the assessee and a/so taken note of provisions of section 43A opined that, if provision of section 43A of the Act is not applicable, then the assessee cannot capitalize forex loss on ECB and claim depreciation. Therefore, the AO rejected arguments of the assessee and disallowed depreciation claimed on forex loss capitalized and added back to the total income. .....' 4. It is an admitted fact that the non-applicability of the provisions of section 43A of the Act were neither disputed by the revenue nor by the petitioner before the Hon'ble ITAT, Hence, it is submitted that the provisions of section 43A of the Act are not applicable to the petitioner's case. 5. However, Hon'ble ITAT, while disposing the appeal, has issued a direction to Commissioner of Income Tax (Appeals) to decide the issue of capitalization of forex loss on restatement of ECB loan in light of provisions of section 43A of the Act. The relevant portion of para 15 at page 12 is reproduced as under: '15. .... ...... Therefore, in our considered view, the issue needs to be examined in light of provisions of section 43A of the Act alone. Since, the Id. CIT(A) has allowed appeal filed by the assessee on legal issue and has not discussed the issue on merits, we are of the considered view that the issue needs to be set aside to the file of the CIT(A) to decide on merits. Thus, we admit petition filed by the assessee in terms of Rule 27 of ITAT Rules, 1963 and direct the CIT(A) to decide the issue of capitalization of forex loss on restatement of ECB loan in light of provisions of section 43 A of the Act'. MA No.74/Chny/2023 (in ITA No.868/Chny/2020) :: 3 :: please be modified deleting the references to Section 43A of the Act and accordingly allow the Miscellaneous Petition and thus render justice. 7. No application u/s 254(2) other than the instant application has been filed against the order of the Hon'ble ITAT. 3. We have heard both the sides and considered the contents of Miscellaneous Application filed by the assessee in light of findings of the Tribunal in Para No.10-11 of its order dated 31.01.2023, and after careful examination of relevant facts, we find that the assessee has failed to make out a case of prima facie mistake apparent from the order of the Tribunal dated 31.01.2023, which can be rectified u/s.254(2) of the Income Tax Act, 1961. But, what was sought through present Miscellaneous Application filed by the assessee is to review the decision rendered by the Tribunal in the given facts and circumstances of the case, and thus, we are of the considered view that there is no merit in Miscellaneous Application filed by the assessee, and thus, same is stands dismissed. 4. In the result, the Miscellaneous Application filed by the assessee is dismissed. Order pronounced in the open Court on the 14 th day of July, 2023, in Chennai. Sd/- (वी. दुगा राव) (V. DURGA RAO) याियक सद य/JUDICIAL MEMBER Sd/- (मंजूनाथा.जी) (MANJUNATHA.G) लेखा सद य/ACCOUNTANT MEMBER चे ई/Chennai, दनांक/Dated: 14 th July, 2023. TLN MA No.74/Chny/2023 (in ITA No.868/Chny/2020) :: 4 :: आदेश क ितिलिप अ ेिषत/Copy to: 1. अपीलाथ /Appellant 3. आयकर आयु /CIT 5. गाड फाईल/GF 2. यथ /Respondent 4. िवभागीय ितिनिध/DR