ACIT, CHENNAI v. M/s. Samalpatti Power Co. (P) Ltd., CHENNAI

ITA 382/CHNY/2011 | 2006-2007
Pronouncement Date: 30-07-2012 | Result: Dismissed

Appeal Details

RSA Number 38221714 RSA 2011
Assessee PAN AADCS1893D
Bench Chennai
Appeal Number ITA 382/CHNY/2011
Duration Of Justice 1 year(s) 4 month(s) 28 day(s)
Appellant ACIT, CHENNAI
Respondent M/s. Samalpatti Power Co. (P) Ltd., CHENNAI
Appeal Type Income Tax Appeal
Pronouncement Date 30-07-2012
Appeal Filed By Department
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 30-07-2012
Date Of Final Hearing 19-07-2012
Next Hearing Date 19-07-2012
Assessment Year 2006-2007
Appeal Filed On 02-03-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH CHENNAI BEFORE DR. O. K. NARAYANAN VICE PRESIDENT AND SHRI V. DURGA RAO JUDICIAL MEMBER .. ITA NOS. 381 382 & 383/MDS/2011 ASSESSMENT YEARS : 2003-04 2006-07 & 2007-08 THE ASSISTANT COMMISSIONER OF INCOME TAX COMPANY CIRCLE- VI(1) CHENNAI. V. M/S. SAMALPATTI POWER CO. (P) LTD. SREYAS VIRAT NO. 14 III CROSS ROAD R.A. PURAM CHENNAI-600 028. (PAN : AADCS1893D) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SHAJI P. JACOB ADDL. CIT RESPONDENT BY : DR. MRS.ANITA SUMANTH ADVOCATE DATE OF HEARING : 19.07.2012 DATE OF PRONOUNCEMENT : 30. 07.2012 O R D E R PER V. DURGA RAO JUDICIAL MEMBER : THESE THREE APPEALS BY THE REVENUE ARE DI RECTED AGAINST THE ORDERS ARE DIRECTED AGAINST THE COMMON ORDER OF THE CIT(APPEALS)-V CHENNAI DATED 25-11-2010 FOR THE AS SESSMENT YEARS 2003-04 2006-07 AND 2007-08. AS COMMON ISSU ES ARE ITA NO.381-383 /MDS/2011 2 INVOLVED IN THESE APPEALS THEY WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER. ITA NO. 381/MDS/2011: 2. GROUND NO.1 RAISED IN ALL THE APPEALS IS GENERAL IN NATURE AND REQUIRES NO ADJUDICATION. 3. GROUND NOS. 2.1 TO 4.2 RELATE TO THE ISSUE THAT T HE AO HAD OBSERVED THAT THE ASSESSEE COMPANY HAD INFLATED THE O & M EXPENDITURE TO THE EXTENT OF AMOUNT RECEIVED AS DEP OSIT TOWARDS MAJOR MAINTENANCE EXPENDITURE AND HAD MADE ADDITION IN THIS REGARD FOR THE PURPOSE OF COMPUTATION OF INCOME UND ER NORMAL PROVISIONS OF THE ACT. THIS ISSUE IS SQUARELY COV ERED BY THE DECISION OF THE TRIBUNAL IN THE ASSESSEES CASE IN ITA NOS. 894 AND 1657/MDS/2009 DATED 24-05-2011 WHEREIN THE TRIB UNAL HAS HELD AS UNDER : 15. WE HAVE GONE THROUGH THE ENTIRE RECORDS INCLUDING THE PLANT MANUFACTURERS MANUAL FOR PERIODIC MAINTENANCE; EXTRACT OF THE TRAA; EXTRACTS OF THE FINANCIAL STATEMENT OF THE COMPANY AND THE O&M CONTRACTOR; PAYMENT DETAILS OF MME DEPOSIT BACK TO THE O&M CONTRACTOR; AND LETTER FROM THE O& M CONTRACTOR ACKNOWLEDGING THE RECEIPT OF THE DEPOSIT IT HELD WITH THE COMPANY. UNDER THESE CIRCUMSTANCES ITA NO.381-383 /MDS/2011 3 WE FIND NO FORCE IN THE REVENUES GROUNDS HENCE GROUND NOS. 4.1 AND 4.2 STAND DISMISSED. RESPECTFULLY FOLLOWING THE DECISION OF THE TRIBUNAL IN THE ASSESSEES OWN CASE IN ITA NOS. 894 & 1657/MDS/2009 DATED24-05-2011 THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 4. GROUNDS 5.1 TO 5.3 RELATE TO LONG TERM CAPITA L LOSS. THE ASSESSEE COMPANY IN 1996 HAD PURCHASED LANDS AT SAM ALPATTI VILLAGE MEASURING 10.81 ACRES AND 16.66 ACRES TO CO NSTRUCT ITS POWER PLANT. LATER ON DUE TO CONSTRAINTS LIKE INAB ILITY TO IMPLEMENT THE RAILWAY SIDING ARRANGEMENT AND OTHER ENVIRONMENTAL REASONS INCLUDING NON-AVAILABILITY OF WATER THE ASSESSEE WAS OFFERED ALTERNATE LAND IN SIPCOT. DUR ING THE PERIOD THE ASSESSEE SOLD A PART OF THE LAND PURCHA SED ADMEASURING 10.81 ACRES FOR ` 9.05 LAKHS AND INCURRED A LONG TERM CAPITAL LOSS OF ` 15.76 LAKHS IN SUCH TRANSACTION. THE AO HELD THAT THE CONCERNED AGRICULTURAL LAND NOT BEING A CAPITAL ASSET LOSS ON THE SALE OF THE SAME WOULD NOT RESUL T IN ANY LONG TERM CAPITAL LOSS AND NO SUCH LOSS WOULD BE PERMITT ED TO BE CARRIED FORWARD FOR PURPOSES OF SET OFF IN FUTURE Y EARS. ON ITA NO.381-383 /MDS/2011 4 APPEAL THE LEARNED CIT(A) HELD THAT AT THE TIME OF PURCHASE BY THE ASSESSEE THE CONCERNED LAND MAY HAVE BEEN AGRIC ULTURAL AS IS INDICATED BY THE PRESENCE OF SOME COCONUT AND PA LMYRA TREES. IT WAS CERTAINLY CLASSIFIED AS AGRICULTURAL LAND IN THE LAND REVENUE RECORDS. HOWEVER THE ASSESSEE COMPANY PUR CHASED THIS LAND NOT WITH ANY INTENTION TO USE IT FOR CARR YING OUT ANY AGRICULTURAL OPERATIONS BUT TO SET UP A POWER PLAN T. RIGHT FROM ITS ACQUISITION IN 1996 UPTO THE DATE OF ITS SALE NO AGRICULTURAL OPERATIONS WERE CARRIED OUT ON THIS LAND BY THE ASS ESSEE COMPANY OR BY ANY PERSON ON BEHALF OF THE ASSESSEE COMPANY. ON THESE FACTS THE LEARNED CIT(A) HELD THAT ON THE DATE OF SALE THE CONCERNED LAND CANNOT BE CLASSIFIED AS AN AGRIC ULTURAL LAND. IT WAS A BUSINESS ASSET HELD AS SUCH IN THE BOOKS O F THE ASSESSEE COMPANY. LOSS ON SALE OF SUCH LAND WOULD CONSTITUTE A LONG TERM CAPITAL LOSS AND WOULD BE ELIGIBLE FOR CARRY FORWARD FOR SET OFF TO FUTURE YEARS. THE LEARNED CIT(A) AC CORDINGLY ALLOWED THE APPEAL OF THE ASSESSEE. 5. THE REVENUE BEING AGGRIEVED IS IN APPEAL BEFO RE US. WE FIND THAT THIS ISSUE IS SQUARELY COVERED BY THE DEC ISION OF THE TRIBUNAL IN ITA NOS. 894 & 1657/MDS/2009 DATED 24-0 5-2011 ITA NO.381-383 /MDS/2011 5 WHEREIN THE CO-ORDINATE BENCH OF THIS TRIBUNAL HAS HELD AS UNDER : 17. WE HAVE GONE THROUGH THE ENTIRE RECORDS INCLU DING THE LETTER DATED 14.3.1997 FROM TNEB MEMORANDUM OF UNDERSTANDING BETWEEN THE PROMOTER AND THE TNEB DATE D 18.2.1995; AND SHAREHOLDERS AGREEMENT DATED 26.2.19 99. WE HAVE ALSO GONE THROUGH THE RELEVANT PROVISIONS A ND PRECEDENTS ON THE ISSUE. SECTION 2(14) EXCLUDES AGRICULTURAL LAND FROM THE PURVIEW OF CAPITAL ASSET . THE DEFINITION AVAILABLE FURTHER ELABORATES ON THE LOCA TION OF SUCH LAND BUT THE SUBJECT MATTER OF SUCH EXCLUSION REMAINS AGRICULTURAL LAND. THIS ISSUE HAS BEEN D EALT BY THE HONBLE APEX COURT IN THE CASE OF CWT VS OFFICE R-IN- CHARGE (COURT OF WARDS) 105 ITR 133). RELIANCE WAS ALSO PLACED ON THE DECISION OF HONBLE MADRAS HIGH COURT RENDERED IN THE CASE OF M.S. SRINIVASA NAICKER AND OTHERS VS. ITO (292 ITR 481) IN WHICH IT HAS BEEN HELD AS UNDER: HELD THAT IT WAS AN ADMITTED CASE THAT TILL THE DATE OF SALE AGRICULTURAL OPERATIONS WERE CARRIED ON BY TH E ASSESSEE. THE LAND WAS PUT TO USE ONLY FOR AGRICUL TURAL PURPOSES AND NOT FOR ANYTHING ELSE. THE LANDS IN Q UESTION WERE ALSO REGISTERED AS AGRICULTURAL LANDS AND ASSE SSED TO LAND REVENUE. THE FACT THAT THE PURCHASER HAD PUT IT TO USE FOR A TOTALLY DIFFERENT PURPOSE FROM THAT OF TH E ASSESSEE OUGHT NOT TO HAVE WEIGHED WITH THE TAX AUTHORITY. CAPITAL GAIN TAX COULD NOT BE LEVIED. ITA NO.381-383 /MDS/2011 6 HELD ALSO THAT THE TRIBUNAL HELD THAT ADDIT ION WAS MADE TOWARDS GROSS PROFITS ON THE GROUND THAT THE PROFI T MARGIN ADOPTED BY THE ASSESSEE FOR A HIGH QUALITY OF KAPAS WAS MUCH LOWER IN POINT OF RETURN COMPARED TO WHAT HAD BEEN RETURNED ON LESSER QUALITY OF KAPAS. IN THE A BSENCE OF ANY MATERIAL TO SUBSTANTIATE THE CLAIM OF THE AS SESSEE THAT THE ADDITION OF GROSS PROFIT WAS NOT SUPPORTED BY ANY EVIDENCE THE ADDITION WAS JUSTIFIED. 18. IT IS TRUE THAT AT THE TIME OF PURCHASE OF THIS LAND THE CONCERNED LAND MAY HAVE BEEN AGRICULTURAL LAND AS I S INDICATED BY THE PRESENCE OF SOME COCONUT AND PALMY RAH TREES. IT WAS CERTAINLY CLASSIFIED AS AGRICULTURAL LAND IN THE LAND REVENUE RECORDS. HOWEVER THE ASSESSEE-COMPANY PURCHASED THIS LAND WITH NO INTENTION TO USE IT FOR CARRYING OUT ANY AGRICULTURAL OPERATIONS BUT TO SET UP A PO WER PLANT. RIGHT FROM ITS ACQUISITION IN 1996 AND UPTO THE DATE OF ITS SALE NO AGRICULTURAL OPERATIONS WERE CARRIE D OUT ON THIS LAND BY THE ASSESSEE OR BY ANY PERSON ON BEHAL F OF THE ASSESSEE-COMPANY. CONSEQUENTLY AS ON THE DATE OF SALE THE CONCERNED LAND CANNOT BE TREATED AS AN AGRICULTURAL LAND. IT WAS DEFINITELY A BUSINESS AS SET HELD AS SUCH IN THE BOOKS OF THE ASSESSEE-COMPANY HENCE LOSS ON SALE OF SUCH LAND WOULD CONSTITUTE A LONG TERM C APITAL LOSS AND WOULD BE ELIGIBLE FOR CARRY FORWARD FOR SE T OFF TO FUTURE YEARS. HENCE THE GROUNDS RAISED BY THE REV ENUE CANNOT BE ALLOWED. \ ITA NO.381-383 /MDS/2011 7 THE REVENUE HAS NOT BEEN ABLE TO SHOW THAT THE ABOVE DECISION OF THE TRIBUNAL HAS EITHER BEEN REVERSED OR MODIFIE D BY THE HONBLE JURISDICTIONAL HIGH COURT. THE LEARNED DR FAIRLY ACCEPTED THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE. IN SUCH CIRCUMSTANCES IN VIEW OF THE ABOVE FINDING OF THE TRIBUNAL THE REVENUES APPEAL ON THIS ISSUE IS DISMISSED. 6. THE NEXT GROUND OF APPEAL COVERED BY GROUN D NOS. 6.1 AND 6.2 RELATES TO THE LEVY OF INTEREST U/S 234D OF THE INCOME TAX ACT 1961. THE AO WHILE PASSING THE ASSESSMENT ORDER L;EVIED INTEREST U/S 234D OF THE ACT. THE ASSESSEE CONTENDED THAT SECTION 234D WAS INSERTED IN THE ACT VIDE FINA NCE ACT 2003 W.E.F. 01-06-2003. THE LEARNED CIT(A) ALLOWED THE ASSESSEES APPEAL ON THE GROUND THAT THE PROVISIONS OF SEC. 23 4D CAME INTO FORCE IN JUNE 2003 AND CANNOT HAVE THE APPLICATION IN RESPECT OF THE ASSESSMENT YEAR 2003-04. THE REVENUE IS AGGRIE VED AND HAS COME UP IN APPEAL BEFORE THE TRIBUNAL. THE LEA RNED DR RELIED ON THE DECISION OF THE HONBLE JURISDICTIONA L HIGH COURT RENDERED IN THE CASE OF CIT V. INFRASTRUCTURE DEVEL OPMENT FINANCE CO. LTD. (340 ITR 580) (MAD). THE LEARNED COUNSEL FOR THE ASSESSEE ON THE OTHER HAND SUPPORTED THE ORDER OF THE LEARNED CIT(A). ITA NO.381-383 /MDS/2011 8 7. WE FIND THAT THIS ISSUE HAS BEEN DECIDED BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT V. INF RASTRUCTURE DEVELOPMENT FINANCE CO. LTD. (340 ITR 580) (MAD) WH EREIN IT HAS BEEN HELD THAT SINCE THE REGULAR ASSESSMENT HAD BEEN COMPLETED ON MARCH 30 2004 AND SECTION 234D CAME INTO OPERATION ON AND FROM JUNE 1 2003 WHICH WAS PRIOR TO THE COMPLETION OF THE REGULAR ASSESSMENT THE ASSESSEE WAS LIABLE TO PAY INTEREST ON THE EXCESS R EFUND AMOUNT RECEIVED AS CONTEMPLATED UNDER SECTION 234D OF THE ACT. IT IS NOT THE YEAR OF ASSESSMENT THAT FAL LS FOR CONSIDERATION IN SUCH CIRCUMSTANCES BUT THE DATE O N WHICH THE REGULAR ASSESSMENT ORDER HAS BEEN PASSED. RESPECTFULLY FOLLOWING THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT THIS GROUND OF THE REVENUE IS ALLOWED. 8. IN THE CIRCUMSTANCES THE APPEAL IN ITA NO. 381/MDS/2011 IS PARTLY ALLOWED. 9. ITA NO. 382/MDS/2011: GROUND NO.1 IS GENERAL IN NATURE AND REQUIRES NO ADJUDICATION. 10. GROUNDS 2.1 TO 4.2 RELATE TO THE CIT(A)S ACTIO N IN ALLOWING THE ASSESSEES APPEAL AGAINST THE DISALLOWANCE MADE BY THE AO IN RESPECT OF INFLATED O&M EXPENDITURE. WE HAVE AL READY DEALT ITA NO.381-383 /MDS/2011 9 WITH THIS ISSUE IN PARA NO. 3 ABOVE. FOR THE DETAI LED REASONS STATED THEREIN THE GROUND RAISED BY THE REVENUE IS DISMISSED. 11. GROUND NOS. 5.1 AND 5.2 RAISED BY THE REVE NUE RELATE TO THE CIT(A)S ALLOWANCE OF THE ASSESSEES APPEAL AGA INST THE AOS MAKING ADDITION OF START UP FUEL COST WHICH THE ASS ESSEE HAD BILLED AGAINST TNEB BUT DID NOT INCLUDE IN RECEIPTS. THE SAME ISSUE HAS BEEN ELABORATELY DEALT WITH BY THE TRIBUN AL IN THE ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2005-06 AND VIDE ORDER IN ITA NOS. 894 & 1657/MDS/2009 DATED 24-05- 2011 THE TRIBUNAL HELD AS UNDER : 12. GROUND NO. 3 (3.1 & 3.2) RELATES TO CLAIM OF THE ASSESSEE REGARDING START UP FUEL COSTS FROM TNEB BUT HAS NOT RECOGNIZED THE SAME IN ITS ACCOUNTS SINCE TNEB HAS TAKEN A STAND THAT START UP FUEL COST IS NOT PAYABLE. ACCORDING TO TNEB IT HAS ISSUED INSTRUCTIONS ONLY TO REDUCE THE STATION LOAD BUT NOT SHUT DOWN. THE CASE OF THE REVENUE IS THAT SINCE TNEB HAS REFUSED TO ACCEPT THE CLAIMS MADE BY THE COMPANY TOWARDS START UP FUEL THE COMPANY HAS NOT RECOGNIZED THE REVENUE ON THE BASIS OF THE REAL INCOME CONCEPT. IT WAS FURTHER ARGUED THAT TNEB HAS CONFIRMED THAT IT HAS NOT PAID ANY AMOUNT TO THE COMPANY TOWARDS THE CLAIM FOR START UP FUEL COST FROM INCEPTION VIDE IT S ITA NO.381-383 /MDS/2011 10 LETTER DATED 17.4.2003. ON THE OTHER HAND THE LD. AR HAS RELIED ON THE APPELLATE FINDING AND THE SUM AND SUBSTANCE OF THIS IS THAT EVEN THOUGH THE ASSESSEE HAS BEEN FOLLOWING THE MERCANTILE SYSTEM OF ACCOUNTING WHICH BRINGS INTO CREDIT WHAT IS DUE IMMEDIATELY IT BECOMES DUE AND THEREFORE BEFORE IT IS ACTUALLY RECEIVED AND IT BRINGS INTO DEBIT EXPENDITURE THE AMOUNT FOR WHICH A LEGAL LIABILITY HAS BEEN INCURRED BEFORE IT IS ACTUALLY DISBURSED. HOWEVER ON THE FACTS OF THE PRESENT THE CLAIM WHICH HAS BEEN MADE TOWARDS START UP FUEL COST HAS NOT BEEN ACCEPTED BY THE TNEB AND IN SUCH CIRCUMSTANCES THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF CIT VS. CHAMANLAL MANGALDAS AND COMPANY (39 ITR 8) AND THE CASE OF GODHARA ELECTRICITY COMPANY LTD. VS. CIT (225 ITR 746) AND THAT OF HONBLE JURISDICTIONAL HIGH COURT IN TH E CASE OF CIT VS. PIONEER ENGINEERING SYNDICATE (234 ITR 503) ARE RELEVANT. THE GIST OF RATIO DECIDENDI OF THESE CASES IS THAT SINCE THE CLAIM MADE BY THE ASSESSEE AGAINST THE GOVERNMENT HAS NOT BEEN ACCEPTED BY THE LATTER THERE WAS NO QUESTION OF THE SAID AMOUNT HAVING ACCRUED TO THE ASSESSEE. AFTER CONSIDERING THE RIVAL SUBMISSIONS WE ARE ALSO OF THE OPINION THAT THE CONCEPT OF ACCRUAL IS BASED ON THE ACQUISITION OF AN ENFORCEABLE RIGHT TO RECEIVE. IF SUCH RIGHT TO RECEIVE IS SUBJECT TO CERTAIN CONTINGENCIES THEN ITA NO.381-383 /MDS/2011 11 ACCRUAL CANNOT BE SAID TO HAVE TAKEN PLACE. IN SUCH CIRCUMSTANCES THE PAYER MUST ALSO ACCEPT THE LIABILITY FALLING WHICH AN ENFORCEABLE RIGHT T O RECEIVE DOES NOT ARISE AS PER LAW. THUS IF A RECEIPT IS UNCERTAIN AND IS SUBJECT TO THE OUTCOME OF THE EVENTS IN FUTURE IT CANNOT BE TREATED AS HAVING ACCRUED DURING THE RELEVANT PERIOD. SINCE TNEB HAS REFUSED TO ACCEPT AS ITS LIABILITY THE STAR T UP FUEL COST INCURRED BY THE ASSESSEE THE INCOME IN RESPECT OF START UP FUEL COST BASED ON THE INVOICES RAISE BY THE ASSESSEE-COMPANY CANNOT BE TREATED AS HAVING ACCRUED TO THE COMPANY EVEN IT HAS BEEN FOLLOWING MERCANTILE SYSTEM OF ACCOUNTING. ON A SPECIFIC QUERY RAISED BY THE BENCH IT HAS BEEN CONFIRMED THAT THE AMOUNT OF START UP FUEL COSTS HAS NOT BEEN RECOGNIZED BY THE ASSESSEE AS NOTED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER. THEREFORE WE DO NOT FIND ANY INFIRMITY IN THE FINDING OF THE LD. CIT(A) IN ALLOW ING THE APPEAL IN FAVOUR OF THE ASSESSEE. HENCE WE DISMISS GROUND NOS. 3.1 AND 3.2 RAISED BY THE REVENUE. THE LEARNED DR HAS FAIRLY ACCEPTED THAT THE ORDER I S IN FAVOUR OF THE ASSESSEE. IN THE LIGHT OF THE ABOVE THE REVEN UES APPEAL ON THIS ISSUE IS DISMISSED. ITA NO.381-383 /MDS/2011 12 12. GROUND NOS. 6.1 TO 7.2 RELATES TO THE ISSUE OF INTEREST U/S 234B & C. AT THE TIME OF HEARING THE LEARNED DR FAI RLY ACCEPTED THAT THE ISSUE IS DECIDED IN FAVOUR OF THE ASSESSEE IN THE ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2005-06 IN ITA NOS. 894 & 1657/MDS/2009 DATED24-5-2011. WE FIND T HAT THE TRIBUNAL HAS DECIDED THIS ISSUE BY OBSERVING AS UN DER : 6. THE ADDITIONAL GROUND IS WITH REGARD TO CHARGING OF INTEREST U/S 234B. ACCORDING TO THE LD.AR IT CANNOT BE LEVIED ON THE TAX BY VIRTUE OF RETROSPECTIVE AMENDMENT TO SECTION 115JB OF THE ACT AS THE COMPANY HAD REMITTED THE TAX BY TAKING INTO CONSIDERATION THE LAW PREVALENT AT THAT POINT OF TIME. TO SUPPORT HER CONTENTION THE LD. AR HAS RELIED ON THE FOLLOWING CASE LAWS: CIT VS. SEDCO FOREX INTERNATIONAL DRILLING CO. LTD. 264 ITR 320 (UTTARANCHAL HIGH COURT) CIT VS. REVATHI EQUIPMENT LTD. 298 ITR 67 (MAD). 7. THE LD.DR HAS RELIED ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF JT. CIT VS. ROLTA INDIA LTD. 330 ITR 470. 8. IN OUR VIEW THE DECISION CITED BY THE DEPARTMENT IS NOT DIRECTLY ON THE ISSUE. THEREFORE WE FIND FORCE IN THE ADDITIONAL GROUND BECAUSE THE ASSESSEE HAD PAID TAX AS ITA NO.381-383 /MDS/2011 13 PER THE EXISTING LAW AND NOBODY CAN KNOW AS TO WHAT IS GOING TO HAPPEN IN FUTURE. HENCE FOR NO DEFAULT OF THE ASSESSEE SUCH INTEREST CANNOT BE CHARGED. ACCORDINGLY WE ALLOW THE ADDITIONAL GROUND RAISED BEFORE US. IN VIEW OF THE ABOVE THE GROUND OF APPEAL RAISED B Y THE REVENUE IS DISMISSED. IN THE CIRCUMSTANCES THE AP PEAL OF THE REVENUE IN ITA NO. 382/MDS/2011 IS DISMISSED. 13. ITA NO. 383MDS.2011: GROUND NO. 1 RAISED IN THIS APPEAL IS GENERAL IN NATURE AND NEEDS NO ADJUDICATI ON. 14. GROUNDS 2.1 & 2.2 RELATE TO THE ISSUE THAT THE LEARNED CIT(A) HAS ERRED IN ALLOWING THE ASSESSEES APPEAL AGAINST AOS ADDITION OF START UP FUEL COST WHICH THE ASSESSEE H AD BILLED AGAINST TNEB BUT DID NOT INCLUDE IN RECEIPTS. WE H AVE ALREADY DEALT WITH THIS ISSUE VIDE PARA 11 ABOVE. FOR THE REASONS STATED THEREIN THIS GROUND OF APPEAL RAISED BY THE ASSESS EE IS DISMISSED. 15. GROUND NO. 3.1 TO 4.2 RELATES TO THE ISSUE THAT THE CIT(A) ERRED IN ALLOWING THE ASSESSEES APPEAL AGAINST AO S ACTION OF DISALLOWANCE OF INFLATED O&M EXPENDITURE. FOR TH E DETAILED ITA NO.381-383 /MDS/2011 14 REASONS GIVEN IN PARA NO.3 ABOVE THE DEPARTMENTAL APPEAL ON THIS GROUND IS DISMISSED. 16. GROUNDS 5.1 AND 5.2 RELATE TO INTEREST U/S. 234 B. THE SAME ISSUE HAS BEEN DECIDED BY US IN PARA 12 ABOVE. FOR THE DETAILED REASONS GIVEN THEREIN THE APPEAL OF THE R EVENUE ON THIS GROUND IS DISMISSED. 17. IN THE CIRCUMSTANCES THE REVENUES APPEAL IS D ISMISSED. 18. IN THE RESULT THE REVENUES APPEALS IN ITA NO . 381/MDS/2011 IS PARTLY ALLOWED AND ITA NOS. 382 & 383/MDS/2011 ARE DISMISSED. ORDER PRONOUNCED ON MONDAY THE 30 TH OF JULY 2012 AT CHENNAI. SD/- SD/- (DR. O. K. NARAYANAN) ( V.DURGA RAO ) VICE PRESIDENT JUDICIAL MEMBER CHENNAI DATED THE 30 TH JULY 2012. H. COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE