DCIT, Panchkula v. M/s Uttar Haryana Bijli Vitran Nigam Ltd., Panchkula

ITA 752/CHANDI/2011 | 2003-2004
Pronouncement Date: 16-04-2014 | Result: Allowed

Appeal Details

RSA Number 75221514 RSA 2011
Assessee PAN AAACU4562G
Bench Chandigarh
Appeal Number ITA 752/CHANDI/2011
Duration Of Justice 2 year(s) 8 month(s) 28 day(s)
Appellant DCIT, Panchkula
Respondent M/s Uttar Haryana Bijli Vitran Nigam Ltd., Panchkula
Appeal Type Income Tax Appeal
Pronouncement Date 16-04-2014
Appeal Filed By Department
Order Result Allowed
Bench Allotted A
Tribunal Order Date 16-04-2014
Date Of Final Hearing 17-02-2016
Next Hearing Date 17-02-2016
Assessment Year 2003-2004
Appeal Filed On 19-07-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A CHANDIGARH BEFORE SHRI T.R.SOOD ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA JUDICIAL MEMBER ITA NO.752/CHD/2011 ASSESSMENT YEAR : 2003-04 THE DY. COMMISSIONER OF VS UTTAR HARYANA BIJLI VI TRAN INCOME TAX NIGAM LTD. PANCHKULA CIRCLE SECTOR 6 PANCHKULA. PANCHKULA. PAN : AAACU4562G (APPELLANT) (RESPONDENT) APPELLANT BY : DR. AMARVEER SINGH RESPONDENT BY : SHRI HARISH NAYYAR DATE OF HEARING : 27.03.2014 DATE OF PRONOUNCEMENT : 16.04.2014 O R D E R PER SUSHMA CHOWLA JM THE APPEAL BY THE REVENUE IS AGAINST THE ORDER OF T HE COMMISSIONER OF INCOME TAX (APPEALS) PANCHKULA DAT ED 18.05.2011 AGAINST THE ORDER PASSED UNDER SECTION 154 OF THE I NCOME-TAX ACT 1961 ( 'THE ACT' FOR SHORT). 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : 1. WHETHER ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE THE &. CIT(A )HAS ERRED IN DELETING THE ADDITION ON ACCOUNT OF DISALLOWANCE OF DEPRECIATION ON ASSETS CREAT ED OUT OF GRANTS AND CONSUMER CONTRIBUTION DESPITE HER OWN FI NDING THAT THERE IS NO DOUBT THAT THE COST OF AN ASSET ACQUIRE D IN THE FORM OF SUBSIDY OR GRANT IS TO BE EXCLUDED FROM THE ACTUAL COST OF THE ASSET. 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE. THE LD.CIT(A) HAS ERRED IN HOLDING THAT THE ISSUE INVOL VED IS A DEBATABLE DESPITE THE CLEAR PROVISIONS OF SECTION 4 3(1)OF THE INCOME TAX ACT 1961 AND HER OWN FINDING AS PER ( 1) ABOVE. 2 3. THE REVENUE IN THE PRESENT APPEAL IS AGGRIEVED B Y THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) IN DELETING TH E ADDITION ON ACCOUNT OF DISALLOWANCE OF DEPRECIATION ON ASSETS C REATED OUT OF GRANTS AND CONSUMER CONTRIBUTIONS. THE REVENUE IS ALSO AGGRIEVED BY THE DECISION OF THE COMMISSIONER OF INCOME TAX ( APPEALS) IN HOLDING THAT THE ISSUE INVOLVED IN THE PRESENT CASE IS DEBATABLE AND HENCE NOT COVERED UNDER SECTION 154 OF THE INCOME TAX ACT. 4. THE BRIEF FACTS OF THE CASE ARE THAT FOR THE YE AR UNDER CONSIDERATION THE ASSESSEE HAD FILED INCOME DECLAR ING LOSS OF RS.6.02 CR ON 01.12.2013 WHICH WAS PROCESSED UNDER SECTION 143(1) OF THE ACT. THEREAFTER THE ASSESSEE FILED REVISED RETURN DECLARING LOSS OF RS. 98.34 CR. THE ASSESSMENT IN THE CASE W AS COMPLETED UNDER SECTION 143(3) OF THE ACT AT LOSS OF RS. 602. 59 CR. THEREAFTER AN ORDER UNDER SECTION 154 OF THE INCOM E TAX ACT WAS PASSED ON THE ISSUE OF DEPRECIATION ON BUILDING AND GENERAL ASSETS. THE ASSESSING OFFICER THEREAFTER NOTED THAT THE AS SESSEE HAD CLAIMED AND WAS ALLOWED DEPRECIATION ON WDV OF RS. 485.78 CR WHICH INCLUDED ASSETS AMOUNTING TO RS. 68.70 CR ACQ UIRED OUT OF CONSUMER CONTRIBUTIONS AND GRANTS. NOTICE UNDER SE CTION 154 OF THE INCOME TAX ACT WAS ISSUED TO THE ASSESSEE POINTING OUT THAT THE DEPRECIATION ON THE SAID ASSETS WAS NOT ADMISSIBLE IN VIEW OF THE EXPLANATION 10 TO SECTION 43(1) OF THE ACT. AFTER CONSIDERING THE REPLY OF THE ASSESSEE THE ASSESSING OFFICER REDUCE D THE ENTIRE AMOUNT OF RS. 12.48 CR RECEIVED AS GRANT-IN-AID FRO M THE COST AND THE DEPRECIATION RELATABLE TO GRANT-IN-AID @ 25% TO TALING RS.3.12 CR WAS DISALLOWED. SIMILARLY THE ASSESSEE HAD SHOWN CAPITAL RESERVE OF RS. 56.21 CR ON ACCOUNT OF CONSUMERS CONTRIBUTI ON FOR SERVICES OF CONNECTION LINES AND OTHER CAPITAL RECEIPTS. T HE ASSESSING OFFICER NOTED THAT THE AMOUNT WAS PAID BY THE CONSU MERS TOWARDS 3 COST OF ASSETS SUCH AS METERS TRANSFORMERS TRANSM ISSION LINES SPECIFICALLY LAID DOWN FOR THE CONSUMERS. THE ASSE SSEE HAD NOT REDUCED THE SAID AMOUNT OF CONSUMERS CONTRIBUTION F ROM THE ACTUAL COST OF ASSETS AND ASSESSING OFFICER THUS DISALLOW ED 25% ON ACCOUNT OF DEPRECIATION OUT OF SUCH CONTRIBUTION I. E. RS. 56.21 CR RESULTING IN DISALLOWANCE OF DEPRECIATION AT RS. 14 .05 CR. 5. THE COMMISSIONER OF INCOME TAX (APPEALS) DID AGR EE THAT THE COST OF ASSETS ACQUIRED IN THE FORM OF SUBSIDY OR G RANT IS TO BE EXCLUDED FROM THE ACTUAL COST OF THE ASSET BUT AS P ER THE COMMISSIONER OF INCOME TAX (APPEALS) THIS COULD NO T BE CARRIED OUT UNDER THE GARB OF SECTION 154 OF THE ACT AS THE SCOPE OF THE SAID SECTION WAS LIMITED TO CORRECT ARITHMETICAL ERRORS AND MISTAKE APPARENT FROM THE RECORD. RELIANCE WAS PLACED UPON THE HON'BLE APEX COURT DECISION IN T.S.BALARAM VS VOLKART BROTH ERS (1971) 82 ITR 50 (S.C) AND MAHARANA MILLS (P) LTD. VS ITO 36 ITR 350 (S.C). THE ADDITION MADE BY THE ASSESSING OFFICER WAS DELE TED BY THE COMMISSIONER OF INCOME TAX (APPEALS) BEING OUTSIDE THE SCOPE OF SECTION 154 OF THE ACT. THE REVENUE IS IN APPEAL AG AINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS). 6. THE LD. DR FOR THE REVENUE STRESSED THAT IN VIEW OF THE NON- APPLICATION OF CLEAR PROVISIONS OF THE ACT THE REC TIFICATION UNDER SECTION 154 OF THE ACT ON THE QUESTION OF LAW WAS C LEARLY ATTRACTED. IT WAS A CASE OF MISTAKE IN APPLICATION OF LAW AND THE SAME COULD BE CORRECTED BY RESORTING TO THE PROVISIONS OF SECTION 154 OF THE ACT. RELIANCE WAS PLACED BY THE LD. DR FOR THE REVENUE O N THE FOLLOWING DECISIONS : I) CIT VS STEEL STRIPS LTD. 200 TAXMAN 368(P&H) 4 II) M.K.VENKATACHAIRM VS BOMBAY DYEING & MANUFACTU RING COMPANY LTD. 34 ITR 143 (S.C) III) PADMAVATI JAYKRISHNA VS CWT 105 ITR 115(GUJ) IV) ADDITIONAL CIT VS DISTT. COOPERATIVE BANK LTD. 119 ITR 142 (ALL) 7. THE LD. AR FOR THE ASSESSEE VEHEMENTLY STATED TH AT THE EXERCISE OF NON ALLOWANCE OF THE DEPRECIATION INVOL VED VARIOUS ASPECTS I.E. THE COSTS AND THE SUBSIDIES BEING RELA TABLE TO THE ASSETS AND THE SAID EXERCISE IN NO TERMS COULD BE SAID TO BE MISTAKE APPARENT FROM RECORD WHICH CAN BE RECTIFIED UNDER T HE PROVISIONS OF SECTION 154 OF THE ACT. IT WAS STRESSED BY THE LD. AR FOR THE ASSESSEE THAT THE ORDER OF THE ASSESSING OFFICER IN THIS REGARD WAS NOT SUSTAINABLE IN LAW. RELIANCE WAS ALSO PLACED UP ON CIT VS INVESTMENT TRUST OF INDIA LTD. 184 TAXMAN 381 (P&H) AND MEPCO INDUSTRIES LTD. VS CIT 319 ITR 208 (S.C). 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. UNDER THE PROVISIONS OF SECTION 154 OF THE INCOME T AX ACT INCOME TAX AUTHORITY IS AUTHORIZED TO RECTIFY ANY MISTAKE APPARENT FROM THE RECORD BY AMENDING ANY ORDER PASSED BY IT UNDER THE PROVISIONS OF THE ACT. SIMILAR POWERS ARE ALSO THERE TO RECTIFY A NY MISTAKE APPARENT FROM RECORD IN ANY DEEMED INTIMATION ISSUE D UNDER SECTION 143(1) OF THE ACT. 9. THE ISSUE ARISING IN THE PRESENT APPEAL IS IN RE LATION TO SUCH EXERCISE OF POWER UNDER SECTION 154 OF THE ACT. TH E ASSESSEE HAD REWORKED THE DEPRECIATION OF CERTAIN PORTION OF THE ASSETS WHICH WERE NOT ADMISSIBLE IN VIEW OF THE PROVISIONS OF EX PLANATION 10 TO SECTION 43(1) OF THE ACT. THE NON-APPLICATION OF PROVISIONS OF THE ACT IS A MISTAKE AND SUCH MISTAKES ARE AMENABLE TO RECTIFICATION BY EXERCISE OF POWERS UNDER SECTION 154 OF THE ACT. TH E COMPLEXITY OF 5 THE WORKING OF THE ALLOWABLE DEPRECIATION TO RE-WOR K VALUE OF ASSETS DOES NOT IN ANY MANNER RESTRAIN THE ASSESSING OFFIC ER AND THE ASSESSING OFFICER IS OPEN TO CARRY OUT THE RECTIFIC ATION UNDER SECTION 154 OF THE ACT IN ORDER TO CORRECT ANY MIST AKE IN APPLICATION OF LAW. WE FIND THAT THIS ISSUE IS SQUARELY COVERE D BY THE DECISION OF THE HON'BLE PUNJAB & HARYANA HIGH COURT IN CIT V S INVESTMENT TRUST OF INDIA LTD. 184 TAXMAN 381 (P&H). HOWEVER WE DIRECT THE ASSESSING OFFICER TO RECOMPUTE THE DEPRECIATION ON REDUCED VALUE OF ASSETS AFTER GIVING A REASONABLE OPPORTUNITY OF HEA RING TO THE ASSESSEE IN THIS REGARD. THE ASSESSEE IS DIRECTED TO PRODUCE THE RELEVANT DATA/MATERIAL BEFORE THE ASSESSING OFFICER IN THIS RESPECT. ACCORDINGLY THE GROUNDS OF APPEAL RAISED BY THE RE VENUE ARE ALLOWED FOR STATISTICAL PURPOSES. 10. IN THE RESULT APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 16 TH APRIL 2014. SD/- SD/- ( T.R.SOOD) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 16 TH APRIL 2014 POONAM COPY TO: THE APPELLANT THE RESPONDENT THE CIT(A) THE CIT DR. ASSISTANT REGISTRAR ITA T CHD.