M/s New Kashmir Steel Rollin mills,, Jammu v. The Dy. Commissioner of Income-tax, Jammu

ITA 762/ASR/2014 | 2007-2008
Pronouncement Date: 28-10-2016 | Result: Partly Allowed

Appeal Details

RSA Number 76220914 RSA 2014
Assessee PAN AABFN0941L
Bench Amritsar
Appeal Number ITA 762/ASR/2014
Duration Of Justice 1 year(s) 10 month(s) 9 day(s)
Appellant M/s New Kashmir Steel Rollin mills,, Jammu
Respondent The Dy. Commissioner of Income-tax, Jammu
Appeal Type Income Tax Appeal
Pronouncement Date 28-10-2016
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted DB
Tribunal Order Date 28-10-2016
Date Of Final Hearing 21-09-2016
Next Hearing Date 21-09-2016
Assessment Year 2007-2008
Appeal Filed On 19-12-2014
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR BEFORE SH.T.S.KAPOOR ACCOUNTANT MEMBER AND SH.N.K.CHOUDHRY JUDICIAL MEMBER I.T.A. NOS.761 762 & 763(ASR)/2014 ASSESSMENT YEAR: 2006-07 2007-08 & 2008-09 M/S. NEW KASHMIR STEEL ROLLING MILLS INDUSTRIAL AREA GANGYAL JAMMU. PAN:AABFN0941L VS. DY. CIT CENTRAL CIRCLE JAMMU. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. TARUN BANSAL (ADV.) RESPONDENT BY: SH. RAHUL DHAWAN (DR) DATE OF HEARING: 21.09.2016 DATE OF PRONOU NCEMENT: 28.10.2016 ORDER PER N. K. CHOUDHRY (JM): THESE THREE APPEALS FILED BY THE ASSESSEE ARE AGAIN ST THE ORDER OF THE LD. CIT(A) JAMMU EACH DATED 05.08.2014 RELATI NG TO ASSESSMENT YEARS 2006-07 TO 2008-09 RESPECTIVELY. AS THE ISSU ES INVOLVED IN ALL THE APPEALS ARE ALMOST IDENTICAL THEY ARE BEING DISPOS ED OF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 2. THE ASSESSEE HAS TAKEN THE FOLLOWING IDENTICAL G ROUNDS OF APPEAL IN ALL THE APPEALS. HOWEVER THE GROUNDS TAKEN IN ITA NO.761/ASR/2014 ITA NO.762(ASR)/2014 & 763(ASR)/2014 ARE REPRODUCED BELOW: ITA NO.761(ASR)/2014 FOR ASST. YEAR:2006-07 1. THAT THE ORDER UNDER APPEAL IS AGAINST LAW AND FACT S OF THE CASE. ITA NOS .761 TO 763(ASR)/2014 ASST. YEAR S: 2006-07 TO 2008-09 2 2. THAT THE LD. CIT(A) HAS NOT BEEN JUSTIFIED IN LAW I N ACCEPTING THE APPEAL OF THE APPELLANT AND DELETING THE DISALLOWAN CE MADE ON ACCOUNT OF TRUCK EXPENSES. IN ANY CASE THE DISALLOWANCE SUSTAINED BY THE LD. C IT(A) ON ACCOUNT OF TRUCK EXPENSES IS EXCESSIVE. 3. THAT THE LD. CIT(A) HAS ALSO ERRED IN CONFIRMING TH E 10% DISALLOWANCE OF TELEPHONE EXPENSES AND 25% DISALLOW ANCE OF THE DEPRECIATION. I IN ANY CASE THE DISALLOWANCE SUSTAINED BY THE LD. C IT(A) ARE EXCESSIVE. 4. THAT THE LD. CIT(A) HAS ERRED IN LAW IS NOT ADMITTI NG THE ADDITIONAL GROUND OF APPEAL RELATING TO EXCISE DUTY REFUND AND INTEREST SUBSIDY FOR HOLDING THEM AS CAPITAL RECEIPTS IN VIE W OF JUDGMENT OF THE HIGH COURT OF JAMMU AND KASHMIR IN SHREE BALA JI CASE. ITA NO.762(ASR)/2014 FOR ASST. YEAR:2007-08 1. THAT THE ORDER UNDER APPEAL IS AGAINST LAW AND FACTS OF THE CASE. 2. THAT THE LD. CIT(A) HAS NOT BEEN JUSTIFIED IN NOT ACCEPTING THE APPEAL OF THE APPELLANT AND DELETING THE DISALLOWAN CE MADE ON ACCOUNT OF TRUCK EXPENSES. IN ANY CASE THE DISALLOWANCE SUSTAINED BY THE LD. C IT(A) ON ACCOUNT OF TRUCK EXPENSES IS EXCESSIVE 3. THAT THE LD. CIT(A) HAS ERRED IN LAW IS NO T ADMITTING THE ADDITIONAL GROUND OF APPEAL RELATING TO EXCISE DUTY REFUND AND INTEREST SUBSIDY FOR HOLDING THEM AS CAPITAL RECEIPTS IN VIE W OF JUDGMENT OF THE HIGH COURT OF JAMMU & KASHMIR IN SHREE BALA JI CASE. ITA NO.763(ASR)/2014 FOR ASST. YEAR:2008-09 1. THAT THE ORDER UNDER APPEAL IS AGAINST LAW AND FACT S OF THE CASE. 2. THAT THE LD. CIT(A) HAS NOT BEEN JUSTIFIED IN LAW I N ACCEPTING THE APPEAL OF THE APPELLANT AND DELETING THE DISALLOWAN CE MADE ON ACCOUNT OF TRUCK EXPENSES. IN ANY CASE THE DISALLOWANCE SUSTAINED BY THE LD. C IT(A) ON ACCOUNT OF TRUCK EXPENSES IS EXCESSIVE. 3. THAT THE LD. CIT(A) HAS ERRED IN LAW IS NOT ADMITT ING THE ADDITIONAL GROUND OF APPEAL RELATING TO EXCISE DUTY REFUND AND INTEREST SUBSIDY FOR HOLDING THEM AS CAPITAL RECEIP TS IN VIEW OF JUDGMENT OF THE HIGH COURT OF JAMMU AND KASHMIR IN SHREE BALA JI CASE. ITA NOS .761 TO 763(ASR)/2014 ASST. YEAR S: 2006-07 TO 2008-09 3 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ORIGINA L RETURN U/S 139 WAS FILED ON 31.10.2006 DECLARING THE TOTAL INCOME OF RS.1 42 83 550/-. HOWEVER RETURN OF INCOME DECLARING A TOTAL INCOME OF RS.1 42 83 550/- WAS FILED ON 16.02.2009 IN RESPONSE TO NOTICE U/S 1 53A DATED 10.04.2008 SERVED UPON THE ASSESSEE ON 15.04.2008. SEARCH AND SEIZURE OPERATION U/S 132 WAS CARRIED OUT AT THE BUSINESS P REMISES OF M/S. NEW STEEL ROLLING MILLS ON 19.04.2007 AS WELL AT THE RE SIDENTIAL PREMISES OF ITS PARTNER SH. SUBASH CHANDER AND ITS ACCOUNTANT SH. K RISHAN KUMAR AGGARWAL EMPLOYEE OF M/S. NEW KASHMIR STEEL ROLLIN G MILLS JAMMU. DURING THE SEARCH PROCEEDINGS DOCUMENTS/ BOOKS OF ACCOUNTS MARKED ANNEXURE A-1 TO A-55 WERE FOUND AND SEIZED FROM THE BUSINESS PREMISES OF M/S. NEW KASHMIR STEEL ROLLING MILLS JAMMU. SIM ILARLY LOOSE PAPERS MARKED ANNEXURE A-4 WERE FOUND AND SEIZED FROM THE RESIDENCE OF SH. KRISHAN KUMAR AGGARWAL DURING SEARCH PROCEEDINGS ON 19.9.2007 OF WHICH PAGE NO.33 TO 34 RELATE TO M/S. NEW KASHMIR STEEL ROLLING MILLS JAMMU. 3.1 M/S. NEW KASHMIR STEEL ROLLING MILLS CONSISTS O F THE FOLLOWING PARTNERS:- L. SH. SUBASH CHANDER 2.SH. AKHIL GUPTA 3.SH. AMIT GUPTA 4.SH. NAVNEET GUPTA 5.SH. SHASHI SINGLA SH. AKHIL GUPTA IS SON OF SH. SUBASH CHANDER SH. NAVNEET GUPTA AND SH. AMIT GUPTA ARE NEPHEWS ARE O F SH. SUBASH GUPTA. ITA NOS .761 TO 763(ASR)/2014 ASST. YEAR S: 2006-07 TO 2008-09 4 3.2 THE ASSESSEE DERIVES INCOME FROM MANUFACTURIN G OF STEEL AND IRON. NOTICE U/S 143(2)/142(1) ALONGWITH QUESTIONNAIRE LETTER DATED 12.5.2008 WERE ISSUED AN D SERVED UPON THE ASSESSEE FOR HEARING OF THE CASE FO R 28.5.2008. IN COMPLIANCE TO STATUTORY NOTICES PROCEEDINGS WERE ATTENDED BY SH. SUDHIR SEHGAL ADVOCATE. SH. VIR SAIN AGGARWAL ADVOCATE ON BEHALF OF THE ASSESSEE AND THE INFORMATION /REPLY FILED BY THEM F ROM TIME TO TIME WAS EXAMINED WITH RESPECT TO FACTS AND LEGAL ASPECTS OF THE CASE. THE CASE WAS DISCUSSED WITH TH EM FROM TIME TO TIME. THE DOCUMENTS SEIZED DURING SEAR CH PROCEEDINGS THE CASH AND THE STOCK FOUND DURING SE ARCH PROCEEDINGS HAVE BEEN DISCUSSED IN THE ASSESSMENT ORDERS U/S153A(B)/143(3) OF ASSESSMENT YEARS 2007-0 8 AND 2008-09. THE ASSESSING OFFICER FINALLY CONCLUDE D AS UNDER: (I) TRUCK EXPESNES : TRUCK EXPENSES HAVE BEEN CLAIMED AT RS.35 22 604/- BUT TRUCK EXPENSES BELOW RS.2 500/- ARE NOT FULLY VOUCH ED. THEREFORE DISALLOWANCE OF RS.90 000/- IS MADE OUT OF TRUCK EX PENSES ARE UNVOUCHED EXPENSES KEEPING IN VIEW ITAT AMRITSARS ORDER DATED 19.01.2009 FOR THE ASSESSMENT YEAR: 2004-05. (II) TELEPHONE EXPENSES : TELEPHONE EXPENSES HAVE BEEN CLAIMED AT RS.1.39.466/- WHICH INCLUDES EXPENSES OF TELEPHONE INSTALLED AT THE RESIDENCE OF THE PARTNERS. THEREFO RE DISALLOWANCE OF RS.13946/- I.E. 10% IS MADE OUT OF TELEPHONE EXPENSES KEEPING IN VIEW THE ORDER OF ITA T AMRITSAR'S ORDER U/S 254(1) DATED 19.1.2009 FOR THE ASSESSMENT YEAR: 2004-05. (III) CAR EXPENSES & DEPRECIATION ON CAR : ITA NOS .761 TO 763(ASR)/2014 ASST. YEAR S: 2006-07 TO 2008-09 5 CAR EXPENSES HAVE BEEN CLAIMED AT RS.65 485/- AND DEPRECIATION ON CAR HAVE BEEN CLAIMED AT RS.27 689/-. DISALLOWANCE OUT OF CAR EXPENSES AND C AR DEPRECIATION IS MADE TO THE EXTENT OF 25% FOR USE O F CAR BY THE PARTNERS AND MEMBERS OF THEIR FAMILY KEEPING IN VIEW THE ORDER OF ITAT AMRITSAR'S ORDER U/S 254(1) DATED 19.1.2009 FOR THE ASSESSMENT YEAR:2004-05. THIS WIL L RESULT INTO DISALLOWANCE OF RS.16371 + RS.6922/- TOTALING TO RS.23 293/- 4. AGGRIEVED BY THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER THE ASSESSEE PREFERRED THE APPEAL BEFORE THE LD. CI T(A) INTER ALIA ON THE FOLLOWING GROUNDS. (I) THAT THE ORDER UNDER APPEAL IS AGAINST LAW AND FACTS OF THE CASE. (II) THAT THE LD. DEPUTY COMMISSIONER HAS NOT BEEN JUSTIFIED IN MAKING ADDITION OF RS.90 000/- OUT OF TRUCK EXPENSE S ON THE ALLEGED GROUND THAT THESE ARE UN-VOUCHED EXPENSES WHEN ALL THE EXPENSES INCLUDING THE EXPENSES BELOW RS.2 500/- ARE FULLY V OUCHED. (III) THAT THE LD. ASSESSING OFFICER HAS ERRED IN D ISALLOWING 10% OF THE TELEPHONE EXPENSES. THE DISALLOWANCE OF 25% OF CAR DEPRECIATION IS ALSO NOT JUSTIFIED. HOWEVER DURING THE PROCEEDING OF THE APPEAL BEFORE LD. CIT(A) THE ASSESSEE ALSO FILED ONE APPLICATION FOR RAISING TH E ADDITIONAL GROUND WHICH IS REPRODUCED HEREIN BELOW. (A) THAT IN VIEW OF JUDGMENT OF THE HONBLE HIGH C OURT OF JAMMU & KASHMIR IN M/S SHREE BALAJI ALLOYS V/S CIT AND ANOT HER DATED 31 ST JANUARY 2011 (REPORTED AS (2011) 333 ITR 335 (J&K) ) - WHEREIN THE HONBLE HIGH COURT HAS HELD THAT EXCISE DUTY RE FUND AND INTEREST SUBSIDY RECEIPTS RECEIVED BY INDUSTRIAL UN ITS ARE CAPITAL RECEIPTS AND NOT REVENUE RECEIPTS THE EXCISE DUTY REFUND AND INTEREST SUBSIDY RECEIVED BY THE APPELLANT BEING CA PITAL RECEIPTS HAVE WRONGLY BEEN TREATED AS REVENUE RECEIPTS BY TH E LD. AO AND ASSESSED AS INCOME OF THE APPELLANT. (B) THAT THE LD. AO HAS NOT BEEN JUSTIFIED IN LAW I N TREATING THE EXCISE DUTY REFUND RECEIPTS AND INTEREST SUBSIDY RE CEIPTS AS REVENUE RECEIPTS AND SUBJECTING THEM TO TAX AS EXCISE DUTY REFUND RECEIPTS AND INTEREST SUBSIDY RECEIPTS BEING CAPITAL RECEIPT S CANNOT BE MADE SUBJECT TO TAX. ITA NOS .761 TO 763(ASR)/2014 ASST. YEAR S: 2006-07 TO 2008-09 6 5. THE LD. CIT(A) WHILE ADJUDICATING THE ORIGINAL G ROUNDS RAISED IN THE APPEAL ALSO ADJUDICATED THE ADDITIONAL GROUNDS OF APPEAL RAISED BY THE ASSESSEE AND FINALLY CONCLUDED AS UNDER: THE FIRST GROUND OF APPEAL IS GENERAL HENCE DOES NOT REQUIRE ANY ADJUDICATION. AS REGARDS GROUND NO.2 PERTAINING TO DISALLOWANCE O F RS.90 000/- OUT OF TRUCK EXPENSES THE AO OBSERVED THAT THE ASS ESSEE HAD DEBITED AN AMOUNT OF RS.35 22 604/- UNDER THE HEAD TRUCK EXPEN SES BUT TRUCK EXPENSES BELOW RS.2500/- WERE NOT FULLY VOUCHED. TH E AO THEREFORE PROCEEDED TO MAKE THE DISALLOWANCE OF RS.90 000/- IN VIEW OF THE DECISION OF THE ITAT AMRITSAR BENCH DATED 19.01.2 009 IN THE CASE OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2004-05 OUT OF TOT AL DEBIT OF RS.26 89 386/- OBSERVING INTER-ALIA THAT THE ASSESSEE WAS A PARTNERSHIP FIRM HAVING MANY PARTNERS AND THE PERSONAL USAGE O F THE TRUCK CANNOT BE RULED OUT AND THAT HAD THE ASSESSEE FURNISHED EN TIRE DETAILS AND SUPPORTED BY VOUCHERS AND LOG BOOK ADDITION COULD NOT HAVE BEEN MADE. 6. ON APPEAL THE LD. CIT(A) UPHELD THE DISALLOWANC E MADE BY THE AO OBSERVING THAT THE FACTS FOR THE YEAR UNDER CONSIDE RATION WERE NOT DIFFERENT FROM THOSE FOR THE ASSESSMENT YEAR 2004-0 5 AND THAT IN THE ABSENCE OF VOUCHERS AND LOG BOOK A NOMINAL AMOUNT OF DISALLOWANCE HAD CORRECTLY BEEN MADE. ITA NOS .761 TO 763(ASR)/2014 ASST. YEAR S: 2006-07 TO 2008-09 7 7. AGGRIEVED WITH THE ORDER OF THE LD. CIT(A) THE ASSESSEE IS IN APPEAL BEFORE THIS BENCH. 8. THE LD. COUNSEL FOR THE ASSESSEE CONTENDED THAT THE ITAT AMRITSAR BENCH VIDE ITS ORDER DATED 10.03.2016 FOR THE ASSE SSMENT YEAR 2003-04 IN ASSESSEES OWN CASE REDUCED THE DISALLOWANCE O F TRUCK EXPENSES AS UNDER: A.Y.2003-04 AMOUNT TRUCK EXPENSES 22 64 065/- DISALLOWED BY AO 59 000/- DISALLOWED BY ITAT 29 500/- % OF DISALLOWANCE BY ITAT 1.30% HE FURTHER STATED THAT IN THE PRESENT THREE YEARS THE POSITION IS AS UNDER AND DISALLOWANCE AS PER HONBLE ITAT ORDER FOR THE A.Y. 2003-04 SHALL BE AS PER THE FOLLOWING TABLE: S.NO. ASSTT. YR. TRUCK EXPS DISALLOWED BY AO DISALLOWANCE @ 1.30% AS PER ITAT ORDER FOR A.Y. 2003-04 1. 2006-07 35 22 604/- 90 000/- 45794 2. 2007-08 36 92 747/- 96 000/- 48005 3. 2008-09 42 24 510/- 1 10 000/- 54919 IN VIEW OF THE ABOVE THE LD. COUNSEL FOR THE ASSE SSEE PRAYED THAT WHILE FOLLOWING THE ORDER OF THE TRIBUNAL DATED 10. 03.2016 FOR THE A.Y. 2003-04 IN ASSESSEES OWN CASE THE DISALLOWANCE FO R ALL THE THREE YEARS VIZ. 2006-07 TO 2008-09 MAY BE REDUCED TO THE AMOUN TS AS NOTED IN THE ABOVE TABLE. ITA NOS .761 TO 763(ASR)/2014 ASST. YEAR S: 2006-07 TO 2008-09 8 9. THE LD. DR ON THE OTHER HAND PLACED STRONG REL IANCE ON THE IMPUGNED ORDER AND CONTENDED THAT THE FACTS FOR THE YEAR UNDER CONSIDERATION ARE NOT DIFFERENT FROM THOSE FOR THE A.Y. 2004-05 AND SUBMITTED THAT 10% DISALLOWANCE MADE BY THE AO ON ACCOUNT OF PERSONAL USAGE OF THE TRUCK HAS CORRECTLY BEEN CON FIRMED BY THE LD. CIT(A). 10. HAVING HEARD THE RIVAL CONTENTIONS AND HAVING G ONE THROUGH THE MATERIAL PLACED ON RECORD WE ARE OF THE VIEW THAT THE ASSESSEE HAS INCURRED THESE EXPENSES UNDER THE HEADS OF TOOL TAX MOBILE OIL DIESEL REPAIR AND MAINTENANCE PARKING WEIGHING AND FOOD EXPENSES. ALL THESE EXPENSES ARE MOSTLY SMALL EXPENSES. THE DETAILS OF THESE EXPENSES HAVE NOT BEEN PRODUCED BEFORE THE TRIBUNAL FOR THE ASSES SMENT YEAR 2004-05 THE ORDER OF THE TRIBUNAL FOR WHICH YEAR WAS FOLLOW ED BY THE AUTHORITIES BELOW. IT IS SEEN THAT THE TRIBUNAL WHILE PASSING T HE ORDER IN ASSESSEES OWN CASE FOR THE A.Y. 2003-04 DATED IN 10.03.2016 IN ITA NO.596/ASR/2014 HAS REDUCED THE DISALLOWANCE TO 50% . AS THE FACTS AND CIRCUMSTANCES OF THE PRESENT YEAR ARE SIMILAR A S IN THE A.Y. 2003-04 THE DISALLOWANCE OF RS.90 000/- IS REDUCED TO RS. 45 000/- FOLLOWING THE AFORESAID ORDER OF THE TRIBUNAL DATED 10.03.2016. ACCORDINGLY GROUND NO.2 OF THE ASSESSEE IS PARTLY ACCEPTED. 11. WITH REGARD TO GROUND NO.3 IT HAS NOT BEEN PRE SSED BY THE ASSESSEE HENCE GROUND NO.3 IS DISMISSED AS NOT PR ESSED. ITA NOS .761 TO 763(ASR)/2014 ASST. YEAR S: 2006-07 TO 2008-09 9 12. WITH REGARDS TO GROUND NO.4 RELATING TO EXCISE DUTY REFUND AND INTEREST SUBSIDY THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ISSUE IN DISPUTE STANDS ALREADY ADJUDICATED IN FAVO UR OF THE ASSESSEE AND AGAINST THE REVENUE BY THE DECISION OF THE HONBLE J&K HIGH COURT IN THE CASE OF SH. BALAJI ALLOYS REPORTED IN (2011) 333 I TR 335. HE FURTHER SUBMITTED THAT THE AFORESAID JUDGMENT OF THE HONBL E J & K HIGH COURT HAS BEEN AFFIRMED BY THE HONBLE SUPREME COURT IN T HE CASE OF CIT JAMMU & ANOTHER VS. M/S SH. BALAJI ALLOYS VIDE CIV IL APPEAL NO.10061 OF 2011 DATED 19.04.2016 (60 I.T. REPS. 305(SC) HO LDING AS UNDER: INCENTIVE SUBSIDY RECEIVED BY ASSESSEE BY WAY OF R EFUND OF EXCISE DUTY AND INTEREST FOR SETTING UP A NEW INDUS TRIAL UNDERTAKING PURSUANT TO NEW INDUSTRIAL POLICY ANNOU NCED FOR THE STATE OF J&K HELD IS A CAPITAL RECEIPT IS NOT T AXABLE INCOME. 13. WE HAVE CAREFULLY GONE THROUGH THE OPERATIVE PA RT OF THE ORDER PASSED BY THE LD. CIT(A) WE FEEL IT APPROPRIATE TO REPRODUCE THE OBSERVATION/CONCLUSION FOR THE SAKE OF BREVITY AND CONVENIENCE. 8. I HAVE CONSIDERED THE FACTS OF THE CASE THE SU BMISSION OF THE APPELLANT AND THE COMMENTS OF THE ASSESSING OFFICER IN THE REMAND REPORT. IT WAS SEEN THAT THE ASSESSEE HAD ITSELF TR EATED THE IMPUGNED EXCISE DUTY REFUND AND INTEREST SUBSIDY AS REVENUE RECEIPTS IN THE RETURN OF INCOME FILED AND THE SAID ITEMS WERE THEREFORE ASSESSED AS SUCH AS PER RETURN OF INCOME BY THE ASSESSING OFFICER. THE ASSESSEE IS IN APPEAL ON DIF FERENT ISSUES OTHER THAN THIS ISSUE AS THERE WAS NO GRIEVANCE IN VIEW OF THE ORDER OF THE ASSESSING OFFICER AS NO ADDITION HAD BEEN MA DE AT ALL. I AGREE WITH THE VIEW OF THE ASSESSING OFFICER THAT T HE ASSESSEE INDIRECTLY INTENDS TO REVISE HIS RETURN OF INCOME A T THIS STAGE BY FILING ADDITIONAL GROUND OF APPEAL. THE APPEAL BY T HE ASSESSEE U/S 246 OF THE I.T. ACT 1961 COULD BE ONLY WITH REFERE NCE TO THE GRIEVANCE ARISING OUT OF THE ORDER OF THE ASSESSING OFFICER WHEREAS THE CURRENT CLAIM IS BASED UPON A SUBSEQUENT ORDER OF THE HONBLE JURISDICTIONAL HIGH COURT AND THE ASSESSEE IN THE R ETURN OF INCOME HAD ITSELF TREATED THE IMPUGNED ITEMS AS REVENUE RE CEIPTS. THEREFORE THIS GROUND OF APPEAL IS NOT ADMITTED AN D ACCORDINGLY REJECTED. ITA NOS .761 TO 763(ASR)/2014 ASST. YEAR S: 2006-07 TO 2008-09 10 IT WAS FURTHER ARGUED BY THE LD. AR THAT THE LD. CI T(A) FAILED TO ADJUDICATE THE ADDITIONAL GROUND RAISED BY THE ASSE SSEE ON MERITS BECAUSE SIMPLY NOT AVAILING AND/OR AGITATING ANY GR OUND BEFORE THE LOWER AUTHORITIES DOES NOT PRECLUDE FROM RAISING TH E SAME IN FUTURE. THE LD. COUNSEL ALSO RELIED UPON THE JUDGMENT PASSED BY THE APEX COURT IN THE CASE OF NTPC LTD. VS. CIT 229 ITR 0383 (SC). T HE RELEVANT FINDING IS REPRODUCED HEREIN BELOW. 5. THE VIEW THAT THE TRIBUNAL IS CONFINED ONLY TO ISSUES ARISING OUT OF THE APPEAL BEFORE THE CIT(A) TAKES TO NARROW A VIEW OF THE POWERS OF THE TRIBUNAL [VIDE E.G. CIT VS. ANAND PRASAD (1981) 128 ITR 388 (DEL): TC 8R.1021 CIT VS. KARAMCHAND PREMC HAND (P) LTD. (1969) 74 ITR 254 (GUJ): TC 8R.547 AND CIT VS. CELL ULOSE PRODUCTS OF INDIA LTD. (1985) 44 CTR (GUJ) 278 (FB): (1985)1 51 ITR 499 (GUJ) (FB): TC 8R.965]. UNDOUBTEDLY THE TRIBUNAL WILL HA VE THE DISCRETION TO ALLOW OR NOT ALLOW A NEW GROUND TO BE RAISED. BU T WHERE THE TRIBUNAL IS ONLY REQUIRED TO CONSIDER A QUESTION OF LAW ARISING FROM THE FACTS WHICH ARE ON RECORD IN THE ASSESSMENT PRO CEEDINGS WE FAIL TO SEE WHY SUCH A QUESTION SHOULD NOT BE ALLOWED TO BE RAISED WHEN IT IS NECESSARY TO CONSIDER THAT QUESTION IN O RDER TO CORRECTLY ASSESS THE TAX LIABILITY OF AN ASSESSEE. THE LD. AR ALSO RELIED UPON THE JUDGMENT PASSED BY THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. PRUTHVI BR OKERS & SHAREHOLDERS (P) LTD. 349 ITR 0336 (BOM.) WHEREIN T HE COURT HAS HELD AS UNDER '(2) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE TRIBUNAL ERRED IN NOT ALLOWING THE ASSESSEE LEAVE T O RAISE IN ITS OWN APPEALS ADDITIONAL GROUNDS AND IN THE DEPARTMENTAL APPEALS CROSS OBJECTIONS REGARDING THE DEDUCTIBILITY OF THE SUMS TRANSFERRED TO CONTINGENCY RESERVE AND TARIFF AND DIVIDEND CONTROL RESERVE?' (B). THE DIVISION BENCH WHICH HEARD THE REFERENCE FINDING THAT THERE WAS A CONFLICT OF DECISIONS PLACED THE PAPER S BEFORE THE HON'BLE CHIEF JUSTICE FOR CONSTITUTING A LARGER BEN CH TO RESOLVE THE CONTROVERSY. THE FULL BENCH ANSWERED THE REFERENCE IN THE AFFIRM ATIVE AND IN FAVOUR OF THE ASSESSEE. THE FULL BENCH HELD:- ITA NOS .761 TO 763(ASR)/2014 ASST. YEAR S: 2006-07 TO 2008-09 11 'THUS THE APPELLATE ASSISTANT COMMISSIONER HAS VER Y WIDE POWERS WHILE CONSIDERING AN APPEAL WHICH MAY BE FILED BY T HE ASSESSEE. HE MAY CONFIRM REDUCE ENHANCE OR ANNUL THE ASSESS MENT OR REMAND THE CASE TO THE ASSESSING OFFICER. THIS IS B ECAUSE UNLIKE AN ORDINARY APPEAL THE BASIC PURPOSE OF A TAX APPEAL IS TO ASCERTAIN THE CORRECT TAX LIABILITY OF AN ASSESSEE IN ACCORDA NCE WITH LAW. HENCE AN APPELLATE ASSISTANT COMMISSIONER ALSO HAS THE POWER TO ENHANCE THE TAX LIABILITY OF THE ASSESSEE ALTHOUGH THE DEPARTMENT DOES NOT HAVE A RIGHT OF APPEAL BEFORE THE APPELLAT E ASSISTANT COMMISSIONER. THE EXPLANATION TO SUBSECTION (2) HO WEVER MAKES IT CLEAR THAT FOR THE PURPOSE OF ENHANCEMENT THE APPE LLATE ASSISTANT COMMISSIONER CANNOT TRAVEL BEYOND THE PROCEEDINGS W HICH WERE ORIGINALLY BEFORE THE INCOME-TAX OFFICER OR REFER T O NEW SOURCES OF INCOME WHICH WERE NOT BEFORE THE INCOME-TAX OFFICER AT ALL. FOR THIS PURPOSE THERE ARE OTHER SEPARATE REMEDIES PROVIDED UNDER THE INCOME-TAX ACT.' (C) IT IS UNNECESSARY TO REFER TO ALL THE JUDGME NTS THAT THE FULL BENCH REFERRED TO WHILE ANSWERING THE REFERENCE. TH E FULL BENCH REFERRED TO THE OBSERVATIONS OF THE SUPREME COURT I N JUTE CORPORATION OF INDIA LIMITED V. COMMISSIONER OF INC OME-TAX (SUPRA) SET OUT ABOVE. IT IS IMPORTANT TO NOTE THAT EVEN IN THIS CASE THEREFORE THE GROUND EXISTED WHEN THE RETURN WAS F ILED. THE MERE FACT THAT A DECISION OF A COURT IS RENDERED SUBSEQU ENTLY DOES NOT INDICATE THAT THE GROUND DID NOT EXIST WHEN THE LAW WAS ENACTED. JUDGMENTS ARE ONLY A DECLARATION OF THE LAW. THE AS SESSEE COULD HAVE RAISED THE GROUND IN ITS RETURN ITSELF. IT DID NOT HAVE TO AWAIT A DECISION OF A COURT IN THAT REGARD. INDEED EVEN IF A JUDGMENT IS AGAINST AN ASSESSEE IT IS ALWAYS OPEN TO THE ASSES SEE TO CLAIM THE DEDUCTION AND CARRY THE MATTER HIGHER. THE WORDS 'C OULD NOT HAVE BEEN RAISED' THEREFORE CANNOT BE READ STRICTLY. N EITHER THE SUPREME COURT NOR THE FULL BENCH OF THIS COURT MEANT THEM T O BE READ STRICTLY. THEY INCLUDE CASES WHERE THE ASSESSEE DID NOT RAISE THE CLAIM FOR A REASON FOUND TO BE REASONABLE OR VALID BY THE APPELLATE AUTHORITIES IN THE FACTS AND CIRCUMSTANCES OF A CAS E. THE LD. AR ALSO RELIED UPON THE JUDGMENT PASSED BY THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF VIJAY KU MAR JAIN VS. CIT 99 ITR 0349(P&H). THE RELEVANT CRUX IS REPRODUCED H EREIN BLEW. 8. THE MATTER HAS BEEN PUT BEYOND ANY DOUBT BY THE SUPREME COURT IN CIT VS. KURBAN HUSSAIN IBRAHIMJI MITHIBORW ALA 1973 CTR (SC) 545 (1971) 82 ITR 821 (SC) WHEREIN IN IS OBSE RVED: IT IS WELL SETTLED THAT THE ITOS JURISDICTION TO R EOPEN AN ASSESSMENT UNDER S.34 (IT IS EQUIVALENT TO S.147) DEPENDS UPON THE ISSUANCE OF A VALID NOTICE (NOW SE. 148). IF THE NOTICE ISSUED BY HIM IS INVALID FOR REASON THE ENTIRE PROCEEDINGS TAKEN BY HIM WOUL D BECOME VOID FOR WANT OF JURISDICTION. ITA NOS .761 TO 763(ASR)/2014 ASST. YEAR S: 2006-07 TO 2008-09 12 9. IT IS AXIOMATIC THAT WHAT IS VOID IS NON EST. IN THIS SITUATION THE ASSESSEE WAS NOT PRECLUDED FROM URGING THE GROU NDS NOS.2 TO 5. BY GIVING THEM UP THE ASSESSEE COULD NOT CONFER JUR ISDICTION ON THE ITO WHERE HE HAD NONE. THEREFORE THE TRIBUNAL WAS BOUND TO HEAR THE ASSESSEE AND COULD NOT REJECT THE APPEAL ON THE GROUND THAT GROUND NOS.2 TO 5 WERE NOT AGITATED BEFORE THE ACC AND THUS COULD NOT BE PERMITTED TO BE AGITATED BEFORE IT. 14. ON THE OTHER HAND THE LD. DR VEHEMENTLY OPPOSE D THE PRAYER OF THE ASSESSEE AND SUBMITTED THAT WHILE PASSING A JUD GMENT THE LD. CIT(A) HAS GIVEN VALID REASONS FOUNDED ON THE FACTS AND CI RCUMSTANCES OF THE CASE AND IN ACCORDANCE WITH LAW AND HE RELIED UPON THE ORDER PASSED BY THE LD. CIT(A) AS THE SAME DOES NOT REQUIRE ANY IN TERFERENCE BY THIS HONBLE BENCH. 15. WE HAVE GONE THROUGH THE FACTS AND CIRCUMSTANCE S OF THE CASE AND ALSO PERUSED THE MATERIAL ON RECORD AND JUDGMENTS P LACED ON RECORD AND ALSO RIVAL SUBMISSIONS OF THE PARTIES. WHILE DECIDING GROUND NO.4 IT WAS HELD BY THE LD. CIT(A) THAT THE ASSESSEE HAD ITSELF TREATED THE EXCISE DUTY REFUND AND INTEREST SUBSIDY AS REVENUE RECEIPTS IN THE RETURN OF INCOME FILED AND THE SAID ITEMS WERE THEREFORE ASSESSED AS SUCH AS PER RETURN OF INCOM E BY THE ASSESSING OFFICER. THE ASSESSEE IS IN APPEAL ON DIFFERENT ISS UES OTHER THAN THIS ISSUE AS THERE WAS NO GRIEVANCE IN VIEW OF THE ORDER OF T HE ASSESSING OFFICER AS NO ADDITION HAD BEEN MADE AT ALL. BUT BY RAISING AD DITIONAL GROUND THE ASSESSEE INDIRECTLY INTENDS TO REVISE HIS RETURN OF INCOME AT THIS STAGE. THE APPEAL BY THE ASSESSEE U/S 246A OF THE I.T. ACT COULD BE ONLY WITH REFERENCE TO THE GRIEVANCES ARISING OUT OF THE ORDE R OF THE ASSESSING ITA NOS .761 TO 763(ASR)/2014 ASST. YEAR S: 2006-07 TO 2008-09 13 OFFICER WHEREAS THE CURRENT CLAIM IS BASED UPON A S UBSEQUENT ORDER OF THE HONBLE JURISDICTIONAL HIGH COURT. IN OUR CONSI DERED OPINION AND RESPECTFULLY FOLLOWING THE JUDGMENT OF HONBLE SUPR EME COURT AS WELL AS DIFFERENT HIGH COURTS RELIED UPON BY THE ASSESSEE WE ARE IN AGREEMENT THAT CERTAINLY THE ASSESSEE IS ENTITLED TO RAISE AD DITIONAL GROUND AT ANY STAGE HOWEVER IN OUR CONSIDERED OPINION GROUND H AS TO BE SUBJECT MATTER OF THE IMPUGNED ORDER OR THE ASSESSMENT ORDE R WHICH IS NOT IN THE PRESENT CASE. AS IN THE INSTANCE CASE BEFORE PASSING OF THE JUDG MENT THERE WAS NO SUCH LAW HAS BEEN SETTLED BY THE APEX COURT OR T HE JURISDICTIONAL HIGH COURT WITH REGARD TO THE DETERMINATION OF EXCI SE DUTY REFUND AND INTEREST SUBSIDY AS CAPITAL RECEIPTS EVEN OTHERWIS E THE ASSESSEE HIMSELF TREATED THE SAME AS REVENUE RECEIPTS AND ASSESSING OFFICER DETERMINED THE INCOME AS PER RETURN OF INCOME FILED BY THE ASS ESSEE ONLY. IN THE INSTANT CASE ASSESSEE FILED THE RETURN AND T HEREFORE CHALLENGED THE ASSESSMENT ORDER AND THIS GROUND WAS NEITHER SUBJECT MATTER OF ASSESSMENT ORDER NOR OF THE APPEAL FILED BEFORE CIT(A) BUT SUBSEQUENTLY THE HONBLE PUNJAB & HARYANA HIGH COUR T PASSED THE JUDGMENT ON WHICH THE ASSESSEE WANTS TO TAKE BENEFI T RETROSPECTIVELY. IN OUR CONSIDERED OPINION BEST COURSE TO THE ASSES SEE WAS TO REVISE THE RETURN WITHIN TIME LIMIT PRESCRIBED BY L AW WHICH THE ASSESSEE FAILED TO DO SO THEREFORE AS ALL THE JUDGMENTS CAN NOT BE GIVEN EFFECT TO BE OPERATIVE RETROSPECTIVELY UNTIL AND UNLESS THE C OURT PASSING THE JUDGMENT SPECIFIED THE SAME. HENCE WE ARE OF THE C ONSIDERED OPINION ITA NOS .761 TO 763(ASR)/2014 ASST. YEAR S: 2006-07 TO 2008-09 14 THAT GROUND NO.4 DOES NOT DESERVES TO BE ADMITTED THEREFORE SAME IS DISMISSED. 16. IN VIEW OF THE ABOVE THIS APPEAL OF THE ASSESS EE IS PARTLY ALLOWED. 17. NOW WE TAKE UP APPEALS OF THE ASSESSEE IN ITA NOS.762 & 763(ASR)/2014 FOR THE ASST. YEARS: 2007-08 & 2008- 09 WHERE THE ASSESSEE HAS RAISED SIMILAR GROUNDS AS TAKEN IN ITA NO.761(ASR)/2014 FOR ASST. YEAR:2006-07 EXCEPT GROUND NO.3. SINCE T HE GROUNDS RAISED IN THESE APPEALS HAVE ALREADY BEEN DECIDED BY US HEREI NABOVE IN ITA NO.761(ASR)/2014 AND THE FINDINGS GIVEN THEREIN SHA LL APPLY MUTATIS MUTANDIS TO THESE APPEALS ALSO. ACCORDINGLY THESE APPEALS A RE PARTLY ALLOWED. 18. IN THE RESULT THE APPEALS FILED BY THE ASSESSE E ARE PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 28. 10. 2016. SD/- SD/- (T. S. KAPOOR) (N.K.CHOUDHRY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED:28.10.2016. /PK/ PS. COPY OF THE ORDER FORWARDED TO: (1) THE ASSESSEE: (2) THE (3) THE CIT(A) (4) THE CIT (5) THE SR DR I.T.A.T. TRUE COPY BY ORDER