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2016 (6) TMI 458 - ITAT KOLKATA

2016 (6) TMI 458 - ITAT KOLKATA - TMI - Revision u/s 263 - period of limitation for revision order - CIT(A) held that the assessee is not eligible for deduction to an amount in respect of gain of foreign currency loan, which was included and claimed as deduction u/s. 80IA before the AO by observing as it is not a profit and gain from industrial undertaking or enterprises engaged in infrastructure development u/s. 80IA of the Act - Held that:- The order passed u/s. 263 of the Act by the CIT was a .....

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ority concerned. Therefore, the ratio of the Hon’ble Kerala High Court in the case of Government Wood Works supra is applicable to the facts of the present case. Respectfully following the same, we hold that the impugned order passed u/s. 263 of the Act by the CIT is barred by limitation - Decided in favour of assessee - I.T.A No. 1743/Kol/2013 - Dated:- 10-6-2016 - Shri M. Balaganesh, Accountant Member And Shri S. S. Viswanethra Ravi, Judicial Member For the Appellant : Shri H. Chakraborty, Ld. .....

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For that the order u/s. 263 passed by Ld. Commissioner of Income tax-IV, Kolkata (hereinafter referred to as Ld. CIT) is barred by limitation. 2. For that the Ld. CIT failed to substantiate his findings either in the notice u/s. 263 or in the corresponding order. 3. For that the Ld. CIT erred in not dealing with all the submissions and queries of the Appellant during the proceedings u/s. 263. 4. For that the Ld. CIT erred in law and facts in disallowing foreign currency gain of ₹ 1,76,44, .....

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mpany generates power and energy and filed its income declaring at Nil after claming deduction u/s. 80IA(4) of the Act. Having selected for scrutiny, notices u/s. 143(2)/142(1) of the Act were issued to assessee. 4. During such scrutiny proceedings, the AO found interest income earned on surplus amounts which were invested as deposits for small duration with assessee s main banker and treated the same as income from other sources. Secondly, the AO disallowed an amount of ₹ 38,92,132/- for .....

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- treating it as profit earned on trading of power and also computed the income of the assessee u/s. 115JB of the Act by an order dtd. 30- 12-2010. 5. As matter stood thus, CIT having exercised power of revision u/s. 263 of the Act called for records pertaining to the year under consideration and found that the assessee is not eligible for deduction to an amount of ₹ 1,76,44,053/- in respect of gain of foreign currency loan, which was included and claimed as deduction u/s. 80IA before the .....

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g were noticed: a) The assessee claimed deduction of ₹ 81,34,56,971/- under section 80IA which includes foreign currency gain of Rs, 3,33,05,084/- due to repayment of foreign currency loan obtained earlier for acquisition of fixed assets. Out of the above gain ₹ 1,56,61,031/- was deducted for adjustment made in value of Plant and Machinery in computation of profit and gain from business ( generation and sale of power ). Thus gain of foreign currency loan of ₹ 1,76,44,053/- ( &# .....

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1961 was issued. b) The assessee vide his submission dated 12.03.2013 submitted that the ₹ 1,76,44,053/- included in the income and has been offered for tax. But the fact is that, the assessee included that amount of Rs, 1,76,44,053/ - in his Gross Total Income and then claimed deduction under section 80lA on that amount also. So, factually that amount was not offered to tax as claimed by the assessee. The question is whether this amount being the foreign currency gain is the eligible bus .....

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under section 80IA allowed on foreign currency gain amounting to ₹ 1,76,44,053/- ought to have disallowed and the AO should look into this issue afresh and pass necessary order as per law. (S.C.BABERIA) COMMISSIONER OF INCOME TAX KOLKATA-IV, KOLKATA Memo No. CIT, Kol-IV/Kol./263/2012-13/394-396 Dated 28-03-2013 /01-05-2013 6. As aggrieved, the assessee is in appeal before us. The Ld. AR contended that the impugned order passed u/s. 263 by the CIT is barred by limitation. He argued that the .....

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t was held that order was made, signed and kept in the files, was not effective and complete until it was issued to the party. 7. In reply, the Ld. DR argued that in section 263 of the Act the requirement is only making of the order within the specified time by giving a finding that the order is erroneous as well as prejudicial to the interest of the Revenue and it comes into effect forthwith and it is immaterial on what date it was dispatched to or served on the assessee for the purpose of limi .....

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issions and perused the material available on record. The first issue involved in this appeal is as to whether the order passed by CIT u/s. 263 is barred by limitation. The sub section (2) of section 263 reveals that no order shall be made u/s. (1) of section 263 after the expiry of 2 years from the end of the financial year in which the order was passed. In the present case the AO passed the assessment order on 30-12-2012 u/s. 143(3) of the Act. The CIT having jurisdiction under revisionary pow .....

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Act provides limitation for revision of order(s) u/s. 263. It is very much clear that the order u/s. 263 shall be made under sub section (1) of section 263 within the expiry of 2 years from the end of the financial year in which the order sought to be revised was passed. The period of limitation in the instant case for passing the order u/s. 263 comes to end on 31-03-2013. The order of the CIT contains the date 28-03-2013 it claimed that this is the date on which the order was passed. The same .....

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of finding is reproduced here under for the sake clarity:- 13. A Division Bench of this Court, consisting of Subramonian Potti, Ag. C. J. and Chandrasekhara Menon, J., had occasion to deal with a similar question in Malayil Mills v. State of Kerala (T.R.C. Nos.15 and 16 of 1981), the judgment in which was delivered on 7th June, 1982. The assessee in that case had purchased copra during the years 1961-62 and 1962-63. The law, as it then stood, did not serve the purpose of bringing to tax the purc .....

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nts to be made within three years (extended by subsequent amendment to five years) of the date of publication of the Validation Act in cases where the tax payable on the purchase of copra had not been assessed under the General Sales Tax Act. By virtue of this provision, as amended, the assessing authority could assess the tax due on the purchases of copra within five years from 27th September, 1965, i.e., before 27th September, 1970. The assessments in question for the two years 1961-62 and 196 .....

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of Punjab AIR 1963 SC 395, State of Punjab v. Khemi Ram AIR 1970 SC 214, B.J. Shelat v. State of Gujarat AIR 1978 SC 1109 and the earlier decision of this Court in T. R. C. No. 6 of 1981, to which the Acting Chief Justice was a party, it was stated: Any authority on which power is conferred, the exercise of which power would affect the rights of parties, is to communicate its order to the party against whom the order would operate. The mere preparation of an order or even keeping the order signe .....

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tial part of making such order. This is naturally so, for any authority who writes out an order and signs it is free to change it at any time before it is communicated. It is not final at all, for the authority may become wiser on information supplied to it or otherwise and may choose to change the order at any time before it is dispatched to the party against whom it operates. 14. The order of any authority cannot be said to be passed unless it is in some way pronounced or published or the part .....

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within the prescribed period, though the actual service of the order may be beyond that period. This aspect of the matter had not come up for consideration in the cases of Viswanaihan Chettiar [1954] 25 ITR 79 (Mad.) and Laxmidas & Co. [1969] 72 ITR 88 (Bom) where the only question dealt with was whether service of the order after the prescribed period rendered it invalid. Unless, therefore, the order of the Deputy Commissioner in this case had been so issued is office within the period pres .....

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