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2017 (4) TMI 923 - BOMBAY HIGH COURT

2017 (4) TMI 923 - BOMBAY HIGH COURT - TMI - Claim of deduction u/s 80IA - Tribunal not allowing the appellant to raise additional ground in appeal - Held that:- The claim for deduction under Section 80IA of the Act was not made before the Assessing Officer or the CIT(A) but was made for the first time only before the Tribunal nor was there any evidence in support of the claim for the subject assessment year on record. Thus it stands covered by the above decision in Gurjargravures Pvt. Ltd. (197 .....

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Authority that the ground now raised was bona fide and the same could not have been raised earlier for good reasons. - In such cases, the raising of additional ground could be allowed. - In this case, there is nothing on record to indicate as to what was the reason which prevented the appellant assessee from raising a claim for deduction under Section 80IA of the Act for subject assessment year during the proceedings before the Assessing Officer and the CIT(A). Therefore, in the above facts .....

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o raise the additional ground satisfies the authority concerned that for good and sufficient reasons, the ground could not be raised before the lower authorities. - In the present facts, no such ground has been made out by the assessee before the Tribunal. In the present facts, as pointed out above and being reiterated once more, the additional ground, which is raised, is not a pure question of law, but would depend upon the satisfaction of the authority as to the facts existing in the subje .....

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ereinafter referred to as the Act) challenges the order dated 20th February, 2014 of the Income Tax Appellate Tribunal (hereinafter referred to as the Tribunal). The assessment year involved is A.Y. 2008-09. 2] The appellant assessee has urged only the following question of law for our consideration: Whether on the facts and in the circumstances of the case and in law, the Tribunal erred in refusing to admit the additional ground of the appellant of claim of deduction under Section 80IA of the A .....

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essee is engaged in the business of manufacture, sale and trading of cement and cement related products. For the subject assessment year, the appellant assessee had filed its Return of Income declaring a total income of ₹ 1,287 crores. On 20th February, 2011, the Assessing Officer passed an order under Section 143(3) of the Act determining the appellant's income at ₹ 1,490 crores. 6] Being aggrieved, the appellant assessee carried the issue in appeal to the Commissioner of Income .....

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r than that offered for disallowance was not justified in law; and (d) The disallowance in respect of the provisions for expenses made for employees stock option plan (ESOP). 7] The CIT (A) by an order dated 21st December, 2011 partly allowed the appellant assessee's appeal. The appeal was allowed on all issues except on issue of disallowance of expenditure under Section 14A of the Act and on provision for expenses made for ESOP. 8] Being aggrieved, the appellant assessee carried the issue i .....

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e State of Gujarat under agreement with the Gujarat Maritime board. The Jetty / Port commenced its operations in Financial Year 1997-98 i.e. A.Y. 1998-99. (ii) Under proviso to Sec. 80IA(2), the deduction can be claimed for any ten consecutive years out of twenty years beginning from the year in which the enterprise develops, operates and maintains the infrastructure facility . 9] In support of the above additional ground being entertained, the appellant assessee submitted that the issue of dedu .....

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ot a part of the record for assessment year under consideration i.e. Assessment Year 2008-09. Thus, this issue was not considered. Further the impugned order holds that reliance upon the order passed for subsequent assessment year allowing the claim under Section 80IA of the Act cannot be considered as evidence for earlier assessment year, when the material facts to support such a claim for the subject assessment year is not on record before the Assessing Officer. This was by placing reliance up .....

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ppeal before us and Mr. Agarwal in support of the appeal submits as under : (a) The power of the Tribunal to admit additional ground in an appeal is very wide as its basic purpose is to ascertain the correct tax liability of an assessee in accordance with law. Thus, the additional ground ought to have been allowed to be raised, even if the same was not urged before the lower Authorities. (b) In any case, the primary facts i.e. the evidence of a jetty / port having been in operation since the Ass .....

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namely Assessment Year 2009-10 and, therefore, there was evidence on record to allow the urging of the additional ground. 11] As against the above, Mr. Chanderpal, learned Counsel appearing for the respondent Revenue in support of the impugned order submits as under :Uday (a) An additional ground could be urged by the appellant assessee for the first time in appeal only if it is supported by evidence on record for the year under consideration; (b) In any case, under Section 80IA(7) of the Act de .....

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is entitled to the benefit of Section 80IA(1) of the Act for the subject assessment year; and (c) In any case, the grant of benefit of Section 80IA of the Act in a subsequent assessment year cannot be evidence on record for an earlier assessment year to grant the benefit of deduction u/s 80IA of the Act. Each year is a separate assessment year and the assessee must satisfy Sub-Section 4 of Section 80IA of the Act in the year for which deduction is claimed. This by production of evidence of the s .....

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uch as Jetty / Port is, among other things, being run on the basis of an agreement for either developing or operating and maintaining or developing, operating and maintaining a new infrastructure facility. The sine qua non provided in Sub-Section (7) of Section 80IA of the Act is the furnishing along with its Return of Income, a report of audited accounts in Form 10CCB as required under Rule 18BBB(3) of the Act. The Form 10CCB which is required to be filed along with Return of Income has various .....

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ct assessment year, no Form 10CCB has been filed by the appellant assessee. Therefore, there is no evidence on record for subject assessment year to allow the claim. The submission of Mr. Agrawal for the appellant that primary evidence in the form of jetty is on record is not acceptable. Mere ownership or existence of jetty is not evidence of eligibility to the benefit of Section 80IA of the Act, which is admittedly conditional upon satisfaction of certain requirements as provided therein. 13] H .....

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year. This cannot be accepted, more particularly for the reason that in the subsequent assessment year when the benefit of Section 80IA of the Act was granted, the evidence in the form of the Auditor's report in Form 10CCB of the Rules was available. This Form 10CCB of the Rules is not available on record for the subject assessment year. The consideration and the nature of activity may undergo a change from year to year for purposes of claiming deduction under Section 80IA of the Act. This d .....

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of the Act has been granted to the appellant assessee's jetty / port it must ipso facto follow that for the earlier years also the benefit must be granted on the mere say of the assessee that there is no change in the facts and circumstances of the case. Admittedly, for the subject assessment year, there is no claim made for the benefit of deduction under Section 80IA of the Act before the lower authorities and the evidence of an Auditor as required by law in Form 10CCB of the Rules for elig .....

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Authority before the claim under Section 80IA of the Act can be allowed, cannot be faulted. 15] Mr. Agarwal then contended that once the additional ground is allowed, he would lead evidence in support. This submission seeks to unsettle the settled position as laid down in NTPC Ltd. (supra) that additional ground can be urged before the appellate authorities provided the evidence is on record. If the submission of Mr. Agarwal is accepted, that a new ground alongwith fresh evidence can be urged be .....

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nt assessment year. Therefore, the additional ground raised should have been admitted for consideration. 17] In support, he placed reliance upon the decision of the Punjab & Haryana High Court in Atlas Cycle Industries Ltd. v. C.I.T., Patiala (133 ITR 231) and the decision of the Calcutta High Court in Indra Singh & Sons Pvt.Ltd. v. Union of India & another (LXIV ITR 501). Both the aforesaid decisions arise out of rectification applications filed before the authorities and the words .....

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f deduction u/s 80IA of the Act is available only when Form 10CCB is filed duly certified by the auditors. This Form 10CCB requires detailed information to be provided, which would then be a subject of examination by the Assessing Officer before extending the benefit of deduction u/s 80IA of the Act. 19] Mr. Agarwal then placed reliance upon the decision of the Apex Court in Hukumchand Mills Ltd. v. CIT (62 ITR 232). The issue before the Tribunal was the question as to what should be the proper .....

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and machinery for calculating depreciation u/s 10(2)(vi) of the 1922 Act. The Assessing Officer as well as the first appellate authority did not accept the assessee's contention that the original cost of the buildings and machinery be taken as written down value for the purpose of computing depreciation. It held that only that part of the depreciation which was actually allowed under the 1922 Act could be considered while arriving at the written down value of the fixed assets. The Tribunal .....

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n if it is assumed that such an issue of additional ground was raised before the Tribunal, it was open to the Tribunal to consider the additional ground and for that purpose, remand the issue. The Court held that the question for consideration in appeal from orders of lower authorities was the proper written down value of the buildings and machinery. Therefore the additional ground to determine the above issue could be raised. 20] In this case, the issue of claim for deduction u/s 80IA of the Ac .....

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n under Section 80IA of the Act in respect of port / jetty by way of an additional ground before the Tribunal is not on record. 21] Mr. Agarwal next placed reliance upon the decision of the Apex Court in CIT v. Mahalaxmi Textile Mills Ltd. (66 ITR 710). In this case, the assessee had claimed an expenditure of ₹ 93,000/for introduction of the Casablanca conversion system in its spinning plant. This involved replacement of certain rollers to the spinning machinery, removal of ring frames fro .....

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Court held that the Tribunal had evidence before it from which it could conclude that the expenditure of ₹ 93,000/was allowable as current repairs even if the claim for development rebate was disallowed. In the aforesaid facts, it would be noted that all the evidence was available before the Tribunal entitling the appellant - assessee to raise an additional alternative ground. In these circumstances, the above decision would also not assist the appellant - assessee. In the present facts, .....

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72, the appellant - assessee did not claim the deductions on account of sums transferred to contingency reserve and dividend control reserve. However, when the matter was pending before the Tribunal, this Court in the case of Amalgamated Electricity Co.Ltd. v. CIT (97 ITR 334) held that the amounts transferred to contingency reserve and dividend control reserve are allowed as deductions on revenue account. It is in view of the decision of this Court in the case of Amalgamated Electricity Co. Ltd .....

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ings and not necessarily from the subject matter raised in the memo of appeal. The reliance was also placed upon the decision of the Apex Court in Jute Corporation of India Ltd. v. CIT (187 ITR 688) wherein the Apex Court permitted the appellant to raise an additional ground for the first time before the appellate authority claiming deduction of purchase tax liability because the same had become liable to payment subsequent to the assessment order. The Full Bench observed that the Apex Court in .....

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before an additional ground is allowed to be raised, the appellate authority must be satisfied that the ground raised could not have been raised earlier for good reasons. The underlying basis for allowing the raising the additional ground in the case of Ahmedabad Electricity Co.Ltd. (supra) was the subsequent decision rendered by this Court in Amalgamated Electricity Co.Ltd. (supra) when appeal was pending. As held by the subsequent decisions of the Apex Court in NTPC Ltd. (supra), a judicial d .....

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inted out above, upon the satisfaction of the facts necessary for claiming a deduction. The allowing of a deduction in a subsequent year's assessment order cannot determine the facts as existing in the earlier assessment year, such as in this case so as to allow the deduction. 25] In fact, the issue with regard to the raising of new grounds in the absence of any evidence on record is no longer res integra in view of decision of the Apex Court in Addl. Commissioner of Income Tax Vs. Gurjargra .....

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cts also, the claim for deduction under Section 80IA of the Act was not made before the Assessing Officer or the CIT(A) but was made for the first time only before the Tribunal nor was there any evidence in support of the claim for the subject assessment year on record. Thus it stands covered by the above decision in Gurjargravures Pvt. Ltd. (supra). The aforesaid decision of the Apex Court was subject matter of consideration in Jute Corporation of India Ltd.(supra) wherein the Court while disti .....

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s nothing on record to indicate as to what was the reason which prevented the appellant assessee from raising a claim for deduction under Section 80IA of the Act for subject assessment year during the proceedings before the Assessing Officer and the CIT(A). Therefore, in the above facts , the view taken by the Tribunal in not allowing the appellant to raise additional ground in appeal is in line with the decision of the Apex Court in Gurjargravures Pvt.Ltd. (supra), NTPC Ltd. (supra) and Jute Co .....

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e before it. Where only a pure question of law arises from facts which are already on record, then there is no reason why the appellate authority should not consider the question of law so as to determine the correct tax liability of an assessee in accordance with law. However, where evidence is to be examined and that is not on record, then it will be considered only if the parties seeking to raise the additional ground satisfies the authority concerned that for good and sufficient reasons, the .....

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