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2017 (7) TMI 569 - ITAT CHANDIGARH

2017 (7) TMI 569 - ITAT CHANDIGARH - Tmi - Disallowing of Peak load violation charges paid to PSEB - nature of expenditure - Held that:- There could be no grievance of the assessee vis--vis non-entertainment of claim by the lower authorities. As regards disallowance of the same, we find that the CIT (Appeals) had held the same to be penal in nature. On being confronted by the Bench to adduce evidence to prove that the claim was not penal in nature, the learned counsel for the assessee expressed .....

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e Ld. Counsel for the assessee has shown us the inclusion of the impugned sum in the Profit and Loss Account and has further tried to demonstrate through its computation of income that the same was not reduced. But we find that the facts do not appear to be evident and clear. We, therefore consider it fit to restore the issue to the file of the Ld. CIT (Appeals) to adjudicate the issue in accordance with law. We may add that the assessee be granted due opportunity of hearing and also be allowed .....

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5. 2. The assessee has raised the following grounds : 1. That order passed u/s 250(6) of the Income Tax Act, 1961 by the Ld.Commissioner of Income Tax (Appeals)-2, Ludhiana is against law and facts on the file in as much as she was not justified to uphold a sum of ₹ 20,000/- out of expenses on ground that certain expenses were un-vouched without pin pointing any specific item of disallowance. 2. That the Ld. Commissioner of Income Tax (Appeals)II, gravely erred in not entertaining the clai .....

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the Ld. CIT (Appeals) in not entertaining the following claims of the assessee made by way of filing letter before the Assessing Officer : 1. Peak load violation charges paid to PSEB Rs. 2,57,643/- 2. Excess depreciation reduced From the income of the assessee Rs.4,75,06,021/- 5. Brief facts relating to the issue are that during the course of assessment proceedings the assessee filed a revised computation of income claiming deduction on account of sum paid as violation charges of peak load facil .....

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load facility to PSEB, entertained and considered the claim of the assessee, but disallowed it holding it to be penal in nature. As for reduction of depreciation written back, claimed by the assessee, the Ld. CIT (Appeals) did not entertain the claim, since it was not made through a revised return of income and moreover, since no detailed bifurcation of the depreciation was furnished as it had been disallowed many times in earlier year. 6. Before us, on the issue of peak load charges, it was poi .....

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ure, the learned counsel for the assessee expressed his inability to do so. In view of the same, we hold that there is no infirmity in the order of the learned CIT (Appeals) in disallowing the claim of peak load violation charges paid amounting to ₹ 2,57,643/-. 7. As regards the remaining issue relating to reduction of excess depreciation credited to the Profit and Loss Account, Ld.AR contented that excess depreciation computed as per Companies Act, was included in its income by way of tra .....

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o this effect cited by the assessee.Ld AR referred to the following judgements in support of its contention : 1) DCIT Vs. Lab India Instruments Pvt. Ltd. (2005) 93 ITD 120 (Pune) 2) CIT Vs. Ramco International, 322 ITR 306 (P&H) 3) CIT Vs. Jai Parabolic Springs Ltd., 306 ITR 42 (Del) 8. Ld. DR on the other hand relied upon the order of the CIT(A) and stated that since the assessee had failed to explain how it failed to claim the same at the time of filing of original return as well as when t .....

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ced by the Ld .Counsel for the assessee in this regard on the decision of the ITAT Pune Bench in the case of DCIT vs. Lab India Instruments Pvt. Ltd. (2005) 93 ITD 120 is apt wherein the Tribunal held that an income not taxable cannot be taxed merely because the assessee forgot to claim the exemption of deduction under some belief. The Tribunal held that under section 4 of the Income Tax Act only true and correct total income is to be assessed and it is the duty of the tax collector to collect t .....

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e completion of assessment. In our humble opinion, the answer to such question is in negative for the reasons given hereafter. It is true and correct total income of every person which is assessable Under Section 4 of the Act. Consequently, the tax collector is rather duty bound to collect the legitimate tax due on such total income neither a penny less nor a penny more. The determination/assessment of total income would depend on the relevant provisions of the Act irrespective of the nature of .....

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ertent mistake cannot be exploited by tax authorities for rejecting the claim of assessee for exemption/deduction even though such claim has been made by assessee in the course of assessment proceedings. Rather, it is the duty of the AO to allow such deduction or exemption to which assessee is entitled to on the basis of material placed on record. No doubt, the claim of exemption/deduction cannot be thus; upon the assessee but, at least, it is the duty of AO to apprise of the relevant provisions .....

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he return or in the course of assessment proceedings then assessee is entitled to make such claim by moving application Under Section 154 for rectification since non-granting of deduction/exemption would amount to mistake apparent from record. The ratio of this judgment is based on the principle that AO is duty bound to giant the exemption/deduction even where assessee failed to claim the same. The relevant observations of then Lordships are extracted below: An obligation is imposed on the Incom .....

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e found with the Income-tax Office for pot making an order under Section 84 favouring the assessee. 10. Our view is further fortified by the judgment of Hon'ble Supreme Court in the case of National Thermal Power Corporation, 229 ITR 383 wherein it has been held that entire assessment proceedings are open before the Tribunal, and therefore, assessee is entitled to raise additional ground of appeal to claim any deduction/exemption provided no investigation into facts is required at appellate .....

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AO in the course of assessment proceedings. 11.The question before us can also be considered (sic)om another angle. The provisions of Section 139 are procedural provisions for making the assessment (R. Dalmia, 236 ITR 480. Therefore, such provisions cannot affect the rights and liabilities of the assessee unless specific provisions (sic) made to that effect. Reference can be made to the provisions of Section (sic) which disentitles the assessee to claim the carry forward/set off of losses Under .....

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