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TMI Blog2023 (4) TMI 1258X X X X Extracts X X X X X X X X Extracts X X X X ..... ppreciation of facts, the appeal being ITA No. 500/Ahd/2015 for the A.Y. 2007-08 is treated as a "lead case". In this appeal, the assessee has raised following grounds of appeal: "On Validity 1. On the facts and in the circumstances of the case and in law, the Commissioner of Income-tax (Appeals) ['CIT(A)'] erred in upholding the action of the Assessing Officer (AO) in re-opening the assessment under section 148 of the Income-tax Act, 1961 ('the Act'). 2. On the facts and in the circumstances of the case and in law, the CIT(A) erred in upholding the validity of re-opening the assessment under section 148 of the Act in spite of the fact that reassessment under section 147 could not be made after the expiry of four years from the end of the assessment year viz. after 31 March 2011 unless there has been any failure on part of the appellant to disclose fully and truly all material facts necessary for the assessment. 3. On the facts and in the circumstances of the case and in law, the CIT(A) erred in upholding the validity of re-opening the assessment under section 148 of the Act inspite of the fact that the agreement entered into with Gujarat Industrial Develop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the AO in levying interest under section 234C of the Act without appreciating the fact that amount under section 234C ought to be levied as per the return of income. 11. On the facts and in circumstances of the case and in law, the CIT(A) erred in upholding the action of the AO in levying interest under section 234D of the Act without appreciating the fact that interest under the said section cannot be levied pursuant to the assessment made under section 147 of the Act if the regular assessment has already been made under section 143(3) of the Act. 12. On the facts and in the circumstances of the case and in law, the CIT(A) erred in upholding the action of the AO in not allowing deduction amounting to Rs. 95,54,119/-in respect of payment of pit covering expenses made against provision for earlier years. Grounds of appeal raised in the appeal against the additions/disallowances made in the assessment order passed under section 143(3) which is in continuance with the assessment order passed u/s.143 (3) read with section 147 of the Act. 13. On the facts and in the circumstances of the case and in law, the CIT(A) erred in upholding the action of the AO in reducing from th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Tribunal in assessees own case for AY 2006-07in ITA No. 499/Ahd/2015 dated 28.02.2022. The case of assessee for AY 2007-08 as well as for AY 2006-07 was also reopened on similar reasons, after four years from the end of relevant assessment year on the basis of assessment order passed for AY 201011. The ld SR Advocate for assessee submits that in appeal for AY 2006-07, the Tribunal in its order dated 28.02.022 has already held that reopening is not valid. The ld Sr Advocate for the assessee submits that there is no variation in the facts for this assessment year. 4. On the other hand, the ld DR for the revenue supported the orders of lower authorities. 5. We have considered the rival submissions of the parties and perused the order of the lower authorities. We find that the assessing officer reopened the case of assessee on the basis of assessment order in AY 2010-11 dated 01.03.2013, wherein the assessing officer took his view that the assessee does not fulfil the conditions for claiming deduction under section 80IA. The conditions of which deduction under section 80IA was disallowed are also applicable for AY 2007-08. We find that while adjudication the similar grounds of appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13. The Hon'ble Gujarat High Court in CIT Vs Nirma Chemical Works (P) Ltd (supra) held that when the assessee-company claimed relief under section 80-I, the assessing allowed part relief by reworking and reducing the relief available and on appeal entire relief was allowed to the assessee. Thereafter the Commissioner passed order under section 263 disallowing the claim under section 80-I on the ground that new industrial undertaking was formed by splitting/ reconstructing up of old business. The Hon'ble High Court held that when deduction under section 80-I was granted by assessing officer after disallowing a part of claim which was carried in appeal before CIT(A), requirement of conditions stipulated by sub-section (2) of section 80-I was very much subject matter of appeal and merely because Commissioner took a different view, it would not be sufficient to permit Commissioner to exercise power under section 263. 14. Further, the Hon'ble Gujarat High Court in Nirma Industries Ltd Vs DCIT (supra) held that in case where an order of a subordinate forum is carried in appeal, the appellate court may - (i) reverse the order under appeal, (ii) modify the order under appeal, (iii) mer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g of the lower court or forum, there is no decision of the appellate court or forum. (as per para 19). The doctrine of merger is founded on principle of propriety in the hierarchy of justice delivery system, the underlying logic being that there cannot be more than one operative order governing same subject-matter at a given point of time. The only caveat to the doctrine of the merger is that the content or the subject-matter of challenge before the superior forum has to be borne in mind. 15. The Hon'ble jurisdictional High Court in the case of Cliantha Research Ltd. (supra), wherein the Hon'ble court held that where during the original assessment assessee's claim was processed at length and after calling for detailed submission, the same was accepted, merely because a certain element or angle was not in the mind of Assessing Officer while accepting such a claim, could not be a ground for issuing notice under section 148 for reassessment was based on change of opinion on the part of Assessing Officer and that all materials were available before the Assessing Officer which have already scrutinized. Therefore, notice issued after four years from the end of relevant assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion on his other submissions on the validity of claim under section 80IA and on the adjudication on the merits of various grounds of appeal has become academic." 6. Considering the aforesaid decision of this combination on similar set of facts on similar grounds of appeals, the ground No. 1 to 3 of the appeal are allowed. 7. Ground No. 4 & 5 relates to disallowance /eligibly of deduction under section 80IA in respect of land fill project I, considering the same as new undertaking. The ld Senior Advocate for assessee submits that ground No. 4 & 5 are covered by the order of Tribunal in favour of assessee in assessees own case for AY 2008-09, in ITA No. 1849/Ahd/2014 dated 2712.2021. The ld Sr Advocate for the assessee submits that ld CIT(A) followed the order of CIT(A) in AY 208-09, which has been allowed in favour of assessee and there, is no variation in the facts for this assessment year. 8. On the other hand, the ld DR for the revenue supported the orders of lower authorities. 9. We have considered the rival submissions of the parties and perused the order of the lower authorities. We find that this combination in assesses own case for AY 2008-09 in ITA No. 1849/Ahd/2014 on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eduction under section 80-IA(4) of the Act and accordingly, entire deduction claimed on account of such income should not be disallowed and the assessment accordingly enhanced. The assessee filed detailed explained dated 24.12.2013 as recorded in para 4.2.2 of order of CIT(A). the ld CIT(A) after considering the explanation of assessee held the assessee started claiming deduction under section 80IA(4) on an infrastructure facility which was already on operation since 01.04.1998. Before him the assessee's AR claimed that the assessee started claiming deduction under section 80IA(4) when it became eligible on account of amendment made in the relevant provisions. The ld CIT(A) held that eligibility was available to the assessee from F.Y. 2001-02 itself and hence if the assessee had entered into an agreement with GIDC during this Financial Year, it could have been eligible for deduction under section 80IA(4) on account of such infrastructure facility already inexistence, as this infrastructure facility had been started after 1st of April, 1995. But since this has not been done, hence the assessee is not eligible for deduction under section 80IA(4) on Landfill Project No. '1' as this is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n'ble Bombay High Court in Simple Foods Products Ltd Vs CIT (2017) 84 taxmann.com 239 (Bom). 23. Hon'ble Gujarat High Court in Saurashtra Cement & Chemical Industries Ltd vs. CIT (123 ITR 669) has held as under: "The Tribunal was perfectly justified in taking the view that if the relief of tax holiday was granted to the assessee company for the asst. yr. 196869, the assessee was entitled to continuance of that relief for the subsequent four years and the ITO would not be justified in refusing to continue the allowance for the assessment year under reference, i.e., 1969-70, without disturbing the relief for the initial year The next question to which the Tribunal addressed itself, and in our opinion rightly, was whether the ITO was justified in refusing to continue the relief of tax holiday granted to the assessee-company for the asst. yr. 1968-69, in the assessment year under reference, that is, 1969-70, without disturbing the relief granted for the initial year. It should be stated that there is no provision in the scheme of s. 80J similar to the one which we find in the case of development rebate which could be withdrawn in subsequent years for breach of certain conditions. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is a distinct and separate undertaking from Landfill I. In the result, the assessee succeeds on this ground of appeal. 26. In the result, ground No.1 of the appeal is allowed." 10. Considering the aforesaid decision of this combination on similar set of facts on similar grounds of appeals, the ground No. 4 & 5 of the appeal, wherein no variation in facts is brought to our notice, thus, both the grounds of appeal are allowed with similar observation. 11. Ground No. 6 & 7 relates to not allowing deduction under section 80IA(4), when it was allowed in initial year and fulfilment of required conditions. Considering the fact that we have allowed relief to the assessee on ground No. 4 & 5 therefore, adjudication on these grounds of appeal have become academic. 12. Ground No. 8 relates to not treating Incinerator Project No. 2 as separate undertaking and not allowing separate deduction under section 80IA(4). The ld Senior Advocate for assessee submits that ground No. 4 & 5 are covered by the order of Tribunal in favour of assessee in assessees own case for AY 2008-09, in ITA No. 1849/Ahd/2014 dated 2712.2021. The ld Sr Advocate for the assessee submits that ld CIT(A) followed the ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e have considered the rival submissions of the parties and have gone through the orders of the lower authorities. The assessing officer while passing the assessment order allowed deduction under section 80IA in respect of Land Fill I, Land Fill II and Incinerator project by treating the said undertakings as a composite undertaking. The ld CIT(A) held that Incinerator is a new infrastructure facility and hence eligible for deduction under section 80- IA(4) of the Act for 10 years from AY 2007-08. This finding of ld CIT(A) is not challenged by revenue before Tribunal, thus, it has attained finality. So far as finding of the ld CIT(A) with regard to Incinerator-II is concerned it was not a subject matter of appeal before ld. CIT(A) for the year under consideration, therefore,we are in agreement with the submissions of the learned Senior Counsel for the assessee that such finding given by the CIT(A) is totally incorrect and uncalled for while deciding the appeal for AY 2008-09. 36. In the result, ground No. 3& 4 of the appeal is allowed. 15. Considering the aforesaid decision of this combination in AY 2008-09, on similar set of facts on similar ground of appeals, wherein no variatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lopments post facto filing of the instant appeals. We therefore accept assesse's these two grounds as well. Its appeal ITA No.2223/Ahd/2010 succeeds." 55. Considering the consistent decision of the Tribunal on similar set of fact on similar component of income, and following the principle of consistency, we direct the AO to follow the order of Tribunal in AY 200708 dated 27.02.2017 and allow / delete the disallowance of provisions of pit covering expenses. 56. In the result, ground No. 8 of the appeal is allowed." 20. Considering the aforesaid decision of this combination in AY 2008-09, on similar set of facts on similar ground of appeals, wherein no variation of facts is brought to our notice, the ground No. 12 & 16 of the appeal are allowed with similar observation. 21. Ground No. 13 of the appeal relates to reducing the interest income of Rs. 42.88 lacs earned on fixed deposits from profit of business. The ld Senior Advocate for assessee submits that this ground of appeal is covered by the order of Tribunal in favour of assessee in assessees own case for AY 2008-09, in ITA No. 1849/Ahd/2014 dated 2712.2021. The ld Sr Advocate for the assessee submits that ld CIT(A) fol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsistency, we direct the AO to follow the order of Tribunal in AY 2007-08 dated 27.02.2017 and recomputed the eligible deduction under section 80IA accordingly. 41. In the result, ground No. 5 of the appeal is allowed. 24. Considering the aforesaid decision of this combination in AY 2008-09, on similar set of facts on similar ground of appeals, wherein no variation in facts is brought to our notice, thus, this ground No. 13 of appeal is allowed with similar observation. 25. Ground No. 14 of the appeal relates to not adjudication allowance of 10% interest income for deduction for exempt income. The ld Senior Advocate for the assessee submits that he is not pressing this ground of appeal. Considering the submissions of ld Senior Counsel for assessee this ground of appeal is dismissed. 26. Ground No. 15 relates to disallowance of provision of post closer expenses. The ld Senior Advocate for assessee submits that this ground of appeal is covered by the order of Tribunal in favour of assessee in assessees own case for AY 2008-09, in ITA No. 1849/Ahd/2014 dated 2712.2021. The ld Sr Advocate for the assessee submits that ld CIT(A) followed the order of CIT(A) in AY 208-09, which has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed relief on both the disallowances to the assessee, therefore, this issue have become academic. 31. In the result, the appeal of the assessee is allowed on legal issue of reopening as well as on various issues on merit as well. 32. In ITA No. 501/Ahd/2015 for the A.Y. 2008-09, the assessee has raised following grounds of appeal: "On Validity 1. On the facts and in the circumstances of the case and in law, the Commissioner of Income-tax (Appeals) ['CIT(A)'] erred in upholding the action of the Assessing Officer (AO) in re-opening the assessment under section 148 of the Income-tax Act, 1961 ('the Act'). On Merits 2. On the facts and in the circumstances of the case and in law, the CIT(A) erred in upholding the action of the AO in not granting deduction under section 80IA of the Act in respect of profit derived from Landfill Project 1 being an eligible infrastructure facility under section 80IA(4) of the Act. 3. On the facts and in the circumstances of the case and in law, the CIT(A) erred in holding that the appellant is not entitled for deduction under section 80IA(4)(i)(b) in respect for Landfill Project 1 since it is not a 'new' undertaking a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot be levied pursuant to the assessment made under section 147 of the Act if the regular assessment has already been made under section 143(3) of the Act. Grounds of appeal raised in the appeal against the additions/disallowances made in the assessment order passed under section 143(3) which continue in assessment order passed under section 143(3) read with section 147 of the Act. 11. On the facts and in the circumstances of the case and in law, the CIT(A) erred in upholding the action of the AO in reducing from the "profits and gains of the business" an amount of Rs. 34,84,029/- in respect of interest income earned on fixed deposit with Bank. 12. On the facts and in the circumstances of the case and in law, the CIT(A) erred in not giving any finding in respect of the ground of appeal relating to allow 10% of interest income as deduction towards expenditure incurred for earning other income. 13. On the facts and in the circumstances of the case and in law, the CIT(A) erred in upholding the action of the AO in disallowing an amount of Rs. 29,84,694/- in respect of provision for post closure care expenditure. 14. On the facts and in the circumstances of the case and in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also allowed with similar directions. Once, we have allowed ground No. 7, the consideration of ground No.8 have become academic. 38. Ground No. 9 & 10 relates levy of interest under section 234B, 234C & 234D of the Act. We find that these ground of appeal are consequential, therefore, the assessing officer is directed to recompute various interests accordingly. 39. Ground No. 11 relates to reduction of interest income from fixed deposits from profits of eligible for deduction. We find that ground No. 13 in the present appeal is identical to the ground No.8 in ITA No. 500/Ahd/2015 for AY 2007-08, which we have allowed vide para 23 and 24 of this order, therefore, this ground of appeal is also allowed with similar directions. 40. Ground No. 12 relates to not adjudicating allowance of 10% income as deduction for expenses incurred for earning other income. The ld Senior Advocate for assessee submits that he is not pressing this ground of appeal. Therefore, this ground of appeal is dismissed as not pressed. 41. Ground No. 13 & 14 relates to disallowance of provisions for post closer expenses and pit covering expenses. We find that these ground of present appeal is identical to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al income determined on the basis of reassessment or recomputation exceeds the tax on total income determined on the basis of regular assessment. Grounds of appeal raised in the appeal against the additions/disallowances made in the assessment order passed under section 14(3) which continue in the assessment order passed under section 143(3) read with section 147 of the Act. 6. On the facts and in the circumstances of the case and in law, the CIT(A) erred in upholding the action of the AO in reducing from the "profits and gains of the business" an amount of Rs. 32,29,316/- in respect of interest income earned on fixed deposit with Bank. 7. On the facts and in the circumstances of the case and in law, the CIT(A) erred in not giving any finding in respect of the ground of appeal relating to allow 10% of interest income as deduction towards expenditure incurred for earning other income. 8. On the facts and in the circumstances of the case and in law, the CIT(A) erred in upholding the action of the AO in disallowing an amount of Rs. 29,91,757/- in respect of provision for post closure care expenditure. 9. On the facts and in the circumstances of the case and in law, the CIT(A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al, therefore, the Assessing Officer is directed to recompute the interest under Section 234 accordingly. 50. Ground No. 6 relates to confirming reduction of interest amount of Rs. 32.29 lacs earned on fixed deposits from profit eligible for deduction. We find that this ground of appeal is identical to the ground No. 11 in appeal for A.Y. 2008-09, which we have allowed by following order of Bench in earlier years in para 39 of this order. Therefore, following the principle of consistency, this ground of appeal is allowed with similar direction. 51. Ground No. 7 relates to not adjudicating allowance of 10% of interest income as deduction towards expenses incurred in earning exempt income. The ld. Sr. Counsel for the assessee submits that he is not pressing this ground of appeal. Considering the submission of ld. Sr. Counsel, this ground of appeal is dismissed as not pressed. 52. Ground No. 8 and 9 relates to disallowance of provisions of post closure care expenses and provision for pit covering expenses. We find that these grounds of appeal are identical to the ground No. 13 and 14 in appeal for A.Y. 2008-09, which we have allowed by following order of Bench in earlier years in p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8,94,592/- in respect of provision for post closure care expenditure. 7. On the facts and in the circumstances of the case and in law, the CIT(A) erred in upholding the action of the AO in disallowing an amount of Rs. 40,26,304/- in respect of provision for pit covering expenses. 8. On the facts and in the circumstances of the case and in law, the CIT(A) erred in upholding the action of the AO in adding back the following amount while computing the book profits under section 115JB of the Act: (a) Provision for post closure expenditure -Rs. 38,94,592/- (b) Provision of pit covering expenses - Rs. 40,26,304/- 9. On the facts and in the circumstances of the case and in law, the CIT(A) erred in upholding the action of the AO of levying interest under Section 115P of the Act amounting to Rs. 7,08,361/-. The appellant hereby reserves the right to add to, alter or amplify the above grounds of appeal, at any time before or at, the time of appeal, so as to enable the Honorable Tribunal to decide the appeal in accordance with law." 56. Ground No. 1 relates to upholding the disallowance of landfill project No. 1 and 2 in not treating as separate undertaking for deduction under Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We find that we have already allowed the relief on disallowance of provision of pit covering expenses and provision for post closure expenses. Thus, this ground of appeal has become academic. 63. Ground No. 9 relates to levy of interest under Section 115P of Rs. 7,08,361/-. The ld. Senior Advocate for the assessee submits that during the relevant period, the assessee declared dividend of Rs. 41.86 lacs and paid dividend distribution tax within statutory period prescribed under Section 115-O(3) of the Act. The Assessing Officer levied interest of Rs. 708361/- under Section 115P and failed to grant credit of dividend distribution tax. The ld. CIT(A) confirmed the action of Assessing Officer by holding that the assessee failed to furnish evidence that due tax were paid on 29/09/2010. The ld. Senior Advocate for the assessee submits that dividend distribution tax was paid within statutory time period, and may be verified by the Assessing officer, thus, the issue may be restored back to the Assessing Officer to grant relief to the assessee subject to verification of facts. 64. On the other hand, the ld./ CIT-DR for the revenue supported the order of the lower authorities. The ld. CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t with Bank. 5. On the facts and in the circumstances of the case and in law, the CIT(A) erred in not giving any finding in respect of the ground of appeal relating to allow 10% of interest income as deduction towards expenditure incurred for earning other income. 6. On the facts and in the circumstances of the case and in law, the CIT(A) erred in upholding the action of the AO in disallowing an amount of Rs. 3,37,57,688/- in respect of provision for post closure care expenditure. 7. On the facts and in the circumstances of the case and in law, the CIT(A) erred in upholding the action of the AO in disallowing an amount of Rs. 2,07,61,318/- in respect of provision for pit covering expenses. 8. On the facts and in the circumstances of the case and in law, the CIT(A) erred in upholding the action of the AO in adding back the following amount while computing the book profits under section 115JB of the Act: (a) Provision for post closure expenditure -Rs. 3,37,57,688/- (b) Provision of pit covering expenses - Rs. 2,07,61,318/- 9. On the facts and in the circumstances of the case and in law, the CIT(A) erred in upholding the action of the AO of levying interest under Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aking had started its operation from AY 2012-13 and the said issue was not raised in the appeal before the CIT(A). 4. On the facts and in the circumstances of the case and in law, the CIT(A) erred in upholding the action of the AO in reducing from the "profits and gains of the business" an amount of Rs. 32,29,316/- in respect of interest income earned on fixed deposit with Bank. 5. On the facts and in the circumstances of the case and in law, the CIT(A) erred in upholding the action of the AO in reducing from the "profits and gains of the business" an amount of Rs. 3,30,000/- in respect of membership fees. 6. On the facts and in the circumstances of the case and in law, the CIT(A) erred in not giving any finding in respect of the ground of appeal relating to allow 10% of interest income as deduction towards expenditure incurred for earning other income. 7. On the facts and in the circumstances of the case and in law, the CIT(A) erred in upholding the action of the AO in disallowing an amount of Rs. 29,91,757/- in respect of provision for post closure care expenditure. 8. On the facts and in the circumstances of the case and in law, the CIT(A) erred in upholding the action ..... X X X X Extracts X X X X X X X X Extracts X X X X
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