Income Tax Appellate Tribunal - Hyderabad
Dcit, Circle-17(1), Hyd, Hyderabad vs East India Petroleum Pvt.Ltd., Hyd, ... on 22 September, 2017
ITA No 876 and CO 49 of 2015 East India Petroleum P Ltd Hyderabad.
IN THE INCOME TAX APPELLATE TRIBUNAL
Hyderabad ' A ' Bench, Hyderabad
Before Smt. P. Madhavi Devi, Judicial Member
AND
Shri S.Rifaur Rahman, Accountant Member
ITA No.876/Hyd/2015
(Assessment Year: 2008-09)
DCIT Circle - 17 (1) Vs M/s. East India Petroleum
Hyderabad Private Limited
Hyderabad
PAN: AAACE 4494 K
(Appellant) (Respondent)
C.O. No.49/Hyd/2015
(Arising out of ITA No.876/Hyd/2015)
(Assessment Year: 2008-09)
M/s. East India Vs DCIT Circle - 17 (1)
Petroleum Private Hyderabad
Limited, Hyderabad
PAN: AAACE 4494 K
(Appellant) (Respondent)
For Revenue : Smt. Suman Malik, DR
For Assessee: Shri P. Murali Krishna
Date of Hearing: 13.09.2017
Date of Pronouncement: 22.09.2017
ORDER
Per Smt. P. Madhavi Devi, J.M.
The appeal is filed by Revenue for the A.Y 2008-09 against the order of the CIT (A)-5, Hyderabad, dated 27.03.2015 and the cross objection is filed by the assessee.
Page 1 of 4ITA No 876 and CO 49 of 2015 East India Petroleum P Ltd Hyderabad.
2. In this case, during the course of assessment proceedings for the A.Y 2008-09, the assessee has filed a revised computation of income, claiming that the principal waiver amounting to Rs.9,26,00,305/- was by mistake offered to income and claimed that since the said amounts received are capital in nature, the same cannot be taxed. As the assessee has not made the claim in the return of income, respectfully following the decision of the Apex court in the case of Goetze India Ltd. Vs (284 ITR 323), the same has been rejected by the Assessing Officer. On an appeal, the CIT (A), vide orders in ITA.No.0344/DC- 2(2)/CIT(A)-III/2011-12, dt.24-12-2012 has stated that the assessee obtained the loan for the purchase of machinery and it was a capital receipt ab-initio. The CIT (A) further, directed Assessing Officer to consider the cost of acquisition of the capital assets connected to this loan amount as zero and disallow depreciation in all the years starting from the year in which the assets were acquired. Following the decision of the CIT (A), the assessee was asked to explain why the depreciation should not be disallowed on the said amount.
3. The assessee submitted its reply, but the AO was not convinced with the same and completed the assessment u/s 143(3) r.w.s. 147 of the Act, against which the assessee preferred an appeal before the CIT (A) who deleted the addition by following the decision of the Hon'ble Supreme Court in the case of Tata Iron & Steel Co. Ltd (281 ITR 285) (S.C) wherein it was held that the waiver of loan on subsequent dates will not affect the cost of assets. Against this order, the Revenue is in appeal before us and the assessee is in cross objection stating that the CIT (A) ought to Page 2 of 4 ITA No 876 and CO 49 of 2015 East India Petroleum P Ltd Hyderabad.
have given a categorical finding that the decision of the Hon'ble Supreme Court in the case of Saharanpur Electric Co. Ltd vs. CIT, reported in 194 ITR 294 has no application to the facts and circumstances of the assessee's case.
4. At the time of hearing, the learned Counsel for the assessee Shri P. Murali Krishna, submitted that the earlier proceedings of the CIT (A) dated 24.12.2012 had been challenged by both the assessee as well as the Revenue before the Tribunal in ITA No.235/Hyd/2013 and C.O No.18/Hyd/2013 and that the cross objection was raised by the assessee against the direction of the CIT (A) to reopen the assessment for the earlier A.Ys and reduce the depreciation after reducing the cost of assets, the Tribunal vide orders dated 29.07.2015 has upheld the contention of the assessee by following the decision of the Hon'ble Bombay High Court in the case of Mahindra & Mahindra Ltd vs. CIT reported in 261 ITR 501 wherein it has been held that the amount of waiver is not assessable u/s 28(iv) and hence there is no remission of liability and the amount is not assessable u/s 41(1) of the Act and therefore, the waiver of loan does not reduce the cost of acquisition of the Plant & Machinery and therefore, there is no question of reducing the depreciation on such Plant & Machinery. Therefore, according to him, the present appeal of the Revenue does not survive.
5. Having regard to the rival contentions and the material on record, we find that the present proceedings are consequent to the proceedings of the CIT (A) dated 24.12.2012 which has since been negated by the Tribunal vide order dated 29.07.2015. In Page 3 of 4 ITA No 876 and CO 49 of 2015 East India Petroleum P Ltd Hyderabad.
view of the same, we hold that the assessment proceedings and also the consequential appellate proceedings are not sustainable. Since the Revenue's appeal is dismissed, the assessee's cross objection also does not survive and is accordingly dismissed.
6. In the result, both the Revenue's appeal as well as the cross objection of the assessee are dismissed.
Order pronounced in the Open Court on 22nd September, 2017.
Sd/- Sd/-
(S.Rifaur Rahman) (P. Madhavi Devi)
Accountant Member Judicial Member
Hyderabad, dated 22nd September, 2017.
Vinodan/sps
Copy to:
1 DCIT, Circle 17(1), 6th Floor, B Block, I.T. Towers, AC Guards,
Hyderabad
2 M/s. East India Petroleum P Ltd, 202, Roxana Towers-B, 7-1-
24/1 Green Lands, Begumpet, Hyderabad
3 CIT (A)-5 Hyderabad
4 Pr. CIT - 5 Hyderabad
5 The DR, ITAT Hyderabad
6 Guard File
By Order
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