Income Tax Appellate Tribunal - Delhi
M/S. Rio Tinto Exploration (I) Pvt. ... vs Dcit, New Delhi on 5 April, 2018
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH: 'F' NEW DELHI
BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER
&
SHRI P. MAHARISHI, ACCOUNTANT MEMBER
ITA No.-5562/Del/2014
(Assessment Year: 2007-08)
DCIT vs Rio Tinto Exploration (I) Pvt. Ltd.
Circle 15(1) Apt. No. 100, A/5, Ground Floor,
New Delhi. The Capital Court,
Old of Palme Marg, Munirka,
New Delhi. 110067
PAN No. AABCA1913A
&
Cross Objection No. 168/Del/2015
(In ITA No.-5562/Del/2014)
(Assessment Year: 2007-08)
Rio Tinto Exploration (I) Pvt. Ltd. vs DCIT
Apt. No. 100, A/5, Ground Floor, Circle 15(1)
The Capital Court, New Delhi.
Old of Palme Marg, Munirka,
New Delhi. 110067
PAN No. AABCA1913A
Assessee by Sh. Nageshwar Rao &
Sh. Sandeep Karhail, Advs.
Revenue by Smt. Deepali Chandra, CIT (DR)
Date of Hearing 05.04.2018
Date of Pronouncement 05.04.2018
ITA No. 5562/Del/2014 & CO No. 168/Del/2015
Rio Tinto Exploration (I) Pvt. Ltd.
ORDER
PER JOGINDER SINGH, J.M.
The Revenue is aggrieved by the impugned order dated 25.07.2014 of the Ld. First Appellate Authority, New Delhi, whereas the assessee has also filed cross objection against the aforementioned impugned order. First we shall take up the appeal of the Revenue, wherein the only ground pertains to deleting the disallowance of provision for work in progress amounting to Rs. 18,27,27,697/- ignoring the fact that the provision made was an unascertained liability and hence, not allowable as per section 37(1) of the Income Tax Act, 1961 (hereinafter the 'Act').
2. During hearing, the Ld. CIT(DR) Smt. Deepali Chandra defended the addition made by the Ld. AO by advancing arguments which are identical to the ground raised. Our attention was invited to the concluding para of the Ld. CIT (A) by arguing that the factual aspect was ignored by the Ld. First Appellate Authority. Hence, the claim was wrongly allowed by him.
2.1 On the other hand, Shri Nageshwar Rao alongwith Shri Sandeep Karhail, Ld. Advocates for the assessee claimed that in earlier year the issue in hand was decided in favour of the assessee by the Ld. First Appellate Authority and the matter was carried in the 2 ITA No. 5562/Del/2014 & CO No. 168/Del/2015 Rio Tinto Exploration (I) Pvt. Ltd.
appeal before the Tribunal by the Revenue, wherein the appeal of the Revenue was dismissed and on further appeal the Hon'ble High Court upheld the order of the Tribunal. It was also contended that even on the rule of consistency the Department is not expected to take a different view. Our attention was invited to pages 62, 122 & 126 of the paper book.
2.2 We have considered the submissions of Ld. DR and perused the material available on record. The facts in brief are that the assessee declared loss of Rs. 15,28,51,180/- in its return filed on 30.10.2007 which was processed u/s 143(1) of the Act. The case of the assessee was selected for scrutiny and thereafter the assessment was made u/s 143(3) of the Act at a loss of Rs. 15,28,13,605/- on 30.10.2009. Later on it was noticed that the assessee has debited an amount of Rs. 18,27,27,697/- towards provision for work in progress. The Ld. AO was of the view that as the provision made was not an ascertained liability, therefore, the same was disallowed and added back to the returned loss of the assessee company.
2.3 On appeal before the Ld. CIT (A), considering various judicial pronouncements and the factual matrix the disallowance 3 ITA No. 5562/Del/2014 & CO No. 168/Del/2015 Rio Tinto Exploration (I) Pvt. Ltd.
made by the Ld. AO was deleted. The Revenue is in appeal before this Tribunal.
2.4 If the observation made in the assessment order, impugned order and the decisions cited before us, if kept in juxtaposition and analyzed, we find that for AY 2001-02 (pages 62 of the PB) identical issue was raised before the Ld. CIT (A), wherein the issue was finally decided in favour of the assessee. It was observed by the Ld. CIT (A) (page 122 of the PB) that "the provisions for project work in progress amounting to Rs. 1,61,80,156/- represents expenses actually incurred/crystallized during the normal course of business. Accordingly, the same been claimed as a deduction while computing the total taxable income for the subject assessment year 2001-02".
2.5 It is further noted that the matter was carried in appeal before the Tribunal by the Revenue on the issue of non-appreciation the provision contained in section 35E of the Act. The Tribunal vide order dated 26.09.2008 (ITA No. 4908/Del/2005) dismissed the appeal of the Revenue. Thereafter the Revenue filed appeal before the Hon'ble High Court. The Hon'ble High Court vide order dated 28.01.2010 considered the matter, wherein the Revenue raised the issue by contending that the Ld. CIT (A) did not appreciate the provision contained in section 35E of the Act which according to the 4 ITA No. 5562/Del/2014 & CO No. 168/Del/2015 Rio Tinto Exploration (I) Pvt. Ltd.
Revenue was clearly applicable. The controversy before the Hon'ble High Court was with respect to applicability of section 35E of the Act. The Hon'ble High Court affirmed the view taken by the Tribunal. It was held that no substantial question of law arose for consideration. Before us no contrary decision was cited by the Revenue. Till the stage the stand taken by the Ld. First Appellate Authority has attained finality, therefore, even on the rule of consistency the assessee is having the case in its favour. If this issue is analyzed with respect to principle of consistency, it is also noted that in earlier assessment years, as discussed above, the disallowance made by the AO was either deleted by the Ld. First Appellate Authority or by the Tribunal as is evident from the orders of the earlier assessment years. In view of these undisputed facts, the ld. Assessing Officer is expected to follow the principle of consistency unless and until contrary material/facts are brought on record. On the issue of consistency, we are supported by following decisions:-
i. Parshuram Pottery Works Ltd. vs ITO 106 ITR 1 (SC) ii. Security Printers 264 ITR 276(Del.) iii. CIT vs Neo Polypack Pvt. Ltd. 245 ITR 492 (Del.) iv. CWT vs Allied Finance Pvt. Ltd. 289 ITR 318 (Del.) v. Berger Paints India Ltd. vs CIT 266 ITR 99 (SC) vi. DCIT vs United Vanaspati (275 ITR 124) (AT)(Chandigarh ITAT) vii. Union of India vs Kumudini N. Dalal 249 ITR 219 (SC) viii. Union of India vs Satish Pannalal Shah 249 ITR 221 5 ITA No. 5562/Del/2014 & CO No. 168/Del/2015 Rio Tinto Exploration (I) Pvt. Ltd.
ix. B.F.Varghese vs State of Kerala 72 ITR 726 (Ker.) x. CIT vs Narendra Doshi 254 ITR 606 (SC) xi. CIT vs Shivsagar Estate 257 ITR 59 (SC) xii. Pradip Ramanlal Seth vs UOI 204 ITR 866 (Guj.) xiii. Radhaswamy Satsang vs CIT 193 ITR 321 (SC) xiv. Aggarwal warehousing & Leasing Ltd. 257 ITR 235 (MP) 2.6 The sum and substance of the aforesaid judicial pronouncements is that on the basis of principle of judicial discipline, consistency has to be followed and once in a particular year, if any view is taken, in the absence of any contrary material, no contrary view is to be taken as finality to the litigation is also a principle which has to be followed. Before us, no contrary facts or any adverse material was brought on record by the Revenue, therefore, we find no infirmity in the finding/conclusion of the ld. First Appellate Authority.
We affirm his view being uncontroverted on facts. Resultantly the appeal of the Revenue is dismissed.
3. Now, we shall take up the cross objection (168/Del/2015). During hearing the Ld. Counsel for the assessee contended that if the appeal of the Revenue is dismissed then the assessee may be permitted not to press the cross objection raised by the assessee. Since, we have dismissed the appeal of the Revenue, upholding the order of the Ld. CIT (A), therefore, the cross objection of the assessee is dismissed as not pressed.
6 ITA No. 5562/Del/2014 & CO No. 168/Del/2015
Rio Tinto Exploration (I) Pvt. Ltd.
Finally, the appeal of the Revenue is dismissed and the cross objection of the assessee are dismissed as not pressed.
This order was pronounced in the open court, at the conclusion of the hearing, in the presence of Ld. DR on 05.04.2018.
Sd/- Sd/-
(P. MAHARISHI) (JOGINDER SINGH)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Dated: 05.04.2018
*Kavita Arora
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(Appeals)
5. DR: ITAT
TRUE COPY
ASSISTANT REGISTRAR
ITAT NEW DELHI
This order was directly dictated 05.04.2018 on Computer to the P.S. Draft dictated on 05.04.2018 Draft proposed & placed before 05.04.2018 the second member Draft discussed/approved by Second Member.
Approved Draft comes to the 06.04.18
Sr.PS/PS
Kept for pronouncement on 05.04.18
File sent to the Bench Clerk 06.04.18
Date on which file goes to the
AR
Date on which file goes to the
Head Clerk.
Date of dispatch of Order.
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