Income Tax Appellate Tribunal - Jaipur
Acit, Ajmer vs Ajmer Vidhyut Vitran Nigam Ltd., Ajmer on 4 October, 2018
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IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR
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BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM
M.A. Nos. 108,109 & 110/JP/2018
(Arising out of ITA Nos. 306, 307 & 308/JP/2016)
fu/kZkj.k o"kZ@Assessment Years : 2002-03, 2003-04 & 2006-07.
The ACIT cuke M/s Ajmer Vidyut Vitran
Circle-2, Vs. Nigam Ltd., Vidyut Bhawan,
Ajmer Panchsheel Nagar,
Makarwali Road, Ajmer
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jktLo dh vksj ls@ Revenue by : Shri J. C. Kulhari (JCIT)
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s Assessee by : Shri Sunil Porwal &
Shri Ashok Gupta (CA)
lquokbZ dh rkjh[k@ Date of Hearing : 28/09/2018
mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 04/10/2018
vkns'k@ ORDER
PER: VIKRAM SINGH YADAV, A.M. These are three miscellaneous applications filed by the Revenue against the consolidated order passed by the Co-ordinate Bench in ITA Nos. 306, 307 & 308/JP/2016 dated 09/08/2017.
2. In the said order, the Co-ordinate Bench has deleted the levy of penalty on depreciation disallowed on non-existing assets as well as excess depreciation disallowed u/s 32(1)(iii) read with sec 43(1) and explanation 10 thereto.
2 M.A. Nos. 108,109 & 110/JP/2018The ACIT, Ajmer Vs. M/s Ajmer Vidyut Vitran Nigam Ltd., Ajmer
3. The ld. DR has submitted that the Department has since moved an appeal before the Hon'ble High Court against the said consolidated order passed by the Co-ordinate Bench and the Hon'ble High Court has been pleased to pass an order in DB Appeal No. 19, 26 & 31/2018 dated 03/04/2018 wherein it was held as under:-
"4. The facts of the case are that the return declaring income Nil filed on 31.10.2002 than it had been revised at income of Rs. 49,70,09,117/- before allowing depreciation was filed on 31.10.2003 shown in the return as Nil income. Later on the order u/s 143(3) was made. The order u/s 143(2)/148 was made as per the direction u/s 144A issued by worthy Addl. CIT, Rage-2, Ajmer on 23.12.2008. While completing the assessment the following additions were made:-
(i) Depreciation disallowed on non existing assets : Rs. 21,60,26,673/-
(ii) Depreciation disallowed u/s 43(1) explanation 10 Rs.
18,99,41,047/-.
5. Counsel for the appellant states that in all these appeals, the matters may be remitted back to the tribunal on the main issue. In that view of the matter, he would like to file rectification application before the tribunal and request the tribunal to heard all these matters together.
6. In view of the above, all these appeals stand disposed of with liberty to the appellant to move rectification application before the tribunal with a request to hear all the matters together. If such a request is made before the tribunal, we hope that the tribunal will decide all the matters together."
3 M.A. Nos. 108,109 & 110/JP/2018The ACIT, Ajmer Vs. M/s Ajmer Vidyut Vitran Nigam Ltd., Ajmer
4. It was accordingly submitted by the ld. DR that the said order passed by the Co-ordinate Bench may kindly be recalled in light of the direction so passed by the Hon'ble High Court.
5. Per contra, the ld. AR submitted that in the context of quantum proceedings, the Hon'ble High Court in its earlier order dated 21.12.2017 in DB Appeal No. 298, 299, 300, 35, 36 & 37/2017 dated 21/12/2017 has admitted the following substantial questions of law and has held as under:
"3. This court while admitting the appeals framed following substantial question of law:-
3.1 Appeals No. 298/2016, 299/2016 & 300/2016 admitted on 8.2.2017.
"Whether the Id. ITAT was justified in law in uploading the reduction of subsidy/grant from the actual cost of the Capital Asset before computation of depreciation under Section 32 of the Act of 1961 without appreciating that the Appellant is a State Government company governed by the Rajasthan State Electricity Board's rules and regulations and as per the rules framed under the Electricity (supply) Annual Accounts Rules, 1985, wherein the cost of the Capital Asset shall be calculated without considering 4 M.A. Nos. 108,109 & 110/JP/2018 The ACIT, Ajmer Vs. M/s Ajmer Vidyut Vitran Nigam Ltd., Ajmer the contribution, subsidy or grants received towards the cost of the asset is mandatory?"
3.2 Appeal No. 35/2017 admitted on 23.5.2017.
"(I) Whether in the facts and circumstances of the case the ITAT was justified in law in allowing the depreciation claimed even when the physical existence of the assets has not been proved by the assessee company and this has been acknowledged by the Tribunal in para 9.6 of its Order.
(ii) Whether in the facts and circumstances of the case the ITAT was justified in law in holding that the provisions of section 115JB of the IT Act are not applicable on the assessee company being a company governed under the Electricity Act and the companies Act, ignoring that section 115JB does not make any exception for any company.
(iii) Whether in the facts and circumstances of the case the ITAT was justified in law in confirming the order of the CIT(A) who had deleted the addition of Rs. 93,26,61,20/- ignoring that the assessee failed to submit vouchers/evidence of such expenditure.
3.3 Appeals No. 36/2017 & 37/2017 admitted on 25.1.2017.
5 M.A. Nos. 108,109 & 110/JP/2018The ACIT, Ajmer Vs. M/s Ajmer Vidyut Vitran Nigam Ltd., Ajmer "(i) Whether in the facts and circumstances of the case the ITAT was justified in law in allowing the depreciation claimed even when the physical existence of the assets has nct been proved by the assessee company and this has been acknowledged by the Tribunal in para 9.6 of its Order.
(ii) Whether in the facts and circumstances of the case the ITAT was justified in law in holding that the provisions of section 1153B of the IT Act are not applicable on the assessee company being a cmpany governed under the Electricity Act and the companies Act, ignoring that section 115JB does not make any exception for any company.
4. The facts of the case are that the appellant company is a public sector company carrying on business of Sub Transaction, Distribution and Supply of Electricity. The company was formed after re-structuring of RSEB (Rajasthan State Electricity Board) on 19.06.2000, when 5 companies came in to existence. When the company was formed, certain assets and liabilities were transferred from the parent company and income and expenditure was subject to reconciliation. The year under consideration was third year after the company's inception and certain expenses and income being in the nature of prior period were claimed as per normal accounting norms and on the belief that certain expenses 6 M.A. Nos. 108,109 & 110/JP/2018 The ACIT, Ajmer Vs. M/s Ajmer Vidyut Vitran Nigam Ltd., Ajmer though pertaining to the previous years are admissible only in the year in which it crystallized and accounted for on the basis of system of accounting regularly followed by the assessee. During the year the prior period income amounted to Rs. 1,99,40,531/- and prior period expenses amounted to Rs. 3,54,81,308/-. Thus, net expenses were claimed at Rs. 1,55,40,777/- (Rs. 3,54,81,308 - Rs. 1,99,40,531/-).
5. We have heard both the parties earlier but in view of the Notification which has been issued on 18.01.2002, the present appellant-company is covered by the said notification issued by the State Government.
6. In that view of the matter, the very basis of the consideration by the tribunal considering it to be under the Companies Act is required to be reconsidered. In that view of the matter, the order of the tribunal is required to be quashed and set aside as it is based on wrong presumptions.
7. Hence, we remit back the matters to the tribunal.
8. It will be open for the parties to raise all contentions before the tribunal in all the appeals. The tribunal will reconsider the matters after taking into consideration notification of 2002. The counsel for the 7 M.A. Nos. 108,109 & 110/JP/2018 The ACIT, Ajmer Vs. M/s Ajmer Vidyut Vitran Nigam Ltd., Ajmer assessee will put all the documents before the tribunal by the First week of January, 2018.
9. Both the parties will appear before the tribunal on or before 22.1.2018 and tribunal will hear the matters afresh including all the issues which are admitted by the court."
6. After hearing both the parties and in light of directions of the Hon'ble High Court vide its order dated 3.04.2018, we hereby recall the order passed by the Co-ordinate Bench in ITA No. 306, 307 & 308/JP/2016 dated 09/08/2017 for hearing the matter afresh along with matter relating to quantum proceedings in terms of order of the Hon'ble High Court dated 21/12/2017.
7. Both the penalty and quantum matters are directed to be listed for hearing on 18/11/2018. Inform parties.
In the result, miscellaneous applications filed by the Revenue are disposed off in light of above directions.
Pronounced in the Open Court on 04/10/2018.
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(Vijay Pal Rao) (Vikram Singh Yadav)
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*Ganesh.
8 M.A. Nos. 108,109 & 110/JP/2018
The ACIT, Ajmer Vs. M/s Ajmer Vidyut Vitran Nigam Ltd., Ajmer vkns'k dh izfrfyfi vxzfs 'kr@Copy of the order forwarded to:
1. vihykFkhZ@The Appellant- The ACIT, Ajmer
2. izR;FkhZ@ The Respondent- M/s Ajmer Vidyut Vitran Nigam Ltd., Ajmer
3. vk;dj vk;qDr@ CIT
4. vk;dj vk;qDr@ CIT(A)
5. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur.
6. xkMZ QkbZy@ Guard File {M.A Nos. 108,109 & 110/JP/2018} vkns'kkuqlkj@ By order, lgk;d iathdkj@Asst. Registrar