TaxTMI 
TaxTMI 
2019 (11) TMI 692
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....e facts and in the circumstances of the case and in law, the Ld. CIT(A) was right in holding that the reimbursement of expenses made by the assessee to an institute for running of a school at Mankahari, Satna was not hit by the provision of section 401A(9) of the Act." 3. We have heard the rival contentions and gone through the facts and circumstances of the case. We noted that the CIT(A) has deleted the addition following Tribunal's order in assessee's own case for AY 2000-01 in ITA No. 889/Mum/2005 order dated 27.02.2008 by observing in Para 6.3 as under: - "6.3 I have considered the submissions of the appellant and perused the materials available on record including copies of the judicial decisions relied upon by the appellant. A perusal of the record shows that this is a recurring issue. So for the issue was covered against the appellant by order of Hon'ble Mumbai ITAT dated 27.2.2018 in its own case in ITA No 889/Mum/2004 for AY 2000-01. Following the said decision, the disallowance made by the AO in AYs 2008-09 and 2009-10 was upheld in first appeal. However, as stated above, pursuant to the filing of a Miscellaneous Application by the appellant, the Hon'ble ITAT vide its ....
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....als available on record including copies of the judicial decisions relied upon by the appellant. It is observed form the record that the issue under appeal is also a recurring issue covered in favour of the appellant by order of my predecessor in AY 2006-07 which has been followed while deciding the first appeals filed by the appellant for AY 2008-09 and 2009-10. The facts and submissions made by the appellant are substantially similar to those in AY 2008-09. There being no change in the facts as well as the legal position on this issue. I have no reason to differ from the decision taken by my predecessors in AYs. 2008-09 and 2009-10. In view of the above position, the disallowance of depreciation of Rs. 3,53,75,977/- made by the AO cannot be sustained and the same is deleted. Grounds bearing Nos. 5(a) to 5(d) raised by the appellant are accordingly allowed." 7. Even we noted that the Tribunal in AYs 2008-09 and 2009-10 in ITA No. 8048/Mum/2011 and 1776/Mum/2013 has dismissed the Revenue's appeal by observing in Para 12 as under: - "12. The last Ground in the appeal of the Revenue is with regard to assessee's claim of depreciation which was restricted by the Assessing Officer to....
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....er referred to as the Assessing Officer) in disallowing a sum of Rs. 1,83,50,404/- under section 14A while computing the total income of the appellant under normal provisions as well as book profit under section 115JB. (b) Without prejudice to what is stated above, the appellant submits that Commissioner of Income tax (Appeals) erred in upholding the action of Assessing Officer in considering interest expenses for the purpose of calculation under Rule 8D(ii) as the entire interest paid was for the purpose of its business and for working capital requirements of the appellant and no borrowed funds were utilized for the purpose of investments." 10. The first issue is regarding the order of CIT(A) confirming the disallowance of expenses relatable to exempt income by invoking the provisions of section 14A of the Act read with Rule 8D2 of the Rules while computing book profit under section 115JB of the Act. The CIT(A) noted that the AO has rightly disallowed expenses relatable to exempt income amounting to Rs. 2,03,95,311/- by invoking the provisions of section 14A of the Act read with Rule 8D of the Rules, while computing book profit under section 115JB of the Act in view of provisio....
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.... is observed that the appellant had suo moto disallowed Rs. 20,44,907/- u/s.14A as per the tax audit report u/s.44AB. In this connection, I find merit in the plea of the appellant that the A.O. has not given any cogent reasons for rejecting the working of disallowance u/s.14A amounting to Rs. 20,44,907/- made by the appellant and resorting to the provisions of Section 14A(2) r.w.Rule 8D. 5.3.2 A perusal of the impugned order reveals that the A.O. has not properly examined the working of disallowance of Rs. 20,44,907/- u/s.14A suo moto made by the appellant. Nor has the A.O. expressed any opinion on the correctness or otherwise of the appellant's claim in respect of aforesaid expenditure, having regard to the accounts of the appellant. However, such lapse or omission on part of the A.O. is at best a procedural lapse and it cannot be said to be fatal. It is not a defect affecting the fundamental jurisdiction of the A.O. to make the assessment but one which can be cured at the stage of first appeal. It is also well-established that the powers of CIT(A) are co-terminus with those of the Assessing Officer and that the former can do what the latter can do [CIT v. Kanpur Coal Syndic....
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....) Without prejudice to what is stated above, the appellant submits that UPS are in the nature of energy saving device and as such entitled to depreciation @ 80%." 14. We have heard rival contentions and gone through the facts and circumstances of the case. We noted that this issue was identical in earlier year i.e. AYs 2008-09 & 2009-10, in ITA No.8048/Mum/2011 & 1776/Mum/2013, wherein this issue has been dealt with vide Para 8 and 8.1: - "8. In the fourth Ground, the grievance of the assessee is against the action of the income tax authorities in allowing depreciation on UPS @15% treating it as a part of Plant & Machinery, as against assessee's claim for allowance of depreciation @60% as part of computer. 8.1 On this aspect, it was submitted before us that in assessment year 2005-06, the Tribunal vide its order dated 16/05/2016 (supra) has upheld the claim of the assessee for depreciation @60%. Following such precedent, which continues to hold the field, we uphold the claim of the assessee for depreciation on UPS @ 60%. Thus, assessee succeeds on this aspect." 15. As the Tribunal relied on the assessment year 2005-06 dated 16.05.2016 in assessee's own case, as consistently, ....
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....ure facility in the nature of Rail System developed, operated and maintained by assessee. For this assessee has raised following ground No. 3: - "3. That on the facts and in circumstances of the case, deduction under section 80IA of the Act certified in Form 10CCB be allowed to the appellant in respect of the infrastructure facility in the nature of Rail System developed, operated and maintained by it." 19. Before us, the learned Counsel for the assessee argued issue wise on the above additional grounds and narrated the facts. The learned Counsel for the assessee stated the first issue of sale tax exemption under package scheme of incentives, 1993 is capital receipt. He stated the facts that the assessee is an integrated building materials company having following three divisions: a) Prism Cement - engaged in manufacturing of cement. b) RMC Ready mix - engaged in manufacturing of ready mix concrete C) H & R Johnson ('HRJ) - engaged in manufacturing of ceramic tiles, sanitary-ware, bath fittings, kitchens and engineered marble. 20. HRJ division has manufacturing units at various Locations. One of the said manufacturing units of HRJ division at Pen, Dist. Raigad, Mahara....
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....vely. 21. The next issue is sale of carbon credit earned during the year under consideration is to be treated as capital receipt. He stated the facts that the assessee has undertaken a Clean Development Mechanism ('COM') project by utilization of waste gases emitted from gas based power generating system for spray drying and vertical drying application at HRJ unit in Dewas, Madhya Pradesh. The project for utilization of waste gases generated has been registered under IJNFCCC as CDM Project. The assessee received Carbon Emission Reductions (CER5') for utilization of waste gases. During the previous year relevant to AY 2010-11, the assessee has earned Rs. 1,14,34,760/- on account of income from sale of CERs. The same was credited to the profit & loss account of the assessee company. Carbon credit being in the nature of an entitlement' received to improve atmosphere and environment reducing carbon, heat and gas emissions, it is arising out of environmental concerns and not as part of the business of the assessee. Hence, in the absence of any element of profit or gain, income from sale of carbon credit should be treated as a capital receipt and should be excluded in co....
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..... 23. Subsequently, the assessee noticed that the Hon'ble Mumbai ITAT in the case of M/s. Ultratech Cement Ltd. -vs.- DOT [ITA No. 5107 It 7614/Mum/2014, Order dt. 05-0420171 dealing with the similar facts as that of the assessee's case, has granted deduction u/s 80-IA in respect of Rail System. Based on the said decision, the assessee sought advice from its consultants and the assessee was advised that such a claim can be lodged. Accordingly, as advised, the assessee intends to take up additional ground of appeal seeking to claim deduction u/s 80-IA in respect of the Rail System. 24. The learned Counsel for the assessee before us relied on the decision of Hon'ble Bombay High Court (Full Bench) in the case of Ahmedabad Electricity Co. Ltd. vs. CIT (1993) 199 ITR 351 (Bom) and he drew our attention at para 18 and 19 of the judgement of Hon'ble Bombay High Court wherein the Full Bench has considered this issue and held that the Tribunal has power under section 254(1) of the Act to admit the additional grounds as raised for the first time before it, so long as the additional grounds were the subject matter of the proceedings. The learned Counsel referred to the ratio of Hon'....
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....(except possibly the power of enhancement) which are conferred upon the Appellate Assistant Commissioner by section 31 of the Act. ..." (p. 237) And a little later, the Court explained: "In the present case, the subject-matter of the appeal before the Tribunal was the question as to what should be the proper written down value of the buildings, machinery, etc. of the assessee for calculating the depreciation allowance under section 10(2)(vi) of the Act. ..." (p. 237). Therefore, the Supreme Court clearly said that the Tribunal could permit additional grounds to be raised for the first time before it so long as these additional grounds were the subject-matter of the proceedings; because quite clearly the Court has interpreted the subject-matter of the appeal widely as covering the various issues arising in the proceedings whether raised earlier or not." 25. Finally, the Full Bench of Hon'ble Bombay High Court has directed in Para 39 as under: - "39. In view of the above decisions it is quite clear that the Tribunal has jurisdiction to permit additional grounds to be raised before it even though these may not arise from the order of the AAC, so long as these grounds are in r....
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....017] is the latest decision of the jurisdictional High Court dealing with the power of the ITAT to admit additional ground. The said decision is related additional ground claiming deduction u/s 801A on infrastructure facility namely Jetty/Port. But the principles enunciated therein applies to additional ground on any issue. 6. Decision of Hon'ble Bombay High Court in case of Ultratech Cement Limited [supra] has considered all the landmark judgements. delivered so far on the subject matter and it is requested that the aforesaid decision of the jurisdictional High Court should be followed to decide all the three issues in the present case including the issue of admitting addl. ground related to Sales Tax exemption claimed to have been covered by the ITAT's order in the case of the assessee for the earlier years because the decision of the High Court in case of Ultratech Cement Ltd. is subsequent to the decisions of the Tribunal in case of appellant and hence not considered by the Hon'ble ITAT. 7. In the case of Ultratech Cement Limited reported in [2017] 81 taxmann.com 74 (Bom), the additional ground was not admitted because relevant facts which would entitle the asse....
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....here the Tribunal is only required to consider a question of law arising from the facts which are on record in the assessment proceedings, we fail to see why such a question should not be allowed to be raised when it is necessary to consider that question in order to correctly assess that tax liability of an assessee The reframed question, therefore, is answered in the affirmative, i.e., the Tribunal has jurisdiction to examine a question of law which arises from the facts as found by the authorities below and having a bearing on the tax liability of the assessee. 16. To conclude, in case of National Thermal Power Co. Ltd. Vs. CIT [1998] 229 ITR 383 (SC)], it was held that the assessee can make a legal claim before the Tribunal for the first time, so long as the relevant facts are on record in respect of that item before the lower authorities. 17. The Supreme Court in case of CIT vs. Rai Bahadur Hardutroy Motilal Chamari [1967] 66 ITR 443 (SC) which deals with power of CITA u/s 251 has held as under: As we have already stated, it is not open to the Appellate Assistant Commissioner to travel outside the record. i.e. the return made by the assessee or the assessment order of ....
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....eme is to be examined to know the purpose of the incentive and then to take a decision as to whether the incentive is capital receipt or revenue receipt. There is no claim made by the assessee that copy of the scheme was filed before any lower authority. Actual utilisation of incentives or amount exempt will also to be examined before coming to conclusion. All these facts are not available on record before the AO. 22. Similarly, the form no. 1000B and agreement with Railway authority in support of its claim u/s 801A are also being filed before Tribunal for the first time and the same are not available on record before the Assessing Officer. 23. In case of sale of carbon credits also, the basic facts of its receipts and sales are not available on record. 24. The reasons given by the assessee to file additional ground on sales tax incentive is mentioned as" The appellant has now been advised that as per the various judicial pronouncements on the issue such sales tax exemption being a capital receipt is not subject to tax ". The aforesaid reason is really vague and cannot be termed as bona fide reasons from any angle. There is no mention of even any concrete decision on basis of....