2020 (9) TMI 418

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.... Revenue was allowed. However, the issue pertains only to the assessment year 2009-2010. 3. The Assessee is a private limited company, engaged in the generation of power, which is sold to the Tamilnadu Generation and Distribution Corporation [TANGEDCO] under a power purchase agreement entered into between the parties. For the assessment year under consideration, AY - 2009-2010, the assessee declared a total income of Rs. 4,15,55,069/- under the normal provisions of the Act. After claiming deduction under Section 80IA of the Act to the tune of Rs. 1,06,50,60,712/-, the assessee declared a book profit of Rs. 1,11,44,71,000/- under Section 115 JB of the Act. Subsequently, a revised return of income was filed on 23.09.2010 adding back Rs. 70 Crores being the provision for cash discount allowable to TANGEDCO, declaring the very same income, Rs. 4,15,55,070/- under the normal provisions of the Act and claiming enhanced deduction under Section 80 IA of the Act to the tune of Rs. 1,76,50,60,712/-. The assessee admitted a book profit of Rs. 1,81,44,71,000/- under Section 115JB of the Act. The return of income was processed under Section 143(1) of the Act and subsequently, the case was....

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.... right in affirming the finding of the assessing officer?. 7. We have carefully perused the order passed by the assessing officer and found it to be a speaking order. The assessing officer has recorded a factual finding that the assessee was not recognising income in accordance with Schedule VI of 1956 Act and this was highlighted by the statutory auditors of the assessee in the main audit report in Paragraph No.3, after explaining with regard to the revenue recognition and noting the factual position, the assessing officer has held that nonrecognition of revenue to the extent of Rs. 25.07 crores and provisions for cash discount to the tune of Rs. 17.16 crores clearly shows that the assessee did not follow matching concept relating to the recognition of revenue and expenses and accounting standards prescribed by the ICAI. 8. Further, while dealing with the stand taken by the assessee there were uncertainities in receiving funds from TANGEDCO, the assessing officer held that the stand is incorrect because the power purchase agreement is backed by the state guarantee and there was never uncertainity about the determination of revenue. Finally, the assessing officer held that ha....

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....e 1956 Act by a deeming fiction and therefore, Section 115 J [1A] is to be read in the strict sense and if the company is a MAT Company, it has to prepare profit and loss account for the purpose of Section 115 J in accordance with Part II and Part III of Schedule VI of the 1956 Act, otherwise the very purpose of enacting Section 115 J would stand defeated particularly, as the said section does not make any distinction between public and private companies. Therefore, it was held that the Judgment in Malayala Manorama Co., Ltd., Vs. CIT reported in (2008) 300 ITR 251(SC) needs reconsideration by a larger bench. 13. On behalf of the Revenue it was argued that there was excess provision made by the assessee, which is also an important factor to be taken note of, in this regard, reliance was placed on the decision of the Division Bench of this Court in Commissioner of Income Tax Vs. Forbes Campbell Finance Limited reported in [2013] 352 ITR 0602. The learned Senior Counsel also referred to the decision of Hon'ble Supreme Court in Commissioner of Income Tax V. British Paints India Limited reported in [1991] 188 ITR 0044, wherein the Court pointed out the importance of system of....

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....t the income which is to be assessed in the particular year cannot be assessed in any other year. 16. It is the submission of Mr.G.Baskar, learned counsel for the appellant that the Tribunal having recorded the above finding, ought to have issued a direction to the assessing officer to take appropriate steps for assessment years 2010-2011 to 2014-2015 during which period, the assessee had received the disputed sums including the specified taxes and was assessed to tax on the said receipts. Therefore, it is submitted that consequential direction should have been issued to the assessing officer. In this regard, the learned counsel has drawn the attention of this Court to Paragraph No.6.7 of the impugned order, wherein such a point was canvassed before the Tribunal. Therefore, it is submitted that the order passed by the Tribunal suffers from error and appropriate direction may be issued to the assessing officer. 17. Mr.T.Ravikumar, learned senior standing counsel for the respondents submitted that the assessee should be considered as a person never to be aggrieved on such a finding as no such ground was raised and for the first time, in these appeals filed under Section 2....