Commissioner Of Income-Tax, Hisar v. To Be Referred To The Reporters Or Not?2.Whether The Judgment Should Be Reportedin The Digest?

Income Tax Appeal No. 73 of 2010 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Income Tax Appeal No. 73 of 2010Date of Decision: February 16, 2010 Commissioner of Income-tax, Hisar ----Appellant Versus M/s. Prakash Industries Ltd.---Respondent CORAM:HON'BLE MR. JUSTICE M.M. KUMARHON'BLE MR. JUSTICE JITENDRA CHAUHAN Present: Mr. Sanjeev Kaushik, Sr. Standing Panel Counselfor Direct Taxes. 1.To be referred to the Reporters or not?2.Whether the judgment should be reportedin the Digest? **** M.M. KUMAR, J. This is an appeal filed by the Revenue under Section 260Aof the Income Tax Act, 1961 (for brevity 'the Act') challenging orderdated 18.06.2009 passed by the Income Tax Appellate Tribunal,Delhi Bench 'D', New Delhi (for brevity 'the Tribunal) in I.T.A. No.4610/Del./05 in respect of the assessment year 1994-95. Facts: On 30.11.1994 the assessee-respondent filed its return ofincome declaring a loss of Rs. 58,56,48,200/-. A deduction underSection 35AB was claimed at Rs. 1,30,68,020/- i.e., 1/6[th] of Rs.7,84,08,120/-. The deduction was claimed on account of the fact thatassessee had imported technical know-how for which payment of -2- Rs.6,53,40,099/- was made to foreign collaborators M/s. LurgiGMBH, Germany, the assessee had also paid Rs. 1,30,68,021/- byway of T.D.S. to the Central Government under Section 201 of theAct. The T.D.S. amount along with the amount paid to the foreigncollaborators was deducted from the value of the Block of assets. On 26.3.1997, while passing the assessment order,Assessing Officer allowed deduction under Section 35-AB to theextent of Rs. 1,08,90,017/- i.e. 1/6[th] of Rs. 6,53,40,099/-. On theblock assets depreciation was also allowed after reducing Rs.7,84,08,120 under Section 32 of the Act. The CIT(A) followed itsdecision rendered for the assessment year 1995-96 and held that theassessee-respondent was entitled to deduction under Section 35ABon the amount paid to foreign collaborators, as per view taken bythe Assessing Officer. However, claim for depreciation disallowed bythe Assessing Officer was set aside with the direction that properverification be made and and the relief of depreciation be grantedonly if the assessee-respondent has deducted a sum of Rs.7,84,08,120/- from the gross value of block assets. It is appropriateto mention that the order dated 16.08.2000 passed in respect of theassessment year 1995-96 attained finality and the revenue did notfile any appeal. After remand, Assessing Officer vide order dated27.03.2002 proceeded to hold that assessee-respondent was notentitled to depreciation on the amount of TDS paid to the CentralGovernment by the assessee because it was refunded to it on -3- 14.10.2004. The revenue filed an appeal on the question ofdepreciation only against the order of CIT(A) dated 16.08.2000before the Tribunal. The revenue raised issue that the assessee-respondent was entitled to depreciation only on Rs. 1,30,68,120/-i.e., Rs. 7,84,08,120(-) Rs. 6,53,40,099/- and not on the gross valueof block assets after deduction of Rs. 7,84,08,120/-. However,Tribunal held that the ground was rendered infructuous because theCIT(A) had passed an order setting aside the assessment made bythe Assessing Officer. The order of Assessing Officer dated 27.03.2002 waschallenged before the CIT(A) by the assessee-respondent. The CIT(A) held that no depreciation was allowable on the amount of T.D.S.deposited by the assessee. It further held that depreciation could beallowed only in respect of Rs. 6,53,40,102/- contrary to the order ofthe CIT(A) dated 16.08.2000 which had already granted relief to theassessee and deduction under Section 35AB on the aforesaid amounthas been allowed. The order of Assessing Officer dated 27.03.2002 waschallenged before the CIT(A) by the assessee-respondent. The CIT(A) held that no depreciation was allowable on the amount of T.D.S.deposited by the assessee. It further held that depreciation could beallowed only in respect of Rs. 6,53,40,102/- contrary to the order ofthe CIT(A) dated 16.08.2000 which had already granted relief to theassessee and deduction under Section 35AB on the aforesaid amounthas been allowed. On 30.12.2005 assessee filed a rectification applicationunder Section 154 before CIT(A). The CIT(A) held depreciation wasallowable on the amount of TDS deposited by the assessee as alsothe relief of deduction under Section 35AB was also allowable on theamount of Rs. 6,53,40,102/-, as the amount of Rs. 7,84,08,120/- hadbeen reduced by assessee from the gross block of assets for claimingdepreciation in their return. The Tribunal on further appeal filed by the revenue against -4- order dated 14.10.2005 held that the assessee was not entitled todepreciation under Section 32 on an amount of Rs. 6,53,40,102/- butall the same it was entitled to deduction under Section 35AB of theAct. The Tribunal further held that the value of block of assets willhave to be increased by an amount of Rs. 1,30,68,120/- for thepurpose of computation of depreciation on the assets in the block.The order dated 31.10.2007 passed by the Tribunal has not beenchallenged by the revenue till date under Section 260A of the Act.The revenue also filed an appeal against the rectification order dated30.12.2005 passed by the C.I.T.(A). The assessee-respondent alsofiled an appeal against the order dated 14.10.2005, appeal of theassessee-respondent has been dismissed taking the view that theassessee-respondent is entitled to deduction under Section 35AB onthe amount of Rs. 6,53,40,102/- and the value of block of assets willhave to be increased by an amount of Rs. 1,30,68,120/- for thepurpose of computation of depreciation on the assets in the block. We have heard learned counsel for the parties at a lenghtand are of the view that the Tribunal has recorded a categoricalfinding that the order dated 31.10.2007 passed by the Tribunal hasattained finality. The aforesaid finding is unassailable in view of theprinciple of consistency laid down by Hon'ble the Supreme Court inthe case of Radhasoami Satsang v. CIT (1992) 193 ITR 321(SC); Berger Paints India Ltd. v. CIT (2004) 266 ITR 99; CITv. J.K. Charitable Trust (2009) I SCC 196 and C.K.Gangadharan v. C.I.T. (2008) 8 SCC 739. -5- Therefore, it has to be held that once similar propositionhas been accepted by the revenue as per the terms of the order ofTribunal, which has attained finality, then it is not open to revenue tochallenge a similar finding and deviate it from its earlier stand onthat count. -5- Therefore, it has to be held that once similar propositionhas been accepted by the revenue as per the terms of the order ofTribunal, which has attained finality, then it is not open to revenue tochallenge a similar finding and deviate it from its earlier stand onthat count. Even otherwise, the question which is sought to be raisedby the revenue would not emerge out of the order of Tribunal,inasmuch as no argument on the aforesaid issue was raised there bythe revenue namely ignoring of fact by the assessee that it hadneither revised the return nor claimed the treatment regardingincrease in value of block assets by Rs. 1,30,68,120/- before theAssessing Officer during the assessment proceeding, in that regardreliance may be placed on the judgment of Hon'ble the SupremeCourt in the case of Commissioner of Income-tax v. Scindia SteamNavigation Co. Ltd. (1961) 42 ITR 589 (SC) and the Division Benchjudgment of this Court in the case of Echo Shella v. CIT (2007) 293ITR 234 (P&H). It has been categorically laid down that when aquestion of law is neither raised before the Tribunal nor consideredby it then such a question cannot be deemed to have emerged outof the order of the Tribunal. It is further evident that there is nochallenge to the findings of fact recorded in para 8 of its order by theTribunal, wherein it has been held that the value of block assets is tobe increased by an amount of Rs. 1,30,68,120/- for the purpose ofcomputation of depreciation on the ground of perversity. Therefore,the instant appeal is liable to be dismissed, as has been held by Income Tax Appeal No. 73 of 2010 Hon'ble the Supreme Court in the case of K. Ravindranathan Nairv. CIT (247 ITR 178). We do not find any question of law would arise fordetermination of this Court. Likewise, in respect of the earlierassessment year 1993-94, this Court in ITA No. 512 of 2009 decidedon 28.10.2009, inter se the same parties has decided the issue infavour of the assessee-respondent by upholding a similar order ofTribunal. For the reasons aforementioned, the appeal fails and sameis hereby dismissed. (M.M. KUMAR) Judge 16[th] February, 2010Atul (JITENDRA CHAUHAN) Judge