Itxa/2180/2011 Of The Commissiosner Of Income Tax -10 v. Reliance Infrastructure Ltd

kps IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.2180 OF 2011 The Commissioner of Income Tax...Appellant-Versus-Reliance Infrastructure Limited...Respondents ........... Mr.Suresh Kumar, for the Appellant/ Revenue.Mr.R.Murlidhar a/w Mr.Balasaheb Yewale i/by Rajesh Shah & Company, for the Respondent. ........... CORAM: S.C. DHARMADHIKARIAND GIRISH S. KULKARNI, JJ. DATE :- 17[th] April, 2014 P.C.: 1Having heard Mr.Suresh Kumar, learned counsel appearing on behalf of the Revenue in support of this Appeal and perusing the order passed by the Income Tax Appellate Tribunal under challenge, what we find is that the ITAT was dealing with the claims in the Assessment Year 2006-07. 2As far as the Question (a) at page 4 and projected as a substantial question of law is concerned, the ITAT has noted that the very claim was subject matter in the Assessee's own case. In that the ITAT had directed the Assessing Officer to allow it. The details in that behalf are referred in paragraph 6 of the ITAT's order. The Chart would indicate as to how the same has been raised in the Assessment Years 1999-2000 till 2005-2006. The current year is 2006-2007. Mr.Suresh Kumar could not offer any explanation as to whether the Revenue has accepted this finding of the ITAT for the prior Assessment Years or whether the same has been questioned and challenged in appropriate proceedings. In the light of the fact that the Tribunal was dealing with the Company engaged in the business of providing energy/ electricity and finding that the expenses have been incurred for development and to take care of environmental issues that we are of the opinion that the findings of fact do not raise any substantial question of law. 3We are not impressed by Mr.Suresh Kumar's argument that the Revenue has questioned the findings and decision of the ITAT in the case of very Assessee for the Assessment Years 2001-2002, 2002-2003 and 2003-2004 simply because the Revenue's Appeals have been dismissed on the ground that the findings of fact in relation to Assessment Years prior to Assessment Years 1999-2000 and 2000-2001 were never questioned and challenged by the Revenue. The Revenue could not give any explanation much less satisfactory and cogent for not challenging the findings. Having found that they are accepted that the Appeals of the Revenue were dismissed. That by itself will not raise any substantial question of law. 4Insofar as the question (b) in relation to the claim of deduction on account of replacement of meters is concerned, the ITAT in paragraphs 8 to 10 of the order under challenge noted the factual position and particularly that the very claim arose for the Assessment Years 1999-2000 to 2005-2006. The particulars in that regard are referred to in paragraph 12 of the order of the ITAT. In the circumstances that we have narrated in relation to question (a) that we found that this deduction as well does not raise a substantial question of law. 5Insofar as the question (c) in relation to Head Office Expenses is concerned, the findings of fact by the ITAT for the prior Assessment Years have been referred to and if at all any reference is needed, paragraphs 17 and 18 of the ITAT's order are complete answers. Therefore, the factual findings do not raise any substantial question of law in relation to this claim as well. 5Insofar as the question (c) in relation to Head Office Expenses is concerned, the findings of fact by the ITAT for the prior Assessment Years have been referred to and if at all any reference is needed, paragraphs 17 and 18 of the ITAT's order are complete answers. Therefore, the factual findings do not raise any substantial question of law in relation to this claim as well. 6As far as question (d), namely, the claim relating to purchase price from Tata Power Company is concerned and that was for the deduction under Section 80-IA, the ITAT in paragraph 21 onwards has noted the factual findings and also referred to the order of the Maharashtra Electricity Regulatory Authority (for short “MERC”). Paragraph 36 set outs as to how the claim arose. The claim has been considered in the light of Section 80-IA and particularly proviso and explanation thereto. The Tribunal eventually held that till the Assessment Year 2005-2006, the Revenue considered the rate at which the power was purchased by the Assessee from Tata Power Company as market value. There is nothing brought on record as to how the rate determined by the MERC is the true market value. The Assessee gave explanation that the rates determined by the MERC do not reflect the correct market rate. The finding is that the mode of computation and deduction under Section 80-IA requires no deviation from the past. The findings of fact and to be found in paragraphs 42 to 50 also reflect that the very issue came up for consideration for the Assessment Year 2003-2004. For the reasons assigned by the ITAT and finding that the attempt is to seek reappreciation and reappraisal of the factual data that we come to a conclusion that even question (d) as framed is not a substantial question of law. 7As far as question (e) is concerned, even that is part of the question (d). For the reasons that we find that the question (d) is not a substantial question of law, even this question cannot be termed as such. 8The last question that is projected as a substantial question of law has made reference to Section 14-A of the Income Tax Act, 1961 and Rule 8D of the Income Tax (Fifth Amendment) Rules, 2008. In relation to that a judgment has been rendered by a Division Bench of this Court in the case of Godrej & Boyce Manufacturing Company Limited v/s Deputy Commissioner of Income Tax in Income Tax Appeal No.626/2010 and Writ Petition No.758/2010 decided on 12.08.2010. The Division Bench held that the disallowance under Section 14-A of the Income Tax Act, 1961 has to be made in accordance with the principles laid down in this decision. Rule 8D should not be applied retrospectively. The Assessing Officer has been directed by the ITAT, by following this decision, to adopt a reasonable basis in relation to all relevant facts and circumstances. Therefore, this will have to be reworked and recomputed by the Assessing Officer. Such findings of remand and based on the judgment of this Court obviously will not raise a substantial question of law. That is imminently possible in the given facts and circumstances. 9As a result of the above discussion, the Appeal fails. It is dismissed. No costs. (GIRISH S. KULKARNI, J.) (S.C. DHARMADHIKARI, J.)