M/S.kaveri Gas Power Ltd., Chennai-40 v. The Deputy Commissioner Of Income Tax/Ito, Corporate Circle4(2)/Ward-4(3), Chennai

In the High Court of Judicature at Madras Dated : 30.11.2018 Coram : The Honourable Mr.Justice T.S.SIVAGNANAM and The Honourable Mr.Justice N.SATHISH KUMAR Tax Case Appeal No.387 of 2018 M/s.Kaveri Gas Power Ltd.,Chennai-40 ...Appellant/AppellantVs The Deputy Commissioner of Income Tax/ITO, Corporate Circle-4(2)/Ward-4(3), Chennai. ...Respondent/Respondent APPEAL under Section 260A of the Income Tax Act, 1961against the order dated 28.2.2018 in ITA No.1848/Mds/2016 on thefile of the Income Tax Appellate Tribunal Madras 'C' Bench forthe assessment year 2010-11.against the order passed by theCommissioner of Income Tax (Appeals)-8 Chennai, dated:30/03/2016made in ITA.No.27/2012-13 and against the order of theCommissionerofIncomeTax,(Appeals)-III,Chennai,Dt.28/02/2013 made in P.A.No.AABCK4793Q and against the order ofAdditional Commissioner of Income Tax, Company Range-II,Chennai, dt:04/02/2013 PAN./G.I.R.No. . Judgment was delivered by T.S.SIVAGNANAM,JWe have heard the learned counsel on either side.2. This appeal filed by the assessee is directed against theorder passed by the Income Tax Appellate Tribunal, 'C' Bench,Chennai in ITA.No. 1848/Mds/2016 for the assessment year 2010-11. The Tribunal, by a common order in ITA.Nos.1848 and3200/Mds/2016, dismissed the appeals filed by the assessee byholding that the liability of compensation was unascertainable https://hcservices.ecourts.gov.in/hcservices/ and that therefore, it had to be added back to the book profitand by confirming the order passed by the Lower Authority. 3. The appeal has been filed raising the followingsubstantial questions of law : “i. Whether, on the facts and in thecircumstances of the case, the Income TaxAppellate Tribunal was right in law inholding that the provision created forpayment of compensation was an unascertainedliability and hence, it has to be addedwhile computing 'book profit' under Section115JB of the Income Tax Act, 1961? ii. Whether the liability of theassessee to pay compensation has becomeascertained immediately on failure of theassessee to supply power to Madura Coats andAgni Steels as per the terms of agreementand only the quantification of such liablitywas done later, which do not make theprovision made for payment of compensationas unascertainable for the purpose of bookprofit ? Andiii. Whether the provision made forpayment of compensation would be'unascertained liability' for the purpose ofcomputation of 'book profit', even thoughthe liability of the assessee to paycompensationhasbecomeascertainedimmediately on failure of the assessee tosupply power as per the terms of agreementand only the quantification of suchliability was done later?”4.It appears that the assessee – appellant earlier filed amiscellaneous petition in MP.No.82 of 2018 inITA.No.1848/Mds/2016 stating that an error had occurred inthe order dated 28.2.2018, which is impugned before us. TheTribunal, by order dated 21.8.2018, partly allowed the saidmiscellaneous petition by remanding the matter to theAssessing Officer to decide the issue afresh in accordancewith law after giving a reasonable opportunity to theassessee - appellant. In the light of the order passed bythe Tribunal in the miscellaneous petition, nothingsurvives for adjudication in this appeal. 5. Accordingly, the above tax case appeal is closed. Thesubstantial questions of law raised are left open. No costs. Sd/- Assistant Registrar(CS III) //True Copy// Sub Assistant Registrar To1.The Income Tax Appellate Tribunal, Madras 'C' Bench Chennai.2.The Deputy Commissioner of Income Tax/ITO,Corporate Circle, 4(2)/Ward-4(3), Chennai.3.The Commissioner of Income Tax (Appeals)-8,Chennai.4.The Commissioner of Income Tax (Appeals)-III,Chennai.5.The Additional Commissioner of Income Tax,Company Range-II, Chennai.+1cc to Mr.G.Baskar, Advocate, S.R.No.82070TCA.No.387 of 2018BS(CO)GSP(08/01/2019)