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Income Tax Appellate Tribunal, “G“ BENCH, MUMBAI
Before: SHRI SAKTIJIT DEY & SHRI M. BALAGANESH
PER SAKTIJIT DEY, J.M.
These appeals by the Revenue relating to the same assessee arise out of five separate orders passed by the learned Commissioner of Income Tax (Appeals)–2 and 6, Mumbai, pertaining to the assessment years 2007–08, 2008–09, 2009–10, 2012–13 and 2013– 14.
The grounds raised in all these appeals are identical except variation in figures.
As could be seen from the grounds raised, the dispute is with regard to deletion of disallowance of interest payment.
When the appeals were called for hearing no one was present on behalf of the assessee to represent the case. There is no application seeking adjournment either. On a perusal of the order sheet entries, it is noticed that from the very first date of hearing itself i.e., 8th November 2018, no one appeared on behalf of the assessee each time the appeal was fixed for hearing despite the fact that several notices were issued through registered post as well as through the O/o the learned Departmental Representative. In view of the above and considering the nature of dispute, we proceed to dispose off the 3 Gas And Power Investment Co. Ltd.
appeals ex–parte qua the assessee after hearing the learned Departmental Representative and on the basis of material available on record.
Brief facts are, the assessee, as it appears from the facts on record, was incorporated on 15th February 2005, as a Special Purpose Vehicle (SPV) by various financial institutions for the purpose of settlement of claim of off–shore lenders of Dabhol Power Company (DPC). During the assessment proceedings, for the assessment years under appeal, the Assessing Officer noticed that the assessee had claimed interest expenditure of various amounts in the relevant assessment years. The Assessing Officer observed that the accounting policy followed by the assessee was similar to the past assessment years. Further he observed that like the past assessment years, the assessee has not claimed the interest expenditure on actual payment basis. Accordingly, he held that in terms of provision contained under section 43B(e) of the Act, the interest expenditure cannot be allowed to the assessee. Accordingly, he disallowed the interest expenditure claimed by the assessee in all the assessment years under dispute. Being aggrieved with the aforesaid decision of the Assessing Officer, the assessee preferred appeals before the first appellate authority.
After considering the submissions of the assessee in the context of the facts and material on record, learned Commissioner (Appeals)
4 Gas And Power Investment Co. Ltd. found that while considering identical nature of dispute in assessee’s own case in assessment year 2011–12, his predecessor–in–office had allowed assessee’s claim of deduction in respect of interest expenditure. Thus, following the said decision of his predecessor–in– office, learned Commissioner (Appeals) deleted the disallowance of interest expenditure made by the Assessing Officer in all the assessment years under dispute.
The learned Departmental Representative submitted, while deciding identical issue in assessee’s own case for the assessment year 2011–12, the Tribunal has restored the issue to the Assessing Officer for de novo adjudication. He also furnished a copy of the order passed by the Tribunal in ITA no.4414/Mum./2016, dated 25th April 2018. Thus, he submitted, the issue may be restored back to the Assessing Officer with similar direction.
We have heard the learned Departmental Representative and perused the material on record. Undisputedly, while completing the assessment for the impugned assessment years, the Assessing Officer had noticed that the assessee had not actually paid the interest during the relevant previous years. Therefore, invoking the provisions of 43B(e) of the Act, he has disallowed the interest expenditure. However, learned Commissioner (Appeals) has allowed assessee’s
5 Gas And Power Investment Co. Ltd. claim by relying upon the decision of his predecessor–in–office in assessee’s own case for the assessment year 2011–12.
A careful perusal of the impugned orders of learned Commissioner (Appeals) reveal that while disposing off the appeal for the assessment year 2011–12, learned Commissioner (Appeals) has followed his order of the assessment year 2010–11. However, the Tribunal, while deciding revenue’s appeal in ITA no.3128/Mum./2018, dated 3rd January 2018, has restored the issue to the file of the learned Commissioner (Appeals) for fresh adjudication. Following the aforesaid decision of the Bench, the Tribunal, while deciding Revenue’s appeal in assessment year 2011–12, in the order cited by learned Departmental Representative has restored the issue back to the Assessing Officer for fresh adjudication. Thus, as could be seen, the very basis on which learned Commissioner (Appeals) allowed assessee’s claim of deduction towards interest expenditure in the impugned assessment year, no longer exists as the orders passed by the learned Commissioner (Appeals) in assessment year 2010–11 and 2011–12 have been restored back to learned Commissioner (Appeals) and the Assessing Officer respectively, for fresh adjudication. Therefore, consistent with the view of the Tribunal in assessee’s own case for the assessment years 2010–11 and 2011–12, we are inclined to restore the issue raised in the present appeals to the Assessing
6 Gas And Power Investment Co. Ltd.
Officer for deciding afresh keeping in view the directions of the Tribunal in assessment year 2010–11 and 2011–12 as noted above. It goes without saying, the Assessing Officer while deciding the issue must provide reasonable opportunity of being heard to the assessee. With the aforesaid observations, the impugned orders of learned Commissioner (Appeals) are set aside. Grounds raised by the Revenue are allowed for statistical purposes.
In the result, appeals are allowed for statistical purposes. Order pronounced in the open court on 06.11.2020