SUPER SALES INDIA LTD.,COIMBATORE vs. DCIT CORPORATE CIRCLE 1, COIMBATORE

आदेश / O R D E R

PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER:

ITA No. 1584/CHNY/17 :- 2 -:

The case was posted for hearing earlier on 6th September, 2. 2017, 28th November, 2017 and 18th December, 2017. On each of these occasion, ld. Authorised Representative of the assessee had filed adjournment petitions and nobody had appeared on behalf of the assessee. Adjournment petitions were all almost typically worded and did not give any valid reason for seeking such adjournments. Except for stating that ld. Authorised Representative was unable to present for hearing due to certain other professional engagements and/ or unavoidable circumstances there is nothing on record which reflect any justifiable reason for seeking the adjournment. Even today there is an adjournment petition on record which is more or less on the same lines. Reason cited for seeking adjournment is not found to be satisfactory, and we reject the adjournment petition. The case is decided on merits.

With reference to the issue raised by the assessee in the 3. appeal, observation of the ld. Commissioner of Income Tax (Appeals) appearing at para 8 of has order is reproduced hereunder:-

ITA No. 1584/CHNY/17 :- 3 -: income in the return is reduced by way of allowing an additional or fresh grounds during appellate proceedings which is not admissible as per Section 251(1)(a) of the Income Tax Act. The C!T(A) can only reduce the addition made in the assessment. It is not possible to go' beyond the powers of the Act to allow the deduction which is not available in the return.

There is a clear finding by the ld. Commissioner of Income Tax (Appeals) that assessee had not claimed any deduction for foreign exchange loss, either in its return of income nor during course of assessment proceedings. What was stated by the assessee in its written submission before the ld. Commissioner of Income Tax (Appeals) is reproduced hereunder:-

‘’Foreign Exchange Fluctuation of Rs.40.92 Lakhs relating to Foreign Currency Term Loan availed for purchase of wind energy generation has been added to the cost of wind mill:-

The cost of wind mill,' on which, the additional depreciation had been claimed before adding' the above said Rs.40.92 Lakhs, was ₹13.19 Crores and the depreciation thereon claimed was Rs.1O,55,62,429/- in the return of income. The Assessing Officer' has disallowed the depreciation claimed in full on the wind mill, including on the cost of the wind mill, thus she has added a sum of Rs.10,71,99,388/-. "There' cannot be such disallowance, as in so far as the cost of wind mill of Rs.13.19 Crores is concerned. The disallowance of depreciation of Rs.10,55,62,429/- on the 'cost of wind mill, as representing Foreign Currency Fluctuation, was an error on the part of the Assessing Officer, which is required to be set right in the appeal proceedings. In respect of Foreign Exchange

ITA No. 1584/CHNY/17 :- 4 -: fluctuation, admittedly, the asset acquired was an indigenous asset and not a foreign' asset and therefore, depreciation is not admissible to the extent of Rs.16,36,959/-- claimed by the appellant. At the same time, the Foreign Exchange loss incurred in acquiring an indigenous machinery, the entire amount of Rs.40,92,398j- is required to be allowed as a deduction on the basis of the decision of the Hon'ble ITAT in Magna Electro Castings Ltd Vs ACIT, Company Circle-l(l), Coimbatore in ITA No.186/Mds/2013. Appropriate directions for allowance of the depreciation on the cost of wind mill at Rs.10,55,62,429/-- and for allowing Foreign Exchange Loss to the extent - of Rs.40,92,398/-- as an allowable deduction in the computation of total income of, the appellant for the Asst. Year be issued while allowing the appeal’’.

There is a clear admission by the assessee that depreciation was not admissible to the extent claimed by the assessee in respect of the foreign exchange fluctuation effected on the value of indigenous assets acquired by it. Though the assessee states that foreign exchange loss incurred for acquiring indigenous machinery was an allowable deduction, it did not cite any reason why it had to be considered so, and what stopped it from making such claim in the return of income or atleast during the course of assessment proceedings before the ld. Assessing Officer. In such circumstances, in our opinion, ld. Commissioner of Income Tax (Appeals) was justified in holding that assessee could not prefer this claim before the ld. Commissioner of Income Tax (Appeals). We do not find any reason to ITA No. 1584/CHNY/17 :- 5 -: interfere with the order of the ld. Commissioner of Income Tax (Appeals).

Order pronounced in the open court at the time of hearing on Monday, the 26th February, 2018, at Chennai.