Case Number: ITA 4915/DEL/2019
Appellant: NHPC Ltd., Faridabad
Respondent: ACIT, Circle-II, Faridabad
Assessment Year: 2016-17
Case Filed On: 2019-05-30
Order Type: Final Tribunal Order
Date of Order: 2023-09-14
Pronounced On: 2023-09-14
The case of NHPC Ltd., Faridabad vs ACIT, Circle-II, Faridabad (ITA 4915/DEL/2019) involves cross appeals filed by both the Revenue and the assessee against the order of the Commissioner of Income Tax (Appeals) [CIT(A)], Faridabad dated 29.03.2019 pertaining to the assessment year 2016-17. This case highlights multiple issues, including the deletion of a substantial addition of Rs.139 crore under Section 14A with Rule 8D, and disputes over deductions related to various allowances like gratuity and leave encashment, as well as the treatment of depreciation on land.
NHPC Ltd., Faridabad (the appellant) contested several disallowances made by the Assessing Officer (AO) under normal provisions and while computing book profit under Section 115JB of the Income-tax Act, 1961. The main points of contention included:
The arguments presented by both parties were heard by the Tribunal. The counsel for NHPC Ltd. referenced past decisions by the ITAT in favor of the assessee in similar cases, asserting that the issues were covered by these precedents. The Revenue could not provide counterarguments to dispute this position.
The AO made a disallowance of Rs.139 crore under Section 14A read with Rule 8D, which was deleted by the CIT(A) based on earlier Tribunal orders in favor of the assessee. The Tribunal upheld the CIT(A)’s decision, citing consistent rulings in NHPC Ltd.’s favor from previous years.
The AO disallowed Rs.6,68,59,118 while computing book profit under Section 115JB, arguing that the provisions for various employee benefits were not ascertained. The CIT(A) deleted this disallowance, and the Tribunal confirmed the CIT(A)’s order, referencing the Hon’ble Punjab and Haryana High Court’s decision and consistent Tribunal rulings in NHPC Ltd.’s favor.
The AO disallowed Rs.9,03,93,108 on account of depreciation claimed on the amortization of land while computing book profit under Section 115JB. The CIT(A) deleted the disallowance, and the Tribunal upheld this decision, again relying on past rulings in favor of NHPC Ltd.
NHPC Ltd. argued for the allowance of a deduction of Rs.8,74,67,641 on other income under Section 80-IA. The AO had denied this deduction, but the Tribunal, following precedents in NHPC Ltd.’s favor, directed the AO to allow the deduction without excluding the disallowed amount.
The Tribunal’s final judgment on September 14, 2023, upheld the CIT(A)’s decisions, dismissing the Revenue’s appeal and allowing NHPC Ltd.’s appeal. This decision reinforces the consistent application of tax law precedents and the importance of established judicial rulings in resolving complex tax disputes.
Order Pronounced: September 14, 2023
By:
SHAMIM YAHYA, ACCOUNTANT MEMBER
ASTHA CHANDRA, JUDICIAL MEMBER
Copy forwarded to:
AR, ITAT, New Delhi
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