2016 (4) TMI 457 - AT - Income Tax

Addition of assignment fee from HTMT Global Solutions P. Ltd - CIT(A) deleted the addition based on fresh evidence filed by the assessee wereas the Assessing Officer was denied opportunity under Rule 46A - Held that -The ld. Commissioner of Income Tax (Appeals) has summarized and relied on the submissions of the assessee filed by letter dated 10.10.2008 which are entirely on new dimension and assessment order does not speak on this issue. The pre-conditions and probabilities of entering into agreement and realization of money on happening of event was not discussed or mentioned in the assessment order. The letter filed by the assessee on the issue of crystallization of event as per agreement on obtaining of permission brought on record for the first time before the Commissioner of Income Tax (Appeals) and the Assessing Officer was deprived to verify such vital evidence for taxation purpose. In the hearing proceedings, the ld. Authorised Representative drew attention to the Escrow Account in which amount has been transferred and drew attention to the permit from CPWD dated 01.08.2008 at page no.60 and also drew attention to the income tax return of the assessee firm for the assessment year 2009-2010 were the assignment income was offered. These are the new set of facts which the assessee for the first time brought on record. So, considering apparent facts and circumstances and the agreements and material evidence and also the provisions of Rule 46(A) of the Income Tax Rules were additional evidence has been filed. The opportunity has to be provided to Assessing Officer which the Commissioner of Income Tax (Appeals) overlooked. We are of the opinion that the matter has to be remitted to the file of the Assessing Officer - Decided in favour pf revenue for statistical purposes. Deprecation on Wind Turbine Generators (WTG) - @100% OR @50% - Held that - There is scope of confusion regarding invoice dated 30.9.2007 on comparison of delivery challans issued much prior to the date of invoice. Further the first meter reading was taken on commissioning on WTG by the territorial field officer on 13.10.2007 explaining the generated units for export and import. The ld. Commissioner of Income Tax (Appeals) has allowed 100% depreciation based on written submissions followed by the evidence supporting the installations and there is no dispute on ownership of units. The assessee submitted commissioning certificate issued by TNEB bills raised by TNEB and installation documents which the Assessing Officer was denied an opportunity to examine the evidence filed before the Commissioner of Income Tax (Appeals). Considering the apparent facts, we are of the opinion that the matter needs to be re-examined by the Assessing Officer with the fresh evidence filed by the assessee on commissioning of WTG. Therefore, we set aside the order of the Commissioner of Income Tax (Appeals) on this ground and remit the issue to the file of Assessing Officer for limited purpose to examine whether the WTG has been put to use for more than 180 days and adequate opportunity of being heard be provided to assessee before passing the order on merits. - Decided in favour pf revenue for statistical purposes.

Summary

Issues Involved:
1. Deletion of addition of assignment fee from HTMT Global Solutions P. Ltd based on fresh evidence.
2. Allowance of 100% depreciation on Wind Turbine Generators (WTG) instead of 50%.

Issue-wise Detailed Analysis:

1. Deletion of Addition of Assignment Fee from HTMT Global Solutions P. Ltd:
The Revenue challenged the deletion of the addition of assignment fee from HTMT Global Solutions P. Ltd by the Commissioner of Income Tax (Appeals). The core issue was whether the assignment fee should be recognized in the assessment year 2008-09 or the subsequent year. The Assessing Officer had included the fourth assignee fee in the income for the year 2008-09, arguing that the fee was accrued and should be taxed in that year. The assessee contended that the fee was conditional upon obtaining necessary approvals and was held in an escrow account, thus not recognized as income until the conditions were met in the subsequent year.

The Commissioner of Income Tax (Appeals) found that the agreement with HTMT Global Solutions was conditional and the fee was rightly offered in the next assessment year when the conditions were fulfilled. However, the Tribunal noted that the fresh evidence presented by the assessee was not examined by the Assessing Officer, and the Commissioner of Income Tax (Appeals) did not call for a remand report. The Tribunal set aside the order of the Commissioner of Income Tax (Appeals) and remitted the issue back to the Assessing Officer for a complete examination of the facts and evidence, ensuring the assessee is provided with an adequate opportunity to support their submissions.

2. Allowance of 100% Depreciation on Wind Turbine Generators (WTG):
The Revenue contested the direction to allow 100% depreciation on WTGs instead of 50%. The Assessing Officer had restricted the depreciation claim to 50%, arguing that the WTGs were not used for more than 180 days as per the evidence from TNEB and the supplier. The assessee provided commissioning certificates and other documents indicating that the WTGs were operational before the cut-off date, thus justifying the 100% depreciation claim.

The Commissioner of Income Tax (Appeals) accepted the assessee's evidence and directed the allowance of 100% depreciation. However, the Tribunal observed that the fresh evidence was not part of the assessment records and the Assessing Officer did not have the opportunity to verify it. Consequently, the Tribunal set aside the order of the Commissioner of Income Tax (Appeals) and remitted the issue back to the Assessing Officer for re-examination, ensuring that the assessee is given an opportunity to present their case.

Conclusion:
The Tribunal allowed the Revenue's appeal for statistical purposes, remitting both issues back to the Assessing Officer for re-examination with the direction to provide the assessee with an adequate opportunity to present their evidence and arguments. The Tribunal emphasized the need for a thorough verification of the fresh evidence submitted by the assessee in both issues.