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TMI Blog2013 (8) TMI 327X X X X Extracts X X X X X X X X Extracts X X X X ..... new tangible material, for resorting to reopening - Following decision of DEPUTY COMMISSIONER OF INCOME TAX Versus M/s NEYVELI LIGNITE CORPORATION LTD [2012 (8) TMI 190 - ITAT, CHENNAI] - Decided against Revenue. - I.T.A. No. 1946/Mds/2012 - - - Dated:- 31-7-2013 - Shri Abraham P. George And Shri V. Durga Rao,JJ. For the Appellant : Shri T. N. Betgiri, JCIT For the Respondent : Shri Saroj Kumar Parida, Advocate ORDER Per Abraham P. George, Accountant Member :- In this appeal filed by the Revenue, its grievance is that the CIT(Appeals) deleted the disallowance of Rs. 301.5 Crores relating to sales adjustment, arising out of revision of power tariff by Central Electricity Regulatory Commission (CERC). Revenue has also fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ead of earlier year policy of accounting at the rate applicable as per power purchased agreement entered into with Electricity Boards. Since the final order in respect of tariff was passed by CERC on 23.3.2007, the assessee has reduced an amount of Rs. 301.5 crores from the sales. By means of showing excess income in the previous assessment years, the assessee has claimed excess deduction u/s 80IA of the Act. It is notable that the assessee is not eligible for the deduction u/s 80IA of the Act during the current year. Hence, it is clear that, the assessee has not disclosed all the material facts fully and truly before the Assessing Authority, hence the income has escaped assessment. Since, the assessee is having mercantile system of acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idering that the letter filed by the assessee. Assessee was supplying electricity to various customers based on power purchase agreement, but subject to tariff determination by CERC, which was the statutory order for fixing electricity tariff. Such determination by the CERC, when it became effective, applied to the earlier periods also. Assessee was therefore forced to reverse the revenue to regularize the sale price billed in the earlier year based on power purchase agreement. After verifying such aspects, A.O. had originally allowed such claim. By going for a reopening based on same material, Assessing Officer was only trying to change his view. Reliance was placed on the decision of Hon'ble Apex Court in the case of CIT v. Kelvinator Ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st sales pertaining to earlier years and such reversal could not be done in the impugned assessment year. Further, according to him, the issue of reversal was not adjudicated by the Assessing Officer in the original assessment order and, in view of the decision of Hon'ble Delhi High Court in the case of Dalmia (P.) Ltd. v. CIT (2012) 348 ITR 469 and in the case of Consolidated Photo and Finvest Limited v. ACIT (281 ITR 394), the A.O. was justified in resorting to reopening. 6. Per contra, learned A.R. strongly supported the order of CIT(Appeals). 7. We have perused the orders and heard the rival submissions. There is no dispute that assessee was required to give particulars regarding the sum of Rs. 301.50 Crores that was reversed during ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r for earlier years as well. Assessee had in the earlier years billed according to power purchase agreement with its respective customers. Even if we consider that the adjustment pertained to income relatable to earlier years, it still remains a fact that assessee could not recover such amount from the concerned customers since the customers were bound to pay only as per the tariff determined by CERC. This being so, if it is not allowed as bad debt, it is surely a business loss of the assessee. As held by the Hon'ble Apex Court in the case of CIT v. Woodward Governor India Pvt. Ltd. (312 ITR 254), even business loss incurred in normal course of business is eligible for deduction under Section 37 of the Act. We are, therefore, of the opinion ..... X X X X Extracts X X X X X X X X Extracts X X X X
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