Income Tax Appeal No. 73 of 2010 -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Income Tax Appeal No. 73 of 2010 Date of Decision: February 16, 2010 Commissioner of Income-tax, Hisar ----Appellant Versus M/s. Prakash Industries Ltd. ---Respondent CORAM: HON'BLE MR. JUSTICE M.M. KUMAR HON'BLE MR. JUSTICE JITENDRA CHAUHAN Present: Mr. Sanjeev Kaushik, Sr. Standing Panel Counsel for Direct Taxes. 1. To be referred to the Reporters or not? 2. Whether the judgment should be reported in the Digest? **** M.M. KUMAR, J. This is an appeal filed by the Revenue under Section 260A of the Income Tax Act, 1961 (for brevity 'the Act') challenging order dated 18.06.2009 passed by the Income Tax Appellate Tribunal, Delhi Bench 'D', New Delhi (for brevity 'the Tribunal) in I.T.A. No. 4610/Del./05 in respect of the assessment year 1994-95. Facts: On 30.11.1994 the assessee-respondent filed its return of income declaring a loss of Rs. 58,56,48,200/-. A deduction under Section 35AB was claimed at Rs. 1,30,68,020/- i.e., 1/6th of Rs. 7,84,08,120/-. The deduction was claimed on account of the fact that assessee had imported technical know-how for which payment of Income Tax Appeal No. 73 of 2010 -2- Rs.6,53,40,099/- was made to foreign collaborators M/s. Lurgi GMBH, Germany, the assessee had also paid Rs. 1,30,68,021/- by way of T.D.S. to the Central Government under Section 201 of the Act. The T.D.S. amount along with the amount paid to the foreign collaborators was deducted from the value of the Block of assets. On 26.3.1997, while passing the assessment order, Assessing Officer allowed deduction under Section 35-AB to the extent of Rs. 1,08,90,017/- i.e. 1/6th of Rs. 6,53,40,099/-. On the block assets depreciation was also allowed after reducing Rs. 7,84,08,120 under Section 32 of the Act. The CIT(A) followed its decision rendered for the assessment year 1995-96 and held that the assessee-respondent was entitled to deduction under Section 35AB on the amount paid to foreign collaborators, as per view taken by the Assessing Officer. However, claim for depreciation disallowed by the Assessing Officer was set aside with the direction that proper verification be made and and the relief of depreciation be granted only if the assessee-respondent has deducted a sum of Rs. 7,84,08,120/- from the gross value of block assets. It is appropriate to mention that the order dated 16.08.2000 passed in respect of the assessment year 1995-96 attained finality and the revenue did not file any appeal. After remand, Assessing Officer vide order dated 27.03.2002 proceeded to hold that assessee-respondent was not entitled to depreciation on the amount of TDS paid to the Central Government by the assessee because it was refunded to it on Income Tax Appeal No. 73 of 2010 -3- 14.10.2004. The revenue filed an appeal on the question of depreciation only against the order of CIT(A) dated 16.08.2000 before the Tribunal. The revenue raised issue that the assessee- respondent was entitled to depreciation only on Rs. 1,30,68,120/- i.e., Rs. 7,84,08,120(-) Rs. 6,53,40,099/- and not on the gross value of block assets after deduction of Rs. 7,84,08,120/-. However, Tribunal held that the ground was rendered infructuous because the CIT(A) had passed an order setting aside the assessment made by the Assessing Officer. The order of Assessing Officer dated 27.03.2002 was challenged before the CIT(A) by the assessee-respondent. The CIT (A) held that no depreciation was allowable on the amount of T.D.S. deposited by the assessee. It further held that depreciation could be allowed only in respect of Rs. 6,53,40,102/- contrary to the order of the CIT(A) dated 16.08.2000 which had already granted relief to the assessee and deduction under Section 35AB on the aforesaid amount has been allowed. On 30.12.2005 assessee filed a rectification application under Section 154 before CIT(A). The CIT(A) held depreciation was allowable on the amount of TDS deposited by the assessee as also the relief of deduction under Section 35AB was also allowable on the amount of Rs. 6,53,40,102/-, as the amount of Rs. 7,84,08,120/- had been reduced by assessee from the gross block of assets for claiming depreciation in their return. The Tribunal on further appeal filed by the revenue against Income Tax Appeal No. 73 of 2010 -4- order dated 14.10.2005 held that the assessee was not entitled to depreciation under Section 32 on an amount of Rs. 6,53,40,102/- but all the same it was entitled to deduction under Section 35AB of the Act. The Tribunal further held that the value of block of assets will have to be increased by an amount of Rs. 1,30,68,120/- for the purpose of computation of depreciation on the assets in the block. The order dated 31.10.2007 passed by the Tribunal has not been challenged by the revenue till date under Section 260A of the Act. The revenue also filed an appeal against the rectification order dated 30.12.2005 passed by the C.I.T.(A). The assessee-respondent also filed an appeal against the order dated 14.10.2005, appeal of the assessee-respondent has been dismissed taking the view that the assessee-respondent is entitled to deduction under Section 35AB on the amount of Rs. 6,53,40,102/- and the value of block of assets will have to be increased by an amount of Rs. 1,30,68,120/- for the purpose of computation of depreciation on the assets in the block. We have heard learned counsel for the parties at a lenght and are of the view that the Tribunal has recorded a categorical finding that the order dated 31.10.2007 passed by the Tribunal has attained finality. The aforesaid finding is unassailable in view of the principle of consistency laid down by Hon'ble the Supreme Court in the case of Radhasoami Satsang v. CIT (1992) 193 ITR 321 (SC); Berger Paints India Ltd. v. CIT (2004) 266 ITR 99; CIT v. J.K. Charitable Trust (2009) I SCC 196 and C.K. Gangadharan v. C.I.T. (2008) 8 SCC 739. Income Tax Appeal No. 73 of 2010 -5- Therefore, it has to be held that once similar proposition has been accepted by the revenue as per the terms of the order of Tribunal, which has attained finality, then it is not open to revenue to challenge a similar finding and deviate it from its earlier stand on that count. Even otherwise, the question which is sought to be raised by the revenue would not emerge out of the order of Tribunal, inasmuch as no argument on the aforesaid issue was raised there by the revenue namely ignoring of fact by the assessee that it had neither revised the return nor claimed the treatment regarding increase in value of block assets by Rs. 1,30,68,120/- before the Assessing Officer during the assessment proceeding, in that regard reliance may be placed on the judgment of Hon'ble the Supreme Court in the case of Commissioner of Income-tax v. Scindia Steam Navigation Co. Ltd. (1961) 42 ITR 589 (SC) and the Division Bench judgment of this Court in the case of Echo Shella v. CIT (2007) 293 ITR 234 (P&H). It has been categorically laid down that when a question of law is neither raised before the Tribunal nor considered by it then such a question cannot be deemed to have emerged out of the order of the Tribunal. It is further evident that there is no challenge to the findings of fact recorded in para 8 of its order by the Tribunal, wherein it has been held that the value of block assets is to be increased by an amount of Rs. 1,30,68,120/- for the purpose of computation of depreciation on the ground of perversity. Therefore, the instant appeal is liable to be dismissed, as has been held by Income Tax Appeal No. 73 of 2010 -6- Hon'ble the Supreme Court in the case of K. Ravindranathan Nair v. CIT (247 ITR 178). We do not find any question of law would arise for determination of this Court. Likewise, in respect of the earlier assessment year 1993-94, this Court in ITA No. 512 of 2009 decided on 28.10.2009, inter se the same parties has decided the issue in favour of the assessee-respondent by upholding a similar order of Tribunal. For the reasons aforementioned, the appeal fails and same is hereby dismissed. (M.M. KUMAR) Judge (JITENDRA CHAUHAN) 16th February, 2010 Judge Atul