INCOME TAX ACT, 1961

Section 143(3)

Assessment - Additions to income - Alleged suppression of receipt from sale of power - Contention of assessee that receipts were subjected to tax in subsequent years

Assessee was a private limited company, engaged in generation of power, which was sold to the Tamil Nadu Generation and Distribution Corporation [TANGEDCO] under a power purchase agreement entered into between the parties. Assessee was aggrieved by additions made under normal provisions of Act as well as under section 115JB by contending that receipts from sale of power to TANGEDCO was subjected to tax in subsequent year. Held: Ground raised by assessee was to delete additions on ground that the receipts were subjected to the tax in the subsequent year, whatever the assessee received from TANGEDCO. Tribunal did not agree with assessee and sustained the addition. If such was the factual position, natural consequences that was to flow was to issue a direction to AO to take appropriate action in so far as the assessments from the years 2010-2011 to 2014-2015, during which assessee was taxed on the said receipts. If such a consequential direction was not issued, then, assessee would be subjected to double taxation which is unauthorised in law. AO was directed to reopen assessments from years 2010-11 to 2014-15 on said issue alone and examine as to whether assessee paid taxes on receipts, on which addition was sustained in relevant assessment year 2009-10. AO was further directed to afford an opportunity of hearing to assessee, and re-do assessment on that aspect alone.

REFERRED :

FAVOUR : Matter remanded

A.Y. : 2009-10

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