The demand of Rs 7,983 crore, and an equal quantity of penalty, pertained to evaluation years 2006-07 to 2011-12. While the unique evaluation order was issued on December 31, 2008, reassessment proceedings to disallow amortisation of curiosity on zero coupon bonds have been initiated on March 28, 2013, which the tribunal mentioned occurred “beyond four years”. It mentioned that for evaluation 12 months 2004-05, the difficulty of amortisation of curiosity was determined in favour of the corporate.
Noida Toll Bridge Company had additionally challenged the enhancement of the evaluation by the commissioner of revenue tax on three counts – arrear of designated return (round Rs 180 crore), lease of land handled as income subsidy (Rs 1,730 crore) and disallowance of depreciation (round Rs 16 crore). The tribunal concluded that the commissioner (appeals) can not “make an enhancement by exploring a new source of income” if the assessing officer has not assessed any revenue.
“… the assessing officer has never considered the three issues mentioned herein on which the CIA(A) has made enhancement, nor were they a part of the return of income. Therefore, in our considered view, the enhancement is bad in law,” the tribunal mentioned in an order.
It then went on to dismiss the premise on which the commissioner (appeals) enhanced the evaluation. The commissioner held that the corporate was entitled to a return of 20% from the federal government, which was based mostly on a report by the chartered accountant. Noting that the certificates doesn’t entitle the corporate to a return of 20% of the venture value, the tribunal famous that the commissioner (appeals) had “completely misunderstood the entire arrangement” between Noida and IL&FS and dismissed the addition of Rs 180 crore.
The commissioner (appeals) had additionally enhanced the evaluation by Rs 1,730 crore by concluding that the land was transferred to the Noida Toll Bridge Company with no consideration to commercially exploit and this was not disclosed within the books. After arriving on the market worth of the land, the remaining quantity was taken to be compensation for a attainable shortfall in income and handled as income subsidy for which the enhancement was made. “The lands were given on lease and, therefore, there is no question of ownership being transferred to the assessee and therefore, there is no question of any addition on this account,” the tribunal dominated.
It additionally dismissed the disallowance of depreciation, concluding that no capital subsidy is concerned since part of the land with the corporate was handled as capital receipt.
