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August, 02nd 2013
+                  INCOME TAX APPEAL NO. 574/2009
                                         Date of decision: 29th July, 2013
                                                            ..... Appellant
                    Through Mr. R. Santhanam, Advocate.
                                               ..... Respondent
                            Through Mr. Sanjeev Sabharwal, Sr.
                            Standing Counsel.



        This appeal by the assessee-M/s Ester Industries Limited

impugns order of the Income Tax Appellate Tribunal dated 14th

December, 2007, which relates to Assessment Year 1997-98.

2.      Learned counsel for the appellant submits that adjustments

required for computing book profits under Section 115JA of the

Income Tax Act, 1961 (Act, for short) have been wrongly made by the

Assessing Officer and benefit of Section 80HHC has not been granted.

3.      For the assessment year in question, the assessee had filed return

on 28th November, 1997 declaring "nil" taxable income under the

normal provisions.       The assessee did not compute taxable income

ITA No. 574/2009                                                 Page 1 of 5
under MAT provisions, i.e., Section 115JA and a specific note was

attached that the said provisions were not applicable.

4.      The Assessing Officer passed an order under Section 143(1)(a)

of the Act making adjustments and computing 30% of the book profit

at Rs.4,07,72,346/-. This was made subject matter of challenge in the

appellate proceedings but we need not refer to the orders passed as this

aspect is not relevant.

5.      In the meanwhile, the Assessing Officer passed a regular

assessment order and calculated the tax payable under Section 115JA

at Rs.4,07,72,346/-. The Assessing Officer directed levy of interest

under Sections 234B and 234C and observed that penalty proceedings

under Section 271(1)(c) had already been initiated.

6.      The assessee filed first appeal but was not successful before the

Commissioner of Income Tax (Appeals). Order passed by the first

appellate authority has, however, not been placed on record. The

assessee thereupon filed second appeal before the Income Tax

Appellate Tribunal raising the following grounds:-

                         "1. In upholding Rs.14,175/- U/s
                   40A(3) of the Income Tax Act illegally and

                         2.     In disallowing the appellant's
                   claim for gratuity liability of Rs.22,48,530/-.

                        3.    In confirming a disallowance of
                   50% of the expenditure as if it is in the nature

ITA No. 574/2009                                                      Page 2 of 5
                   of entertainment when it is not at all falling U/s
                   37(2) as entertainment expenditure for

                         4.     In confirming an illegal demand of
                   Rs.1,75,32,108/- towards Minimum Alternate
                   Tax U/s 115JA ignoring the fact that U/s 115
                   JAA the deposit of any amount will be
                   considered as available as credit and in the
                   absence of any deposit, the credit would be
                   denied and in the absence of any tax liability
                   being determined in the normal assessment and
                   adjusted within the 5 years period, the entire
                   amount of credit would be swallowed by the
                   Government and non-payment of any amount
                   towards interest-free credit cannot, therefore, be
                   considered as tax payable by the appellant and
                   hence the imposition of Minimum Alternate
                   Tax on the appellant is clearly illegal and
                   unauthorised by law and must be set aside and

                         5.    In not directing the disallowance
                   U/s 43 43B of Rs.72,17,146/- to be deleted
                   instead of remanding the matter to the
                   Assessing Officer who does not act in a fair and
                   just manner."

7.       Subsequently, an application raising two additional grounds was

filed but the said application was rejected by the tribunal by the

impugned order. Additional grounds raised but were not entertained


                   "1. On the facts and in the circumstances of
                   the case, the entire amount of MAT sought to
                   be levied and collected is required to be given
                   credit mandatorily and the amount of such
                   credit ought to be refunded with interest to the
                   assessee in the event of there being no such

ITA No. 574/2009                                                        Page 3 of 5
                   liability in the next five years in the case of the
                   appellant, the refund of the entire amount
                   collected with interest being granted to the

                   2.     On the facts and in the circumstances of
                   the case, the authorities below have erred, both
                   on facts and in law, in disregarding the
                   provisions for grant of credit u/s 115 JAA and
                   the consequent non-existence of liability to
                   MAT during the five years following the year
                   1997-98 and hence, the orders passed by the
                   authorities below and denied refund with
                   interest to the appellant cannot be upheld."

8.      It is noticeable from the grounds of appeal raised before the

tribunal as well as the additional grounds that the assessee never

challenged the computation made under Section 115JA or challenged

or questioned the assessment order on the ground that adjustments had

not been made, as required and mandated by law. The assessee in the

grounds of appeal as well as additional grounds did not challenge the

assessment on the said ground.              To this extent, he did not raise

grievance or protest. Tribunal in the impugned order dated 13 th/14th

December, 2007 has dealt with the grounds as originally raised on

merits and has dismissed the appeal of the assessee. There is no

discussion in the impugned order on the question of adjustments,

which should be permitted and allowed under Section 115JA or

computation of taxable book profits under Section 115JA.                       It is

apparent and crystal clear that this issue/question was not raised before

ITA No. 574/2009                                                         Page 4 of 5
the tribunal as the petitioner, who appears, did not want to raise the

said contention and issue. The tribunal in the impugned order has

specifically recorded as under:-

                          "The grounds of appeal raised by the assessee does
                   (sic) do not challenge the manner of determination of
                   book profits under Section 115JA of the Act."

9.      In view of the aforesaid position, we do not think the assessee

can now in the fourth appeal, (maintainable only on the ground of

substantial question of law arising out of the order of the tribunal) can

be allowed and permitted to raise this contention and set the ball

rolling back once again to the Assessing Officer, after lapse of several

years. The appeal relates to the Assessment Year 1997-98. Allowing

the appellant to now question the computation will be allowing a

person to raise stale issue and to question a decision which was

accepted.          In these circumstances, we do not think the appellant-

assessee should be permitted and allowed to raise this ground belatedly

at this stage. The issue was not raised before the tribunal, and has not

been dealt and decided by them. The appeal is accordingly dismissed.

                                           SANJIV KHANNA, J.

                                           SANJEEV SACHDEVA, J.
        JULY 29, 2013
ITA No. 574/2009                                                   Page 5 of 5
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