Nuclear Power Corporation of India Ltd. vs. Principal Commissioner of Income Tax-3

Parties Involved

Facts Summary

The assessee, Nuclear Power Corporation of India Ltd., filed its return of income for the Assessment Year 2018-19 under the normal provisions of the Act and section 115JB. The return was selected for scrutiny, and the Assessing Officer issued notices under sections 142(1) and 143(2) of the Act. The assessee submitted information and details in response to the notices. The Assessing Officer identified issues related to the addition of decommissioning levy, interest on R&M fund levy, computation of book profits under section 115JB, disallowance of other income under section 80IA, and addition of taxes or non-monetary perquisites to employees. The Assessing Officer made additions/disallowances in the assessment order dated 20.05.2021. The Principal Commissioner of Income Tax issued a notice under section 263 of the Act, proposing to revise the assessment order. The assessee filed a reply, arguing that the income earned during the construction period should not be added to the book profits under section 115JB. The assessee referred to previous decisions in its favor and argued that the income earned during the construction period was not subject to adjustment under section 115JB. The Income Tax Appellate Tribunal allowed the appeal, holding that the order passed by the Principal Commissioner of Income Tax under section 263 was erroneous and not prejudicial to the interests of the revenue.…

Legal Issues

• 1. Whether the income earned during the construction period should be added to the book profits under section 115JB?
• 2. Whether the order passed by the Principal Commissioner of Income Tax under section 263 was erroneous and prejudicial to the interests of the revenue?

Judgment Outcome

Decided in favour of Partly Assessee / Partly Revenue.

Precedents Relied Upon

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