TATA FINANCE LTD ( NOW MERGED WITH TATA MOTORS LTD), MUMBAI V. DCIT 2(3), MUMBAI

CO 215/MUM/2010

• Counselvise Citation: [2012] 122 COUNSELVISE.COM (IT) 8036 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 20 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 20-11-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2000-2001
• Appeal Filed On: 30-12-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: GIRIJA DAYAL
• Assessee Lawyers: DINESH VYAS
• Keywords: Reassessment proceedings

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'E' BENCH, MUMBAI BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER INT. TAX APPEALS NO. 09 & 10/MUM/2010 (ASSESSMENT YEARS: 1999-2000 & 2000-01) D C I T - 2(3) M/S. TATA FINANCE LTD. ROOM NO. 555, 5TH FLOOR BOMBAY HOUSE AAYAKAR BHAVAN, M.K. ROAD VS. 24 HOMI MODY STREET MUMBAI 400020 FORT, MUMBAI 400001 PAN - AAACT 1629 F APPELLANT RESPONDENT CO NO. 214&215/MUM/2010 (ASSESSMENT YEARS: 1999-2000 & 2000-01) M/S. TATA FINANCE LTD. D C I T - 2(3) BOMBAY HOUSE ROOM NO. 555, 5TH FLOOR 24 HOMI MODY STREET VS. AAYAKAR BHAVAN, M.K. ROAD FORT, MUMBAI 400001 MUMBAI 400020 PAN - AAACT 1629 F CROSS OBJECTOR APPELLANT IN APPEAL REVENUE BY: MS. GIRIJA DAYAL ASSESSEE BY: SHRI DINESH VYAS DATE OF HEARING: 20.11.2012 DATE OF PRONOUNCEMENT: 20.11.2012 O R D E R PER D. MANMOHAN, V.P. THESE CROSS APPEALS PERTAIN TO ASSESSMENT YEARS 199 9-2000 AND 2000- 01. COMMON ISSUE IS INVOLVED IN BOTH THE APPEALS FI LED BY THE REVENUE. SIMILARLY THE CROSS OBJECTIONS FILED BY THE ASSESSE E IS ON IDENTICAL ISSUE, I.E. WITH REGARD TO REOPENING OF THE ASSESSMENT. 2. THE GROUND URGED IN THE APPEALS FILED BY THE REVENU E ARE AS UNDER: - (A) ASSESSMENT YEAR 1999-2000 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN HOLDING THAT THE AMOUNT OF RS.272.2 0 CRORES RECEIVED FROM HIRE-PURCHASE TRANSACTIONS ARE NOT CHARGEABL E TO INTEREST TAX INT. TAX APPEALS 09&10/MUM/2010 M/S. TATA FINANCE LTD. 2 WITHOUT APPRECIATING THAT THE TRANSACTIONS WERE IN THE NATURE OF FINANCE TRANSACTIONS AND NOT HIRE PURCHASE AND AMOUNT RECEI VED THEREFROM WAS IN THE NATURE OF INTEREST CHARGEABLE TO INTERES T TAX. (B) ASSESSMENT YEAR 2000-01 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN HOLDING THAT THE AMOUNT OF RS.267.6 9 CRORES RECEIVED FROM HIRE-PURCHASE TRANSACTIONS ARE NOT CHARGEABL E TO INTEREST TAX WITHOUT APPRECIATING THAT THE TRANSACTIONS WERE IN THE NATURE OF FINANCE TRANSACTIONS AND NOT HIRE PURCHASE AND AMOUNT RECEI VED THEREFROM WAS IN THE NATURE OF INTEREST CHARGEABLE TO INTERES T TAX. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD. CIT(A) ERRED IN HOLDING THAT THE AMOUNT OF RS.8.58 IS NOT CHARGEABLE TO INTEREST TAX WITHOUT APPRECIATING THAT THE AMOUNT O F ` 8.58 CRORES IS IN FACT IN THE NATURE OF INTEREST EMBEDDED IN THE LEAS E RENTALS AND IS CHARGEABLE UNDER INTEREST TAX. 3. THE CASE OF THE AO WAS THAT THE ASSESSEE COMPANY BE ING A FINANCE COMPANY, HIRE-PURCHASE CHARGES RECEIVED BY IT ARE A SSESSABLE TO INTEREST TAX ACT. SIMILARLY THE LEASE RENTALS ARE ALSO ASSESSABL E TO INTEREST TAX ACT. THE LEARNED CIT(A) NOTICED THAT THE HIRE-PURCHASE CHARG ES AS WELL AS INTEREST IN THE LEASE RENTALS ARE NOT ASSESSABLE TO INTEREST TA X ACT IN THE LIGHT OF THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEARS 1998- 99 AND 1999-2000. 4. AGGRIEVED REVENUE IS IN APPEAL BEFORE US. AT THE TI ME OF HEARING THE LEARNED COUNSEL FOR THE ASSESSEE PLACED BEFORE US A COPY OF THE ORDER OF THE ITAT D BENCH MUMBAI IN ASSESSEES OWN CASE FOR A. Y. 1999-2000 (INT. TAX APPEAL NO. 48/MUM/2005 DATED 28 TH SEPTEMBER, 2007) AND ALSO ORDER PASSED BY THE ITAT IN INT. TAX APPEALS NO. 44 TO 47 /MUM/2005 DATED 20 TH JUNE, 2006 IN SUPPORT OF HIS CONTENTION THAT HIRE-P URCHASE CHARGES RECEIVED BY THE ASSESSEE AS WELL AS THE LEASE RENTALS ARE NO T COVERED UNDER THE INTEREST TAX ACT AND HENCE THEY ARE NOT ASSESSABLE TO TAX UNDER THE INTEREST TAX ACT. 5. THE LEARNED D.R. FAIRLY ADMITTED THAT THE ISSUE STA NDS SQUARELY COVERED BY THE DECISION OF THE ITAT CITIED BY THE L EARNED COUNSEL FOR THE ASSESSEE (SEE PAGES 24 TO 35 OF THE PAPER BOOK). SI NCE THE LEARNED CIT(A) FOLLOWED THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE, WE DO NOT FIND INT. TAX APPEALS 09&10/MUM/2010 M/S. TATA FINANCE LTD. 3 ANY INFIRMITY IN THE VIEW TAKEN BY THE LEARNED CIT( A). WE, THEREFORE, DISMISS THE APPEALS FILED BY THE REVENUE. 6. AT THIS JUNCTURE THE LEARNED COUNSEL FOR THE ASSESS EE SUBMITTED THAT THE ASSESSEE COMPANY RAISED A PRELIMINARY ISSUE BEF ORE THE FIRST APPELLATE AUTHORITY CHALLENGING THE VALIDITY OF REASSESSMENT PROCEEDINGS BUT THE CIT(A) HAS NOT DECIDED THE SAME ON MERITS BY HOLDIN G THAT IT IS ACADEMIC IN NATURE SINCE THE QUANTUM ISSUES ARE DISPOSED OF ON MERITS IN FAVOUR OF THE ASSESSEE. IT WAS PLEADED BEFORE US THAT THE ASSESSE E HAS A STRONG CASE EVEN ON THE PRELIMINARY ISSUE. HOWEVER, THE FACT REMAINS THAT EVEN THE FIRST APPELLATE AUTHORITY HAS NOT GONE INTO THAT ISSUE SI NCE IT IS OF ACADEMIC IMPORTANCE. SINCE WE HAVE DISMISSED THE APPEALS FIL ED BY THE REVENUE ON MERITS, THE CROSS OBJECTIONS FILED BY THE ASSESSEE ARE DISMISSED BY HOLDING THAT DISPOSAL OF THE ISSUE RAISED BY WAY OF CROSS O BJECTIONS IS OF ACADEMIC IMPORTANCE. 7. IN THE RESULT, THE APPEALS FILED BY THE REVENUE AND THE CROSS OBJECTIONS FILED BY THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH NOVEMBER, 2012. SD/- SD/- (D. KARUNAKARA RAO) (D. MANMOHAN) ACCOUNTANT MEMBER VICE PRESIDENT MUMBAI, DATED: 20 TH NOVEMBER, 2012 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 6, MUMBAI 4. THE CIT 2, MUMBAI CITY 5. THE DR, E BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.