The Madura Yarn Merchants Association Limited, Madurai V. ITO, Madurai

CO 92/CHNY/2015

• Counselvise Citation: [2015] 123 COUNSELVISE.COM (IT) 1173 (ITAT-CHENNAI)
• Duration Of Justice: 12 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 02-09-2015
• Appeal Filed By: Assessee
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 20-08-2015
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTH
• Keywords: Earning of tax free income

Judgement Text

, , IN THE INCOME - TAX APPELLATE TRIBUNAL C BENCH, CHENNAI . , . , BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER & SHRI V. DURGA RAO, JUDICIAL MEMBER ./ I.T.A.NO. 8 2 7 /MDS/2015 & C.O. NO. 92/MDS/2015 [IN I.T.A. NO. 827/MDS/2015] THE INCOME TAX OFFICER , C O RPORATE WARD 4 , MADURAI. VS. THE MADURA YARN MERCHANTS ASSOCIATION LTD., NO. 56, NAVABATHKANA STREET, MADURAI 625 001. [PAN : A A B C T1835A ] ( APPELLANT ) ( R ESPONDENT /CROSS OBJECTOR ) DEPARTMENT BY : SHRI A.V. SREEKANTH, JCIT ASSESSEE BY : NONE / DATE OF HEARING : 3 1 . 0 8 .201 5 / DATE OF P RONOUNCEMENT : 02 .0 9 .201 5 / O R D E R PER V. DURGA RAO, JUDICIAL MEMBER : TH E APPEAL FILED BY THE REVENUE AND THE CROSS OBJECTION FILED BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) I , MADURAI , DATED 2 2 . 0 1 .201 5. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE, THE MADURA YARN MERCHANTS ASSOCIATION LIMITED HAS FILED ITS RETURN OF INCOME SHOWING A TOTAL INCOME OF .77,840/ - . THE ASSESSEE COMPANY IS INCORPORATED IN THE YEAR 1942 AS A GUARANTEE COMPANY UNDER THE COMPAN IES ACT, 1956. THE ASSESSING I.T.A. NO. 8 2 7 /M/ 1 5 & C.O.NO. 92/MDS/15 2 OFFICER HAS ASSESSED INTEREST INCOME RECEIVED BY THE ASSESSEE FROM THE BANK AS INCOME FROM OTHER SOURCES AND TAXED ACCORDINGLY. 3. ON APPEAL, THE LD. CIT(A) DIRECTED THE ASSESSING OFFICER TO REFUND THE AMOUNT TAXED BY THE AS SESSING OFFICER ON THE GROUND THAT THE ASSESSEE IS COVERED BY PRINCIPLE OF MUTUALITY AND THE INCOME IS EXEMPT INCOME. 4. ON BEING AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 5. NONE APPEARED ON BEHALF OF THE ASSESSEE. EVEN BEFORE THE LD. CIT(A), NONE APPEARED ON BEHALF OF THE ASSESSEE. 6. THE LD. DR HAS SUBMITTED THAT THE INCOME RECEIVED BY THE ASSESSEE IS ONLY INTEREST INCOME FROM THE BANK AND THEREFORE, THE MUTUALITY PRINCIPLE HAS NO APPLICATION AND THE SAME IS LIABLE TO BE TAXED. HE RELIED ON THE DECISION IN THE CASE OF MADRAS GYMKHANA CLUB V. DCIT 328 ITR 348 (MAD). 7. AFTER HEARING THE LD. DR AND CONSIDERING THE ENTIRE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND THAT THE ONLY ISSUE INVOLVED IN THIS APPEAL IS WHETHER THE INTEREST INCOME RECEIVED BY THE ASSESSEE IS TAXABLE IN THE HANDS OF THE ASSESSEE OR NOT? WE FIND THAT IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER HAS NOT DISCUSSED ANY FACTS. EVEN THE LD. CIT(A), WITHOUT DISCUSSING THE FACTS, ONLY BY RELYING ON THE CASE LAW, DI RECTED THE ASSESSING OFFICER TO REFUND THE TAXED AMOUNT. THE ASSESSEE HAS NEITHER APPEARED BEFORE THE LD. CIT(A) NOR BEFORE THE TRIBUNAL. UNDER THESE FACTS AND CIRCUMSTANCES OF THE CASE, THE ISSUE HAS TO BE REMITTED BACK TO THE ASSESSING I.T.A. NO. 8 2 7 /M/ 1 5 & C.O.NO. 92/MDS/15 3 OFFICER TO DECIDE THE ISSUE AFRESH IN THE LIGHT OF THE DECISION OF THE HON BLE JURISDICTIONAL HIGH COURT IN THE CASE OF MADRAS GYMKHANA CLUB V. DCIT 328 ITR 348. ACCORDINGLY, WE SET ASIDE THE ORDER PASSED BY THE LD. CIT(A) AND REMIT THE MATTER BACK TO THE ASSESSING OFFICER TO DECIDE THE ISSUE DE NOVO IN ACCORDANCE WITH LAW. ACCORDINGLY, THE APPEAL FILED BY THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. 8. SO FAR AS CROSS OBJECTION FILED BY THE ASSESSEE IS CONCERNED, THE SAME IS FILED IN SUPPORT OF THE ORDER OF THE LD. CIT(A). SINCE WE HAVE SET ASIDE THE ORDER OF THE LD. CIT(A) AND REMITTED THE MATTER BACK TO THE ASSESSING OFFICER TO DECIDE AFRESH, THE CROSS OBJECTION FILED BY THE ASSESSEE HAS BECOME INFRACTUOUS. ACCOR DINGLY, THE CO FILED BY THE ASSESSEE STANDS DISMISSED. 9. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES AND THE CROSS OBJECTION FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED ON WEDNESDAY, THE 2 ND OF SEPTEMBE R, 201 5 AT CHENNAI. SD/ - SD/ - ( A. MOHAN ALANKAMONY ) ACCOUNTANT MEMBER ( V. DURGA RAO ) JUDICIAL MEMBER CHENNAI, DATED, THE 02 . 0 9 .201 5 VM/ - / COPY TO: 1. / APPELLANT , 2. / RESPONDENT , 3. ( ) / CIT (A) , 4. / CIT , 5. / DR & 6. / GF.