All Bank Finance Ltd., Kolkata V. ACIT, Circle - 6, Kolkata, Kolkata

ITA 1097/KOL/2006

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 9400 (ITAT-KOLKATA)
• Duration Of Justice: 4 year(s) 7 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-01-2011
• Appeal Filed By: Assessee
• Bench Allotted: Not Allotted
• Assessment Year: 2002-2003
• Appeal Filed On: 22-05-2006
• Court: TRIBUNAL
• Department Lawyers: MRS KAVITA JHA
• Assessee Lawyers: B K GHOSH
• Keywords: Notional interest
• Section: 14A

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL, BEN CH A, KOLKATA () BEFORE . . . . . . . . , ,, , SHRI D.K.TYAGI, JUDICIAL MEMBER. !' !' !' !' /AND . .. . . .. .! !! ! , # SHRI C.D. RAO, ACCOUNTANT MEMBER '$ '$ '$ '$ / ITA NO. 1097/KOL/2006 %&' !()/ ASST. YEAR : 2002-03 (+, / APPELLANT ) ALLBANK FINANCE LTD. (PAN: AACCA 4014D) - !& - - VERSUS - (.+,/ RESPONDENT ) A.C.I.T., CIRCLE-6, KOL. +, / 0 / FOR THE APPELLANT: / SHRI B.K.GHOSH .+, / 0 / FOR THE RESPONDENT : MRS. KAVITA JHA 1 / ORDER ( . .. . . .. .! !! ! ) # PER SHRI C.D.RAO, A.M . THIS APPEAL FILED BY THE ASSESSEE IS PREFERRED AGAI NST THE ORDER DATED 13.03.2006 OF THE C.I.T.(A)-VI, KOLKATA PERTAINING TO ASSESSME NT YEAR 2002-03. 2. THE APPEAL NO.1097/KOL/2006 FILED BY THE ASSESS EE WAS EARLIER DISMISSED FOR WANT OF COD APPROVAL. LATER ON, AFTER OBTAINING THE COD APPROVAL, THE ASSESSEE FILED THE M.A. WHICH WAS ALLOWED BY THIS TRIBUNAL VIDE IT S ORDER DATED 04.05.2007. IN THIS RESTORED APPEAL, THE ASSESSEE HAS SUBMITTED THE C.O .D. PERMISSION TO PROCEED AGAINST THE ADDITION OF NOTIONAL INTEREST RECEIVABLE FROM V .B.DESAI & CO., EXPENSE ALLEGEDLY RELATABLE TO THE EARNING OF THE EXEMPTED DIVIDEND I NCOME, NOT ADJUDICATING LEVY OF CONSEQUENTIAL INTEREST UNDER SECTION 234B, 234C AND 234D. 3. AT THE TIME OF HEARING BEFORE US, BOTH THE PARTI ES HAVE FAIRLY CONCEDED THAT THE ISSUE OF NOTIONAL INTEREST OF V.B.DESAI & CO. IS SQ UARELY COVERED BY THE ORDERS OF THE TRIBUNAL DATED 28.9.2008 IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 1993-94. THE RELEVANT OBSERVATIONS OF THE TRIBUNAL ARE AS UNDER: 2 10.6 WE HAVE EXAMINED THE RIVAL SUBMISSIONS. WE FIN D THAT THE CONTENTION OF THE DEPARTMENTAL REPRESENTATIVE HAS NO MERIT AND CA NNOT BE ACCEPTED. THE SPECIAL COURT ADJUDICATED THE RESPECTIVE RIGHTS OF THE PARTIES INVOLVED IN THE TRANSACTIONS. IT DECIDED ON THE NATURE OF SUCH TRAN SACTIONS AFTER THOROUGH EXAMINATION OF ORAL AND DOCUMENTARY EVIDENCE. THE A SSESSMENT RELATING TO SUCH TRANSACTIONS CANNOT BE MADE DEHORS SUCH ADJUDICATIO N. IRRESPECTIVE OF THE DATE OF ADJUDICATION, WHICH WILL ALWAYS BE MUCH AFTER TH E DATES OF SUCH TRANSACTIONS OR EVENTS, SUCH ADJUDICATION HAS ITS EFFICACY SINCE THE VERY INCEPTION. THE ADJUDICATION DOES NOT CREATE ANY NEW RELATIONSHIP B UT ONLY DECIDES WHAT WAS ALL ALONG THERE. 10.7 WE FURTHER FIND THAT THE ADDITION OF RS.9.02 C RORES ON ACCOUNT OF ALLEGED ACCRUED INTEREST ON ALLEGED DUES OF VBD CANNOT STAN D IN VIEW OF THE FINDING OF THE SPECIAL COURT THAT THE SAID SHARES OF OTHER COM PANIES AND BONDS WERE GIVEN BY VBD IN MAY 1992 IN FULL AND FINAL SETTLEMENT OF THE ASSESSEES DUES. THE ADDITION OF RS.9.02 CRORES IS DIRECTED TO BE DELETE D. GROUND NO.2 IN THE ASSESSEES APPEAL IS ALLOWED . 3.1 KEEPING IN VIEW OF THE FACT THAT THE FACTS INVO LVED IN THE PRESENT ASSESSMENT YEAR ARE SIMILAR TO THAT OF THE ONE DECIDED BY THE TRIBUNAL IN ASSESSEES OWN CASE IN ITA NO. 679/KOL/05 FOR THE ASSESSMENT YEAR 1993-94, WE FIND NO INFIRMITY IN THE ORDERS OF THE LD. CIT(A), WHICH ARE IN CONFORMITY W ITH THE ORDERS OF THIS TRIBUNAL. THEREFORE, WE ALLOW THE GROUND TAKEN BY THE ASSESSE E. 3.2 AS REGARDING THE ISSUE OF EARNING OF EXEMPTED D IVIDEND INCOME UNDER SECTION 14A OF THE I.T.ACT, THE LD. COUNSEL FOR THE ASSESSE E HAS NOT SERIOUSLY ARGUED ON THIS ISSUE. THEREFORE, THE SAME IS DISMISSED. 3.3 THE OTHER ISSUE TAKEN BY THE ASSESSEE IN THIS A PPEAL IS RELATING TO CHARGING OF INTEREST UNDER SECTION 234B, 234C AND 234D OF THE I .T. ACT, WHICH IS CONSEQUENTIAL IN NATURE. THEREFORE, WE DIRECT THE AO TO RE-COMPUTE T HE SAME, AFTER GIVING EFFECT OF THIS ORDER OF THE TRIBUNAL. 4. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED IN PART, AS INDICATED ABOVE. 2 1 3 4& 25 ORDER IS PRONOUNCED IN THE OPEN COURT ON 14/01/2011 . SD/- SD/- . . . . . . . . , ,, , D.K.TYAGI, JUDICIAL MEMBER . .. . . .. .! !! ! , # C.D. RAO, ACCOUNTANT MEMBER ( (( (# # # #) )) ) DATE: 14.01.2011 MST(SR.P.S.) 3 1 / .%%6 76(8- COPY OF THE ORDER FORWARDED TO: 1. ALLBANK FINANCE LTD., 15 MAHARANA PRATAP SARANI (FO RMERLY INDIA EXCHANGE PLACE), 4 TH FLOOR, KOLKATA 700 001. 2 A.C.I.T., CIRCLE-6, KOL. 3. THE CIT, 4. THE CIT(A), 5. DR, KOLKATA BENCHES, KOLKATA 6 .%/ TRUE COPY, 1&4/ BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES