DCIT 2(1)(1), MUMBAI V. BANK OF INDIA, MUMBAI

ITA 1128/MUM/2017

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 3971 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2018
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2004-2005
• Appeal Filed On: 17-02-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Bad and doubtful debts; Revised return
• Section: 244A; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI BEFORE SHRI G. S. PANNU , VP AND SHRI AMARJIT SINGH, JM / I .T.A. NO S . 1128 / MUM/ 20 1 7 & 1093 / MUM/ 2017 ( / ASSESSMENT YEAR S: 2004 - 05 & 2008 - 09 ) DCIT - 2(1)(1) ROOM NO. 561, 5 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 400020 . / VS. M/S. BANK OF INDIA STAR HOUSE, C - 5, G - BLOCK BANDRA - KURLA COMPLEX BANDRA (E), MUMBAI - 400051. ./ ./ PAN/GIR NO. : AAACB 0472 C ( / APPELL ANT ) .. ( / RESPONDENT ) / DATE OF HEARING : 21 . 0 8 .201 8 / DATE OF PRONOUNCEMENT : 31.10 . 2018 / O R D E R PER AMARJIT SINGH, J M: THE REVENUE HAS FILED THE ABOVE MENTIONED APPEAL S AGAINST THE DIFFERENT ORDER PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) - 3 , MUMBAI [HEREINAFTER REFERRED TO AS THE CIT(A)] R ELEVANT TO THE AY S . 200 4 - 05 & 2008 - 09 . ITA. NO. 1128/M/2017 THE REVENUE HAS FILED THE PRESENT APPEAL AGAINST THE ORDER DATED 15.11.2016 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) - 3, REVENUE BY: S HRI AWUNASHI GIMSON ASSESSEE BY : SHRI C. NARESH ITA. NO. 1128 TO 1093 /M/20 1 7 A.Y. 2004 - 05 & 2008 - 09 2 MUMBAI [HEREINAFTER REFERRED TO AS THE CIT(A)] RELEVANT TO THE AY. 20 04 - 05 . 2 . THE REVENUE HAS RAISED THE FOLLOWING GROUNDS: - WHETHER ON THE FACTS AND IN THE CIRCUM STANCES OF THE CASE AND IN LAW, THE HON'BLE ITAT WAS CORRECT IN LAW IN HOLDING THAT THE INTEREST PORTION OF THE REFUND ISSUED EARLIER HAS TO BE IGNORED FOR THE PURPOSE OF CALCULATING INTEREST U/S 244A OF THE INCOME TAX ACT, 1961, PAYABLE TO THE ASSESSEE, ON REFUND ARISING OUT OF THE ORDER GIVING EFFECT TO ORDER OF APPELLATE AUTHORITY?. 2. 'WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE TRIBUN AL WAS CORRECT IN LAW, IN INTERPRETING THE PROVISIONS OF SECTION 244A OF THE INCOME TAX ACT, 1961, SO AS TO IGNOR E INTEREST ALREADY GRANTED U/S 2 44A. WHILE CALCULATING INTEREST IN ORDER GIVING EFFECT TO THE APPELLATE AUTHORITY.' 3. FOR THESE AND OTHER GR OUNDS THAT MAY BE URGED AT THE TIME OF HEARING, THE DECISION OF THE CIT(A) MAY BE SET ASIDE AND THAT OF THE AC BE RESTORED, 3 . THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED ITS RETURN OF INCOME ON 30 .10.20 04 DECLARING TOTAL INCOME TO THE TUNE OF RS.846,32,11,640/ UNDER THE NORMAL PROVISIONS OF THE I.T. ACT. THEREAFTER, THE ASSESSEE REVISED THE RETURN OF INCOME ON 29.04.2005 DECLARING AN INCOME OF RS.426,22,65,630/ - . THEREAFTER, THE ASSESSMENT WAS SELECTED FOR SCRUTINY AND NOTICES U/S 143(2) & 142 (1) OF THE ACT WERE ISSUED AND SERVED UPON THE ASSESSEE. THE ASSESSEE HAS CLAIMED THE BAD DEBTS OF RS.508,90,28,469/ - U/S 36(1)(VII) OF THE ACT IN THE REVISED RETURN OF INCOME. IN THE ORIGINAL RETURN OF INCOME, THE ASSESSEE CLAIM OF BAD DEBTS IN SUM OF RS. 550,03,05,865/ - , THE SAME WAS REDUCED BY RS.41,12,77,396/ - . THE ASSESSEE HAS FURTHER CLAIMED THE DEDUCTION U/S 36(1)(VIIA) OF THE ACT AS UNDER: ITA. NO. 1128 TO 1093 /M/20 1 7 A.Y. 2004 - 05 & 2008 - 09 3 7.5% OF TOTAL INCOME OF RS.60,20,39,885/ - 10% OF RURAL ADVANCES OF RS.305,92,25,746/ - TO THE EXTENT OF PROFIT ON BUY BACK GOVT. SECURITIES OF RS.9,83,65,220/ - TOTAL RS.375,96,30,845/ - THE AO DISALLOWED THE CLAIM OF BAD DEBTS TO THE EXTENT OF RS.375,96,30,845/ - . A FTER SOME MORE DISALLOWANCE , T HE INCOME OF THE ASSESSEE WAS ASSESSED TO THE TUNE OF RS.1459,09,86,270/ - . THE ASSESSEE WAS NOT SATISFIED, THEREFORE, FILED AN APPEAL BEFORE THE CIT(A) WHO ALLOWED THE CLAIM OF THE ASSESSEE PARTLY BUT THE REVENUE WAS NOT SATISFIED ON THE POINT OF ADJUSTING THE INTEREST PORTION OF THE REFUND ISSUED EARLIER FOR THE PURPOSE OF CALCULATING THE INTEREST U/S 244 A OF THE I.T. ACT, 1961 PAYABLE TO THE ASSESSEE. THEREFORE, THE REVENUE HAS FILED THE PRESENT APPEAL BY US. 4. WE HAVE HEARD THE ARGUMENT AND ADVANCED BY THE LD. REPRESENTATIVE OF THE PARTIES AND PERUSED THE RECORD. THE ISSUE RELATES TO NO N - GRANT OF INTEREST WHILE ALLOWING THE INTEREST U/S 244A OF THE I. T. ACT, 1961 . THE CIT(A) DECIDED THE MATTER OF CONTROVERSY ON THE BASIS OF THE DECISION OF THE HONBLE ITAT IN THE ASSESSEES OWN CASE FOR THE A.Y. 2008 - 09. THE RELEVANT FINDING IS HEREBY REPRODUCED BELOW: - 6 GROUND NO. 1 RELATES TO NON - GRANT OF INTEREST ON INTEREST WHILE ALLOWING INTEREST U/S 244A OF THE IT ACT THIS IS AN APPEAL OF THE APPELLANT AGAINST THE ORDER OF THE AO PASSED U/S 254 DATED 18.03.2014. THIS ISSUE HAS BEEN DECIDED IN THE APPELLANT'S OWN ITA. NO. 1128 TO 1093 /M/20 1 7 A.Y. 2004 - 05 & 2008 - 09 4 CASE FOR THE AY 2008 - 09 AND 2001 - 02 BY ITAT 'B' B ENCH, MUMBAI IN WHICH THE HONBLE ITAT HAS HELD THAT - '6. WE HEARD LD. DR AND PERUSED THE RECORD. WE NOTICE THAT AN IDENTICAL ISSUE WAS CONSIDERED BY THIS BENCH OF TRIBUNAL IN THE ASSESSES OWN CANE REFERRED SUPRA AND T HE SAME WAS DECIDED AS UNDER: - '5. THE NEXT ISSUE CONTESTED BY THE ASSESSES RELATES TO GRANTING OF INTEREST U/S 244A OF THE ACT, THE LD. AR SUBMITTED THAT THE ASSESSES HAS BEEN RECEIVING REFUNDS UPON PASSING OF ORDERS BY THE APPELLATE AUTHORITIES OR UPON PASSING OF ORDERS U/S 154 OF THE ACT. T HE LD. AR SUBMITTED THAT THE AO HAS MADE ADJUSTMENT OF REFUND (CONSISTING OF TAX AND INTEREST) ALREADY GRANTED AGAINST THE REFUND OF TAX DUE IN EACH OF THE SUCCESSIVE ORDERS. THE LD. AR SUBMITTED THAT THE ENTIRE OF REFUND (BOTH TAX AND INTEREST) GRANTED BE FIRST AGAINST THE INTEREST PORTION THAT HAS BECOME DUE AND THEN THE REMAINING AMOUNT, IF ANY, SHOULD BE ADJUSTED AGAINST THE TAX PORTION OF THE REFUND THE HAS BECOME DUE. IN SUPPORT OF HIT, CONTENTION, THE LD. AR PLACED RELIANCE ON THE DECISION RENDERED B Y THE TRIBUNAL IN THE ASSESSES OWN CASE IN ITA NO - 5344 TO 5446/MUM/2O13 DATED 22.12.2014 AND ALSO THE DECISION RENDERED BY THE TRIBUNAL IN THE. CASE OF UNION BANK OF INDIA (ITA NO. 571 & 574/M/2013 DATED 23.06.2014). 6. WE HEARD THE PARTIES ON THIS ISSUE. SINCE IT IS MATTER INVOLVING COMPUTATION OF ELIGIBLE AMOUNT OF INTEREST U/S 244A OF THE ACT, WE ARE OF THE VIEW THAT THIS ISSUE REQUIRES FRESH EXAMINATION THE. END OF THE AO. IN THE RELIED UPON BY THE ASSESSEE, THE TRIBUNAL HAS FOLLOWED THE DECISION RENDE RED BY THE HON'BLE DELHI HIGH COURT IN THE CASE OF INDIA TRADE PROMOTION ORGANIZATION VS. CIT (361 ITR 646] AND ACCORDINGLY GIVEN DIRECTION TO THE AO TO FALLOUT THE SAID DECISION. CONSIS TED WITH THE VIEW TAKEN BY THET 'RIBUNAL, RESTORE THIS ISSUE TO THE WIT H THE DIRECTION TO EXAMINE THE ISSUE AFRESH BY FOLLOWING THE DECISION RENDERED IN THE CASE OF INDIA TRADE PROMOTION ORGANIZATION (SUPRA)' CONSISTENT WITH THE VIEW TAKEN IN THE ABOVE SAID APPEAL, WE RESTORE THIS ISSUE TO THE FILE OF THE AO IN BOTH THE YEARS WITH SIMILAR DIRECTIONS. 6.2 IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE , THE AO IS DIRECTED TO RECOMPUTED THE INTEREST AS DIRECTED BY THE HONBLE TRIBUNAL IN THE APPELLANT'S OWN CASE AND ALLOW REFUND AS PER THE PROVISIONS OF SECTION 244AOFT HE IT ACT. THEREFORE, GROUND NO - 1 IS PARTLY ALLOWED. ITA. NO. 1128 TO 1093 /M/20 1 7 A.Y. 2004 - 05 & 2008 - 09 5 5. ON APPRAISAL OF THE ABOVE MENTIONED FINDING, WE NOTICE THAT THE HONBLE ITAT REMANDED THE ISSUE BEFORE THE AO TO DECIDE THE MATTER OF CONTROVERSY AFRESH ON THE DECISION OF THE HONBLE DELHI HIGH CO URT IN CASE OF INDIA TRADE PROMOTION ORGANISATION VS. CIT (361 ITR 646) AND ACCORDINGLY, ALLOW THE REFUND IN VIEW OF THE PROVISION 244A OF THE ACT. THE FACTS ARE NOT DISTINGUISHABLE AT THIS STAGE. NO DISTINGUISHABLE MATERIAL HAS BEEN PRODUCED BEFORE US TO WHICH IT CAN BE ASSUMED THAT THE FINDING OF THE CIT(A) IS WRONG AGAINST LAW AND FACTS. TAKING INTO ACCOUNT, ALL THE FACTS AND CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE FINDING OF THE CIT(A) IS QUITE CORRECT WHICH IS NOT LIABLE TO BE INTERFERE WITH AT THIS APPELLATE STAGE. ITA. NO. 1093 /M/2017 THE REVENUE HAS FILED THE PRESENT APPEAL AGAINST THE ORDER DATED 15.11.2016 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) - 3, MUMBAI [HEREINAFTER REFERRED TO AS THE CIT(A)] RELEVANT TO THE AY. 200 8 - 09 . 6 . THE R EVENUE HAS RAISED THE FOLLOWING GROUNDS: - 1 . 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD, CIT(A) HAS ERRED IN H OLDING CHAT THE EXPENSES OF RS, 28,41,01, 133/ - REPRESENT AUDITOR'S TRAVEL EXPENSES WITHOUT REALIZING THAT THE ASS ESSEE ITSELF CATEGORIZED THESE EXPENSE S AS 'HOTEL, BOARDING & LODGING EXPENSES', ITA. NO. 1128 TO 1093 /M/20 1 7 A.Y. 2004 - 05 & 2008 - 09 6 2. 'THE LD CIT(A) ERRED IN TAKING THE EXPENSES OUT OF FBT AMBIT WITHOUT APPRECIATING T HE ASSESSEE ITSELF HAS OFFERED FBT @ 5 % ON THESE EXPENSES.' 3. 'THE LD CIT(A) ER RED IN DELETING THE LEVY OF FBT WITHOUT PROVIDING THE AO AN OPPORTUNITY TO EXAMINE THE NEW CONTENTION OF THE ASSESSEE THAT THESE EXPENSES ARE AUDITOR'S TRAVEL EXPENSES.' 4. FOR THESE AND OTHER GROUN DS THAT MAY BE URGED AT THE TIME OF HEARING THE DE CISION OF THE C1T(A) MAY BE SET ASIDE AND THAT OF THE AO RESTORED. 7 . THE FACTS OF THE PRESENT CASE ARE THAT QUITE SIMILAR TO THE FACTS OF THE CASE AS NARRATED ABOVE IN THE APPEAL BEARING NO. 1128/M/2017. HOWEVER, THE FIGURE IS DIFFERENT. I SSUE NOS . 1 TO 3 : - 8 . ISSUE NOS. 1 TO 3 ARE IN CONNECTION WITH THE ALLOWANCE OF EXPENSES OF RS.28,41,01,133/ - ON ACCOUNT OF AUDITORS TRAVEL EXPENSES. THE ASSESSEE NOWHERE TOOK THE PLEA TH AT AUDITORS TRAVEL EXPENSES ARE NOT LIABLE TO BE FBT IN VIEW OF THE CIRCULAR NO. 8/2005 . T HE AO DECLINED THE CLAIM. ON THE OTHER HAND, THE CIT(A) HAS ALLOWED THE CLAIM ON THE GROUND OF THAT THE PLEA WAS NOT TAKEN BEFORE THE AO. TAKING INTO ACCOUNT, ALL THE FACTS AND CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE FACTS ARE LIABLE TO BE CON SIDERED AT THE END OF THE AO AND TO BE ADJUDICATED IN ACCORDANCE WITH LAW BY GIVING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. ACCORDINGLY, THE FINDING OF THE CIT(A) IS HEREBY ORDERED TO BE SET ASIDE AND THE ISSUE IS RESTORED BEFORE THE AO TO DECIDE TH E MATTER AFRESH IN VIEW OF THE PLEA TAKEN BEFORE THE ITA. NO. 1128 TO 1093 /M/20 1 7 A.Y. 2004 - 05 & 2008 - 09 7 CIT(A). ACCORDINGLY, THESE ISSUES ARE DECIDED IN FAVOUR OF THE REVENUE AGAINST THE ASSESSEE. 9 . IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS HERE BY ORDERED TO BE PARTLY ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 31.10 . 2018 . SD/ - SD/ - ( G. S. PANNU ) (AMARJIT SINGH) VICE PRESIDENT JUDICIAL MEMBER MUMBAI; DATED : 31.10 . 2018 . V IJAY / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. / BY ORDER, //TRUE COPY// / / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI