DCIT, CHENNAI V. Madras Fertilizers Ltd., CHENNAI

ITA 1168/CHNY/2013

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 4527 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-08-2013
• Appeal Filed By: Department
• Bench Allotted: B
• Assessment Year: 2003-2004
• Appeal Filed On: 27-05-2013
• Court: TRIBUNAL
• Department Lawyers: RAJIB KUMAR HOTA
• Assessee Lawyers: TAXATI
• Section: 143(3); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : CHENNAI [BEFORE DR. O.K. NARAYANAN, VICE PRESIDENT & SHRI VIKAS AWASTHY, JUDICIAL MEMBER] I.T.A. NO. 1168/MDS/2013 & C.O. NO. 111/MDS/2013 ( IN ITA NO. 1168/MDS/2013 ) ASSESSMENT YEAR 2003-04 DEPUTY COMMISSIONER OF INCOME TAX, COMPANY CIRCLE-IV(1), CHENNAI. VS M/S. MADRAS FERTILIZERS LTD., POST BAG NO. 2, MANALI, CHENNAI-68. [PAN: AAACM 5198 E] (APPELLANT) (RESPONDENT/CROSS OBJECTOR) REVENUE BY : SHRI RAJIB KUMAR HOTA, CIT ASSESSEE BY : SHRI V. CHANDRAMOULI, MANAGER, CORPORATE ACCOUNTS & TAXATION DATE OF HEARING : 07-08-2013 DATE OF PRONOUNCEMENT : 07-08-2013 O R D E R PER VIKAS AWASTHY, JUDICIAL MEMBER THE APPEAL HAS BEEN FILED BY THE REVENUE AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS)-V, CHENN AI DATED I.T.A. NO. 1168/MDS/2013 C.O. NO. 111/MDS/2013 :- 2 -: 28-02-2013 RELEVANT TO THE ASSESSMENT YEAR (AY) 200 3-04. THE ASSESSEE HAS FILED CROSS-OBJECTIONS IN SUPPORT OF T HE ORDER OF THE CIT(APPEALS). 2. THE ASSESSEE HAD FILED ITS RETURN OF INCOME FOR THE AY. 2003-04 ON 28-11-2003 DECLARING NIL INCOME AFTER SE TTING OF BROUGHT FORWARD LOSSES TO THE TUNE OF ` 37,21,48,994/-. ASSESSMENT U/S. 143(3) OF THE INCOME TAX ACT, 1961 (HEREIN AFTER REFERRED TO AS THE ACT) WAS COMPLETED ON 17-03-20 06. THE ASSESSEE HAD RECEIVED BENEFIT OF INTEREST WAIVER FR OM NATIONAL FERTILIZER LTD., THE INTEREST WAIVED INCLUDED PENA L INTEREST OF ` 15.47 CRORES AND INTEREST OF ` 8.68 CRORES FOR THE PERIOD APRIL TO OCTOBER, 2002. THE ASSESSING OFFICER WAS OF THE VI EW THAT THE ASSESSEE DID NOT OFFER WAIVED INTEREST/PENAL INTERE ST AS INCOME AND HAS THUS ESCAPED ASSESSMENT. THEREFORE, NOTICE U/S. 148 WAS ISSUED TO THE ASSESSEE ON 17-03-2010. THE ASSE SSING OFFICER VIDE ASSESSMENT ORDER DATED 31-12-2010 PASS ED U/S. 143(3) R.W.S. 147 OF THE ACT, MADE ADDITION OF THE AMOUNT OF PENAL INTEREST AND INTEREST WAIVED BY NATIONAL FERTILIZER LIMITED. I.T.A. NO. 1168/MDS/2013 C.O. NO. 111/MDS/2013 :- 3 -: 3. AGGRIEVED AGAINST THE ASSESSMENT ORDER, THE ASSE SSEE PREFERRED AN APPEAL BEFORE THE CIT(APPEALS). THE S TAND OF THE ASSESSEE WAS THAT THE AMOUNT OF PENAL INTEREST WAIV ED ` 15.47 CRORES WAS NOT CHARGED IN THE ACCOUNTS AS EXPENSES BUT WAS TREATED AS CONTINGENT LIABILITY IN THE BOOKS. THER EFORE, WAIVER DOES NOT AMOUNT TO INCOME. ON THE WAIVER OF INTERE ST THE CONTENTION OF THE ASSESSEE WAS THAT, ` 30.62 CRORES WAS WAIVED, THE ASSESSEE HAD ACCOUNTED ` 21.94 CRORES AFTER NETTING OF ` 8.6 CRORES CHARGED TO ACCOUNTS TOWARDS INTEREST ACCRUED FOR THE PERIOD FROM APRIL TO OCTOBER 2002. THE SAID AMOUNT WAS REVERSED ON WAIVER. IN SUPPORT OF ITS CONTENTIONS, THE ASSESSEE HAD FURNISHED XEROX COPIES OF THE SCHEDULES TO THE ACCOUNTS FOR THE RELEVANT AY BEFORE THE CIT(APPEALS). THE CIT( APPEALS) DIRECTED THE ASSESSING OFFICER TO DELETE THE ADDITI ONS AFTER VERIFYING THE FACTS AND THE ACCOUNTS OF THE ASSESSE E FOR THE RELEVANT PERIOD, PRODUCED BEFORE HIM. AGGRIEVED AGAINST THE ORDER OF THE CIT(APPEALS), TH E REVENUE HAS COME IN APPEAL BEFORE US. I.T.A. NO. 1168/MDS/2013 C.O. NO. 111/MDS/2013 :- 4 -: 4. SHRI RAJIB KUMAR HOTA, APPEARING ON BEHALF OF TH E REVENUE SUBMITTED THAT THE ADDITIONS HAVE BEEN MADE BY THE ASSESSING OFFICER IN THE ABSENCE OF DOCUMENTARY EVIDENCE IN S UPPORT OF THE CONTENTIONS MADE BY THE ASSESSEE. THE DOCUMENTS WH ICH HAVE BEEN PRODUCED BEFORE THE CIT(APPEALS) WERE NEVER PR ODUCED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER. ON THE OTHER HAND, SHRI V. CHANDRAMOULI, MANAGER, CORPORATE ACCOUNTS & TAXATION, APPEARING ON BEHALF OF THE ASSESSEE VEHEMENTLY SUPPORTED THE ORDER OF THE CIT( APPEALS) AND PRAYED FOR THE DISMISSAL OF THE APPEAL OF THE R EVENUE. 5. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESENTATIVES OF BOTH THE SIDES AND PERUSED THE O RDERS OF THE AUTHORITIES BELOW. THE ONLY ISSUE RAISED BEFORE US IN APPEAL BY THE REVENUE IS THE DELETION OF INTEREST AMOUNT ` 8.67 CRORES BY THE CIT(APPEALS). WE FIND THAT THE CIT(APPEALS) HA S DELETED THE ADDITIONS ON THE BASIS OF THE DOCUMENTARY EVIDENCE PRODUCED BY THE ASSESSEE BEFORE HIM. THE CIT(APPEALS) AFTER SA TISFYING HIMSELF THAT THE ADDITIONS MADE BY THE ASSESSING OF FICER DESERVES TO BE DELETED, REMITTED THE MATTER BACK TO THE ASSE SSING OFFICER I.T.A. NO. 1168/MDS/2013 C.O. NO. 111/MDS/2013 :- 5 -: FOR VERIFYING THE FACTS FROM THE DOCUMENTS SUBMITTE D BEFORE HIM. WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CI T(APPEALS). THEREFORE, NO INTERFERENCE IS CALLED FOR IN THE ORD ER OF THE CIT(APPEALS), THE SAME IS CONFIRMED AND THE APPEAL OF THE REVENUE IS DISMISSED AS IT IS DEVOID OF MERIT. 6. THE ASSESSEE HAS FILED CROSS-OBJECTIONS IN SUPPO RT OF THE IMPUGNED ORDER. SINCE THE APPEAL OF THE REVENUE HA S BEEN DISMISSED, THE CROSS OBJECTIONS HAVE BECOME INFRUCT UOUS AND ARE DISMISSED ACCORDINGLY. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF H EARING ON WEDNESDAY, THE 7 TH AUGUST, 2013 AT CHENNAI. SD/- SD/ - (DR. O.K. NARAYANAN) (VI KAS AWASTHY) VICE PRESIDENT JUDICIAL MEMBER DATED: 7 TH AUGUST, 2013 TNMM COPY TO: ASSESSEE/AO/CIT(A)/CIT/DR