Smt. Punitaben K.Patel, Ahmedabad V. The ACIT., Cent.Circle-1(1), Ahmedabad

ITA 1255/AHD/2006

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 76815 (ITAT-AHMEDABAD)
• Duration Of Justice: 8 year(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-05-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 06-05-2014
• Assessment Year: 2002-2003
• Appeal Filed On: 17-05-2006
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD (BEFORE SHRI D.K. TYAGI, J.M. & SHRI ANIL CHATURVED I, A.M.) I.T. A. NO.1255 /AHD/2006 (ASSESSMENT YEA R: 2002-03) SMT. PUNITABEN K PATEL NIRMA HOUSE, ASHRAM ROAD, AHMEDABAD V/S THE ACIT, CENTRAL CIRCLE- 1(1), AHMEDABAD (APPELLANT) (RESPONDENT) APPELLANT BY : URVASHI SHODHAN, A.R. RESPONDENT BY : SHRI SUBHASH BAINS, CIT D.R. ( )/ ORDER DATE OF HEARING : 06-05-201 4 DATE OF PRONOUNCEMENT : 30 -05-2014 PER SHRI ANIL CHATURVEDI,A.M. 1. THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER OF CIT(A)-I, AHMEDABAD DATED 09.03.2006 FOR A.Y. 2002-03. 2. BEFORE US, AT THE OUTSET THE LD. A.R. SUBMITTED THA T THE HONBLE TRIBUNAL WHILE PASSING A CONSOLIDATED ORDER DATED 21.06.2013 IN ITA NO. 1255/A/2006 FOR A.Y. 02-03 IN THE CASE OF ASSESSEE AND OTHERS, THE ADDITIONAL GROUND RAISED BY ASSESSEE WAS NOT ADJUDI CATED AND THEREFORE ASSESSEE HAD PREFERRED MISCELLANEOUS APPLICATION. T HE HONBLE TRIBUNAL IN MISCELLANEOUS APPLICATION NO. 179/A/2013 ORDER D ATED 07.03.2014 HAS RECALLED THE ORDER DATED 21.06.2013 FOR ADJUDIC ATING THE ADDITIONAL GROUND WHICH READS AS UNDER:- ITA NO 1255/AHD/2006 . A.Y. 2002-03 2 IN LAW AND IN THE FACTS OF THE APPELLANTS CASE, T HE ADDITION OF RS. 50,185/- BEING NOTIONAL ACCRUED INTEREST ON OPTIONALLY FULLY CONVERTIBLE PREMIUM NO TES (OFCPNS) OF NIRMA INDUSTRIES LTD MAY BE DELETED. 3. BEFORE US, THE LD. A.R. SUBMITTED THAT ASSESSEE HAD OFFERED ACCRUED INTEREST ON OPTIONALLY FULLY CONVERTIBLE PREMIUM NO TES (OFCPNS) OF NIRMA INDUSTRIES AMOUNTING TO RS. 50,185/- FOR TAX THOUGH NO INTEREST WAS RECEIVED BY THE ASSESSEE. HE FURTHER SUBMITTED THAT THE ISSUE OF NOTIONAL ACCRUED INTEREST ON OPTIONALLY FULLY CONVE RTIBLE PREMIUM NOTES OF NIRMA INDUSTRIES IS COVERED IN FAVOUR OF ASSESSE E BY THE DECISION OF THE HONBLE TRIBUNAL IN THE CONSOLIDATED ORDER IN T HE CASE OF SHRI KARSHANBHAI K PATEL IN ITA NO. 1258/A/06 ORDER DATE D 21.06.2013. HE POINTED TO THE RELEVANT GROUND RAISED IN THAT APPEA L AND THE DECISION OF HONBLE TRIBUNAL. HE FURTHER SUBMITTED THAT SINCE T HE FACTS OF THE CASE IN THE YEAR UNDER APPEAL IN THE CASE OF ASSESSEE ARE I DENTICAL TO THAT OF SHRI KARSHANBHAI K PATEL, THE ISSUE NEEDS TO BE DECIDED IN FAVOUR OF ASSESSEE. 4. THE LD. D.R. ON THE OTHER HAND SUPPORTED THE ORDER OF A.O. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT THE ISSUE IN PRESENT APPEAL IS WITH RE SPECT TO TAXABILITY OF ACCRUED INTEREST ON OFCPN. WE FIND THAT IN A CONSOL IDATED ORDER WHICH WAS PASSED IN THE CASE OF ASSESSEE AND OTHERS IN IT A NO. 1255/AHD/2006 ORDER DATED 21.06.2013 IN ITA NO. 125 8/AHD/2006 FOR A.Y 02-03 IN THE CASE OF KARSHANBHAI K PATEL AN IDE NTICAL ISSUE WAS RAISED BEFORE TRIBUNAL AND THE SAME WAS DECIDED AS UNDER:- 3.7 THE ASSESSEE HAS RAISED ON ADDITIONAL GROUND WH ICH READS AS UNDER: 'IN LAW AND IN THE FACTS OF THE APPELLANTS CASE, TH E ADDITION OF RS.4,90,220/- BEING NOTIONAL ACCRUED INTEREST ON OPTIONALLY FULLY CONVERTIBLE PREMIUM NO TES (OFCPNS) OF NIRMA INDUSTRIES LTD. MISCELLANEOUS APPLICATION BE DELETED. ' ITA NO 1255/AHD/2006 . A.Y. 2002-03 3 3.7.1 IT WAS SUBMITTED BY THE LD. A.R. THAT THE DE CISION ON THIS GROUND IS DEPENDING ON THE OUTCOME O F GROUND NO.2 OF THE ASSESSEE'S APPEAL AND IF IT IS H ELD THAT THE ASSESSEE IS FOLLOWING CASH SYSTEM OF ACCOUNTING THEN THIS INCOME OF RS.4,90,220/- OF OFC PNS OF NIRMA INDUSTRIES LTD. CANNOT BE TAXED IN THE PRESENT YEAR BECAUSE THE INCOME OF THE ASSESSEE HAS TO BE ASSESSED ON CASH BASIS ONLY. SINCE WE HAVE DECIDED GROUND NO.2 IN FAVOUR OF THE ASSESSEE AS PER PARA 3.2.3 ABOVE AND IT IS HELD BY US THAT T HE ASSESSEE IS FOLLOWING CASH SYSTEM OF ACCOUNTING , T HE ADDITIONAL GROUND RAISED BY THE ASSESSEE HAS TO BE ALLOWED BECAUSE ONCE IT IS HELD THAT THE ASSESSE E IS FOLLOWING CASH SYSTEM OF ACCOUNTING, NO INCOME ON ACCOUNT OF INTEREST OF OFCPNS CAN BE TAXED IN TH E PRESENT YEAR ON ACCRUAL BASIS AND THIS IS ADMITTED FACT THAT NO SUCH INTEREST INCOME WAS RECE IVED BY THE ASSESSEE IN THE PRESENT YEAR. THEREFORE, THIS ADDITIONAL GROUND IS ALSO ALLOWED W ITH THE RIDER THAT THE INTEREST INCOME SHOULD BE TAXED IN THE YEAR IN WHICH THE SAME IS RECEIVED BY THE ASSESSEE. 6. BEFORE US, LD. D.R. HAS NOT BROUGHT ANY MATERIAL ON RECORD TO DEMONSTRATE THAT THE FACTS OF THE CASE OF ASSESSEE ARE NOT IDEN TICAL TO THAT IN THE CASE OF SHRI KARSANBHAI PATEL (SUPRA) WHICH HAS BEEN DEC IDED BY THE CO- ORDINATE BENCH. SINCE THE FACTS OF THE CASE IN THE YEAR UNDER APPEAL ARE IDENTICAL TO THAT OF IN THE CASE OF ITA NO. 1258/AH D/2006, WE FOR THE SAME REASONING AS GIVEN BY THE CO-ORDINATE BENCH, W E ALLOW THE GROUND RAISED IN ASSESSEES APPEAL. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED IN OPEN COURT ON 30 - 05 - 2014. SD/- SD/- (D.K. TYAGI) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD. TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT ,AHMEDABAD