Sporting Pastime India Limited, Coimbatore V. DCIT, Coimbatore

ITA 1484/CHNY/2017

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 4264 (ITAT-CHENNAI)
• Duration Of Justice: 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-06-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 07-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M N MAURYA
• Assessee Lawyers: G BASKAR
• Keywords: Business expenditure

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI , , % BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER ./ I.T.A. NO. 1484/MDS/2017 / ASSESSMENT YEAR : 2013-14 SPORTING PASTIME INDIA LIMITED, 78, CHERAN TOWERS, GOVT. ARTS COLLEGE ROAD, COIMBATORE 641 012. [PAN: AAJCS 2802C] VS. THE DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE -1, COIMBATORE. ( / APPELLANT) ( / RESPONDENT) & ' / APPELLANT BY : SHRI G. BASKAR, ADVOCATE *+& ' / RESPONDENT BY : SHRI M.N. MAURYA, CIT ' /DATE OF HEARING : 19.06.2017 ' /DATE OF PRONOUNCEMENT : 19.06.2017 /O R D E R PER S. JAYARAMAN, ACCOUNTANT MEMBER: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-1, COIMBATORE IN ITA NO. 54/16-17 DATED 31.03.2017. ITA NO.1484/MDS/2017 :- 2 -: 2. M/S. SPORTING PASTIME INDIA LIMITED, THE ASSESSE E, IS A DOMESTIC COMPANY. WHILE COMPLETING THE ASSESSMENT FOR ASSES SMENT YEAR 2013-14, THE AO DISALLOWED INTEREST AT RS. 7,66,43,136/- DEBITED IN THE P&L ACCOUNT @ 15% ON RS. 25 CRORES FROM THE PERIOD 21.01.2011 TO 04.0 2.2013 STATING THAT IT IS IN THE NATURE OF PENALTY. ON AN APPEAL, THE CIT(A)-1, COIMBATORE DISMISSED THE APPEAL. AGGRIEVED AGAINST THAT ORDER, THE ASSESSEE FILED THIS APPEAL STATING, INTER ALIA; THAT THE CIT(A) PASSED THE ORDER WITHOU T GIVING ADEQUATE OPPORTUNITY TO THE ASSESSEE, THE CIT(A) WENT WRONG IN HOLDING THAT THE INTEREST PAID IS PENALTY FOR VIOLATION OF LAW, THE CIT(A) FAILED TO NOTE THAT THE ORDER OF THE STATUTORY AUTHORITY COULD NOT BE COMPL IED WITH BECAUSE OF THE ORDERS PASSED BY THE INCOME TAX DEPARTMENT ATTACHIN G THE FIXED DEPOSIT MADE BY THE ASSESSEE WITH STATE BANK OF INDIA, THE ASSESSEE PAID THE INTEREST PURSUANT TO THE ORDERS OF THE HIGH COURT ON THE AMO UNTS USED FOR BUSINESS AND THEREFORE IT IS CLEARLY A BUSINESS EXPENDITURE AND THE C'SIT(A) FINDING SPRING FROM AN INCORRECT APPRECIATION OF FACTS ETC. 3. THE AR INVITED OUT ATTENTION TO PARA 39 OF THE O RDER OF THE COMPANY LAW BOARD IN C.P. NO. 50/2005 DATED 09.10.2006. TH E RELEVANT PORTION IS EXTRACTED AS UNDER: 39. THE AFORESAID ATTACHMENT ORDERS AND RESTRAIN O RDER SHALL BE WITHDRAWN ON DEPOSIT OF RS. 78,45,50,000/- WITH THE CANARA BANK IN TERMS OF THE ORDER DATED 18 TH NOVEMBER, 2005. THE SAID AMOUNT MUST BE DEPOSITED IMMEDIATELY IN TERMS OF THE SAID ORDER AND LATEST BY OR BEFORE 31 ST MARCH, 2011. THE ATTACHMENT ORDERS IN RESPECT OF THE BANK ITA NO.1484/MDS/2017 :- 3 -: ACCOUNTS AND FIXED DEPOSITS OR OTHER DEPOSITS WILL NOT COME IN THE WAY OF DEPOSITING PAYMENTS. IN CASE DEPOSIT IS NOT MADE B Y 31 ST MARCH, 2011, THE PARTIES CONCERNED WILL BE LIABLE TO PAY INTERES T @ 15% PER ANNUM WITH EFFECT FROM THE DATE OF PASSING OF THIS ORDER. THE QUESTION OF PAYMENT OF INTEREST FOR PAST PERIOD IS FOR THE TIME BEING LEFT OPEN. THE ASSESSEE SUBMITTED THAT IN PURSUANCE OF THE ABO VE DIRECTION ONLY THE ASSESSEE PAID INTEREST AND HENCE, THE INTEREST IS A LLOWABLE. THE AR SOUGHT OUR ATTENTION TO PARA 3 TO 6 OF THE CIT(A) ORDER WHICH IS EXTRACTED AS UNDER: 3. IN THIS CASE HEARING NOTICE WAS ISSUED ON 02.03 .2017 POSTING THE CASE FOR HEARING ON 22.03.2017. THE AS SESSEE FILED A LETTER DATED 22.03.2017 REQUESTING THAT THE HEARING MAY BE POSTPONED FOR 30 DAYS DUE TO NON AVAILABILITY OF THEIR AUTHORIZED RE PRESENTATIVE. THE CASE WAS THEN POSTED FOR 31.03.2017 VIDE THIS OFFICE LET TER DATED 22.03.2017 CLEARING INDICATING THEREIN THAT THIS IS A HIGH DEM AND CASE WITH A TOTAL DEMAND OF RS. 3,52,16,560/- WHICH IS A PRIORITY OF CBDT, NEW DELHI FOR DISPOSAL. IT WAS ALSO CLEARLY INDICATED IN THE LET TER THAT NO FURTHER ADJOURNMENT WILL BE GRANTED IN THE CASE. 4. THE ASSESSEE FILED A LETTER DATED 31.03.2017 SI GNED BY A AUTHORIZED SIGNATORY OF THE ASSESSEE COMPANY W HO HAS NOT IDENTIFIED HIMSELF AND WHO REQUESTED TWO MORE MONTH S TIME FOR REPRESENTING THE CASE 5. IT IS TO BE NOTICED THAT THE ASSESSMENT ORDER H AS BEEN PASSED ON 30.03.2016 AND THE ASSESSEE FILED AP PEAL ON 25.04.2016. EVEN AFTER THE EXPIRY OF NEARLY ONE YE AR THE ASSESSEE HAS NOT APPOINTED AN AUDITOR TO REPRESENT THEIR CASE 6. IN VIEW OF LACK OF REPRESENTATION FROM THE ASSE SSEE, I AM CONSTRAINED TO COMPLETE THE APPELLATE PROCEEDI NGS WITH THE MATERIALS AVAILABLE ON RECORD. ITA NO.1484/MDS/2017 :- 4 -: AND SUBMITTED THAT THE CIT(A) HAS NOT GIVEN ADEQUAT E OPPORTUNITY. PER CONTRA, THE DR RELIED ON THE ORDERS OF THE AO/CIT(A ). 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FI ND THAT ALL THE FACTS RELATING TO THE ASSESSMENT IS NOT EMANATING FROM TH E ORDERS OF THE AO/CIT(A) AND HENCE, THESE ISSUES ARE RESTORED TO THE AO FOR RE-ADJUDICATION AFTER GIVING ADEQUATE OPPORTUNITY TO THE ASSESSEE. THE AO SHALL PASS A SPEAKING ORDER. 5. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON MONDAY, THE 19 TH DAY OF JUNE, 2017 AT CHENNAI. SD/- ( ) (GEORGE MATHAN) ' # /JUDICIAL MEMBER SD/- ( ) (S. JAYARAMAN) # /ACCOUNTANT MEMBER /CHENNAI, 1 /DATED: 12 TH JUNE, 2017 JPV ' *34 54 /COPY TO: 1. &/ APPELLANT 2. *+& /RESPONDENT 3. 6 ( )/CIT(A) 4. 6 /CIT 5. 4 * /DR 6. /GF