Amalgam Foods Ltd, Cochin V. Dy CIT, Alappuzha

ITA 150/COCH/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 4433 (ITAT-COCHIN)
• Duration Of Justice: 1 year(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-04-2010
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 12-04-2010
• Assessment Year: 2003-2004
• Appeal Filed On: 24-03-2009
• Court: TRIBUNAL
• Department Lawyers: DR BABU JOSEPH
• Section: 28

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI N.VIJAYAKUMARAN & SHRI SANJAY ARORA I.T.A.NO.150/COCH/2009 ASSESSMENT YEAR:2003-04 M/S. AMALGAM FOODS LTD., KOCHI. PA NO.AABCA 8283 D VS. THE DY. COMMISSIONER OF INCOME-TAX, CIRCLE-1, ALLEPPEY. (APPELLANT) ( RESPONDENT ) APPELLANT BY SHRI R. SREENIVASAN, CA RESPONDENT BY DR. BABU JOSEPH, SR.DR O R D E R PER N.VIJAYAKUMARAN,J.M: THIS APPEAL IS FILED BY THE ASSESSEE, VIZ. M/S. AM ALGAM FOODS LTD., KOCHI. THIS APPEAL IS DIRECTED AGAIN ST THE ORDER DATED 17-02-2009 OF THE COMMISSIONER OF INCOME-TAX, KOTTAYAM, PASSED U/S.263 OF THE INCOME-TAX ACT,1961 . THE APPEAL RELATES TO THE ASSESSMENT YEAR 2003-04. 2. THE FACTS OF THE CASE IN BRIEF ARE THAT THE LD. COMMISSIONER OF INCOME-TAX WHILE EXERCISING POWER U /S.263 HELD THAT THE ORDER OF THE ASSESSING OFFICER IS ERR ONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE W AIVER LOAN BENEFIT SHOULD BE TAXED U/S.28(IV) OF THE I.T.ACT. THE LD. ITA NO.150 /COCH/200 2 COMMISSIONER THEREFORE DIRECTED THE ASSESSING OFFIC ER TO REDO THE ASSESSMENT BY TAXING THE AMOUNT OF PRINCIP AL AND INTEREST WAIVED BY THE ASSESSEES BANKERS AS BUSINE SS INCOME U/S.28. 3. WE HAVE HEARD THE LD. COUNSEL FOR THE ASSESSEE, SHRI R. SREENIVASAN AND DR. BABU JOSEPH, THE LD. SR.D.R. AN D CONSIDERED THE SUBMISSIONS CAREFULLY. THE LD. COU NSEL FOR THE ASSESSEE BESIDES HIS SUBMISSIONS RELIED ON THE ORDER OF THE INCOME-TAX APPELLATE TRIBUNAL, COCHIN BENCH, IN ITA NO.971/COCH/2008 FOR THE ASSESSMENT YEAR 2005-06 IN THE CASE OF ACCELERATED FREEZ & DRYING CO. LTD. VS. DCI T, WHEREIN THE TRIBUNAL WHILE DECIDING THE ISSUE THAT THE WAIVER OF LOAN AMOUNT COULD NOT BE CONSIDERED AS NON-RECUR RING WHEREAS SECTION 28(IV) TO CHARGE THE VALUE OF ANY B ENEFIT OR PERQUISITE, MEANING THEREBY THAT THE BENEFIT MUST B E IN KIND WHEREAS THE WAIVER OF LOAN WAS IN CASH. HENCE, CLA USE (IV) OF SECTION 28 WAS NOT ATTRACTED. THE DECISION OF THE BOMBAY HIGH COURT IN THE CASE OF MAHINDRA AND MAHINDRA LTD. VS. CIT 261 ITR 501 AND THAT OF GUJARAT HIGH COURT IN THE CASE OF CIT VS. ALCHEMIC PVT. LTD. 130 ITR 168 WAS ALSO RELIED. THE TRIBUNAL FINALLY CAME TO THE CONCLUSI ON THAT THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE O F CIT VS. TV SUNDARAM IYENGAR AND SONS LTD. 222 ITR 344 DOES ITA NO.150 /COCH/200 3 NOT BECOME APPLICABLE TO THE CASE OF THE ASSESSEE A ND DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. HOWE VER THE LD. COUNSEL FOR THE ASSESSEE WOULD SUBMIT THAT IN E XERCISING THE POWER U/S.263, THE ORDER OF THE ASSESSING OFFIC ER SHOULD BE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE AS LAID BY THE HONBLE SUPREME COURT IN THE CASE OF MALABAR INDUSTRIAL CO. LTD. VS. C.I.T. 243 ITR 83 AND IN THE CASE OF C.I.T. VS. MAX INDIA LTD. 295 ITR 282. IN THE PRESENT CASE, THE ASSESSMENT ORDER COULD NOT BE HELD TO BE ERRONEOUS SO AS TO BRING UNDER THE DISCRETION OF 26 3 POWERS TO BE ASSUMED BY THE LD. COMMISSIONER. HENCE, WE HAVE NO HESITATION IN QUASHING THE IMPUGNED ORDER OF THE LD . C.I.T. PASSED U/S.263 OF THE I.T.ACT. 4. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. SD/- SD/- (SANJAY ARORA) (N.VIJAYKUMARAN) ACCOUNTANT MEMBER JUDICIAL M EMBER ERNAKULAM, DATED THE 19 TH APRIL,2010. PM. COPY FORWARDED TO: 1. M/S. AMALGAM FOODS LTD., AMALGAM HOUSE, W/ISLAND, BRISTO ROAD, KOCHI-3. 2. THE DY. COMMISSIONER OF INCOME-TAX, CIRCLE-1, ALLEP PEY. 3. CIT, KOTTAYAM. /4. D.R.