The ACIT, 1(1), V. M/s Sidharth Soya Products Ltd.,

ITA 150/IND/2005

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 1477 (ITAT-INDORE)
• Duration Of Justice: 4 year(s) 8 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-11-2009
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 04-11-2009
• Assessment Year: 2000-2001
• Appeal Filed On: 17-02-2005
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: APARNA KARAN
• Keywords: Retrospective amendment
• Section: 143(3); 80HHC; 143(2); 263

Judgement Text

PAGE 1 OF 7 I.T.A.NO. 150/IND/05 & C.O.NO.42/IND/2 005 SIDDHARTH SOYA PRODUCTS LIMITED, HARDA IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH : INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI V.K. GUPTA, ACCOUNTANT MEMBER PAN NO. :AABCS-9646-L I.T.A.NO. 150/IND/2005 A.Y. : 2000-01 A.C.I.T., M/S. SIDDHARTH SOYA PRODUCTS LIMITED, CIRCLE 1(1), VS HARDA. BHOPAL APPELLANT RESPONDENT C.O.NO. 42/IND/2005 A.Y. : 2000-01 M/S. SIDDHARTH SOYA PRODUCTS LIMITED, A.C.I.T., HARDA. VS CIRCLE 1(1), BHOPAL CROSS OBJECTOR RESPONDENT APPELLANT BY : SMT. APARNA KARAN, SR. DR RESPONDENT BY : SHRI AJAY CHHAJED, ADV. DATE OF HEARING : 04/11/2009 PAGE 2 OF 7 I.T.A.NO. 150/IND/05 & C.O.NO.42/IND/2 005 SIDDHARTH SOYA PRODUCTS LIMITED, HARDA O R D E R PER V.K. GUPTA, A.M. THIS APPEAL FILED BY THE REVENUE AND THE CROSS OBJ ECTION FILED BY THE ASSESSEE ARISE OUT OF ORDER OF THE LD. CIT(A)- II, BHOPAL, DATED 05.11.2004, FOR THE ASSESSMENT YEAR 2000-01. 2. WE HAVE HEARD BOTH THE PARTIES AND HAVE ALSO PERUSE D THE MATERIAL AVAILABLE ON RECORD. 3. FIRST, WE SHALL TAKE UP THE ASSESSEES CROSS OBJECT ION. 4. IN GROUND NO.1, THE ASSESSEE HAS CHALLENGED THE VAL IDITY OF THE ASSESSMENT ORDER PASSED U/S 143(3) BECAUSE NOTICE U /S 143(2) WAS SERVED BEYOND THE STATUTORY PERIOD. 5. THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE FILED RE TURN OF INCOME ON 29TH NOVEMBER, 2000, HENCE, NOTICE U/S 143(2) SH OULD HAVE BEEN SERVED ON 30.11.2001. THE ASSESSEE STATED THAT NOTI CE WAS NOT SO SERVED. THE LD. A.O., HOWEVER, HELD THAT NOTICE HAD BEEN SE RVED THROUGH FAX ON 30.11.2001 AND HAD ALSO BEEN SENT BY SPEED POST. HE NCE, THERE WAS NO MERIT IN THIS CONTENTION OF THE ASSESSEE. THE A.O. ALSO OBSERVED THAT THE FACT OF RECEIVING OF THE FAX HAD ALSO BEEN CONFIRME D BY CONCERNED PERSON OF THE ASSESSEE ON THE SAME DATE. ON APPEAL, THE LD. CIT(A) ALSO DISMISSED THIS GROUND OF THE ASSESSEE FOR THE SAME REASONS. STILL AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. PAGE 3 OF 7 I.T.A.NO. 150/IND/05 & C.O.NO.42/IND/2 005 SIDDHARTH SOYA PRODUCTS LIMITED, HARDA 6. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT NOTICE SHOULD HAVE BEEN SERVED AS PER THE PROVISIONS OF SE CTION 282 OF THE ACT, AND PLACED STRONG RELIANCE ON THE ORDER OF THE HON' BLE M.P.HIGH COURT IN THE CASE OF CIT VS. SATTANDAS MOHAN DAS SIDHI, AS R EPORTED IN 230 ITR 591, WHEREIN IT WAS HELD THAT NOTICE BY TELEGRAM, W HICH DID NOT BEAR THE SIGNATURE OF THE CONCERNED OFFICER AND THE SEAL OF THE OFFICE WAS NOT A SUBSTITUTE FOR NOTICE BY POST, HENCE, THE ORDER PAS SED BY THE CIT U/S 263 WAS NULL AND VOID. THE LEARNED COUNSEL FOR THE ASSE SSEE ALSO SUBMITTED THAT THE FAX RECEIVED BY IT WAS IN MUTILATED CONDIT ION, HENCE, WAS NOT READABLE. 7. THE LD. DEPARTMENTAL REPRESENTATIVE, ON THE OTHER H AND, PLACED STRONG RELIANCE ON THE ORDER OF THE LD. CIT(A). 8. WE HAVE CONSIDERED THE SUBMISSIONS MADE BY BOTH THE SIDES, MATERIAL ON RECORD AND THE ORDERS OF THE AUTHORITIE S BELOW. IT IS NOTED THAT NOTICE BY FAX HAD BEEN SENT BY THE ASSESSING OFFICE R ON 30 TH NOVEMBER,2001, WHICH DATE FALLS WITHIN THE STIPULAT ED PERIOD, WHEREIN THE NOTICE CAN BE SERVED ON AN ASSESSEE FOR MAKING AN ASSESSMENT U/S 143(3) OF THE ACT. IT IS FURTHER NOTED THAT THE FAC T OF SENDING OF FAX AND RECEIVING OF FAX HAS BEEN CONFIRMED BY THE DEPARTM ENT FROM ONE OF THE EMPLOYEES OF THE ASSESSEE ON THE SAME DATE. THUS, I N VIEW OF THESE FACTS, WE ARE OF THE VIEW THAT WHATEVER WAS POSSIBLE FOR T HE DEPARTMENT, IT HAS PAGE 4 OF 7 I.T.A.NO. 150/IND/05 & C.O.NO.42/IND/2 005 SIDDHARTH SOYA PRODUCTS LIMITED, HARDA DONE FOR SERVING NOTICE U/S 143(2) WITHIN THE STIPU LATED PERIOD AND IT AMOUNTS TO SUBSTANTIAL COMPLIANCE OF THE PROVISIONS OF SECTION 282 OF THE ACT. WE FURTHER FIND THAT IN THE CASE RELIED ON BY THE ASSESSEE, A TELEGRAM HAD BEEN SENT WHICH DID NOT BEAR THE SIGNATURE AND OFFICE SEAL OF THE LD. COMMISSIONER, WHEREAS, IN THE PRESENT CASE, A FAX H AS BEEN SENT, WHERE- ON BOTH THE SIGNATURES AS WELL AS OFFICE SEAL IS AP PARENT. HENCE, THE RATIO OF THAT DECISION DOES NOT RENDER ANY ASSISTANCE TO THE CAUSE OF ASSESSEE. ACCORDINGLY, THIS GROUND OF THE ASSESSEE IS DISMISS ED. 9. GROUND NO.2 RELATING TO ELIGIBILITY OF MISC. INCOME FOR COMPUTING DEDUCTION U/S 80HHC WAS NOT PRESSED, HENC E, DISMISSED AS NOT PRESSED. 10. GROUND NO. 3 RELATING TO COMPUTATION OF BOOK PROFIT U/S 115-JA IS TO BE DECIDED AGAINST THE ASSESSEE, IN VIEW OF T HE RETROSPECTIVE AMENDMENT OF THE SAID SECTION BY THE FINANCE ACT, 2 009, AND BOTH THE PARTIES HAVE AGREED ON THIS ISSUE. ACCORDINGLY, THI S GROUND OF THE ASSESSEE IS ALSO DISMISSED. 11. GROUND NO.4 RELATING TO CHARGEABILITY OF INTEREST U /S 234-B IS OF CONSEQUENTIAL IN NATURE. HENCE, NO SPECIFIC DECISIO N IS CALLED FOR. 12. IN THE RESULT, THE CROSS OBJECTION FILED BY THE ASS ESSEE STANDS DISMISSED. PAGE 5 OF 7 I.T.A.NO. 150/IND/05 & C.O.NO.42/IND/2 005 SIDDHARTH SOYA PRODUCTS LIMITED, HARDA 13. NOW, WE SHALL TAKE UP THE REVENUES APPEAL IN I.T.A .NO. 150/IND/2005. 14. IN GROUND NOS. 1, 2 & 3, THE REVENUE IS AGGRIEVED B Y THE DECISION OF LD. CIT(A) IN DELETING THE DISALLOWANCE MADE BY THE ASSESSING OFFICER OUT OF TRAVELING EXPENSES, TELEPH ONE EXPENSES AND OTHER EXPENSES ON ACCOUNT OF PERSONAL USE. 15. THE LD. DEPARTMENTAL REPRESENTATIVE PLACED STRONG R ELIANCE ON THE ORDER OF THE A.O., WHEREAS THE LEARNED COUNSEL FOR THE ASSESSEE PLACED STRONG RELIANCE ON THE ORDER OF THE LD. CIT( A). 16. WE HAVE CONSIDERED THE SUBMISSIONS MADE BY BOTH THE SIDES, MATERIAL ON RECORD AND THE ORDERS OF THE AUTHORITIE S BELOW. 17. IT IS NOTED THAT THE ASSESSEE IS A PRIVATE LIMITED COMPANY. HENCE, NO DISALLOWANCE CAN BE MADE IN THE HANDS OF THE COMPANY ON AD HOC BASIS FOR PERSONAL USE AND THIS HAS BEEN THE RE ASON FOR DELETION OF SUCH DISALLOWANCE BY THE LD. CIT(A). IN OUR VIEW, T HERE IS NO INFIRMITY IN THE ORDER OF THE LD. CIT(A). HENCE, WE DECLINE TO I NTERFERE. THUS, GROUND NOS. 1, 2 & 3 ARE DISMISSED. 18. IN GROUND NO.4, THE REVENUE IS AGGRIEVED BY THE DEC ISION OF LD. CIT(A) IN HOLDING THAT INTEREST INCOME OF RS. 59,21 ,775/- ON INTER CORPORATE DEPOSIT WAS TO BE ASSESSED AS BUSINESS IN COME AS AGAINST INCOME FROM OTHER SOURCES TREATED BY THE ASSESSING OFFICER. PAGE 6 OF 7 I.T.A.NO. 150/IND/05 & C.O.NO.42/IND/2 005 SIDDHARTH SOYA PRODUCTS LIMITED, HARDA 19. THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THIS GROUND REQUIRES MODIFICATION AS THIS INCOME HAD BEEN CONSI DERED AS ELIGIBLE FOR DEDUCTION U/S 80HHC. AT THIS STAGE, THE BENCH OPINE D THAT IN VIEW OF THE PROVISIONS OF CLAUSE (BAA) OF EXPLANATION TO SECTIO N 80HHC, SUCH INTEREST INCOME WAS NOT ELIGIBLE FOR DEDUCTION U/S 80HHC. TH E LEARNED COUNSEL FOR THE ASSESSEE CONCEDED ON THIS ISSUE AND STATED THAT HE WAS NOT INTENDING TO CLAIM THE DEDUCTION U/S 80HHC ON THIS AMOUNT AND, THEREFORE, THE MATTER COULD BE PROCEEDED WITH. THE LEARNED COUNSEL, THEREAFTER, SUBMITTED THAT ISSUE OF HEAD OF ASSESSA BILITY OF THIS INCOME WAS COVERED BY THE EARLIER ORDERS OF THIS BENCH IN ASSESSEES OWN CASE FOR EARLIER YEARS AND DREW OUR ATTENTION TO RELEVANT PA GES OF SAID ORDERS STARTING FROM ASSESSMENT YEAR 1993-94. 20. THE LD. DEPARTMENTAL REPRESENTATIVE COULD NOT CONTR OVERT THE CLAIM OF THE ASSESSEE. HOWEVER, SHE PREFERRED TO RE LY ON THE ORDER OF THE A.O. ACCORDINGLY, WE HOLD THAT THE INTEREST INCOME ON SUCH INTEREST CORPORATE DEPOSIT IS TO BE ASSESSED AS BUSINESS INC OME. HOWEVER, THE ASSESSEE WILL NOT BE ELIGIBLE FOR DEDUCTION THEREON U/S 80HHC. THUS, THIS GROUND OF THE REVENUE STANDS PARTLY ALLOWED. 21. IN THE RESULT, THE APPEAL FILED BY THE REVENUE STA NDS PARTLY ALLOWED. PAGE 7 OF 7 I.T.A.NO. 150/IND/05 & C.O.NO.42/IND/2 005 SIDDHARTH SOYA PRODUCTS LIMITED, HARDA 22. TO SUM UP, THE ASSESSEES CROSS OBJECTION IS DISMIS SED AND THE REVENUES APPEAL STANDS PARTLY ALLOWED. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 11 TH NOVEMBER, 2009. SD/- SD/- (JOGINDER SINGH) (V. K. GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 11 TH NOVEMBER, 2009. CPU* 49D