DCIT, Tiruppur V. The Tirupur Co-op Urban Bank Ltd., Tiruppur

ITA 1538/CHNY/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 86286 (ITAT-CHENNAI)
• Duration Of Justice: 8 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-02-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 05-02-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 03-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P RADHAKRISHNAN
• Assessee Lawyers: P N RAJAN

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI .. , ! , ' #$ BEFORE SHRI B.R. BASKARAN, ACCOUNTANT MEMBER AND SHRI VIKAS AWASTHY, JUDICIAL MEMBER ./ ITA NO. 1538/MDS/2014 & C.O. NO. 83/MDS/2014 (IN I.T.A. NO. 1538/MDS/2014) ' % &% / ASSESSMENT YEAR : 2010-11 THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE I, 121, SIXTY FEET ROAD, TIRUPUR 641 602. V. M/S THE TIRUPUR CO-OP URBAN BANK LTD., NO.217, KUMARAN ROAD, TIRUPUR 641 601. PAN : AAAAT 8637 K (!(/ APPELLANT) (*+!(/ RESPONDENT & CROSS-OBJECTOR) !( , - / APPELLANT BY : SHRI P. RADHAKRISHNAN, JCIT *+!( , - / RESPONDENT BY : SHRI P.N. RAJAN, ADVOCATE . , / / DATE OF HEARING : 05.02.2015 01& , / / DATE OF PRONOUNCEMENT : 05.02.2015 / O R D E R PER B.R. BASKARAN, ACCOUNTANT MEMBER: THE APPEAL FILED BY THE REVENUE AND THE CROSS- OBJECTION FILED BY THE ASSESSEE ARE DIRECTED AGAINS T THE ORDER DATED 03-03-2014 PASSED BY LD CIT(APPEALS)-1, COIMBATORE AND THEY 2 I.T.A. NO. 1538/MDS/2014 C.O. NO. 83/MDS/2014 RELATE TO ASSESSMENT YEAR 2010-11. THE REVENUE IS AGGRIEVED BY THE DECISION OF LD CIT(APPEALS) IN DELETING THE ADD ITION OF ACCRUED INTEREST OF ` 13,80,000/- ON ZERO COUPON BONDS. THE ASSESSEE HAS FILED THE CROSS-OBJECTION SUPPORTING THE ORDER OF T HE LD. CIT(APPEALS). 2. WE HEARD THE PARTIES AND PERUSED THE RECORD. WE NOTICE THAT THE LD CIT(APPEALS) HAS FOLLOWED HIS OWN DECISION R ENDERED IN THE ASSESSEES OWN CASE IN AY 2009-10. WE FURTHER NOTI CE THAT THE REVENUE HAS CHALLENGED THE ORDER PASSED BY LD CIT(A PPEALS) IN AY 2009-10 BY FILING APPEAL BEFORE THE TRIBUNAL AND TH E TRIBUNAL HAS CONFIRMED THE ORDER OF LD CIT(APPEALS). THE PARTIES PLACED BEFORE US THE COPY OF ORDER DATED 25-07-2014 PASSED BY THE CO-ORDINATE BENCH IN THE ASSESSEES OWN CASE IN ITA NO.1078/MDS /2014 RELATING TO THE ASSESSMENT YEAR 2009-10. FOR THE S AKE OF CONVENIENCE, WE FURNISH BELOW THE OPERATIVE PORTION OF THE ORDER OF THETRIBUNAL:- 6. WE HAVE HEARD BOTH PARTIES AND GONE THROUGH THE CASE FILE. THE REVENUES SOLE ARGUMENT IS THAT ONC E THE ASSESSEE HAS ITSELF RECOGNIZED IN ITS BOOKS A SUM O F ` 13,80,000/- AS ACCRUED INTEREST FROM NABARD BONDS, THE SAME COULD NOT HAVE BEEN REDUCED FROM ITS PROFITS. REPLYING THIS, THE ASSESSEE RELIES ON ITS CROSS OBJECTIONS T O SUBMIT 3 I.T.A. NO. 1538/MDS/2014 C.O. NO. 83/MDS/2014 THAT THE CIT(A) HAS RIGHTLY HELD THAT NABARD BONDS G IVE RISE TO ONLY CAPITAL AND NOT REVENUE RECEIPTS. WE FIND FROM THE BOOKLET OF NABARD BONDS SCHEME THAT THESE BHAVISHYA NIRMAN BONDS DO NOT CARRY ANY INTEREST. A PERUSAL OF CLAUSE 9 AT PAGE 35 OF THE PAPER BOOK MAKES IT APPARENT THAT THESE BONDS GIVE RISE TO GAINS ON MAT URITY WHICH ARE TO BE TREATED AS LONG TERM CAPITAL GAINS ONLY. THE SOLE ISSUE BEFORE US IS ABOUT THE ALLEED ACCRUAL OF INTEREST ON THE SAID BONDS. IT IS APPARENT THAT ONCE THERE IS NO QUESTION OF ACCRUAL OF ANY INTEREST ON NABARD BONDS, THE ASSESSEE APPEARS TO HAVE WRONGLY CHARGED THE IMPUGN ED AMOUNT OF ` 13,80,000/- IN ITS BOOKS. IT IS NOT THE REVENUES CASE THAT THE BONDS SCHEME PLACED ON RECORD DOES NO T COVER FACTS OF THIS CASE. WE ARE OF THE VIEW THAT NO INT EREST ON NABARD BONDS IN QUESTION HAS ACCRUED TO THE ASSESSE E LIABLE TO BE RECOGNIZED AS INCOME. THUS, WE UPHOLD THE CIT(A)S ORDER AND REJECT THE REVENUES GROUNDS. 3. SINCE THE LD CIT(APPEALS) HAS RENDERED THE D ECISION IN ACCORDANCE WITH THE VIEW TAKEN BY THE TRIBUNAL ON I DENTICAL ISSUE, WE DO NOT FIND ANY REASON TO INTERFERE WITH HIS ORD ER ON THIS ISSUE. 4. IN THE RESULT, THE APPEAL FILED BY THE REVE NUE IS DISMISSED AND THE CROSS OBJECTION FILED BY THE ASSESSEE IS DI SMISSED AS INFRUCTUOUS. 4 I.T.A. NO. 1538/MDS/2014 C.O. NO. 83/MDS/2014 ORDER PRONOUNCED IN THE OPEN COURT AFTER CONCLUSI ON OF HEARING ON THE 5 TH DAY OF FEBRUARY, 2015 AT CHENNAI. SD/- SD/- ( ! ) ( .. ) (VIKAS AWASTHY) (B.R. BASKARAN) ' /JUDICIAL MEMBER /ACCOUNTANT MEMBER /CHENNAI, A /DATED, THE 5 TH FEBRUARY, 2015. KRI. B , *'/C D &/ /COPY TO: 1. !( /APPELLANT 2. *+!( /RESPONDENT 3. . E/ () /CIT(A)-I, COIMBATORE 4. . E/ /CIT-III, COIMBATORE 5. FG *'/' /DR 6. GH% I /GF.