DCIT, CHENNAI V. M/s. Spencer & Co. Ltd., CHENNAI

ITA 1747/CHNY/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 64544 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-11-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2002-2003
• Appeal Filed On: 18-09-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR S MOHARANA
• Assessee Lawyers: S SRIDHAR
• Keywords: Reasonable cause; Difference of opinion
• Section: 143(3); 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI BEFORE DR. O.K. NARAYANAN, VICE-PRESIDENT AND SHRI VIKAS AWASTHY, JUDICIAL MEMBER ITA NO.1747/MDS/2012 (ASSESSMENT YEAR: 2002-03) DEPUTY COMMISSIONER OF INCOME TAX, COMPANY CIRCLE-VI(4) , 7 TH FLOOR, AAYAKAR BHAVAN NEW BLOCK, CHENNAI-34. VS. M/S. SPENCER & CO.LTD., IV FLOOR, SPENCER PLAZA, 769, ANNA SALAI, CHENNAI-600 002 PAN: AAACS4451J (APPELLANT) (RESPONDENT) APPELLANT BY : DR. S.MOHARANA, CIT DR RESPONDENT BY : MR. S.SRIDHAR, ADVOCATE DATE OF HEARING : 20 TH NOVEMBER, 2012 DATE OF PRONOUNCEMENT : 20 TH NOVEMBER, 2012 O R D E R PER VIKAS AWASTHY, JM: THE APPEAL HAS BEEN PREFERRED BY THE REVENUE IMPUGNING THE ORDER OF THE CIT(A)V, CHENNAI DATED 27.06.2012. 2. THE APPEAL HAS BEEN FILED WITH A DELAY OF TWO DA YS. APPLICATION FOR CONDONATION OF DELAY, CITING REASON S FOR THE DELAY HAS ALSO BEEN FILED BY THE REVENUE ALONG WITH THE A PPEAL. BEING SATISFIED ABOUT THE EXISTENCE OF REASONABLE CAUSE A ND IN THE ITA NO.1747/MDS/2012 2 INTEREST OF JUSTICE, WE CONDONE THE DELAY IN FILING OF THE APPEAL AND ADMIT THE SAME FOR DISPOSAL. 3. THE ASSESSEE IS A COMPANY REGISTERED UNDER THE PROVISIONS OF COMPANIES ACT. ONE OF THE SUBSIDIARI ES OF THE COMPANY WAS MERGED WITH THE ASSESSEE COMPANY VIDE O RDER DATED 25.10.2010 PASSED BY THE HONBLE MADRAS HIGH COURT. THE ASSESSEE GAVE EFFECT TO THE SAID ORDER IN THE P ERIOD RELEVANT TO THE ASSESSMENT YEAR 2002-03. CONSEQUENT TO THE A CCOUNTING TREATMENT GIVEN FOR THE MERGER OF THE TWO COMPANIES , CREDIT BALANCE OF ` 2988.68 LAKHS TO THE RESERVE OF THE ASSESSEE COMPANY BY WAY OF BALANCING BOOK ENTRY WAS MADE. TH E ASSESSING OFFICER HELD THE SAME TO BE BUSINESS INCO ME UNDER SECTION 28(IV) AND BROUGHT THE SAME TO TAX IN THE O RDER MADE UNDER SECTION 143(3) READ WITH SECTION 263 OF THE A CT DATED 9.11.2011. 4. THE CREDIT AMOUNT OF ` 2988.68 LAKHS WAS TAXED IN THE PROCEEDINGS INITIATED UNDER SECTION 263 OF THE ACT. AGGRIEVED AGAINST THE ORDER OF THE CIT PASSED UNDER SECTION 2 63, THE ASSESSEE HAD COME IN APPEAL BEFORE THE TRIBUNAL IN ITA NO.440/MDS/2011 RELEVANT TO THE ASSESSMENT YEAR 200 2-03. ITA NO.1747/MDS/2012 3 SINCE THE MEMBERS HAD DIFFERENCE OF OPINION ON THE ISSUE, THE MATTER WAS REFERRED TO THIRD MEMBER FOR FINAL ADJUD ICATION. VIDE ORDER DATED 2 ND APRIL, 2012, THE THIRD MEMBER, CONCURRING WITH THE VIEW OF THE LEARNED ACCOUNTANT MEMBER, PARTLY A LLOWED THE APPEAL OF THE ASSESSEE AND HELD THAT A SUM OF ` 2988.68 LAKHS IS NOT IN THE NATURE OF ANY BENEFIT OR PERQUISITE A ND THUS NOT TAXABLE UNDER SECTION 28(IV) OF THE ACT. ITA NO.440 /MDS/2011 WAS FINALLY DISPOSED OF BY THE TRIBUNAL ON 20.04.20 12. IN THE MEANTIME, THE ASSESSING OFFICER HAD GIVEN EFFECT TO THE ORDER OF THE CIT PASSED UNDER SECTION 263 OF THE ACT. AGGRIE VED AGAINST THE ASSESSMENT ORDER DATED 9.11.2011 PASSED UNDER S ECTION 143(3) READ WITH SECTION 263 OF THE ACT, THE ASSESS EE PREFERRED AN APPEAL BEFORE THE CIT(A). DURING THE PENDENCY O F THE APPEAL BEFORE THE CIT(A), THE ORDER OF THE TRIBUNAL IN ITA NO.440/MDS/2011 WAS PRONOUNCED HOLDING THAT THE AM OUNT OF ` 2988.68 LAKHS IS NOT TAXABLE UNDER THE PROVISIONS O F SECTION 28(IV) OF THE ACT. THE CIT(A) FOLLOWING THE ORDER O F THE TRIBUNAL ALLOWED THE APPEAL OF THE ASSESSEE VIDE ORDER DATED 27.06.2012. ITA NO.1747/MDS/2012 4 5. NOW, THE REVENUE HAS COME IN APPEAL BEFORE THE T RIBUNAL ASSAILING THE AFOREMENTIONED ORDER OF THE CIT(A). S INCE THE ISSUE HAS ALREADY BEEN ADJUDICATED BY THE TRIBUNAL IN FAVOUR OF THE ASSESSEE IN ITA NO.440/MDS/2011, THE PRESENT AP PEAL OF THE REVENUE IS DISMISSED BEING DEVOID OF ANY MERIT. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF H EARING ON TUESDAY, THE 20 TH DAY OF NOVEMBER, 2012 AT CHENNAI. SD/- SD/- ( DR. O.K.NARAYANAN ) (VIKAS AWASTHY) VICE-PRESIDENT JUDICIAL MEMBER CHENNAI, DATED THE 20 TH NOVEMBER, 2012. SOMU COPY TO: (1) APPELLANT (4) CIT(A) (2) RESPONDENT (5) D.R. (3) CIT (6) G.F.