The DCIT, Circle-1, Kakinada V. M/s Manihamsa Power Projects Ltd., Ravulapalem

ITA 185/VIZ/2010

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 0745 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 2 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-05-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2004-2005
• Appeal Filed On: 18-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G S S GOPINATH
• Keywords: Business income
• Section: 80IA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE: SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI BR BASKARAN, ACCOUNTANT MEMBER ITA NO.185/VIZAG/2010 ASSESSMENT YEAR : 2004-05 DCIT, CIRCLE-1 KAKINADA M/S. MANIHAMSA POWER PROJECTS LTD. RAVULAPALEM (APPELLANT) VS. (RESPONDENT) GIR NO.M-09 APPELLANT BY: SHRI G.S.S. GOPINATH, DR RESPONDENT BY: SHRI G.V.N. HARI, CA ORDER PER SHRI S.K. YADAV, JUDICIAL MEMBER:- THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST T HE ORDER OF THE CIT(A) ON FOLLOWING GROUNDS: 1. THE LD. CIT(A) OUGHT TO HAVE UPHELD THE ACTION OF A O IN RECOMPUTING THE DEDUCTION U/S 80IA. 2. WHETHER ON LAW AND ON FACTS, THE CIT(A) WAS CORRECT IN TREATING THE INTEREST EARNED ON FDRS OF RS.6,42,863/- AS BU SINESS INCOME AND ALLOWING IT TO BE NETTED WITH THE BUSINESS EXPE NDITURE ESPECIALLY IN VIEW OF THE DECISION OF THE HONBLE S UPREME COURT IN THE CASE OF PANDIAN CHEMICALS LTD. VS. CIT (262 ITR 278) 3. WITHOUT PREJUDICE TO THE ABOVE, WHETHER THE LD. CIT (A) WAS CORRECT IN DIRECTING THE AO TO NET OFF THE INTEREST ON FDRS WITH THE INTEREST PAID ON LOAN TAKEN FOR OBTAINING BANK GUARANTEE ESP ECIALLY WHEN THE INTEREST EXPENDITURE IS NOT RELATABLE TO THE IN TEREST EARNED ON THE FDRS. 4. FOR THE ABOVE AND SUCH OTHER GROUNDS THAT MAY BE RA ISED AT THE TIME OF HEARING THE APPEAL, THE APPELLANT PRAYS YOU R HONOUR TO UPHOLD THE ADDITIONS MADE BY THE AO. FURTHER, THE APPELLANT CRAVES LEAVE TO ADD, OR ALTER, BY DELETION, SUBSTIT UTION OR OTHERWISE THE ABOVE GROUNDS OF APPEAL AT ANY TIME BEFORE OR D URING THE HEARING. 2. DURING THE COURSE OF HEARING, THE LD. COUNSEL FO R THE ASSESSEE HAS SUBMITTED THAT THE IMPUGNED ISSUE IS SQUARELY COVER ED BY THE ORDERS OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2000-01 AND 2001- 02. COPY OF THE ORDER OF THE TRIBUNAL WERE PLACED ON RECORD AND FROM A 2 CAREFUL PERUSAL OF THIS ORDER OF THE TRIBUNAL, WE F IND THAT TRIBUNAL HAS TAKEN A VIEW THE INTEREST EARNED ON DEPOSITS IS A BUSINESS INCOME AND IS ELIGIBLE FOR DEDUCTION U/S 80IA OF THE ACT. MOREOVER, THE CIT(A ) HAS RELIED UPON THE ORDER OF THE TRIBUNAL WHILE ADJUDICATING THE ISSUE OF NATURE OF INTEREST IN FAVOUR OF THE ASSESSEES. SINCE THE ORDER OF THE CI T(A) IS CONSONANCE WITH THE RATIO LAID DOWN BY THE TRIBUNAL IN THE ASSESSEE S OWN CASE, WE FIND NO INFIRMITY THEREIN. WE ACCORDINGLY, CONFIRM THE OR DER OF THE CIT(A). 3. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMI SSED. PRONOUNCED IN THE OPEN COURT ON 21.5.2010 SD/- SD/- (BR BASKARAN) (SUNIL KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER VG/SPS VISAKHAPATNAM, DATED 21 ST MAY, 2010 COPY TO 1 DCIT, CIRCLE-1, KAKINADA 2 M/S. MANIHAMSA POWER PROJECTS LTD., D.NO.8-226, C ANAL ROAD, RAVULAPALEM, E.G. DIST. 3 THE CIT, RAJAHMUNDRY 4 THE CIT(A), RAJAHMUNDRY 5 THE DR, ITAT, VISAKHAPATNAM. 6 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM