M/s. Narmada Hydroelectric Development Corporation Ltd., Indore V. The DCIT., Bhopal

ITA 186/IND/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 9582 (ITAT-INDORE)
• Duration Of Justice: 10 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-02-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 27-01-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 09-04-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KESHAV SAXENA
• Keywords: Opportunity of being heard; Capital receipt; Revised return

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI R.C. SHARMA, ACCOUNTANT MEMBER ITA NOS.185 TO 187/IND/2010 A.YS.2003-04 TO 2005-06 NARMADA HYDROELECTRIC DEVELOPMENT CORPORATION LIMITED (NOW NHDC LTD.) BHOPAL PAN AABCN-1732-G APPELLANT VS DY. COMMISSIONER OF INCOME TAX 2(1), BHOPAL RESPONDENT APPELLANT BY : SHRI M.C. MEHTA WITH SHRI HITESH CHIMNANI RESPONDENT BY : SHRI KESHAV SAXENA O R D E R PER JOGINDER SINGH, JUDICIAL MEMBER THESE ARE THE APPEALS BY THE ASSESSEE AGAINST THE C OMMON ORDER OF THE LEARNED CIT(A) DATED 29.1.2010 ON THE FOLLO WING GROUND :- THAT, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) ERRED IN MAINTAINING ADDITION OF GROSS PROFIT OF RS. 1,95,56,180/- (A.Y. 2003-04), RS.12,52,00,000/- (A.Y. 2004-05) AND RS.33,05,00,00 0/- (A.Y. 2005-06) TOWARDS INTEREST ON TERM DEPOSITS/BA NK ACCOUNTS AS INCOME FROM OTHER SOURCES WHEN THE SAID INTEREST IS IN THE NATURE OF CAPITAL RECEIPT WHICH IS REQUIRED TO BE DEDUCTED FROM THE COST OF ASSETS. 2 2. DURING HEARING OF THESE APPEALS, THE LD. COUNSEL FOR THE ASSESSEE CONTENDED THAT THE COMMITTEE ON DISPUTE HELD ON 25. 6.2009 HAS ACCORDED PERMISSION TO THE ASSESSEE TO PURSUE THESE APPEALS BEFORE THE TRIBUNAL. THE ASSESSEE FILED THE COPY OF THE M INUTES OF THE MEETING DATED 6 TH JULY, 2009. THE LEARNED CIT DR DID NOT CONTROVERT THE ASSERTION OF THE ASSESSEE. IT WAS PLEADED THAT THE IMPUGNED ISSUE IS COVERED BY THE DECISION OF THIS BENCH OF THE TRIBUN AL DATED 30.7.2010 IN ITA NO. 375/IND/2009 IN THE CASE OF THIS ASSESSEE I TSELF WHEREIN ON IDENTICAL FACTS THE ISSUE WAS REMANDED BACK TO THE FILE OF THE ASSESSING OFFICER. THE LEARNED CIT DR DID NOT CONTROVERT THIS FACTUAL MATRIX BUT CONTENDED THAT IT IS THE DUTY OF THE ASSESSEE TO CO OPERATE THE IMPUGNED AMOUNTS WITH PLANT AND MACHINERY BY PLACING RELIAN CE UPON THE DECISION IN THE CASES OF TUTI CORIN ALKALI CHEMICALS AND FER TILIZERS LIMITED; 227 ITR 172 (SC) AND CIT BD. BOKARO STEELS LIMITED; 236 ITR 315 (SC). HOWEVER, TO MEET THE ENDS OF JUSTICE, HE DID NOT OB JECT TO SENDING THE ISSUE BACK TO THE FILE OF THE LEARNED ASSESSING OFF ICER. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF LD. REPRESENTATIVES OF BOTH SIDES AND PERUSED THE MATERIAL AVAILABLE ON RE CORD. IN VIEW OF THE AFORESAID ASSERTION, WE ARE REPRODUCING HEREUNDER T HE RELEVANT PORTION OF THE SAID ORDER DATED 30 TH JULY, 2010 :- 12. IT IS ALSO VERY CLEAR FROM THE FOREGOING DISCUSSION THAT THE INTEREST EARNED ON SURPLUS FUND 3 OUT OF EQUITY DEPOSIT AS FDR WAS LIABLE TO BE TAXED AS INCOME FROM OTHER SOURCES. SINCE THE NATURE OF RECEIPT OF INTEREST IS NOT VERY CLEAR FROM THE DETA ILS GIVEN ON RECORD, IT IS NOT POSSIBLE TO GIVE ANY FIN DING AS TO THE TAXABILITY THEREOF IN VIEW OF THE DECISIO N DISCUSSED ABOVE. WE ARE, THEREFORE, OF THE CONSIDERED OPINION THAT THE ISSUE IS REQUIRED TO BE RESTORED TO THE A.O. WHO IS REQUIRED TO EXAMINE THE NATURE OF RECEIPT OF INTEREST AND DECIDE THE ISSUE IN VIEW OF THE RATIO OF THE DECISIONS DISCUSSED ABOVE AFTER GIVING PROPER OPPORTUNITY TO THE ASSESSEE. WHILE COMING TO THE AFORESAID CONCLUSION, THE BENCH CONSIDERED THE DECISION OF TUTICORIN ALKALIES CHEMICAL LIMITED (SU PRA), CIT V. BOKARO STEELS LIMITED (SUPRA), CIT VS. KARNATAKA POWER COR PORATION AND CIT V. AUTO CAST LIMITED, CIT VS. DR. V.P. GOPINATHAN, ETC . THE CLAIM OF THE ASSESSEE BEFORE THE AUTHORITIES WAS THAT THE INTERE ST EARNED ON SOLE TERM DEPOSIT WITH THE BANK WAS NOT INCOME FROM OTHE R SOURCES BEING CAPITAL RECEIPT AND REQUIRED TO BE REDUCED FROM CAP ITAL COST OF THE PROJECT. HOWEVER, THE STAND OF THE REVENUE IS THAT IN VIEW OF THE DECISION IN THE CASE OF GOETZE (INDIA) LIMITED VS. CIT; 284 ITR 323 (SC), THERE IS NO PROVISION IN THE ACT ALLOWING AN AMENDMENT IN TH E RETURN WITHOUT A REVISED RETURN. IN VIEW OF THESE FACTS, THE JUDICI AL PRONOUNCEMENTS MENTIONED ABOVE AND THE DECISION OF THE TRIBUNAL TH AT TOO IN THE CASE OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2006-07, THESE APPEALS ARE REMANDED BACK TO THE FILE OF THE LEARNED ASSESSING OFFICER TO EXAMINE THE NATURE OF RECEIPT OF INTEREST AND DECIDE THE IS SUE IN VIEW OF THE RATIO LAID DOWN BY THE HONBLE APEX COURT IN THE ABOVEMEN TIONED CASES. 4 NEEDLESS TO MENTION HERE THAT THE ASSESSEE BE PROVI DED DUE OPPORTUNITY OF BEING HEARD. THEREFORE, THESE APPEA LS OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES ONLY. ORDER PRONOUNCED IN OPEN COURT IN THE PRESENCE OF LEARNED REPRESENTATIVES OF BOTH THE SIDES ON 17 TH FEBRUARY, 2011. (R.C.SHARMA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 17 TH FEBRUARY, 2011 COPY TO: APPELLANT, RESPONDENT, CIT, CIT(A), DR, G UARD FILE DN/-