ESSEL MINING & INDUSTRIES LIMITED, WEST BENGAL V. DCIT CENTRAL CIR-1(4) , MUMBAI

ITA 188/MUM/2021

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 1494 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-10-2022
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: E
• Next Hearing Date: 12-09-2022
• Assessment Year: 2007-2008
• Appeal Filed On: 28-02-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHIJIT CHAUDHARI

Judgement Text

आयकर अपीलीय अिधकरण मुंबई पीठ “ ई”, मुंबई ी जी. एस. प ,अ एवं ी िवक स अव ी, ियक स!" क# सम IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “E”, MUMBAI BEFORE SHRI G. S. PANNU, PRESIDENT & SHRI VIKAS AWASTHY, JUDICIAL MEMBER आअसं. 188/मुं/2021 (िन.व. 2007-08) ITA NO.188/MUM/2021 (A.Y.2007-08) Essel Mining & Industries Limited, Industry House, 18 th Floor, 10, Camac Street, Kolkata – 700 017 PAN: AAACE-6607-L ...... % /Appellant बन म Vs. Dy. Commissioner of Income Tax, Cen.Circle-1(4), 9 th Flor, Old CGO Building, M.K.Road, Mumbai-400020 ..... & ' ! /Respondent % ( / Appellant by : Shri Yogesh Thar and Ms.Sukanya Jayaram & ' ! ( /Respondent by : Shri Abhijit Chaudhari सुन ई क ' / Date of hearing : 13/09/2022 घोषण क ' / Date of pronouncement : 07/10/2022 आदेश/ ORDER This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals) -47, Mumbai [in short ‘the CIT(A)] dated 30/12/2020 for the assessment year 2007-08. The solitary issue raised in the appeal is with respect to disallowance of assessee’s claim of interest u/s. 244A(1) of the Income Tax Act, 1961 [in short ‘the Act’]. 2. The brief facts of the case as emanating from records are: The assessee is engaged in the business of manufacturing of ferro alloys, generation of electricity (wind 2 ITA NO.188/MUM/2021 (A.Y.2007-08) power and solar power), etc. During the period relevant to assessment year under appeal, the assessee had foreign exchange fluctuation gain of Rs.10.89 crores. Out of the aforesaid gain Rs.5.79 crores gain was against foreign currency loans utilized for purchase of indigenous machinery for wind power units. The assessee claim that the foreign exchange fluctuation gain to the extent of foreign currency used for acquiring fixed assets the gain is on capital account, therefore, an amount of Rs.5.79 is required to be reduced from the total taxable income. The assessee made the aforesaid claim during the course of assessment proceedings. In the return of income no claim was made by the assessee on this account. The Assessing Officer in the light of the decision of Hon’ble Apex Court in the case of Goetze (India) Ltd., 284 ITR 323 (SC) rejected assessee’s claim. The assessee was unsuccessful even before the CIT(A). The issue travelled to the Tribunal. The Kolkata Bench of the Tribunal vide order dated 20/05/2016 directed the Assessing Officer to accept assessee’s claim and reduce its total taxable income by Rs.5.79 crores. As a result of reduction in returned income refund accrued to the assessee. The Assessing Officer rejected assessee’s claim of refund. Aggrieved against the order passed u/s.143(3) r.w.s. 254 of the Act, the assessee filed appeal before the CIT(A). The CIT(A) vide impugned order upheld the findings of Assessing Officer stating that the assessee is not eligible for interest u/s.244A(1) of the Act as the refund has resulted from additional claim made by the assessee during the course of assessment proceedings. The CIT(A) further observed that since no refund had accrued to the assessee at the time of filing of return, the interest u/s. 244A(1) of the Act many not be applicable. Against the aforesaid findings of the CIT(A), the assessee is in appeal before the Tribunal. 3. Shri Yogesh Thar appearing on behalf of the assessee fairly admitted that the assessee made claim for first time before the Assessing Officer during the course of assessment proceedings. The delay if any, in making the claim is only upto the date of making an additional claim before the Assessing Officer. Therefore, the interest u/s. 244A(1) should be allowed to the assessee from the date of claim. In support of his 3 ITA NO.188/MUM/2021 (A.Y.2007-08) submissions the ld. Authorized Representative of the assessee Placed reliance on the decision of Hon'ble Bombay High Court in the case of CIT vs. Melstar International Technology Ltd. Reported as 106 taxamann.com 142 and the decision of Hon'ble Gujarat High Court in the case of Ajanta Manufacturing Ltd. Vs. DCIT reported as 391 ITR 33. 4. Per contra, Shri Abhijit Chaudhari representing the Department vehemently defended the impugned order and prayed for dismissing the appeal of assessee. The ld.Departmental Representative submitted that claim was first made by the assessee before the Assessing Officer. Fresh claim was not made by assessee by way of revised return of income. The claim of the assessee, which resulted in refund was accepted by the Tribunal after protracted litigation. Hence, assessee’s claim of interest u/s. 244A(1) has been rightly rejected by the Assessing Officer and the CIT(A). 5. Both sides heard. In so far as facts are concerned they are undisputed. The short issue before us is, whether the assessee is eligible for interest u/s. 244A(1) of the Act on a claim made for the first time during assessment proceedings. We find that the Hon’ble Jurisdictional High Court in the case of CIT vs. Melstar International Technology Ltd. (supra) in somewhat similar circumstances allowed interest under section 244A(1) of the Act. The assessee therein claimed certain expenditure for the first time before the Tribunal. The Tribunal remanded the issue to CIT(A). The First Appellate Authority accepted assessee’s claim. This resulted in refund. The question of interest under section 244A(1) of the Act on such refund travelled to the Tribunal. The Tribunal directed payment of interest. On an appeal by the Department, the Hon’ble High Court following the decision rendered in the case of Ajanta Manufacturing Ltd. Vs. DCIT (supra) held that where issue of refund order was not delayed for any period attributable to the assessee, the assessee is eligible to claim interest to that extent in terms of section 244A(1) of the Act. 4 ITA NO.188/MUM/2021 (A.Y.2007-08) 6. Thus, in the light of the aforesaid decision and the facts of the case, we hold that assessee is entitled to interest u/s. 244A(1) of the Act, on the refund for the period, where delay is not attributable to the assessee. 7. No other ground raised in the appeal was agitated before the Bench. 8. In the result, appeal by assessee is partly allowed. Order pronounced in the open court on Friday the 7 th day of October, 2022. Sd/- Sd/- (G.S. PANNU) (VIKAS AWASTHY) /PRESIDENT !"/JUDICIAL MEMBER मुंबई/Mumbai, !न ं /Dated: 07/10/2022 SL/VM Sr.PS ितिलिप अ ेिषत/Copy of the Order forwarded to : 1. %/The Appellant , 2. & ' ! / The Respondent. 3. आयकर आयु-(अ)/ The CIT(A)- 4. आयकर आयु- CIT 5. िवभागीय &ितिनिध , आ .अप .अ ., मुबंई/DR, ITAT, Mumbai 6. गाड1 फाइल/Guard file. BY ORDER, //True Copy// (Dy./Asstt. Registrar) / Sr.Private Secretary ITAT, Mumbai