Tube Investments of India Ltd., CHENNAI V. DCIT, CHENNAI

ITA 1984/CHNY/2002

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 61154 (ITAT-CHENNAI)
• Duration Of Justice: 9 year(s) 5 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-06-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 04-06-2012
• Assessment Year: 1991-1992
• Appeal Filed On: 23-12-2002
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR S MOHARANA
• Assessee Lawyers: DR ANITHA SUMANTH; G STANL Y S
• Keywords: Question of law; Revenue expenditure

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.1984/MDS/2002 (ASSESSMENT YEAR: 1991-92) M/S. TUBE INVESTMENTS OF INDIA LTD. TIAM HOUSE, 28, RAJAJI SALAI, CHENNAI-600 001. PAN:AAACT1249H VS. THE DEPUTY COMMISSIONER OF INCOME TAX, SPECIAL RANGE-VI, CHENNAI-600 034. (APPELLANT) (RESPONDENT) APPELLANT BY : DR. ANITHA SUMANTH & G.STANL Y, ADVOCATES RESPONDENT BY : DR. S.M OHARANA, CIT DR DATE OF HEARING : 4 TH JUNE ,2012 DATE OF PRONOUNCEMENT : 4 TH JUNE, 2012 O R D E R PER VIKAS AWASTHY, JUDICIAL MEMBER: THE PRESENT APPEAL, FILED BY THE ASSESSEE, HAS BEE N REMANDED BACK BY THE HONBLE MADRAS HIGH COURT VIDE JUDGEMENT DATED 01.11.2011. THE APPEAL WAS FILED BY THE ASSESSEE BEFORE THE HONBLE HIGH COURT OF MADRAS IN TAX CASE (APPEAL) NO.520 OF 2005 RAISING THE FOLLOWING SUBSTANTIAL QUESTION OF LAW:- WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE TRIBUNAL WAS RIGHT IN HOLDING THAT THAT THE PAYMENTS MADE FOR NON-COMPETITION AND ITA NO.1984/MDS /2002 2 RESTRICTING OF BUSINESS FOR THREE YEARS IS REVENUE IN NATURE? 2. THE MATTER HAS BEEN REMITTED BY THE HONBLE HIGH COURT TO THE TRIBUNAL VIDE ITS JUDGEMENT DATED 1 ST NOVEMBER, 2011. THE OBSERVATION OF THE HONBLE HIGH COURT IN PARA 3 OF THE SAID ORDER IS REPRODUCED HEREIN BELOW:- 3. THE LEARNED COUNSEL APPEARING FOR THE REVENUE HAS RELIED UPON THE JUDGEMENT OF THIS COURT REPORTED IN (1991) 191 ITR 249 (CHELPARK COMPANY LIMITED VS. CIT) AND THE SUBSEQUENT JUDGEMENT IN (TAMIL NADU DAIRY DEVELOPMENT CORPORATION LTD. VS CIT) 1991 239 ITR 142(MADRAS). HOWEVER, ON GOING THROUGH THE FINDING OF THE TRIBUNAL, WE FIND THAT T HE TRIBUNAL HAS NOWHERE CONSIDERED ABOUT THE IMPLICATION OF AGREEMENT IN ITS PROPER PERSPECTIVE . IT IS RELEVANT TO NOTE THAT WHILE THE TRIBUNAL FOR THE PURPOSE OF COMING TO THE CONCLUSION THAT SUCH AMOUNT PAID SHOULD BE TREATED AS REVENUE EXPENDITURE, SEVERAL AUTHORITIES ARE AVAILABLE. UNFORTUNATELY, NO ONE OF THE AUTHORITIES HAVE BEEN REFERRED TO OR RELIED UPON BY IT. AGAIN, THE TRIBUN AL HAS CHOSEN TO MENTION THE AMOUNT OF ` 14,00,000/- (14 LAKHS) AND ` 1,00,000/- SUBJECT MATTER OF THE ITA NO.1984/MDS /2002 3 AGREEMENT ENTERED IN 1990 AS A COMMISSION FOR REFRAINING THE SAID PERSONS FOR A PERIOD OF THREE YEARS, WHICH IS FACTUALLY INCORRECT FINDING. IN THI S VIEW OF THE MATTER, WE ARE OF THE CONSIDERED VIEW THAT THE MATTER MUST BE REMANDED TO THE TRIBUNAL FOR THE PURPOSE OF PROPER DECISION IN RESPECT OF THOSE ISSUES. IT IS OPEN TO THE REVENUE TO PUT FORT H THE ABOVE TWO DECISIONS BEFORE THE TRIBUNAL FOR CONSIDERATION. ACCORDINGLY, THE IMPUGNED ORDER OF THE TRIBUNAL STANDS SET ASIDE AND THE MATTER IS REMANDED TO THE TRIBUNAL FOR FRESH DECISION ON MERITS AND IN ACCORDANCE WITH LAW AND THE TAX CASE APPEAL STANDS ALLOWED. NO COSTS. 3. AFTER HEARING BOTH THE PARTIES AND GOING THROUGH THE RECORDS, WE ARE OF THE CONSIDERED OPINION THAT IN T HE PRESENT CASE THE MATTER HAS TO BE DECIDED AFRESH BY TAKING FRESH EVIDENCE AND SOME OTHER RELEVANT DOCUMENTS WHICH AR E NOT AVAILABLE IN THE FILE. THEREFORE, WE DEEM IT APPROP RIATE TO REMIT THE MATTER BACK TO THE ASSESSING OFFICER TO DECIDE IT AFRESH IN THE LIGHT OF THE DIRECTIONS OF THE HONBLE HIGH COU RT, FACTS OF THE CASE, RELEVANT DOCUMENTS SUBMITTED BY THE ASSES SEE AND THE WELL SETTLED LAW. LIBERTY IS GRANTED TO THE AS SESSEE TO ITA NO.1984/MDS /2002 4 FURNISH FRESH DETAILS, IF SO ADVISED, BEFORE THE AS SESSING OFFICER WITH REGARD TO THE QUESTION REMITTED BY TH E HONBLE HIGH COURT VIDE ITS JUDGEMENT DATED 1 ST NOVEMBER, 2011. 4. THUS, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF H EARING ON MONDAY, THE 4 TH OF JUNE, 2012 AT CHENNAI. SD/- SD/- ( DR. O.K.NARAYANAN ) ( VIKAS AWASTHY ) VICE PRESIDENT JUDICIAL MEMBER CHENNAI, DATED THE 4 TH JUNE, 2012. SOMU COPY TO: (1) APPELLANT (2) RESPONDENT (3) CIT (4) CIT(A) (5) D.R. (6) G.F .