Arvind Healthcare (P) Ltd., CHENNAI V. ITO Company Ward 1(1), CHENNAI

ITA 2032/CHNY/2018

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 8704 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-12-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2003-2004
• Appeal Filed On: 25-06-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BALINA SURESH BABUJCITD R
• Assessee Lawyers: R T VIJAYARAGHAVANF
• Keywords: Reopening of assessment

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH : CHENNAI , . , BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER & SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ I.T.A.NO.2032/CHNY/2018 / ASSESSMENT YEAR : 2003-04 M/S ARVIND HEALTH CARE PVT. LTD., NO.64, MANDALEY, 2 ND STREET T. NAGAR, CHENNAI 600 017 VS. THE INCOME TAX OFFICER COMPANY WARD I(1) CHENNAI [PAN AADCA 9269 M] ( / APPELLANT) ( /RESPONDENT) ! ' # / APPELLANT BY : MR.R.T.VIJAYARAGHAVAN,F.C.A $% ! ' # /RESPONDENT BY : MR.BALINA SURESH BABU,JCIT,D.R & ' ' () / DATE OF HEARING : 19 - 12 - 201 8 * ' () / DATE OF PRONOUNCEMENT : 20 - 12 - 201 8 / O R D E R PER GEORGE MATHAN, JUDICIAL MEMBER THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-4, CHENNAI IN ITA ITA NO.2032/CHNY/2018 :- 2 -: NO.5/2011-12/A.Y 2003-04/CIT(A)-4 DATED 20.02.201 8 FOR THE ASSESSMENT YEAR 2003-04. 2. MR.R.T.VIJAYARAGHAVAN REPRESENTED ON BEHALF OF THE ASSESSEE AND MR.BALINA SURESH BABU REPRESENTED ON BEHALF OF THE REVENUE. 3. IT WAS SUBMITTED BY LD.A.R THAT ORIGINAL ASSESS MENT IN THE CASE OF ASSESSEE CAME TO BE COMPLETED U/S.143(1) OF THE ACT ON 19.04.2014. SUBSEQUENTLY NOTICE U/S.148 OF THE ACT HAD BEEN ISSUED ON 08.02.2010 BEYOND FOUR YEARS PERIOD FOR BRINGING TO TAX INTEREST PAYMENTS UNDER THE HEAD INCOME FROM OTHER SOURCES ON THE GROUND THAT THE ASSESSEE DID NOT HAVE BUSINESS ACTIVITY DU RING THE RELEVANT ASSESSMENT YEAR. IT WAS A SUBMISSION THAT AT THE OU TSET, THERE WAS NO FRESH MATERIAL AVAILABLE WITH THE LD. ASSESSING OFF ICER FOR THE PURPOSE OF REOPENING OF ASSESSMENT. IT WAS A FURTHER SUBMI SSION THAT THE ASSESSEE COMPANY WAS INCORPORATED DURING ASSESSMENT YEAR 2000-01, AND THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF PURCHASE AND SALE OF PHARMA RAW MATERIALS. IT WAS A SUBMISSION T HAT ASSESSEE COMPANY IS ALSO DEALING IN HEALTH CARE PRODUCTS. IT WAS A SUBMISSION THAT BEING A COMPANY, THE ASSESSEE HAD BORROWED CER TAIN FUNDS WHICH HAD BEEN REQUIRED IMMEDIATELY AND THE SAME HAD BEEN GIVEN ON INTEREST. IT WAS A SUBMISSION THAT THE LD. ASSESSIN G OFFICER DISALLOWED ITA NO.2032/CHNY/2018 :- 3 -: THE INTEREST PAID ON THE GROUND THAT THERE WAS NO B USINESS ACTIVITY. IT WAS A SUBMISSION THAT AS THE ASSESSEE HAD BORROWED FUNDS, INTEREST HAD TO BE PAID. IT WAS A SUBMISSION THAT THE PRINCI PLE WAS NOT BEING DISPUTED, BUT ONLY THE INTEREST PAYMENTS ON THE LOA N TAKEN HAS BEEN DISALLOWED, ALLEGING NO BUSINESS ACTIVITY. IT WAS A PRAYER THAT THE REOPENING ITSELF IS LIABLE TO BE QUASHED AND EVEN O N MERITS, THE INTEREST PAYMENT WAS LIABLE TO BE ALLOWED IN SO FAR AS THE I NTEREST RECEIPT HAS ALSO BEEN TAXED. 4. IN REPLY, THE LD.D.R VEHEMENTLY SUPPORTED THE O RDERS OF THE LD. ASSESSING OFFICER AND THE LD.CIT(A). 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PE RUSAL OF THE ASSESSMENT ORDER CLEARLY SHOWS THAT LD. ASSESSING O FFICER HAS ISSUED A NOTICE U/S.148 OF THE ACT BEYOND THE PERIOD OF 4 YE ARS WITHOUT HAVING ANY FRESH EVIDENCES NOR POINTING OUT WHAT IS THE FA ILURE ON THE PART OF THE ASSESSEE TO TRULY AND FULLY DISCLOSED MATERIAL FACTS REQUIRED FOR HIS ASSESSMENT. THIS BEING SO, THE REOPENING OF THE ASS ESSMENT ITSELF IS INVALID. EVEN ON MERITS, IT IS NOT DISPUTED THAT I NTEREST RECEIPT HAS BEEN TAXED. ONCE THE INTEREST RECEIPT HAS BEEN TAXE D, OBVIOUSLY THE EXPENDITURE INCURRED IN RESPECT OF EARNING SUCH INT EREST RECEIPT BEING ITA NO.2032/CHNY/2018 :- 4 -: THE INTEREST OUTGO IS ALSO LIABLE TO BE ALLOWED. TH IS BEING SO, EVEN ON MERITS NO ADDITION IS CALLED FOR. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH DECEMBER, 2018, AT CHENNAI. SD/ - SD/ - ( . ) (A.MOHAN ALANKAMONY) ! '# / ACCOUNTANT MEMBER ( ) (GEORGE MATHAN) $ '# / JUDICIAL MEMBER - ' / CHENNAI . / DATED: 20 TH DECEMBER, 2018. K S SUNDARAM / ' $(01 2 1( / COPY TO: 1 . ! / APPELLANT 4. & 3( / CIT 2. $% ! / RESPONDENT 5. 145 $(6 / DR 3. & 3( () / CIT(A) 6. 57 8' / GF