ACIT, Cir 2, V. UP Hill Elec. Company P. Ltd.,

ITA 2061/DEL/2007

• Counselvise Citation: [2010] 119 COUNSELVISE.COM (IT) 5560 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 9 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-02-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 15-02-2010
• Assessment Year: 2004-2005
• Appeal Filed On: 25-04-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R R PRASHAD
• Assessee Lawyers: V K TULSIYAN

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH H DELHI BEFORE SHRI K.G. BANSAL AND SHRI GEORGE MATHAN ITA NO. 2061(DEL)/2007 ASSESSMENT YEAR: 2004-05 ASSTT. COMMISSIONER OF M/S U.P. HILL ELECTRONICS INCOME-TAX, CIRCLE-2, DEHRADUN. VS. CORPN . LTD., 252, INDIRA NAGAR, DEHRADUN. C.O. NO. 280(DEL)/2007 (ARISING OUT OF ITA NO. 2061(DEL)/2007) ASSESSMENT YEAR: 2004-05 M/S U.P. HILL ELECTRONICS ASSTT. COMMISSIONER OF INCOME CORPN., LTD., DEHRADUN. VS. TAX, CIRCLE-2, DEHRADUN. (APPELLANT) (RESPONDENT) DEPARTMENT BY : SHRI R.R. PRASHAD , SR.DR ASSESSEE BY : SHRI V.K. TULS IYAN, C.A. ORDER PER K.G. BANSAL : AM THE APPEAL OF THE REVENUE AND THE CROSS OBJEC TION OF THE ASSESSEE EMANATE FROM THE ORDER OF CIT(APPEALS)-I, DEHRAD UN, PASSED ON 15.02.2007 IN APPEAL NO. 28/DDN/2007, PERTAINI NG TO ASSESSMENT YEAR 2004-05. THE REVENUE HAS TAKEN UP TWO SUBSTA NTIVE GROUNDS IN THE APPEAL AS UNDER:- (I) THE LD. CIT(A) WAS ERRED IN LAW AND ON FACTS IN THE CASE BY DELETING INTEREST INCOME OF RS. 98,49,906/- STA TING THEREIN THAT ITA NO. 2061(DEL)/2007 & C.O. NO. 280(DEL)/2007 2 THE NET INTEREST EARNED ON THESE AMOUNTS GET S DIVERTED BY OVERRIDING TITLE AND CANNOT BE TAKEN AS INCOME OF THE APPELLANT. (II) WHETHER THE LD. CIT(A) WAS CORRECT IN LAW A ND ON FACTS AND IN THE CASE BY DELETING RS. 15,54,026/- ON AC COUNT OF CONTRACTUAL RECEIPTS STATING THEREIN THAT THE AO WAS, THEREFORE, NOT RIGHT IN MAKING THE ADDITION THAT TOO WITHOUT AFFORDING AN OPPORTUNITY TO THE APPELLANT, WHER EAS THE FACTS WAS THAT THE ASSESSEE WAS NOT COOPERATING IN CO MPLETING THE ASSESSMENT. 1.1 THE ASSESSEE HAS ALSO TAKEN TWO GROUNDS IN ITS APPEAL AS UNDER:- (I) THE LD. CIT(APPEALS) HAS ACTED CORRECTLY BO TH IN LAW AND ON THE FACTS BY DIRECTING THE AO TO DEL ETE THE ADDITION OF RS. 98,49,906.00 MADE ON ACCOUNT OF DIFFERENCE IN INTEREST DECLARED BY THE PRESENT RESPONDEN T AND THE INTEREST AS PER TDS CERTIFICATES ON ACCOUNT OF THE OVERRIDING TITLE OF THE INTEREST UNDER QUESTION . (II) THE LD. CIT(APPEALS) HAS ACTED CORRECTLY BO TH IN LAW AND ON THE FACTS BY HOLDING THAT THE GROSS RECEIPTS OF RS. 15,54,026.00 WERE INCLUDED IN THE INCOME AND THE AO HAD NO RIGHT TO MAKE ADDITIONS ON THIS GROUND AN D THAT TOO WITHOUT AFFORDING OPPORTUNITY TO THE PRESENT RESPONDENT. 2. AT THE OUTSET, THE LD. COUNSEL AND THE LD. DR WERE QUESTIONED AS TO WHETHER THE APPROVAL OF THE COD WAS OBTAINE D FOR FILING THE APPEAL AND THE CROSS OBJECTION. IT WAS INFORMED BY BOTH OF THEM THAT NO SUCH APPROVAL HAS BEEN TAKEN BY EITHER OF THEM. TH EIR ATTENTION WAS DRAWN TOWARDS THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF ONGC ITA NO. 2061(DEL)/2007 & C.O. NO. 280(DEL)/2007 3 LTD. VS. CITY & INDUSTRIAL DEVELOPMENT CORPORATI ON, MAHARASHTRA & OTHERS, 31 I.T.J 334, IN WHICH IT WAS HELD THA T THE APPROVAL OF THE COD WAS REQUIRED EVEN IN LITIGATION BETWEEN A D EPARTMENT OF THE CENTRAL GOVERNMENT AND THE CORPORATION OF A STATE GOVERN MENT. THE HONBLE COURT ALSO FURNISHED THE DETAILS OF COMPOSITIO N OF THE COMMITTEE WHICH SHALL LOOK INTO SUCH TAX-DISPUTES. THE GIST OF THE RELEVANT PORTION OF THE JUDGMENT OF THE HONBLE COURT IS STATED AS UNDER :- (A) VARIOUS DEPARTMENTS OF THE GOVERNMENT ARE IT S LIMBS AND, THEREFORE, THEY MUST ACT IN COORDINATION AN D NOT IN CONFRONTATION. FILING OF A WRIT PETITION BY ONE DEPARTMENT AGAINST THE OTHER BY INVOKING THE EXTRAORDINARY JURISDICTION OF THE HIGH COURT IS NOT ONLY AGAINST THE PROP RIETY AND POLITY AS IT SMACKS OF INDISCIPLINE BUT IS ALS O CONTRARY TO THE BASIC CONCEPT OF LAW WHICH REQUIRES THAT FOR SUING OR BEING SUED, THERE MUST BE EITHER A NATURAL OR A JURISTIC PERSON. THAT STATES/UNION OF INDIA MUST EVOLVE A MECHANISM TO SET AT REST ALL INTER-DEPARTMENT AL CONTROVERSIES AT THE LEVEL OF THE GOVERNMENT AN D SUCH MATTERS SHOULD NOT BE CARRIED TO A COURT OF L AW FOR RESOLUTION OF THE CONTROVERSY. COMMITTEES SHOULD BE FORMED TO ENSURE THAT NO LITIGATION COMES TO COURT OR TO A TRIBUNAL WITHOUT THE MATTER HAVING BEEN FIRST EXAMINED B Y THE COMMITTEE AND ITS CLEARANCE FOR LITIGATION. (B) CONSIDERING THE NATURE OF THE CONTROVERSY WHIC H IS A RECURRING FEATURE WE DIRECT THAT A COMMITTE E BE FORMED TO SORT OUT THE DIFFERENCES BETWEEN THE CENTRAL GOVERNMENT AND THE STATE GOVERNMENT ENTITIES. THE COMPOSIT ION OF SUCH COMMITTEE SHALL BE AS FOLLOWS: (1) THE CABINET SECRETARY OF THE UNION. ITA NO. 2061(DEL)/2007 & C.O. NO. 280(DEL)/2007 4 (2) CHIEF SECRETARIES OF THE STATE (3) SECRETARIES OF THE CONCERNED DEPARTMENTS OF U NION AND THE STATE; AND (4) CHIEF EXECUTIVE OFFICER OF THE CONCERNED UNDERTAKINGS. AS THE MATTER IS PENDING SINCE LONG, WE DIRECT THAT THE COMMITTEE SHALL BE CONSTITUTED FORTHWITH TO TAKE A DECISION WITHIN FOUR MONTHS FROM THE DATE OF RECEIPT OF COPY OF THIS JUDGMENT. 2.1 IN VIEW OF THE AFORESAID DECISION OF THE A PEX COURT, BOTH THE PARTIES HAD NO OBJECTION IF THE APPEAL AND THE CRO SS OBJECTION RESPECTIVELY WERE DISMISSED WITH LIBERTY TO MAKE APPLICATIO N FOR RESTORATION THEREOF IN CASE APPROVAL IS OBTAINED FROM THE COD. A CCORDINGLY, THE APPEAL AND THE CROSS OBJECTIONS ARE DISMISSED WITH LIBERTY TO THE PARTIES TO MOVE FOR RESTORATION OF THEIR RESPECTIVE APPEAL OR THE C ROSS OBJECTION, AS THE CASE MAY BE, AFTER OBTAINING THE APPROVAL OF THE COD. 3. IN THE RESULT, THE APPEAL AND THE CROSS OBJECT ION ARE DISMISSED. THE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 15 .02.2010 SOON AFTER COMPLETION OF THE HEARING. SD/- SD/- (GEORGE MATHAN) (K.G.BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE OF ORDER: 15TH FEBRUARY, 2010. SP SATIA ITA NO. 2061(DEL)/2007 & C.O. NO. 280(DEL)/2007 5 COPY OF THE ORDER FORWARDED TO:- 1. M/S U.P. HILL ELECRTRONICS CORPN. LTD., DEHRADU N. 2. ACIT, CIRCLE -2, DEHRADUN. 3. CIT(A) 4. CIT 5. DR, ITAT, NEW DELHI. ASSISTANT REGISTRA R.