DCIT, Madurai V. M/s. Shriram Overseas Finance Co. Ltd., CHENNAI

ITA 2147/CHNY/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 8054 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-01-2017
• Appeal Filed By: Department
• Bench Allotted: A
• Assessment Year: 2003-2004
• Appeal Filed On: 18-07-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SHIVA SRINIVAS
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 92

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : CHENNAI , ! ' . #$ % &' BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY , JUDICIAL MEMBER ./ I.T.A.NO.2147/MDS./2016 / ASSESSMENT YEAR : 2003-04 THE DCIT, CORPORATE CIRCLE 2, MADURAI. VS. M/S.SHRIRAM OVERSEAS FINANCE COMPANY LTD ., (FORMERLY KNOWN AS M/S.SHRIRAM OVERSEAS FINANCE LTD.,) MOOKAMBIKA COMPLEX, 3 RD FLOOR, 4 LADY DESIKA ROAD, MYLAPORE, CHENNAI 600 004. [PAN AABCP 6170 G ] ( () / APPELLANT) ( *+() /RESPONDENT) / APPELLANT BY : SHRI SHIVA SRINIVAS, JCIT D.R /RESPONDENT BY : SHRI R.SIVARAMAN,ADVOCATE / DATE OF HEARING : 28 - 12 - 2016 / DATE OF PRONOUNCEMENT : 25 - 01 - 2017 , / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-1,MADURAI DATED 28.04.2016 PERTAINING TO ASSESSMENT YEAR 2003-04. ITA NO.2147/16 :- 2 -: 2. THE FIRST GROUND IN ITS APPEAL IS WITH REGARD T O DELETION OF ADDITION UNCLAIMED DEPOSITS LYING WITH THE ASSESSEE AT OF ` 22,27,500/-. 3. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, TH E AO NOTICED FROM THE DIRECTORS REPORT THAT A SUM OF ` 22,27,500/- WAS REMAINING AS UNCLAIMED DEPOSITS AT THE END OF THE YEAR. HENCE, T HE AO TREATED THE SAME AS INCOME OF ASSESSEE. AGGRIEVED, THE ASSESSEE CARR IED THE APPEAL BEFORE THE LD.CIT(A). ON APPEAL, LD.CIT(A) ALLOWED THE CLA IM OF ASSESSEE BY PLACING RELIANCE ON THE DECISION OF CHENNAI TRIBUNA L IN ITA NO.481/MDS./2004 DATED 22.07.2004 IN ASSESSEE'S OWN CASE FOR ASSESSMENT YEAR 1999-2000. AGAINST THIS, THE REVENUE IS IN APP EAL BEFORE US. 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. THE ASSESSEES COUNSEL STRONGLY PLACED RELI ANCE ON THE EARLIER ORDER OF TRIBUNAL IN ITA NO.481/MDS./2004 IN ASSESSEE'S OWN CASE (SUPRA). IN THAT CASE, SINGLE MEMBER CONFIRMED THE ORDER OF THE CIT(APPEALS) BY OBSERVING AS FOLLOWS:- THESE CONTENTIONS WERE CONSIDERED BY THE LD.CIT (A) AND CONSEQUENTLY IN PARA 7.3., HE HAS GIVEN HIS FINDING AS UNDER:- 7.3 THE ISSUE HAS BEEN CONSIDERED. THE APPELLANT H AD ONLY CLASSIFIED THE DEPOSITS AS UNCLAIMED AND THERE WAS NO QUESTION OF TREATING SUCH DEPOSITS AS INCOME DURING THE YEAR. I T IS ALSO NOTICED ITA NO.2147/16 :- 3 -: THAT THE APPELLANT COULD NOT HAVE APPROPRIATED THE UNCLAIMED DEPSOITS. AS PER THE COMPANIES ACT AND ALSO AS PER THE RESERVE BANK NORMS, SUCH UNCLAIMED DEPOSITS WERE TO BE TRAN SFERRED TO THE INVESTOR EDUCATION AND PROTECTION FUND WITHIN SEVEN YEARS FROM THE DAE THAT THE DEPOSITS BECAME DUE FOR PAYMENT. APPEL LANT DID NOT HAVE ANY CLAIM OVER THE AMOUNT. ACCORDINGLY, THE A DDITION IS DELETED. AFTER CONSIDERING THE FACTS AND MATERIALS AND SUBMI SSIONS MADE, I DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A PPEALS) . THE SAME IS, THEREFORE, CONFIRMED. IT IS ORDERED ACCORDINGLY . IN VIEW OF THE ABOVE ORDER OF TRIBUNAL, WE ARE INCL INED TO DISMISS THE GROUND TAKEN BY THE REVENUE. 5. THE NEXT GROUND IN ITS APPEAL IS WITH REGARD TO DEL ETION OF ADDITION OF ` 27,91,076/- TOWARDS ACCRUED INTEREST ON HIRE PURCHA SE FINANCE ADVANCES AND ` 11,80,139/- TOWARDS ACCRUED INTEREST ON OTHER ADVAN CES. 6. THE FACTS OF THE ISSUE ARE THAT THE AO NOTICED THAT ASSESSEE HAD NOT CREDITED INTEREST ACCRUED ON NON-PERFORMING ASSETS IN THE BOOKS OF ACCOUNT. ACCORDING TO AO, THE ASSESSEE WA S FOLLOWING MERCANTILE METHOD OF ACCOUNTING; THE INTEREST ACCRU ED ON ADVANCES ITA NO.2147/16 :- 4 -: SHOULD BE ADDED. ACCORDINGLY, AO ADDED ` 27,91,076/- TOWARDS HIRE PURCHASE FINANCE ADVANCES AND ` 11,80,139/- TOWARDS ACCRUED INTEREST ON OTHER ADVANCES. AGGRIEVED, ASSESSEE CARRIED THE APP EAL BEFORE THE LD.CIT(A). ON APPEAL, THE LD.CIT(A) FOLLOWING THE C HENNAI BENCH TRIBUNAL ORDER IN ITA NO.1534/MDS./2008 IN ASSESSEE'S OWN CA SE FOR ASSESSMENT YEAR 2005-06 DATED 11.02.2009 DELETED THE ADDITION. AGGR IEVED, THE REVENUE IS IN APPEAL BEFORE US. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. THIS ISSUE CAME FOR CONSIDERATION BEFORE TH IS TRIBUNAL IN ASSESSEE'S OWN CASE IN ASSESSEE'S OWN CASE DATED 11.02.2009(SU PRA) WHEREIN HELD AS FOLLOWS:- 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RECORDS AVAILABLE WITH US. WE HAVE GONE THROUGH THE ORDER P ASSED BY THE C.L.T.(APPEALS) AS WELL AS THE JUDGMENT OF THE HON BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT V. ELG I FINANCE LTD. WE ARE OF THE CONSIDERED OPINION THAT THE ISSUE IN DIS PUTE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION O F THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT V. ELG I FINANCE LTD.(SUPRA). RESPECTFULLY FOLLOWING THE SAME, WE DI SMISS THE APPEAL OF THE REVENUE. ACCORDINGLY, WE UPHOLD THE O RDER OF THE C.L.T.(APPEALS). ITA NO.2147/16 :- 5 -: 7.1 FURTHER, THIS VIEW OF THE ABOVE ORDER OF TRIBU NAL WAS SUPPORTED BY THE DECISION OF SUPREME COURT IN THE C ASE OF UCO BANK VS. CIT REPORTED IN [1999] 237 ITR 889 (SC) WHEREIN HELD THAT INTEREST ON LOAN CEASED RECOVERY IS DOUBTFUL AND WHICH HAS NOT BEEN RECOVERED BY THE ASSESSEE , BUT HAS BEEN KEPT IN SU SPENSE ACCOUNT AND HAS NOT BEEN BROUGHT TO P&L A/C OF THE ASSESSE E, COULD NOT BE INCLUDED IN THE INCOME OF ASSESSEE FOR THE RELEVANT TO ASSESSMENT YEAR. IN VIEW OF THE ABOVE, WE ARE INCLINED TO DIS MISS THE GROUND RAISED BY THE REVENUE. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED ON 25 TH JANUARY, 2017, AT CHENNAI. SD/ - SD/ - ! ' # . $ %& ' ( DUVVURU RL REDDY ) ) % / JUDICIAL MEMBER ( ) (CHANDRA POOJARI) / ACCOUNTANT MEMBER () / CHENNAI *+ / DATED: 25 TH JANUARY, 2017. K S SUNDARAM +,-- ./-0/ / COPY TO: - 1 . / APPELLANT 3. - 1-!' / CIT(A) 5. /23- 4 / DR 2. / RESPONDENT 4. - 1 / CIT 6. 3&-5 / GF