ACIT, CHENNAI V. M/s. Chentech Computer Services P. Ltd., CHENNAI

ITA 216/CHNY/2011

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 5265 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-04-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 10-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P B SEKARAN
• Assessee Lawyers: SAROJ KUMAR
• Section: 260A

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL CHENNAI B BENCH, CHENNAI. BEFORE SHRI.U.B.S. BEDI J.M. & SHRI. ABRAHAM P. GEORGE A.M. I.T.A. NOS. 216 AND 217/MDS/2011 ASSESSMENT YEARS: 2006-07 AND 07-08 ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE I(3), CHENNAI 600 034. VS. M/S. CHENTECH COMPUTERS SERVICES P. LTD. NO. 75-A, DR. RADHAKRISHNAN SALAI, MYLAPORE, CHENNAI 600 004. [PAN:AAACM5280H] (APPELLANT) (RESPONDENT) REVENUE BY : SHRI P.B. SEKARAN ASSESSEE BY : SHRI SAROJ KUMAR ORDER PER U.B.S. BEDI, J.M . THESE TWO APPEALS OF THE DEPARTMENT ARE DIRECTED AGAINST THE SEPARATE ORDERS PASSED BY THE LD. CIT(A) III, CHENNAI BOTH DATED 29.11.2010 RELEVANT TO THE ASSESSMENT YEARS 2006- 07 AND 07-08, W HEREBY IN TWO COMMON GROUNDS, THE DEPARTMENT HAS CHALL ENGED THE DELETION OF ADDITI ON MADE ON ACCOUNT ON THE ACCRUAL OF INTEREST TO THE TUNE OF ` .4,48,72,068/- BY RELYING UPON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CI T V. SHIV PRAKASH JANAK RAJ & CO. PVT. LTD. (222 ITR 583) AND A BENCH DECI SION OF THE TRIBUNAL IN THE CASE OF JCIT V. INDIA EQUIPMENT LEASING LTD. 111 ITD 37 WH ILE CONTENDING THAT THE ORDER OF THE TRIBUNAL IN ITA NOS. 1242 AND 1243/MDS/2008 DATED 18.05.2009 FOR THE ASSESSMENT YEARS 2001-02 AND 2002-03 IN THE CASE OF THE ASSESSEE ON SAME ISSUE, WHICH HAS BEEN RELIED UPON BY THE LD. CIT(A), HAS NOT BECOME FINAL AND APPEAL TO THE HIGH COURT UNDER SECTION 260A OF THE INCOME TAX ACT STANDS ALREADY PREFERRED, SO THE IMPUGNED ORDERS BE REVERSED. I.T.A. NOS.216 & 217/MDS/11 2 2. AT THE VERY OUTSET, WHILE FILING C OPY OF THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE, WHICH HAS BEEN RELIED UPON BY THE LD. CIT(A) IN THE CASE OF THE ASSESSEE DATED 18.05. 2009 FOR EARLIER ASSESSMENT YEARS, IT WAS PLEADED BY THE LD. COUNSEL FOR THE ASSESSEE THAT SI NCE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEEBY THE ABOVE NOTED DECISION IN WHICH THE HO NBLE MADRAS HIGH COURTS DECISION IN THE CASE OF ELGI FINANCE LTD. 293 IT R 357 HAS BEEN CITED AND FOLLOWED, THEREFORE, THE APPEALS OF THE DEPARTMENT FO R BOTH THE YEARS SHOULD BE DISMISSED. 3. THE LD. DR WHILE RELYING UPON T HE GROUNDS OF APPEAL AS RAISED BY THE DEPARTMENT HAS PLEADED FOR REVERSAL OF T HE ORDER OF THE LD. CIT(A) AND RESTORING THAT OF THE ASSESSING OFFICER AS ISSUE HAS NOT BECOME FINAL. 4. AFTER HAVING HEARD BOTH THE SIDES AND CONSIDERING THE MATERIAL ON RECORD AS WELL AS PRECEDENTS RELIED UPON BY THE LD. CIT(A) AND REITERATED BY THE LD. COUNSEL FOR THE ASSESSEE, WE FIND TH AT IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEARS 2001-02 AND 2002-03 IN ITA NOS. 1242 AND 1243/MDS/2008 DATED 18.05.2009, WE FIND THAT THE A BENCH OF THE TRI BUNAL (IN WHICH ONE OF US IS PARTY) HAS FOLLOWED THE HONBLE JURISDIC TIONAL HIGH COURTS DECISION TO DECIDE THE ISSUE IN FAVOUR OF THE ASSESS EE FOR BOTH THE YEARS VIDE ORDER DATED 18.05.2009 AND RELEVANT PARAS 6 AND 7 OF THE SAID ORDER IS REPRODUCED AS UNDER: 6. WE HAVE HEARD BOTH THE SIDES, CONS IDERED THE MATERIAL ON RECORD AS WELL AS PRECEDENTS RELIED UPON AND FIND THAT THE ISSUE RA ISED IN THESE APPEALS IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE HONBLE JURISDICTIONAL HIGH COURTS DECISION IN THE CASE OF CIT V. ELGI FINANCE LTD. [SUPRA] AND HEAD NOTE IS AS UNDER: INCOME - ACCRUAL - NO N-BANKING FINANCIAL COMPANY - MERCANTILE SYSTEM OF ACOUNTING - I.T.A. NOS.216 & 217/MDS/11 3 INTEREST ON NON-PERFORMING ASSETS - TO BE CONSIDERED ONLY AFTER RECOGNISING INCOME FROM SUCH ASSETS - NO INCOME RECOGNISED FROM SUCH ASSETS IN CONSONANCE WITH RBI NOTIFICATION AND ACCOUNTING STANDARD - INTEREST COMPUTED AS TAXABLE INCOME TO BE DELETED - INTEREST TO BE TAXED IN APPROPRIATE ASSESSMENT YEARS ON BASI S OF ACTUAL RECEIPT - INCOME TAX ACT, 1961. SINCE THE LD. CIT(A), BY FOLLOWING TH E HONBLE JURISDICTIO NAL HIGH COURTS DECISION, SUCH DECISION WHICH HAS NOT BEEN REVERSED BY THE HONBLE SUPREME COURT, SO FAR, IT IS A BIND ING PRECEDENT AND THE TRIBUNAL SITTING WITHIN THE JURISD ICTION OF HONBLE MADRAS HIGH COURT CANNOT TAKE A DIFFERENT VIEW. AS SUCH, WE DO NOT FIND ANY INFIRMITY OR FLAW IN THE IMPUGNED ORDER AND UPHOLD THE SAME WHILE DISMISSING THE APPEALS OF THE REVENUE. 7. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE ARE DISMISSED. 5. SINCE NO CONTRARY HIGHER COURT S DECISION HAS BEEN BROUGHT TO OUR NOTICE AND THE ISSUE IS OTHERWISE FOUND TO BE COVER ED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE A BENCH OF THE TRIBUNAL IN ASSESSE ES OWN CASE FOR EARLIER ASSESSMENT YEARS, THEREFOR E, WHILE UPHOLDING THE ORDER S OF THE LD. CIT(A), WE DISMISS BOTH THE APPEALS OF THE REVENUE. 6. IN THE RESULT, BOT H THE APPEALS OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED SOON AFTER THE C ONCLUSION OF HEARING ON 18.04.2011. SD/- SD/- (ABRAHAM P. GEORGE) ACCOUNTANT MEMBER (U.B.S. BEDI) JUDICIAL MEMBER CHENNAI, DATED, THE. 18.04.2011 VM/- TO:THE ASSESSEE//A.O./CIT(A)/CIT/D.R.