ACIT, CHENNAI V. National Trust Housing Finance Limited, CHENNAI

ITA 2298/CHNY/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 7743 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-03-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 04-03-2016
• Assessment Year: 2004-2005
• Appeal Filed On: 21-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P RADHAKRISHNAN
• Assessee Lawyers: R VIJAYARAGHAVAN
• Keywords: Tax effect

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI . . . , . !'# ! , % !& BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NO.2298/MDS/2015 ( )( / ASSESSMENT YEAR : 2004-05 THE ASSISTANT COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 4(2), CHENNAI - 600 034. V. M/S NATIONAL TRUST HOUSING FINANCE LTD., NO.1/1B, CLUB HOUSE ROAD, SUBRAMANIAN BUILDING, GROUND FLOOR, ANNA SALAI, CHENNAI - 600 002. PAN : AAACM 4897 L (+,/ APPELLANT) (-.+,/ RESPONDENT) +, / 0 / APPELLANT BY : SH. P. RADHAKRISHNAN, JCIT -.+, / 0 / RESPONDENT BY : SH. R. VIJAYARAGHAVAN, ADVOCAT E 1 / 2% / DATE OF HEARING : 04.03.2016 3') / 2% / DATE OF PRONOUNCEMENT : 18.03.2016 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-8, CHENNAI , DATED 20.10.2015 AND PERTAINS TO ASSESSMENT YEAR 2004-05. 2 I.T.A. NO.2298/MDS/15 2. WHEN THE APPEAL WAS TAKEN UP FOR HEARING, SH. R. VIJAYARAGHAVAN, THE LD.COUNSEL FOR THE ASSESSEE, SU BMITTED THAT THE TAX EFFECT IN THIS CASE IS LESS THAN ` 10,00,000/-, THEREFORE, IN VIEW OF THE LATEST CIRCULAR OF CBDT IN CIRCULAR NO.21/2015 DATED 10.12.2015, THE APPEAL FILED BY THE REVENUE IS NOT MAINTAINABLE. HOWEVER, SH. P.RADHAKRISHNAN, THE LD. DEPARTMENTAL REPRESENTATIVE STRONGLY OBJECTED AND SUBMITTED THAT THE TAX EFFECT INVOLVED IN THIS CASE IS MORE THAN ` 10,00,000/-, THEREFORE, THE CIRCULAR OF THE CBDT IS NOT APPLICABLE IN THIS CASE . REFERRING TO THE ASSESSMENT ORDER, THE LD. D.R. SUBMITTED THAT THE T OTAL DISALLOWANCE MADE BY THE ASSESSING OFFICER IS ` 31,71,471/- AND THE INCOME-TAX ON THIS AMOUNT OF ` 31,71,471/- COMES TO NEARLY ` 11,00,000/-. THEREFORE, THE CIRCULAR OF THE CBDT I S NOT APPLICABLE. 3. ON THE CONTRARY, SH. R. VIJAYARAGHAVAN, THE LD.C OUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE CLAIMS A S UM OF ` 38,89,413/- AS INCOME FROM BUSINESS AND ALSO CLAIME D DEDUCTION UNDER SECTION 36(1)(VIII) OF THE INCOME-TAX ACT, 19 61 (IN SHORT 'THE ACT'). THE CIT(APPEALS) FOUND THAT THE INTEREST ON ICD TO THE EXTENT OF ` 6,34,019/-, INTEREST ON FIXED DEPOSIT WITH BANK TO THE EXTENT OF ` 58,568/- AND INCOME-TAX REFUND TO THE EXTENT OF ` 25,355/- ARE 3 I.T.A. NO.2298/MDS/15 INCOME FROM OTHER SOURCES. HOWEVER, A SUM OF ` 31,71,471/- BEING THE DISCOUNTING CHARGES, WAS TREATED AS INCOME FROM BUSINESS AND THE CIT(APPEALS) ALLOWED 40% OF THE SAME AS DEDUCTI ON UNDER SECTION 36(1)(VIII) OF THE ACT. THEREFORE, THE LD. COUNSEL CLARIFIED THAT THE SUM OF ` 31,71,471/- WAS TAKEN AS INCOME FROM BUSINESS WHICH WAS INCLUDED IN THE TOTAL INCOME COMPUTED BY THE AS SESSING OFFICER. WHAT WAS DISALLOWED BY THE ASSESSING OFFICER WAS 40 % OF ` 31,71,471/-, WHICH COMES TO ` 12,68,588/-. THE INCOME-TAX ON ` 12,68,588/- COMES TO LESS THAN ` 10,00,000/-. THEREFORE, ACCORDING TO THE LD. COUNSEL, THE APPEAL FILED BY THE REVENUE IS NOT MAINTAINABLE. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. AS SEEN FROM THE COMPUTATION MADE BY THE ASSESSING OFFICER AT PAGE 5 OF THE ASSESSMENT ORDER, A SUM OF ` 38,89,413/- WAS TAKEN AS INCOME. THE ASSESSING OFFICER HAS TAKEN THE ENTIRE AMOUNT O F ` 38,89,413/- AS INCOME FROM OTHER SOURCES AND DISALLOWED THE CLA IM UNDER SECTION 36(1)(VIII) OF THE ACT. ON APPEAL BY THE A SSESSEE, THE CIT(APPEALS), AFTER VERIFYING THE DETAILS OF THE SU M OF ` 38,89,413/-, FOUND THAT THE INTEREST ON ICD, INTEREST ON FD AND IT REFUND ARE TO 4 I.T.A. NO.2298/MDS/15 BE CLASSIFIED AS INCOME FROM OTHER SOURCES. THEREF ORE, THE SAME ARE NOT ELIGIBLE FOR DEDUCTION UNDER SECTION 36(1)( VIII) OF THE ACT. HOWEVER, THE DISCOUNTING CHARGES TO THE EXTENT OF ` 31,71,471/- WAS TAKEN AS INCOME FROM BUSINESS. THEREFORE, THE CIT( APPEALS) GRANTED DEDUCTION ON THE DISCOUNTING CHARGES AT THE RATE OF 40% UNDER SECTION 36(1)(VIII) OF THE ACT. THIS 40% COM ES TO ONLY ` 12,68,558/-. THEREFORE, THE DISPUTE BEFORE THIS TR IBUNAL IS REGARDING THE DISALLOWANCE OF ` 12,68,558/- AND NOT ` 31,71,471/-. THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINI ON THAT THE INCOME-TAX ON ` 12,68,558/- IS LESS THAN ` 10,00,000/-. HENCE, THE APPEAL FILED BY THE REVENUE BEFORE THIS TRIBUNAL IS NOT MAINTAINABLE IN VIEW OF THE CBDTS CIRCULAR NO.21/2015 DATED 10. 12.2015 INSTRUCTING ITS OFFICERS NOT TO FILE ANY APPEAL WHE RE THE TAX IS LESS THAN ` 10,00,000/- 5. IN VIEW OF THE ABOVE, THIS TRIBUNAL IS OF THE CO NSIDERED OPINION THAT THE APPEAL FILED BY THE REVENUE IS NOT MAINTAINABLE. ACCORDINGLY, THE SAME IS DISMISSED. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. 5 I.T.A. NO.2298/MDS/15 ORDER PRONOUNCED ON 18 TH MARCH, 2016 AT CHENNAI. SD/- SD/- (. !'# ! ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) % / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 5 /DATED, THE 18 TH MARCH, 2016. KRI. / -267 87)2 /COPY TO: 1. +, /APPELLANT 2. -.+, /RESPONDENT 3. 1 92 () /CIT(A)-8, CHENNAI 4. PRINCIPAL CIT, CHENNAI-4, CHENNAI 5. 7: -2 /DR 6. ;( < /GF.