The ACIT- 3(1), Indore V. M/s STI Power India Pvt. Ltd., Indore

ITA 238/IND/2013

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 70072 (ITAT-INDORE)
• Duration Of Justice: 6 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 25-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BHIM KUNWAR
• Assessee Lawyers: S S SOLANKI
• Keywords: Capital receipt
• Section: 56

Judgement Text

1 INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI R.C. SHARMA, ACCOUNTANT MEMBER ITA NO.238/IND/2013 A.Y. 2007-08 ACIT-3(1), INDORE ... APPELLANT VS STI POWER INDIA P. LTD., INDORE PAN AAHCS 6216 J ... RESPONDENT REVENUE BY SHRI BHIM KUNWAR ASSESSEE BY SHRI S.S. SOLANKI DATE OF HEARING 30.10.2013 DATE OF PRONOUNCEMENT 30.10.2013 O R D E R PER JOGINDER SINGH, JUDICIAL MEMBER THIS IS AN APPEAL BY THE REVENUE CHALLENGING THE O RDER DATED 10.1.2013 OF THE LEARNED COMMISSIONER OF INCO ME TAX (APPEALS)-1, INDORE. THE SUM & SUBSTANCE OF THE GRO UNDS OF APPEAL IS THAT ON THE FACTS AND IN THE CIRCUMSTANCE S OF THE CASE, 2 THE LD. FIRST APPELLATE AUTHORITY ERRED IN DELETING THE ADDITION OF RS.1,30,79,620/- MADE BY THE ASSESSING OFFICER U/S 56 OF THE ACT ON ACCOUNT OF INTEREST RECEIVED FROM MPEB. 2. DURING HEARING OF THIS APPEAL, WE HAVE HEARD SHR I BHIM KUNWAR, LEARNED SR.DR AND SHRI S.S. SOLNAKI, LEARNE D COUNSEL FOR THE ASSESSEE. AT THE OUTSET, THE LEARNED COUNSEL FO R THE ASSESSEE CONTENDED THAT THE IMPUGNED ISSUE IS COVERED BY THE DECISION OF TRIBUNAL, THAT TOO, IN THE CASE OF ASSESSEE ITSELF VIDE ORDER IN ITA NO.355/IND/2012 (AY 2008-09) DATED 26.10.2012. THIS ASSERTION OF THE ASSESSEE WAS NOT CONTROVERTED BY THE REVENUE . 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL AVAILABLE ON FILE. IN VIEW OF THE ABOVE, W E ARE REPRODUCING HEREUNDER THE RELEVANT PORTION OF THE A FORESAID ORDER DATED 26.10.2012: THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 6.3.2012 OF THE COMMISSIONER OF INCOME TAX (APPEALS) FOR THE ASSESSMENT YEAR 2008-09 ON THE GROUND THAT THE LEARNED CIT(A) WAS NOT JUSTIFIE D IN DELETING THE ADDITION OF RS. 86,67,944/- TOWARDS 3 INTEREST RECEIVED FROM MPEB AND CONSIDERING THE SAME AS CAPITAL IN NATURE. 2. DURING HEARING, WE HAVE HEARD SHRI R.A. VERMA, LEARNED SENIOR DR AND SHRI S.S. SOLANKI, LEARNED COUNSEL FOR THE ASSESSEE. THE CRUX OF ARGUMENTS ON BEHALF OF THE REVENUE IS THAT THE LEARNED CIT(A) WA S NOT JUSTIFIED IN DELETING THE ADDITION OF RS. 86,67,044/- RECEIVED BY THE ASSESSEE TOWARDS INTEREST FROM MPEB AND TREATING THE SAME AS CAPITAL IN NATURE. ON THE OTHER HAND, LEARNED COUNSEL FOR T HE ASSESSEE SUPPORTED THE ORDER OF THE LEARNED CIT(A) AND CONTENDED THAT THE DEPARTMENT HAS NOT BROUGHT ANY MATERIAL ON RECORD TO CONTROVERT THE FINDINGS RECORDED BY THE LEARNED CIT(A) AND AS SUCH THE ORDE R OF THE LEARNED CIT(A) DESERVES TO BE SUSTAINED. TH E LEARNED COUNSEL FOR THE ASSESSEE PLACED RELIANCE ON THE ORDERS OF THE HONBLE SUPREME COURT IN THE CASE OF BOKARO STEEL LIMITED; 236 ITR 315 AND KARNAL CO- OP. SUGAR MILLS LIMITED; 243 ITR 2. THE LEARNED COUNSEL FURTHER SUBMITTED THAT THE INDORE BENCH OF THE TRIBUNAL, FOLLOWING THESE DECISIONS, HAS ALSO B EEN TAKING A CONSISTENT VIEW THAT SUCH AMOUNTS ARE CAPITAL IN NATURE. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF THE PARTIES BEFORE US AND HAVE ALSO GONE THROUGH THE MATERIAL ON RECORD. THE BRIEF FACTS OF THE CASE AR E THAT THE RETURN WAS FILED BY THE ASSESSEE DECLARING TOTAL INCOME AT NIL. THE ASSESSEE HAD RECEIVED INTEREST OF RS. 85,67,944/- ON ITS DEPOSITS MADE WI TH MPEB AND CLAIMED THE SAME AS CAPITAL RECEIPTS ON THE GROUND THAT THE ASSESSEE HAS BEEN IN PROCESS OF SETTING UP OF THE POWER PROJECT. THE CLAIM OF TREA TING THE RECEIPTS AS CAPITAL WAS NOT ACCEPTED BY THE REVENUE. FELT AGGRIEVED, THE ASSESSEE PREFERRED FI RST APPEAL BEFORE THE LEARNED CIT(A) WHO, AFTER CONSIDERING THE FACTS OF THE CASE AND THE SUBMISSIO NS MADE BEFORE HIM, OBSERVED AS UNDER :- 4 4. DURING THE APPEAL PROCEEDINGS, MY ATTENTION WAS DRAWN ONTO THE DECISIONS DATED 26,09.2008,27.03.200 9 AND 12.05.2009, OF THE HON'BLE TRIBUNAL IN THE CASE OF ASSESSEE IN ITA NO.180/IND./2008 A.Y. 2006-07, ITA NO.534/IND/2006 A.Y.2003-04 AND ITA NO.478/IND./2007 A.Y. 2004-05 RESPECTIVELY WHEREBY THE SIMILAR ISSUE IN THOSE YEARS HAS BEEN DECIDED I N THE FAVOUR OF THE ASSESSEE. IN ALL THOSE ORDERS, THE TR IBUNAL HAS CONSIDERED THE RECEIPT OF SUCH INTEREST FROM MP EB AS CAPITAL RECEIPTS IN VIEW OF THE FACT THAT DEPOSI T WAS MADE BY THE ASSESSEE IN MPEB IN ORDER TO FULFILL TH E CONDITION AND AS SUCH THE RECEIPT OF INTEREST WAS INEXTRICABLY LINKED WITH THE PROCESS OF SETTING OF ITS PLANT & MACHINERY. FOLLOWING THOSE ORDERS OF THE HON'BLE TRIBUNAL THE ADDITION OF RS.85,67,944/- STA NDS DELETED AFTER CAREFULLY CONSIDERING THE SUBMISSIONS OF THE RIVAL PARTIES IN VIEW OF THE FACTS OF THE CASE, ORD ERS OF THE AUTHORITIES BELOW AND THE JUDICIAL PRONOUNCEMENTS (SUPRA), MINUTES OF THE STATE EXPERT APPRAISAL COMMITTEE (81 ST MEETING DATED 12 TH OCTOBER, 2011), THE DIRECTION OF THE URJA VIBHAG, GOVT. OF M .P. DATED 8.11.2011, THE LETTER OF THE UPPAR COLLECTOR, GUNA, DATED 23.3.2011, THE LETTER OF THE ASSESSEE DATED 10 TH MARCH, 2011 ADDRESSED TO DISTRICT COLLECTOR, GUNA AND THE EARLIER ORDER OF THE TRIBUN AL (ITA NO. 180/IND/2008 DATED 26 TH SEPTEMBER, 2008) FOR THE A.Y. 2006-07, ITA NO. 478/IND/2007, ORDER DATED 12 TH MAY, 2009 FOR THE A.Y. 2004-05, ITA NO. 534/IND/2006, ORDER DATED 27 TH MARCH, 2009 (A.Y. 2003-04) AND FOR EARLIER ASSESSMENT YEARS (1996-97 TO 1998-99,1999-00, 2000-01 TO 2002-03), ORDER DATED 28.2.2006, WE FIND NO INFIRMITY IN THE STAND OF THE LEARNED CIT(A) HOLDING THAT THE RECEIPT OF INTE REST IS INEXTRICABLY LINKED WITH THE PROCESS OF SETTING UP OF PLANT AND MACHINERY AND AS SUCH IT WAS CAPITAL IN NATURE. WE, THEREFORE, UPHOLD THE SAME. 5 4. FINALLY, THE REVENUES APPEAL STAND DISMISSED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT ON 26 TH OCTOBER, 2012. IN THE LIGHT OF THE ABOVE, SINCE THE FACTS AND THE ISSUE ARE IDENTICAL, THEREFORE, FOLLOWING THE AFORESAID ORDER , WE FIND NO MERIT, ON THIS ISSUE, IN THE APPEAL OF THE REVENUE, MORE S PECIFICALLY, WHEN THE LD. FIRST APPELLATE AUTHORITY HAS FOLLOWED THE AFORESAID DECISION OF THE TRIBUNAL. NO CONTRARY DECISION WAS BROUGHT TO OUR NOTICE BY THE REVENUE. FINALLY, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER WAS PRONOUNCED IN THE OPEN IN THE PRESENCE OF LEARNED REPRESENTATIVES FROM BOTH THE SIDES AT THE CONCLUSI ON OF THE HEARING ON 30.10.2013. SD/- SD/- (R.C.SHARMA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 30.10.2013 COPY TO: APPELLANT, RESPONDENT, CIT, CIT(A), DR, GU ARD FILE !VYAS!