Assistant Commissioner of Income Tax, Palakkad V. M/s Prince rollings (P) Ltd, Palakkad

ITA 239/COCH/2009

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 0899 (ITAT-COCHIN)
• Duration Of Justice: 1 year(s) 8 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-01-2011
• Appeal Filed By: Department
• Bench Allotted: DB
• Next Hearing Date: 18-01-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 04-05-2009
• Court: TRIBUNAL
• Keywords: Business income; Rectification of order; Set aside
• Section: 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI N.VIJAYAKUMARAN & SHRI SANJAY ARORA I.T.A.NO. 239 /COCH/200 9 ASSESSMENT YEAR: 2005 - 06 THE ASST. COMMISSIONER OF INCOME-TAX, CIRCLE-1, PALAKKAD. VS. M/S. PRINCE ROLLINGS (P)LTD. ANAPPURAMKADU, KINASSERY PO, PALAKKAD. PA NO.AABCP 3682M (APPELLANT) (RESPONDENT) & I.T.A.NO.240/COCH/2009 ASSESSMENT YEAR:2005 - 06 THE ASST. COMMISSIONER OF INCOME-TAX, CIRCLE-1, PALAKKAD. VS. M/S. PRINCE ALLOYS (P) LTD., 9/78,ANAPPURAMKADU, KINASSERY PO, PALAKKAD. PANO.AABCP 3680K (APPELLANT) (RESPONDENT) APPELLANT BY SHRI T.J.VINCENT, JR.DR RESPONDENT S B Y SHRI C.R. HARISH,CA - + O R D E R PER N.VIJAYAKUMARAN,J.M: BOTH THESE APPEALS ARE BY THE DEPARTMENT AGAINST T WO SEPARATE ORDERS OF THE LD. CIT(APPEALS)-V, KOCHI, D ATED 06- 01-2009 IN THE CASE OF M/S. PRINCE ROLLINGS (P) LTD ., PALAKKAD AND M/S. PRINCE ALLOYS (P) LTD., PALAKKAD. THE ASSESSMENT YEAR INVOLVED IS 2005-06 IN BOTH THE CAS ES. 2 ITA NOS.239 & 240/COCH/2009 SINCE COMMON ISSUE IS INVOLVED IN THESE APPEALS, BO TH APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. THE ASSESSING OFFICER INITIALLY COMPLETED THE ASSESSMENT U/S.143(3). WHILE COMPLETING THE REGUL AR ASSESSMENT, THE ASSESSING OFFICER ALLOWED DEDUCTION U/S.80IB AND FOR THAT PURPOSE WHILE DETERMINING THE GROSS TOTAL INCOME, THE INTEREST INCOME EARNED FROM FIXED DEPOSITS WITH BANKS WERE ALSO CONSIDERED AS QUALIFIED. THIS WAS FOUND TO BE A WRONG AS THE INTEREST INCOME OF FIXED DEPOSITS IS TO BE TREATED AS INCOME FROM OTHER SOURCES AND T HE SAME IS NOT TO BE RECKONED AS INCOME FROM THE INDUSTRIAL ACTIVITIES, THE ASSESSEE WAS NOT ENTITLED TO 80IB D EDUCTION. ACCORDINGLY, THE ASSESSING OFFICER ISSUED NOTICE U/ S.154 AND CORRECTED THE MISTAKE. THE MISTAKE IS APPARENT F ROM RECORD IN VIEW OF THE DECISION OF THE HONBLE JURIS DICTIONAL HIGH COURT, IN THE CASE OF ACIT VS. SOUTH INDIA PRO DUCE COMPANY (2003) 262 ITR 20 WHEREIN THE HONBLE HIGH COURT HELD THAT INTEREST INCOME ON BANK DEPOSIT IS ONLY I NCOME FROM OTHER SOURCES AND DOES NOT CONSTITUTE BUSINESS INCOME. THE HONBLE APEX COURT IN THE CASE OF PANDIAN CHEMI CALS LTD. VS. CIT REPORTED IN 262 ITR 278 ALSO HELD THAT INTEREST 3 ITA NOS.239 & 240/COCH/2009 ON DEPOSIT IS NOT INCOME DERIVED FROM THE INDUSTRIA L UNDERTAKING. AS THE DECISION OF THE APEX COURT IS DIRECTLY ON THE ISSUE AND THE MISTAKE IS AN APPARENT MISTAKE AN D NOT DEBATABLE, AFTER CONSIDERING THE SUBMISSIONS, WE HO LD THAT RECTIFICATION ORDER PASSED BY THE ASSESSING OFFICER IN RESPECT OF THE ABOVE TWO ASSESSEES ARE PERFECTLY JUSTIFI ED AND NO INTERFERENCE IS CLEARED FOR. HENCE, WE SET ASIDE T HE ORDER OF THE LD. CIT(APPEALS) IN BOTH THE CASES AND RESTORE THE RECTIFICATION ORDER PASSED BY THE LD. ASSESSING OFF ICER. 3. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE A RE ALLOWED. SD/- SD/- (SANJAY ARORA) (N.VIJAYKUMA RAN) ACCOUNTANT MEMBER JUDICIAL M EMBER ERNAKULAM, DATED THE 19 TH JANUARY,2011. PM. COPY FORWARDED TO: 1. THE ACIT, CIRCLE-1, PALAKKAD. 2. M/S.PRINCE ROLLINGS (P) LTD., ANAPPURAMKADU, KINASS ERY PO, PALAKKAD. 3. M/S.PRINCE ALLOYS (P) LTD., 9/78, ANAPPURAMKADU, KI NASSERY PO, PALAKKAD. 4.CIT(A)-V,KOCHI. 4.CIT, TRICHUR. 5.D.R. 4 ITA NOS.239 & 240/COCH/2009