DCIT, CHENNAI V. M/s. Mediclone Biotech Pvt. Ltd., CHENNAI

ITA 2525/CHNY/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 4021 (ITAT-CHENNAI)
• Duration Of Justice: 10 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-07-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 27-06-2017
• Assessment Year: 2012-2013
• Appeal Filed On: 29-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R RAJESWARI
• Assessee Lawyers: K RAVI

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: CHENNAI , ! . , ' BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER , AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NO.2525/MDS/2016 /ASSESSMENT YEAR: 2012-13 THE DY. COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE-4(1), CHENNAI. VS. M/S.MEDICLONE BIOTECHPVT. LTD., BLOCK-B, NO.36/37, MILLENNIUM M.K. SRINIVASAN NAGAR, NO.144, OLD MAHABALIPURAM ROAD, PERUNGUDI, CHENNAI-600 096. [PAN: AAACM 5301 R] ( & /APPELLANT) ( '(& /RESPONDENT) & ) / APPELLANT BY : SMT. R. RAJESWARI, JCIT '(& ) /RESPONDENT BY : SHRI K. RAVI, ADV. ) /DATE OF HEARING : 12.07.2017 ) /DATE OF PRONOUNCEMENT : 12.07.2017 / O R D E R PER GEORGE MATHAN , JUDICIAL MEMBER : ITA NO.2525/MDS/2016 IS AN APPEAL FILED BY THE REV ENUE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-8 , CHENNAI, IN ITA NO.177/2015-16 DATED 21.06.2016 FOR THE AY 2012-13. ITA NO.2525/MDS/2016 :- 2 -: 2. SMT. R. RAJESWARI, JCIT, REPRESENTED ON BEHALF O F THE REVENUE AND SHRI K. RAVI, ADV., REPRESENTED ON BEHALF OF THE AS SESSEE. 3. IT WAS SUBMITTED BY THE LD.DR THAT THERE ARE TWO ISSUES IN THE REVENUES APPEAL. THE FIRST ISSUE AGAINST THE ACTION OF THE LD.CIT(A ) IN DELETING THE DISALLOWANCE MADE BY THE AO BY INVOKING THE PROVISI ONS OF SEC.43B OF THE ACT. IT WAS A SUBMISSION THAT THE ASSESSEE HAD CLA IMED INTEREST EXPENSES PAYABLE TO THE GOVERNMENT DEPARTMENTS ON THE LOANS TAKEN FROM THEM BEING THE DEPARTMENT OF BIO-TECHNOLOGY, TO AN EXTEN T OF RS.11,33,300/- AND DEPARTMENT OF SCIENCE & TECHNOLOGY, TO AN EXTE NT OF RS.30,66,000/-. IT WAS A SUBMISSION THAT AS THE SAID INTERESTS WERE NOT ACTUALLY PAID, THE AO BY INVOKING THE PROVISIONS OF SEC.43B OF THE ACT HAD DISALLOWED THE SAME. IT WAS A SUBMISSION THAT THE LD.CIT(A) HAD A LLOWED THE SAME, HOLDING THAT THE INTEREST PAYMENTS DUE TO THE DEPAR TMENT OF BIO- TECHNOLOGY AND THE DEPARTMENT OF SCIENCE & TECHNOLO GY, GOVERNMENT OF INDIA, WERE PAYMENTS TO THE GOVERNMENT, WHICH WERE NOT COVERED BY THE PROVISIONS OF SEC.43B(D) OF THE ACT. IT WAS A SUBM ISSION THAT THE ORDER OF THE LD.CIT(A) WAS LIABLE TO BE REVERSED ON THIS ISS UE. IT WAS A SUBMISSION THAT THE SECOND ISSUE WAS AGAI NST THE ACTION OF THE LD.CIT(A) IN DELETING THE ADDITION MADE BY THE AO BY INVOKING THE PROVISIONS OF SEC.68 OF THE ACT IN RESPECT OF THE A MOUNT OF RS.2,50,000/- ITA NO.2525/MDS/2016 :- 3 -: CREDITED TO THE ASSESSEES BANK ACCOUNT. IT WAS A SUBMISSION THAT THE LD.CIT(A) HAD DELETED THE SAME, HOLDING THAT THE SO URCE OF THE CREDIT WAS EXPLAINED AS BEING FROM THE DIRECTOR OF THE ASSESSE ES COMPANY. IT WAS A SUBMISSION THAT THE ORDER OF THE LD.CIT(A) WAS LIAB LE TO BE REVERSED. 4. IN REPLY, THE LD.AR SUBMITTED THAT IN RESPECT OF THE FIRST ISSUE THE INTEREST PAYMENTS WERE DUE TO THE DEPARTMENT OF BIO -TECHNOLOGY AND THE DEPARTMENT OF SCIENCE & TECHNOLOGY, WHICH DID NOT F ALL WITHIN THE PROVISIONS OF SEC.43B OF THE ACT. IT WAS A FURTHER SUBMISSION THAT IN RESPECT OF THE SECOND ISSUE, THE AMOUNTS REPRESENTE D THE FUNDS COLLECTED BY THE DIRECTOR OF THE ASSESSEE COMPANY AND DEPOSIT ED INTO THE BANK ACCOUNT OF THE ASSESSEE. HE VEHEMENTLY SUPPORTED T HE ORDER OF THE LD.CIT(A). 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. IN RES PECT OF THE ISSUE OF THE DISALLOWANCE U/S.43B, A PERUSAL OF THE FACTS IN THE ASSESSEES CASE CLEARLY SHOWS THAT, THE INTEREST PAYMENTS ARE DUE T O THE DEPARTMENT OF BIO-TECHNOLOGY AND THE DEPARTMENT OF SCIENCE & TECH NOLOGY, WHICH ARE BASICALLY DEPARTMENTS OPERATING UNDER GOVERNMENT OF INDIA. THE SAID DEPARTMENTS ARE NOT PUBLIC FINANCIAL INSTITUTIONS N OR/OR SCHEDULED BANKS. THIS BEING SO, THE PROVISIONS OF SEC.43B DOES NOT A PPLY IN RESPECT OF THE SAID INTEREST LIABILITY. THIS BEING SO, WE FIND NO ERROR IN THE ORDER OF THE LD.CIT(A) ON THIS ISSUE. ITA NO.2525/MDS/2016 :- 4 -: 6. IN RESPECT OF THE ISSUE OF THE CASH CREDIT OF RS .2,50,000/-, A PERUSAL OF THE ASSESSMENT ORDER CLEARLY SHOWS THAT THE AO W AS WELL AWARE THAT THE AMOUNT OF RS.2,50,000/- OUT OF THE LOAN OF RS.3 ,24,800/- RAISED BY THE DIRECTOR OF THE ASSESSEE COMPANY. A PERUSAL OF THE ORDER OF THE LD.CIT(A) SHOWS THAT, THE LD.CIT(A) HAS CONSIDERED THE FACTS GIVING RISE TO THE DEPOSIT OF RS.2,50,000/- WAS IN THE ASSESSEES BANK ACCOUNT OUT OF THE LOAN TAKEN BY THE DIRECTOR. THIS BEING SO, WE ARE OF THE VIEW THAT THE FINDINGS ARRIVED BY THE LD.CIT(A) IS ON A RIGHT FOO TING AND DOES NOT CALLED FOR ANY INTERFERENCE. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON JULY 12, 201 7, AT CHENNAI. SD/- SD/- ( . ) ( A. MOHAN ALANKAMONY ) ! /ACCOUNTANT MEMBER ( ) (GEORGE MATHAN) ! /JUDICIAL MEMBER /CHENNAI, 1 /DATED: JULY 12, 2017. TLN ) '23 43 /COPY TO: 1. & /APPELLANT 4. 5 /CIT 2. '(& /RESPONDENT 5. 3 ' /DR 3. 5 ( ) /CIT(A) 6. /GF