Dy. Commissioner of Income Tax , Circle-2(2), Hyderabad V. Transmission Corporation of Telangana Limited , Hyderabad

ITA 255/Hyd/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 0862 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 4 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-07-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB-A
• Next Hearing Date: 28-04-2021
• Assessment Year: 2015-2016
• Appeal Filed On: 26-02-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R. DIPAK
• Assessee Lawyers: M. CHANDRAMOULESWARA RAO
• Keywords: Revised return; TDS
• Section: 143(3); 139(1); 13; 20

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A : HYDERABAD (THROUGH VIRTUAL CONFERENCE) BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER IT A NO. 255 /H/20 1 9 ASSESSMENT YEAR: 2 0 1 5 - 1 6 DY. COMMISSIONER OF INCOME - TAX, CIRCLE 2(2), HYDERABAD. VS. TRANSMISSION CORPORATION OF TELANGANA LTD., HYDERABAD. PAN A AFCT0166J (APPELLANT) (RESPONDENT) REVENUE BY: SHRI R. DIPAK ASSESSEE BY: S HRI M. CHANDRAMOULESWARA RAO DATE OF HEARING: 2 8 /0 4 /2021 DATE OF PRONOUNCEMENT: 13 /0 7 /2021 O R D E R PER L.P. SAHU, A.M. : THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST CIT(A) - 2 , HYDERABAD S ORDER DATED 04/12/2018 FOR AY 20 1 5 - 1 6 INVOLVING PROCEEDINGS U/S 14 3(3) OF THE INCOME - TAX ACT, 1961; IN SHORT THE ACT ON THE FOLLOWING GROUNDS OF APPEAL: I TA NO. 255 /HYD /20 1 9 M/S TRANSMISSION CORPORATION OF TELANGANA LTD., HYD. : - 2 - : 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WHETHER THE CIT(A) IS I 99,57,57,978 CORRECT IN LAW IN HOLDING THAT THE INTEREST EARNED FROM FDS BY THE ASSESSEE ON GRANTS ISSUED BY GOAP FOR EXECUTION OF PROJECTS IS NOT TAXABLE?' 2. IN THE FACTS AND CIRCUMSTANC ES OF THE CASE, WHETHER THE CLT(A) IS I 69,98,34,360 CORRECT IN LAW IN DIRECTING THE AD TO CONSIDER THE REVISED RETURN WHICH WAS FILED AFTER THE DUE DATE AS PER THE IT ACT? 3. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WHETHER THE CIT(A) IS I NIL CORRECT IN LAW IN ISSUING DIRECTIONS WHICH ARE CONTRARY TO THE PROVISIONS OF THE IT ACT ? 4. ANY OTHER GROUND THAT MAY BE URGED DURING THE COURSE OF APPELLATE PROCEEDINGS. 2. BRI EFLY, THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS A COMPANY ENGAGED IN THE BUSINESS OF TRANSMISSION OF ELECTRICAL ENERGY IN THE STATE OF TELANGANA, FILED ITS RETURN OF INCOME FOR AY 2015 - 16 ON 30/09/2015 ELECTRONICALLY U/S 139(1) OF THE ACT ADMITTING TO TAL INCOME OF RS. 147,16,83,030/ - . SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY UNDER CASS AND ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT ON 22/12/2017 BY DETERMINING THE TOTAL INCOME OF RS. 193,03,72,588/ - BY MAKING THE FOLLOWING ADDITIONS: 1. RS. 99,57,57,978/ - BEING THE INTEREST EARNED BY THE ASSESSEE ON THE DEPOSITS/INVESTMENTS MADE FROM UNUTILIZED LIS FUNDS. 2. RS. 8,88,30,178/ - TOWARDS OBSOLETE ITEMS DEBITED TO P&L A/C I TA NO. 255 /HYD /20 1 9 M/S TRANSMISSION CORPORATION OF TELANGANA LTD., HYD. : - 3 - : 3. RS. 11,81,372/ - TOWARDS LOSS ON SALE OF SCRAP. 3. WHEN THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A), THE CIT(A) DELETED THE ADDITION OF RS. 99,57,57,978/ - , CONFIRMED THE ADDITION OF RS. 8,88,30,178/ - AND PARTLY ALLOWED THE GROUND ON LOSS ON SALE OF SCRAP. 4. THE REVENUE IS IN APPEAL BEFORE THE ITAT AGAINST THE ACT ION OF CIT(A) IN DELETING THE ADDITION OF RS. 99,57,57,978/ - . 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD AS WELL AS GONE THROUGH THE ORDERS OF REVENUE AUTHORITIES. 5.1 THE AO IN HIS ORDER, INTER - ALIA, OBSERVED THAT T HERE IS NO DISPUTE IN THE FACT THAT THE ASSESSEE EARNED AN INTEREST OF RS. 99 , 57,57,978/ - FROM THE DEPOSITS MADE WITH DISCOMS. HOWEVER) THE ASSESSEE INSTEAD OF RECOGNIZING THE SAME AS REVENUE) CREDITED IT TO (DEPOSITS FROM GOAP FOR LIS ACCOUNT). THOUGH THE ASSESSEE DID NOT OFFER THE ABOVE INTEREST TO TAX) IT CLAIMED THE CREDIT FOR THE TDS MADE ON THE SAME) WHICH IS SELF - DEFEATING/CONTRADICTING ACTION ON THE PART OF THE ASSESSEE. FURTHER) TO ALLOW THE CLAIM OF TDS THE PROVISIONS OF SECTION 199 ARE CLEARLY APPLICABLE TO THE INSTANT CASE. AS PER THE PROVISIONS OF SEC. 199 TAX CREDIT I TA NO. 255 /HYD /20 1 9 M/S TRANSMISSION CORPORATION OF TELANGANA LTD., HYD. : - 4 - : WOULD BE GIVEN ONLY WHEN THE ASSE SSEE OFFERS CORRESPONDING INCOME FOR TAX PURPOSE. HOWEVER) IN THE PRESENT CASE) THE ASSESSEE FAILED TO OFFER THE INTEREST INCOME ON DEPOSITS FROM GOAP FOR LIS ACCOUNT' . IN VIEW OF THE ABOVE OBSERVATIONS, THE AO HELD THAT THE INTEREST EARNED BY THE ASSESSE E ON THE DEPOSITS/ INVESTMENTS MADE FROM UNUTILIZED LIS FUNDS IS T REATED AS INCOME ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE. 5.2 THE CIT(A) FOLLOWING THE DECISION OF THE COORDINATE BENCH OF THIS TRIBUNAL IN ASSESSEES OWN CASE IN ITA NOS. 366 TO 37 2/HYD/2018, ORDER DATED 13/06/2018, DELETED THE ADDITION MADE BY THE AO. 5.3 THE COORDINATE BENCH IN ASSESSEES OWN CASE CITED SUPRA HELD AS UNDER: 5. AFTER CONSIDERING THE RIVAL CONTENTIONS, WE DO NOT FIND ANY MERIT IN REVENUE GROUNDS. AS CAN BE SEEN, THE FUNDS ARE CLEARLY ALLOCATED FOR A SPECIFIC PURPOSE AND ASSESSEE HAS NO CONTROL OVER THE FUNDS, EXCEPT UTILIZING THEM FOR THE SCHEME FOR WHICH IT WAS GRANTED. THESE FUNDS ARE ALSO KEPT SEPARATELY AND THE INT EREST WAS ALSO ACCOUNTED FOR ON BEHALF OF THE GOVERNMENT AND HAS KEPT SEPARATELY FROM ASSESSEE'S TRANSACTIONS. HENCE, ON THE PRINCIPLES LAID DOWN BY THE HON'BLE SUPREME COURT IN THE CASE OF MIS BOKARO STEEL [236 ITR 315] (SC) AND ALSO RELYING ON VARIOUS CA SE LAW ON THE ISSUE, WE ARE OF THE OPINION THAT THE DECISION OF LD.CIT(A) DOES NOT REQUIRE ANY MODIFICATION. NOTHING WAS PLACED ON RECORD TO COUNTER THE FINDINGS OF CIT(A) BOTH ON FACTS AND ON I TA NO. 255 /HYD /20 1 9 M/S TRANSMISSION CORPORATION OF TELANGANA LTD., HYD. : - 5 - : LAW. IN THE RESULT, ALL THE REVENUE APPEALS ARE DISMISSED. 5. 4 RESPECTFULLY FOLLOWING THE DECISION COORDINATE BENCH IN ASSESSEES CASE CITED SUPRA, WE UPHOLD THE ORDER OF CIT(A) AND DISMISS THE GROUNDS RAISED BY THE REVENUE ON THIS ISSUE. THE LD. DR HAS NOT BROUGHT ANY CONTRARY DECISION IN THIS REGARD NOR PLACED ON RECORD TO COUNTER THE FINDINGS OF CIT(A) BOTH ON FACTS AND ON LAW. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED IN ABOVE TERMS. PRONOUNCED IN THE OPEN COURT ON 13 TH JU LY , 2021 . SD/ - SD/ - ( S.S. GODARA ) (L . P . SAHU) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDE RABAD, DATED : 13 TH JU LY , 20 2 1 . K V C OPY TO : 1 DCIT, CIRCLE 2(2), ROOM NO. 513, 5 TH FLOOR, SIGNATURE TOWERS, OPP. BOTANICAL GARDEN, KONDAPUR, HYDERABAD 500 084 2 M/S TRANSMISSION CORPORATION OF TELANGANA LTD., HYDERABAD . 3 C I T(A) 2, HYDERABAD. 4 PR. CIT - 2 , HYDERABAD. 5 ITAT, DR, HYDERABAD. 6 GUARD FILE.