Appeal details
Counselvise Citation
[2019] 112 COUNSELVISE.COM (IT) 1817 (ITAT-CHENNAI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
2 year(s) 11 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
04-12-2019
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
B
Assessment Year
2007-2008
Appeal Filed On
23-11-2017
Judgement Text
, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI . . . , ! ' # , % #& BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ./ ITA NO.2831/CHNY/2017 & C.O. NO.35/CHNY/2018 (IN I.T.A. NO.2831/CHNY/2017) ) *) / ASSESSMENT YEAR : 2007-08 THE DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 2(1), CHENNAI - 600 034. V. M/S EIH ASSOCIATED HOTELS LTD., NO.1/24, G.S.T. ROAD, MEENAMBAKKAM, CHENNAI - 600027. PAN : AAACE 2125 M (,-/ APPELLANT) ( RESPONDENT & CROSS-OBJECTOR) ,- . / / APPELLANT BY : SHRI AR.V. SREENIVASAN, JCIT 01,- . / / RESPONDENT BY : NONE 2 . 3% / DATE OF HEARING : 24.10.2019 45* . 3% / DATE OF PRONOUNCEMENT : 04.12.2019 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER : THE REVENUE HAS FILED THE APPEAL AGAINST THE ORDE R OF THE COMMISSIONER OF INCOME TAX (APPEALS)-6, CHENNAI, DA TED 15.09.2017, FOR THE ASSESSMENT YEAR 2007-08. THE A SSESSEE HAS ALSO FILED CROSS-OBJECTION AGAINST THE VERY SAME OR DER OF THE CIT(APPEALS). THEREFORE, WE HEARD THE APPEAL OF TH E REVENUE AND 2 I.T.A. NO.2831/CHNY/17 C.O. NO.35/CHNY/18 THE CROSS-OBJECTION OF THE ASSESSEE TOGETHER AND DI SPOSING THE SAME BY THIS COMMON ORDER. 2. LETS FIRST TAKE THE REVENUES APPEAL. THE FIRS T ISSUE ARISES FOR CONSIDERATION IS DISALLOWANCE MADE BY THE ASSES SING OFFICER UNDER SECTION 14A OF THE INCOME-TAX ACT, 1961 (IN S HORT 'THE ACT'). 3. IT IS NOT IN DISPUTE THAT THERE WAS NO EXEMPT IN COME EARNED BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION . THE CIT(APPEALS) PLACING HIS RELIANCE ON THE JUDGMENT O F MADRAS HIGH COURT IN REDINGTON (INDIA) LTD. V. ADDL. CIT (2017) 392 ITR 633, HAS DELETED THE ADDITION MADE BY THE ASSESSING OFFICER. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT WHEN THE CIT(APPEALS ) HAS PLACED HIS RELIANCE ON THE JUDGMENT OF MADRAS HIGH COURT, WHICH IS BINDING ON ALL THE AUTHORITIES IN STATE, THERE IS NO ERROR IN THE ORDER OF THE CIT(APPEALS). EVEN IN RESPECT OF INVESTMENTS MADE IN SUBSIDIARY COMPANY, THERE WAS NO EXEMPT INCOME EARNED BY THE A SSESSEE. THEREFORE, THERE IS NO QUESTION OF ANY ADDITION / D ISALLOWANCE WITH REGARD TO EXPENDITURE. THEREFORE, THIS TRIBUNAL DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LOWER AUT HORITY AND ACCORDINGLY THE SAME IS CONFIRMED. 3 I.T.A. NO.2831/CHNY/17 C.O. NO.35/CHNY/18 4. THE NEXT ISSUE ARISES FOR CONSIDERATION IS DISAL LOWANCE OF BAD DEBT TO THE EXTENT OF 1,21,967/-. 5. THE ONLY GRIEVANCE OF THE REVENUE IS THAT THIS A MOUNT OF 1,21,967/- WAS DUE FROM MINISTRY OF EXTERNAL AFFAIR S, THEREFORE, IT CANNOT BE WRITTEN OFF. THE INCOME-TAX ACT DOES NOT SAY THAT THE AMOUNT DUE FROM GOVERNMENT CANNOT BE WRITTEN OFF. WHAT IS TO BE SEEN IS WHETHER THE ASSESSEE HAS WRITTEN OFF THE AM OUNT AS IRRECOVERABLE. IT IS NOT IN DISPUTE THAT THE ASSES SEE HAS IN FACT WRITTEN OFF THE ABOVE SAID AMOUNT DUE FROM MINISTRY OF EXTERNAL AFFAIRS. THEREFORE, THIS TRIBUNAL IS OF THE CONSID ERED OPINION THAT THE CLAIM OF THE ASSESSEE HAS TO BE ALLOWED. IN CASE, IT WAS RECOVERED SUBSEQUENTLY, THE SAME HAS TO BE TAKEN AS INCOME OF THE ASSESSEE IN THE YEAR IN WHICH IT WAS RECOVERED, SUBJECT TO T HE ABOVE OBSERVATION. THIS TRIBUNAL DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LOWER AUTHORITY AND ACCORDINGLY TH E SAME IS CONFIRMED. 6. NOW COMING TO THE CROSS-OBJECTION FILED BY THE A SSESSEE, THE ONLY ISSUE RAISED IN THE CROSS-OBJECTION IS WITH RE GARD TO LEAVE ENCASHMENT TO THE EXTENT OF 14,41,057/-. 4 I.T.A. NO.2831/CHNY/17 C.O. NO.35/CHNY/18 7. THE ASSESSING OFFICER AS WELL AS THE CIT(APPEALS ) DISALLOWED THE PROVISION FOR LEAVE ENCASHMENT ON TH E BASIS OF THE JUDGMENT OF CALCUTTA HIGH COURT IN EXIDE INDUSTRIES LTD. V. UNION OF INDIA (2007) 292 ITR 470. IN THE GROUNDS OF APPEAL , THE ASSESSEE HAS RAISED AN ISSUE WITH REGARD TO STAY GRANTED BY APEX COURT ON THE OPERATION OF THE JUDGMENT OF CALCUTTA HIGH COUR T IN EXIDE INDUSTRIES LTD. (SUPRA). THE ASSESSING OFFICER FOU ND THAT THE STAY WAS GRANTED ON 27.06.2007 BY THE CALCUTTA HIGH COUR T AND SUBSEQUENT DEVELOPMENT WAS NOT AVAILABLE. THE FACT REMAINS THAT THE JUDGMENT OF CALCUTTA HIGH COURT WAS STAYED BY T HE APEX COURT AND THE APPEAL / SLP FILED BEFORE THE APEX COURT IS STILL PENDING. THEREFORE, FOR ALL PRACTICAL PURPOSES, IT HAS TO BE CONSTRUED THAT SECTION 43B(F) OF THE ACT CONTINUED TO BE IN THE ST ATUTE BOOK. SINCE, ADMITTEDLY, LEAVE ENCASHMENT WAS NOT PAID BY THE AS SESSEE, THE CIT(APPEALS) HAS RIGHTLY CONFIRMED THE ORDER OF THE ASSESSING OFFICER. THEREFORE, THIS TRIBUNAL DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LOWER AUTHORITY AND ACCORDING LY THE SAME IS CONFIRMED. 8. IN THE RESULT, BOTH THE APPEAL OF THE REVENUE AS WELL AS THE CROSS-OBJECTION OF THE ASSESSEE STAND DISMISSED. 5 I.T.A. NO.2831/CHNY/17 C.O. NO.35/CHNY/18 ORDER PRONOUNCED IN THE COURT ON 4 TH DECEMBER, 2019 AT CHENNAI. SD/- SD/- ( ! ' # ) ( . . . ) (INTURI RAMA RAO) (N.R.S. GANESAN) % / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 7 /DATED, THE 4 TH DECEMBER, 2019. KRI. . 0389 :9*3 /COPY TO: 1. ,- /APPELLANT 2. 01,- /RESPONDENT 3. 2 ;3 () /CIT(A)-6, CHENNAI 4. PRINCIPAL CIT- 2, CHENNAI 5. 9< 03 /DR 6. =) > /GF.
