Appeal Details
Counselvise Citation
[2018] 125 COUNSELVISE.COM (IT) 6189 (ITAT-KOLKATA)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
4 month(s) 22 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
13-07-2018
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
SMC
Assessment Year
2011-2012
Appeal Filed On
21-02-2018
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA SMC BENCH, KOLKATA (BEFORE SRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER) ITA NO. 307/KOL/2018 ASSESSMENT YEAR: 2011-12 SHASHI CABLES LIMITED.....................APPELLANT 7, CHITTARANJAN AVENUE 2 ND FLOOR LAHA PAINT HOUSE KOLKATA 700 072 [PAN : AAECS 0433 Q] DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-1(2), KOLKATA..............RESPONDENT APPEARANCES BY: SHRI RAJ KUMAR AGARWAL, A/R, APPEARED ON BEHALF OF THE ASSESSEE. SHRI S.M. DAS, ADDL. CIT, D/R. APPEARING ON BEHALF OF THE REVENUE. DATE OF CONCLUDING THE HEARING : JULY 05 TH , 2018 DATE OF PRONOUNCING THE ORDER : JULY 13 TH , 2018 ORDER PER J. SUDHAKAR REDDY, AM :- THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-I, KOLKATA, (HEREINAFTER THE LD. CIT(A)), DT. 05/12/2017, PASSED U/S 250 OF THE INCOME TAX ACT, 1961 (HEREINAFTER THE ACT), RELATING TO ASSESSMENT YEAR 2012-13, ON THE FOLLOWING GROUNDS:- 1. FOR THAT LD. CIT(A) ERRED IN HOLDING THAT THE ENTIRE AMOUNT OF RS 25 LACS RECEIVED FROM M/S VIJAY ELECTRICALS LTD. WAS TAXABLE IN IMPUGNED ASSESSMENT YEAR AND THUS, UPHOLDING THE ADDITION OF RS.14,28,571/-. 2. FOR THAT LD CIT(A) ERRED IN UPHOLDING THE DISALLOWANCE OF RS.2,21,951/- UNDER PROVISO TO SEC 36(1)(III) OUT OF INTEREST EXPENSE 3. FOR THAT THE APPELLANT CRAVES THE RIGHT TO PUT ADDITIONAL GROUNDS AT OR BEFORE THE TIME OF HEARING. 2. AFTER HEARING RIVAL CONTENTIONS, WE FIND THAT THE ASSESSEE HAS OFFERED TO TAX THE ENTIRE AMOUNT OF RS.75 LAKHS RECEIVED BY HIM AS LICENSE FEE FROM M/S VIJAY ELECTRICALS BETWEEN THE ASSESSMENT YEAR 2008-09 TO THE ASSESSMENT YEAR 2015-16 ON TIME BASIS ON THE TERMS OF THE AGREEMENTS.. THE CHART IS EXTRACTED FOR READY REFERENCE:- 2 ITA NO. 307/KOL/2018 ASSESSMENT YEAR: 2011-12 SHASHI CABLES LIMITED 2.1. WHILE SO, THE FINDINGS OF THE LD. ASSESSING OFFICER THAT, INCOME HAS ACCRUED AND ARISEN DURING THE YEAR, AND HENCE TAXABLE DURING THE YEAR IS NOT CORRECT. THE ASSESSEE HAS BEEN, FROM THE FINANCIAL YEAR 2008-09, CONSISTENTLY FOLLOWING A METHOD OF RECOGNIZING INCOME FROM LICENSE FEE UNDER THE AGREEMENT ENTERED INTO WITH M/S VIJAY ELECTRICALS LTD. YEARWISE. THERE IS NO VALID REASON FOR DEVIATING FROM THIS METHOD OF ACCOUNTING. THE ENTIRE AMOUNT OF RS.75 LACS HAS BEEN OFFERED TO TAX OVER THE PERIOD OF 7 YEARS. THOUGH RS.50 LACS WAS RECEIVED BY THE ASSESSEE, DURING THE FINANCIAL YEAR 2008- 09, ONLY RS.9,39,335/-, WAS OFFERED TO TAX IN THAT YEAR AND THE BALANCE HAS BEEN SPREAD OVER THE PERIOD OF CONTRACT. THIS ACTION OF THE ASSESSEE WAS ACCEPTED BY THE REVENUE. UNDER THOSE CIRCUMSTANCES, THE ADDITION MADE AS SUSTAINED BY THE LD. CIT(A) ARE BAD IN LAW. ACCORDINGLY, I DELETE THE SAME. IN THE RESULT, GROUND NO. 1, IS ALLOWED. 3. COMING TO GROUND NO. 2, INTEREST HAS BEEN DISALLOWED U/S 36(1)(III) OF THE ACT, ON THE GROUND THAT BORROWINGS WERE MADE AND UTILIZED FOR CAPITAL WORK IN PROGRESS. THE ASSESSEE IS A GOING CONCERN. UNDER THOSE CIRCUMSTANCES, IN MY VIEW, NO DISALLOWANCE CAN BE MADE U/S 36(1)(III) OF THE ACT AS INTEREST PAID ON LOAN TAKEN FOR PURCHASE OF CAPITAL ASSETS IS ALLOWABLE U/S 36(1)(III) OF THE ACT. ACCORDINGLY THIS DISALLOWANCE IS DELETED. 4. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. KOLKATA, THE 13 TH DAY OF JULY, 2018. SD/- [ J. SUDHAKAR REDDY ] ACCOUNTANT MEMBER DATED : 13.07.2018 {SC SPS} 3 ITA NO. 307/KOL/2018 ASSESSMENT YEAR: 2011-12 SHASHI CABLES LIMITED COPY OF THE ORDER FORWARDED TO: 1. SHASHI CABLES LIMITED 7, CHITTARANJAN AVENUE 2 ND FLOOR LAHA PAINT HOUSE KOLKATA 700 072 2. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-1(2), KOLKATA 3. CIT(A)- 4. CIT- , 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER SENIOR PRIVATE SECRETARY HEAD OF OFFICE/ D.D.O. ITAT, KOLKATA BENCHES
