ADIT, New Delhi V. M/s. Cargill TSF Asia Pte. Ltd., Singapore

ITA 3244/DEL/2011

• Counselvise Citation: 324420114 RSA 2011
• Duration Of Justice: 2 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-08-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 24-08-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 16-06-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHWANI MAHAJAN
• Section: 234B; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B NEW DELHI BEFORE SHRI R.P. TOLANI AND SHRI K.D. RANJAN ITA NO.3244/DEL/11 A. YR: 2006-07 ACIT, CIR. 1(1), VS. M/S CARGILL TSF ASIA PTE. LTD. NEW DELHI. 300, BEACH ROAD, #23-00, THE CONCOURSE, SINGAPORE-199555 PAN/GIR NO. AACCC6912C ( APPELLANT ) ( RESPONDENT ) APPELLANT BY : SHRI ASHWANI MAHAJAN CIT DR RESPONDENT BY: S/SHRI SANDEEP CHAUFLA, MANISH BANS AL, VIVEK SAWHNEY & MS. SONAM KHANNA O R D E R PER R.P. TOLANI, J.M : THIS IS REVENUES APPEAL AGAINST CIT(A)S ORDER DA TED 8-3-2011 RELATING TO A. YR. 2006-07. 2. FOLLOWING GROUNDS ARE RAISED: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED FOLLOWING THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF DIT VS. JACOB CIVIL INCORPORAT ED (ITA NO. 491/2008) HOLDING THAT INTEREST U/S 234B IS NOT LEV IABLE IN THE ABSENCE OF THE ASSESSEES LIABILITY TO PAY ADVANCE TAX ON ITS ENTIRE INCOME, IN CONTRAVENTION OF THE HONBLE SUPR EME COURTS DECISION IN THE CASE OF CIT VS. ANJUM M.H. GHASWALA AND OTHER 252 ITR 1 SC, WHEREIN IT WAS HELD THAT LEVY O F INTEREST U/S 234B IS MANDATORY IN NATURE. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE T HE LD. CIT(A) HAS ERRED IN DELETING THE INTEREST U/S 234B IN 2 CONTRAVENTION OF THE DECISION OF HONBLE ITAT, BENC H H, NEW DELHI IN THE CASE OF M/S GRACEMAC CORPORATION V S. ADIT (ITA NO. 1331-36(DEL) OF 2008) AND MICROSOFT CORPOR ATION VS. ADIT (ITA NO. 1392(DEL) OF 2005), WHEREIN THE HONB LE ITAT HELD INTEREST U/S 234B TO BE MANDATORY FOLLOWING TH E HONBLE SUPREME COURT DECISION IN THE CASE OF CIT VS. ANJUM M.H. GHASWALA AND OTHER 252 ITR 1 SC. 2. VIDE PARA 3.2 OF HIS ORDER, THE LEARNED CIT(A) D IRECTED TO DELETE INTEREST CHARGED U/S 234B BY OBSERVING AS UNDER: CHARGE OF INTEREST IS CONSEQUENTIAL. STILL CONSIDE RING THE DECISION OF THE JURISDICTIONAL HIGH COURT AS STATED ABOVE THE LD. AO IS ASKED TO DELETE THE INTEREST CHARGED U/S 234B . 3. LEARNED DR IS HEARD. 4. LEARNED COUNSEL FOR THE ASSESSEE CONTENDS THAT I TAT VIDE ITS CONSOLIDATED ORDER DATED 19-8-2011 IN ASSESSEES OW N CASE IN CROSS APPEALS FOR A.Y. 2006-07 AND 2007-08 HAS DELETED SUBSTANTIA L ADDITIONS AND HELD THE LEVY OF INTEREST U/S 234B AS CONSEQUENTIAL IN NATUR E BY FOLLOWING OBSERVATION: 8. THE DISCOUNTING CHARGES ARE TO BE TREATED AS BU SINESS INCOME AND CONSEQUENTLY THE APPEALS FILED BY THE AS SESSEE FOR ASSESSMENT YEARS 2006-07 AND 2007-08 I.E. ITA NO. 3057/DEL/11 AND ITA NO. 3880/DEL/10 ARE ALLOWED. IN ITA NO. 3880/DEL/10, THE ASSESSEE AHS CHALLENGED THE CHARGI NG OF INTEREST UNDER SEC. 234B OF THE ACT. SINCE, WE HAVE DELETED THE MAIN ADDITION IN RESPECT OF TAXABILITY OF DISCOUNTI NG CHARGES AS INTEREST INCOME. THIS ISSUE IN THE LIGHT OF OUR OBS ERVATIONS WOULD REQUIRE TO BE READJUDICATED. IN OTHER WORDS, IT IS CONSEQUENTIAL IN NATURE. 5. IT IS CONTENDED THAT REVENUES GROUND, CHALLENGI NG DELETION OF INTEREST U/S 234B MAY BE HELD TO BE CONSEQUENTIAL IN NATURE, SINCE THE QUANTUM ADDITIONS ARE DELETED. 3 6. WE HAVE HEARD THE SUBMISSIONS OF THE PARTIES AND GONE THROUGH THE RELEVANT MATERIAL ON RECORD. SINCE QUANTUM ADDITION HAS BEEN DELETED AND IN REVENUES SIMILAR APPEAL ON 234B FOR A.Y. 2006-07 & 2007-08 (SUPRA), IT HAS BEEN HELD THAT LEVY OF INTEREST U/S 234B IS CON SEQUENTIAL IN NATURE, FOLLOWING THE SAME WE HOLD THAT THE LEVY OF INTERES T U/S 234B IS CONSEQUENTIAL IN NATURE. THE AO WILL VERIFY ACCORDI NGLY. 7. IN THE RESULT, REVENUES APPEAL STANDS DISMISSE D IN ABOVE TERMS. ORDER PRONOUNCED IN OPEN COURT ON 24-08-2011. SD/- SD/- ( K.D. RANJAN ) ( R.P. TOLANI ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 24-08-2011. MP COPY TO : 1. ASSESSEE 2. AO 3. CIT 4. CIT(A) 5. DR 4