SUN POLYTRON INDUSTRIES LTD, MUMBAI V. ITO WD 2(3)2, MUMBAI

ITA 3507/MUM/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 62281 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-04-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: J
• Next Hearing Date: 19-04-2012
• Assessment Year: 2000-2001
• Appeal Filed On: 04-05-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: D S SUNDER SINGH
• Assessee Lawyers: S U CHHABRIA
• Section: 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES J , MUMBAI BEFORE SHIRI R.S. SYAL, A.M. AND SHRI VIJAY PAL RAO , J.M. ITA NO. : 3506 & 3507/MUM/2010 ASSESSMENT YEARS : 1999-2000 & 2000-01 M/S. S UN POLYTRON INDUSTRIES LTD. FELTHAM HOUSE, GR. FLLOR, 10, J.N. HEREDIA MARG, BALLARD ESTATE, MUMBAI-400 001 PAN NO: AAACK 1985 F VS. I.T.O. WARD 2(3)2 AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400 020 (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S. U. CHHABRIA RESPONDENT BY : SHRI D. S. SUNDER SINGH DATE OF HEARING : 19.04.2012 DATE OF PRONOUNCEMENT : 25 .04.2012 ORDER PER VIJAY PAL RAO, J.M.: THESE APPEALS BY THE ASSESSEE ARE DIRECTED AGAINST THE COMPOSITE ORDER OF THE LD. CIT(A)-6, MUMBAI DATED 21.01.2010 FOR THE A.YS 1999- 2000 AND 2000-01. THE ASSESSEE HAS RAISED THE COMM ON ISSUES IN BOTH THE APPEALS. THE COMMON GROUND RAISED FOR THE A.Y. 1999-2000 ARE REPRODUCED AS UNDER :- 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL S) 6, MUMBAI (HEREINAFTER REFERRED TO AS THE LEARNED COMMISSIONER) ERRED IN LAW IN UPHOLDING THE ORDER OF THE ASSESSING OFFICER GIVING EFFECT TO THE CIT(A)XXXIII S ORDER DATED 25/05/2007 WITHOUT CONSIDERING THE EVIDENCE PRODUCED BEFORE HIM RELATING TO (A) INCOME FROM INT EREST WHICH WAS IN FACT RECEIVED FROM THE DEBTORS TO WHOM GOODS WERE ITA NOS : 3506 & 3507/MUM/2010 M/S.S UN POLYTRON INDUSTRIES LTD. 2 SUPPLIED, FOR DELAYING PAYMENTS AND (B) INTEREST ON FIXED DEPOSITS GIVEN TO SYNDICATE BANK FOR SERCURING BANK GUARANTEE FOR PROCURING ELECTRICITY CONNECTION FROM GUJARAT ELECTRICITY BOARD. HENCE THIS INCOME WAS FROM INDU STRIAL UNDERTAKING FOR THE PURPOSES OF COMPUTING DEDUCTION U/S.80IA OF THE INCOME TAX ACT, 1961 (THE ACT). HE OUGHT NOT TO HAVE DONE SO. 2. THE LEARNED COMMISSIONER ERRED IN LAW IN UPHOLDI NG THE CHARGING INTEREST OF EXORBITANT AMOUNT OF `. 30,067/- U/S.234A OF THE ACT EVENTHOUGH THE DELAY IN FILING RETURN OF INCOME WAS ADMITTEDLY ONLY FOR ONE MONTH WHICH WAS EXTENDED BY CBDT CIRCULAR. HE OUGHT NOT TO HAVE DO NE SO. 3. THE LEARNED COMMISSIONER ERRED IN LAW IN UPHOLDI NG THE CHARGING INTEREST OF EXORBITANT AMOUNT OF `. 2,70,605/- U/S.234B OF THE ACT. HE OUGHT NOT TO HAVE DONE SO. THE APPELLANT DENIES ITS LIABILITY TO PAY INTEREST U/S. 234B OF THE ACT. 2. GROUND NO. 1 IS REGARDING THE DISALLOWANCE OF DE DUCTION U/S.80IA ON THE INTEREST RECEIVED ON FIXED DEPOSIT WITH BANK S. WE HAVE HEARD THE LEARNED AR AS WELL AS THE LEARNED DR AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. THESE APPEALS ARE ARISING FROM THE GIVING EFFECTIVE ORDER PASSED BY THE A.O. IN PURSUANT TO THE ORDERS DATED 25.05.2007 OF THE LD. CIT(A). UNDISPUTEDLY, THE ASSESSEE DID NOT CHALLENGED THE ORDER OF THE LD. CIT(A) DATED 25.05.2007, WHEREBY THE LD. CIT(A) HAS GIVEN A FINDING THAT THE INTEREST INCOME AND PROFIT ON SALE OF INVESTMENT ARE NOT INCOME DERIVED FROM INDUSTRIAL UNDERTAKING, HENCE A RE NOT ELIGIBLE FOR DEDUCTION U/S.80IA OF THE ACT. ONLY WITH REGARD TO THE MISCELLANEOUS INCOME, THE LD. CIT(A) DIRECTED THE A.O. TO EXAMINE WHETHER THIS RECEIPTS ARE DERIVED FROM THE INDUSTRIAL UNDERTAKING OR NOT. THEREFORE, THE ISSUE OF DEDUCTION U/S.80IA ON THE INTEREST INCOME AND PR OFIT ON SALE OF INVESTMENT WAS DECIDED BY THE LD. CIT(A) IN THE FIR ST GROUND OF LITIGATION AND SINCE, THE ASSESSEE DID NOT CHALLENGE THE ORDER OF THE LD. CIT(A), THEREFORE, THE SAID FINDING OF THE LD. CIT(A) HAS A TTENDED THE FINALITY. ITA NOS : 3506 & 3507/MUM/2010 M/S.S UN POLYTRON INDUSTRIES LTD. 3 3. IN THE GIVING EFFECT ORDER, THE A.O. WAS NOT TO EXAMINE ANY ISSUE OF DEDUCTION OF 80IA WITH RESPECT TO INTEREST INCOME A ND PROFIT ON INVESTMENTS BUT ONLY WITH RESPECT TO MISCELLANEOUS INCOME WAS TO BE EXAMINED AND DECIDED BY THE A.O. THEREFORE, WHEN T HE ISSUE OF DEDUCTION U/S.80IA ON INTEREST INCOME WAS DECIDED B Y THE LD. CIT(A) AND WAS NOT CHALLENGED, THEN IN THE SECOND ROUND OF LIT IGATION, THE ASSESSEE CANNOT BE PERMITTED TO CHALLENGE THE SAID ISSUE, AS THE SAME DOES NOT ARISE FROM THE IMPUGNED ORDER OF A.O. WHICH WAS LIM ITED ONLY TO THE ISSUE OF MISCELLANEOUS INCOME. ACCORDINGLY, WE DO NOT FIND ANY MERIT OR SUBSTANCE IN THIS GROUND AS RAISED BY THE ASSESSEE. HENCE DISMISSED. 4. GROUND NO. 2 IS REGARDING THE CHARGING OF INTERE ST U/S.234A. WE HAVE HEARD THE LEARNED AR AS WELL AS THE LEARNED DR AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. THE LEARNED AR OF THE ASSESSEE HAS POINTED OUT THAT FOR THE A.Y. 1999-2000, THE CBDT VIDE ITS CIRCULAR HAD EXTENDED THE DATE OF FILING OF THE RETURN WHICH HAS NOT BEEN CONSIDERED BY THE A.O. WHILE CHARGING THE INTEREST U/S.234A. SINCE, THIS A SPECT HAS NOT BEEN CONSIDERED BY THE AUTHORITY BELOW, THEREFORE, IN TH E INTEREST OF JUSTICE WE SET ASIDE THIS ISSUE TO THE RECORD OF THE A.O. FOR LIMITED PURPOSE TO VERIFY AND DECIDE THE SAME IN THE LIGHT OF THE CBDT CIRCUL AR, IF ANY. 5. GROUND NO.3 IS REGARDING THE LEVY OF INTEREST U/ S.234B. THE LEVY OF INTEREST U/S.234B IS CONSEQUENTIAL IN NATURE, THERE FORE, NO SPECIFIC FINDING IS REQUIRED. THIS GROUND IS ACCORDINGLY DI SMISSED. 6. THE NEXT GROUND RAISED BY THE ASSESSEE FOR THE A .Y. 2000-01 IS THE CHARGING OF INTEREST U/S.234D. WE HAVE HEARD THE L EARNED AR AS WELL AS THE LEARNED DR AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CI T VS. BAJAJ HINDUSTAN LTD. VIDE ORDER DATED 15.04.2009 IN ITA NO.198/MUM/ 2009 HAS HELD ITA NOS : 3506 & 3507/MUM/2010 M/S.S UN POLYTRON INDUSTRIES LTD. 4 THAT THE PROVISION U/S.234D HAS COME ON STATUTE BOO K W.E.F 01.04.2003. ACCORDINGLY, THE SAID PROVISION DOES NOT HAVE RETRO SPECTIVE EFFECT. THE A.O. IS DIRECTED TO DECIDE THIS ISSUE IN THE LIGHT OF THE DECISION OF HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF BAJAJ HIND USTAN LTD. (SUPRA). 7. THE ASSESSEE HAS ALSO RAISED THE GROUND FOR THE A.Y. 2000-01 REGARDING THE INTEREST U/S.220(2) AS UNDER :- 6. THE ASSESSING OFFICER ERRED IN LAW IN CHARGING INTEREST OF `. 85,929/- U/S.220(2) OF THE ACT. THE APPELLANT DENI ES ITS LIABILITY TO PAY INTEREST U/S.220(2) OF THE ACT. 7.1 SINCE THIS ISSUE DOES NOT ARISE FROM THE IMPUGN ED ORDERS IN THE REGULAR ASSESSMENT, THEREFORE, THE SAME CANNOT BE D ECIDED IN THE PRESENT PROCEEDINGS. ACCORDINGLY DISMISSED. 8. IN THE RESULT, BOTH THE APPEALS FILED BY THE ASS ESSEE ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THIS 25 TH DAY OF APRIL, 2012. SD/- SD/- ( R.S. SYAL ) ( VIJAY PAL RAO ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DT: 25.04.2012 COPY FORWARDED TO : 1. THE APPELLANT, 2. THE RESPONDENT, 3. THE C.I.T. 4. CIT (A) 5. THE DR, - BENCH, ITAT, MUMBAI //TRUE COPY// BY ORDER ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI ROSHANI