DEUTSCHE BANK A.G., MUMBAI V. DY.CIT (IT),RANGE 1 (2), MUMBAI

ITA 3789/MUM/2010

• Counselvise Citation: 378919914 RSA 2010
• Duration Of Justice: 1 year(s) 11 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-04-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 19-04-2012
• Assessment Year: 1996-1997
• Appeal Filed On: 11-05-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RUPINDER BRAR
• Assessee Lawyers: NISHANT THAKKAR
• Section: 154; 244A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES D MUMBAI BEFORE SHRI DINESH KUMAR AGARWAL (J.M.) AND SHRI RAJENDRA (A.M.) ITA NO. 3789/MUM /2010 ASSESSMENT YEAR : 1996-97 ITA NO. 3790/MUM /2010 ASSESSMENT YEAR : 1997-98 ITA NO. 4182/MUM /2010 ASSESSMENT YEAR : 2002-03 DEUTSCHE BANK A.G. , FLOOR 3, NIRLON KNOWLEDGE PARK, BLOCK 1, WESTERN EXPRESS HIGHWAY, GOREGAON EAST, MUMBAI 4000063. PAN : AAACD 1390 F VS. THE DEPUTY DIRECTOR OF INCOME - TAX (INTERNATIONAL TAXATION), RANGE 1(2), SCINDIA HOUSE, BALLARD ESTATE, MUMBAI 400 038. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI NISHANT THAKKAR RESPONDENT BY : MS. RUPINDER BRAR DATE OF HEARING 19.4.2012 DATE OF PRONOUNCEMENT 27.4.2012 O R D E R PER DINESH KUMAR AGARWAL, J.M. THESE THREE APPEALS PREFERRED BY THE ASSESSEE ARE D IRECTED AGAINST THE SEPARATE ORDERS DATED 19-2-2010 FOR ASSESSMENT YEARS 1996-97 AND 1997-98 AND DTD. 15-3-2010 FOR A.Y. 2002-03 PASSED BY THE LD. CIT(A). ITA NO. 3789-90 & 4182/MUM/2010 DEUTSCHE BANK A.G. 2 SINCE FACTS ARE IDENTICAL AND ISSUE INVOLVED IS COM MON, ALL THESE APPEALS ARE DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE O F CONVENIENCE. 2. THE COMMON GROUND TAKEN BY THE ASSESSEE IN ALL T HESE APPEALS READS AS UNDER:- THE COMMISSIONER OF INCOME-TAX (APPEALS) 10 MUMBA I (CIT(A) OUGHT TO HAVE HELD THAT THE APPELLANTS HAD SUFFERED LOSS OF REVENUE ON ACCOUNT OF INTEREST UNDER SECTION 244A ON THE REFUND THAT W AS RIGHTLY DUE AS WELL AS POTENTIAL INCOME IT WOULD HAVE EARNED ON INTERES T IF IT WOULD HAVE RECEIVED IT ON TIME. 3. THE BRIEF FACTS OF THE ABOVE ISSUE ARE THAT IN THIS CASE THE A.O. HAS PASSED THE FOLLOWING ORDERS:- A.Y . ORDER PASSED DATE OF ORDER 1996-97 ORDER GIVING EFFECT TO ITATS ORDER 04-11-2 008 1996-97 ORDER PASSED U/S 154 11-03-2010 1997-98 ORDER GIVING EFFECT TO ITATS ORDER 05-11-2 008 2002-03 ORDER GIVING EFFECT TO CIT(A)S ORDER R.W.ORDER U/S 154 23-06-2008 THE ASSESSEE CLAIMED THAT THE INTEREST U/S 244A OF THE INCOME TAX 1961 (THE ACT) HAS NOT BEEN ALLOWED TILL THE ISSUE OF RE FUND VOUCHER. ON APPEAL, THE LD. CIT(A) HELD THAT THE APPELLANT IS N OT ENTITLED TO INTEREST ON INTEREST U/S 244A OF THE ACT AS THERE IS NO PROVIS IONS IN INCOME-TAX ACT BY WHICH THE AUTHORITIES CAN GRANT SUCH COMPENSATI ON AND ACCORDINGLY REJECTED THE CLAIM OF THE ASSESSEE. ITA NO. 3789-90 & 4182/MUM/2010 DEUTSCHE BANK A.G. 3 4. AT THE TIME OF HEARING, THE LD. COUNSEL FOR THE ASSESSEE SUBMITS THAT THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSE E BY THE DECISION OF THE HONBLE SUPREME COURT IN SANDVIK ASIA LTD. V. CIT ( 2006) 280 ITR 643 (SC), CIT VS. H.E.G. LTD.(2010) 189 TAXMAN 335 (SC) : 324 ITR 331 (SC) AND THE RECENT DECISION OF THE TRIBUNAL IN DY. DIT (IT) VS. M/S THE DEVELOPMENT BANK OF SINGAPORE LTD. IN ITA 4754/MUM/ 2010 ORDER DATED 31-01-2012 FOR A.Y. 2001-02. HE ALSO PLACED O N RECORD THE COPY OF THE SAID ORDER OF THE TRIBUNAL. HE, THEREFORE, SUB MITS THAT THE INTEREST U/S 244A BE ALLOWED UP TO THE DATE OF RECEIPT OF TH E REFUND. 5. THE LD. D.R., ON THE OTHER HAND, WHILE STRONGLY RELYING ON THE ORDER OF THE LD. CIT(A) SUBMITS THAT UNDER THE INCOME-TAX ACT THERE IS NO SUCH PROVISION TO ALLOW SUCH INTEREST AND, THEREFORE, TH E LD. CIT(A) WAS FULLY JUSTIFIED IN NOT ALLOWING THE SAME. SHE, THEREFORE , SUBMITS THAT THE ORDER PASSED BY THE LD. CIT(A) BE UPHELD. 6. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS O F THE RIVAL PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FI ND THAT THE FACTS ARE NOT IN DISPUTE IN ASMUCH AS IT IS ALSO NOT IN DISPU TE THE A.O. HAS NOT GRANTED THE INTEREST U/S 244A UPTO THE DATE OF ISSU E /RECEIPT OF REFUND. 7. IN SANDVIK ASIA LTD. (SUPRA) IT HAS BEEN HELD TH AT THE ASSESSEE WAS ENTITLED TO INTEREST ON THE AMOUNTS OF INTEREST PAID UNDER SECTION 214 ITA NO. 3789-90 & 4182/MUM/2010 DEUTSCHE BANK A.G. 4 AND/OR SECTION 244, AND THAT THE DEPARTMENT WAS BOU ND TO GRANT INTEREST WHICH HAD ACCRUED FOR THOSE PERIODS. 8. IN H.E.G. LTD.(SUPRA) IT HAS BEEN HELD (HEAD NOT E OF (2010) 324 ITR 331(SC): HELD, REJECTING THE CLAIM OF THE DEPARTMENT, THAT T HE INTEREST COMPONENT PARTOOK OF THE CHARACTER OF AMOUNT DUE UNDER SECT ION 244A AND BECAME AN INTEGRAL PART OF RS. 45,73,528/- WHICH WAS NOT P AID FOR 57 MONTHS AFTER THAT AMOUNT BECAME PAYABLE. THE ASSESSEE WAS ENTIT LED TO INTEREST FOR 57 MONTHS ON RS. 45,73,528/-. 9. IN THE DEVELOPMENT BANK OF SINGAPORE LTD. (SUPRA ) THE TRIBUNAL DIRECTED THE A.O. TO ALLOW INTEREST ON INTEREST IN ACCORDANCE WITH THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE O F SANDVIK ASIA LTD. (SUPRA). 10. RESPECTFULLY FOLLOWING THE AUTHORITATIVE PRONOU NCEMENT OF THE HONBLE SUPREME COURT IN H.E.G. LTD. (SUPRA) WE ARE OF THE VIEW THAT ALL THE DECISIONS RELIED ON BY THE REVENUE ARE DISTINGU ISHABLE AND NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. THIS BEING SO WE DIRECT THE A.O. TO ALLOW THE INTEREST U/S 244A IN ACCORDANCE W ITH THE DECISION OF HONBLE APEX COURT IN THE CASE OF H.E.G. LTD. (SUPR A). THE COMMON GROUNDS TAKEN BY THE ASSESSEE IN ALL THESE THREE AP PEALS ARE, THEREFORE, ALLOWED. ITA NO. 3789-90 & 4182/MUM/2010 DEUTSCHE BANK A.G. 5 11. IN THE RESULT, APPEALS FILED BY THE ASSESSEE AR E ALLOWED. ORDER PRONOUNCED ON THIS 27 TH DAY OF APRIL, 2012. SD/ - (RAJENDRA) ACCOUNTANT MEMBER SD/ - (DINESH KUMAR AGARWAL) JUDICIAL MEMBER MUMBAI, DATED : 27 TH APRIL , 2012. RK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER OF INCOME TAX (APPEALS)- 7, MUMBAI 4. COMMISSIONER OF INCOME TAX 3, MUMBAI 5. DEPARTMENTAL REPRESENTATIVE, BENCH D, MUMBAI //TRUE COPY// BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI