ITO, New Delhi V. M/s. National High Power Test Laboratory Pvt. Ltd., New Delhi

ITA 392/DEL/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 2829 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 7 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-09-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2013-2014
• Appeal Filed On: 24-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 6; 56

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES E: DELHI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI B.R.R. KUMAR, ACCOUNTANT MEMBER ITA.NO.392/DEL./2017 ASSESSMENT YEAR 2013-2014 THE INCOME TAX OFFICER, WARD-17(4), ROOM NO.225D, C.R. BUILDING, I.P. ESTATE, NEW DELHI. VS., M/S. NATIONAL HIGH POWER TEST LABORATORY PVT. LTD., NTPC BHAWAN, CORE-7, INSTITUTIONAL AREA, NEW DELHI 110 003. PAN AADCN0782A (APPELLANT) (RESPONDENT) FOR REVENUE : MS. RINKU SINGH, SR. D.R. FOR ASSESSEE : -NONE- DATE OF HEARING : 14.08.2019 DATE OF PRONOUNCEMENT : 02.09.2019 ORDER PER BHAVNESH SAINI, J.M. THIS APPEAL BY REVENUE HAS BEEN DIRECTED AGAINST THE ORDER OF THE LD. CIT(A)-6, DELHI, DATED 09.11.2 016 FOR THE A.Y. 2013-2014, ON THE FOLLOWING GROUNDS : 1. WHETHER IN FACTS AND CIRCUMSTANCES OF THE CASE, TH E LD. CIT(A) IS LEGALLY JUSTIFIED IN HOLDING THAT INT EREST 2 ITA.NO.392/DEL./2017 M/S. NATIONAL HIGH POWER TEST LABORATORY PVT. LTD., NEW DELHI. INCOME EARNED ON SURPLUS FUNDS DURING THE PRE- COMMENCEMENT OF BUSINESS IS NOT LIABLE TO TAX U/S 5 6 OF THE INCOME TAX ACT (THE ACT) ? 2. WHETHER IN FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE RATIO DECIDENDI AS LAID DOWN BY HONBLE APEX COURT IN CASE OF TUTICORIN ALKALI CHEMICALS AN D FERTILIZERS LTD. VS CIT(1997) 227 ITR 172 (SC) AND CIT VS. COROMANDAL CEMENT LTD. (1998) 134 ITR 412 IS APPLICABLE TO THE FACTS AND CIRCUMSTANCES OF THE CA SE? 3. WHETHER IN FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) IS LEGALLY JUSTIFIED IN FOLLOWING THE OR DER OF HIS PREDECESSOR ON THE ISSUE IGNORING THE DECISION OF HONBLE SUPREME COURT IN CASE OF TUTICORIN ALKALI CHEMICALS AND FERTILIZERS LTD. VS CIT ? 2. BRIEFLY THE FACTS OF THE CASE ARE THAT A.O. ON PERUSAL OF THE OF NOTE OF OTHER INCOME OF THE S TATEMENT OF PROFIT AND LOSS ACCOUNT OBSERVED THAT THE ASSESSEE COMPANY HAS SHOWN RECEIPT OF RS.2,39,21,154/- ON AC COUNT OF INTEREST INCOME FROM INDIAN BANKS. THE ASSESSEE HAS REDUCED THE ENTIRE RECEIPTS ON ACCOUNT OF INTEREST FROM THE 3 ITA.NO.392/DEL./2017 M/S. NATIONAL HIGH POWER TEST LABORATORY PVT. LTD., NEW DELHI. TOTAL EXPENDITURE DURING CONSTRUCTION PERIOD AND TH E NET AMOUNT HAS BEEN TRANSFERRED TO THE CAPITAL WORK-IN- PROGRESS. THE A.O. ASKED THE EXPLANATION OF ASSESSE E AS TO WHY THE INTEREST RECEIVED FROM THE BANK BE NOT ASSE SSED AS INCOME UNDER THE HEAD INCOME FROM OTHER SOURCES. THE A.O. AFTER CONSIDERING EXPLANATION OF ASSESSEE TREA TED THE ENTIRE INTEREST INCOME ON FDR OF RS.2,39,21,156/- A S INCOME UNDER THE HEAD INCOME FROM OTHER SOURCES. THE ASSESSEE CHALLENGED THE ADDITION BEFORE THE LD. CIT (A) AND SEVERAL DECISIONS WERE RELIED UPON IN SUPPORT OF TH E CONTENTION THAT IT IS NOT TAXABLE. THE LD. CIT(A) F OUND THAT HE HAS DECIDED SIMILAR ISSUE IN PRECEDING A.Y. 2012 -2013 AND ADDITION HAVE BEEN DELETED. THE LD. CIT(A) FOLL OWING HIS ORDER FOR A.Y. 2012-2013 DELETED THE ADDITION. 3. THE LD. D.R. FAIRLY STATED THAT IN PRECEDING A. Y. 2012-2013 THE DEPARTMENTAL APPEAL HAVE BEEN DISMISS ED BY ITAT, DELHI F-BENCH IN ITA.NO.5740/DEL./2015 VIDE O RDER DATED 15.02.2019. COPY OF THE ORDER IS PLACED ON RE CORD. 4 ITA.NO.392/DEL./2017 M/S. NATIONAL HIGH POWER TEST LABORATORY PVT. LTD., NEW DELHI. 4. CONSIDERING THE ABOVE FACTS, IT IS CLEAR THAT ISSUE IS COVERED BY THE ORDER OF ITAT, DELHI F-BENCH IN T HE CASE OF SAME ASSESSEE FOR PRECEDING A.Y. 2012-2013 WHEREBY THE FINDINGS OF THE LD. CIT(A) HAVE BEEN UPHELD BY DISM ISSING THE DEPARTMENTAL APPEAL. FOLLOWING THE SAME ORDER, WE DO NOT FIND ANY MERIT IN THE DEPARTMENTAL APPEAL AND T HE SAME IS ACCORDINGLY DISMISSED. 5. IN THE RESULT, APPEAL OF DEPARTMENT DI SMISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (B.R.R. KUMAR) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DELHI, DATED 2 ND SEPTEMBER, 2019 VBP/- COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. CIT(A) CONCERNED 4. CIT CONCERNED 5. D.R. ITAT E BENCH 6. GUARD FILE //BY ORDER// ASST. REGISTRAR : ITAT : DELHI BENCHES : DELHI. 5 ITA.NO.392/DEL./2017 M/S. NATIONAL HIGH POWER TEST LABORATORY PVT. LTD., NEW DELHI. DATE OF DICTATION 14.08.2019 DATE ON WHICH THE TYPED DRAFT ORDER IS PLACED BEFOR E THE DICTATION MEMBER 14.08.2019 DATE ON WHICH THE APPROVAL DRAFT COMES TO THE SR. P S 02.09.2019 DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATION MEMBER FOR PRONOUNCEMENT 02.09.2019 DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S. 02.09.2019 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT 02.09.2019 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 03. 09.2019 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER.