M/s Sangamesh Sugars Limited, Belagavi V. The Income Tax Officer, Ward - 1(4), Belagavi

ITA 403/PAN/2018

AI Insights

M/s. Sangamesh Sugars Limited appealed against the orders of the CIT(A), Belagavi, which upheld the Income Tax Officer's additions of interest income received on term deposits for the assessment years 2011-12 and 2012-13. The primary contention of the assessee was that these interest incomes should not be taxed as they were offset by the preliminary and pre-operative expenses incurred before the commencement of business operations. However, both the CIT(A) and the Tribunal found no merit in this argument, concluding that such expenses could not be set off against the income earned from term deposits, as the business activities had not commenced during the relevant financial years.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 136997 (ITAT-PANAJI)
• Duration Of Justice: 4 year(s) 4 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-01-2023
• Appeal Filed By: Assessee
• Order Result: DismissedDismissed
• Bench Allotted: SMC
• Next Hearing Date: 15-01-2023
• Assessment Year: 2011-2012
• Appeal Filed On: 19-09-2018
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI ‘SMC’ BENCH : PANAJI (THROUGH VIRTUAL HEARING) BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER ITA.No.403/PAN/2018 Assessment Year 2011-12 M/s. Sangamesh Sugars Limited, Represented by Chief Executive Officer, At Post : Naganur, Taluka : Athani, Dist. Belagavi. PIN - 591 240 PAN AANCS4976M vs., The Income Tax Officer, Ward-1(4), Feroz Building, Opp. Civil Hospital, Dr. B.R. Ambedkar Road, Belagavi - PIN 590 001. Karnataka. (Appellant) (Respondent) ITA.No.404/PAN/2018 Assessment Year 2012-2013 M/s. Sangamesh Sugars Limited, Represented by Chief Executive Officer, At Post : Naganur, Taluka : Athani, Dist. Belagavi. PIN - 591 240 PAN AANCS4976M vs., The Income Tax Officer, Ward-1(1), Feroz Building, Opp. Civil Hospital, Dr. B.R. Ambedkar Road, Belagavi - PIN 590 001. Karnataka. (Appellant) (Respondent) For Assessee : Shri Omkar Godbole, C.A. For Revenue : Shri N. Shrikant Date of Hearing : 16.01.2023 Date of Pronouncement : 25.01.2023 ORDER These assessee’s twin appeals for assessment years 2011-12 & 2012-13, arise against the CIT(A), Belagavi’s separate orders, both dated 18.06.2018, passed in case ITA.No.04/BGV/2016-17 and in case No.339/BGM/2014-15, in proceedings u/s. 143(3) r.w.s. 147 of the Income Tax Act, 2 ITA.No.403 & 404/PAN/2018 1961 and in proceedings u/s. 143(3) of the Income Tax Act, 1961, (in short "the Act") assessment year-wise, respectively. Heard both the parties. Case file perused. 2. It emerges during the course of hearing that the assessee’s identical sole substantive grievance raised in both these appeals seeks to reverse the learned lower authorities action adding interest income of Rs.3,18,602/- and Rs.11,71,029/- [received on term deposits] during the course of assessment and upheld in the CIT(A)'s order(s) as follows : 3 ITA.No.403 & 404/PAN/2018 3. I have given my thoughtful consideration to vehement rival stands and find no merit in the assessee’s arguments. This is for the precise reason in light of the CIT(A)'s detailed discussion extracted in the preceding paragraph that the impugned deduction for preliminary and pre-operative expenses prior to commencement of the assessee’s business could hardly be given to be set-off against any other income. Learned CIT(A) has already concluded that the assessee could very well amortize or capitalize the impugned expenditure since it had not even commenced its manufacturing activities in both these financial years. Faced with the situation, I find no merit in assessee’s instant substantive ground. The same is rejected therefore. Ordered accordingly. 4. These assessee’s twin appeals are dismissed in above terms. A copy of this common order be placed in the respective case files. Order pronounced in the open court on 25.01.2023. Sd/- [SATBEER SINGH GODARA] JUDICIAL MEMBER Pune, Dated 25 th January, 2023 VBP/- 4 ITA.No.403 & 404/PAN/2018 Copy to 1. The appellant 2. The respondent 3. The Ld. CIT(A) concerned. 4. The CIT concerned 5. D.R. ITAT, Panaji ‘SMC’ Bench, Panaji 6. Guard File. //By Order// Assistant Registrar, ITAT, Pune Benches, Pune.