ADIT (IT) 1(2), MUMBAI V. DBS BANK LTD, MUMBAI

ITA 442/MUM/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3941 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 6 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-07-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: L
• Next Hearing Date: 30-07-2013
• Assessment Year: 2001-2002
• Appeal Filed On: 17-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AJAY SHRIVASTAVA
• Assessee Lawyers: P J PARDIWALLA

Judgement Text

, , , , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES L, MUMBAI . , !' #$ %& , ' #$, ! ( BEFORE SHRI B. RAMAKOTAIAH, AM AND SHRI VIJAY PAL RAO JM ITA NO.442 /MUM/2011: ASST.YEAR 2001-2002 ASSISTANT DIRECTOR OF INCOME TAX (IT) 1(2),119 SCINDIA HOUSE, BALLARD PIER, MUMBAI 400 038. M/S DBS BANK LTD. 3 RD FLOOR, FORT HOUSE, 221, DR. D.N. ROAD, FORT MUMBAI- 400 001 PAN : AAACT4652J ( )* / // / APPELLANT) , , , , / VS. ( -.)*/ RESPONDENT) )* / // / 0 ! 0 ! 0 ! 0 ! / APPELLANT BY : MR. AJAY SHRIVASTAVA -.)* / 0 ! / 0 ! / 0 ! / 0 ! / RESPONDENT BY : MR. P.J. PARDIWALLA & MR. MADHUR AGARWAL , / 1' / / / / DATE OF HEARING : 30.07.2013 23 / 1' / DATE OF PRONOUNCEMENT : 30 .07 .2013 #!4 #!4 #!4 #!4 / O R D E R SHRI VIJAY PAL RAO ( JM) : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 5 TH OCTOBER. 2010 OF CIT(A) FOR THE ASSESSMENT YEAR 200 1-02. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS IN THIS APPEAL. 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, WHETHER THE LD. CIT(A) WAS JUSTIFIED IN HOLDING THA T THE ASSESSING OFFICER HAS WRONGLY APPLY THE PROVISIONS OF SECTION 44C OF THE IT ACT IN ALLOWING THE HEAD OFFICE EXPENSES OF RS.71,0 8,008/- 2. ON THE FACT AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, WHETHER THE LD. CIT(A) WAS JUSTIFIED IN HOLDING THA T THE CLAIM OF NATIONAL PROFIT ON RE-VALUATION OF SECURITIES AND O N RE-VALUATION OF FOREIGN EXCHANGE CONTRACT IS AN ALLOWABLE DEDUCTION WITHOUT APPRECIATING THE FACT THAT NOTIONAL LOSS WAS DISALL OWED IN EARLIER YEARS. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, WHETHER THE LD. CIT(A) WAS JUSTIFIED IN ALLOWING TH E EXEMPTION ON ACCOUNT OF INTEREST ON TAX FREE BONDS CLAIMED RS.66 ,50,000/- AS ITA NO .442/ MUM/2011 DBS BANK LTD. MUMBAI. 2 AGAINST ALLOWED BY THE ASSESSING OFFICER OF RS.12,4 4,662/- HOLDING THAT EXEMPTION CAN BE GRANTED TO THE ASSESSEE ONLY IN RESPECT OF THE NET INCOME ARISING TO IT UNDER THE CATEGORY OF EXEM PT INCOME. 3. WE HAVE HEARD THE LD. DR AS WELL AS LD. SENIO R COUNSEL FOR THE ASSESSEE AND CAREFULLY PERUSED THE RELEVANT RECORD. AT THE O UTSET WE NOTE THAT THIS IS SECOND ROUND OF LITIGATION BEFORE THIS TRIBUNAL. IN THE FIRST ROUND BOTH THE ASSESSES AS WELL AS REVENUE CHALLENGED THE ORDER OF CIT(A) DATED 25.12.2004 IN ITA NO. 2037 OF 2005 AND 2269 OF 2005 RESPECTIVELY. THE ASSESSEE IMPUGNED THE EARLIER ORDER OF CIT(A) BEFORE THIS TRIBUNAL ON LY IN RESPECT OF NON ADMISSION OF THE ADDITIONAL GROUND RELATING TO THE ASSESSEES CLAIM FOR EXEMPTION UNDER SECTION 10(23G) OF THE ACT. THE TRIBUNAL WHILE DECI DING THE ASSESSEES APPEAL IN THE FIRST ROUND VIDE ORDER DATED 03.12.2007 HAS DIS POSED OF THE ONLY GROUND RAISED BY THE ASSESSEE AS UNDER: THIS APPEAL BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2001-02 IS DIRECTED AGAINST THE ORDER OF CIT(A). THE ONLY GROU ND OF APPEAL OF THE ASSESSEE IS AS UNDER:- 1. THE CIT(A) ERRED IN NOT ADMITTING THE ADDITIO NAL GROUND OF APPEAL RELATING TO THE APPELLANTS CLAIM FOR EXEMPTI ON U/S. 10(23G) OF THE ACT IN RESPECT OF INTEREST OF RS.1,4 1,58,150/- ON THE LONG TERM LOAN ADVANCED TO M/S. PSA SICAL TERMI NALS LTD. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE CIT(A) SHOULD HAVE ADMITTED THE ADDITIONAL GROUND OF APPEAL RELAT ING TO ASSESSEES CLAIM FOR EXEMPTION U/S. 10(23G) OF THE ACT IN RESP ECT OF THE INTREST RS.1.41 CRORES ON THE LONG TERM LOAN ADVANCED TO M/ S. PSA SICAL TERMINALS LTD.. HE SUBMITTED THAT THE ASSESSEE IS E NTITLED TO RAISE GROUND OF APPEAL FOR THE FIRST BEFORE THE CIT(A) AS HELD BY THE HONBLE SUPREME COURT REPORTED IN 187 ITR 688 (SC). THE LD. DR HAS RELIED ON THE ORDER OF ASSESSING OFFICER AND THE CIT(A). W E HAVE CONSIDERED THE RIVAL SUBMISSIONS. IN THE FACTS OF THE CASE, WE HOLD THAT THE CIT(A) SHOULD HAVE ADMITTED THE ADDITIONAL GROUND OF APPEA L RELATING TO ASSESSEES CLAIM FOR EXEMPTION U/S. 10(23G) OF THE ACT IN RESPECT OF INTEREST ON THE LONG TERM LOAN ADVANCED TO M/S. PSA SICAL TERMINALS LTD. AND ACCORDINGLY, THE ORDER OF THE CIT(A) IS SE T ASIDE TO HIS FILE WITH DIRECTION TO PASS A DE NOVO APPELLATE ORDER ON MERITS AFTER ADMITTING THE ADDITIONAL GROUND OF APPEAL RELATING TO ASSESSEES CLAIM OF EXEMPTION U/S. 10(23G) OF THE ACT IN RESPECT OF INTEREST ON THE LONG ITA NO .442/ MUM/2011 DBS BANK LTD. MUMBAI. 3 TERM LOAN ADVANCED, AFTER ALLOWING DUE OPPORTUNITY OF HEARING TO THE PARTIES. WE DIRECT ACCORDINGLY. 3. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. THUS THE TRIBUNAL REMITTED THE ISSUE TO THE RECORD OF THE CIT(A) FOR DECIDING ON MERITS AFTER ADMITTING THE ADDITIONAL GROUND. HO WEVER, THE LD. CIT(A) WHILE PASSING THE IMPUGNED ORDER AS PER THE DIRECTION OF THIS TRIBUNAL HAS AGAIN DECIDED THE OTHER ISSUES WHICH WERE EARLIER CHALLEN GED BY THE REVENUE BEFORE THE TRIBUNAL THE REVENUE HAS NOT CHALLENGED THE FIN DINGS OF CIT(A) ON THE ADDITIONAL ISSUE REMANDED BY THE TRIBUNAL. THE ISSU ES RAISED IN THE PRESENT APPEAL ARE THE SAME WHICH WERE RAISED IN THE EARLIE R APPEAL IN ITA NO. 2269 OF 2005 AND HAVE BEEN DECIDED BY THIS TRIBUNAL VIDE OR DER DATED 20.04.2011. SINCE THE ISSUE RAISED BY THE REVENUE IN THE PRESEN T APPEAL HAVE ALREADY BEEN DECIDED BY THIS TRIBUNAL VIDE ORDER DATED 20.04.201 1 AND ATTAINED THE FINALITY THEREFORE, THE APPEAL FILED BY THE REVENUE IN RESPE CT OF THE ISSUES ALREADY DECIDED BECOME INFRUCTUOUS. 4. ACCORDINGLY WE DISMISS THE APPEAL OF THE REVENUE BEING INFRUCTUOUS. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMIS SED. ORDER PRONOUNCED ON THIS 30TH DAY OF JULY, 2013. #!4 / 23 5#,6 30.07.2013 / 7 SD/- SD/- ( B. RAMAKOTAIAH ) ( VIJAY PAL RAO, ) !' #$ / ACCOUNTANT MEMBER ' #$ ' #$ ' #$ ' #$ / JUDICIAL MEMBER MUMBAI ; 5#, DATED : 30 TH JULY, 2013. ASHISH * ITA NO .442/ MUM/2011 DBS BANK LTD. MUMBAI. 4 #!4 / -'18% 9!%31 #!4 / -'18% 9!%31 #!4 / -'18% 9!%31 #!4 / -'18% 9!%31/ COPY OF THE ORDER FORWARDED TO : 1. )* / THE APPELLANT 2. -.)* / THE RESPONDENT. 3. : () / THE CIT, MUMBAI. 4. : / CIT(A)-41 , MUMBAI 5. %=7 -'1', , , / DR, ITAT, MUMBAI 6. 7> ? / GUARD FILE. #!4, #!4, #!4, #!4, / BY ORDER, .%1 -'1 //TRUE COPY// @ @ @ @/ // /A & A & A & A & ( DY./ASSTT. REGISTRAR) , , , , / ITAT, MUMBAI DATE INITIAL 1. DRAFT DICTATED ON 30.07.13 PS 2. DRAFT PLACED BEFORE AUTHOR 30.07.13 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM