Dy. Commissioner Of Income Tax Central Circle-1, Nashik, Nashik V. Shri Ajit Bhavarlal Jain, Jalgaon , Jalgaon

ITA 464/PUN/2022

AI Insights

The case involves two appeals by the Revenue against Shri Ajit Bhavarlal Jain concerning the assessment years 2015-16 and 2016-17. The core issue in both appeals was the treatment of interest on refundable and adjustable deposits received by the assessee, a director at Jain Irrigation System Ltd. (JISL), under a license agreement. The Assessing Officer (AO) had treated these deposits as perquisites chargeable to tax under section 17(2)(viii) of the Income Tax Act, which was contested and subsequently deleted by the CIT(A). The Tribunal, referencing a previous decision in the assessee's own case and a Supreme Court judgment, upheld the deletion of the additions made by the AO.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 137766 (ITAT-PUNE)
• Duration Of Justice: 6 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-01-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 15-01-2023
• Assessment Year: 2016-2017
• Appeal Filed On: 16-06-2022
• Other Referred Cases: V.M. Salgaocar & Bros. (P) Ltd. Etc Vs. CIT (2000) 243 ITR 383 (SC)
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH, ‘A’ PUNE BEFORE SHRI R.S. SYAL, VICE PRESIDENT AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER आयकर अपील सं. / ITA Nos.463 & 464/PUN/2022 नधा रण वष / Assessment Years : 2015-16 and 2016-17 DCIT, Central Circle-1, Nashik Vs. Shri Ajit Bhavarlal Jain, N.H.No.6, C/o. Jain Irrigation System Ltd., Jain Fields, Bambhori, Jalgaon – 425 001 Maharashtra AALPJ3439R Appellant Respondent आदेश / ORDER PER R.S. SYAL, VP : These two appeals by the Revenue relate to the assessment years 2015-16 & 2016-17. Since a common issue is raised therein, we are, therefore, proceeding to dispose them off by this consolidated order for the sake of convenience. 2. For the A.Y. 2015-16, the Revenue is aggrieved by the deletion of addition of Rs.2,24,88,436/- made by the Assessing Officer (AO) treating such amount as perquisite chargeable to tax u/s.17(2)(viii) of the Act. Assessee by None Revenue by Shri Ramnath P. Murkunde Date of hearing 16-01-2023 Date of pronouncement 16-01-2023 ITA Nos.463 & 464/PUN/2022 Ajit Bhavarlal Jain 2 3. Briefly stated, the facts of the case are that the assessee is a director of M/s. Jain Irrigation System Ltd. (JISL). He, along with other co-owners of the property, renewed the license agreement with JISL. As per the agreement, the assessee received interest free refundable deposit and also interest free adjustable deposit, totalling upto Rs.17.29 crore. The AO held that the interest on such amount of deposits was to be taxed as perquisite in the hands of the assessee as he was a Director in the company which furnished such securities. The ld. CIT(A) deleted the addition by relying on Tribunal order for the earlier year. Assailing the said deletion, the Revenue has come up in appeal before the Tribunal. 4. The facts for the A.Y. 2016-17 are also admittedly similar. For this year, the AO made an addition towards notional interest to the tune of Rs.2.00 crore on deposits of Rs.15.89 crore, which came to be deleted by the ld. first appellate authority. 5. We have heard the ld. DR and gone through the relevant material on record. There is no appearance from the side of assessee despite notice. As such, we are proceeding to dispose of the appeal ex parte qua the assessee. ITA Nos.463 & 464/PUN/2022 Ajit Bhavarlal Jain 3 6. It is seen that the AO made the additions towards the notional interest on deposit received by the assessee, who is director in the company. The AO treated such amount as perquisite chargeable to tax. Similar issue came up for consideration before the Tribunal in the assessee’s own case for the A.Y. 2009-10. The Tribunal, vide its order dated 28-11-2014, has decided this issue in favour of the assessee by relying on the judgment of the Hon’ble Supreme Court in V.M. Salgaocar & Bros. (P) Ltd. Etc Vs. CIT (2000) 243 ITR 383 (SC). The ld. DR could not point out any distinguishing point qua the years under consideration requiring departure from the earlier view taken by the Tribunal in assessee’s own case. Respectfully following the precedent, we uphold the impugned orders. 7. In the result, the appeals are dismissed. Order pronounced in the Open Court on 16 th January, 2023. Sd/- Sd/- ( S.S. VISWANETHRA RAVI) (R.S.SYAL) JUDICIAL MEMBER VICE PRESIDENT पुणे Pune; िदनांक Dated : 16 th January, 2023 सतीश ITA Nos.463 & 464/PUN/2022 Ajit Bhavarlal Jain 4 आदेश की ितिलिप अ ेिषत/Copy of the Order is forwarded to: 1. अपीलाथ / The Appellant; 2. थ / The Respondent 3. The CIT(A) concerned 4. 5. The Pr. CIT concerned DR, ITAT, ‘A’ Bench, Pune 6. गाड फाईल / Guard file. आदेशानुसार/ BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण ,पुणे / ITAT, Pune Date 1. Draft dictated on 16-01-2023 Sr.PS 2. Draft placed before author 16-01-2023 Sr.PS 3. Draft proposed & placed before the second member JM 4. Draft discussed/approved by Second Member. JM 5. Approved Draft comes to the Sr.PS/PS Sr.PS 6. Kept for pronouncement on Sr.PS 7. Date of uploading order Sr.PS 8. File sent to the Bench Clerk Sr.PS 9. Date on which file goes to the Head Clerk 10. Date on which file goes to the A.R. 11. Date of dispatch of Order. *