The DCIT, Circle-1(1), Vijayawada V. M/s The KCP Ltd., Chennai

ITA 514/VIZ/2010

• Counselvise Citation: [2011] 119 COUNSELVISE.COM (IT) 6911 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 6 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-06-2011
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 31-03-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 26-11-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: N RAUL
• Assessee Lawyers: C SUBRAMANYAM

Judgement Text

ITA NO 514 OF 2010 THE KCP LTD CHENNAI PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE: SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI BR BASKARAN, ACCOUNTANT MEMBER ITA NO.514/VIZAG/2010 ASSESSMENT YEAR:2007-08 DCIT CIRCLE-1(1) VIJAYAWADA VS. THE KCP LTD., CHENNAI (APPELLANT) (RESPONDENT) PAN NO:AAACT 8046 J ASSESSEE BY: SHRI C. SUBRAMANYAM, CA DEPARTMENT BY: SHRI N. RAUL, CIT ORDER PER SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST TH E ORDER OF THE CIT (A) MAINLY ON TWO GROUNDS. ONE IS WITH REGARD TO TH E DISALLOWANCE OF EXPENSES CLAIMED UNDER THE HEAD LIQUIDATED DAMAGES AND THE OTHER IS WITH REGARD TO DISALLOWANCE OF CLAIM RAISED UNDER THE HE AD FOREIGN EXCHANGE FLUCTUATION. 2. DURING THE COURSE OF HEARING OF THE APPEAL, THE LD COUNSEL FOR THE ASSESSEE HAS INVITED OUR ATTENTION TO THE ORDER OF THE TRIBUNAL IN THE ASSESSES OWN CASE FOR THE ASSESSMENT YEAR 2004-05 T O 2006-07 WITH THE SUBMISSIONS THAT BOTH THE ISSUES ARE COVERED BY THI S JUDGMENT. WITH REGARD TO THE DISALLOWANCE OF EXPENSES CLAIMED UNDE R THE HEAD LIQUIDATED ITA NO 514 OF 2010 THE KCP LTD CHENNAI PAGE 2 OF 3 DAMAGES THE LD COUNSEL FOR THE ASSESSEE HAS SUBMITT ED THAT THE CIT (A) HAS ADJUDICATED THE ISSUE FOLLOWING THE ORDER OF TH E TRIBUNAL. THEREFORE, THERE IS NO ERROR OR MISTAKE OR INFIRMITY IN THE OR DER OF THE CIT (A). 3. WE HAVE CAREFULLY EXAMINED THE ORDER OF THE LOWE R AUTHORITIES AND WE FIND THAT THE IMPUGNED ISSUE HAS BEEN ADJUDICATE D BY THE TRIBUNAL FOLLOWING THE ORDER OF THE SPECIAL BENCH OF THE INC OME TAX APPELLATE TRIBUNAL AND ALLOWED THE CLAIM OF LIQUIDATED DAMAGE S. THIS ORDER OF THE TRIBUNAL WAS FOLLOWED BY THE CIT (A) WHILE ADJUDICA TING THE IMPUGNED ISSUE. WE THEREFORE, FIND NO INFIRMITY IN THE ORDER OF THE CIT (A) AS HE WAS BOUND BY THE ORDERS OF THE TRIBUNAL. WE ACCORDINGLY CONFIRM THE ORDER OF THE CIT (A) IN THIS REGARD. 4. OTHER ISSUE IS WITH REGARD TO DISALLOWANCE OF CL AIM UNDER THE HEAD FOREIGN EXCHANGE FLUCTUATION. OUR ATTENTION WAS INV ITED THAT THE ISSUE WAS ALSO COVERED BY THE ORDER OF THE TRIBUNAL IN THE AS SESSES OWN CASE PERTAINING TO THE ASSESSMENT YEAR 2001-02, 2004-05 AND 2006-07. IN THOSE ORDERS THE TRIBUNAL HAS SET ASIDE THE ISSUE T O THE FILE OF THE ASSESSING OFFICER WITH THE DIRECTION TO CORRELATE T HE FOREIGN EXCHANGE LOSS/GAINS TO SPECIFIC ASSETS AND DECIDE THE ISSUE AFRESH IN ACCORDANCE WITH THE PRINCIPLE STATED AND ALSO IN ACCORDANCE WI TH THE LAW. SINCE THE IMPUGNED ISSUE IS SQUARELY COVERED BY THE AFORESAID ORDER OF THE TRIBUNAL, WE SET ASIDE THE ORDER OF THE CIT (A) AND RESTORE T HE ISSUE BACK TO THE FILE OF THE ASSESSING OFFICER WITH THE DIRECTIONS TO COR RELATE THE FOREIGN EXCHANGE LOSS /GAINS TO SPECIFIC ASSETS AND DECIDE THE ISSUE AFRESH IN ITA NO 514 OF 2010 THE KCP LTD CHENNAI PAGE 3 OF 3 ACCORDANCE WITH THE PRINCIPLES LAID DOWN IN THAT OR DER OF THE TRIBUNAL AND ALSO IN ACCORDANCE WITH THE LAW. 5. IN THE RESULT THE APPEAL OF THE REVENUE IS PARTL Y ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 2/6/2011. SD/- SD/- (BR BASKARAN) (SUNIL KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER PVV/SPS VISAKHAPATNAM, DATE: 2 ND JUNE, 2011 COPY TO 1 THE DCIT CIRCLE-1(1) VIJAYAWADA 2 THE K C P LTD., NO.2, RAMAKRISHNA BUILDINGS, DR. PV CHERIAN CRESCENT ROAD, EGMORE, CHENNAL 600 008 3 4. THE CIT VIJAYAWADA THE CIT(A),VIJAYAWADA 5 THE DR, ITAT, VISAKHAPATNAM. 6 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM