M/s. Millennium Alcobev Private Limited, Bangalore V. DCIT, CHENNAI

ITA 527/CHNY/2009

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 58029 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 10 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-03-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 13-03-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 16-04-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI BEFORE DR. O.K.NARAYANAN, VICE-PRESIDENT AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER ITA NOS.1045(MDS)/2007, 2093(MDS)/2008, & 1619(MDS) /2009 ASSESSMENT YEARS : 2003-04, 2004-05 & 2005-06 THE INCOME-TAX OFFICER, CO.WARD IV(1), CHENNAI/THE DY.COMMR./ASST.COMMR., CO.CLE.IV(3), CHENNAI. VS. M/S.MILLENNIUM ALCOBEV PVT. LTD., UB TOWER, LEVEL 4, UB CITY, 24-VITTAL MALLAYYA RD., BANGALORE-560 001. PAN AAACC3674M. (APPELLANT) (RESPONDENT) AND ITA NOS.2019(MDS)/2008 & 527(MDS)/2009 ASSESSMENT YEARS : 2004-05 & 2005-06 M/S.MILLENNIUM ALCOBEV PVT. THE DEPUTY COMMISSIONER LTD., BANGALORE. VS. OF IT,CO.CLE.IV(1), CHENNAI (APPELLANT) (RESPONDENT) DEPARTMENT BY : SHRI SHAJI P JACOB, IRS, COMMI SSIONER OF IT. ASSESSEE BY : NONE DATE OF HEARING : 13 TH MARCH, 2012 DATE OF PRONOUNCEMENT : 13 TH MARCH, 2012 O R D E R PER DR.O.K.NARAYANAN, VICE-PRESIDENT: THIS IS A BUNCH OF FIVE APPEALS, FILED BOTH BY TH E REVENUE AND THE ASSESSEE. THE APPEAL IN ITA NO.1045(MDS)/2 007 FOR THE - - ITA 1045 OF 2007, 2093 OF 2008, ETC. 2 ASSESSMENT YEAR 2003-04 IS FILED BY THE REVENUE. F OR THE ASSESSMENT YEAR 2004-05 BOTH THE REVENUE AS WELL AS THE ASSESSEE HAVE FILED APPEALS IN ITA NOS.2093(MDS)/20 08 AND 2019(MDS)/2008. AGAIN, FOR THE NEXT ASSESSMENT YEA R 2005-06 THERE ARE CROSS APPEALS IN ITA NOS.527(MDS)/2009 AN D 1619(MDS)/2009 BY THE ASSESSEE AND THE REVENUE RESP ECTIVELY. 2. ALL THESE APPEALS ARE DIRECTED AGAINST THE DIFF ERENT ORDERS OF THE COMMISSIONER OF INCOME-TAX(APPEALS)-V AT CHENNAI DATED 15-1-2007, 3-4-2008 AND 9-2-2009. TH E APPEALS ARISE OUT OF THE ASSESSMENTS COMPLETED UNDER SECTIO N 143(3) OF THE INCOME-TAX ACT, 1961. 3. IN COMPLETING THE RESPECTIVE ASSESSMENTS, THE ASSESSING AUTHORITY HAD MADE DISALLOWANCES OF EXPEN SES CLAIMED BY THE ASSESSEE BY WAY OF DEDUCTIONS. THE MOST PROMINENT DISALLOWANCE MADE BY THE ASSESSING AUTHOR ITY IS THE CLAIM OF DEDUCTION OF INTEREST ON THE GROUND THAT T HE ASSESSEE HAD DIVERTED INTEREST-BEARING FUNDS FOR NON BUSINES S PURPOSES. AMONG OTHER THINGS, THE ASSESSING OFFICER HAS ALSO APPLIED RULE 8D, READ WITH SECTION 14A, TO DISALLOW THE EXPENDIT URE RELATING TO EARNING OF INCOME NOT LIABLE FOR TAXATION. - - ITA 1045 OF 2007, 2093 OF 2008, ETC. 3 4. IN FIRST APPEALS, THE ASSESSEE WAS SUCCESSFUL I N ITS GROUNDS RELATING TO THE DISALLOWANCES, MAINLY ON TH E DISALLOWANCE OF INTEREST ON THE GROUND OF DIVERSION OF FUNDS. FOR ALL THESE THREE ASSESSMENT YEARS 2003-04, 2004-05 A ND 2005-06 THE REVENUE IS AGGRIEVED BY THE ORDERS OF THE COMMI SSIONER OF INCOME-TAX(APPEALS) GRANTING RELIEFS TO THE ASSESSE E BY ACCEPTING ITS CONTENTIONS AND ALLOWING THE INTEREST EXPENDITURE AS DEDUCTIONS. THAT IS WHY THE REVENUE HAS COME IN APPEALS FOR ALL THE ASSESSMENT YEARS. 5. THE COMMISSIONER OF INCOME-TAX(APPEALS) HAS NOT ACCEPTED THE CONTENTIONS OF THE ASSESSEE ON THE QUE STION OF APPLYING RULE 8D, READ WITH SECTION 14A, AND THE DI SALLOWANCES WERE CONFIRMED. IT IS AGAINST THIS THAT THE ASSESS EE HAS COME IN APPEALS FOR THE TWO ASSESSMENT YEARS 2004-05 AND 20 05-06. THIS IS THE COMPOSITION OF THE FIVE APPEALS FILED F OR THE THREE ASSESSMENT YEARS 2003-04, 2004-05 AND 2005-06. 6. WHEN THESE MATTERS WERE CALLED ON FOR HEARING, NOBODY WAS PRESENT FOR THE ASSESSEE INSPITE OF NOTI CE. THE NOTICE OF POSTING HAS BEEN SERVED ON THE ASSESSEE A ND THE POSTAL ACKNOWLEDGEMENT IS PLACED ON RECORD. THESE APPEALS - - ITA 1045 OF 2007, 2093 OF 2008, ETC. 4 HAVE BEEN POSTED FOR A NUMBER OF TIMES IN THE PAST. THE APPEALS COULD NOT BE DISPOSED OF MAINLY FOR THE REA SON THAT THE ASSESSEE SOUGHT ADJOURNMENTS FROM TIME TO TIME. ON THE LAST OCCASION WHEN THE MATTER WAS POSTED, THERE WAS NO A PPEARANCE AT ALL. 7. IN THESE CIRCUMSTANCES, WE ARE NOT INCLINED TO PROLONG THE DISPOSAL OF THESE APPEALS MAINLY FOR TH E REASON THAT THE APPEALS ARE VERY OLD FILED WAY BACK IN 2007, 20 08 AND 2009. 8. WE HEARD SHRI SHAJI P JACOB, THE LEARNED COMMISSIONER OF INCOME-TAX, APPEARING FOR THE REVEN UE AND PROCEED TO DISPOSE OF THE APPEALS EX-PARTE, QUA, TH E ASSESSEE. 9. AS HELD BY THE HONBLE CO-ORDINATE BENCH IN ITS ORDER DATED 12-6-2009 PASSED FOR THE ASSESSMENT YEA R 2002-03 IN ITA NO.589(MDS)/2007, THE REVENUE AUTHORITIES HA VE NOT EXAMINED THE FINE DISTINCTION BETWEEN PURPOSE AND MOTIVE IN EITHER DISALLOWING OR LATER ON ALLOWING THE CLAIMS OF THE ASSESSEE. THEREFORE, WE FIND THAT IT IS JUST AND PROPER THAT THESE MATTERS MAY BE REMITTED BACK TO THE ASSESSING OFFICER FOR D E NOVO CONSIDERATION IN ACCORDANCE WITH LAW AND DECIDE THE VARIOUS CLAIMS OF EXPENDITURE MADE BY THE ASSESSEE. THE AS SESSEE IS - - ITA 1045 OF 2007, 2093 OF 2008, ETC. 5 FREE TO AGITATE ALL THE ADDITIONS AND DISALLOWANCES MADE BY THE ASSESSING AUTHORITY FOR THESE ASSESSMENT YEARS ON T HE BASIS OF THE GROUNDS FILED BEFORE THE TRIBUNAL. 10. THE ORDERS OF THE LOWER AUTHORITIES FOR THE IMPUGNED ASSESSMENT YEARS 2003-04, 2004-05 AND 2005 -06 ARE SET ASIDE AND THE FILES ARE REMITTED BACK TO THE AS SESSING AUTHORITY FOR DE NOVO DISPOSAL AFTER HEARING THE AS SESSEE. 11. IN RESULT, THE APPEALS FILED BY THE REVENUE AS WELL AS BY THE ASSESSEE ARE TREATED AS ALLOWED FOR STATI STICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ON TUESDAY, THE 13 TH OF MARCH, 2012 AT CHENNAI. SD/- SD/- (CHALLA NAGENDRA PRASAD) (DR. O.K.NARAYANAN) JUDICIAL MEMBER VICE-PRESIDENT CHENNAI, DATED THE 13 TH MARCH, 2012. V.A.P. COPY TO: APPELLANT/RESPONDENT/CIT/CIT(A)/ DR/GF