DyCIT, New Delhi V. M/s Bhartiya Samruddhi Finance Ltd., New Delhi

ITA 5827/DEL/2015

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 8840 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 5 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-04-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Assessment Year: 2011-2012
• Appeal Filed On: 27-10-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AGAINST RESPECTIVE S PASSED
• Keywords: Question of law
• Section: 143(3); 142(1); 115JB; 143(1); 145

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: C, NEW DELHI BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER AND SHRI L.P. SAHU, ACCOUNTANT MEMBER ITA NOS. 5827 & 5828/DEL/2015 ASSESSMENT YEARS: 2011-12 & 2012-13 DCIT, CIRCLE 4(2), ROOM NO. 398D, C.R. BUILDING, NEW DELHI VS. BHARTIYA SAMRUDDHI FINANCE LTD. F-5, GROUND FLOOR, KAILASH COLONY, G.K. ENCLAVE PART-I, NEW DELHI 110 048 (PAN : AAACB5337Q) (APPELLANT) (RESPONDENT) ORDER PER H.S. SIDHU, JM THESE APPEALS ARE FILED BY THE REVENUE AGAINST THE RESPECTIVE ORDERS PASSED BY THE LD. CIT(A)-2, NEW DEL HI RELATING TO ASSESSMENT YEARS 2011-12 & 2012-13. S INCE THE ISSUES INVOLVED IN THESE APPEALS ARE COMMON, EXCEP T THE DIFFERENCE IN FIGURES, HENCE, THE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF DEPARTMENT BY SH. AMIT KATOCH, SR. DR ASSESSEE BY SMT. RAJNI GOEL, ADV. 2 CONVENIENCE, BY DEALING WITH ITA NO. 5827/DEL/2015 (A Y 2011- 12) AND THE RESULT THEREOF WILL APPLY MUTATIS MUTANDIS TO OTHER APPEAL FOR THE ASSESSMENT YEAR 2012-13. 2. THE GROUNDS RAISED IN ITA NO. 5827/DEL/2015 (AY 2011- 12) READ AS UNDER:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE OF RS. 2,39,93,102/- ON ACCOUNT OF DERECOGNIZED INTEREST. 2. THE APPELLANT CRAVES LEAVE FOR RESERVING THE RIG HT TO AMEND, MODIFY, ALTER, ADD OR FOREGO ANY GROUND(S) OF APPEAL AT ANY TIME BEFORE OR DURING THE HEARING OF THIS APPEAL. 3. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE FI LED ITS RETURN OF INCOME DECLARING AT RS. 33,16,15,762/- UNDER THE NORMAL PROVISIONS OF THE I.T. ACT, 1961 AND BOOK PROF IT OF RS. 34,01,92,241/- UNDER MAT PROVISIONS OF THE INCOME TAX ACT, 1961 (IN SHORT ACT) FILED ON 29.9.2011. THE RETU RN OF INCOME WAS PROCESSED U/S. 143(1) OF THE ACT. THE CASE WAS SELECTED 3 FOR SCRUTINY. NOTICE U/S. 143(2) OF THE ACT WAS ISSU ED ON 9.8.2012 AND WAS SERVED ON THE ASSESSEE. SUBSEQUENTLY, NOTICE U/S. 142(1) OF THE ACT ALONGWITH QUESTIONNAIR E WAS ISSUED ON 17.7.2013. IN COMPLIANCE THEREOF, THE AR OF THE ASSESSEE ATTENDED THE ASSESSMENT PROCEEDINGS FROM T IME TO TIME AND FILED NECESSARY DETAILS AS CALLED FOR. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AR OF THE ASSE SSEE COMPANY WAS ASKED TO SUBMIT THE DETAILS IN RESPECT OF DE- RECOGNITION OF INTEREST INCOME. THEREFORE, THE AO ASKED THE ASSESSEE WHY THE SAME SHOULD NOT BE DISALLOWED AND ADDED BACK TO THE INCOME OF THE ASSESSEE COMPANY BY TAKIN G NOTE OF THE FACT THAT THE SAME DISALLOWANCE MADE IN THE PRE VIOUS YEAR ALSO. IN RESPONSE TO THE SAME, THE AR FOR THE ASSE SSEE SUBMITTED ITS REPLY AND AFTER CONSIDERATION OF THE SAME, THE AO OBSERVED THAT THE SAID DISALLOWANCE WAS DISCUSSED IN DETAIL WHILE PASSING THE ASSESSMENT ORDERS FOR THE AYS 200 4-05, 2005-06, 2006-07, 2007-08, 2008-9, 2009-10 AND 2010- 11 AND THE DEPARTMENT IS CONTESTING THIS ISSUE BEFOR E THE HONBLE HIGH COURT AGAINST THE DECISION OF THE ITAT , APPEAL ALLOWING THE SAME. AO FURTHER OBSERVED THAT THE AS SESSEE COMPANY HAS BEEN REGULARLY MAINTAINING ITS ACCOUNTS ON THE 4 MERCANTILE SYSTEM AND WAS BOUND TO OFFER INTEREST DERECOGNIZED ON THE ACCRUAL BASIS ON NPA AS INCOME OF THE YEAR AS PER THE PROVISION OF SECTION 145 OF THE I.T . ACT, 1961. FURTHER AO PLACED RELIANCE UPON THE DECISION OF THE HONBLE SUPREME COURT, IN THE MATTER OF SOUTHERN TECHNOLOGIE S LTD., EVEN ON THE DE-RECOGNITION OF INTEREST IS IN FAVOUR OF THE DEPARTMENT. AO FURTHER OBSERVED THAT AS THE FACTS R EMAIN THE SAME IN THE ASSESSEES CASE, THE DE-RECOGNISED INTER EST AMOUNTING TO RS. 2,39,93,102/- WAS TREATED AS INCOME OF THE ASSESSEE AND ADDED TO ITS TOTAL INCOME. ACCORDINGLY , THE AO ASSESSED HE INCOME OF THE ASSESSEE AT RS. 35,58,25, 770/- UNDER THE NORMAL PROVISIONS OF THE ACT AND AT BOOK PROFIT OF RS. 34,04,09,150/- U/S. 115JB OF THE ACT VIDE ORDER DAT ED 17.2.2014 PASSED U/S. 143(3) OF THE ACT. AGAINST TH E ASSESSMENT ORDER, ASSESSEE APPEALED BEFORE THE LD. CI T(A), WHO VIDE HIS IMPUGNED ORDER DATED 23.7.2015 HAS PAR TLY ALLOWED THE APPEAL OF THE ASSESSEE AND DELETED THE ADDITION OF RS. 2,39,93,102/- ON ACCOUNT OF DERECOGNIZED INTEREST . AGGRIEVED WITH THE IMPUGNED ORDER, REVENUE IS IN A PPEAL BEFORE THE TRIBUNAL. 5 4. ON THE OTHER HAND, LD. DR RELIED UPON THE ORDER OF THE ASSESSING OFFICER. 5. LD. COUNSEL FOR THE ASSESSEE RELIED UPON THE ORD ER OF THE LD. CIT(A) AND STATED THAT THE ISSUE IS SQUARELY COV ERED BY THE DECISION DATED 19.5.2014 OF THE HONBLE HIGH COURT IN ITA NOS. 207/2014, 208/2014 AND 209/2014 WHEREIN THE ISSUE REGARDING THE DERECOGNITION OF INTEREST ON ACCRUAL BASIS ON NON PERFORMING ASSETS HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE. IN THIS BEHALF, HE FILED THE COPIES OF THE AFORESAID DECISION BEFORE US. 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RE CORDS ESPECIALLY THE IMPUGNED ORDER. WE FIND THAT LD. CIT (A) HAS ELABORATELY DISCUSSED THE ISSUES IN DISPUTE VIDE P ARA NO. 3.2 AT PAGE NO. 6 & 7 OF THE IMPUGNED ORDER. FOR THE SAKE OF CLARITY, WE ARE REPRODUCING THE RELEVANT FINDING OF THE LD. C IT(A) AS UNDER:- 3.2 I HAVE GONE THROUGH THE FINDINGS IN THE ASSESSMENT ORDER AND THE SUBMISSION OF THE APPELLANTS AR. AS PER ORDER DATED MAY 19, 2014 OF HONBLE HIGH COURT OF DELHI IN 6 ITA NOS. 207/2014, 208/2014 AND 209/2014, THE ISSUE REGARDING THE DERECOGNITION OF INTEREST ON ACCRUAL BASIS ON NON PERFORMING ASSETS HAS BEEN DECIDED IN FAVOUR OF THE APPELLANT AS FOLLOWS:- AS FAR AS THE FIRST ISSUE GOES, THE QUESTION OF LAW IS COVERED AGAINST THE REVENUE BY TWO DECISION, I.E. CIT VS. VASISTH CHAY VYAPAR LTD. AND ANR. 330 ITR 440 (DEL.) AND DIT VS. BRAHAMPUTRA CAPITAL FINANCE LTD. 335 ITR 182. AS FAR AS THE SECOND ASPECT GOES, WE NOTICE THAT THE REVENUE HAD SUCCEEDED BEFORE THE ITAT IN LIGHT OF THE JUDGMENT OF THE SUPREME COURT IN SOUTHERN TECHNOLOGIES LTD. VS. JCIT 320 ITR 577 (SC). THE REVENUE IS NOT IN APPEAL IN RESPECT OF THAT QUESTION. 7 FOLLOWING THE DECISION IN VASISTH CHAY VYAPAR LTD. (SUPRA) AND BRAHAMPUTRA CAPITAL FINANCE LTD. (SUPRA), THE QUESTION OF LAW URGED BY THE REVENUE IS ANSWERED AGAINST IT AND IN FAVOUR OF THE ASSESSEE. SINCE THE ISSUE HAS BEEN DECIDED IN EARLIER YEARS IN FAVOUR OF THE APPELLANT IN ITS OWN CASE BY THE HONBLE HIGH COURT, THE ADDITION TO INCOME ON THIS ACCOUNT MADE IN THE IMPUGNED ORDER IS ALSO DELETED. THIS GROUND OF APPEAL IS ALLOWED. 6.1 AFTER PERUSING THE AFORESAID ORDER DATED 19.5.201 4 OF THE HONBLE HIGH COURT OF DELHI IN ITA NOS. 207/2014, 2 08/2014 AND 209/2014, WE NOTE THAT THE ISSUE IN DISPUTE HA S BEEN DECIDED IN FAVOUR OF THE ASSESSEE AND THEREFORE, LD . CIT(A) HAS OBSERVED THAT SINCE THE ISSUE HAS BEEN DECIDED IN E ARLIER YEARS IN FAVOUR OF THE ASSESSEE IN ITS OWN CASE BY THE H ONBLE HIGH COURT, THE ADDITION TO INCOME ON THIS ACCOUNT MADE IN THE IMPUGNED ORDER WAS RIGHTLY DELETED. HENCE, IN OUR C ONSIDERED 8 OPINION THERE IS NO ILLEGALITY OR INFIRMITY IN THE FINDING OF THE LD. CIT(A) ON THE ISSUES IN DISPUTE, THEREFORE, WE UPHO LD THE ACTION OF THE LD. CIT(A) ON THE ISSUES IN DISPUTE AN D REJECT THE GROUNDS RAISED BY THE REVENUE. 7. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED ON 08-04-2019. SD/- SD/- [L.P. SAHU] [H.S. SIDHU] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE:08/04/2019 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4.CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES