M/s. Consolidated Coin Company Pvt. Ltd., Delhi V. DCIT, New Delhi

ITA 6186/DEL/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 7205 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 7 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 2
• Next Hearing Date: 21-06-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 12-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income; Benefit of exemption
• Section: 10B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : SMC-II : NEW DELHI BEFORE SHRI R.S. SYAL, ACCOUNTANT MEMBER ITA NO.6186/DEL/2014 ASSESSMENT YEAR : 2007-08 CONSOLIDATED COIN COMPANY PVT. LTD., A-11, DDA COMMERCIAL COMPLEX, RING ROAD, DEFENCE COLONY, NEW DELHI. PAN: AAACN0894J VS. DCIT, CIRCLE-3(1), NEW DELHI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI SATYAJIT GOEL, CA DEPARTMENT BY : SHRI DEEPAK GARG, SR. DR DATE OF HEARING : 21.06.2016 DATE OF PRONOUNCEMENT : 21.06.2016 ORDER THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER PASSED BY THE CIT(A) ON 10.09.2014 CONFIRMING THE P ENALTY AMOUNTING ITA NO.6186/DEL/2014 2 TO RS.13,21,500/- IMPOSED BY THE AO U/S 271(1)(C) O F THE ACT, IN RELATION TO THE ASSESSMENT YEAR 2007-08. 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE IS CARRYING ON BUSINESS OF MANUFACTURING AND EXPORT/SALE IN COI N BLANKS AND STRIPS. THE ASSESSEE IS A 100% EOU WHOSE INCOME IS FULLY EX EMPT U/S 10B OF THE ACT. DURING THE YEAR UNDER CONSIDERATION, THE A SSESSEE EARNED CERTAIN INTEREST INCOME ON FIXED DEPOSITS WHICH WERE MADE W ITH THE BANK AS MARGIN MONEY AND/OR FOR BANK GUARANTEE. SUCH BANK INTEREST AMOUNTING TO RS.36,04,094/- WAS DECLARED IN THE RETURN OF IN COME AS INCOME FROM OTHER SOURCES ON WHICH NO BENEFIT OF EXEMPTION U/S 10B WAS CLAIMED. HOWEVER, DURING THE COURSE OF ASSESSMENT PROCEEDING S, THE ASSESSEE FILED A REVISED COMPUTATION OF INCOME CLAIMING SUCH INTEREST AS `BUSINESS INCOME, ELIGIBLE FOR EXEMPTION U/S 10B. THE AO NEGATIVED THE ASSESSEES CLAIM ON SUCH INTEREST INCOME AND MA DE ADDITION FOR THE SAME. THEREAFTER, PENALTY WAS IMPOSED U/S 271(1)(C ) OF THE ACT IN RESPECT OF SUCH CHARGING OF INTEREST INCOME TO TAX, WHICH CAME TO BE AFFIRMED IN THE FIRST APPEAL. ITA NO.6186/DEL/2014 3 3. I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED T HE RELEVANT MATERIAL ON RECORD. IT IS EVIDENT FROM THE ASSESSMENT ORDER ITSELF THAT THE ASSESSEE RECEIVED INTEREST ON FIXED DEPOSITS MADE WITH THE B ANK AS MARGIN MONEY AND/OR FOR BANK GUARANTEES. THIS SHOWS THAT FIXED DEPOSITS WERE MADE FOR THE PURPOSE OF BUSINESS AND THERE WAS A LIVE LI NK BETWEEN THE CARRYING ON OF A BUSINESS AND EARNING OF INTEREST I NCOME. WHEN THE POSITION IS SO, SUCH INTEREST INCOME OUGHT TO HAVE BEEN TREATED AS `BUSINESS INCOME AS HAS BEEN HELD BY THE HONBLE D ELHI HIGH COURT IN PRINCIPAL CIT VS. UNIVERSAL PRECISION SCREWS VIDE I TS JUDGMENT DATED 6.7.2015 IN ITA NO.392/2015, WHOSE COPY HAS BEEN P LACED ON RECORD. IN MY CONSIDERED OPINION, THE TREATMENT OF INTEREST INCOME WHICH WAS CLAIMED AS BUSINESS INCOME, BUT, ASSESSED AS INC OME FROM OTHER SOURCES AND WHICH OUGHT TO HAVE BEEN RIGHTLY ASSES SED AS BUSINESS INCOME, CANNOT BE EQUATED WITH CONCEALMENT OF INC OME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME ATTRACTING PENA LTY U/S 271(1)(C). OVERTURNING THE IMPUGNED ORDER, I ORDER FOR THE DEL ETION OF PENALTY. ITA NO.6186/DEL/2014 4 4. IN THE RESULT, THE APPEAL IS ALLOWED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 21.06.2 016. SD/- [R.S. SYAL] ACCOUNTANT MEMBER DATED, 21 ST JUNE, 2016. DK COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT AR, ITAT, NEW DELHI.