Metropolitan Transport Corporation, CHENNAI V. ITO (OSD), CHENNAI

ITA 625/CHNY/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 64341 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-09-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 25-09-2012
• Assessment Year: 2004-2005
• Appeal Filed On: 26-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K E B RANGAR AJAN JR
• Assessee Lawyers: K SANTHANAKRISHNAN
• Keywords: Revised return
• Section: 148; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AND SHRI VIKAS AWASTHY, JUDICIAL MEMBER ITA NO.625/MDS/2012 (ASSESSMENT YEAR: 2004-05) METROPOLITAN TRANSPORT CORPORATION (CHENNAI) LTD. NO.1, PALLAVAN HOUSE, ANNA SALAI, CHENNAI-600 002. PAN: AAACP1935C VS. INCOME TAX OFFICER (OSD), COMPANY CIRCLE-IV(2), CHENNAI-34. (APPELLANT) (RESPONDENT) APPELLANT BY : MR. K.SANTHANAKRISHNAN , C.A RESPONDENT BY : MR. K.E.B. RANGARAJAN, JR.STANDING COUNSEL DATE OF HEARING : 25 TH SEPTEMBER, 2012 DATE OF PRONOUNCEMENT : 25 TH SEPTEMBER, 2012 O R D E R PER VIKAS AWASTHY, JM: THE APPEAL HAS BEEN FILED BY THE ASSESSEE IMPUGNIN G THE ORDER OF THE CIT(A)VI, CHENNAI DATED 20.12.20 11. 2. THE ASSESSEE IS A STATE OWNED TRANSPORT CORPORAT ION. THE ASSESSEE HAD FILED ITS RETURN OF INCOME ON 30.1 0.2004 RELEVANT TO THE ASSESSMENT YEAR 2004-05. THE RETURN OF THE ASSESSEE WAS PROCESSED UNDER SECTION 143(1) ON 29.0 3.2005. THEREAFTER, THE ASSESSEE FILED REVISED RETURN FOR T HE ASSESSMENT YEAR 2004-05 ON 5.1.2005 AND THE SAME WAS PROCESSED UNDER SECTION 143(1) ON 31.10.2005. SUBSEQUENTLY, NOTICE UNDER ITA NO.625/MDS/2012 2 SECTION 148 WAS ISSUED TO THE ASSESSEE ON 16.05.200 7 AND ASSESSMENT ORDER WAS PASSED BY THE ASSESSING OFFICE R ON 25.10.2007 BY MAKING CERTAIN ADDITIONS IN THE INCOM E RETURNED BY THE ASSESSEE. 3. AGGRIEVED AGAINST THE ASSESSMENT ORDER, THE ASSE SSEE PREFERRED AN APPEAL BEFORE THE CIT(A). THE CIT(A) V IDE ORDER DATED 20.12.2011 PARTLY ALLOWED THE APPEAL OF THE A SSESSEE . HOWEVER, WHILE PARTLY ALLOWING THE APPEAL OF THE AS SESSEE, THE CIT(A) DISMISSED THE CONTENTION OF THE ASSESSEE WIT H REGARD TO ADDITION MADE BY ASSESSING OFFICER TO THE TUNE OF ` 7.29 CRORES AS TRADING RECEIPTS. NOW, THE ASSESSEE IS IN SECOND APPEAL BEFORE THE TRIBUNAL ASSAILING THE ORDER OF THE CIT(A). THE ONL Y GROUND RAISED BY THE ASSESSEE IN APPEAL BEFORE THE TRIBUN AL IS ADDITION OF ` 7,29,00,000/- AS TRADING RECEIPTS WHEREAS FUNDS WERE PROVIDED BY THE GOVERNMENT OF TAMIL NADU TO TH E ASSESSEE FOR PAYMENT OF INTEREST ON ACCOUNT OF BELA TED PAYMENT OF TERMINAL BENEFITS TO THE EMPLOYEES. 4. SHRI K.SANTHANAKRISHNAN APPEARING ON BEHALF OF T HE ASSESSEE SUBMITTED THAT THE ASSESSEE IS A STATE GOV ERNMENT UNDERTAKING. A SUM OF ` 20.50 CRORES WERE RECEIVED BY THE ITA NO.625/MDS/2012 3 ASSESSEE DURING THE YEAR 1999 VIDE GOMS NO.191 DATE D 29.6.1999 TO MAKE PAYMENT OF 15% INTEREST FOR THE B ELATED SETTLEMENT OF TERMINAL BENEFITS OF THE EMPLOYEES OF STATE TRANSPORT DEPARTMENT. HE SUBMITTED THAT AFTER THE PAYMENT OF INTEREST, BALANCE AMOUNT OF ` 7.29 CRORES WAS LEFT WITH THE ASSESSEE ON 31.03.2003. THE ASSESSING OFFICER TREAT ED THE SAID UNDISBURSED AMOUNT AS TRADE RECEIPT AS PER ITEM NO. 17C OF THE AUDITORS REPORT STATING THE SAME WAS UTILIZED WOR KING CAPITAL REQUIREMENTS. THE A.R. FURTHER SUBMITTED THAT THE A MOUNT OF ` 7.29 CRORES WAS NOT RECEIVED BY THE ASSESSEE DURING THE ASSESSMENT YEAR AS IT WAS OUTSTANDING OPENING BALAN CE AS ON 31.03.2004, THEREFORE, THE SAME CANNOT BE TREATED A S TRADING RECEIPT FOR THE ASSESSMENT YEAR 2004-05. THE A.R. F URTHER CONTENDED THAT UNDISBURSED BALANCE AMOUNT HAS ACTUA LLY BEEN ADJUSTED FULLY AGAINST THE STUDENTS CONCESSION SUBS IDY DUE TO THE ASSESSEE FROM THE GOVERNMENT OF TAMIL NADU IN T HE SUBSEQUENT YEARS. THE A.R. PLACED ON RECORD COPY OF ORDER G.O.MS. NO.44 DATED 24.03.2009 VIDE WHICH THE OUTST ANDING AMOUNT HAS BEEN ADJUSTED TOWARDS PAYMENT OF STUDENT CONCESSION SUBSIDY FOR THE YEAR 2008-09. ITA NO.625/MDS/2012 4 5. ON THE OTHER HAND, LEARNED D.R. SUPPORTED THE OR DER OF THE CIT(A). 6. WE HAVE HEARD THE SUBMISSIONS MADE BY THE RIVAL PARTIES AND HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE ASSESSEE IS A STATE TRANSPORT UNDERTAKING AND IS FU LLY OWNED BY THE GOVERNMENT OF TAMIL NADU. IT HAS NOT BEEN DISPU TED BY THE REVENUE THAT AN AMOUNT OF ` 20.50 CRORES WAS RECEIVED BY THE ASSESSEE FROM THE STATE GOVERNMENT DURING THE YEAR 1999 FOR MAKING PAYMENT OF INTEREST FOR BELATED SETTLEMENT O F TERMINAL BENEFITS OF THE EMPLOYEES OF TRANSPORT DEPARTMENT. IT HAS ALSO BEEN NOT DISPUTED BY THE REVENUE THAT THE AMOUNT OF ` 7.29 CRORES IS BALANCE OF UNDISBURSED AMOUNT RECEIVED B Y THE ASSESSEE FROM THE STATE GOVERNMENT. THE ASSESSING O FFICER VIDE ASSESSMENT ORDER DATED 25.10.2007 HAS TREATED THE SAID AMOUNT AS TRADING RECEIPT FOR THE REASON THAT THE S AID AMOUNT WAS TO BE KEPT IN SEPARATE ACCOUNT AND NOT TO BE UT ILIZED FOR ANY OTHER PURPOSES. SINCE THE ASSESSEE HAD UTILIZED THE UNDISBURSED BALANCE OF ` 7.29 CRORES FOR WORKING CAPITAL REQUIREMENTS, THE SAME WAS ADDED BACK AS A TRADING RECEIPT. THE CIT(A) HAS ALSO UPHELD THE FINDINGS OF THE ASSE SSING OFFICER. WE ARE OF THE CONSIDERED OPINION THAT BOTH THE ITA NO.625/MDS/2012 5 ASSESSING OFFICER AND CIT(A) HAVE COMMITTED ERROR I N TREATING THE AMOUNT AS TRADING RECEIPTS. THE AMOUNT WAS DISB URSED TO THE ASSESSEE IN PURSUANCE TO THE GOVERNMENT ORDER D ATED 29.6.1999. THE UNDISBURSED AMOUNT HAS BEEN ADJUSTED BY THE GOVERNMENT TOWARDS PAYMENT OF STUDENTS CONCESSION S UBSIDY TO BE PAID TO THE ASSESSEE IN ACCORDANCE WITH THE GOVERNMENT INSTRUCTIONS VIDE G.O.MS NO.44 DATED 24.3.2009. THE ASSESSEE HAS BEEN APPROPRIATING THE AMOUNT AS PER THE DIRECT IONS OF THE STATE GOVERNMENT. THEREFORE, IN VIEW OF THE ABOVE, WE ARE OF THE CONSIDERED OPINION THAT BY NO STRETCH OF IMAGIN ATION THE UNDISBURSED AMOUNT OF ` 7.29 CRORES RECEIVED BY THE ASSESSEE IN THE YEAR 1999 TOWARDS THE TERMINAL BENEFITS OF T HE EMPLOYEES CAN BE TREATED AS TRADING RECEIPTS IN SUBSEQUENT AS SESSMENT YEARS. 7. WE, THEREFORE, FOR THE REASONS RECORDED ABOVE, SET ASIDE THE ORDER OF THE CIT(A) AND ALLOW THE APPEAL OF THE ASSESSEE. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF H EARING ON TUESDAY, THE 25 TH DAY OF SEPTEMBER, 2012 AT CHENNAI. SD/- SD/- (ABRAHAM P.GEORGE ) (VIKAS AWASTHY) ACCOUNTANT MEMBER JUDICIAL MEMBER CHENNAI, DATED THE 25 TH SEPTEMBER, 2012. SOMU ITA NO.625/MDS/2012 6 COPY TO: (1) APPELLANT (4) CIT(A) (2) RESPONDENT (5) D.R. (3) CIT (6) G.F.