Baring Private Equity Partners (India) Pvt. Ltd., New Delhi V. ACIT, Circle- 4(1), New Delhi

ITA 6713/DEL/2017

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 3589 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 7 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-06-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 07-11-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: MP RASTOGI SH PREVIN CHAND
• Keywords: Rule of consistency
• Section: 143(3); 143(1); 201

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: A NEW DELHI BEFORE SHRI R.K.PANDA, ACCOUNTANT MEMBER & SHRI K.NARASIMHA CHARY, JUDICIAL MEMBER ITA NO.- 6713 /DEL/2017 (ASSESSMENT YEAR: 2013-14) BARRING PRIVATE EQUITY PARTNERS (INDIA) PRIVATE LIMITED, A-16/9, VASANT VIHAR, NEW DELHI 110057 VS. ACIT, CIRCLE 4 (1), CENTRAL REVENUE BUILDING NEW DELHI-110002 PAN NO. AACCB 5013B APPELLANT RESPONDENT ASSESSEE BY SH. MP RASTOGI, ADVOCATE SH. PREVIN CHAND, CA REVENUE BY SH. MAHESH THAKUR, SR. DR DATE OF HEARING: 9/6/2021 PRONOUNCEMENT ON 9/6/2021 ORDER PER K. NARASIMHA CHARY, JM AGGRIEVED BY THE ORDER DATED 29/9/2017 PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-44, NE W DELHI (THE LD. CIT(A)) IN APPEAL NO. 88/2016-17/CIT (A)-44, F OR THE ASSESSMENT YEAR 2013-14, IN THE CASE OF M/S BARRING P VT. LTD PARTNERS (INDIA) PRIVATE LIMITED, ASSESSEE PREFERRED TH IS APPEAL. 2 2. BRIEF FACTS ARE THAT DURING THE ASSESSMENT YEAR 2012- 2013, THE ASSESSEE HAD SUBSCRIBED TO 7500 NCDS OF RS. 1,00 0/- EACH ISSUED BY MUTHOOT FINANCE LTD.; THAT THESE NCDS HAVE AN INTEREST OBLIGATION ON THE PART OF MUTHOOT; THAT THEASSESSEE IS ENTITLED TO INTEREST ON THESE NCDS; AND THAT THE ASSESSEE HAS OPTED/ CHOSEN TO RECEIVE INTEREST ON THE MATURITY/REDEMPTION OF THESE DEB ENTURES. AS PER THE THE ALLOTMENT ADVICE, THE ASSESSEE IS ENTITL ED TO RECEIVE INTEREST ON THE EXPIRY OF 66 MONTHS FROM THE DATE OF ALL OTMENT. PROSPECTUS ALSO MAKES IT CLEAR THAT THE ASSESSEE HAS CH OSEN TO RECEIVE INTEREST ON THE DATE OF REDEMPTION OF NCDS. IT IS, THEREFORE, EVIDENT THAT ON THE EXPIRY OF 66 MONTHS, THE ASSESSEE IS ENTITLED TO RECEIVE RS.2,000/- REPRESENTING RS. 1,000/- BEING THE FACE VALUE OF NCD AND RS. 1,000/- BEING THE INTEREST FOR 66 MONTHS. THE ASSESSEE, HOWEVER, IN ORDER TO COMPLY WITH THE ACCOUN TING STANDARD, HAD SHOWN THE INTEREST INCOME OF RS. 13,63,73 5/- IN ITS PROFIT & LOSSACCOUNT. ACCORDINGLY, THE ASSESSEE EXCL UDED THE INTEREST OF RS. 13,63,735/- FROM THE TOTAL INCOMEWHILE FILING THE RETURN OF INCOME ON 29/11/2013 DECLARING AN INCOME O F RS. 5, 94, 91, 580/-. 3. LEARNED ASSESSING OFFICER, BY ORDER DATED 22/12/2 016 HELD THAT INASMUCH AS THE ASSESSEE ADMITTED AND HAD SHOWN IN THE P&L ACCOUNT THAT A SUM OF RS. 13, 63, 735/-AS INCOME OF CU RRENT YEAR UNDER THE HEAD OF INCOME, WHICH IS NOT SHOWN IN THE COMPUTATION HAS TO BE ADDED BACK TO THE INCOME OF THE ASSESSEE. IN THE APPEAL LD. CIT(A) OBSERVED THAT THE ASSESSEE HAD ADMITTED AND S HOWN THE INTEREST ACCRUED ON THE ABOVE-MENTIONED INTEREST OF RS . 3 13,63,735/-IN THE P&L ACCOUNT AS THE INCOME OF THE CUR RENT YEAR UNDER THE HEAD OTHER INCOME, IT IS NOT OPEN FOR THE AS SESSEE TO SAY ANYTHING CONTRARY. ON THIS PREMISE LD. CIT(A) DISM ISSED THE CONTENTION OF THE ASSESSEE ON THIS GROUND. 4. AGGRIEVED BY THE SAME, ASSESSEE PREFERRED THIS AP PEAL CONTENDING THAT FOR SUBSEQUENT YEARS THE CONTENTION OF THE ASSESSEE WAS ACCEPTED AND NO ADDITION WAS MADE IN RE SPECT OF THE INTEREST INCOME AND AS A MATTER OF FACT THE ASSESSEE OFFE RED THE ENTIRE INTEREST INCOME OF RS. 75, 75, 000/-TO TAX IN THE YEAR OF REDEMPTION, NAMELY, 2018-19 WHICH WAS ACCEPTED BY THE REVENUE. HE THEREFORE CONTENDS THAT THE ADDITION OF INTEREST FOR THIS PARTICULAR YEAR AMOUNTS TO DOUBLE TAXATION AND ALSO CON TRARY TO THE CONDUCT OF THE REVENUE IN ACCEPTING THE CONTENTION OF THE ASSESSEE FOR SUBSEQUENT YEARS. 5. PER CONTRA, IT IS ARGUED BY THE LD. DR THAT THE ASSESS EE HAS BEEN FOLLOWING THE MERCANTILE SYSTEM OF ACCOUNTING AND THEREFORE, THE INTEREST ACCRUED IN THIS YEAR WAS RIGHTLY ADDED BY THE LEARNED ASSESSING OFFICER AND THE ORDERS OF THE AUTHORITIES BE LOW ARE IN PERFECT CONSONANCE WITH THE ACCOUNTING POLICY OF THE AS SESSEE. 6. WE HAVE GONE THROUGH THE RECORD IN THE LIGHT OF THE SUBMISSIONS MADE ON EITHER SIDE. APART FROM THE CONTEN TIONS RELATING TO THE MATTER OF ACCOUNTANCY FOLLOWED BY THE AS SESSEE, IT REMAINS AN ADMITTED FACT THAT FOR THE ASSESSMENT YEARS 201 5-16 AND 2016-17 THERE WAS NO OBJECTION FROM THE LEARNED AS SESSING OFFICER IN RESPECT OF NON-INCLUSION OF THIS PARTICUL AR INTEREST ON 4 NCDS AND THE RETURN WAS PROCESSED UNDER SECTION 143(1) OF THE ACT. FOR THE ASSESSMENT YEAR 2017-18, HOWEVER, THERE WA S A SCRUTINY OF THE RETURN OF INCOME AND THE ASSESSING OFFI CER ACCEPTED THE NON-INCLUSION OF THE INTEREST ON NCDS AND DID NOT MAKE ANY ADVERSE COMMENT THE CONSEQUENT ADDITION. IT IS ALSO AN ADMITTED FACT THAT FOR THE ASSESSMENT YEAR 2014-15 THOUGH THE LEARN ED ASSESSING OFFICER MADE A SIMILAR ADDITION AS MADE IN THIS YEAR, IN APPEAL, LD. CIT(A) DELETED THE SAME. IT IS SUBMITTED BY THE LD. AR THAT NO APPEAL WAS PREFERRED BY THE REVENUE AGAINST THE RELIEF GRANTED BY THE LD. CIT(A) FOR THE ASSESSMENT YEAR 2014- 15 AND IT HAS BECOME FINAL. 7. IT IS, THEREFORE, CLEAR THAT THOUGH THE LEARNED ASSES SING OFFICER HAD TAKEN A SIMILAR OBJECTION FOR THE ASSESSME NT YEAR 2014- 15, IT WAS RETURNED DOWN BY THE LD. CIT(A) IN APPEAL A ND THE REVENUE ACCEPTED THE SAME. SUCH AN ACCEPTANCE OF REVE NUE IS NOT ONLY FOR THE ASSESSMENT YEAR 2014-15 BUT IT CONTINUED F OR THE SUBSEQUENT YEARS 2015-16 AND 2016-17 AND MORE PARTICU LARLY FOR THE ASSESSMENT YEAR 2017-18 IN WHICH YEAR THOUGH THE LE ARNED ASSESSING OFFICER RECORD THE RETURN FOR SCRUTINY UNDE R SECTION 143(3) OF THE ACT, DID NOT TAKE ANY OBJECTION IN THIS RE GARD. ABOVE ALL, THE SUBMISSION OF THE ASSESSEE IS THAT IN THE ASSES SMENT YEAR 2018-19 THE ASSESSEE OFFERED THE ENTIRE INTEREST INCOME OF RS. 75, 75, 000/-TO TAX. 8. IN THE CIRCUMSTANCES, WE ARE OF THE CONSIDERED OPIN ION THAT THE RULE OF CONSISTENCY DEMANDS THAT THE REVENUE CANNOT 5 APPROBATE AND REPROBATE IN RESPECT OF THE VERY SAME ISS UE FROM YEAR TO YEAR AND FINALLY REMAINS SILENT WHEN THE ENTIR E INTEREST AMOUNT WAS OFFERED TO TAX IN THE ASSESSMENT YEAR 2018-1 9. WE, THEREFORE, FIND SUBSTANCE IN THE SUBMISSIONS MADE ON B EHALF OF THE ASSESSEE AND HOLD THAT THE IMPUGNED ADDITION CANNOT BE SUSTAINED. WE CONSEQUENTLY DIRECT THE LEARNED ASSESSING OFFICER T O DELETE THE IMPUGNED ADDITION. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS THE 9 TH DAY OF JUNE, 2021 IMMEDIATELY AFTER CONCLUSION OF HEARING OR VIRTUAL MODE. SD/- SD/- (R.K.PANDA) (K. NARSIMHA CHARY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 9/6/2021 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT TRUE COPY ASSISTANT REGISTRAR ITAT NEW DELHI