DCIT, Thrissur V. KSFE Ltd, Thrissur

ITA 720/COCH/2008

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 8227 (ITAT-COCHIN)
• Duration Of Justice: 1 year(s) 8 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-03-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 25-02-2010
• Assessment Year: 1995-1996
• Appeal Filed On: 06-06-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR BABU JOSEPHSR

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI N.VIJAYAKUMARAN & SHRI SANJAY ARORA I.T.A.NO S . 720 & 721 /COCH/200 8 ASSESSMENT YEAR S : 1995 - 96 & 1996 - 97 THE ASSIST. COMMISSIONER OF INCOME-TAX, CIRCLE-1(1), TRICHUR. VS. THE KER ALA STATE FINANCIAL ENTERPRISES LTD., TRICHUR. PA NO.AABCT 3817A (APPELLANT) ( RESPONDENT ) & C.O.NOS. 60 & 61/COCH/2008 (ARISING OUT OF I.T.A.NOS.720 & 721/COCH/2008 ASSESSMENT YEARS:1995 - 96 & 1996 - 97 THE KERALA STATE FINANCIAL ENTERPRISES LTD., TRICHUR. PA NO.AABCT 3817A VS. THE ASSIST. COMMISSIONER OF INCOME -TAX, CIRCLE-1(1), TRICHUR. ( CROSS OBJECTOR ) (RESPONDENT) REVENUE BY DR. BABU JOSEPH,SR.DR ASSESSEE BY NONE (ADJ.PETN. REJECTED O R D E R PER N.VIJAYAKUMARAN,J.M: THESE APPEALS ARE BY THE DEPARTMENT AND THE CROSS OBJECTIONS ARE BY THE ASSESSEE. THE APPEALS ARE D IRECTED AGAINST THE ORDERS OF THE CIT(APPEALS)-V, KOCHI REL ATING TO THE ASSESSMENT YEARS 1995-96 AND 1996-97. ITA NOS. 720 & 721/COCH/2008 & CO NOS.60 & 61/COCH/2008 2 2. AS THE ISSUE BEING COMMON IN THESE TWO APPEALS, FOR THE PURPOSE OF DISCUSSION, WE ARE TAKING ITA NO.720/COCH/2008, WHICH IS FOR THE ASSESSMENT YEAR 1995- 96. 3. THE LD. CIT(APPEALS) WHILE PASSING THE APPELLATE ORDER ON 25-02-2008 CAME TO THE CONCLUSION THAT AS IT IS A DEBATABLE ISSUE THAT WHETHER THE INCOME RECEIVED IS TAXABLE UNDER INTEREST TAX ACT OR THE REFUND ARISING FROM T HE CESSATION OF LIABILITY AND THEREFORE TAXABLE AGAIN U/S.41 OF THE I.T.ACT, AS PER THE DECISION OF THE HONBLE SUP REME COURT IN THE CASE OF VOLKART BROS. (1971) 82 ITR 50 , IT WILL NOT COME UNDER THE AMBIT OF SECTION 154. THEREFORE, THE LD. CIT(APPEALS) FOUND THAT ADJUSTMENT IS NOT SUSTAINAB LE AGAINST WHICH THE REVENUE IS IN APPEAL BEFORE US. 5. ON BEHALF OF THE ASSESSEE NONE APPEARED. THE ASS ESSEE HAS FILED AN ADJOURNMENT PETITION, WHICH WAS REJECT ED BY THE BENCH. WE HAVE HEARD THE LD. SENIOR DEPARTMENTAL REPRESENTATIVE. 6.THE EFFECTIVE GROUNDS RAISED BY THE REVENUE ARE A S FOLLOWS: ITA NOS. 720 & 721/COCH/2008 & CO NOS.60 & 61/COCH/2008 3 2. THE CIT(APPEALS) ERRED IN DECIDING THAT THE IS SUE IS DEBATABLE ONE WITHOUT POINTING OUT ANY DEBATE OR CONTRADICTORY DECISION FROM ANY COURT AND THEREFORE DOES NOT FALL UNDER THE AMBIT OF ORDER U/S.154 OF T HE I.T.ACT. 3. THE CIT(APPEALS) OUGHT TO HAVE DECIDED THE ISS UE AS PER THE SECTION 18 OF THE INTEREST TAX ACT, SPECIFICALLY PROVIDED THAT THE INTEREST-TAX PAYABL E BY THE CREDIT INSTITUTION FOR ANY ASSESSMENT YEAR SHAL L BE DEDUCTIBLE FROM THE INCOME, UNDER RESPECTIVE HEADS, OF THE CREDIT INSTITUTION ASSESSABLE FOR THAT ASSESSME NT YEAR. 4. THE CIT(APPEALS) HAS WRONGLY APPLIED SECTION 4 1 OF THE INCOME-TAX ACT,1961 IN DECIDING THE ISSUE. 6. AFTER CONSIDERING THE SUBMISSIONS OF THE LD. S ENIOR DEPARTMENTAL REPRESENTATIVE AND THE ORDER OF THE TR IBUNAL DATED 12-03-2009 IN ASSESSEES OWN CASE FOR THE ASS ESSMENT YEARS 1993-94, 1994-95, 1998-99 AND 1999-2000, COP Y OF WHICH IS PRODUCED BEFORE US, WHEREIN THE TRIBUNAL F OLLOWING ITS EARLIER ORDER DATED 27-08-2008, IN ASSESSEES O WN CASE, IN ITA NOS. 650 TO 653/COCH/2007 HELD THAT A DEBATA BLE ISSUE IS NOT AVAILABLE FOR RECTIFICATION U/S.154, A S THERE IS NO SUCH APPARENT MISTAKE. ACCORDINGLY, THE TRIBUNAL DISMISSED THE APPEAL FILED BY THE DEPARTMENT AND THE CROSS OB JECTIONS FILED BY THE ASSESSEE. TO BE IN CONSISTENCE WITH TH E DECISION ITA NOS. 720 & 721/COCH/2008 & CO NOS.60 & 61/COCH/2008 4 OF THE TRIBUNAL UNDER THE GIVEN SET OF FACTS AND CIRCUMSTANCES OF THE CASE, WE FOLLOW THE AFORESAID ORDER OF THE TRIBUNAL AND DISMISS BOTH THE APPEALS FILED BY THE REVENUE. 7. TURNING TO THE CROSS OBJECTIONS FILED BY THEE AS SESSEE, WHICH ARE TO BE DISMISSED AS INFRUCTUOUS AS THEY AR E ONLY SUPPORTING THE ORDERS OF THE LD. CIT(APPEALS), WHIC H ORDER WE HAVE CONFIRMED. 8. IN THE RESULT, THE APPEALS FILED BY THE REVENUE AND THE CROSS OBJECTIONS FILED BY THE ASSES SEE ARE DISMISSED. SD/- SD/- (SANJAY ARORA) (N.VIJAYKUMARAN) ACCOUNTANT MEMBER JUDICIAL M EMBER ERNAKULAM, DATED THE 04 TH MARCH,2010. PM. COPY FORWARDED TO: 1. THE ASSIST. COMMISSIONER OF INCOME-TAX, CIRCLE-1(1) ,TRICHUR. 2. THE KERALA STATE FINANCIAL ENTERPRISES LTD., BHADRA THA, MUSEUM ROAD, TRICHUR. 3. CIT(A)-V, KOCHI/4. CIT, TRICHUR./5. D.R.