ACIT, New Delhi V. M/s. Gillettee Group India Pvt. Ltd., New Delhi

ITA 776/DEL/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 52457 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-08-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 04-08-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 07-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SALIL MISHRA
• Assessee Lawyers: R K KAPUR

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : C : NEW DELHI BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI K.G. BANSAL, ACCOUNTANT MEMBER ITA NO.776/DEL/2011 ASSESSMENT YEAR : 2007-08 ACIT, CIRCLE 12 (1), NEW DELHI. VS. GILLETTE GROUP INDIA PVT. LTD., 34, OKHLA INDUSTRIAL ESTATE, NEW DELHI. PAN : AAACG2468D (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI R.K. KAPUR, FCA REVENUE BY : SHRI SALIL MISHRA, SR. DR ORDER PER I.P. BANSAL, JUDICIAL MEMBER THIS IS AN APPEAL FILED BY THE REVENUE. IT IS DIRECT ED AGAINST THE ORDER PASSED BY THE CIT (A) DATED 19 TH NOVEMBER, 2010 FOR ASSESSMENT YEAR 2007-08. THE GROUNDS OF APPEAL READ AS UNDER:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE ORDER OF THE CIT (A) IS WRONG, PERVERSE, ILLEGAL AND AGAINST THE PROVISIONS OF LAW WHICH IS LIABLE TO BE SET ASIDE. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LD. CIT (A) HAS ERRED IN DELETING THE ADDITION OF RS.23,80 ,155/- MADE BY THE A.O. ON ACCOUNT OF INTEREST INCOME. 3. THE APPELLANT CRAVES TO LEAVE, TO ADD, ALTER OR AME ND ANY GROUND OF APPEAL RAISED ABOVE AT THE TIME OF THE HEARIN G. 2. THE ASSESSEE COMPANY IS A NON-BANKING FINANCE COMPANY REGISTERED WITH THE RESERVE BANK OF INDIA. IT FILED ITS RETURN OF INCOME AT ` 2,69,83,829/- ON 24 TH OCTOBER, 2007. DURING THE COURSE OF ITA NO.776/DEL/2011 2 ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT T HE ASSESSEE HAS GIVEN A LOAN OF ` 3,52,00,000/- TO ITS GROUP COMPANY, NAMELY, M/S GILLETTE DIVERSIFIED OPERATIONS PVT. LTD. THE ASSESSEE WAS REQUIRED TO EXPLAIN AS TO WHY THE INTEREST WAS NOT CHA RGED ON SUCH DEPOSIT. BY TAKING THE INTEREST RATE AT 6.50%, THE ASSE SSING OFFICER CALCULATED THE INTEREST AT ` 23,80,155/- WHICH WAS AD DED TO THE INCOME OF THE ASSESSEE. THE ADDITION WAS AGITATED BY THE ASSESSEE I N AN APPEAL FILED BEFORE THE CIT (A), BEFORE WHOM IT WAS SUBMITTED THAT COMPLETE DETAILS OF INTEREST WERE FILED BY THE ASSESSEE B EFORE THE ASSESSING OFFICER ACCORDING TO WHICH THE ASSESSEE HAD EARNE D AN INTEREST INCOME OF ` 34,44,883/- WHICH WAS DULY DISCLO SED AND WHICH INCLUDE INTEREST EARNED BY THE ASSESSEE OF A SUM OF ` 23, 80,155/- ON THE AFOREMENTIONED LOAN GIVEN TO M/S GILLETTE DIVERSI FIED OPERATIONS PVT. LTD. THE SAID FACT ALSO CAN BE VERIFIED FROM TH E TDS CERTIFICATE ISSUED BY THE DEDUCTOR WHICH WAS SUBMITTED IN ORIGINAL AT THE TIME OF FILING THE RETURN OF INCOME AND THE CREDIT OF WHICH TDS WAS ALSO ALLOWED BY THE ASSESSING OFFICER IN THE ASSESSMENT. THUS, I T WAS SUBMITTED THAT THE ASSESSING OFFICER WITHOUT PROPERLY VE RIFYING THE DETAILS FILED BY THE ASSESSEE HAS MADE ADDITION WHICH WAS NOT WARRANTED AND WHICH WILL TANTAMOUNT TO DOUBLE ADDIT ION. ON THESE SUBMISSIONS, LD. CIT(A), AFTER VERIFYING THE FACT FROM THE RECORD, HAS DELETED THE DISALLOWANCE. THE REVENUE IS AGGRIEVED, HENCE, IN APPEAL. 3. LD. DR, AFTER NARRATING THE FACTS, RELYING UPON T HE ASSESSMENT ORDER PLEADED THAT THE ADDITION WAS RIGHTLY MADE BY THE ASSESSING OFFICER AND CIT (A) HAS WRONGLY DELETED THE SAME. 4. ON THE OTHER HAND, LEARNED AR OF THE ASSESSEE HAS SUBM ITTED BEFORE US COPY OF THE AUDITED ANNUAL ACCOUNTS OF THE ASSESSEE TO DEMONSTRATE THAT THE SAID AMOUNT OF INTEREST WAS DULY I NCLUDED IN THE INTEREST INCOME SHOWN IN THE PROFIT & LOSS ACCOUNT. TH EREFORE, HE SUBMITTED THAT THE ADDITION MADE BY THE ASSESSING OFFICE R WAS WITHOUT ITA NO.776/DEL/2011 3 PROPERLY VERIFYING AND EXAMINING THE DETAILS SUBMITTE D AND THE LEARNED CIT (A) AFTER EXAMINING THE SAME HAS RIGHTLY DELETED THE ADDITION AND HIS ORDER SHOULD BE UPHELD. 5. AFTER CAREFUL CONSIDERATION OF THE SUBMISSIONS OF BOT H THE PARTIES AND THE ANNUAL ACCOUNTS PRODUCED BY THE LEARNED AR O F THE ASSESSEE, WE FIND THAT THE AFOREMENTIONED INTEREST WAS ALREADY PART OF THE PROFIT & LOSS ACCOUNT FILED BY THE ASSESSEE AND, THUS, WE FIND NO INFIRMITY IN THE FINDINGS RECORDED BY THE LEARNED CIT (A), ACCORD ING TO WHICH THE IMPUGNED ADDITION HAS BEEN DELETED ON THE GROUND THA T THE SAME WAS DOUBLE ADDITION MADE BY THE ASSESSING OFFICER AND THE I NCOME WAS ALREADY INCLUDED BY THE ASSESSEE IN THE RETURN OF ITS IN COME. FOR THE SAKE OF COMPLETENESS, SCHEDULE 10 IN WHICH THE ENTIRE INTEREST INCOME HAS BEEN SHOWN FOR THE YEAR UNDER CONSIDERATION IS AS UN DER:- AS AT MARCH AS AT MARCH AS AT MARCH AS AT MARCH 31,2007 31,2007 31,2007 31,2007 AS AT MARCH AS AT MARCH AS AT MARCH AS AT MARCH 31,2006 31,2006 31,2006 31,2006 10. OTHER INCOME INTEREST RECEIVED FROM FIXED DEPOSITS/INTER-CORPORATE DEPOSITS (GROSS) (TAX DEDUCTED AT SOURCE RS.7,64,206) (PREVIOUS YEAR: RS.5,58,663) 34,44,883 24,89,871 INTEREST RECEIVED OTHERS 11,33,439 14,94,226 SERVICE INCOME 36,05,421 1,54,83,379 EXCHANGE GAINS (NET) 4,03,467 --- PROFIT ON SALE OF INVESTMENTS (NET) 5,07,04,136 --- WRITE-BACK OF LIABILITIES NO LONGER REQUIRED 18,66,603 92,83,736 6,11,57,949 2,87,51,212 6. AS IT CAN BE SEEN FROM THE AFOREMENTIONED SCHEDULE , THE TOTAL AMOUNT OF INTEREST INCOME SHOWN BY THE ASSESSEE IS A SUM OF ` 45,78,322/- (`34,44,883 + `11,33,439/-). 7. THE ASSESSEE HAS ALSO FURNISHED THE BREAK-UP OF THE INT EREST INCOME AT PAGE 18 OF THE PAPER BOOK WHICH IS AS UNDER :- ITA NO.776/DEL/2011 4 BREAK-UP OF INTEREST INCOME S.NO. COMPANY NAME AMOUNT (RS.) 1. THIRD PARTY INTEREST INCOME 660,383 2. INTEREST INCOME GDOPL 597,146 3. INTERCOMPANY INTEREST INCOME GDOPL 1,783,007 4. INTEREST INCOME BANK INTEREST 741,772 5. INTEREST INCOME EMPLOYEE LOANS 796,014 TOTAL 4,578,322 8. IN THE AFOREMENTIONED BREAK-UP, GDOPL STANDS FOR G ILLETTE DIVERSIFIED OPERATIONS PVT. LTD. AND TOTAL OF TWO IT EMS IN THE NAME OF GDOPL COMES TO ` 23,80,155/- (` 5,97,146-17,83,009). IN THE PROFIT & LOSS ACCOUNT, COPY OF WHICH IS PLACED AT PAGE 2 OF THE PAPER BOOK, A SUM OF ` 6,11,57,949/- HAS BEEN SHOWN AS OTHER INCOME , THE SCHEDULE OF WHICH HAS ALREADY BEEN REPRODUCED ABOVE. FROM ALL THESE FACTS, IT IS CLEAR THAT THE AFOREMENTIONED AMOUNT OF ` 23,80,155/- WAS ALREADY INCLUDED IN THE INCOME OF THE ASSESSEE AND THE ADDITION MADE BY THE ASSESSING OFFICER WAS A DOUBLE ADDITION OF THE SA ME AMOUNT. 9. IN VIEW OF THE ABOVE DISCUSSION, WE FIND NO MERIT I N THE DEPARTMENTAL APPEAL AND THE SAME IS DISMISSED. 10. IN THE RESULT, THE APPEAL IS DISMISSED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 04.08.20 11. SD/- SD/- [K.G. BANSAL] [I.P. BANSAL] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED, 04.08.2011. DK ITA NO.776/DEL/2011 5 COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT, DELHI BENCHES ITA NO.776/DEL/2011 6 DATE OF DICTATION 04.08.2011 DATE OF PRESENTATION OF THE DRAFT ORDER TO THE MEMBER 05.08.2011 DATE OF RETURN FROM THE BENCH AFTER PRONOUNCEMENT &SIGNING DATE OF DISPATCH OF THE ORDER TO THE BENCH