Saregama India Ltd., Kolkata V. DCIT, CIR-3, KOLKATA, Kolkata

ITA 809/KOL/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1715 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 2 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-08-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2001-2002
• Appeal Filed On: 05-06-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: GOULEN HANGSHING
• Section: 143(3); 234B; 263; 63; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : KOLKATA [BEFORE HONBLE SHRI A.T.VARKEY, JM & SRI M.BALA GANESH, AM ] I.T.A NOS. 808 & 809/ KOL/2015 ASSESSMENT YEAR : 2001-0 2 SAREGAMA INDIA LTD. -VS.- DCIT, CIRC LE-3, KOLKATA [PAN : AAACT 9815 B] (APPELLANT) (RESPONDENT) FOR THE APPELLANT : SHRI J.P. KHAITAN, AR SHRI PRATYUSH JHUNJHUNWALA, AR FOR THE RESPONDENT : SHRI GOULEN HANGSHING, CIT, DR DATE OF HEARING : 24.08.2017 DATE OF PRONOUNCEMENT : 06.09.2017. ORDER PER M.BALAGANESH, AM 1. THE APPEAL IN ITA NO. 808/KOL/2015 IS DIRECTED A GAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-I, KOLKATA [ I N SHORT LD CITA] IN APPEAL NO. 906/CIT(A)-1/C-3/2014-15 DATED 11.3.2015 FOR THE AS ST YEAR 2001-02 AGAINST THE ORDER OF THE DCIT, CIRCLE -3, KOLKATA [ IN SHORT THE LD A O] DATED 11.9.2009 UNDER SECTION 154/254/154/143(3)/263 OF THE INCOME TAX ACT , 1961 (HEREINAFTER REFERRED TO AS THE ACT). THE APPEAL IN ITA NO. 809/KOL/2015 IS DIRECTED AGAI NST THE ORDER OF THE LD CITA IN APPEAL NO. 907/CIT(A)-1/C-3/2014-15 DATED 11.3.2015 FOR THE ASST YEAR 2001-02 AGAINST THE ORDER OF THE LD AO DATED 24.3.2008 UNDE R SECTION 254/154/143(3)/263 OF THE ACT. 2. THE IDENTICAL ISSUES INVOLVED IN THESE APPEALS A RE WITH REGARD TO THE CHARGEABILITY OF INTEREST U/S 234B , 234D AND 220(2) OF THE ACT. 2 ITA NOS.808 & 809/KOL/2015 SAREGAMA INDIA LTD. A.YR.2001-02 2 3. THE BRIEF FACTS OF THE ISSUES ARE THAT THE ASSES SEE IS A WIDELY HELD INDIAN COMPANY ENGAGED INTER ALIA IN THE BUSINESS OF MANUFACTURE A ND SALE OF AUDIO CASSETTES, CDS ETC AND ALSO IN PRODUCTION OF FILMS / TV SERIALS ETC. FOR THE MANUFACTURE AND SALE OF AUDIO CASSETTES AND CDS ETC, THE ASSESSEE ENTERS INTO AGR EEMENT WITH VARIOUS PRODUCERS TO PURCHASE THE RIGHT TO REPRODUCE FILM MUSIC WHICH C ONSTITUTES THE RAW MATERIAL TO REPRODUCE THE FILM MUSIC AND SELL THE SAME TO THE PUBLIC AT LARGE IN THE FORM OF MUSIC CASSETTES , CDS ETC. FOR THE YEAR ENDED 31.3.2011 , THE ASSESSEE FILED ITS RETURN OF INCOME DECLARING TOTAL INCOME OF RS 7,42,10,590/- U NDER THE NORMAL PROVISIONS OF THE ACT AND BOOK PROFITS OF RS 5,36,14,562/-. THE TAX WAS PAID UNDER THE NORMAL PROVISIONS OF THE ACT AS THE SAME WAS HIGHER THAN T HAT DETERMINED UNDER THE BOOK PROFITS. THE LD AO INITIALLY COMPLETED THE ASSESS MENT U/S 143(3) OF THE ACT ON 29.3.2004 DETERMINING TOTAL INCOME AT RS 9,21,33,48 0/-. IN THE SAID ORDER, INTEREST U/S 234B OF THE ACT WAS CHARGED BY THE LD AO. 3.1. THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD CITA AGAINST THIS ORDER OF ASSESSMENT , WHICH WAS DISPOSED OFF BY THE LD CITA ON 24.12.2004 GRANTING PART RELIEF TO THE ASSESSEE. 3.2. GIVING EFFECT TO THIS ORDER OF THE LD CITA DAT ED 24.12.2004, THE LD AO PASSED AN ORDER U/S 251 OF THE ACT ON 18.1.2005 WHEREIN , INT EREST U/S 234B OF THE ACT WAS NOT CHARGED BY THE ASSESSEE AS THE COMPUTATION RESULTED IN A REFUND IN VIEW OF MAT CREDIT, ADVANCE TAX AND TDS. 3.3. AGAINST THE ORDER OF THE LD CITA DATED 24.12.2 004, THE ASSESSEE PREFERRED FURTHER APPEAL BEFORE THIS TRIBUNAL , WHICH WAS DISPOSED OF F GRANTING PARTIAL RELIEF TO THE ASSESSEE VIDE ORDER IN ITA NO. 492 & 522/KOL/2005 DATED 9.2.2007. 3 ITA NOS.808 & 809/KOL/2015 SAREGAMA INDIA LTD. A.YR.2001-02 3 3.4. GIVING EFFECT TO THE ORDER DATED 9.2.2007 OF T HIS TRIBUNAL , THE LD AO PASSED AN ORDER U/S 254/154/143(3)/263 OF THE ACT ON 24.3.2008 (ONE OF THE IMPUGNED ASSESSMENT ORDER BEFORE US) , WHEREIN THE INCOME WAS DETERMINED AT RS 14,25,10,080/-. IN THE SAID ORDER, THE LD AO CHARGED INTEREST U/S 234B OF THE ACT . 3.5. THIS ACTION OF THE LD AO WAS UPHELD BY THE LD CITA AS CHARGING OF INTEREST U/S 234B OF THE ACT WHICH WAS OMITTED TO BE CHARGED IN THE EARLIER ORDER IS A MISTAKE APPARENT FROM RECORD AND IS ALSO CONSEQUENTIAL IN N ATURE TO THE DETERMINATION OF FINAL DEMAND THEREON. 3.6. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US ON THE FOLLOWING GROUNDS:- 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(APPEALS) ERRED IN CONFIRMING THE LEVY OF INTEREST U/S 234B O F THE ACT AS CHARGED BY THE ASSESSING OFFICER. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(APPEALS) ERRED IN NOT APPRECIATING THE FACT THAT THE LEVY OF INTEREST U/S 234B OF THE ACT IS A DEBATABLE MATTER AND HENCE, OUTSIDE THE PURVIEW OF SECTION 154 OF THE ACT. 3. THAT THE APPELLANT CRAVES LEAVE TO ADD TO AND/OR ALTER, AMEND, MODIFY OR RESCIND THE GROUNDS HEREINABOVE BEFORE OR AT THE HE ARING OF THIS APPEAL. 4. THE LEARNED COMMISSIONER OF INCOME TAX [ IN SHO RT THE LD CIT] INVOKED REVISIONARY JURISDICTION U/S 263 OF THE ACT AND SOUGHT TO REVIS E THE ORDER PASSED BY THE LD AO U/S 143(3) OF THE ACT DATED 29.3.2004. THE ORDER OF T HE LD CIT U/S 263 OF THE ACT WAS PASSED ON 31.3.2006. AGAINST THE ORDER OF THE LD C IT U/S 263 OF THE ACT DATED 31.3.2006, THE ASSESSEE PREFERRED AN APPEAL BEFORE THIS TRIBUNAL , WHICH WAS DISPOSED OFF IN ITA NO. 1148/KOL/2006 DATED 30.12.2006. 4.1. GIVING EFFECT TO THE ORDER OF THE LD CIT U/S 2 63 OF THE ACT, THE LD AO PASSED AN ORDER ON 28.12.2006 DETERMINING TOTAL INCOME OF THE ASSESSEE AT RS 15,31,50,240/-. 4 ITA NOS.808 & 809/KOL/2015 SAREGAMA INDIA LTD. A.YR.2001-02 4 THE ASSESSEE PREFERRED APPEAL AGAINST THIS ORDER BE FORE THE LD CITA WHICH WAS DISPOSED OFF IN FAVOUR OF THE ASSESSEE. IT IS NOT KNOWN WHET HER THE REVENUE HAD PREFERRED FURTHER APPEAL BEFORE THIS TRIBUNAL AGAINST THIS ORDER OR N OT. 4.2. THE LD AO PASSED AN ORDER U/S 154/254/154/143( 3)/263 OF THE ACT ON 11.9.2009 (ONE OF THE IMPUGNED ORDER BEFORE US) , WHEREIN INT EREST U/S 234B, 234D AND 220(2) OF THE ACT WERE CHARGED BY THE ASSESSEE. THIS LEVY O F INTEREST HAS BEEN UPHELD BY THE LD CITA VIDE HIS ORDER DATED 11.3.2015 IN APPEAL NO. 9 06/CIT(A)-1/C-3/2014-15. 4.3. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US ON THE FOLLOWING GROUNDS:- 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(APPEALS) ERRED IN CONFIRMING THE LEVY OF INTEREST U/S 234B O F THE ACT AS CHARGED BY THE ASSESSING OFFICER. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(APPEALS) ERRED IN NOT CONSIDERING THE ISSUE OF LEVY OF INTER EST U/S 234D OF THE ACT AS CHARGED BY THE ASSESSING OFFICER. 3. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(APPEALS) ERRED IN NOT CONSIDERING THE ISSUE OF LEVY OF INTER EST U/S 220(2) OF THE ACT AS CHARGED BY THE ASSESSING OFFICER. 4. THAT THE APPELLANT CRAVES LEAVE TO ADD TO AND/OR ALTER, AMEND, MODIFY OR RESCIND THE GROUNDS HEREINABOVE BEFORE OR AT THE HE ARING OF THIS APPEAL. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS. WE FIND TH AT THIS TRIBUNAL AGAINST THE ORDER OF THE LD CIT U/S 263 OF THE ACT HAD PASSED AN ORDER I N ITA NO. 1148/KOL/2006 DATED 30.12.2006 FOR THE ASST YEAR 2001-02 HAD PASSED AN ORDER AS UNDER:- THIS IS AN APPEAL PREFERRED BY THE ASSESSEE AGAINS T THE ORDER OF CIT.-1, KOLKATA U/S 263 OF THE ACT DATED 31.03.2008 FOR A.Y. 2001-02. 2. AT THE OUTSET, WE WOULD LIKE TO TAKE NOTE OF THE ORDER SHEET ENTRY DATED 24.11.2016 WHICH READS AS UNDER: THIS IS AN APPEAL AGAINST AN ORDER U/S 263 OF THE ACT. THE LD. SR. COUNSEL FOR ASSESSEE SUBMITTED THAT PURSUANT TO THE ORDER U/S 2 63 OF THE ACT THE AO PASSED 5 ITA NOS.808 & 809/KOL/2015 SAREGAMA INDIA LTD. A.YR.2001-02 5 AN ORDER OF ASSESSMENT AND THE ASSESSEE CHALLENGED THE ADDITIONS MADE THEREIN BEFORE CIT(A). THE CIT(A) ALLOWED CERTAIN RELIEFS T O THE ASSESSEE. IF THE DEPARTMENT DOES NOT FILE ANY FURTHER APPEAL BEFORE ITAT AGAINST THE ORDER OF THE CIT(A) THE ASSESSEE WILL NOT PURSUE THIS APPEAL. TH E LD. DR SOUGHT TIME TO VERIFY IF ANY APPEAL AGAINST THE ORDER OF LD. CIT(A ) HAS BEEN FILED BY THE REVENUE. ACCORDING THE APPEAL IS ADJOURNED TO 19.12 .2016. DATE ANNOUNCED IN OPEN COURT. 3. IN THE BACK DROP OF THE AFORESAID FACTS ON QUERY FROM THE BENCH AS TO WHETHER THE REVENUE HAS FILED ANY APPEAL AGAINST THE ORDER OF C IT(A), THE LD. DR WAS NOT ABLE TO POSITIVELY STATE AS TO WHETHER THE APPEAL HAS BEEN FILED OR NOT. ACCORDING TO THE LD. AR, TO THE BEST OF HIS KNOWLEDGE THE REVENUE HAS NOT PR EFERRED ANY APPEAL AGAINST THE ORDER OF CIT(A). IN SUCH A SCENARIO THE LD. AR WISHES TO WITHDRAW THE APPEAL WITH A LIBERTY THAT IT CAN MOVE APPROPRIATE APPLICATION TO RECAL L THE ORDER IF THE REVENUE HAD IN FACT FILED ANY APPEAL. 4. WE HAVE HEARD THE PARTIES AND PERUSED THE RECORD S. SINCE, THE AO HAS PASSED AN ORDER PURSUANT TO THE IMPUGNED ORDER PASSED BY CIT U/S 263 OF THE ACT WHICH IN TURN HAS BEEN CHALLENGED BY THE ASSESSEE BEFORE CIT(A) AND THE ASSESSEE CLAIMS TO HAVE GOT CERTAIN RELIEF FROM CIT(A). THE ASSESSEES STAND BE FORE THIS TRIBUNAL WAS THAT IF THE REVENUE IS NOT IN APPEAL BEFORE THE TRIBUNAL AGAINS T THE ORDER OF CIT(A), THE ASSESSEE WOULD NOT PURSUE THIS APPEAL PREFERRED AGAINST 263 ORDER OF THE CIT. WE HAD GIVEN OPPORTUNITY TO THE REVENUE TO FIND OUT WHETHER THE REVENUE HAS PREFERRED ANY APPEAL. HOWEVER, THE REVENUE IS NOT IN A POSITION TO STATE POSITIVELY AS TO WHETHER THEY HAVE FILED ANY APPEAL AGAINST THE ORDER OF CIT(A). IN TH E LIGHT OF THE FACTS AND CIRCUMSTANCES, AND SINCE IT IS A VERY OLD APPEAL WE ARE INCLINED T O ALLOW THE PRAYER OF THE ASSESSEE TO WITHDRAW THIS APPEAL WITH THE LIBERTY GIVEN TO THE ASSESSEE THAT IN CASE THE REVENUE FILES/OR HAD FILED AN APPEAL AGAINST THE ORDER OF C IT(A) THEN IT IS AT LIBERTY TO FILE APPROPRIATE APPLICATION TO RECALL THIS ORDER. WITH THIS OBSERVATION WE ARE INCLINED TO DISMISS THE APPEAL AS WITHDRAWN. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS MISSED AS WITHDRAWN. 5.1. EVEN AT THIS STAGE, THE REVENUE WAS NOT ABLE T O POINT OUT WHETHER ANY APPEAL WAS PREFERRED BY THEM BEFORE THIS TRIBUNAL AGAINST THE ORDER PASSED BY THE LD CITA PURSUANT TO GIVING EFFECT ORDER OF SECTION 263 OF THE ACT PA SSED BY THE LD AO ON 28.12.2006. HENCE WE HOLD THAT THE SAME SITUATION THAT WAS PREV AILING WHILE DISPOSING OFF THE APPEAL IN ITA NO. 1148/KOL/2006 DATED 30.12.2006 IS EXISTI NG EVEN ON THE DATE OF THIS HEARING OF APPEAL. THE LD AR STATED THAT TO THE BEST OF HI S KNOWLEDGE THE REVENUE HAD NOT PREFERRED ANY APPEAL BEFORE THIS TRIBUNAL AGAINST T HE SAID ORDER OF LD CITA. IN THESE 6 ITA NOS.808 & 809/KOL/2015 SAREGAMA INDIA LTD. A.YR.2001-02 6 CIRCUMSTANCES, WE PERMIT THE PRAYER OF THE LD AR TO WITHDRAW THESE APPEALS AT PRESENT WITH LIBERTY TO FILE APPROPRIATE APPLICATION TO REC ALL THIS ORDER IN THE EVENT OF REVENUE FILING OR HAD FILED AN APPEAL AGAINST THE ORDER OF THE LD CITA BEFORE THIS TRIBUNAL. HENCE THE DIRECTIONS GIVEN BY THIS TRIBUNAL IN ITA NO. 11 48/KOL/2006 IN PARA 3 & 4 DATED 30.12.2006 WOULD HOLD GOOD FOR THESE APPEALS. 6. IN THE RESULT, THE APPEALS OF THE ASSESSEE ARE D ISMISSED AS WITHDRAWN. ORDER PRONOUNCED IN THE COURT ON 06 .09.2017. SD/- SD/- [A.T.VARKEY] [ M.BALAGANESH] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : SB, SR. PS COPY OF THE ORDER FORWARDED TO: 1.SAREGAMA INDIA LIMITED, 33, JESSORE ROAD, DUM DUM , KOLKATA-700028 2. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-3, KOL KATA, P-7, CHOWRINGHEE SQUARE, AAYAKAR BHAWAN, KOLAKATA-700069 3.CIT(A)-I, KOLKATA 4. CIT-KOLKATA 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER SENIOR PRIVA TE SECRETARY HEAD OF OFFICE/ D.D.O., ITAT KOLKATA BENCHE S 7 ITA NOS.808 & 809/KOL/2015 SAREGAMA INDIA LTD. A.YR.2001-02 7