OXFORD UNIVERSITY PRESS, MUMBAI V. ADDL CIT RG 2(2), MUMBAI

ITA 8173/MUM/2010

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 9556 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-11-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 22-11-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 25-11-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: HEENA DOSHI
• Section: 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH C , MUMBAI BEFORE SHRI RAJENDRA SINGH, ACCOUNTANT MEMBER AND SHRI VIVEK VARMA, JUDICIAL MEMBER ITA NO. 8173/M/2010 ASSESSMENT YEAR : 2006-07 OXFORD UNIVERSITY PRESS 167, C.S.T. ROAD KALINA, SANTACRUZ (E) MUMBAI-400 098. PAN NO. AAACO 3278 K VS. ADDL. COMMISSIONER OF INCOME TAX RANGE 2(2) AAYAKAR BHAVAN, 5 TH FLOOR M.K. ROAD MUMBAI-400 020. (APPELLANT) (RESPONDENT) APPELLANT BY : MS. HEENA DOSHI RESPONDENT BY : SHRI RAJARSHI DWIVEDY DATE OF HEARING : 22.11.2012 DATE OF PRONOUNCEMENT : 22.11.2012 O R D E R PER RAJENDRA SINGH, AM: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER D ATED 17.9.2010 OF AO IN PURSUANCE OF DIRECTION OF DISPUTE RE SOLUTION PANEL (DRP) UNDER SECTION 143(3)/144C(13). THE ONLY DISPUTE IS REGARDING DISALLOWANCE OF CLAIM OF INTEREST EXPENDITURE OF RS.52,4 6,000/- IN ADDITION TO RAISING DISPUTE ON LACK OF PROPER OPPORTUN ITY OF HEARING BY THE DRP. ITA NO.8173/M/10 A.Y. 06-07 2 2. FACTS IN BRIEF ARE THAT THE ASSESSEE COMPANY WHICH IS A BRANCH OF OXFORD UNIVERSITY PRESS, U,K., A DEPARTMENT OF OXFO RD UNIVERSITY HAD CLAIMED ITS INCOME EXEMPT UNDER SECTION 10(22) FOR T HE ASSESSMENT YEAR 1990-91. THE CLAIM OF EXEMPTION HAD BEEN UPHELD BY THE TRIBUNAL IN ASSESSMENT YEAR 1990-91 IN PURSUANCE TO WHICH THE ASSESSEE GOT REFUND OF TAX PAID INCLUDING INTEREST OF RS.5 2.46 LACS IN FINANCIAL YEAR 1993-94. THE ASSESSEE DECLARED INTEREST IN COME OF RS.42.46 LACS FOR TAXATION IN 1994-95 WHICH WAS ASSESSED BY AO IN ASSESSMENT ORDER DATED 6.3.1996. THEREAFTER IT WAS FOUND THAT HON'BLE HIGH COURT OF BOMBAY IN RELATION TO ASSESSMENT YEAR 197 6-77 IN CASE OF THE ASSESSEE HELD THAT INCOME WAS TAXABLE AND NOT EXEM PT UNDER SECTION 10(22). THE JUDGMENT OF THE HIGH COURT WAS UP H ELD BY THE HON'BLE SUPREME COURT ON 24.1.2001. THE AO GAVE EFFE CT TO THE ORDER OF HON'BLE SUPREME COURT FOR ASSESSMENT YEAR 1976-77 ON 16.8.2005. ASSESSEE, THEREFORE, IN ASSESSMENT YEAR 2006-07 CLAIMED DEDU CTION OF RS.52.46 LACS WHICH HAD BEEN OFFERED AS INCOME IN ASSESSMENT YEAR 1994-95, AS THE ASSESSEE HAD TO RETURN THE REFUND AMOUNT WITH INTEREST. THE AO DURING THE ASSESSMENT PROCEEDINGS DID NOT AGREE WITH THE CLAIM MADE BY THE ASSESSEE AND SINCE THE ASSESSEE WAS A FO REIGN COMPANY, THE AO PROPOSED DRAFT ORDER DISALLOWING THE CL AIM AGAINST WHICH THE ASSESSEE FILED OBJECTIONS BEFORE DRP. THE ASSESSEE SUBMITTED BEFORE DRP THAT THE SAME INCOME HAD BEEN TAX ED TWICE I.E., ITA NO.8173/M/10 A.Y. 06-07 3 IN ASSESSMENT YEAR 2006-07 AND 1994-95. IT WAS ARGUED TH AT SINCE INTEREST HAD BEEN RETURNED BACK, INTEREST SHOULD BE ALL OWED AS DEDUCTION IN ASSESSMENT YEAR 2006-07. THE DRP HOWEVER RE JECTED THE CLAIM ON THE GROUND THAT THERE WAS NO PROVISION FOR AL LOWING DEDUCTION ON ACCOUNT OF INTEREST. THE AO IN THE ORDER DATED 17.9 .2010 PASSED UNDER SECTION 143(3)/ 144C(B) DISALLOWED THE CLAIM AGG RIEVED BY WHICH, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 2.1 BEFORE US THE LD. AR SUBMITTED THAT DRP HAD NOT A LLOWED OPPORTUNITY OF HEARING TO THE ASSESSEE BEFORE PASSING THE ORDER AND THEREFORE THE ORDER OF THE AO MAY BE SET ASIDE AND MA TTER MAY BE RESTORED TO THE FILE OF AO FOR FRESH DECISION. IT WAS A LSO SUBMITTED THAT THE SAME INCOME COULD NOT BE TAXED TWICE I.E., ONCE IN ASSESSMENT YEAR 1994-95 AND AGAIN IN ASSESSMENT YEAR 2006-07. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAND SUPPORT ED THE ORDER OF AO PASSED PURSUANCE TO DIRECTION OF DRP AND PLACED RELIAN CE IN THE FINDINGS GIVEN IN THESE ORDERS. 2.2 WE HAVE PERUSED THE RECORDS AND CONSIDERED THE RIVAL CONTENTIONS CAREFULLY. THE DISPUTE IS REGARDING LACK OF ADEQUATE OPPORTUNITY TO THE ASSESSEE BY DRP AND ALLOWABILITY OF INTEREST EXPENDITURE OF RS.52.46 LACS RECEIVED ON INCOME TAX REFU ND IN ASSESSMENT YEAR 1990-91 AND WHICH HAD BEEN OFFERED TO TA X BY THE ITA NO.8173/M/10 A.Y. 06-07 4 ASSESSEE IN ASSESSMENT YEAR 1994-95. SUBSEQUENTLY, CONSEQUENT TO JUDGMENT OF HON'BLE SUPREME COURT FOR ASSESSMENT YEAR 19 76-77 IN WHICH THE INCOME OF THE ASSESSEE WAS FOUND TAXABLE, IT IS C LAIMED THAT THE ASSESSEE HAD REPAID THE REFUND ALONG WITH INTEREST R ECEIVED IN 1994-95. IT HAS THEREFORE BEEN ARGUED THAT INTEREST WHICH HAD BEEN OFFERED BY THE ASSESSEE FOR TAX IN THE ASSESSMENT YEAR 1994 -95 SHOULD BE ALLOWED AS DEDUCTION IN ASSESSMENT YEAR 2006-07. A GR OUND HAS ALSO BEEN RAISED REGARDING LACK OF OPPORTUNITY BY DRP. WE ARE HOWEVER NOT CONVINCED REGARDING LACK OF ADEQUATE OPPO RTUNITY. THE ONLY ARGUMENT ADVANCED BY THE ASSESSEE EVEN AT THIS STAGE IS THAT SINCE THE SAME INCOME CAN NOT BE TAXED TWICE AND, THEREFO RE ASSESSEE BE ALLOWED DEDUCTION ON ACCOUNT OF INTEREST EXPENDITUR E IN ASSESSMENT YEAR 2006-07. WE FIND THAT THIS ARGUMENT HAS ALREADY BEEN NOTED BY THE DRP WHO HAVE REJECTED THE SAME ON THE GROUND THAT THERE WAS NO PROVISION FOR ALLOWING DEDUCTION FOR INTEREST EXPENDI TURE. WE, THEREFORE REJECT THE CLAIM OF LACK OF ADEQUATE OPPORTUNITY. 2.3 AS REGARDS MERIT OF CLAIM WE FIND THAT ASSESSEE HAD OF FERED INTEREST INCOME IN ASSESSMENT YEAR 1994-95 WHICH WAS ASSESSED UNDER SECTION 143(3). SUBSEQUENTLY, IT WAS FOUND, AS PER THE JUDGMENT OF THE HON'BLE SUPREME COURT, THAT INCOME OF THE ASSESSEE WAS TAXABLE AND IT WAS NOT ENTITLED FOR ANY REFUND FOR ASSESSMENT YEAR 1990-91 AND ASSESSEE HAD THEREFORE TO REPAY THE AMOUNT RECEIVED. ITA NO.8173/M/10 A.Y. 06-07 5 THE ASSESSEE HAS THEREFORE CLAIMED EXPENDITURE ON ACCOUNT O F INTEREST ON REFUND RETURNED BY IT IN ASSESSMENT YEAR 2006-07. T HE CLAIM HAS BEEN RIGHTLY REJECTED BY THE AO AS THE INTEREST ON REF UND, RETURNED BY THE ASSESSEE CAN NOT BE CONSIDERED AS EXPENDITURE INCURRED F OR THE PURPOSE OF BUSINESS. THE PROPER COURSE OF ACTION WILL BE TO APPLY FOR AMENDMENT OF THE ORDER FOR ASSESSMENT YEAR 1994-95 IF P ERMISSIBLE UNDER LAW. IN FACT, ASSESSEE HAS ALREADY FILED RECTIFICAT ION PETITION UNDER SECTION 154 AS TRANSPIRED DURING THE HEARING OF T HE APPEAL. WE DO NOT FIND ANY MERIT IN THE CLAIM OF DEDUCTION ON ACCO UNT OF INTEREST IN ASSESSMENT YEAR 2006-07. WE, ACCORDINGLY DO NOT SEE ANY INFIRMITY IN THE ORDER OF AO DISALLOWING THE CLAIM AND THE SAME IS THEREFORE UPHELD. 3. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 22.11.2012. SD/- SD/- (VIVEK VARMA) JUDICIAL MEMBER (RAJENDRA SINGH) ACCOUNTANT MEMBER MUMBAI, DATED: 22.11.2012. JV. ITA NO.8173/M/10 A.Y. 06-07 6 COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR BENCH TRUE COPY BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.