A.C.I.T. 2(3), MUMBAI V. TATA SONS LTD., MUMBAI

ITA 8448/MUM/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 9546 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2004-2005
• Appeal Filed On: 12-12-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GIRIJA DAYAL
• Assessee Lawyers: DINESH VYAS
• Keywords: Tax effect
• Section: 143(3); 244A; 234B; 147

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E MUMBAI . , / BEFORE SHRI D. MANMOHAN, VICE PRESIDENT /AND !'# , ! . . SHRI RAJENDRA, ACCOUNTANT MEMBER . / ITA NO. 8448/MUM/2011 $ $ $ $ / ASSESSMENT YEAR 2004-05 ACIT-2(3), R.NO. 556, AAYAKAR BHAVAN, MUMBAI VS. M/S. TATA SONS LTD., BOMBAY HOUSE, 24, HOMI MODI STREET, FORT, MUMBAI-400 001. PAN: AAACT 4060 A ( %& / APPELLANT ) ( '(%& / RESPONDENT ) REVENUE BY : SHRI GIRIJA DAYAL ASSESSEE BY : SHRI DINESH VYAS ) *+ / DATE OF HEARING : 26-11-2012 ,$ ) *+ / DATE OF PRONOUNCEMENT : 30-11-2012 -!. / O R D E R PER RAJENDRA, A.M. THE APPELLANT HAD FILED THIS APPEAL AGAINST THE ORD ER DT. 19-05-2011 OF THE CIT(A)-6, MUMBAI ON THE FOLLOWING GROUNDS: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LEARNED CIT(A) HAS ERRED IN ALLOWING RELIEF TO THE ASSESSEE TO THE EXTENT IMPUG NED IN THE GROUNDS ENUMERATED BELOW: THE ORDER OF THE CIT(A) IS OPPOSED TO LAW AND FACTS OF THE CASE. 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD. CIT(A) ERRED TO APPRECIATE THAT THE REFUND OF RS. 64,77,77,872/- DE TERMINED AFTER GIVING APPEAL EFFECT WAS DIRECTLY AND MAINLY ATTRIBUTABLE TO DIT RELIEF OF RS. 56,62,06,469/- AND, THEREFORE, THE ASSESSEE WAS NOT ENTITLED TO INTERES T U/S. 244A (1)(A) ON PART OF THE REFUND OF RS. 56,62,06,469/- I.E. DIT RELIEF. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD.CIT(A) ERRED IN DIRECTING THAT THE INTEREST U/S. 244A(1)(A) SHOULD BE GRANTED ON RS. 64,77,77,872/- ITA NO. 8448/MUM/2011 M/S. TATA SONS LTD 2 INSTEAD OF RS. 8,15,71,403/- WITHOUT APPRECIATING T HE FACT THAT THE BALANCE AMOUNT OF RS. 56,62,06,469/- (RS. 64,77,77,872/- REFUND DETER MINED AFTER GIVING DIT RELIEF MINUS RS. 56,62,06,469/- I..E, AMOUNT OF DIT RELIEF ). 3. FOR THESE AND OTHER GROUNDS THAT MAY BE URGED AT TH E TIME OF HEARING, THE DECISION OF THE CIT(A) MAY BE SET ASIDE AND THAT OF THE AO REST ORED. 2. THE ASSESSEE-COMPANY, ENGAGED IN THE BUSINESS OF EX PORT OF SOFTWARE, FILED ITS RETURN OF INCOME ON 29-10-2004 DECLARING TOTAL LOSS OF RS. 21,99,34,573/-. INITIALLY, THE RETURN WAS PROCESSED U/S. 143(1) OF THE INCOME TAX ACT, 1961(ACT). LATER ON, REGULAR ASSESSMENT WAS COMPLETED U/S. 143(3) OF THE ACT ON 27-12-2006 DETERMING THE TOTAL INCOME AT RS. 758,60,37,688/-. LATER ON THE ASSESSMENT WAS RE-OPENED AS PER THE PROVISIONS OF SECTION 147 OF THE ACT AND ASSESSMENT WAS FINALISED ON 30-12-2009 BY THE ASSESSING OFFICER (AO) DETERMINING THE TOTAL IN COME OF THE ASSESSEE AT RS. 13,26,12,33,540/- . ASSESSEE PREFERRED AN APPE AL BEFORE THE FIST APPELLATE AUTHORITY (FAA), WHO DELETED A FEW ADDITIONS/DIS-A LLOWANCES MADE BY THE AO. VIDE ITS ORDER DT. 09-03-2009, AO GAVE EFFECT TO THE ORD ER OF THE FAA. WHILE CALCULATING THE TAX EFFECT OF THE FAA, AO MADE SOME ADJUSTMENTS WITH REGARD TO DOUBLE INCOME TAX RELIEF (DIT RELIEF) (U/S. 90/91) AND INTEREST P AYABLE AS PER THE PROVISIONS OF SECTION 244A. 2.1 AGAINST THE SAID CALCULATION, ASSESSEE PREFERRED AN APPEAL BEFORE THE FAA. AFTER HEARING THE SUBMISSIONS OF THE ASSESSEE AND T HE MATERIAL AVAILABLE ON THE FILE, FAA HELD THAT DIT RELIEF AT COLUMN NO. 18 OF ITNS 150A WAS TO BE CALCULATED AT RS. 56.62 CRORES, THAT TAX CHARGEABLE AT SERIAL NUM BER 21 OF THE ITNS WAS RS. 10.99 CRORES, THAT ADVANCE TAX PAID WAS RS. 57 CRORES, TH AT TAX DEDUCTED AT SOURCE FOR THE YEAR WAS RS. 18.76 CROES, THAT TOTAL AMOUNT OF ADVA NCE TAX AND TDS PAID WAS RS. 75.76 CRORES. FINALLY, HE HELD THAT REFUND DUE TO THE ASSESSEE WAS RS. 64.77 CRORES. HE FURTHER HELD THAT THE AMOUNT BEING REFUNDED TO A SSESSEE-COMPANY WAS OUT OF TDS AND ADVANCE TAX, THAT THE INTEREST U/S. 244A (1)(A) WAS PAYABLE ON THE SAME. HE DIRECTED THE AO TO GRANT INTEREST U/S. 244A (1)(A) ON THE AMOUNT OF RS. 64.77 RORES. 3. BEFORE US, DEPARTMENTAL REPRESENTATIVE (DR) RELIED UPON THE ORDER OF THE AO. AUTHORISED REPRESENTATIVE (AR) SUBMITTED THAT AS PE R THE INCOME TAX COMPUTATION FORM, THE GROSS TAX PAYABLE WAS DETERMINED AS PER P OINT NO. 16 OF THE SAID FORM, THAT POINT NOS. 17 TO 19 PERTAINED TO TAX RELIEF WHICH A N ASSESSEE WAS ENTITLED TO, THAT POINT NO. 18 SPECIFICALLY DEALT WITH DIT RELIEF U/S. 90/9 1 OF THE ACT, THAT AO WAS REGULARLY FOLLOWING THE ABOVE METHOD FOR ARRIVING AT THE NET TAX PAYABLE/REFUNDABLE AND THE CONSEQUENTIAL COMPUTATION OF INTEREST CHARGEABLE/PA YABLE, THAT IN THE AY UNDER CONSIDERATION, THE AO FOR THE FIRST TIME DEVIATED F ROM THE NORMS AS STATED ABOVE, THAT IN THE INCOME TAX COMPUTATION FORM THE AMOUNT OF D IT RELIEF HAD NOT BEEN STATED AT POINT NO. 18 OF THE FORM, THAT THE SAME HAD BEEN REDUCED THAT THE AO WHILE GIVING EFFECT TO THE ORDER OF THE FAA HAD REDUCED THE DIT RELIEF AMOUNTING TO RS. 56.62 CRORES, THAT HE COMPUTED THE INTEREST U/S. 244A (1) (A) OF THE ACT ON THE NET AMOUNT OF RS. 8.15 CRORES, THAT FAA HAD DIRECTED THE AO FOR T HE PURPOSE OF COMPUTING INTEREST U/S. 234B OF THE ACT ALL TAX PAYABLE SHOULD BE CONS IDERED, THAT THE SAME PRINCIPLE SHOULD BE APPLIED WHILE COMPUTING THE INTEREST U/S. 244A (1)(A) OF THE ACT, THAT THE METHOD ADOPTED BY THE AO WAS TOTALLY ARBITRARY AND AGAINST THE METHOD CONSISTENTLY FOLLOWED BY HIS PREDECESSORS, THE FAA HAD RIGHTLY D IRECTED THE AO THE COMPUTE INTEREST U/S. 244A (1)(A) OF THE ACT WITHOUT DEDUCT ING THE DIT RELIEF FROM THE TAX ITA NO. 8448/MUM/2011 M/S. TATA SONS LTD 3 REFUNDABLE AMOUNTING TO RS. 64.77 CRORES. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US. WE HAVE ALSO PERUSED THE PAGE NOS. 5,6,13 AND 14 OF TH E PAPER BOOK (PB). WE FIND THAT WHILE GIVING THE APPEAL EFFECT TO THE ORDER OF THE FAA, DIT RELIEF WAS NOT ALLOWED TO THE ASSESSEE-COMPANY BY THE AO, TO WHICH IT IS ENTI TLED TO. WE ARE OF THE OPINION THAT CALCULATION GIVEN BY THE FAA, AT PARA NO. 3 OF HIS ORDER, IS AS PER THE PROVISIONS OF THE ACT. IN OUR OPINION, HIS ORDER DIRECTING THE A O TO GRANT INTEREST U/S. 244A (1)(A) ON THE AMOUNT OF RS. 64.77 CRORES (PARA NO.4 OF HIS ORDER) DOES NOT SUFFER FROM ANY INFIRMITY AND HENCE DOES NOT NEED ANY INTERFERENCE FROM OUR SIDE. GROUND NOS. 1 AND 2 ARE DECIDED AGAINST THE AO. APPEAL FILED BY THE AO STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH NOVEMBER, 2012 -!. ) ,$ + ! ' 0 1-2 30 TH NOVEMBER, 2012 ) 3 4 SD/- SD/- ( . / D. MANMOHAN) ( !'# / RAJENDRA) / VICE PRESIDENT !+ -5 / ACCOUNTANT MEMBER MUMBAI, 1- DATE: 30 TH NOVEMBER, 2012 TNMM -!. -!. -!. -!. ) )) ) '*6 '*6 '*6 '*6 7!6$* 7!6$* 7!6$* 7!6$* / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. THE CONCERNED CIT (A) 4. THE CONCERNED CIT 5. DR E BENCH, ITAT, MUMBAI 6. GUARD FILE (6* '* //TRUE COPY// -!. -!. -!. -!. / BY ORDER, / DY./ASST. REGISTRAR , / ITAT, MUMBAI