M/s MRM Plantations Pvt. Ltd., CHENNAI V. ACIT, CHENNAI

ITA 898/CHNY/2005

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 64276 (ITAT-CHENNAI)
• Duration Of Justice: 7 year(s) 5 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-09-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2000-2001
• Appeal Filed On: 08-04-2005
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: GURU BHASHYAM
• Keywords: Question of law

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : CHENNAI [BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI VIKAS AWASTHY, JUDICIAL MEMBER] I.T.A.NOS. 863 & 2753/M DS/1984, 841/MDS/1985, 1448/MDS /1987 & 2490/MDS/1988 ASSESSMENT YEARS : 1979-80, 1981-82, 1982-83 & 1 983-84 & 1985-86 M/S M.R.M.PLANTATIONS(P) LTD C/O R.BALASUBRAMANIAN, ADVOCATE POST BOX NO.1383, 6,ARMENIAN STREET CHENNAI 600 001 VS THE ITO COMPANY CIRCLE II (6)/II(3) CHENNAI (APPELLANT) (RESPONDENT) I.T.A.NOS.895 TO 898/MDS/2005 ASSESSMENT YEARS : 1998-99 TO 2001-02 M/S M.R.M.PLANTATIONS(P) LTD C/O R.BALASUBRAMANIAN, ADVOCATE POST BOX NO.1383, 6,ARMENIAN STREET CHENNAI 600 001 VS THE ACIT COMPANY CIRCLE IV(3)/ CHENNAI (APPELLANT) (RESPONDENT) I.T.A.NO.895/2005 ETC :- 2 -: I.T.A.NO.690/MDS/1988 ASSESSMENT YEAR : 1984-85 THE ITO COMPANY CIRCLE II(3) CHENNAI VS M/S M.R.M.PLANTATIONS(P) LTD., C/O R.BALASUBRAMANIAN, ADVOCATE POST BOX NO.1383, 6,ARMENIAN STREET CHENNAI 600 001 (APPELLANT) (RESPONDENT) APPELLANT BY : NONE RESPONDENT BY : SHRI GURU BHASHYAM, JCIT DATE OF HEARING : 12-09-2012 DATE OF PRONOUNCEMENT : 13-09-2012 O R D E R PER N.S. SAINI, ACCOUNTANT MEMBER ALL THE ABOVE CAPTIONED APPEALS ARE FIL ED BY THE ASSESSEE, EXCEPT APPEAL IN I.T.A.NO.690/MDS/1988 WHICH IS FIL ED BY THE REVENUE, AGAINST RESPECTIVE ORDERS OF THE CIT(A), CHENNAI. 2. IN I.T.A.NOS.2753/MDS/1984, 863/MDS/1984, 841/MDS/1 985 AND 1448/MDS/1987, THE ASSESSEE HAS TAKEN COMMON G ROUNDS OF APPEAL WHEREIN THE SOLE ISSUE INVOLVED IS THAT THE CIT(A) ERRED IN CONFIRMING THE ORDER OF THE ASSESSING OFFICER IN MA KING ADDITION OF ` 41,806/- IN ASSESSMENT YEAR 1979-80, ` 1,07,773/- IN ASSESSMENT YEAR I.T.A.NO.895/2005 ETC :- 3 -: 1982-83, ` 8,394/- IN ASSESSMENT YEAR 1981-82 AND ` 81,862/- IN ASSESSMENT YEAR 1983-84 ON ACCOUNT OF FLUCTUATION I N RATE OF EXCHANGE BETWEEN MALAYSIA AND INDIA WHICH AMOUNTS WERE CREDI TED TO NORMALIZE THE ACCOUNTS OF HEAD OFFICE AT MADRAS AND BRANCH AT PENANG. 3. AT THE OUTSET, WE WOULD LIKE TO STATE THAT SMT. MAY A J.NICHANE, ADVOCATE OF THE ASSESSEE HAS WITHDRAWN HER VAKALATH IN THE ABOVE APPEALS FILED BY THE ASSESSEE VIDE LETTE R DATED 16.06.2012 WHICH READS AS UNDER: INCOME-TAX ASSESSMENT 1979-80,1981-82 TO 1985-86 AND OTHER YEARS M.R.M.PLANTATIONS PVT. LTD. C/O R.BALASUBRAMANIAN, NO.108, ARMENIAN STREET, MADRAS 600 001 I.T.A.NO. 2753/84 ETC. ETC. I AM WRITING THIS WITH REFERENCE TO YOUR NOTICE DAT ED JUNE 11, 2012, ISSUED BY YOU, FIXING THE HEARING OF THE ABOVE APPEALS BEFORE THE B BENCH OF THE INCOME-TA X APPELLATE TRIBUNAL, AT MADRAS, ON SEPTEMBER, 4, 201 2. 2. I WISH, IN THIS CONNECTION, TO INFORM YOU THAT I WILL NOT BE REPRESENTING THE APPELLANT/RESPONDENTS IN TH E ABOVE APPEALS, ANY LONGER. 3. I REQUEST YOU KINDLY TO OBTAIN THE ORDERS OF TH E INCOME-TAX APEPLALTE TRIBUNAL AND PERMIT ME TO WITHDRAW MY VAKALATS FILED IN THE ABOVE APPEALS. I UNDERSTAND THAT THE APPELLANT/RESPONDENTS, IN THESE APPEALS, WILL BE MAKING THEIR OWN ARRANGEMENTS FOR CONDUCTING THE APPEALS BEFORE THE INCOME-TAX APPELL ATE TRIBUNAL. I.T.A.NO.895/2005 ETC :- 4 -: 4. STILL FURTHER WE WOULD LIKE TO STATE THAT THE ADDRE SS OF THE ASSESSEE FOR SENDING NOTICE OF HEARING GIVEN IN FOR M NO.36 IS THAT OF THE SAID ADVOCATE, SMT. MAYA J.NICHANE, WHO HAS WIT HDRAWN HER VAKALATH. NO ADDRESS OF THE ASSESSEE IS AVAILABLE ON RECORD OF THE TRIBUNAL TO ISSUE AND SERVE NOTICE ON THE ASSESSEE REGARDING HEARING OF THE APPEALS. THE DR HAS ALSO EXPRESSED HIS INAB ILITY TO SERVE NOTICE ON THE ASSESSEE. WE, THEREFORE, PROCEED TO DECIDE THE APPEALS EX- PARTE ON MERITS AFTER HEARING THE DR. 5. NOW, REVERTING TO THE MERITS OF THE APPEALS. WE FI ND THAT THESE MATTERS WERE DECIDED BY THE TRIBUNAL AGAINST WHICH THE REVENUE FILED APPEAL BEFORE THE HON'BLE MADRAS HIGH COURT A ND VIDE ITS ORDER DATED 10.10.2001 PASSED IN TAX CASE NOS.1573 AND 15 74 OF 1986 AND T.C.NOS.783,784 AND 1268 OF 1987, THE HON'BLE HIGH COURT RESTORED THE MATTER BACK TO THE FILE OF THE TRIBUNAL BY MAKI NG FOLLOWING OBSERVATION: THE ORDER OF THE TRIBUNAL IS NOT CLEAR. WHILE IT STATES IN ONE PLACE THAT THERE IS ACTUAL TRANSFER FROM THE MA LAYSIAN BRANCH OFFICE TO THE HEAD OFFICE IN INDIA IN ANOTHE R PLACE IT STATES THAT THERE IS NO ACTUAL TRANSFER AND THAT TH E TRANSFER IS ALWAYS BY BOOK ENTRIES. UNLESS THE FACTS ARE CLEAR LY ASCERTAINED, IT WILL NOT BE POSSIBLE TO RECORD ANY ANSWER TO THE QUESTION OF LAW. WE, THEREFORE, RETURN THE CAS E TO THE TRIBUNAL WITH A FURTHER DIRECTION THAT IT SHALL REC ORD A DEFINITE FINDING AS TO WHETHER THERE WAS A TRANSFER AT ALL O F THE FUNDS I.T.A.NO.895/2005 ETC :- 5 -: FROM THE BRANCH OFFICE AT MALAYSIA TO THE HEAD OFFI CE IN INDIA, IF SO THE EXTENT AND FURTHER AS TO WHETHER T HE ASSESSEE REALIZED ANY ADDITIONAL AMOUNT AS AND WHEN SUCH TRANSFER WAS EFFECTED OVER AND ABOVE WHAT HAD BEEN TAKEN AS THE EXCHANGE RATE WHILE SHOWING THE AMOUNT TO TH E CREDIT OF THE HEAD OFFICE IN THE BOOKS OF THE BRANCH OFFIC E AT PENANG AND SIMILAR AMOUNT SHOWN IN THE BOOKS AT THE HEAD OFFICE BY REASON OF FLUCTUATION IN THE RATE OF EXCH ANGE. AFTER RECORDING SUCH A FINDING, THE TRIBUNAL SHALL DETERM INE AS TO WHETHER THE DIFFERENCE IN THE RATE PREVAILING AT TH E END OF THE YEAR COMPARED TO THE RATE PREVAILING AT THE COMMENCEMENT OF THE YEAR, WHETHER PLUS OR MINUS, IS A SUM WHICH CAN BE REGARDED AS FORMING PART OF THE ASSESSEES INCOME TAXABLE IN INDIA. 6. FROM A PERUSAL OF THE ABOVE ORDER OF THE HON'BLE H IGH COURT, IT WILL BE SEEN THAT THE DIRECTION OF THE HO N'BLE HIGH COURT TO THE TRIBUNAL IS TO RECORD A DEFINITE FINDING AS TO WHET HER THERE WAS A TRANSFER AT ALL OF THE FUNDS FROM THE BRANCH OFFICE AT MALAYSIA TO THE HEAD OFFICE IN INDIA, IF SO, THE EXTENT AND WHETHER THE ASSESSEE REALIZED ANY ADDITIONAL AMOUNT AS AND WHEN SUCH TRA NSFER WAS EFFECTED OVER AND ABOVE WHAT WAS TAKEN AT THE EXCHANGE RATE WHILE SHOWING THE AMOUNT TO THE CREDIT OF THE HEAD OFFICE IN THE BOOKS OF THE BRANCH OFFICE AT PENANG AND THE AMOUNT SHOWN IN THE BOOKS AT THE HEAD OFFICE BY REASON OF FLUCTUATION IN THE RATE OF EXCH ANGE. THEREAFTER THE TRIBUNAL IS DIRECTED TO DETERMINE WHETHER THE DIFFE RENCE IN THE RATE OF EXCHANGE AS AT THE END OF THE YEAR COMPARED TO THE RATE PREVAILING AT I.T.A.NO.895/2005 ETC :- 6 -: THE COMMENCEMENT OF THE YEAR CAN BE REGARDED AS INC OME OF THE ASSESSEE TAXABLE IN INDIA. 7. SINCE THE A.R OF THE ASSESSEE HAS WITHDRAWN HERSEL F FROM THE APPEALS AND AS WE DO NOT HAVE ANY ADDRESS OF TH E ASSESSEE TO SERVE NOTICE AND ALSO KEEPING IN VIEW THE FACT THAT AS PER THE DIRECTIONS OF THE HON'BLE HIGH COURT, VERIFICATION IS REQUIRED FROM THE BOOKS OF ACCOUNT REGARDING THE TRANSFER OF FUNDS FR OM BRANCH OFFICE AT MALAYSIA TO THE HEAD OFFICE IN INDIA AS ALSO THE RA TE OF EXCHANGE ON THE DATE OF TRANSFER AND THE RATE OF EXCHANGE AT TH E END OF THE FINANCIAL YEAR AND THE RESULTANT DIFFERENCE, IN THE ABOVE FACTS AND CIRCUMSTANCES, IN OUR CONSIDERED OPINION, THE MATTE R HAS TO BE RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER FOR CARRYING OUT THE NECESSARY VERIFICATION FROM THE BOOKS OF ACCOUNT AN D OTHER RELATED DOCUMENTS OF THE ASSESSEE AND THEREAFTER PASSING A SPEAKING ORDER BRINGING ALL THE RELEVANT FACTS ON RECORD. WE, THE REFORE, SET SIDE THIS ISSUE BACK TO THE FILE OF THE ASSESSING OFFICER FOR VERIFICATION AND PASSING OF DETAILED ORDER IN THE LIGHT OF THE DIREC TION OF THE HON'BLE MADRAS HIGH COURT, AFTER ALLOWING REASONABLE OPPORT UNITY OF HEARING TO THE ASSESSEE. THUS, THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE IN THE ABOVE APPEALS ARE ALLOWED FOR STATISTICAL PURPO SES. I.T.A.NO.895/2005 ETC :- 7 -: 8. IN I.T.A.NO.2490/MDS/1988 OF ASSESSEES APPEAL, TH E ONLY ISSUE INVOLVED IS THAT THE CIT(A) ERRED IN CONFIRMI NG THE ORDER OF THE ASSESSING OFFICER IN MAKING ADDITION OF ` 3,32,859/- ON ACCOUNT OF FLUCTUATION IN RATE OF EXCHANGE BETWEEN MALAYSIA AN D INDIA WHICH AMOUNT WAS CREDITED TO NORMALIZE THE ACCOUNTS OF HE AD OFFICE AT MADRAS AND BRANCH OFFICE AT PENANG. 9. THE APPEAL WAS DECIDED BY THE TRIBUNAL AND THE REVE NUE FILED APPEAL AGAINST THE ORDER OF THE TRIBUNAL AND THE HON'BLE MADRAS HIGH COURT VIDE ITS ORDER DATED 13.8.2002 IN TAX CA SE NO.400/95, FOLLOWING ITS EARLIER ORDER DATED 10.10.2001 IN TA X CASE NOS.1573 AND 1574 OF 1986 AND T.C.NOS.783, 784 AND 1268 OF 1 987, RESTORED THE MATTER BACK TO THE FILE OF THE TRIBUNAL WITH TH E VERY SAME DIRECTIONS AS GIVEN IN THE ORDER DATED 10.10.2001. 10. THUS, IN ACCORDANCE WITH OUR DECISION GIVEN IN ABOV E APPEALS IN PARA NO.7, THIS APPEAL IS ALSO RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER WITH THE SAME DIRECTIONS AS GIVEN ABOVE WHILE DECIDING THE ISSUE. THUS, THE GROUNDS OF APPEAL OF THE ASSESSEE IN THIS YEAR ARE ALSO ALLOWED FOR STATISTICAL PURPOSES . I.T.A.NO.895/2005 ETC :- 8 -: 11. I.T.A.NO.690/MDS/1988 IS THE APPEAL OF THE REVENUE FOR ASSESSMENT YEAR 1984-85. IN THIS APPEAL, THE GRIEV ANCE OF THE REVENUE IS THAT THE CIT(A) ERRED IN HOLDING THAT ` 1,23,857/- WOULD NOT REPRESENT ASSESSEES INCOME ON ACCOUNT OF FLUC TUATION IN THE RATE OF EXCHANGE BETWEEN MALAYSIA AND INDIA. 12. WE OBSERVE THAT IN THIS YEAR OF APPEAL OF THE REVEN UE, AS THE FACTS AND ISSUE INVOLVED ARE IDENTICAL TO THE F ACTS AND ISSUE INVOLVED IN THE ABOVE STATED APPEALS OF THE ASSESS EE WHICH HAVE BEEN RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER FOR ADJUDICATION AFRESH, BY BRINGING ALL THE RELEVANT FACTS ON RECOR D IN ACCORDANCE WITH THE DIRECTION OF THE HON'BLE MADRAS HIGH COURT, WE RESTORE THE ISSUE INVOLVED IN THE PRESENT APPEAL OF THE REVENUE ALSO BACK TO THE FILE OF THE ASSESSING OFFICER WITH THE SIMILAR DIRECTIONS A S GIVEN ABOVE WHILE RESTORING THE APPEALS OF THE ASSESSEE. THUS, THE GROUNDS OF APPEAL OF THE REVENUE ARE ALSO ALLOWED FOR STATISTICAL PURPOS ES. 13. IN I.T.A.NOS.895 TO 898/MDS/2005, THE ONLY GROUND O F APPEAL RAISED BY THE ASSESSEE IS THAT THE CIT(A) E RRED IN CONFIRMING THE ORDER OF THE ASSESSING OFFICER DISALLOWING ` 3,04,480/- IN ASSESSMENT YEAR 1998-99, ` 3,30,000/- IN ASSESSMENT YEAR 1999-2000, I.T.A.NO.895/2005 ETC :- 9 -: ` 3,30,000/- IN ASSESSMENT YEAR 2000-01 AND ` 3,30,000/- IN ASSESSMENT YEAR 2001-02 OUT OF SALARY AND COMMISSIO N PAID BY THE ASSESSEE TO ITS MANAGING DIRECTOR. 14. WE FIND THAT THE A.R OF THE ASSESSEE, SMT. MAYA J. NICHANE HAS WITHDRAWN HERSELF FROM THE PRESENT APPE ALS BY MAKING AN APPLICATION TO THE TRIBUNAL VIDE LETTER NO.572/M-51 /79-80 DATED 16.6.2012. THE SAID ADVOCATE HAS STATED THAT THE ASSESSEE WOULD BE MAKING THEIR OWN ARRANGEMENT FOR ARGUING THE APPEAL S BEFORE THE TRIBUNAL. NOTICE OF HEARING HAS BEEN SERVED ON THE ASSESSEE AT THE ADDRESS GIVEN IN FORM NO.36. WE FIND THAT NONE WAS PRESENT ON BEHALF OF THE ASSESSEE WHEN THE CASE WAS CALLED FO R HEARING AND NEITHER ANY ADJOURNMENT APPLICATION WAS FILED. IT IS, THEREFORE, INFERRED THAT THE ASSESSEE IS NOT INTERESTED IN PU RSUING THE APPEALS WHICH ARE HEREBY DISMISSED FOR NON-PROSECUTION FOLL OWING THE ORDER OF THE DELHI BENCH OF THE TRIBUNAL IN THE CASE OF CIT VS MULTIPLAN INDIA (P) LTD (1991) 38 ITD 320(DEL.) AND ALSO THE JUDGME NT OF HON'BLE BOMBAY HIGH COURT IN THE CASE OF CHEMIPOL VS UOI IN CENTRAL EXCISE APPEAL NO.62 OF 2009, ORDER DATED 17 TH SEPTEMBER, 2009. I.T.A.NO.895/2005 ETC :- 10 -: 15. TO SUMMARIZE THE RESULT ASSESSEES APPEALS IN I .T.A.NOS. 895 TO 898/MDS/2005 ARE DISMISSED WHEREAS I.T.A.NOS .2753 AND 863/MDS/1984, 841/MDS/1985, 1448/MDS/1987 AND 2490/ MDS/1988 ARE ALLOWED FOR STATISTICAL PURPOSES. REVENUES AP PEAL IN I.T.A.NO. 690/MDS/1988 IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THURSDAY, THE 13 TH DAY OF SEPTEMBER, 2012, AT CHENNAI. SD/- SD/- (VIKAS AWASTHY) JUDICIAL MEMBER (N.S.SAINI) ACCOUNTANT MEMBER DATED: 13 TH SEPTEMBER, 2012 RD COPY TO: APPELLANT/RESPONDENT/CIT(A)/CIT/DR