UNION BANK OF INDIA, MUMBAI V. ACIT LTU, MUMBAI

ITA 918/MUM/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 93253 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-07-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2005-2006
• Appeal Filed On: 10-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K DHONDIAL
• Section: 244A

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL F BENCH, MUMBAI , , BEFORE MS. SUSHMA CH O WLA , JUDICIAL MEMBER AND SHRI N.K . BILLAIYA, A CCOUNTANT M EMBER / I .T.A. NO . 918/MUM/2014 ( / ASSESSMENT YEAR : 2005 - 06 UNION BANK OF INDIA, UNION BANK BHAVAN, 239, VIDHAN BHAVAN, MARG, NARIMAN POINT, MUMBAI - 400 021 / VS. THE ACIT,LTU, 29 TH FLOOR, WORLD TRADE CENTER, CUFF PARADE, MUMBAI - 400 005 ./ ./ PAN/GIR NO. : AAACU 0564G ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY: SHRI C. NARESH / RESPONDENT BY : SHRI A.K. DHONDIAL / DATE OF HEARING : 22 . 0 7 .2015 / DATE OF PRONOUNCEMENT : 22 .0 7 .2015 / O R D E R PER N.K. BILLAIYA, AM: THIS APPEAL BY THE ASSESSEE IS PREFERRED AGAINST THE ORDER OF THE LD. CIT(A) - 24 , MUMBAI DT. 1.1 1 .201 3 PERTAINING TO ASSESSMENT YEAR 200 5 - 0 6 . 2. THE GRIEVANCE OF THE ASSESSEE READS AS UNDER: THE LD. CIT(A) ERRED IN CONFIRMING THE ORDER OF AO IN WRONGLY CONSIDERING THE AMOUNT OF TAX INCLUDED IN THE ITA. NO . 918/M/2014 2 REFUND GRANTED WHICH RESULTED IN SHORT GRANTING OF INTEREST U/S. 244A OF RS. 2,24,36,158/ - . THE AMOUNT OF TAX INCLUDED IN THE REFUND HAS BEEN WRO NGLY CONSIDERED ON ACCOUNT OF ADJUSTING THE PART REFUND ALREADY GRANTED AGAINST THE TAX REFUND DUE AS AGAINST ADJUSTING THE SAME FIRST AGAINST THE INTEREST REFUND DUE AND THEREAFTER AGAINST THE TAX REFUND DUE. THE CIT(A) ERRED IN RELYING ON THE DECISION OF CIT VS GUJARAT FLOURO CARBONS LTD. 358 ITR 291 (SC) SINCE IN THAT CASE THE ISSUE WAS NOT ON METHOD OF ADJUSTMENT OF THE REFUNDS ALREADY GRANTED. 3. AT THE VERY OUTSET, THE LD. COUNSEL FOR THE ASSESSEE STATED THAT AN IDENTICAL ISSUE WAS CONSIDERED BY THE TRIBUNAL IN ASSESSEES OWN CASE IN A.Y. 1988 - 89 IN ITA NO. 571/M/2013 AND IN A.Y. 2001 - 02 IN ITA NO. 574/M/2013. IT IS THE SAY OF THE LD. COUNSEL THAT SINCE THE ISSUE IS IDENTICAL, THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE SHOULD BE FOLLOWE D. 4. PER CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE COULD NOT BRING ANY DISTINGUISHING DECISION IN FAVOUR OF THE REVENUE. 5. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE ORDERS OF THE AUTHORITIES BELOW QUA THE ISSUE BEFORE US. WE FIND FORCE IN THE C ONTENTION OF THE LD. COUNSEL. AN IDENTICAL ISSUE WAS DECIDED BY THE TRIBUNAL IN ASSESSEES OWN CASE. WE FIND THAT THE TRIBUNAL AT PARA - 4 OF ITS ORDER HAS CONSIDERED THE FACTS WHICH READ AS UNDER: UNDISPUTEDLY FOR A.Y. 1988 - 89 THE ASSESSEE IS ENTITLED T O REFUND OF RS. 14.07 CRORES AS PER ASSESSMENT ORDER AND INTEREST PAYABLE THEREON WORKS OUT TO RS. 1.58 CRORES, THUS TOTAL REFUND DUE IS RS. 15.65 CRORES. THE AO GRANTED REFUND OF RS. 12.03 CRORES. THE DISPUTE BETWEEN THE AO AND THE ASSESSEE IS WITH REGA RD TO ADJUSTMENT OF REFUND, ACCORDING TO THE ASSESSEE REFUND SHOULD FIRST BE ADJUSTED AGAINST INTEREST PAYABLE AND ONLY THE BALANCE AMOUNT SHALL BE ADJUSTED AGAINST TAX REFUNDABLE AND IN THIS PROCESS THE BALANCE REFUND DUE WOULD WORK OUT TO RS. 3,62,28,442 / - ON WHICH THE ASSESSEE IS ENTITLED TO INTEREST U/S. 244A OF THE ACT WHEREAS THE ITA. NO . 918/M/2014 3 AO CALCULATED THE BALANCE REFUND DUE AT RS. 2,03,99,541/ - (TAX COMPONEDNT) AND RS. 1,58,28,9901/ - (INTEREST COMPONENT). REASON S FOR SUCH CALCULATION WAS THAT ACCORDING TO THE AO NO INTEREST IS PAYABLE ON INTEREST DUE IN WHICH EVENT, EVEN IF THERE IS SUBSTANTIAL DELAY IN INTEREST PAYABLE, THE ASSESSEE CAN BE MADE TO WAIT UNENDINGLY WITHOUT PAYMENT OF INTEREST. THOUGH, BEFORE THE AO AS WELL LEARNED CIT(A), THE ASSESSEE S CLA IM OF INTEREST U/S. 244A IS NOT PROPERLY FOCUSSED BUT SUM AND SUBSTANCE OF THE ASSESSEES CASE BEFORE US IS THAT IN THE EVENT OF ADJUSTMENT OF REFUND AGAINST INTEREST DUE TO THE ASSESSEE TAX REFUND DUE SHALL WORK OUT TO RS. 3.62 CRORES ON WHICH THE ASSESS EE WOULD BE ENTITLED TO GET INTEREST U/S. 244A OF THE ACT. IN THIS REGARD, THE ASSESSEE RELIED UPON THE ORDER OF HONBLE DELHI HIGH COURT IN THE CASE OF INDIA TRADE PROMOTION ORGANISATION VS CIT (361 ITR 646) WHEREIN THE COURT OBSERVED THAT UNDER EXPLANAT ION TO SECTION 140A(1) OF THE ACT, WHEN AN ASSESSEE IS DUTY BOUND TO PAY THE OUTSTANDING TAX, AMOUNT PAID BY THE ASSESSEE SHALL FIRST BE ADJUSTED AGAINST INTEREST PAYABLE AND THE BALANCE SHALL BE ADJUSTED AGAINST TAX PAYABLE, THE SAME PROCEDURE NEEDS TO BE FOLLOWED IN RESPECT OF REFUND DUE TO THE ASSESSEE I.E. THE AMOUNT SHALL FIRST BE ADJUSTED TOWARDS INTEREST PAYABLE AND BALANCE, IF ANY, SHALL BE ADJUSTED TOWARDS TAX PAYABLE (IN THE INSTANT CASE TAX REFUNDABLE TO THE ASSESSEE). AND AT PARA - 6, THE TRIBUNAL HELD AS UNDER: WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS. AS RIGHTLY POINTED OUT BY THE ASSESSEE HONBLE DELHI HIGH COURT RIGHTLY EXPLAINED THAT THE AMOUNT REFUNDED BY THE REVENUE HAS TO BE ADJUSTED TOWARDS INTEREST PAYABLE TO THE ASSE SSEE AND THE BALANCE, IF ANY SHALL BE ADJUSTED TOWARDS TAX. ON THIS PRINCIPLE, THERE IS NO CONTRARY DECISION PLACED BEFORE US, WE THEREFORE AGREE WITH THE PLEA OF THE ASSESSEE AND DIRECT THE ASSESSING OFFICER ACCORDINGLY. 6. RESPECTFULLY FOLLOWING THE D ECISION OF THE CO - ORDINATE BENCH, WE HOLD ACCORDINGLY. THE AO IS DIRECTED TO DECIDE THE ISSUE AFRESH IN THE LIGHT OF THE DIRECTIONS GIVEN BY THE TRIBUNAL IN A.Y. 1988 - 89 AND 2001 - 02 . ITA. NO . 918/M/2014 4 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. OR DER P RONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ON 22 ND JU LY , 2015 . SD/ - SD/ - ( SUSHMA CH O WLA ) (N.K. BILLAIYA) /JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED : 22 ND JU LY , 2015 . . ./ RJ , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI