ADDL CIT RG 2(2), MUMBAI V. INDIA IFRASTRUTURE DEVELOPERS LTD, MUMBAI

ITA 926/MUM/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3720 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-05-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: I
• Assessment Year: 2006-2007
• Appeal Filed On: 01-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D K SINHA
• Assessee Lawyers: HEENA DOSHI

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL I BENCH, MUMBAI . . ,, !'#$ , % & BEFORE SHRI B.R. MITTAL JM AND SHRI N.K. BILLAIYA, AM ./I.T.A. NOS. 926 & 927/MUM/2011 ( ' ' ' ' / ASSESSMENT YEARS : 2006-07 & 2007-08 THE DCIT, CIRCLE-2(2), AAYAKAR BHAVAN, MUMBAI-400 020 / VS. M/S. INDIA INFRASTRUCTURE DEVELOPERS LTD., L&T HOUSE, N.M. MARG, BALLARD ESTATE, MUMBAI-400 001 ( % ./ )* ./PAN/GIR NO. : AAACI 4598Q ( (+ /APPELLANT ) .. ( ,-(+ / RESPONDENT ) (+ . / APPELLANT BY: SHRI D.K. SINHA ,-(+ / . / RESPONDENT BY : MS. HEENA DOSHI / 01% / DATE OF HEARING : 08.05.2013 23' / 01% / DATE OF PRONOUNCEMENT : 08.05.2013 4 / O R D E R PER N.K. BILLAIYA, AM: THESE TWO APPEALS BY THE REVENUE ARE DIRECTED AGAIN ST TWO SEPARATE ORDERS OF THE LD. CIT(A)-5, MUMBAI PERTAI NING TO A.YRS. 2006- 07 AND 2007-08. AS BOTH THESE APPEALS HAVE SIMILAR GRIEVANCE, THEREFORE, THEY WERE HEARD TOGETHER AND DISPOSED OF BY THIS C OMMON ORDER FOR THE SAKE OF CONVENIENCE AND BREVITY. ITA NO. 926/MUM/2011 A.Y. 2006-07 ITA NOS. 926 & 927/M./2011 2 2. THE SOLE GRIEVANCE OF THE REVENUE REVOLVES AROUN D THE ISSUE RELATING TO THE TAXABILITY OF INTEREST OF RS. 16.87 LAKHS ALLEGEDLY ACCRUING FOR THE PERIOD FROM 28.2.2006 TO 31.3.2006. 3. DURING THE COURSE OF THE SCRUTINY ASSESSMENT PRO CEEDINGS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS INT EREST INCOME FROM SIDBI BONDS ON AN INVESTMENT OF RS. 35 CRORES. THE AO WAS OF THE OPINION THAT SINCE THE ASSESSEE IS FOLLOWING MERCAN TILE SYSTEM OF ACCOUNTING, IT WAS INCUMBENT UPON THE ASSESSEE TO O FFER THE ACCRUED INTEREST FOR THE PERIOD FROM 28.2. 2006 TO 31.3.200 6 AS THE BONDS WERE ALLOTTED ON 28.2.2006. ON FINDING THAT NO INTEREST HAS BEEN OFFERED FOR TAXATION, THE AO WENT ON TO CALCULATE THE INTEREST AT THE RATE OF 5.5.% FOR 32 DAYS ON RS. 35 CRORES AND ADDED A SUM OF RS. 16 ,87,671/- AS INTEREST ACCRUED ON SIDBI BONDS. 4. THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. C IT(A) AND SUBMITTED THAT SINCE THE INTEREST WAS NOT ACCRUED AS ON 31.3.2006, THERE WAS NO QUESTION FOR OFFERING THE ACCRUED INTEREST O N SIDBI BONDS FOR THE YEAR UNDER CONSIDERATION. AFTER CONSIDERING THE FA CTS AND THE SUBMISSIONS OF THE ASSESSEE, THE LD. CIT(A) WAS CONVINCED THAT NO INTEREST ACCRUED TO THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION AND D ELETED THE ADDITION MADE BY THE AO. 5. THE LD. DEPARTMENTAL REPRESENTATIVE SUPPORTED TH E FINDINGS OF THE AO. 6. THE LD. COUNSEL FOR THE ASSESSEE REITERATED WHAT HAS BEEN SUBMITTED BEFORE THE LOWER AUTHORITIES. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE ORDERS OF THE LOWER AUTHORITIES. IT IS NOT IN DISPUTE THA T THE BONDS OF SIDBI WERE ITA NOS. 926 & 927/M./2011 3 ALLOTTED ON 28.2.2006. AS PER THE COPY OF THE CERT IFICATE OF HOLDING THE BOND, AS OBSERVED BY THE LD. CIT(A), THE INTEREST ON THE BONDS ARE PAYABLE ON 1 ST JUNE EVERY YEAR TILL THE DATE OF MATURITY. THAT B EING THE FACT OF THE MATTER, INTEREST WOULD FALL DUE ON 1 ST JUNE OF EVERY YEAR WHICH MEANS THAT THE INTEREST ON BONDS WILL ACCRUE ON 1 ST JUNE EVERY YEAR. ACCRUE MEANS RIGHT TO RECEIVE. SINCE THE INTERES T DID NOT ACCRUE ON 31 ST MARCH, ASSESSEE HAD NO RIGHT TO RECEIVE IT ON 31 ST OF MARCH. THEREFORE THE LD. CIT(A) HAS RIGHTLY HELD THAT NO INTEREST HAS AC CRUED TO THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION. WE, THEREFORE, D O NOT FIND ANY REASON TO INTERFERE WITH THE FINDINGS OF THE LD. CIT(A). THE REVENUES APPEAL IS ACCORDINGLY DISMISSED. ITA NO. 927/MUM/2011 A.Y. 2007-08 8. THE ISSUE INVOLVED IS IDENTICAL WITH THE ISSUE I N ITA NO. 926/M/11, THOUGH QUANTUM MAY DIFFER, THEREFORE, ON SIMILAR LI NES, SIMILAR REASONS, THE APPEAL FILED BY THE REVENUE IN ITA NO. 927/M/11 FOR ASSESSMENT YEAR 2007-2008 IS ALSO DISMISSED. 9. IN THE RESULT, THE APPEALS FILED BY THE REVENUE ARE DISMISSED. 5 06 ) / 7 %5) / )0 8# ORDER PRONOUNCED IN THE OPEN COURT ON 8.05.201 3 . 4 / 3' % 7 96 8.5.2013 3 / : SD/- SD/- (B.R. MITTAL ) (N .K. BILLAIYA ) /JUDICIAL MEMBER % / ACCOUNTANT MEMBER MUMBAI; 9 DATED 08 /05 /2013 ITA NOS. 926 & 927/M./2011 4 . . ./ RJ , SR. PS 4 4 4 4 / // / ,0! ,0! ,0! ,0! ;!'0 ;!'0 ;!'0 ;!'0 / COPY OF THE ORDER FORWARDED TO : 1. (+ / THE APPELLANT 2. ,-(+ / THE RESPONDENT. 3. < ( ) / THE CIT(A)- 4. < / CIT 5. !=: ,0 , , / DR, ITAT, MUMBAI 6. :> ? / GUARD FILE. 4 4 4 4 / BY ORDER, -!0 ,0 //TRUE COPY// @ @@ @ / 8 8 8 8 ) ) ) ) (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI