DCIT, New Delhi V. Filatex India Ltd., New Delhi

ITA 962/DEL/2010

• Counselvise Citation: 96220114 RSA 2010
• Duration Of Justice: 1 year(s) 5 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 27-05-2014
• Assessment Year: 2003-2004
• Appeal Filed On: 05-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 43B; 143(3); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH B NEW DELHI) BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI B.C. MEENA, ACCOUNTANT MEMBER I.T.A. NO.962/DEL/2010 ASSESSMENT YEAR: 2003-04 D.C.I.T., VS. FILATEX INDIA LTD., 42, COMM- CIRCLE 11(1), UNITY CENTRE, NEW FRIENDS NEW DELHI COLONY, NEW DELHI PAN NO.AAACF 0027 B (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ROHIT GARG, SR. DR RESPONDENT BY : SHRI SURENDER KUMAR, CA ORDER PER RAJPAL YADAV, JM: THE REVENUE IS IN APPEAL BEFORE US AGAINST THE ORDE R OF LEARNED CIT(A) DATED 30.12.2009 PASSED FOR ASSESSME NT YEAR 2003-04. FROM PERUSAL OF THE GROUNDS OF APPEAL IT REVEALED THAT REVENUE HAS PLACED ON RECORD THE GROUNDS OF SO ME OTHER APPEAL, WHICH ARE NOT RELEVANT TO THE ISSUES DISCUSSED 2 BY THE LEARNED CIT(A). HOWEVER, IN THE APPROVAL OR DER GRANTED BY THE COMMISSIONER FOR CHALLENGING THE CIT (A)S ORDER, IT HAS BEEN MENTIONED THAT LEARNED CIT(A) HA S ERRED IN DELETING THE DISALLOWANCE OF `50 LACS ON ACCOUNT OF RESTRUCTURING SCHEME WHICH IS PENDING FOR APPROVAL. 2. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUFACTURE OF SYNTHETIC MONO AN D MULTI FILAMENT YARNS. IT IS ALSO ENGAGED IN RUNNING WIND ELECTRICITY GENERATION. IT HAS FILED ITS INCOME ON 25.11.2003 DECLARING LOSS OF `19,60,09,419/-. THE ASSESSING OFFICER HAS PASSED AN ASSESSMENT ORDER U/S 143(3) ON 19 TH JANUARY, 2006. THIS ASSESSMENT HAS BEEN RE-OPENED BY ISSUANCE OF A NOTI CE U/S 148 ON 31 ST MARCH, 2008 AND FRESH ASSESSMENT ORDER HAS BEEN FRAMED ON 25.09.2008. THE ASSESSING OFFICER H AS MADE A DISALLOWANCE OF `50 LACS U/S 43B OF THE ACT. THE FINDING RECORDED BY THE ASSESSING OFFICER ON THIS I SSUE READ AS UNDER:- DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT IS CONTENDED THAT THE ASSESSEE HAS PROVIDED FOR THE INTEREST OF `50 LACS ON ACCOUNT OF RESTRUCTURIN G SCHEME WHICH IS PENDING FOR APPROVAL. IT IS DISALLOWED U/S 43B. THE ASSESSEE WAS, THEREFORE, 3 ASKED TO EXPLAIN WHY IT SHOULD NOT BE ADDED BACK. THE ASSESSEES REPRESENTATIVE ATTENDED AND SUBMITTED THAT THE PAYMENT HAS BEEN MADE BEFORE THE DUE DATE OF FURNISHING THE RETURN OF INCOME. THE ASSESSEES ARGUMENTS IS NOT ACCEPTABLE BECAUSE /THE INTEREST HAS BEEN PROVIDED ON ASSUMPTION BASIS TOWARDS THE UNASCERTAINED LIABILITY WHICH IS NOT ALLOWABLE UNDE R THE ACT. ACCORDINGLY, THE SUM OF `50 LACS BEING UNPAID INTEREST IS DISALLOWED AND ADDED TO THE TOTAL INCOME. 2.1 BEFORE MAKING ANY COMMENTS ON THE ORDER OF LEAR NED CIT(A), IT IS WORTH TO TAKE NOTE OF THE SUBMISSIONS MADE BY THE ASSESSEE BEFORE LEARNED CIT(A) AS WELL AS HIS F INDING WHICH READ AS UNDER:- THE APPELLANT BEFORE ME SUBMITTED AS BELOW:- THE APPELLANT HAD DULY FILED ITS RETURN OF INCOME U/S 139(1) OF THE ACT, DECLARING A LOSS OF `19,60,41,650/- OUT OF INTEREST OF `50,00,000/- PROVIDED AS BEING PAYABLE TO UTI BY WAY OF INTEREST ON DEBENTURE (COPY OF THE COMPUTATION OF INCOME AS FILED ENCLOSED). THIS DISALLOWANCE WAS MADE ON THE BASIS OF THE TAX AUDITOR OBSERVATION AT ANNEXURE VI-A (COPY ENCLOSED). UPON PERUSAL THEREOF YOU WOULD NOTICE THAT A SUM OF `18,10,000/- HAD BEEN DULY PAID BY THE APPELLANT ON JULY 16, 2003 I.E. BEFORE THE DUE DATE OF FILING RETURN AND ACCORDINGLY WAS ALLOWABLE DEDUCTION U/S 43B AND THE BALANCE OF `31,90,000/- WAS OFFERED FOR TAXATION. AFTER GOING THROUGH THE ASSESSMENT ORDER AND APPELLANT SUBMISSION IT IS NOTICED THAT APPELLANT 4 ITSELF HAS MADE DISALLOWANCE OF `31,90,000/- U/S 43B AND REMAINING AMOUNT OF `18,10,000/- WAS PAID BY APPELLANT ON 16 JULY, 2003 BEFORE THE DUE DATE FILING THE RETURN. IN VIEW ASSESSING OFFICER IS DIRECTED TO VERIFY THIS AND /IF FOUND CORRECT THEN DELETE THE SAME. 3. THE LEARNED COMMISSIONER HAS GRANTED AUTHORIZATI ON U/S 253(2) OF THE INCOME-TAX ACT, 1961 FOR CHALLENG ING THE ORDER OF LEARNED CIT(A) DATED 30.12.2009 PASSED IN APPEAL NO.67/08-09 VIDE ORDER DATED 26 TH FEBRUARY, 2010. IN THIS AUTHORIZATION, HE HAS APPROVED THE GROUNDS OF APPEA L SUBMITTED BY THE ASSESSING OFFICER WHEREIN IT HAS B EEN PLEADED THAT LEARNED CIT(A) HAS ERRED IN DELETING T HE DISALLOWANCE OF `50 LACS. WE FIND THAT IN THE REAS SESSMENT ORDER THE ONLY ADDITION MADE BY THE ASSESSING OFFIC ER IS IN RESPECT OF THIS `50 LACS. WE HAVE ALREADY EXTRACTE D THE FINDINGS OF THE LEARNED ASSESSING OFFICER. BEFORE LEARNED CIT(A), ASSESSEE HAS SUBMITTED THAT IT HAS NO GRIEV ANCE IF `31,90,000/- IS TAXED BECAUSE IT HAS NOT MADE ANY P AYMENT. HOWEVER, OUT OF THE TOTAL AMOUNT OF `50 LACS, `18,1 0,000/- HAS BEEN PAID BY THE ASSESSEE BEFORE THE DUE DATE O F FILING OF THE RETURN AND, THEREFORE, DEDUCTION OF THIS AMO UNT OUGHT 5 TO BE GIVEN BY THE ASSESSING OFFICER. LEARNED CIT( A) HAS ACCEPTED THIS CONTENTION. HE CONFIRMED THE DISALLO WANCE UPTO `31,90,000/- AND REMITTED THE MATTER IN RESPEC T OF `18,10,000/- TO THE ASSESSING OFFICER FOR VERIFICAT ION. THERE IS NO DISPUTE WITH REGARD TO THIS PROPOSITION THAT IF THE AMOUNT IS PAID BEFORE DUE DATE OF FILING THE RETURN THEN IT HAS TO BE ALLOWED. THE CIT(A) HAS JUST REMITTED IT FOR VERIFICATION AND IF CLAIM OF ASSESSEE IS FOUND TO B E CORRECT THEN THIS AMOUNT HAS TO BE DELETED. WE DO NOT SEE HOW REVENUE CAN PLEAD THAT CIT(A) HAS DELETED THE DISAL LOWANCE OF `50 LACS. HOW LEARNED COMMISSIONER ON ADMINISTR ATIVE SIDE HAS APPROVED THE GROUNDS OF APPEAL PLACED BY T HE ASSESSING OFFICER FOR GRANT OF APPROVAL U/S 253(2) OF THE INCOME-TAX ACT FOR FILING THE APPEAL. THE LEARNED COMMISSIONER HAS NOT APPLIED HIS MIND ON THE FACTS AND GRANTED THE APPROVAL IN A MECHANICAL WAY. THERE CA NNOT BE ANY GRIEVANCE TO THE REVENUE AGAINST THE IMPUGNED O RDER. LEARNED CIT(A) HAS ALREADY UPHELD THE DISALLOWANCE TO THE EXTENT OF `31,90,000/-. REST IS SUBJECT TO THE VER IFICATION OF THE ASSESSING OFFICER. TAKING INTO CONSIDERATION A LL THESE 6 ASPECTS, WE DO NOT FIND ANY MERIT IN THIS APPEAL AN D IT IS DISMISSED. 4. IN RESULT, APPEAL OF THE REVENUE IS DISMISSED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT ON 26.08.2011. SD/- SD/- ( B.C. MEENA ) ( RAJPAL YADAV ) ACCOUNTANT MEMBER JUDICIAL MEMBER DT. 26.08.2011. NS COPY FORWARDED TO:- 1. D.C.I.T., CIRCLE 11(1), NEW DELHI. 2. FILATEX INDIA LIMITED, 42, COMMUNITY CENTRE, NEW FRIENDS COLONY, NEW DELHI. 3. THE CIT 4. THE CIT (A)-, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DELHI. TRUE COPY. BY ORDER (ITAT, NEW DELHI). DATE OF HEARING 18.08.2011 DATE OF DICTATION 24.08.2011 DATE OF ORDER SIGNED BY THE HON'BLE MEMBER. DATE OF ORDER SENT TO THE CONCERNED BENCH