Atul Limited, Ahmedabad V. The Dy.CIT.,(OSD)Range-1, Ahmedabad

ITA 981/AHD/2011

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 9776 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 9 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-01-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 14-07-2015
• Assessment Year: 1991-1992
• Appeal Filed On: 04-04-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: P L KUREEL
• Keywords: Business income
• Section: 143(3); 80HHC

Judgement Text

IT A NO. 981 / AHD/ 201 1 ASSESSMENT YEAR: 1991 - 92 PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL, AHMEDABAD D BENCH, AHMEDABAD [CORAM : PRAMOD KUMAR AM AND KUL BHARAT JM] I TA NO. 981 /AHD/201 1 A SSESSMENT Y EAR : 1991 - 92 ATUL LIMITED, .APPELLANT THIRD FLOOR, ASHOKA CHAMBERS, RASALA MARG, ELL IS BRIDGE, AHMEDABAD. [ PAN: A A B CA 2 390 M ] VS. DY. COMMISSIONER OF INCOME TAX (OSD), RANGE - I, AHMEDABAD. . RESPONDENT APPEARANCES BY: S.N. SOPARKAR , FOR THE A PPELLANT P.L. KUREEL , FOR THE RESPONDENT D ATE OF CONCLUDING THE HEARING: NOVEMBER 6, 201 5 DATE OF PRONOUNCING THE ORDER : JANUARY 29 , 201 6 O R D E R PER PRAMOD KUMAR , AM : 1. BY WAY OF THIS APPEAL, THE A SSESS EE APPELLANT HAS CHALLENGED CORRECTNESS OF THE ORDER DATED 24 TH OCTOBER , 201 1 , PASSED BY THE LD. CIT(A), UNDE R SECTION 143(3) READ WITH SECTION 254 OF THE INCOME TAX ACT, 1961 ( THE ACT HEREINAFTER) FOR THE ASSESSMENT YEAR 1991 - 92 , ON THE FOLLOWING GROUNDS: 1 T HE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE DISALLOWANCE OF DEDUCTION UNDER SECTION 80HHC IN RESPECT O F INTEREST INCOME OF RS.2,94,39,911/ - . THE DEDUCTION UNDER SECTION 80HHC IN RESPECT OF INTEREST INCOME BEING ALLOWABLE OUGHT TO HAVE BEEN ALLOWED. IT BE SO HELD NOW AND THE DEDUCTION IN RESPECT OF VARIOUS INTEREST INCOME BE ALLOWED NOW . IT A NO. 981 / AHD/ 201 1 ASSESSMENT YEAR: 1991 - 92 PAGE 2 OF 4 2 . THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ACTION OF THE AO REJECTING THE DEDUCTION TO THE EXTENT IT RELATED TO INTEREST INCOME WITHOUT APPRECIATING THE FACTS AND SUBMISSIONS AND CASE LAWS FURNISHED TO HIM. IT BE SO HELD NOW AND THE DEDUCTION UNDER SECTION 80HHC BE ALLOWED A S CLAIMED. 3 . THE LD. CIT(A) OUGHT TO HAVE ALLOWED THE APPEAL IN TOTO. 4. THE LD. CIT(A) ERRED IN NOT CONSIDERING THE VARIOUS SUBMISSIONS AND CONTENTION RAISED BEFORE HIM WHILE DECIDING THE GROUND OF APPEAL FOR DEDUCTION UNDER SECTION 80HHC WHICH OUGHT TO HAVE BEEN CONSIDERED. IT BE SO HELD NOW AND GROUND OF DEDUCTION UNDER SECTION 80HHC BE ALLOWED . 2. WE WILL TAKE UP ALL THESE GROUNDS OF APPEAL TOGETHER. 3. THIS IS SECOND ROUND OF PROCEEDINGS. IN TH E FIRST ROUND OF PROCEEDINGS, THE MATTER TRAVELLED UPTO THE TRIBUNAL BUT IT WAS SENT BACK TO THE ASSESSING OFFICER WITH A DIRECTION TO ADJUDICATE ON THIS ISSUE DE NOVO. IT IS IN THIS BACKDROP THAT THE ASSESSING OFFICER, VIDE HIS SHOW CAUSE NOTICE DATED 18 TH AUGUST 2009, REQUIRED THE ASSESSEE TO SHOW CAUSE TO WHY THE WHOLE INTEREST INCOME OF RS 2,56,93,993 SHOULD NOT BE EXCLUDED FOR THE PURPOSES OF DETERMINING THE DEDUCTION UNDER SECTION 80HHC OF THE ACT . THE ASSESSING OFFICER, AFTER CONSIDERING THE SUBM ISSIONS OF THE ASSESSEE, WAS OF THE VIEW THAT THE ENTIRE INTEREST INCOME IS REQUIRED TO BE TREATED AS INCOME OF THE NATURE WHICH CHARGEABLE UNDER THE HEAD NCOME FROM OTHER SOURCES , AND, ACCORDINGLY, INELIGIBLE FOR BEING TAKEN INTO ACCOUNT FOR THE PURPOSE OF COMPUTING THE DEDUCTION UNDER SECTION 80HHC. AGGRIEVED, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A) BUT WITHOUT ANY SUCCESS. THE ASSESSEE IS NOT SATISFIED AND IS IN FURTHER APPEAL BEFORE US. 4. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF THE APPLICABLE LEGAL POSITION. 5. AS POINTED OUT BY THE LEARNED COUNSEL. HON BLE JURISDICTIONAL HIGH COURT S HAS, IN THE CASE OF CIT VS NIRMA LIMITED [(2014) 367 ITR 12 (GUJ)], N OTED THAT SO FAR AS THE QUESTION WHETHER THE APPELLATE TRIBUNAL IS RIGHT IN LAW AND ON FACTS IN DELETING THE DISALLOWANCES OF INTEREST FROM DEBTORS OF RS.39,26,316/ - MADE BY AO FOR THE PURPOSE OF CALCULATION OF DEDUCTION UNDER SECTIONS 80I, 80IA & 80HHC O F THE IT ACT AND FURTHER DIRECTING THE AO TO ALLOW THE SAME WHILE RELYING UPON ITS OWN DECISIONS IN IT A NO. 981 / AHD/ 201 1 ASSESSMENT YEAR: 1991 - 92 PAGE 3 OF 4 THE CASES OF NIRMA LTD. & HARJIVANDAS WHICH HAVE NOT REACHED FINALITY AND WITHOUT CONSIDERING THE FACT THAT SUCH EXPENSES INCURRED FROM THE BUSINESS INCOME ONLY AND NOT FOR EARNING INCOME LIABL E TO BE EXCLUDED ? , THE ISSUE IS NOW SETTLED IN FAVOUR OF THE ASSESSEE AND THE RELIEF SO GRANTED NEED NOT, THEREFORE, BE DISTURBED. THE DECISION OF THE COURT IN RESPECT OF SECTION 80 I, IN THE EARLIER YEARS, IS HELD TO BE APPLICABLE IN THIS CONTEXT AS WELL. WE HAVE ALSO RECEIVED INTEREST OF RS 70,42,232, WHICH IS FOR A CREDIT PERIOD OF LESS THAN 90 DAYS, AND INTEREST OF RS 1,12,81,882 WHICH IS DESCRIBED AS FINANCE CHANGES FOR A CREDIT PERIOD OF 90 DAYS OR MORE, AND IT IS RESPECT OF THESE ITEMS THAT THE CLAIM OF THE ASSESSEE IS RESTRICTED. THE MATTER BEING SQUARELY COVERED BY HON BLE HIGH COURT S VIEWS SO EXPRESSED, WE UPHOLD THE GRIEVANCE OF THE ASSESSEE AND DIRECT THE ASSESSING OFFICER TO GRANT RESULTANT RELIEF. AS REGARDS INTEREST OF RS 32,99,217 FROM CORPORATE DEPOSITS, AS IS LEARNED COUNSEL S SHORT CONTENTION, ONLY THE NET AMOUNT IS TO BE EXCLUDED. IN SUPPORT OF THIS CONTENTION, HE HAS RELIED UPON THE DECISION OF HON BLE SUPREME COURT IN THE CASE OF ACG CAPSULE S PVT LTD VS CIT VS CIT [(2012) 343 ITR 89 (BOM)]. ACCORDINGLY, ON THIS ASPECT OF THE MATTER, WE REMIT THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR NECESSARY NETTING OF THE AMOUNT, AND EXCLUDE ONLY THE NET AMOUNT. AS REGARDS REMAINING COMPONENTS OF INTEREST, THE ASSESSEE HAS NOT REALLY PRESSED THE SAME BEFORE US. 6. IN THE LIGHT OF THE ABOVE DISCUSSIONS, GRIEVANCE OF THE ASSESSE IS PARTLY UPHELD IN THE TERMS INDICATED ABOVE. THE ASSESSING OFFICER WILL RECOMPUTE THE DEDUCTION UNDER SECTION 80HHC AS DIRECTED ABOVE. 7. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED IN THE TERMS INDICATED ABOVE. PRONOUNCED I THE OPEN COURT TODAY ON 29 TH DAY OF JANUARY 2016. SD/ - SD/ - KUL BHARAT PRAMOD KUMAR (JUDICIAL ME MBER) (ACCOUNTANT MEMBER) DATED: THE 29 TH DAY OF JANUARY , 201 6 . PBN/ * IT A NO. 981 / AHD/ 201 1 ASSESSMENT YEAR: 1991 - 92 PAGE 4 OF 4 COPIES TO : (1) THE APPE LLANT ( 2) THE RESPONDENT (3) CIT (4) CIT(A) (5) DR (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD