DCIT COMPANY CIRCLE 11(1) (NOW DCIT, CORPORATE CIRCLE 2 (1), CHENNAI V. M/S EXPRESS PUBLICATIONS (MADURAI) LTD, CHENNAI

MA 113/CHNY/2020

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 8183 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 4 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 26-03-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 22-10-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R ANITA
• Assessee Lawyers: T N SEETHARAMAN
• Keywords: Proportionate interest; Commercial expediency
• Section: 43B; 14A; 254(2); 13

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , C B ENCH, CHENNAI . , ! . , ! ' BEFORE SHRI DUVVURU RL REDDY, JUDICIAL MEMBER AND SHRI G. MANJUNATHA, ACCOUNTANT MEMBER MISC. PETITION NO.113/CHNY/2020 [IN ITA NO.615/CHNY/2018 & M.P NO.146/CHNY/2019] ( / ASSESSMENT YEAR: 2009-10) THE DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE-2(1) CHENNAI. VS M/S.EXPRESS PUBLICATIONS (MADURAI) LTD. 29, 2 ND MAIN ROAD, AMBATTUR INDUSTRIAL ESTATE CHENNAI-600 058, PAN:AAACI 0842D ( /PETITIONER) ( /RESPONDENT) / PETITIONER BY : MS. R. ANITA, JCIT /RESPONDENT BY : MR.T.N.SEETHARAMAN, ADVOCATE /DATE OF HEARING : 26.03.2021 /DATE OF PRONOUNCEMENT : 26.03.2021 / O R D E R PER G. MANJUNATHA, AM: THIS MISCELLANEOUS PETITION FILED BY THE REVENUE IS DIRECTED AGAINST ORDER OF THE TRIBUNAL IN M.P.NO.14 6/CHNY/2019 (ARISING OUT OF ITA NO.615/CHNY/2018) VIDE ORDER DA TED 16.12.2019 FOR THE ASSESSMENT YEAR 2009-10. 2. THE REVENUE HAS NARRATED FACTS AND MISTAKES APP ARENT ON RECORD IN THE ORDER OF THE TRIBUNAL DATED 16.12 .2019 AND CONTENTS OF MISC. APPLICATION FILED BY THE REVENUE ARE REPRODUCED AS UNDER:- 2 M.P NO.113 /CHNY/2020 1. THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF PRINTING AND PUBLICATION OF NEWSPAPERS. 2. THE ASSESSEE COMPANY FILED ITS RETURN OF INCOME FOR AY 2009-10 ON 16/12/2009 ADMITTING BUSINESS LOSS OF ` 3,02,23,164/- AND INCOME FROM HOUSE PROPERTY OF ` 1,20,32,127/-. 3. THE CASE WAS SELECTED FOR SCRUTINY AND ORDER U /S 1433) WAS PASSED ON 29/12/2011 DETERMINING INCOME OF ` 3,38,47,111/- (INCLUDING INFORM FROM HP) AFTER THE FOLLOWING ADDITIONS WERE MADE TO THE RETURNED INCOME. ISSUE WISE ADDITIONS MADE ` FEES PAID FOR INCREASING THE AUTHORIZED SHARE CAPITAL 1,13,200 DISALLOWANCE U/S 43B 13,92,220 DISALLOWANCE OF EXPENDITURE U/S 14A 1,73,20,973 DISALLOWANCE U/S.37(1) 7,90,225 DISALLOWANCE U/S.40(A)(I) 26,31,000 DISALLOWANCE OF TRANSSHIPMENT CHARGES 54,96,637 DISALLOWANCE OF CLAIM OF PAYMENT OF INCENTIVE 76,64,585 DISALLOWANCE OF COMMON NEWS SERVICE CHARGES PAID 66,23,665 DISALLOWANCE OF INTEREST PAID ON AMOUNT DIVERTED TO GROUP COMPANIES 1,00,05,643 4. THE ISSUE RELATING TO THE INTEREST BEARING FU NDS DIVERTED TO GROUP COMPANIES WAS CONTESTED BY THE ASSESSEE BEFOR E THE ID. CIT (A) AND FAILED TO SUBMIT THE QUANTUM OF INT EREST BEARING FUNDS DIVERTED TO THE GROUP COMPANIES DURING THE AP PEALLATE PROCEEDINGS. THE RESULTS OF THE APPEAL ON THE ABOVE ISSUE IN FAVOUR OF REVENUE VIDE ORDER IN TA NO. 89/CIT(A).6/ 2012-13 DATED 30/11/2017. 5. AGAINST THE ORDER OF CIT(A)-6 IN TA NO. 89/C IT(A-6/2012- 13 DATED 30/11/2017TBE ASSESSEE FILED APPEAL BEFORE THE HONBLE ITAT, WHICH WAS ALSO DISMISSED VIDE ORDER IN ITA NO. 615/CHNV/2018 FOR AY 2009-10 DATED 27/05/2019. STAT ING THAT THE ASSESSEE COULDNT ABLE TO PRODUCE ANY MATERIAL EVIDENCE TO PROVE THE COMMERCIAL EXPEDIENCY IN ADVANCING THE LOANS TO 3 M.P NO.113 /CHNY/2020 GROUP COMPANIES (REF PARA 21 OF THE ABOVE ITAT ORDE R DT.27.05.2019). 6. AGAINST THE HONBLE ITAT ORDER IN 615/CHNY/2018 DT.27.05.2019, THE ASSESSEE FILED MP STATING THAT T HE ASSESSEE CONTENDED THAT THE HONBIE TRIBUNAL BAD DIS MISSED THE CLAIM OF DEDUCTION OF INTEREST OF RS.1,00,05,64 3/- ON THE GROUND THAT INTEREST BEARING FUNDS WERE DIVERTED TO GROUP COMPANIES AND THE ASSESSEE HAD ALSO PRAYED TO REMAN D BACK THE ISSUE TO THE AO FOR FRESH ADJUDICATION. 7. AFTER CONSIDERING THE ASSESSEES SUBMISSION AN D PERUSED THE MISC.PETITION, THE HONBLE ITAT HAS REMANDED BAC K TO THE FILE ASSESSING OFFICER FOR FRESH CONSIDERATION AGAI NST THE HONBLE ITAT ORDER IN TA NO.615/CHNY/2018 DT.27.05.2 019, FOR THE ISSUE OF INTEREST DISALLOWANCE PROPORTIONATE TO THE INTEREST BEARING FUNDS DIVERTED TO GROUP COMPANIES 8. THE DEPARTMENT IS FILING MISCELLANEOUS PETITI ON PRAYING THAT THE HONBLE TRIBUNAL HAS CATEGORICALLY DECIDED THE SAME ISSUE OF DISALLOWANCE OF PROPORTIONATE INTEREST OF RS.1,00,05,643/- IN FAVOUR OF REVENUE IN ITS OWN OR DER DT.27.05.2019 AND HENCE REMANDING BACK THE SAME ISS UE TO THE FILE OF ASSESSING OFFICER BASED ON MISCELLANEOU S PETITION FILED BY THE ASSESSEE IS NOT CORRECT.HENCE, THIS MI SCELLANEOUS PETITION IS FILED BY THE REVENUE TO CORRECT THE ABO VE MISTAKE AND THE HONBLE ITAT MAY BE PLEASED TO RECONSIDER I TS ORDER AND MAY ADJUDICATE THE CASE AFRESH. 3. WE HAVE HEARD BOTH THE PARTIES AND PERUSED CONT ENTS OF MISCELLANEOUS PETITION FILED BY THE REVENUE AGAINST THE ORDER PASSED BY THE TRIBUNAL U/S.254(2) OF THE ACT IN M.P . NO.146/CHNY/2019 DATED 16.12.2019 AND FIND THAT THE RE IS NO PROVISION UNDER THE ACT IN SECTION 254(2) TO FILE R EPETITIVE APPLICATION U/S.254(2) OF THE ACT. IT IS WELL SET TLED PRINCIPLES OF 4 M.P NO.113 /CHNY/2020 LAW BY HONBLE KARNATAKA HIGH COURT IN THE CASE OF PCIT VS. SMT. ALPANA BHARTIA (2019) 106 TAXMANN.COM 397 (KA R) THAT REPETITIVE APPLICATION U/S.254(2) ARE NOT PERMISS IBLE AND THEREFORE, THE ORDER PASSED U/S.254(2) CANNOT BE R ECTIFIED NOR AMENDED BY INVOKING PROVISIONS OF SUB-SECTION(2) OF SECTION 254 OF THE ACT ONCE AGAIN. THE ITAT., DELHI SPECIA L BENCH IN THE CASE OF SHRI PADAM PRAKASH (HUF) VS. ITO (2011 ) 9 TAXMANN.COM 178 (DEL) HAD CONSIDERED AN IDENTICAL I SSUE AND HELD THAT THE TRIBUNAL HAS NO POWERS TO ADJUDICATE UPON SUBSEQUENT APPLICATION FILED U/S.254(2) OF THE ACT. THE TRIBUNAL FURTHER HELD THAT ONLY COURSE PERMISSIBLE TO ASSESS EE IN SUCH CASE IS TO FILE AN APPEAL AGAINST THAT ORDER AND NOT TO APPROACH TRIBUNAL TO CONTEND THAT SAID ORDER WAS I NVALID ORDER AND SHOULD BE RECALLED. 4. IN THIS CASE, THE TRIBUNAL HAS DISPOSED OFF MISC ELLANEOUS PETITION FILED BY THE ASSESSEE VIDE ITS ORDER DATE D 16.12.2019 AND RECTIFIED STATED MISTAKE IN THE ORDER OF THE T RIBUNAL IN ITA NO.615/CHNY/2018. THEREFORE, WE ARE OF THE CONSIDER ED VIEW THAT ONCE AGAIN FILING APPLICATION U/S.254(2) AGAIN ST THE ORDER OF TRIBUNAL PASSED U/S.254(2) OF THE ACT IS NOT PERMI SSIBLE. 5 M.P NO.113 /CHNY/2020 HENCE, THE REPETITIVE APPLICATION U/S.254(2) OF T HE ACT FILED BY THE REVENUE IS DISMISSED AS NOT MAINTAINABLE. 5. IN THE RESULT, MISCELLANEOUS PETITION FILED BY T HE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH MARCH, 2021 SD/- SD/- ( . ) ( . ) (DUVVURU RL REDDY) ( G.MANJUNATHA ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER /CHENNAI, ' /DATED 26 TH MARCH, 2021 DS &' *' /COPY TO: 1. APPELLANT 2. RESPONDENT 3. + () /CIT(A) 4. + /CIT 5. ' 1 /DR 6. /GF .