ACIT., Central Circle-3(2), Hyderabad, Hyderabad V. M/s Kanigiri Agro Farms Private Limited, Hyderabad

MA 175/HYD/2014

• Counselvise Citation: [2015] 124 COUNSELVISE.COM (IT) 2788 (ITAT-HYDERABAD)
• Duration Of Justice: 1 month(s) 30 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 04-02-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 05-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJAT MITRA
• Section: 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B : HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER M.A.NO. 175/HYD/2014 ARISING OUT OF ITA.NO.752/HYD/2013 ASSESSMENT YEAR 2008-2009 ACIT, CENTRAL CIRCLE 3(2) ( ERSTWHILE ACIT, CC-9 ) HYDERABAD. VS. M/S. KANIGIRI AGRO FARMS P. LTD., HYDERABAD. PAN AADCK2607H (APPLICANT) (RESPONDENT) FOR REVENUE : MR. RAJAT MITRA FOR ASSESSEE : MR. K.C. DEVDAS DATE OF HEARING : 30.01.2015 DATE OF PRONOUNCEMENT : 04.02.2015 ORDER PER B. RAMAKOTAIAH, A.M. THIS MISCELLANEOUS APPLICATION UNDER SECTION 254(2) OF THE INCOME TAX ACT, 1961 WAS PREFERRED BY THE REVENUE ON THE ORDER OF THE ITAT B BENCH, HYDERAB AD IN ITA.NO.752/HYD/2013 DATED 09.07.2014. 2. THE ISSUE IN THE APPEAL PREFERRED BY ASSESSEE WA S ON INVOKING OF JURISDICTION BY THE LD. CIT UNDER SECTI ON 263 OF THE I.T. ACT. IN THE COURSE OF ASSESSMENT, A.O. HAS NOT ED THAT ASSESSEE HAS CLAIMED INTEREST AT 18% BY FILING SUIT BEFORE THE CITY CIVIL COURT, SECUNDERABAD AND ACCORDINGLY, BRO UGHT TO TAX INTEREST AS ACCRUED ON THE OUTSTANDING ADVANCE AT T HE END OF THE YEAR. THIS ORDER OF A.O. WAS SUBJECT MATTER OF APPEAL SEPARATELY. IN THE MEANTIME, LD. CIT NOTICED THAT T OTAL ADVANCES MADE BY ASSESSEE WAS AT RS.30 CRORES AND A .O. HAS 2 MA.NO.175/HYD/2014 IN ITA.NO.752/HYD/2013 M/S. KANIGIRI AGRO FARMS P. LTD., HYDERABAD. EXCLUDED AN AMOUNT OF RS.8 CORES WHICH WAS REPAID D URING THE YEAR. ACCORDINGLY, HE INVOKED JURISDICTION UNDER SE CTION 263 AND DIRECTED THE A.O. TO CONSIDER THE AMOUNT OF RS. 30.00 CRORES FOR THE PURPOSE OF CALCULATION OF INTEREST. THE ITAT ON APPEAL BY ASSESSEE, RELYING ON THE ORDERS OF THE CO ORDINATE BENCH HELD THAT THE VERY LEVY OF INTEREST IS SUBJEC T MATTER OF APPEAL AND SO THE LD. CIT COULD NOT HAVE INVOKED TH E JURISDICTION UNDER SECTION 263. WHILE SETTING ASIDE THE ORDER OF CIT UNDER SECTION 263, THE ITAT HOWEVER, HAS GIVEN AN OPTION TO THE A.O. TO EXAMINE THE PRINCIPLE AS WELL AS INT EREST AS DIRECTED BY THE ITAT IN THE QUANTUM APPEAL. 3. REVENUE PREFERRED THE PRESENT M.A. REQUESTING T HE ITAT TO GIVE A FINDING ON THE AMOUNT OF RS. 8 CRORE WHICH WAS NOT CONSIDERED IN THE COORDINATE BENCH DECISION. SI NCE THE AMOUNT OF RS.8 CRORE REPAID IS NOT PART OF CIVIL SU IT, IT IS REQUESTED THAT ITAT SHOULD GIVE A CLEAR DIRECTION A BOUT TAXABILITY OF INTEREST ON RS. 8 CRORE WHICH WAS NOT DISPUTED BEFORE THE CITY CIVIL COURT. 4. AFTER CONSIDERING THE RIVAL CONTENTIONS, WE ARE OF THE OPINION THAT THE M.A. PREFERRED BY THE REVENUE IS NOT WARRANTED. THE ISSUE BEFORE THE ITAT WAS WHETHER LD . CIT COULD HAVE INVOKED THE JURISDICTION UNDER SECTION 2 63. IT WAS NOTICED THAT AT THE TIME OF ADVANCE THERE IS NO UND ERSTANDING THAT INTEREST WOULD BE LEVIED. THEREFORE, A.O. COUL D NOT HAVE CONSIDERED LEVY OF INTEREST ON THE AMOUNT REPAID DU RING THE YEAR. APART FROM THAT, THE VERY BASIS OF ACCRUAL OF INTEREST ITSELF WAS DISPUTED. THEREFORE, THE LD. CIT COULD NOT HAVE INVOKED JURISDICTION UNDER SECTION 263. UNDER THESE CIRCUMS TANCES, THE ORDER WAS SET ASIDE. HOWEVER, THE ITAT ALSO GAVE AN OPTION TO THE A.O. TO EXAMINE PRINCIPLE AS WELL AS INTEREST I N THE 3 MA.NO.175/HYD/2014 IN ITA.NO.752/HYD/2013 M/S. KANIGIRI AGRO FARMS P. LTD., HYDERABAD. QUANTUM APPEALS. AS FAR AS AMOUNT OF RS. 8 CRORE IS CONCERNED, THE ORDER OF LD. CIT INVOKING JURISDICTI ON WAS SET ASIDE. AS FAR AS THE PRINCIPLE AMOUNT ON WHICH INTE REST IS TO BE CONSIDERED, IT WAS ALREADY LEFT OPEN TO THE A.O. TO BE CONSIDERED IN THE YEAR OF RECEIPT OF INTEREST AS PE R DIRECTIONS OF COURT. IN VIEW OF THE ABOVE, WE ARE OF THE OPINION THAT THE PETITION IS MISCONCEIVED. THIS SORT OF APPLICATION DO INVITE LEVY OF COST ON THE ASSESSING OFFICER. HOWEVER, WE REFRA IN IN DOING SO. WITH THESE OBSERVATIONS, REVENUE APPLICATION IS DISMISSED 5. IN THE RESULT, MISCELLANEOUS APPLICATION OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 04.02.2015. SD/- SD/- (ASHA VIJAYARAGHAVAN) (B.RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED 04 TH FEBRUARY, 2015 VBP/- COPY TO 1. ASST. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 3(2) (ERSTWHILE ACIT, CENTRAL CIRCLE-9), HYDERABAD 2. M/S. KANIGIRI AGRO FARMS P. LTD., R.K. RESIDENCY , H.NO.8-3-229/D/32, 3 RD FLOOR, VENKATAGIRI, YOUSUFGUDA, HYDERABAD. 3. CIT (CENTRAL), 7 TH FLOOR, AAYAKAR BHAVAN, BASHEERBAGH, HYDERABAD 4. ADDL. CIT, C.R.-3, HYDERABAD 5. D.R. B BENCH, ITAT, HYDERABAD.