Talent Pro India HR Private Limited, CHENNAI V. ACIT, CHENNAI

MA 183/CHNY/2015

• Counselvise Citation: [2016] 124 COUNSELVISE.COM (IT) 3811 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 16 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 20-01-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 08-01-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 04-11-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: N MADHAVAN
• Assessee Lawyers: S SWAMINATHAN
• Section: 147

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , C B ENCH, CHENNAI . , ' # . $ , & ( BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY, JUDICIAL MEMBER M.P. NO.183/MDS/2015 (IN ITA NO.1191/MDS/2015) ( / ASSESSMENT YEAR: 2009-10) M/S. TALENT PRO INDIA HR PVT.LTD., NEW NO.64, OLD NO.30, BRILEY ONE, 3 RD FLOOR, ETHIRAJ SALAI, NEXT TO KANCHI HOTEL EGMORE, CHENNAI-600 008. VS ASSISTANT COMMISSIONER OF INCOME TAX, COMPANY CIRCLE-III(1) CHENNAI. PAN:AABCP9823A (APPLICANT) ( /RESPONDENT) APPLICANT BY : MR. S.SWAMINATHAN, C.A /RESPONDENT BY : MR. N.MADHAVAN, JCIT /DATE OF HEARING : 8 TH JANUARY, 2016 /DATE OF PRONOUNCEMENT : 20 TH JANUARY, 2016 / O R D E R PER CHANDRA POOJARI, AM: THIS MISCELLANEOUS PETITION IS FILED BY THE ASSESSE E SEEKING RECTIFICATION OF THE TRIBUNALS ORDER IN IT A NO. 1191/MDS/2015 DATED 28.08.2015 FOR THE ASSESSMENT Y EAR 2009-10. 2. LEARNED AUTHORIZED REPRESENTATIVE SUBMITTED THAT FINDINGS OF THE TRIBUNAL IN PARA 8, WHICH READS AS FOLLOWS, ARE INCORRECT AND CONTRARY TO THE PRINCIPLES LAID DOWN BY THE SUPREME COURT IN THE CASE OF GODHARA ELECTRICITY C O.LTD. VS. 2 M.P.NO.183 /MDS/2015 CIT (225 ITR 746) AND IN THE CASE OF CIT VS. SHOO RJI VALLABHDAS & CO.,( 48 ITR 144)(SC). 8. SO FAR AS CASE LAW RELIED ON BY THE LD. COUNS EL FOR THE ASSESSEE IN THE CASE OF CIT V. DCM LTD. (SUPRA), TH E HONBLE DELHI HIGH COURT HAS CONSIDERED THE REOPENING AFTER EXPIRY OF FOUR YEARS AND OBSERVED THAT THE COMMISSIONER (A PPEALS) RECORDED A FINDING THAT INITIATION OF PROCEEDINGS U NDER SECTION 147 WAS ITSELF INVALID AND HE ALSO RECORDED A FINDING THAT IN ANY EVENT ADDITION ON ACCOUNT OF NOTIONAL I NTEREST WAS NOT MADE OUT ON MERITS INASMUCH AS ASSESSEE COMPANY HAD MORE INTEREST FREE FUNDS THAN AMOUNT OF LOANS/ADVAN CES SAID TO HAVE BEEN ADVANCED TO SUBSIDIARY COMPANIES/TRUST S. IN THE PRESENT CASE, THE ASSESSEE IS RUNNING INTO LOSS AND SUBSIDIARY IS RUNNING WITH PROFIT AND ALSO CLAIMING EXEMPTION UNDER SECTION 10A OF THE ACT. THEREFORE, THE ABOVE CASE LAW HAS NO APPLICATION TO THE FACTS OF THE PRESENT CASE . ACCORDING TO HIM, THE ASSESSEE SUBMITTED BEFORE THE TRIBUNAL THAT THE DELHI HIGH COURT IN THE CASE OF CIT VS. DC M LTD. (177 TAXMANN 300) HAS OBSERVED THAT AS THE FUNDS MADE AVAILABLE WERE OUT OF INTEREST FREE FUNDS ADDITION CANNOT BE MADE ON NOTIONAL BASIS. THIS OBSERVATION THAT NOT IONAL INCOME CANNOT BE ADDED AND ONLY INTEREST PAYMENTS ON INTEREST BEARING FUNDS COULD BE DISALLOWED WER E THE CRUX OF THE ARGUMENTS OF THE ASSESSEE. HOWEVER, THE TR IBUNAL HAS NOT TAKEN THE COGNIZANCE OF THE FACT THAT IRRES PECTIVE OF WHETHER FUNDS MADE AVAILABLE WERE INTEREST FREE F UNDS OR NOT NO NOTIONAL INCOME CAN BE BROUGHT TO TAX IN TH E LIGHT OF 3 M.P.NO.183 /MDS/2015 THE DECISION OF SUPREME COURT IN THE CASE OF GODHR A ELECTRICITY COMPANY LTD. (225 ITR 746) AND DISPOSE D OF THE APPEAL PURELY ON THE BASIS THAT ASSESSEE IS RUNNING INTO LOSS AND SUBSIDIARY IS RUNNING WITH PROFIT AND CLAIM EXE MPTION UNDER SECTION 10A AND THE ABOVE CASE LAW HAS NO APP LICATION TO THE FACTS OF THE PRESENT CASE. 3. ON THE OTHER HAND, LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THERE IS NO ERROR APP ARENT ON RECORD IN THE ORDER OF THE TRIBUNAL WHICH WARRANTS RECALLING OF THE ORDER OF THE TRIBUNAL AND THE ASSESSEE WANTED T O REVIEW THE ORDER OF THIS TRIBUNAL, WHICH IS NOT PERMISSIBL E UNDER THE LAW. 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD . WE HAVE GONE THROUGH THE EARL IER ORDER OF THE TRIBUNAL DATED 28.08.2015 AND ALSO THE SUBM ISSIONS OF THE ASSESSEE. ADMITTEDLY, IN THIS CASE, ASSESS EE IS QUESTIONING THE CONCLUSION REACHED BY THE TRIBUNAL WHICH IS NOT PERMISSIBLE. THE QUESTION BEFORE THE TRIBUNAL WAS WHETHER THE INTEREST ON MONEY ADVANCED BY THE ASSES SEE TO 4 M.P.NO.183 /MDS/2015 BE CHARGEABLE TO TAX OR NOT. IN THIS CASE, THE ASSE SSEE ADVANCED ` 1,21,88,735 /- WITHOUT CHARGING OF INTEREST TO M/S. INTERPRO GLOBAL PVT. LTD. . THE ASSESSING OFFI CER DISALLOWED INTEREST ON 18%. HOWEVER, THE COMMISSION ER OF INCOME TAX (APPEALS) REDUCED THE RATE OF INTEREST TO 12.5% PER ANNUM. WHEN THE ASSESSEE QUESTIONED THE ORDER O F THE COMMISSIONER OF INCOME TAX (APPEALS) BEFORE THE TRI BUNAL, IT CONFIRMED THE ORDER OF THE LOWER AUTHORITIES AND FO UND NO INFIRMITY IN THE ORDER OF THE COMMISSIONER OF INCOM E TAX (APPEALS). NOW, THE ARGUMENT OF THE LEARNED AUTHORI ZED REPRESENTATIVE BEFORE US IS THAT ADDITION COULD NO T BE MADE ON NOTIONAL BASIS. THE FINDINGS OF THE TRIBUNAL CA NNOT BE INTERFERED BY WAY OF MISCELLANEOUS PETITION, UNLESS THE TRIBUNAL HAS TAKEN INTO CONSIDERATION ANY IRRELEVAN T MATERIAL OR HAS FAILED TO TAKE INTO CONSIDERATION ANY RELEVA NT MATERIAL OR THE CONCLUSION ARRIVED AT BY THE TRIBUNAL IS PER VERSE IN THE SENSE THAT NO REASONABLE PERSON ON THE BASIS OF THE FACTS BEFORE THE TRIBUNAL COULD HAVE COME TO THE CONCLUSI ON TO WHICH THE TRIBUNAL HAS COME. 5 M.P.NO.183 /MDS/2015 5. IN THE PRESENT CASE, THE TRIBUNAL HAS TAKEN INT O CONSIDERATION THE ENTIRE FACTS AND CIRCUMSTANCES OF THE CASE ON RECORD WHICH WERE REFERRED TO BY BOTH THE PARTIE S. IT HAS NOT TAKEN INTO ACCOUNT WHICH COULD BE SAID TO BE IR RELEVANT IN ARRIVING AT ITS CONCLUSION WHETHER NOTIONAL INTERES T TO BE DISALLOWED OR NOT. THE TRIBUNAL HAS GIVEN CATEGORIC AL FINDING IN PARA 7 THAT COMMISSIONER OF INCOME TAX (APPEALS) HAS JUSTIFIED IN CONFIRMING THE ORDER OF THE ASSESSING OFFICER. NOW, THE LEARNED AUTHORIZED REPRESENTATIVE WANTS TO REAR GUE THE CASE. IN OUR OPINION, THE TRIBUNAL HAS NO POWER TO REVIEW ITS OWN ORDER UNDER SECTION 254(2) OF THE ACT. THE TRI BUNAL HAS GIVEN A FINDING THAT ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) IS CONFIRMED, AS THERE IS NO INFIRMI TY IN THE ORDER PASSED BY HIM. A PLAIN READING OF THE ORDER O F THE TRIBUNAL MAKES IT CLEAR THAT THE TRIBUNAL HAS, IN F ACT TAKEN INTO ACCOUNT ENTIRE FACTS AND CIRCUMSTANCES OF THE CASE WHILE DELIVERING ITS DECISION. IT IS NOT NECESSARY FOR TH E TRIBUNAL TO STATE IN ITS ORDER SPECIFICALLY THAT IT HAS TAKEN I NTO ACCOUNT THE CUMULATIVE EFFECT OF THE CIRCUMSTANCES OR HAS CONSI DERED THE TOTALITY OF THE FACTS AS IF THAT WERE A MAGIC FOMUL A. ACCORDINGLY, WE ARE OF THE OPINION THAT MISCELLANEO US PETITION 6 M.P.NO.183 /MDS/2015 FILED BY THE ASSESSEE HAS NO MERIT AND THE SAME IS DISMISSED ACCORDINGLY. 6. IN THE RESULT, MISCELLANEOUS PETITION OF THE ASS ESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH JANUARY, 2016 SD/- SD/- ( . # ) ( ( ) (DUVVURU RL REDDY ) ( CHANDRA POOJARI ) , . / JUDICIAL MEMBER . / ACCOUNTANT MEMBER , /CHENNAI, 0 /DATED 20 TH JANUARY, 2016 SOMU 23 53 /COPY TO: 1. APPELLANT 2. RESPONDENT 3. 6 () /CIT(A) 4. 6 /CIT 5. 3 : /DR 6. /GF .