M/s.Pact Securities&Financial Services Ltd., V. Dy.CIT, Circle-16(3),Hyd.,

MA 213/HYD/2013

• Counselvise Citation: [2013] 124 COUNSELVISE.COM (IT) 1254 (ITAT-HYDERABAD)
• Duration Of Justice: 4 month(s) 18 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 13-12-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: misc
• Appeal Filed On: 26-07-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: A V RAGHURAM; P VINOD
• Section: 37(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A', HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER MA NO. 213/HYD/2013 IN ITA NO. 1028/HYD/2007 ASSESSMENT YEAR 2004-05 M/S. PACT SECURITIES & FINANCIAL SERVICES LTD. HYDERABAD PAN: AABCP4438R VS. THE DCIT CIRCLE-16(3) HYDERABAD APPELLANT RESPONDENT APPELLANT BY: S/ SRI P VINOD & AV RAGHURAM RESPONDENT BY: SMT. K. HARITHA DATE OF HEARING: 13 . 12 .2013 DATE OF PRONOUNCEMENT: 13 . 12 .2013 O R D E R PER CHANDRA POOJARI, AM: BY THIS MISCELLANEOUS APPLICATION (MA) THE ASSESSE E IS SEEKING RECTIFICATION IN THE ORDER OF THE TRIBUNAL IN ITA NO. 1028/HYD/2007 DATED 30.9.2011. 2. THE LEARNED AR FILED A PETITION STATING AS FOLLOWS: 'THE APPELLANT PREFERRED AN APPEAL AGAINST THE ORDE R OF THE CIT(A)-V, HYDERABAD ON THE ORDERS OF THE DY. COMMISSIONER OF INCOME-TAX, CIRCLE 16(3) HYDERABAD FOR THE A.Y. 2004-05. THE GROUND RAISED WAS AGAINST NOT CONSIDERING CERTAIN DEBTS AS NPA BY THE AO THAT IS CONFIRMED BY THE LEARNED CIT(A) THE HONOURABLE I.T.A.T., DECIDED THE APPEAL VIDE THEIR ORDERS DT. 30- 9-2011 HOLDING THAT 'BOTH THE PARTIES ARE FAIRLY CONCEDED THAT THIS ISSUE WAS RIGHTLY CONSIDERED BY THE HON'BLE MADRAS HIGH COURT IN THE CASE OF T. N. POWER FINANCE AND INFRASTRUCTURE DEVELOPMENT CORPORATION LTD.' THE HONOURABLE I.T.A.T., WHILE DOING SO HAS FAILED TO APPRECIATE THE FACTS OF THE APPELLANT'S CASE AND THE GROUNDS RAISED. THE GROUND IS NOT AGAINST NOT ALLOWING PROVISION FOR INTEREST ON MA. NO. 213/HYD/2013 M/S. PACT SECURITIES & FINANCIAL SERVICES LTD. ==============-========= 2 NPAS AS IN THE CASE OF THE CASE DECIDED BY THE MADRAS HIGH COURT WHOSE DECISION IS RELIED UPON AND STATED TO HAVE BEEN CONCEDED BY THE COUNSEL. THE APPELLANT SUBMIT THAT THE SUPREME COURT IN THE CASE OF SOUTHERN TECHNOLOGIES REPORTED IN 320 ITR 577 DT . 11-1-2010 HAS OBSERVED THAT 'IT IS IMPORTANT TO NOT E THAT COLLECTABILITY IS DIFFERENT FROM ACCRUAL. HENC E, IN EACH CASE, THE ASSESSEE HAS TO PROVE, AS HAS HAPPENED IN THIS CASE WITH REGARD TO THE SUM OF RS. 20,34,605, THAT INTEREST IS NOT RECOGNIZED OR TAKEN INTO ACCOUNT DUE TO UNCERTAINTY IN COLLECTION OF TH E INCOME. IT IS FOR THE AO TO ACCEPT THE CLAIM OF THE ASSESSEE UNDER THE IT ACT OR NOT TO ACCEPT IT IN WH ICH CASE THERE WILL BE ADD BACK EVEN UNDER REAL INCOME THEORY AS EXPLAINED HEREIN ABOVE' THE APPELLANT SUBMIT THAT THE APPELLANT'S CASE IS SQUARELY COVERED BY THE ABOVE OBSERVATIONS OF THE SUPREME COURT. THIS DECISION OF THE SUPREME COURT THOUGH AVAILABLE WHEN THE HONOURABLE I.T.A.T., HAS DECIDED THE APPEAL WAS NOT CONSIDERED AND ON THE OTHER HAND A DECISION WHICH IS APPLICABLE ONLY WHER E A PROVISION IS CLAIMED AS DEDUCTION IS APPLIED AND NOT TO THE APPELLANT'S CASE IS APPLIED. THE APPELLA NT THEREFORE SUBMIT THAT THERE IS A MISTAKE TO THE EXT ENT OF NOT CONSIDERING THE DECISION OF SUPREME COURT WHICH IS APPLICABLE TO THE APPELLANT'S CASE. THE APPELLANT THEREFORE PRAY THAT THE ORDER MAY PLEASE BE RECALLED AND APPROPRIATE ORDERS BE PASSED.' 3. THE LEARNED DR RELIED ON THE ORDER OF THE TRIBUNAL AND SUBMITTED THAT THE ASSESSEE WANTS TO REVIEW THE ORD ER OF THE TRIBUNAL WHICH IS NOT POSSIBLE UNDER THE LAW. MORE OVER, THE JUDGEMENT RELIED ON BY THE ASSESSEE'S COUNSEL IN TH E CASE OF SOUTHERN TECHNOLOGIES LTD. (320 ITR 577) DOES NOT C HANGE THE RESULT OF THE ORDER OF THE TRIBUNAL. 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATE RIAL ON RECORD. IN THE CASE RELIED ON BY THE ASSESSEE, SOUTHERN TECHNOLOGIES LTD. VS. JCIT (320 ITR 577), IT WAS OB SERVED BY THE APEX COURT THAT RBI DIRECTIONS, 1998, ARE MERELY DI SCLOSURE NORMS AND OR NORMS REGARDING PRESENTATION OF NPA PR OVISIONS MA. NO. 213/HYD/2013 M/S. PACT SECURITIES & FINANCIAL SERVICES LTD. ==============-========= 3 IN THE BALANCE SHEET OF A NBFC AND, THEREFORE, PROV ISION FOR NPA IN TERMS OF RBI DIRECTIONS DOES NOT CONSTITUTE EXPENSES ON THE BASIS ON WHICH DEDUCTION CAN BE CLAIMED BY NBFC U/S. 36(1)(VII) OR U/S. 37(1) OF THE ACT AND THE SAME HA S TO BE ADDED BACK TO THE TOTAL INCOME, EVEN BY APPLYING THE THEO RY OF REAL INCOME. THE RATIO LAID DOWN BY THE SUPREME COURT I S CONFIRMATORY WITH THE JUDGEMENT OF MADRAS HIGH COUR T IN THE CASE OF TN POWER FINANCE & INFRASTRUCTURE DEVELOPME NT CORPORATION LTD. VS. JCIT (280 ITR 491) (MAD) AND T HE JUDGEMENT OF MADRAS HIGH COURT IN THE CASE OF SOUTH ERN TECHNOLOGIES LTD. VS. JCIT (296 ITR 514). BEING SO , THE JUDGEMENT RELIED ON BY THE ASSESSEE'S COUNSEL IN TH E MA IS NOTHING NEW TO SAY THAT THE ISSUE IS DECIDED IN FAV OUR OF THE ASSESSEE. EVEN APPLYING THE RATIO LAID DOWN BY THE SUPREME COURT IN THE CASE OF SOUTHERN TECHNOLOGIES LTD. (SU PRA), THE APPEAL OF THE ASSESSEE AS WELL AS THE MA FILED BY T HE ASSESSEE ARE TO BE DISMISSED. 5. IN THE RESULT, THE MA FILED BY THE ASSESSEE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 13 TH DECEMBER, 2013. SD/ - (ASHA VIJAYARAGHAVAN) JUDICIAL MEMBER SD/ - (CHANDRA POOJARI) ACCOUNTANT MEMBER HYDERABAD, DATED 13 TH DECEMBER, 2013 TPRAO COPY FORWARDED TO: 1. M/S. PACT SECURITIES AND FINANCIAL SERVICES LTD., 6 - 3 - 252/2/6, NAVEEN NAGAR, ERRAMANZIL, HYDERABAD-82. 2. THE DCIT, CIRCLE - 16(3), HYDERABAD. 3. THE CIT(A) - V , HYDERABAD. 4. THE CIT - IV , HYDERABAD 5. THE DR 'A' BENCH, ITAT, HY DERABAD