M.R.M.Plantations P. Ltd., Karaikudi V. DCIT, Madurai

MA 228/CHNY/2015

• Counselvise Citation: [2016] 124 COUNSELVISE.COM (IT) 4018 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 27 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 04-03-2016
• Appeal Filed By: Assessee
• Bench Allotted: D
• Assessment Year: 2005-2006
• Appeal Filed On: 08-12-2015
• Court: TRIBUNAL
• Department Lawyers: P RADHAKRISHNANJCIT
• Assessee Lawyers: R KUMAR

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI ... , , , BEFORE SHRI N.R.S.GANESAN, JUDICIAL MEMBER AND SHRI CHANDRA POOJARI , ACCOUNTANT MEMBER M.P.NOS.228 & 229/MDS./2015 (I.T.A.NOS.2772 & 2773 /MDS./2014 ( / ASSESSMENT YEAR :2005-06 & 2006-07) M/S. M.R.M. PLANTATIONS P. LTD., NO.40,M.R.M.ARCADE, AMMAN SANNATHI STREET, KARAIKUDI. VS. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-II,MADURAI. PAN AACCM 9058 R ( / APPELLANT ) ( / RESPONDENT ) !'# $ % / APPELLANT BY : MR.R.KUMAR,ADVOCATE &''# $ % / RESPONDENT BY : MR.P.RADHAKRISHNAN,JCIT, D.R ( ) $ *+ / DATE OF HEARING : 19.02.2016 ,- $ *+ /DATE OF PRONOUNCEMENT : 04.03.2016 / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER: THESE TWO MISCELLANEOUS APPLICATIONS ARE FILED BY THE ASSESSEE PRAYING FOR RECTIFICATION OF THE ORDER OF THE TRIBU NAL IN ITA NOS.2772 & MP NOS.228 & 229/MDS/2015 2 2773/MDS./2014 DATED 09.10.2015 FOR THE ASSESSMEN T YEARS 2005- 06 & 2006-07. 2. LD.A.R SUBMITTED THAT IN THE APPEALS RELATING T O THE ASSESSMENT YEARS 2005-06 & 2006-07 RAISED THE GROUND RELATING TO DISALLOWANCE OF EXPENDITURE INCURRED BY THE MALAYSIAN BRANCH AND THE EXPENDITURE INCURRED TO BE ALLOWED AS EXPENDITURE UNDER THE HEA D INCOME FROM OTHER SOURCES. ACCORDING TO THE LD.A.R, THE TRIBUN AL HAD WRONGLY HELD THAT THE EXPENDITURE HAD NO NEXUS WITH EARNING INTE REST ON BANK DEPOSIT AND CANNOT BE ALLOWED AND THIS ISSUE WAS DE ALT BY THE TRIBUNAL FOR BOTH THE ASSESSMENT YEARS AND DISMISSE D THE CLAIM OF ASSESSEE. ACCORDING TO THE LD.A.R THE EXPENDITURE INCURRED TO EARN INTEREST INCOME, IT IS TO BE ALLOWED AS EXPENDITURE WHETHER SUCH EXPENDITURE COMPUTED UNDER THE HEAD INCOME FROM OT HER SOURCES OR INCOME FROM BUSINESS. FOR THIS PURPOSE, HE RELIE D ON THE ORDER OF THE MUMBAI TRIBUNAL IN THE CASE OF PREMUS INVESTMEN T & FINANCE LTD., VS. DCIT REPORTED IN (2015) 171 TTJ 794(MUM.) AND IN THE CASE OF KNP SECUTITIES P. LTD. VS. ACIT REPORTED IN (2010) 1 ITR (TRIB.) 130(MUM.). ACCORDING TO HIM, AT LEAST AN A MOUNT OF ` 15,65,918/- TO BE ALLOWED AS EXPENDITURE TO EARN IN TEREST INCOME FOR MP NOS.228 & 229/MDS/2015 3 ASSESSMENT YEAR 2006-07 AND ` 14,71,260/- FOR ASSESSMENT YEAR 2005-06. ON THE OTHER HAND, LD.D.R SUBMITTED THAT THERE IS NO MISTAKEN IN THE ORDER OF THE TRIBUNAL AND THE TRIBU NAL CONSIDERED THE ISSUE IN ITS TO TWO PERSPECTIVE AND GIVEN A FINDING AND THE TRIBUNAL ORDER DOES NOT CALL FOR ANY RECTIFICATION. 3. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. IN THIS CASE, THE TRIBUNAL METICULOUSLY MEN TIONED THE FACTS OF THE CASE IN PARA NOS. 7 & 8 FOR ASSESSMENT YEAR 200 6-07 AND GIVEN A FINDING IN PARA NO.9 THAT THE EXPENDITURE INCURRED BY THE ASSESSEE TOWARDS SALARY, REMUNERATION, COMMISSION, BUILDING MAINTENANCE ETC., HAVE NO NEXUS WITH THE EARNING OF INTEREST ON BANK DEPOSIT AND CANNOT BE ALLOWED AS DEDUCTION U/S.57 OF THE ACT. NOW, THE ASSESSEE WANTS TO REVIEW THE EARLIER ORDER OF THE TRIBUNAL F OR WHICH TRIBUNAL HAS NO POWER U/S.254(2) OF THE ACT. NOW, CONSIDERA TION OF THE ARGUMENTS OF THE ASSESSEES COUNSEL AMOUNTS TO REVI EW OF EARLIER ORDER OF THE TRIBUNAL. SIMILAR IS THE POSITION FOR ASSESSMENT YEAR 2005-06, AS THE CONCLUSION OF THE TRIBUNAL IS BASED FOR THE FINDINGS OF THE ASSESSMENT YEAR 2006-07. ACCORDINGLY, THIS GROU ND RAISED IN BOTH THE MISCELLANEOUS APPLICATIONS IS DISMISSED. MP NOS.228 & 229/MDS/2015 4 4. NEXT PLEA IN M.A NO.229/MDS./15 FOR ASSESSMENT YEAR 2006-07 IS WITH REGARD TO THE FINDINGS OF THE TRIBUNAL ON E XCHANGE FLUCTUATION. LD.A.R SUBMITS THAT THE ASSESSEE RAISED THE GROUND NO.8 BEFORE THE TRIBUNAL REGARDING TAXING OF ` 8,04,623/- TOWARDS EXCHANGE FLUCTUATION RATE. ACCORDING TO THE LD.A.R, THE FINDINGS OF THE TRIBUNAL IN THIS ISSUE THAT EXCHANGE FLUCTUATION IS ACCEPTED BY THE ASSESS EE AND IT IS REVENUE RECEIPT AND LIABLE TO BE TAXED IS NOT APPRO PRIATE. HE SUBMITS THAT THE ASSESSEE CANNOT MAKE PROFIT ITSELF AND IT CANNOT CONSTITUTE INCOME LIABLE TO TAX IN THE HANDS OF ASSESSEE. LD. D.R RELIED ON THE ORDER OF THE TRIBUNAL. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. THE TRIBUNAL HAD GIVEN CATEGORICAL FINDING IN PARA NO.15 THAT EXCHANGE RATE FLUCTUATION, WHICH IS RECEIVED BY THE ASSESSEE TO BE TAXED AS A REVENUE RECEIPT. THERE MAY BE AN ERROR O F JUDGMENT AND IT CANNOT BE SAID THAT THERE IS AN ERROR APPARENT ON R ECORD SO AS TO RECTIFY THE SAME. IF THERE IS AN ERROR OF JUDGMENT , REMEDY LIES ELSEWHERE, NOT BEFORE THE TRIBUNAL. ACCORDINGLY, T HIS PLEA OF THE ASSESSEE IS DISMISSED. MP NOS.228 & 229/MDS/2015 5 6. IN THE RESULT, BOTH THE MISCELLANEOUS APPLICATIO NS FILED BY THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED ON FRIDAY , THE 4 TH OF MARCH,2016 AT CHENNAI. SD/- SD/- ( ' . . '# . $ ) ( N.R.S.GANESAN ) ( ) (CHANDRA POOJARI) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 4 TH MARCH,2016 . K S SUNDARAM. $ &*./! 0 /* /COPY TO: 1. !'# /APPELLANT 2. &''# /RESPONDENT 3. ( 1* ( !) /CIT(A) 4. ( 1* /CIT 5. /4 &*5 /DR 6. 6) /GF