RABO INDIA FINANCE LTD, MUMBAI V. DCIT 1(3), MUMBAI

MA 292/MUM/2021

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 4597 (ITAT-MUMBAI)
• Duration Of Justice: 4 month(s) 24 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 26-04-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: J
• Assessment Year: 2008-2009
• Appeal Filed On: 02-12-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained investment; Notional interest

Judgement Text

MA No 292/Mum/2021 In ITA No.4343/Mum/2014 Assessment year: 2008-09 Page 1 of 3 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI 'J' BENCH, MUMBAI [Coram: Pramod Kumar (Vice President), and Amarjit Singh (Judicial Member)] MA No 292/Mum/2021 In ITA No.4343/Mum/2014 Assessment year: 2008-09 Rabo India Finance Limited ...................... Appellant Forbes Building, 1 st Floor, Charanjit Rai Marg, Fort, Mumbai 400001 [PAN: AAACR6065R] Vs. Deputy Commissioner of Income Tax 1(3) Mumbai ........................ Respondent Appearances by Percy Pardiwala for the applicant Satya Pinisetty for the respondent Date of concluding the hearing : January 28, 2022 Date of pronouncement the order : April 27, 2022 ORDER Per Pramod Kumar, VP: 1. By way of this application, the asseesee applicant points out the following mistake in our order dated 07 th September 2021:- 1. Ground No.1 of the Revenue's appeal dealt with addition of notional interest as a transfer pricing adjustment on account of unexplained investment, being USD 37.5 million allegedly lent by the Applicant to Tata Tea Tetley Limited, U.K. as a part of the consortium. The said issue emanates from assessment year 2006-07. It is the Applicant's case that, it had acted as a facilitator for credit allocation of the said amount by Rabo Bank London (being the lead member of the consortium) to Rabo Bank Singapore for which it was inter alia entitled to receive ongoing fee of 25% of the net income earned by Rabo Bank Singapore from such credit allocation. Relying on certain submissions made by the Applicant's representative before the AO in the course of assessment proceeding, an inference had been drawn that it had lent funds of USD 37.5 million in assessment year 2006-07. In all the subsequent years including the current year i.e., assessment year 2008-09, addition of notional interest on the said unexplained investment has been made. MA No 292/Mum/2021 In ITA No.4343/Mum/2014 Assessment year: 2008-09 Page 2 of 3 2. An independent addition made by the AO in the assessment order related to receipt of interest by the Applicant during the year under consideration from PMT Machine and Sagar Sugar aggregatingtoRs.3,36,415. The said parties had become NPAs in the past. This addition had nothing to do with the aforesaid addition by way of notional interest on aforesaid alleged unexplained investment. 3. The Tribunal in its order dated 07.09.2021 has proceeded on the basis that the Ground No. 1 in the Revenue's Appeal relates to such interest on PA's. Hence, the actual ground has not been disposed of. It is well settled by now that non-disposal of a ground of appeal raises a mistake apparent from the record. Therefore, effective non disposal of ground no.1 of Revenue's appeal discloses a mistake apparent from the record. 4. In any event, addition by way of unexplained investment has been deleted by the Tribunal by its order dated 26.03.2021 for assessment year 2006-07. Based thereon, the addition of notional interest on such unexplained investment also stands deleted for assessment year 2007-08 by order dated 26.03.2021. In fact, the Order dated 07.09.2021impugned herein is a consolidated order passed for assessment years2008-09 and 2009-10. In respect of similar ground raised by the Revenue before the Tribunal for assessment year 2009-10, the said addition has been deleted relying on the Tribunal's order for assessment year 2006-07. It is also well settled that not following a binding order of the co-ordinate Bench of the Tribunal discloses a mistake apparent from the record. The Tribunal may therefore uphold dismissal of ground no. 1 of the Revenue's appeal following these orders as a mistake apparent from record. 2. Learned Departmental Representative does not dispute this point but hastens to add that the mistake, even if any, is not a mistake apparent on record. 3. Heard the parties; perused the material on record. 4. The plea is indeed correct inasmuch as the related quantum addition stands deleted by a coordinate bench’s order for the assessment year 2006-07. Even as outcome of the ground of appeal and the outcome of appeal remains the same, the paragraph 3 of the impugned order accordingly stand deleted and deleted by the following: 3. In view of the undisputed position that the related quantum addition stands deleted by a coordinate bench decision for the assessment year 2006-07, this interest income must stand deleted as well. We order so. 5. In the result, the miscellaneous application is allowed in the terms indicated above. Pronounced in the open court today on the 27 th day of April 2022. Sd/- Sd/- Amarjit Singh Pramod Kumar (Judicial Member) (Vice President) Mumbai, dated the 27 th day of April, 2022 MA No 292/Mum/2021 In ITA No.4343/Mum/2014 Assessment year: 2008-09 Page 3 of 3 Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) DR (6) Guard File By order True Copy Assistant Registrar/ Sr. PS Income Tax Appellate Tribunal Mumbai benches, Mumbai