Ambur Economic Development Organisation, CHENNAI V. ITO (Exemptions) Ward 2, CHENNAI

MA 47/CHNY/2018

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 8915 (ITAT-CHENNAI)
• Duration Of Justice: 7 month(s) 6 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 08-10-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 02-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S VIJAYAPRABHA
• Assessee Lawyers: D ANAND

Judgement Text

, , IN THE INCOME-TAX APPELLATE TRIBUNAL B BENCH, CHENNAI . , . , BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER & SHRI DUVVURU RL REDDY, JUDICIAL MEMBER M.P. NO. 47/CHNY/2018 [ ./ I.T.A.NO.2582/CHNY/2017] / ASSESSMENT YEAR :2007-08 AMBUR ECONOMIC DEVELOPMENT ORGANIZATION, C/O AKBER RIFA & CO., C.AS., AP 122, 6 TH STREET, AF BLOCK, 11 TH MAIN ROAD, ANNA NAGAR, CHENNAI 600 040. [PAN: AAFCA3014L] VS. THE INCOME TAX OFFICER [EXEMPTIONS], WARD 2, CHENNAI. ( /APPELLANT ) ( / RESPONDENT ) / APPELLANT BY : SHRI D. ANAND, ADVOCATE / RESPONDENT BY : MS. S. VIJAYAPRABHA, JCIT / DATE OF HEARING : 20.07.2018 /DATE OF PRONOUNCEMENT : 08.10.2018 / O R D E R PER DUVVURU RL REDDY, JUDICIAL MEMBER: IN THIS MISCELLANEOUS PETITION FILED BY THE ASSESSEE AGAINST THE ORDER OF THE TRIBUNAL IN I.T.A. NO. 2582/CHNY/2017 DATED 20.02.2018 FOR THE ASSESSMENT YEAR 2007-08, ITS GRIEVANCE IS THAT THE TRIBUNAL DISMISSED THE APPEAL OF THE ASSESSEE WITHOUT CONSIDERING VARIOUS ASPECTS AS DETAILED IN THE PETITION AND MORE PARTICULARLY, THE PETITIONER IS A SECTION 25 COMPANY AND A SPECIAL PURPOSE VEHICLE INCORPORATED FOR THE PURPOSE OF EXECUTION OF M.P. NO.47/CHNY/18 2 COMMON EFFLUENT TREATMENT PLANTS IN LEATHER INDUSTRY SITUATED IN THE STATE OF TAMIL NADU. THE LD. COUNSEL FOR THE PETITIONER HAS SUBMITTED THAT THE PETITIONER DOES NOT HAVE OWN FUNDS AND SURVIVES ONLY ON THE GRANT RECEIVED FROM THE GOVERNMENT OF INDIA AND CONTRIBUTION FROM PROMOTERS FOR EXECUTION OF THE PROPOSED PROJECT. IT WAS THE SUBMISSIONS OF THE LD. COUNSEL THAT THIS TRIBUNAL HAD SUSTAINED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER WITHOUT CONSIDERING VARIOUS ASPECT IS A MISTAKE APPARENT ON RECORD AND PRAYED FOR RECALLING THE ORDER DATED 20.02.2018. 2. PER CONTRA, THE LD. DR SUBMITTED THAT THERE WAS NO MISTAKE IN THE ORDER OF THE TRIBUNAL WARRANTING INTERFERENCE UNDER SECTION 254(2) OF THE ACT. 3. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE ORDER OF THE TRIBUNAL. BY REFERRING TO THE MISCELLANEOUS PETITION, T HE LD. COUNSEL HAS SUBMITTED THAT THE FOLLOWING MISTAKES ARE APPARENT FROM THE ORDER OF THE TRIBUNAL: A) THE FACTS FOR THE A.Y. 2006-07 AND 2007-08 ARE IN PARI MATERIA . B) THE UNDISPUTED FACT OF THE PETITIONER'S CASE IS THAT THE PETITIONER DOES NOT HAVE OWN FUNDS AND SURVIVES ONLY ON THE GRANT. THE PECULIAR FEATURE OF ANY GRANT BY THE CENTRAL GOVERNMENT IS THAT (I) THE GRANT AMOUNT SHALL BE SPENT FOR THE PROJECT WITHIN THE SPECIFIED TIME, M.P. NO.47/CHNY/18 3 (II) ANY PORTION OF THE GRANT WHICH IS NOT ULTIMATELY REQUIRED FOR EXPENDITURE FOR THE APPROVED PURPOSES SHALL BE DULY SURRENDERED TO DIT. (III) THE UTILISATION OF GRANT FOR THE INTENDED PURPOSES WILL BE LOOKED INTO BY THE AUDITOR OF GRANTEE INSTITUTION ACCORDING TO THE DIRECTIVES ISSUED BY THE GOVERNMENT OF INDIA AT THE INSTANCE OF THE COMPTROLLER AND AUDITOR GENERAL AND THE SPECIFIC MENTION ABOUT IT WILL BE MADE IN THE AUDIT REPORT. (IV) SHOULD AT ANY TIME GRANTEE INSTITUTION CEASE TO EXIST SUCH ASSETS ETC., SHALL REVERT TO DIT: (V) THE GRANTEE INSTITUTION SHOULD MAINTAIN SEPARATE AUDITED ACCOUNT FOR THE PROJECT. IF IT IS FOUND EXPEDIENT TO KEEP A PART OR WHOLE OF THE GRANT IN A BANK ACCOUNT EARNING INTEREST, THE INTEREST, THUS EARNED SHOULD BE REPORTED TO THIS DEPARTMENT. THE INTEREST SO EARNED WILL BE TREATED AS A CREDIT TO THE GRANTEE TO BE ADJUSTED TOWARDS FUTURE INSTALMENT OF THE GRANT; RECEIVED FROM GOVERNMENT OF INDIA AND CONTRIBUTION FROM PROMOTERS FOR EXECUTION OF THE PROPOSED PROJECT. 4. WE FIND FORCE IN THE ARGUMENTS OF THE LD. COUNSEL. WHILE PASSING IN ITS ORDERS FOR THE EARLIER ASSESSMENT YEAR, WE FIND THAT THE TRIBUNAL HAS SPECIFICALLY STATED THAT THE PETITIONER IS A SPECIAL PURPOSE VEHICLE AND THAT THE PETITIONER DOES NOT HAVE OWN FUNDS AND SURVIVES ONLY ON THE GRANT RECEIVED FROM GOVERNMENT OF INDIA AND CONTRIBUTION FROM PROMOTERS FOR EXECUTION OF THE PROPOSED PROJECT. THUS THE FACTS OF THE PETITIONERS CASE IS PECULIAR IN THE MANNER SUCH THAT, (I) THE PETITIONER BEING A SPV, THE INTEREST IS NOT FROM ANY SURPLUS FUNDS AND IF ALL ANY INTEREST HAS BEEN DERIVED IT HAS TO BE SURRENDERED AND IT CAN ONLY USE THE GRANT FOR THE PURPOSE OF THE PROJECT (II) THE FUNDS ON WHICH THE PETITIONER COMPANY DERIVED INTEREST INCOME IS FROM THE GRANT IN AID, THE INTEREST INCOME CAN EITHER BE GIVEN BACK TO THE PETITIONER IN THE FORM OF FRESH AID OR IT CAN BE TAKEN BACK BY THE CENTRAL M.P. NO.47/CHNY/18 4 GOVERNMENT. THE INTEREST RECEIVED BY THE ASSESSEE BELONGS TO THE CENTRAL GOVERNMENT-BY OVERRIDING TITLE. HENCE, THE INTEREST RECEIVED BY THE ASSESSEE CANNOT BE TAKEN AS INCOME OF THE ASSESSEE. THUS, WE FIND THAT THERE IS A MISTAKE APPARENT FROM THE ORDER OF THE TRIBUNAL AND ACCORDINGLY, WE RECALL THE ORDER OF THE TRIBUNAL DATED 20.02.2018. THE REGISTRY IS DIRECTED TO FIX THE APPEAL FOR HEARING ON REGULAR COURSE BY SERVICE OF NOTICE TO BOTH THE SIDES. 5. IN THE RESULT, THE MP FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON THE 08 TH OCTOBER, 2018 AT CHENNAI. SD/- SD/- (ABRAHAM P. GEORGE) ACCOUNTANT MEMBER (DUVVURU RL REDDY) JUDICIAL MEMBER CHENNAI, DATED, THE 08.10.2018 VM/- /COPY TO: 1. / APPELLANT, 2. / RESPONDENT, 3. ( ) /CIT(A), 4. /CIT, 5. /DR & 6. /GF.