Income Tax Officers , Ward-3(3), Hyderabad, Hyderabad V. Sneha Kinetic Power Projects Private Limited, Hyderabad, Hyderabad

MA 63/Hyd/2021

• Counselvise Citation: [2021] 104 COUNSELVISE.COM (IT) 7703 (ITAT-HYDERABAD)
• Duration Of Justice: 2 month(s) 25 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 24-11-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB-A
• Assessment Year: 2012-2013
• Appeal Filed On: 30-08-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PARUCHURI DINESH
• Section: 80HHC

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES “A” : HYDERABAD (THROUGH VIDEO CONFERENCE) BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER M.A. No.63/HYD/2021 (Arising out of ITA Nos.141 & 142/Hyd/2017) Assessment Years: 2012-13 & 2013-14 Income Tax Officer, Ward-3(3), HYDERABAD Vs Sneha Kinetic Power Projects Private Limited, HYDERABAD [PAN: AAFCS1221B] (Appellant) (Respondent) For Revenue : Shri Paruchuri Dinesh, DR For Assessee : Shri S.Rama Rao, AR Date of Hearing : 22-10-2021 Date of Pronouncement : 25-11-2021 O R D E R PER S.S.GODARA, J.M. : This Revenue’s Miscellaneous Application filed u/s.254(2) of the Income Tax Act, 1961 [in short, ‘the Act’] raises the following pleadings: “A miscellaneous Petition is being filed on the following issue:- Interest income of Rs. 1,92,76,530/-:- With respect to the interest income derived by the assessee, the Hon'ble ITAT in its order confirmed the order of the CIT(A). However, the Hon'ble ITAT in its order relied upon the decision of Hon'ble apex court ACG Associated Capsules Pvt. Ltd. Vs. CIT(20 12)[343 ITR 089] (SC). On verification it is found that the decision of the apex court is related to section 80HHC which is entirely different in the assessee's case. As per the section 80HHC of the Income Tax Act, 1961 deduction is allowed to exporters in respect of profits derived from export of goods or merchandise. It is clear that netting of interest income with expense cannot be allowed when the expense has been held to be preoperative in nature and admittedly capitalized by the assessee, MA No. 63/Hyd/2021 :- 2 -: whereas the interest income being held as Income from other sources, under a different head. The facts mentioned in the SC decision in the case of ACG Associated Capsules Pvt. Ltd. are different from the facts of the present case. In the case of ACG Associated Capsules Pvt. Ltd., the order was to remand the issue to AO in the event the assessee is able to establish nexus between interest expenses and interest earned. In the present case it is held by the ITAT itself that the interest expense is preoperative in nature and has not interfered with the order of the CIT (A) and the AO, on the basis of detailed reasoning made by CIT(A) in his order and that of the AO. Approval for filing of miscellaneous petition has been accorded from Pro Commissioner of Income Tax, Central, Bengaluru vide in F. No. LHRA-12/PCIT(C)/2021-22 dated 26.08.2021. Therefore, it is requested that the Hon'ble ITAT may kindly recall the order on the issue and consider rectification of the matter for relevant assessment years”. 2. We have given our thoughtful consideration to Revenue’s foregoing pleadings and considered learned departmental representative’s vehement contention in support and find no merit therein. This is for the precise reason that once the department has assessed the assessee’s pre-operative interest income as ‘income from other sources’ than under business head, we hold that our order had rightly directed the Assessing Officer to compute the same on netting basis u/s.57 of the Act as per law. And that our directions to this effet are very much self-speaking which do not suffer from any apparent mistake on records. 3. The Revenue’s Miscellaneous Application is dismissed in above terms. Order pronounced in the open court on 25 th November, 2021 Sd/- Sd/- (LAXMI PRASAD SAHU) (S.S.GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER Hyderabad, Dated: 25-11-2021 TNMM MA No. 63/Hyd/2021 :- 3 -: Copy to : 1.The Income Tax Officer, Ward-3(3), Hyderabad. 2.Sneha Kinetic Power Projects Private Limited, C/o. Sri S.Rama Rao, Advocate, Flat No.102, Shriya’s Elegance, 3-6-643, Street No.9, Himayat Nagar, Hyderabad. 3.CIT(Appeals)-3, Hyderabad. 4.Pr.CIT-3, Hyderabad. 5.D.R. ITAT, Hyderabad. 6.Guard File.