The DCIT, Circle-2(1), Vijayawada V. M/s Vignesh Enterprises, Vijayawada

MA 72/VIZ/2010

• Counselvise Citation: [2010] 123 COUNSELVISE.COM (IT) 4739 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 1 month(s) 12 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 22-07-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2005-2006
• Appeal Filed On: 10-06-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUBRATA SARKAR
• Keywords: Revenue expenditure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE: SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI BR BASKARAN, ACCOUNTANT MEMBER MA NO.72/VIZAG/2010 (ARISING OUT OF ITA NO.337/VIZAG/2008 ASSESSMENT YEAR : 2005-06 DCIT, CIRCLE-2(1) VIJAYAWADA M/S. VIGNESH ENTERPRISES VIJAYAWADA (APPELLANT) VS. (RESPONDENT) PAN NO.AAEFV 2030R APPELLANT BY: SHRI SUBRATA SARKAR, DR RESPONDENT BY: SHRI G.V.N. HARI, CA ORDER PER SHRI S.K. YADAV, JUDICIAL MEMBER:- THIS MISCELLANEOUS APPLICATION IS PREFERRED BY TH E REVENUE AGAINST THE ORDER OF THE TRIBUNAL IN ITA NO.337/VIZAG/2008 WITH THE SUBMISSION WHILE RENDERING THE DECISION THE TRIBUNAL HAS RELIED UPON THE DECISION OF DIFFERENT HIGH COURTS REFERRED TO BY THE ASSESSEE FIRM WITHOU T TAKING COGNIZANCE OF THE JUDGEMENT OF THE APEX COURT IN THE CASE OF VIJAYA B ANK LIMITED 187 ITR 541 WHEREIN IT WAS LAID DOWN TO THE EFFECT THAT INTERES T FOR THE BROKEN PERIOD FORMS PART OF THE CAPITAL OUTLAY. BY NOT FOLLOWING THE JUDGEMENT OF THE APEX COURT AN ERROR HAS CREPT IN THE ORDER OF THE TRIBUN AL, AS SUCH, THE RECTIFICATION IS CALLED FOR IN THE ORDER OF THE TRIBUNAL. THE AS SESSEE HAS ALSO PLACED A RELIANCE UPON THE JUDGEMENT OF THE RAJASTHAN HIGH C OURT IN THE CASE OF CIT VS. BANK OF RAJASTHAN LIMITED 316 ITR 391 IN WHICH IT WAS HELD THAT PRICE PAID FOR PURCHASE OF SUCH BONDS IS IN THE NATURE OF CAPITAL OUTLAY AND NO PART OF IT CAN BE SET OFF AS EXPENDITURE AGAINST INCOME ACCRUING ON THOSE SECURITIES AND HENCE THE AMOUNT OF BROKEN PERIOD INTEREST PAID BY THE BANK CANNOT BE CLAIMED AS AN ALLOWABLE DEDUCTION. THE LD. COUNSEL FOR THE ASSESSEE FURTHER CONTENDED THAT SINCE THE TRIBUNAL HAS TAKEN A VIEW CONTRARY TO THE VIEW EXPRESSED BY THE HIGH COURT AND THE APEX COURT, THE ORDER OF THE TRIBUNAL SUFFERS FROM THE INFIRMITY. THEREFORE, NECESSARY R ECTIFICATION IS CALLED FOR IN 2 THE ORDER OF THE TRIBUNAL. HE ACCORDINGLY SUBMITS THAT THE ORDER OF THE TRIBUNAL BE AMENDED IN TERMS OF THE JUDGEMENT OF TH E APEX COURT. 2. THE LD. COUNSEL FOR THE ASSESSEE ON THE OTHER HA ND HAS SUBMITTED THAT THE REVENUE HAS NOT PLACED THE RELIANCE OF THIS JUD GEMENT DURING THE COURSE OF HEARING OF THE APPEAL. MOREOVER, THE JUDGEMENT RELIED ON BY THE REVENUE IN THE CASE OF VIJAYA BANK LIMITED (SUPRA) IS VERY OLD JUDGEMENT AND THAT JUDGEMENT WAS CONSIDERED BY THE OTHER HIGH COURTS W HICH WAS RELIED ON BY THE TRIBUNAL WHILE ADJUDICATING THE IMPUGNED ISSUE. SINCE THE TRIBUNAL HAS ADJUDICATED THE ISSUE IN THE LIGHT OF JUDGEMENTS OF THE DIFFERENT HIGH COURTS CITED BEFORE IT, ORDER PASSED BY IT CANNOT BE TERME D TO BE AN ORDER CONTRARY TO THE VIEW EXPRESSED BY THE APEX COURT. IT WAS FUR THER CONTENDED THAT THROUGH THIS MISCELLANEOUS APPLICATION, THE REVENUE HAS SOUGHT A REVIEW OF THE ORDER OF THE TRIBUNAL WHICH IS NOT PERMISSIBLE U/S 254(2) OF THE I.T. ACT. 3. HAVING HEARD THE RIVAL SUBMISSIONS AND FROM A CA REFUL PERUSAL OF THE RECORD, WE FIND THAT DURING THE COURSE OF HEARING O F THE APPEAL, THE AFORESAID JUDGEMENTS OF THE APEX COURT IN THE CASE OF VIJAYA BANK LIMITED AND THE RAJASTHAN HIGH COURT WAS NOT REFERRED BY THE REVENU E DURING THE COURSE OF HEARING OF THE APPEAL. THE IMPUGNED ISSUE WAS ADJU DICATED BY THE TRIBUNAL IN THE LIGHT OF JUDGEMENT OF THE BOMBAY HIGH COURT AND OTHER HIGH COURTS AND VARIOUS JUDGEMENTS OF THE TRIBUNAL. FOLLOWING THE CONSISTENT VIEW TAKEN BY THE DIFFERENT HIGH COURTS AND TRIBUNALS THAT WHE RE THE ASSESSEE HAS OFFERED THE INTEREST ON BONDS FOR THE BROKEN PERIOD TO TAX, HE IS ENTITLED TO CLAIM THE INTEREST ACCRUED UP TO THE DATE OF THE PU RCHASE ALONG WITH THE INTEREST PREMIUM PAID TO THE SELLER AS THE REVENUE EXPENDITURE, THE TRIBUNAL HAS ADJUDICATED THE ISSUES. NOW THE REVENUE SEEKS THE REVIEW OF THE ORDER IN THE LIGHT OF NEW JUDGEMENTS REFERRED IN THE MISCELL ANEOUS APPLICATION. SINCE THE TRIBUNAL HAS TAKEN A CONSCIOUS DECISION IN THE LIGHT OF JUDGEMENT OF VARIOUS HIGH COURTS, THE ORDER OF THE TRIBUNAL CANN OT BE REVIEWED UNDER THE GARB OF RECTIFICATION U/S 254(2) OF THE ACT AS SCOP E OF SECTION 254(2) IS VERY LIMITED AND ONLY THE ERROR APPARENT FROM THE RECORD CAN BE RECTIFIED. WE THEREFORE FIND NO MERIT IN THE MISCELLANEOUS APPLIC ATION OF THE REVENUE AND ACCORDINGLY WE DISMISS THE SAME. 3 4. IN THE RESULT, THE MISCELLANEOUS APPLICATION OF T HE REVENUE IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 22.7.2010 SD/- SD/- (BR BASKARAN) (SUNIL KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER VG/SPS VISAKHAPATNAM, DATED 22 ND JULY, 2010 COPY TO 1 THE DCIT, CIRCLE-2(1), VIJAYAWADA 2 M/S. VIGNESH ENTERPRISES, (HOTEL DV MANOR), 40-1- 47, M.G. ROAD, VIJAYAWADA-520 010 3 THE CIT, VIJAYAWADA 4 THE CIT(A), VIJAYAWADA 5 THE DR, ITAT, VISAKHAPATNAM. 6 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM