PRINCIPAL COMMISSIONER OF INCOME TAX-3 V. M/S SHRIRAM CHITS PVT. LTD

ITTA/614/2018

AI Insights

The case involves two Income Tax Tribunal Appeals (I.T.T.A.Nos.614 and 630 of 2018) filed by the Principal Commissioner of Income Tax-3 against M/s Shriram Chits Pvt. Ltd. The appeals challenged the orders of the Income Tax Appellate Tribunal, Hyderabad, which had upheld the claims of the assessee regarding the payment of commission on cancelled chits and royalty to its parent company, as well as the deduction of bad debts. The High Court of Telangana at Hyderabad dismissed the appeals, referencing a common decision in a related batch of cases (I.T.T.A.No.307 of 2005 and batch) where similar issues were resolved in favor of the assessee.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 745164 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 02-11-2023
• Assessment Year: misc
• Other Referred Cases: I.T.T.A.No.307 of 2005 and batch
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: MAHESWARA RAO KUNCHEAM
• Assessee Lawyers: J V PRASAD
• Keywords: Income Tax Tribunal Appeal; Royalty Payment; Commission on cancelled chits; Deduction of bad debts
• Section: 37(1); 28(1); 36(1)(vii); 151 CPC; 260-A

Judgement Text

"[ 337s ] IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD THURSDAY, THE SECOND DAY OF NOVEMBER TWO THOUSAND AND TWENTY THREE PRESENT THE HON'BLE SRI JUSTICE P.SAM KOSHY AND THE HON'BLE SRI JUSTIGE N.TUKARAMJI l.T.T.A.Nos:614 and630 of 2018 !.T.T.A.No.614 of 2018 lncome Tax Tribunal Appeal Under Section 260-4 of the lncome Tax Act, 1961 arising out of the order of the lncome-Tax Appellate Tribunal, Hyderabad Bench ' B ' Hyderabad, in l.T.A.No.1947lHYDlzO17, Assessment Year 2013-14, dated 08-06- 2018, preferred against the Order of the Commissioner of lncome Tax (Appeals) 3, Hyderabad, lTA.No.0554/DCIT/Cir-3(1)/C|T(A)-3120'16-17, dated:11-09-2017, preferred against the Order of the Deputy Commissioner of lncome Tax Circle-3(1), Hyderabad PAN/GI R No.AAFCS491 6D dated 02-12-201 6. Between: Principal Commissioner of lncome Tax-3, Bth Floor, Signature Towers, Kondapur, Hyderabad. ...Appellant AND M/s Shriram Chits Pvt. Ltd, 3-6-478, 3'd Floor, Anand Estates, Opp: lndian Bank, Liberty Road, Himayatnagar, Hyderabad- 29. (PAN: AAFCS4916D) ...Respondent lA NO: 1 OF 2018 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to dispense with the filing of certified copy of the order of the lncome Tax Appellate Tribunal in ITA No. 143O1H12013, dated 10-01-2014for A.Y.2005-06. Counsel for the Appellant: SRI J.V. PRASAD, SC FOR INCOME TAX Counsel for the Respondent: MAHESWARA RAO KUNCHEAM l.T.T.A.N0.630 of 20'l 8 lncome Tax Tribunal Appeal Under Section 260-A of the lrrcome Tax Act, 1961 arising out of the order of the lncome-Tax Appellate Tribunal, l-lyderabad Bench ' B ' Hyderabad, in l.T.A.No.1948lHYDl2O17, Assessment Yeat 2014-15, dated 08-06- 2018, preferred against the Order of the Commissioner of lncome Tax (Appeals) 3, Hyderabad, ITA No.0075/DCIT-3(1y CIT(A)-3I2016-17, dated:11-09-2017, preferred against the Order of the Deputy Commissioner of lncome Tax Circle-3(1), Hyderabad PAN/GIR No.AAFCS4916D dated:3'1 -03-201 6. Between: Principal Commissioner of lncome Tax-3, 8h Floor, Signature Towers, Kondapur, Hyderabad. ...Appellant AND M/s Shriram Chits Pvt. Ltd, 3-6-478, 3'd Floor, Anand Estates, Opp: lndian Bank, Liberty Road, Himayatnagar, Hyderabad- 29. (PAN: AAFCS4916D) ...Respondent Counsel for the Appellant: SRI J.V. PRASAD, SC FOR INCOME TAX Counsel for the Respondent: MAHESWARA RAO KUNCHEAM The Court delivered the following: COMMON JUDGMENT ; THE HON'BLE SRI JUSTICE P.SAM KOSI{Y AND THE HON'BLE SRI JUSTICE N. TUKARAMJI I.T.T.A.Nos.614 AND 630 OF 2018 COMMON JUDGMENT:(per Hon'ble Si Justice P.SAM KOSHY) These appeals under Section 260-A of the Income Tax Act, 1961 , has been filed assailing the order, dated 08.06.2018 passed by the Income Tax Appellate Tribunal, Hyderabad Bench 'B', Hyderabad, (for short \"the Tribunal\") in I.T.A.Nos. l9a7/Hydl2O17 and l9a8lHydl20l7 for the Assessment Years 2O 13- 1 4 and 2014-15 respectively. 2. The questions of law framed for deciding these two appeals are as under:- \"1. Whether, on the facts and ciranmstances of the case, any in Ia ut, the Hon'ble ITAT is correct in upholding the claim of the assessee utith regard to paAment of commission on cancelled chits? 2. Whether the facts and ciratmstances of the case, and in lou, the Hon'ble ITAT is corect in lana in upholding the claim of the assessee uith regard to paAment of rogalty to its parent companA despite the fact that the parent compdnA is not rendeing any seruices to assessee compang? -) 2 PSK,J Ab NTR'J I.T.T.A.No.614 tnd 63O of 2O18 3. Whether on the facts and circumstan-ces of the case, the Hon'ble Tibunal is conect in lau' irt holding that claim for deduction of bad debts utitten-qff is alloutable u/ s.36(1)(uii) or busrness loss u/ s.28(1)or bad debts u/ s.37(1) oJ' tlrc Income Tax Act, 1961?\" 3. Today, when the matter is taken up fo: hearing, the learned counsel appearing for the parties have produced before this Court a common decision of the Division Bench of this Court, decided on 09.06.2023 rn I.T.'I.A.No.307 of 2OO5 and batch, whereby the very sarne issu.es have been extensively and elaborately dealt with and considered, arrd finally the Division Bench has reached to ttre t:onclusion that there was no substantial question of law n-rade out by the Revenue in frling of the said appeals and the question of law stood decided in favour of the assessee and the said appeals were dismissed. 4. Given the fact that the question of lau's :rre identical in the present appeals a1so, we are of the considered opinion that the instant two appeals also stald decided in terms of the order passed in I.T.T.A.No.3O7 ol 2005 and batch. As a consequence, the instant appeals of the Revenue fail and are accordingly dismissed. The question 3 PSI(,J & N?R,J I.T.T.A.No.614 and 63O o! 2O7a of law stands ansurered in favour of the assessee. There shall be no order as to costs Consequently, miscellaneous applications if any, shall stand closed. Sd/. K. SRINIVASA RAO JOINT REGISTRAR .t5 To, kam VH //TRUE COPY// SECTION OFFICER 1. The lncome-Tax Appellate Tribunal, Hyderabad Bench ' B ' Hyderabad 2. The Commissioner of lncome Tax (Appeals) 3, Hyderabad' 3. The Deputy Commissioner of lncome Tax Circle-3('l)' Hyderabad' 4. One CC to SRI J.V. PRASAD, SC FOR INCOME TAX [OPUC] 5. One CC to SRI MAHESWARA RAO KUNCHEAM, Advocate IOPUC] 6. Two CD CoPies I HIGH COURT DATED: 0211112023 COMMON JUDGMENT ITTA.Nos.614 and 630 of 2018 THE APPEALS ARE DISMISSED ' # 't '11- I 1sE STAre )+ q J ,, C) t)) 0 [ 0E[ 20n - .. 1fi "