The commissioner of Income Tax-IV, V. M/s. NSL Power Infratech Limited

ITTA/607/2013

AI Insights

The case revolves around an appeal by the Commissioner of Income Tax-IV, Hyderabad against the judgment of the ITAT, which pertained to the assessment year 2006-2007. The core issue was whether the assessee, M/s. NSL Power Infratech Limited, had derived any interest income from M/s. Adarsh Developers Private Limited as per an agreement dated 19.03.2005. The ITAT had concluded that no interest income was derived, leading to the setting aside of the CIT's order under Section 263 of the Income Tax Act, 1961. The High Court, after reviewing the facts and the ITAT's decision, dismissed the appeal, agreeing with the ITAT's findings.

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 719035 (HC-ANDHRA_PRADESH)
• Appeal Type: Others
• Pronouncement Date: 19-12-2013
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Assessee Lawyers: J V PRASAD
• Keywords: Assessment Year 2006-2007; CIT; Income Tax; Interest income; ITAT
• Section: 263

Judgement Text

"IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD THRUSDAY, THE NINETEENTH DAY OF DECEMBER TWO THOUSAND AND THIRTEEN PRESENT THE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SEN GUPTA AND THE HON'BLE SRI JUSTICE SANJAY KUMAR I.T.T.A. No. 607 OF 2013 Between: The Commissioner of Income Tax-IV, Hyderabad. ..... Appellant AND M/s. NSL Power Infratech Limited, Opp: ICICI Bank, 8-2-684/2/A, Road No.12, Banjara Hills, Hyderabad .....Respondent The Court made the following : JUDGMENT: (per the Hon’ble the Chief Justice Sri K.J. Sengupta) This appeal is sought to be preferred against the judgment and order of the learned Tribunal dated 24.01.2013 in relation to the assessment year 2006-2007 on the following suggested question of law: Whether in the facts and circumstances of the case and in law, the Hon’ble ITAT is correct in concluding that assessee has not derived any interest income from M/s. Adarsh Developers Private Limited and thereby setting aside the order of the CIT under Sec. 263 of the Income Tax Act, 1961, without appreciating that interest income had accrued to the assessee in terms of the agreement dated 19.03.2005 entered into by the assessee with Adarsh Developer Private Limited? We have heard Mr. J.V. Prasad, learned counsel for the appellant and gone through the impugned judgment and order of the learned Tribunal. Learned Tribunal has partly allowed the appeal preferred by the assessee on facts. It is better to quote the language of the learned Tribunal. It reads as follows: “…After hearing both the parties and perusing the record, we find that the company’s entire unsecured loan to Embassy got converted into share capital of Saphire all by virtue of the aforesaid written agreements and not any oral understanding. It appears that the company has not derived any interest from M/s. Adarsh Developers Pvt. Ltd. As such, no interest has been provided in the company’s books on the unsecured loan advanced to M/s. Adarsh Developers Pvt. Ltd. Further, it is clear from the agreement that the unsecured loan shall carry a coupon rate of 4% per annum for the first quarter of the investment and thereafter, the company will reset the same to such higher level as may be mutually agreed among the shareholders. The word ‘shall’ only indicates that there is no certainty and in this case the company has not derived any interest from M/s. Adarsh Developers Pvt. Ltd. We are, therefore, of the opinion that the order of CIT is to be set aside and the assessee’s ground of appeal on this issue is to be allowed. We order accordingly. In view of the aforesaid fact-finding, there is no scope to decide further by this court. The decision on law depends upon the fact-finding. We found that the fact-finding arrived at by the learned Tribunal matches with the provision of law. We do not need to decide anything further. Accordingly, we dismiss the appeal. No costs. As a sequel to the dismissal of the appeal, all the pending interim applications shall stand closed. ______________________ Kalyan Jyoti Sengupta, CJ. ______________ Sanjay Kumar, J. December 19, 2013 MAS "