ACIT (OSD) 2 CITY-2, MUMBAI v. KERRY JOST ENGINEERING LTD, MUMBAI

ITA 2486/MUM/2010 | 2005-2006
Pronouncement Date: 29-07-2011 | Result: Allowed

Appeal Details

RSA Number 248619914 RSA 2010
Assessee PAN AAACK4787D
Bench Mumbai
Appeal Number ITA 2486/MUM/2010
Duration Of Justice 1 year(s) 3 month(s) 29 day(s)
Appellant ACIT (OSD) 2 CITY-2, MUMBAI
Respondent KERRY JOST ENGINEERING LTD, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 29-07-2011
Appeal Filed By Department
Order Result Allowed
Bench Allotted A
Tribunal Order Date 29-07-2011
Assessment Year 2005-2006
Appeal Filed On 30-03-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A MUMBAI BEFORE SHRI N.V.VASUDEVAN(J.M) & SHRI R.K.PANDA (A .M) ITA NO.2486/MUM/2010(A.Y.2005-06) THE DCIT CIRCLE 2(2) AAYKAR BHAVAN MK ROAD MUMBAI 20. (APPELLANT) VS. KERRY JOST ENGINEERING LTD. 21/22 LOHA BHAVAN P.D.MELLO ROAD MUMBAI 400 009. PANAAACK 4787D (RESPONDENT) APPELLANT BY : MRS. USHA NAIR RESPONDENT BY : SHRI BASANT KASAT ORDER PER N.V.VASUDEVAN J.M THIS IS AN APPEAL BY THE REVENUE AGAINST THE ORDE R DATED 19/1/2010 OF CIT(A)-V MUMBAI RELATING TO ASSESSMENT YEAR 2005-0 6. THE GROUNDS OF APPEAL RAISED BY THE REVENUE READ AS FOLLOW: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) ERRED IN ALLOWING RELIEF TO THE ASSESSEE T O THE EXTENT IMPUGNED IN THE GROUND ENUMERATED BELOW: 1. THE ORDER OF THE CIT(A) IS OPPOSED TO LAW AND FACTS OF THE CASE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE LD. CIT(A) ERRED IN HOLDING THAT INTEREST U/S. 234B & C CANNOT BE LEVIED WHEN INCOME IS COMPUTED U/S. 115JB OF THE I. T. ACT 1961. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE LD. CIT(A) ERRED IN FOLLOWING THE DECISION OF THE B OMBAY HIGH COURT IN THE CASE OF SNOCEM INDIA LTD. (18 DTR 58) 2099 ( BOM) OVERLOOKING THE FACT THAT THE PROVISIONS OF SECTION 115JB ARE APPLICABLE TO THE ASSESSEES CASE AND THESE PROVISI ONS ARE SUBSTANTIALLY DIFFERENT FROM THE PROVISIONS OF SECT ION 115JA. 4. FOR THESE AND OTHER GROUND THAT MAY BE URGED AT THE TIME OF HEARING THE DECISION OF THE CIT(A) MAY BE SET ASIDE AND THAT OF THE AO RESTORED. ITA NO.2486/MUM/2010(A.Y.2005-06)) 2 2. AS CAN BE SEEN FROM THE GROUND OF APPEAL THE IS SUE SOUGHT TO BE RAISED BY THE REVENUE IS AS TO WHETHER COMPANIES WH ICH ARE LIABLE TO PAY TAX ON BOOK PROFITS U/S.115JB OF THE INCOME TAX ACT 19 61 (THE ACT) SHOULD PAY ADVANCE TAX AND WOULD BE LIABLE TO PAY INTEREST U/S .234-B AND 234-C OF THE ACT IN CASE OF FAILURE TO PAY ADVANCE TAX. THE HO NBLE SUPREME COURT IN THE CASE OF JCIT VS. ROLTA INDIA LTD. 330 ITR 470 (SC) HAS APPROVED THE VIEW TAKEN BY THE HONBLE KARNATAKA HIGH COURT IN JINDAL THERMAL POWER COMPANY LTD. VS. DCIT 286 ITR 182 HOLDING THAT INT EREST FOR FAILURE TO PAY ADVANCE TAX IN TERMS OF SECTION 234 B& 234C OF THE INCOME TAX ACT 1961 (THE ACT) IS LEVIABLE WHEN INCOME OF AN ASSESSEE IS DETERMINED ON THE BASIS OF BOOK PROFITS UNDER SECTION 115JA & 115 JB OF THE AC T. THE DECISION RELIED UPON BY THE CIT(A) IN THE CASE OF SNOCEM INDIA LTD. 313 ITR 170 IS NO LONGER GOOD LAW IN VIEW OF THE DECISION OF THE HON BLE SUPREME COURT REFERRED TO ABOVE. THE LD. COUNSEL FOR THE ASSESEE FAIRLY C ONCEDED ON THE ISSUE. WE THEREFORE REVERSE THE ORDER OF THE CIT(A) AND REST ORE THE ORDER OF THE ASSESSING OFFICER HOLDING THAT INTEREST UNDER SECTI ON 234B & 234C WAS RIGHTLY CHARGED BY THE ASSESSING OFFICER. 3. THE LEARNED COUNSEL FOR THE ASSESSEE ALSO SUBMI TTED THAT IN VIEW OF THE DECISION OF THE TRIBUNAL IN ASSESSEES APPEAL VIZ. ITA NO.1374/MUM/2010 THERE WOULD BE NO LIABILITY TO TAX EVEN U/S.115JB O F THE ACT AND THEREFORE THERE CANNOT BE ANY INTEREST PAYABLE U/S.234-B AND 234-C OF THE ACT. WE ARE OF THE VIEW THAT THE ASSESSEE IS ENTITLED TO BR ING THIS ASPECT TO THE NOTICE OF THE AO IN THE PROCEEDINGS BEFORE AO GIVING EFFEC T TO THE ORDER OF THE TRIBUNAL. THE AO WILL CONSIDER THE CLAIM OF THE AS SESSEE IN ACCORDANCE WITH LAW. WITH THESE OBSERVATIONS THE APPEAL OF THE RE VENUE IS ALLOWED. ITA NO.2486/MUM/2010(A.Y.2005-06)) 3 4. IN THE RESULT THE APPEAL BY THE REVENUE IS ALLO WED. ORDER PRONOUNCED IN THE OPEN COURT ON TH E 29 TH DAY OF JULY 2011. SD/- SD/- (R.K.PANDA ) (N.V.VASUDEVAN) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI DATED. 29 TH JULY.2011 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3 . THE CIT CITY CONCERNED 4. THE CIT(A)- CONCERNED 5. THE D.RA BENCH. (TRUE COPY) BY ORDER ASST. REGISTRAR I TAT MUMBAI BENCHES MUMBAI. VM. ITA NO.2486/MUM/2010(A.Y.2005-06)) 4 DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON 21/7/11 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 22/7/11 SR.PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON SR.PS/PS 7. FILE SENT TO THE BENCH CLERK SR.PS/PS 8 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER