Balvinder Singh Bagga Hyd Hyderabad v. Dcit Central Circle 1 Hyderabad

The Income Tax Appellate Tribunal Hyderabad Bench B Hyderabad Before Smt P Madhavi Devi Judicial Member And Shri S Rifaur Rahman Accountant Member Ita Nos A Y Appellant Respondent 450 Hyd 2012 2001 02 Balvinder Singh Bagga Hyderabad Pan Abxpb 9331 K Dy Cit Central Circle 1 Hyderabad 710 Hyd 2006 2002 03 Balvinder Singh Bagga Hyderabad Pan Abxpb 9331 K Asst Cit Central Circle 1 Hyderabad 766 Hyd 2007 2003 04 Balvinder Singh Bagga Hyderabad Pan Abxpb 9331 K Dy Cit Central Circle 1 Hyderabad 904 Hyd 2008 2004 05 Balvinder Singh Bagga Hyderabad Pan Abxpb 9331 K Dy Cit Central Circle 1 Hyderabad Assessee By Shri P Murali Mohan Rao Revenue By Smt N Swapna Date Of Hearing 12 10 2017 Date Of Pronouncement 15 12 2017 Order Per P Madhavi Devi J M These Appeals Are Filed By The Assessee For The Assessment Years 2002 03 2003 04 And 2004 05 Respectively Ita Nos 710 Hyd 2006 766 Hyd 2007 And 904 Hyd 2008 Were Earlier Heard And Disposed Of By The Coordinate Bench Of This Tribunal On 03 08 2012 Subsequently Vide Ma Nos 111 112 113 Hyd 2013 Dated 30 07 2015 The Limited Issue Involved In Para 102 Of The Itat Order Has Been Recalled Consequent Thereto 2 Shri Balvinder Singh Bagga Hyderabad These Appeals Were Fixed For Hearing Before Us On Going Through The Order Of The Tribunal In Ma Nos 111 112 113 Hyd 2013 We Find That Only The Issue Of Interest Payable By The Assessee To M S Intra Port India Ltd During The Relevant Assessment Years Is Involved In Para 102 Of The Itat Order Dated 03 08 2012 2 Brief Facts Relating To This Issue Are That The Assessee Is The Proprietor Of M S Ram Lakshman Marketing Agencies This Concern Entered Into A Marketing Agreement Dated 28 05 1999 With M S Intra Port India Ltd For Sale Of Their Product Snow Budge Beer As Per The Agreement The Company M S Intra Port India Ltd Was Supposed To Provide Non Refundable Interest Free Deposits To The Assessee And Accordingly No Interest Was Paid Credited To M S Intra Port India Ltd During The F Y 1999 2000 However During The Course Of Search Certain Documents Bearing No 191 And 192 Of Annexure A Gd Po 1 Were Seized Which Are Supposedly Written By M S Ram Lakshman Marketing Agencies To M S Intra Port India Ltd Claiming That Since M S Intra Port India Ltd Failed To Supply The Beer As Per The Agreement It Would Forfeit The Deposits Of The Company It Also Claimed Various 3 Shri Balvinder Singh Bagga Hyderabad Expenditure Incurred By It For Marketing Of The Product Of M S Intra Port India Ltd The Claim For Forfeiture Of Deposits Was Disputed By The Company Which Made A Counter Claim That The Deposits Should Be Refunded Along With Interest 24 Per Annum Neither Were The Deposits Refunded Nor Was The Interest Actually Paid To M S Intra Port India Ltd The A O Observed That The Assessee Company Was Taken Over By The Assessee Group On 17 11 2001 And The Office Was Shifted To Greater Kailash Delhi Thereafter The A O Was Of The Opinion That The Interest On Deposits Was Shown As Payable To M S Intra Port India Ltd Only After Such Takeover And For The F Ys 2000 01 And 2001 02 The Interest Of Rs 1 07 51 283 And 1 01 53 923 Respectively Were Shown As Payable To M S Intra Port India Ltd Because Of These Facts The A O Concluded That The Same Is Not Allowable And That It Is Undisclosed Income Of The Block Period On Appeal By The Assessee The Cit A In The Block Assessment Order Deleted The Addition By Holding That It Should Be Considered Only In The Regular Assessments In The Regular Assessment For The A Ys 2001 02 To 2004 05 The A O Disallowed The Claim Of Interest For The Respective Assessment Years And The Assessees Appeal Before The Cit 4 Shri Balvinder Singh Bagga Hyderabad A Was Also Dismissed Aggrieved The Assessee Is In Appeal Before Us 3 The Ld Counsel For The Assessee Submitted That The A O Has Erroneously Recorded That M S Intra Port India Ltd Was Taken Over By The Assessees Group On 17 11 2001 And On That Premise Has Made The Disallowance Of The Interest Payable To M S Intra Port India Ltd He Submitted That The Assessee Was In No Way Concerned Or Connected With M S Intra Port India Ltd Till It Was Taken Over By The Bagga W E F 24 04 2004 Relevant To The A Y 2005 06 He Submitted That The Relevant Information That The Assessees Brother Shri Satpal Singh Bagga Has Become The Additional Director Of The Said Company On 24 04 2004 Was Filed As Additional Evidence Before The Itat And The Itat Vide Para No 93 Has Admitted The Additional Evidence Containing The Balance Sheet Profit And Loss Account And Other Relevant Details Of M S Intra Port India Ltd But Erroneously The Tribunal Has Not Considered The Same For The Purpose Of Adjudication Vide Orders Dated 03 08 2012 He Has Drawn Our Attention To Various Documents Filed Before The Tribunal To Demonstrate That No Person From The Assessees Group Was A Director Of M S 5 Shri Balvinder Singh Bagga Hyderabad Intra Port India Ltd Till 24 04 2004 He Therefore Prayed That The Issue May Be Remanded To The File Of The A O For Consideration Of The Issue On Merits In The Light Of The Additional Evidence Filed By Him 4 The Ld Dr However Opposed The Remand Of The Matter To The File Of The A O 5 Having Regard To The Rival Contentions And Material On Record We Find That The Tribunal Has Already Admitted The Additional Evidence Filed By The Assessee We Have Gone Through The Additional Evidence And Find That None Of The Persons Of The Assessees Group Was The Director Of The M S Intra Port India Ltd Prior To 24 04 2004 The Interest Shown As Payable To M S Intra Port India Ltd Was Disallowed By The A O For The A Ys 2001 02 To 2004 05 All These A Ys Are Prior To The Company Being Taken Over By The Asseessees Group Therefore The A O Is Not Right In Holding That In Order To Set Off The Loss Of M S Intra Port India Ltd The Interest Is Being Claimed To Have Been Payable To M S Intra Port India Ltd Both The Authorities Below Have Proceeded On The Premise That M S Intra Port India Ltd Has Been Taken Over By The Assessee Group And That It Is Thereafter That The Claim Is Being Made A Search 6 Shri Balvinder Singh Bagga Hyderabad Has Taken Place In The Case Of The Assessee Group On 03 01 2002 Whereas M S Intra Port India Ltd Is Allegedly Taken Over By The Assessee Group Only From 24 04 2004 Therefore There Cannot Be Any Possibility Of Raising The Claim Of Interest Payable To M S Intra Port India Ltd For The A Y 2001 02 To 2004 05 After Taking Over The Said Company In View Of The Same We Are Inclined To Remit The Issue To The File Of The A O With A Direction To Verify And Determine As To When The Company M S Intra Port India Ltd Was Taken Over By The Bagga Group After Taking Into Consideration All Evidence Filed By The Assessee Including The Additional Evidence Admitted By The Tribunal And Thereafter To Decide The Issue Of Allowability Of Interest Needless To Mention That The Assessee Shall Be Given Fair Opportunity Of Hearing 6 In The Result The Assessees Grounds Of Appeal No 4 In Ita No 710 Of 2006 Ground No 3 In Ita No 766 Of 2007 And Ground No 3 In Ita No 904 Of 2008 Are Treated As Allowed For Statistical Purposes 450 Hyd 2012 7 This Appeal Is Not A Recalled Matter But Has Come Up For Hearing In The Regular Course In This Appeal The 7 Shri Balvinder Singh Bagga Hyderabad Assessee Is Challenging Both The Reopening Of The Assessment U S 148 Of The It Act And Also The Disallowance Of Interest Payable To M S Intra Port India Ltd Since We Have Already Remitted The Issue Of Allowability Of Interest Payable To M S Intra Port India Ltd For The A Y 2002 03 To 2004 05 To The File Of The A O And Since The Facts And Circumstances Are Same For This Assessment Year Also We Are Inclined To Remand The Grounds Of Appeal Nos 4 To 7 To The File Of The A O With Similar Directions As Given In The A Ys 2002 03 To 2004 05 The Ld Counsel For The Assessee Also Submitted That In View Of The Above Remand Grounds No 1 To 3 Against Reopening Of Assessment Are Not Being Pressed At This Stage Therefore Grounds 4 To 7 Are Treated As Allowed For Statistical Purposes And Grounds No 1 To 3 And 8 Are Rejected As Not Pressed 8 In The Result All The Assessees Appeals Are Treated As Partly Allowed For Statistical Purposes Pronounced In The Open Court On 15 Th December 2017 Sd Sd S Rifaur Rahman P Madhavi Devi Accountant Member Judicial Member Hyderabad Dated 15 Th December 2017 Krk 8 Shri Balvinder Singh Bagga Hyderabad 1 Shri Balvinder Singh Bagga C O Murali Co Cas 6 3 655 2 3 Ist Floor Somajiguda Hyderabad 2 3 Asst Cit Central Circle 1 Hyderabad Dy Cit Central Circle 1 Hyderabad 4 Cit A 1 Hyderabad 5 Addl Cit Range 1 Hyderabad 6 The Dr Itat Hyderabad 7 Guard File