Sree Rayalaseema Green Energy Ltd, Hyderabad v. CIT Central, Hyderabad

ITA 736/HYD/2010 | 2005-2006
Pronouncement Date: 10-12-2010 | Result: Dismissed

Appeal Details

RSA Number 73622514 RSA 2010
Assessee PAN AAECS7075A
Bench Hyderabad
Appeal Number ITA 736/HYD/2010
Duration Of Justice 6 month(s) 24 day(s)
Appellant Sree Rayalaseema Green Energy Ltd, Hyderabad
Respondent CIT Central, Hyderabad
Appeal Type Income Tax Appeal
Pronouncement Date 10-12-2010
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 10-12-2010
Assessment Year 2005-2006
Appeal Filed On 17-05-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B' HYDERABAD BEFORE SHRI N.R.S. GANESAN JUDICIAL MEMBER AND SHRI AKBER BASHA ACCOUNTANT MEMBER I.T.A. NO. 736/HYD/2010 (ASSESSMENT YEAR 2005-06) SREE RAYALASEEMA GREEN ENERGY LTD. HYDERABAD PAN: AAECS7075A VS. THE CIT (CENTRAL) HYDERABAD APPELLANT RESPONDENT APPELLANT BY: SHRI A.V. RAGHU RAM RESPONDENT BY: SMT. VASUNDHARA SINHA O R D E R PER NRS GANESAN JM: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE ADMINISTRATIVE COMMISSIONER (CENTRAL) HYDERABAD D ATED 26.3.2010 AND PERTAINS TO ASSESSMENT YEAR 2005-06. 2. SHRI A.V. RAGHU RAM THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ADMINISTRATIVE COMMISSIONER IN E XERCISE OF HIS POWERS U/S. 263 OF INCOME-TAX ACT 1961 DIRECTED TH E ASSESSING OFFICER TO REFRAME THE ASSESSMENT WITH REGARD TO INTEREST S UBSIDY RECEIVED FROM IREDA AND THE INTEREST RECEIVED FROM FIXED DEP OSITS FOR THE PURPOSE OF ELIGIBLE DEDUCTION U/S. 80IA OF INCOME-T AX ACT 1961. ACCORDING TO THE LEARNED COUNSEL FOR THE ASSESSEE T HE ASSESSEE HAS NOT RECEIVED INTEREST FROM IREDA. IT WAS ADJUSTED TOWARDS SUBSIDY GRANTED BY THE IREDA. MOREOVER FIXED DEPOSIT WAS M ADE FOR THE PURPOSE OF BORROWAL OF FUNDS FROM IREDA. THEREFORE THIS HAS NEXUS WITH THE BUSINESS OF THE ASSESSEE. REFERRING TO TH E PROVISIONS OF SECTION 80IA THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THERE IS DIFFERENCE BETWEEN THE PROVISIONS OF SECTION 80I A AND SECTION 80IB. IN SECTION 80IA ALL THE INCOME DERIVED BY AN UNDERT AKING OR ENTERPRISE FROM ANY BUSINESS IS ELIGIBLE FOR DEDUCTION U/S.80I A. HOWEVER IN I.T.A. NO. 736/HYD/2010 SREE RAYALASEEMA GREEN ENERGY LTD. ============================= 2 SECTION 80IB THE INCOME WHICH IS DERIVED FROM ANY B USINESS IS ELIGIBLE FOR DEDUCTION. ACCORDING TO THE LEARNED COUNSEL FO R THE ASSESSEE SINCE THE RECEIPT OF INTEREST INCOME HAS NEXUS WITH THAT OF THE BUSINESS OF THE ASSESSEE IT HAS TO BE CONSTRUED AS INCOME DERIVED F ROM THE BUSINESS OF THE UNDERTAKING. THEREFORE ACCORDING TO THE LE ARNED COUNSEL FOR THE ASSESSEE THE ADMINISTRATIVE COMMISSIONER IS NOT JUS TIFIED IN REVISING THE ORDER OF THE ASSESSING OFFICER. 3. WE HEARD SMT. VASUNDHARA SINHA THE LEARNED DR A LSO. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND ALSO PERUSED THE MATERIAL ON RECORD. IT IS NOT IN DISPUTE THAT THE ASSESSEE RECEIVED INTEREST FROM FIXED DEPOSITS AND ALSO FROM IREDA. THE CONTENTION OF THE ASSESSEE IS THAT THE INTEREST FROM IREDA IS NOT SPECIFICALLY RECEIVED BUT IT WAS ADJUSTED TOWARDS T HE SUBSIDY GIVEN BY IREDA. THE FACT REMAINS IS THAT THE ASSESSEE CREDI TED THE RECEIPT OF SUBSIDY FROM IREDA AND INTEREST ON MARGIN MONEY DEP OSIT. UNDER NORMAL SITUATION INTEREST INCOME CANNOT BE CONSTRU ED AS DERIVED FROM INDUSTRIAL UNDERTAKING. SINCE THE ASSESSEE CLAIMS THAT IT HAS NEXUS WITH THE ASSESSEE'S BUSINESS THE MATTER NEEDS TO B E EXAMINED BY THE ASSESSING OFFICER. THE ASSESSING OFFICER WITHOUT A NY EXAMINATION ALLOWED THE DEDUCTION U/S. 80IA EVEN ON THE INTERES T RECEIVED. THEREFORE WITHOUT GOING TO THE MERIT OF THE ISSUE WITH REGARD TO DEDUCTION U/S. 80IA IN OUR OPINION THE ASSESSING OFFICER HAS TO NECESSARILY EXAMINE THE NATURE OF INTEREST RECEIPT. THE ADMINISTRATIVE COMMISSIONER HAS DIRECTED THE ASSESSING OFFICER TO REFRAME THE ASSESSMENT AFTER MAKING PROPER ENQUIRY. THEREFORE WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE ADMINISTRATIVE CO MMISSIONER. HOWEVER WE MAKE IT CLEAR THAT THE ASSESSING OFFICE R SHALL EXAMINE THE ISSUE INDEPENDENTLY WITHOUT BEING INFLUENCED BY ANY OF THE OBSERVATIONS MADE BY THE ADMINISTRATIVE COMMISSIONE R AND THIS TRIBUNAL AND THEREAFTER DECIDE THE ISSUE AFRESH IN ACCORDANCE WITH LAW AFTER TAKING INTO CONSIDERATION THE LAW LAID DOWN B Y THE APEX COURT AND I.T.A. NO. 736/HYD/2010 SREE RAYALASEEMA GREEN ENERGY LTD. ============================= 3 VARIOUS HIGH COURTS ON THE SUBJECT. IT IS NEEDLESS TO POINT OUT THAT AN OPPORTUNITY SHALL BE GIVEN TO THE ASSESSEE BEFORE D ECIDING THE ISSUE. 5. WITH THE ABOVE OBSERVATIONS THE APPEAL OF THE A SSESSEE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 10TH DECEMBER 2010. SD/- (AKBER BASHA) ACCOUNTANT MEMBER SD/- (N.R.S. GANESAN) JUDICIAL MEMBER HYDERABAD DATED 10TH DECEMBER 2010 TPRAO COPY FORWARDED TO: 1. SREE RAYALASEEMA GREEN ENERGY LTD. C/O. K. VASA NT KUMAR & A.V. RAGHU RAM ADVOCATES FLAT NO. 403 MANISHA TO WERS SHYAM NAGAR MASAB TANK HYDERABAD-500 004. 2. THE COMMISSIONER OF INCOME-TAX (CENTRAL) 7TH FL OOR AAYAKAR BHAVAN BASHEERBAGH HYDERABAD. 3. THE ACIT CENTRAL CIRCLE 4 HYDERABAD. 4 THE ADDL. CIT CENTRAL RANGE 2 HYDERABAD. 5. THE DR B BENCH ITAT HYDERABAD