ACIT CIR 2(2), MUMBAI v. UNION BANK OF INIDA, MUMBAI

ITA 951/MUM/2010 | 1999-2000
Pronouncement Date: 22-07-2011 | Result: Dismissed

Appeal Details

RSA Number 95119914 RSA 2010
Assessee PAN AAACV0564G
Bench Mumbai
Appeal Number ITA 951/MUM/2010
Duration Of Justice 1 year(s) 5 month(s) 16 day(s)
Appellant ACIT CIR 2(2), MUMBAI
Respondent UNION BANK OF INIDA, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 22-07-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted F
Tribunal Order Date 22-07-2011
Date Of Final Hearing 14-07-2011
Next Hearing Date 14-07-2011
Assessment Year 1999-2000
Appeal Filed On 05-02-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL 'F' BENCH MUMBAI BEFORE SHRI N.V. VASUDEVAN JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH ACCOUNTANT MEMBER ITA NO. 677/MUM/2010 (ASSESSMENT YEAR: 1999-2000) UNION BANK OF INDIA ACIT LTU 239 VIDHAN BHAWAN MARG MUMBAI NARIMAN POINT MUMBAI 400021 VS. PAN - AAACV 0564 G APPELLANT RESPONDENT ITA NO. 951/MUM/2010 (ASSESSMENT YEAR: 1999-2000) ACIT CIRCLE 2(2) UNION BANK OF INDIA 28TH FLOOR CETNRE-1 239 VIDHAN BHAWAN MARG WORLD TRADE CENTRE CUFFE PARADE VS. NARIMAN POINT MUMBAI 400021 MUMBAI 400005 PAN - AAACV 0564 G APPELLANT RESPONDENT ASSESSEE BY: SHRI C. NARESH REVENUE BY: MR. SUBACHAN RAM O R D E R PER B. RAMAKOTAIAH A.M. THESE ARE CROSS APPEALS BY THE ASSESSEE AND THE REV ENUE AGAINST THE ORDER OF THE CIT(A) LTU MUMBAI DATED 30.11.2009. 2. THE ISSUE IN REVENUE APPEAL IS WITH REFERENCE TO TH E ALLOWANCE OF PRIOR PERIOD EXPENSES BY THE CIT(A) WHEREAS IN ASSESSEES APPEAL THE ISSUE IS DECIDING GRANTING OF INTEREST UNDER SECTION 244A. T HESE ARE CONSIDERED AS UNDER. ITA NO. 951/MUM/2010 3. ASSESSEE CLAIMED PRIOR PERIOD EXPENSES AMOUNTING TO ` 1 71 85 114/- WHICH WAS DISALLOWED BY THE AO WHILE COMPLETING THE ASSESSMENT AND THE MATTER WAS CONTESTED IN APPEAL. THE ITAT RESTORED T HE MATTER TO THE FILE OF THE A.O. FOR FRESH ADJUDICATION AFTER GIVING PROPER OPPORTUNITY OF BEING HEARD TO SUBSTANTIATE ITS CLAIM THAT LIABILITY HAS CRYSTA LLISED DURING THIS YEAR ITA NOS. 677 & 951/MUM/2010 UNION BANK OF INDIA 2 REGARDING CLAIM OF PRIOR PERIOD EXPENSES. ASSESSEE FILED VARIOUS DETAILS BUT A.O. WAS OF THE OPINION THAT THE CLAIMS WERE NOT SU BSTANTIATED BY DOCUMENTARY EVIDENCES. THEREFORE WHILE GIVING EFFE CT TO THE ORDER THE AMOUNT WAS AGAIN DISALLOWED BY REJECTING THE CLAIM OF DEDUCTION OF PRIOR PERIOD EXPENSES. THE CIT(A) IN HIS ORDER HAS EXAMIN ED THE DETAILS AND ALLOWED THE CLAIM BY STATING AS UNDER: - 2.2 THE AUDITED ACCOUNTS OF THE APPELLANT CLEARLY INDICATES THAT THE APPELLANT IS A NATIONALIZED BANK AND ITS ACCOUN TS ARE AUDITED BY THE STATUTORY AUDITORS APPOINTED BY THE RESERVE BAN K OF INDIA AND THE PRIOR PERIOD EXPENDITURE PERTAINED TO ARREAR OF RENT MUNICIPAL TAXES CERTAIN INTEREST OF PRIOR PERIOD ETC. THE A PPELLANTS BRANCHES ARE SPREAD OUT IN VARIOUS PARTS OF INDIA AND AUDIT REPORT CONTAINS BRANCH WISE DETAILS OF SUCH EXPENDITURE WHICH ARE S PECIFIC FOR EXAMPLE: BRANCH EXPENDITURE INDIRA NAGAR BRANCH RS.1 47 293.70 KANPUR MAIN BRANCH RS. 301.50 MAHIM (W) BRANCH RS. 3 63 441 MALAD (E) BRANCH RS. 5 415 HAWRAH RS.3 25 073.69 4. AFTER CONSIDERING THE RIVAL ARGUMENTS WE SO NO REA SON TO INTERFERE WITH THE ORDER OF THE CIT(A). ASSESSEE HAS CLAIMED VARIOUS EXPENSES PERTAINING TO MUNICIPAL TAXES RENT ETC. OF PREVIO US YEAR OF VARIOUS BRANCHES WHICH WERE PAID AFTER NEGOTIATIONS OR AFT ER RECEIPT OF NOTICES DURING THE CURRENT YEAR. THEREFORE IT CANNOT BE STA TED THAT THE EXPENDITURE HAS NOT CRYSTALLISED DURING THE YEAR UNDER CONSIDER ATION. CONSIDERING THAT ASSESSEE HAS BRANCHES ALL OVER INDIA AND INCURRING OF EXPENDITURE IS A CONTINUOUS PROCESS AND AS CIT(A) HAS GIVEN A FACTU AL FINDING THAT THE EXPENDITURE HAS BEEN CRYSTALLISED DURING THE YEAR WE DO NOT SEE ANY REASON TO DIFFER FROM THE FINDINGS OF THE CIT(A). GROUNDS ARE DISMISSED. APPEAL DISMISSED. ITA NO. 677/MUM/2010 5. IN THIS APPEAL ASSESSEE IS CONTESTING THE ISSUE THA T THE CIT(A) ERRED IN NOT GRANTING INTEREST UNDER SECTION 224A ON THE GRO UND THAT THERE IS NO WRONGFUL WITHHOLDING OF REFUND AND HENCE THE RATIO OF APEX COURT IN THE CASE OF SANDVIK ASIA LTD. VS. CIT 280 ITR 643 IS NOT APP LICABLE. ITA NOS. 677 & 951/MUM/2010 UNION BANK OF INDIA 3 6. BRIEFLY STATED THE ASSESSMENT IN THIS CASE WAS COM PLETED ORIGINALLY ON 19.02.2002 WHEREIN AFTER CERTAIN DISALLOWANCES THE TOTAL INCOME WAS DETERMINED AT ` 1 02 27 84 460/-. SINCE THE INCOME COMPUTED UNDER S ECTION 115JA WAS ` 73 13 24 480/- THE TOTAL INCOME OF THE ASSESSEE WAS COMPUTED UNDER THE REGULAR PROVISIONS AND THE DEMANDS WERE R AISED ACCORDINGLY. THE MATTERS WERE CONTESTED IN APPEAL AND CONSEQUENT TO DELAY IN OBTAINING PERMISSIONS OF COD THE MATTER WAS ULTIMATELY DECID ED BY THE ITAT IN ITA NOS. 5104 & 5105/MUM/2004 VIDE ORDER DATED 09.05.20 08. THIS ORDER WAS GIVEN EFFECT TO BY THE A.O. AND THE NORMAL COMPUTAT ION HAS RESULTED IN LOSS OF ` 60 61 25 583 WHICH WAS ALLOWED TO BE CARRIED FORWA RD AND UNDER SECTION 115JA THE TAXABLE INCOME WAS ALSO DETERMIN ED AT NIL. CONSEQUENTLY THE TAX PAID EARLIER HAS BECOME REFUNDABLE TO THE A SSESSEE. IT WAS THE CONTENTION THAT INTEREST UNDER SECTION 244A WAS NOT PROPERLY CALCULATED. ASSESSEE CARRIED THE MATER TO THE CIT(A) WHO REJECT ED THE RELIANCE ON SANDVIK ASIA LTD. VS. CIT (SUPRA) ON THE REASON THA T THE CONSEQUENTIAL ORDERS WERE GIVEN EFFECT TO IMMEDIATELY AFTER THE O RDERS OF THE ITAT ORDER WAS RECEIVED AND THEREFORE THERE IS NO DELAY IN GRANTIN G THE REFUND. ASSESSEE IS CONTESTING THE SAME AND HAS THE FOLLOWING TO SUBMIT : - A) IN TERMS OF SEC 244A INTEREST IS PAYABLE ON AN Y SUM TO BE REFUNDED AND NO DISTINCTION BE MADE WHETHER THE RE FUND IS ON ACCOUNT OF INTEREST OR TAX. RELIANCE IS PLACED ON T HE DECISION OF APEX COURT IN THE DECISIONS OF SANDVIK ASIA LTD. V. CIT [2006] 280 ITR 643 AND IN CIT V HEG LTD. 324 ITR 331. A COPY O F THE DECISION IN THE CASE OF HEG LTD IS ENCLOSED IN ANNE XURE 2. RELIANCE IS ALSO PLACED ON THE DECISION OF THE JURI SDICTIONAL ITAT MUMBAI IN THE CASE OF MULTISCREEN MEDIA (P) LTD VS ACIT (2011- TIOL-91-MUM). A COPY OF THE SAID ORDER IS ENCLOSED IN ANNEXURE 3. B) THE AO OVER LOOKED THE PROVISIONS OF THE SEC 244 A(3) WHEREIN THE SECTION PROVIDES THAT WHERE AS A RESULT OF AN ORDE R UNDER 250 OR SECTION 254 OR SECTION 260 THE AMOUNT ON WHICH INTE REST WAS PAYABLE UNDER SUB-SECTION (1) HAS BEEN INCREASED OR REDUCED AS THE CASE MAY BE THE INTEREST SHALL BE INCREASED OR REDUCED ACCORDINGLY. C) IN THE PRESENT CONTEXT INTEREST U/S 244A WAS CAL CULATED BY THE AO AS A FIRST STEP UPTO 30.03.2001 WHICH AMOUNTED T O RS.17 69 80 026/-. THE REFUND DUE AT THAT POINT OF TIME WAS ARRIVED AT RS.91 43 96 802/-. AFTER ADJUSTING THE R EFUND MADE AT THAT POINT OF TIME OF RS.80 63 50 853/- THE BALANCE REFUNDABLE WAS RS.10 80 45 900/- WHICH IN OUR CONTENTION AMOUN TED ITA NOS. 677 & 951/MUM/2010 UNION BANK OF INDIA 4 REFUND WITHHELD BECAUSE THE SAID SUM WAS NOT REFUND ED AT THAT POINT OF TIME. THE AO HAD NEITHER REFUNDED THE SAID AMOUNT NOR GRANTED INTEREST ON THE SAID AMOUNT FOR THE PERIOD FROM 01/04/2001 TO 31/03.2005. THE APPELLANT SUBMITS THA T THERE IS NO REASON FOR THE AO NOT GRANTING INTEREST FOR THE PERIOD FOR WHICH THE INTEREST WAS WITHHELD. 7. IN SUPPORT THE LEARNED COUNSEL FILED THE DECISION O F THE ITAT F BENCH IN INTEREST TAX NOS. 04 & 05/MUM/2010 WHEREIN ON SI MILAR FACTS DIRECTIONS WERE GIVEN TO THE A.O. TO GRANT INTEREST ON DELAY O F REFUND OF INTEREST TO THE ASSESSEE. 8. THE LEARNED D.R. VEHEMENTLY SUPPORTED THE ORDER OF THE CIT(A) AND RELIED ON THE PRINCIPLES ESTABLISHED BY THE HON'BLE SUPREME COURT TO SUBMIT THAT THERE IS NO UNUSUAL DELAY IN GRANTING INTEREST ON REFUND AND THERE IS NO NEED FOR MODIFYING THE ORDERS. 9. WE HAVE CONSIDERED THE ISSUE. THE ORDER PASSED BY T HE A.O. DOES NOT CONTAIN ANY TAX CALCULATIONS. ASSESSEE HAS NOW PLAC ED ON RECORD TAX CALCULATION SHEET ON THE BASIS OF WHICH THE MATTER WAS CONTESTED BEFORE THE CIT(A). AS SEEN FROM THAT THE TDS AND ADVANCE TAX A MOUNTING TO ` 73 74 16 778/- WAS REFUNDABLE TO THE ASSESSEE ON 3 0.03.2001. AT THAT POINT OF TIME A REFUND OF ` 80 63 50 853/- WAS STATED TO HAVE BEEN BE ISSUED WHICH WAS GIVEN CREDIT IN THE PRESENT WORKING. NOW CONSEQUENT TO THIS ORDER ON THE REFUND OF ` 73 74 16 778/- INTEREST UNDER SECTION 244A WAS CALCULATED AT ` 17 69 80 026/- AND A TOTAL REFUND SO DETERMINED WAS AT ` 91 43 96 802/-. AFTER ADJUSTING THE REFUND ALREADY ISSUED THE BALANCE REFUND WAS WORKED OUT AT ` 10 80 45 949/-. IT IS ON THIS AMOUNT ASSESSEE WANTS INTEREST ON INTEREST AS THE SAID AMOUNT WAS S TATED TO BE PAYABLE ON 30.03.2001. SINCE THE CALCULATION OF THE A.O. IS NO T CLEAR HOW THE REFUND ISSUED ON 30.03.2001 WAS ARRIVED AT ` 80 63 50 853/- AND ON WHAT PORTION INTEREST UNDER SECTION 244A GRANTED EARLIER THE IS SUE CANNOT BE DECIDED BY US. AS FAR AS THE LEGAL PRINCIPLES ARE CONCERNED TH E A.O. IS BOUND TO FOLLOW THE HON'BLE SUPREME COURT DECISION IN THE CASE OF S ANDVIK ASIA LTD. (SUPRA) AND ALSO THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. HEG LTD. 324 ITR 332 WITH REFERENCE TO GRANTING OF INTEREST UNDER SECTION 244A. SINCE THE CALCULATIONS ARE NOT PROPERTY VERIF IABLE ON THE BASIS OF THE ITA NOS. 677 & 951/MUM/2010 UNION BANK OF INDIA 5 MANUAL WORKING PLACED ON RECORD WE REFRAIN FROM GO ING INTO THE TAX CALCULATIONS. THEREFORE WITHOUT GOING INTO THE SPE CIFICS OF THE CALCULATION OF INTEREST AND INTEREST ON INTEREST WE DIRECT THE A. O. TO REWORK OUT THE INTEREST UNDER SECTION 244A PAYABLE TO ASSESSEE BY A SPEAKING ORDER AND ALSO KEEPING IN MIND THE DECISION IN THE CASE OF SA NDVIK ASIA LTD. (SUPRA) AND DECISION IN THE CASE OF HEG LTD. (SUPRA) GRANT INTEREST ON INTEREST IF THERE IS ANY DELAY. BEFORE FINALISING THE A.O. SHO ULD GIVE THE WORKING TO THE ASSESSEE AND SEEK THEIR OBJECTIONS IF ANY AND THEN DETERMINE THE INTEREST BOTH ON FACTS AND AS PER LAW. THE OBJECTION IF ANY SHOULD BE DECIDED BY ACCEPTING OR REJECTING IN A SPEAKING ORDER. WITH TH ESE DIRECTIONS THE ISSUE IN THIS APPEAL IS RESTORED TO THE FILE OF THE A.O. TO CONSIDER IT AFRESH AND DECIDE BY PASSING A SPEAKING ORDER AND TO CONSIDER THE CLA IM OF THE ASSESSEE KEEPING THE LEGAL PRINCIPLES IN MIND. GROUNDS ARE C ONSIDERED ALLOWED FOR STATISTICAL PURPOSES. APPEAL IS ALLOWED FOR STATIST ICAL PURPOSES. 10. IN THE RESULT REVENUES APPEAL IN ITA NO. 951/MUM/ 2010 IS DISMISSED AND ASSESSEES APPEAL IN ITA NO. 677/MUM/ 2010 IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND JULY 2011. SD/- SD/- (N.V. VASUDEVAN) (B. RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI DATED: 22 ND JULY 2011 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) LTU MUMBAI 4. THE CIT LTU MUMBAI CITY 5. THE DR F BENCH ITAT MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT MUMBAI BENCHES MUMBAI N.P.