Power Finance Corporation Ltd.,, v. DCIT, Circle-14(1),,

MA 20/DEL/2010 | 2000-2001
Pronouncement Date: 30-07-2010 | Result: Partly Allowed

Appeal Details

RSA Number 2020124 RSA 2010
Assessee PAN AAACP1570H
Bench Delhi
Appeal Number MA 20/DEL/2010
Duration Of Justice 6 month(s) 24 day(s)
Appellant Power Finance Corporation Ltd.,,
Respondent DCIT, Circle-14(1),,
Appeal Type Miscellaneous Application
Pronouncement Date 30-07-2010
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted E
Tribunal Order Date 30-07-2010
Assessment Year 2000-2001
Appeal Filed On 06-01-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL [ DELHI BENCH E DELHI ] BEFORE SHRI R. P. TOLANI JM AND SHRI K. D. RANJAN AM MISC. APP. NOS. 20 & 21 (DEL) OF 2010. [ IN I. T. APPEAL NOS. 3558 & 5347 (DEL) OF 2004 ]. ASSESSMENT YEARS : 2000-01 & 2001-02. M/S. POWER FINANCE CORPORATION LTD. DY. COMMISSIONER OF INCOME-T AX CHANDRALOK BLDG. 36 JANPATH VS. C I R C L E : 14 (1) N E W D E L H I 110 001. N E W D E L H I. P A N / G I R NO. AAA CP 1570 H. ( APPLICANT ) ( RESPONDENT ) ASSESSEE BY : SHRI M. S. SYALI SR. ADV.; & SHRI TARANDE EP SINGH C. A.; DEPARTMENT BY : SHRI MANISH GUPTA SR. D. R .; O R D E R. PER K. D. RANJAN AM : THE ASSESSEE VIDE MISC. APPLICATIONS NO. 20 & 21 ( DEL) OF 2010 FOR ASSESSMENT YEARS 2000-01 AND 2001-02 HAS REQUESTED TO RECTIFY THE MI STAKES INADVERTENTLY CREPT IN TRIBUNAL ORDERS DATED 28 TH AUGUST 2009 AND 25 TH JUNE 2009. 2. IN MISC. APPLICATION NO. 20 (DEL) OF 2010 IT HAS BEEN SUBMITTED THAT INADVERTENTLY IN PARA 7 AT PAGE 4 OF THE ORDER IT HAS BEEN NOTED THAT AG AINST OTHER INCOMES DIRECT EXPENSES ADJUSTMENTS 2 MISC. APP. NOS. 20 & 21 (DEL) OF 2010. HAS NOT BEEN ALLOWED BY THE LD. CIT (APPEALS). IT HAS BEEN POINTED OUT THAT THE LD. AR OF THE ASSESSEE THAT DURING THE COURSE OF HEARING IT WAS A RGUED THAT AGAINST SUCH OTHER INCOMES THE LD. CIT (APPEALS) HAD ACTUALLY ALLOWED NETTING OF DIREC T EXPENSES. THEREFORE THE WORD NOT FROM THE SENTENCE APPEARING IN PARA 7 AT PAGE 4 SHOULD BE DELETED. 3. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE MATERIAL ON RECORD CAREFULLY. IN PARA 7 THE BENCH HAS NOTED THAT THE LD. AR OF THE A SSESSEE HAD ARGUED THAT DIRECT EXPENSES RELATING TO VARIOUS INCOMES SUCH AS GUARANTEE FEES LEASE INCOME MISC. INCOME CONSULTANCY ASSIGNMENT WORKING CAPITAL KNOWN ETC. HAVE NOT BEE N ALLOWED. ACCORDING TO THE LD. AR THE LD. CIT (APPEALS) HAS ALLOWED DIRECT EXPENSES AGAINST L EASE INCOME AND WORKING CAPITAL. ON CAREFUL CONSIDERATION OF FACTS WE FIND THAT IN PAR A 7 THE BENCH HAS RECORDED THE ARGUMENT OF THE ASSESSEE. AS ADMITTED BY THE LD. AR OF THE ASSESSE E THAT THE EXISTENCE OF THE WORD NOT IN THE SENTENCE WOULD NOT MAKE ANY DIFFERENCE ON THE FINDI NGS OF THE TRIBUNAL. HOWEVER THE FACT REMAINS THAT THE LD. CIT (APPEALS) HAS ALLOWED DIRE CT EXPENSES. WE HAVE CAREFULLY GONE THROUGH THE ORDER OF THE LD. CIT (APPEALS). WE FIND THAT T HE LD. CIT (APPEALS) HAS EXCLUDED DIRECT EXPENSES AGAINST WORKING CAPITAL LOAN AND LEASE INC OME. THEREFORE THE WORD NOT FROM THE SENTENCE DURING THE COURSE OF HEARING THE LD. AR OF THE AS SESSEE HAD ARGUED THAT DIRECT EXPENSES RELATING TO VARIOUS INCOMES SUCH AS GUAR ANTEE FEES LEASE INCOME MISC. INCOME CONSULTANCY ASSIGNMENT WORKING CAPITAL LOAN ETC. HAVE NOT BEEN ALLOWED IS DELETED. THE SENTENCE SHOULD BE READ AS DURING THE COURSE OF HE ARING THE LD. AR OF THE ASSESSEE HAD ARGUED THAT DIRECT EXPENSES RELATING TO VARIOUS INCOMES S UCH AS GUARANTEE FEES LEASE INCOME MISC. INCOME CONSULTANCY ASSIGNMENT WORKING CAPITAL LO AN ETC. HAVE BEEN ALLOWED. 4. IT HAS FURTHER BEEN POINTED OUT THAT THE BENCH H AS NOT CONSIDERED ARGUMENTS OF THE LD. COUNSEL FOR THE ASSESSEE WHILE DECIDING THE ISSUE AT PAGE 28 IN PARA 13. THEREFORE THERE IS A MISTAKE APPARENT FROM RECORD. 5. WE HAVE HEARD BOTH THE PARTIES. IT IS A SETTLED LAW THAT NON-CONSIDERATION OF THE ARGUMENT IS NOT A MISTAKE APPARENT FROM RECORD. THEREFORE THE CONTENTION OF THE ASSESSEE THAT THE 3 MISC. APP. NOS. 20 & 21 (DEL) OF 2010. ARGUMENTS ADVANCED BY THE LD. AR OF THE ASSESSEE WH ILE DECIDING THE ISSUE RELATING TO COMPUTATION OF DEDUCTION UNDER SECTION 36(1)(VII) O F THE ACT HAS NOT BEEN CONSIDERED CANNOT BE TREATED A MISTAKE APPARENT FROM RECORD AND THEREFO RE THE GROUNDS TAKEN IN THE MISC. APPLICATION FOR NON-CONSIDERATION OF ARGUMENT OF THE LD AR IS D ISMISSED. 6. THE LD. AR OF THE ASSESSEE FURTHER SUBMITTED THA T IN PARA 3 THE ITAT WHILE DECIDING THE APPEAL HAS DISMISSED THE GROUND RAISED IN ITA. NO. 3558 (DEL) OF 2004 FOR ASSESSMENT YEAR 2000-01 RELATING TO ALLOCATION OF DIRECT EXPENSES T O INTEREST EARNED FOR THE PURPOSE OF DEDUCTION UNDER SECTION 36(1)(VII) OF THE ACT. HOWEVER ON IDENTICAL FACTS ITAT FOR ASSESSMENT YEARS 2002-03 AND 2003-04 IN ITA. NOS. 5348 (DEL) OF 2004 AND 5349 (DEL) OF 2004 HAD SET ASIDE THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOLLOWI NG THE ORDER PASSED BY THE TRIBUNAL IN ASSESSMENT YEAR 1996-97. THEREFORE IT HAS BEEN RE QUESTED THAT THE ISSUE SHOULD HAVE BEEN SET ASIDE TO THE FILE OF THE ASSESSING OFFICER AS HAS BEEN DONE IN ASSESSMENT YEAR 1996-97 AND ALSO FOR ASSESSMENT YEARS 2002-03 AND 2003-04 IN SUBSEQU ENT ORDER PASSED BY THE TRIBUNAL. 7. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. WE HAVE ALSO GONE THROUGH THE ORDER OF THE TRIBUNAL PA SSED IN ITA. NO. 5348 (DEL) OF 2004 AND 5349 (DEL) OF 2004 FOR ASSESSMENT YEARS 2002-03 AND 2003-04. ITAT AT PAGE NOS. 18 AND 19 IN PARAS 28 AND 29 FOLLOWING THE ORDER FOR ASSESSMENT YEAR 1996-97 IN ITA. NOS. 1062 AND 994 (DEL) OF 2000 DATED 11 TH AUGUST 2006 HAS SET ASIDE THE ISSUE TO THE FILE O F THE ASSESSING OFFICER WITH THE DIRECTIONS TO CONSIDER THE DIRECT EXPENSES INCURRED BY THE ASSESSEE FOR SUCH INCOME ON ACCOUNT OF INTEREST ON SUCH DEPOSITS AND AFTER EXAM INING SUCH EXPENSES THE EXPENSES WHICH ARE INCURRED FOR EARNING THIS INCOME SHOULD BE DEDUCTED FROM THE INCOME ON ACCOUNT OF INTEREST ON DEPOSITS AND ONLY SUCH NET INCOME SHOULD BE EXCLUDE D FROM THE BUSINESS INCOME FOR THE PURPOSE OF ALLOWING DEDUCTION UNDER SECTION 36(1)(VII) OF T HE ACT. IN THE YEAR UNDER CONSIDERATION THE BENCH HAS REJECTED THE CLAIM OF THE ASSESSEE WHEREA S IN SUBSEQUENT YEARS HAS SET ASIDE THE ISSUE TO THE FILE OF THE ASSESSING OFFICER. TO KEEP CONS ISTENCY IN THE DECISION WE ARE INCLINED TO ACCEPT THE CONTENTION OF THE ASSESSEE TO SET ASIDE THE ISS UE TO THE FILE OF THE ASSESSING OFFICER WITH THE 4 MISC. APP. NOS. 20 & 21 (DEL) OF 2010. SIMILAR DIRECTIONS AS HAS BEEN DONE IN ASSESSMENT YEAR 1996-97 AND ASSESSMENT YEARS 2002-03 AND 2003-04. THE ASSESSING OFFICER IS DIRECTED ACCO RDINGLY. 8. NOW COMING TO MISC. APPLICATION NO. 21 (DEL) OF 2010 THE LD. AR OF THE ASSESSEE SUBMITTED THAT THE APPEAL IN ITA. NO. 3558 (DEL) OF 2004 FOR ASSESSMENT YEAR 2000-01 HAS BEEN DECIDED IN RESPECT OF T ORDER PASSED UNDER SECTION 154 BY THE LD. CIT (APPEALS). THE REGULAR APPEAL FOR ASSESSMENT YEARS 2000-01 AND 2001-02 HAS BEEN DECIDED VIDE ORDER DATED 25 TH JUNE 2009. IT HAS BEEN POINTED OUT THAT THE TRIBUNAL WH ILE DECIDING GROUND NO. 5 OF ITA. NO. 713 (DEL) OF 2004 FOR ASSESSMENT YEAR 2000-01 AND GRO UND NO. 3 (A) IN ITA. NO. 5347 (DEL) OF 2004 FOR ASSESSMENT YEAR 2001-02 HAD DISMISSED THE GROUNDS OF APPEAL WITH THE OBSERVATION THAT THE ISSUE IS BEING TAKEN UP AND CONSIDERED IN ITA. NO. 3558 (DEL) OF 2004 FOR ASSESSMENT YEAR 2000-01. IT HAS BEEN SUBMITTED THAT THE APPEAL IN I TA. NO. 3558 (DEL) OF 2004 RELATES TO ASSESSMENT YEAR 2000-01. THEREFORE THE DECISION I N THAT YEAR IN ASSESSMENT YEAR 2000-01 CANNOT BE APPLIED IN ASSESSMENT YEAR 2001-02 UNLESS A SPEC IFIC DIRECTION IS GIVEN IN ORDER DATED 25.6.2009. THEREFORE IT HAS BEEN SUBMITTED THAT I N PARA 6 OF THE ORDER A SENTENCE SHOULD BE ADDED INDICATING THAT WHATEVER IS DECIDED IN ITA. NO. 3558 (DEL) OF 2008 WILL BE APPLICABLE IN APPEAL IN ITA. NO. 5347 (DEL) OF 2004 FOR ASSESSM ENT YEAR 2001-02. 9. WE HAVE CONSIDERED THE SUBMISSIONS CAREFULLY. W E FIND THAT THE CONTENTION OF THE ASSESSEE IS CORRECT. THEREFORE THE FOLLOWING SENT ENCE IS ADDED IN PARA 6 OF THE ORDER AFTER THE WORDS IN ITA. NO. 3558 (DEL) OF 2004 AY 2000-01( O N PAGE 6 OF THE ORDER). WHATEVER IS DECIDED IN ITA NO 3558 (DEL) OF 2004 W ILL BE APPLICABLE FOR ITA NO 5347/ DEL/ 2004 I.E. FOR AY 2001-02. THE ORDER DATED 25 TH JUNE 2009 IS MODIFIED ACCORDINGLY. 5 MISC. APP. NOS. 20 & 21 (DEL) OF 2010. 10. IN THE RESULT THE MISC. APPLICATION NO. 20 (DE L) OF 2010 FILED BY THE ASSESSEE IS PARTLY ALLOWED AND THE MISC. APPLICATION NO. 21 (DEL) OF 2 010 IS ALLOWED. THE ORDER PRONOUNCED IN THE OPEN COURT ON : 30 TH JULY 2010. SD/- SD/- [ R. P. TOLANI ] [ K. D. R ANJAN ] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 30 TH JULY 2010. *MEHTA * COPY OF THE ORDER FORWARDED TO : - 1. APPLICANT. 2. RESPONDENT. 3. CIT 4. CIT (APPEALS) 5. DR ITAT NEW DELHI. TRUE COPY. BY ORDER. ASSISTANT REGISTRAR ITAT. 6 MISC. APP. NOS. 20 & 21 (DEL) OF 2010.