Nabha Power Limited, Patiala vs Assessee

Nabha Power Limited, Vs. The A.C.I.T., PO Box No.28, Circle Mandi Gobindgarh. Near Village Nalash, Rajpura, Dist.Patiala. PAN: AACCN5223H (Appellant) (Respondent)

Appellant by : Shri Deepak Chopra Respondent by : Shri Manjit Singh, DR

Date of hearing : 20.03.2015 Date of Pronouncement : 20.03.2015

Per BHAVNESH SAINI, J.M. :

This order shall dispose off Stay Application filed by the

assessee seeking stay against recovery of the outstanding

demand of Rs.95,64,450/- for assessment year 2009-10.

2. We have heard the learned representatives of both the

parties and perused the material available on record. The

learned counsel for assessee submitted that the assessee has

earned interest income on FDRs from H.D.F.C. bank. The

Assessing Officer noted in the assessment order that the

assessee has not commenced its business in this year. The

assessee has paid interest to Punjab State Electricity Board 2

as interest on loans borrowed for acquisition of assets. Since

the assessee has not commenced its business, therefore, all

the expenses incurred during the year were capitalized as part

of the capital work-in-progress. The assessee has reduced

interest earned out of the FDRs from the interest paid by the

assessee to Punjab State Electricity Board and balance was

shown as capital work-in-progress. The Assessing Officer,

however, treated the interest income earned by the assessee

on idle funds lying with FDRs as taxable income under the

head "Income from other sources" and addition was

accordingly made. The learned counsel for assessee stated

that the learned CIT (Appeals) dismissed the appeal though it

is purely a question of law and there are different views on

the subject and assessee has an arguable case, therefore,

demand may be stayed until the disposal of the appeal. He

has offered to pay Rs.20 lacs in two installments against the

outstanding demand.

3. On the other hand, the learned D.R for the Revenue

submitted that the issue is against the assessee by various

decisions. Therefore, the assessee may be directed to pay the

outstanding demand.

4. We have considered the rival submissions. The issue

arises in the appeal of the assessee is legal in nature. The

total outstanding demand was Rs.1,05,64,450/-, against

which the assessee has paid demand of Rs.10 lacs and the

outstanding demand is Rs.95,64,450/-. The appeal of the

assessee is fixed for hearing on 20.4.2015 and it appears that 3

the issue is legal in nature and the assessee has an arguable

case. Therefore, subject to condition to pay Rs.20 lacs, the

rest of the demand could be stayed until the disposal of the

appeal. In view of the above, we stay the recovery of the

outstanding demand for a period of six months or disposal of

the appeal, whichever expires earlier, subject to the assessee

to pay Rs.20 lacs to the Revenue Department. The assessee

shall pay Rs.20 lacs in two installments i.e. first Rs.10 lacs to

be paid within 10 days from the date of the order and further

Rs.10 lacs to be paid in next 10 days. The appeal shall be

taken for hearing on the date already fixed on 20.4.2015 and

the assessee shall not seek unnecessary adjournment in the

matter. The Paper Book, if any, be filed as per rules.

5. With these directions, Stay Application is allowed as

noted above.

Order pronounced in the open court on this 20th day of

March, 2015.

Sd/- Sd/- (T.R.SOOD) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER

Dated : 20 t h March, 2015

*Rati*

Copy to: The Appellant/The Respondent/The CIT(A)/The CIT/The DR.

Assistant Registrar, ITAT, Chandigarh 4