Netravati Greenfields Private ... vs Department Of Income Tax

Income Tax Appellate Tribunal4 February 2015

CitationITA.No.750/Hyd/2013 - Assessment Year 2008-2009

Ratio decidendi

The rule this decision rests on

Where the assessee's appeal against an assessment order is pending, and the Commissioner's revisionary order under section 263 turns on the same subject matter, the Commissioner cannot invoke section 263 to direct a fresh computation of that same levy; the revision is therefore set aside, and the Assessing Officer may examine the principle and quantum of interest in the pending quantum appeal. A miscellaneous application under section 254(2) seeking a finding on an issue not decided in the earlier order is not warranted where the earlier order has already disposed of the question of the Commissioner's jurisdiction and left the remaining matters open to the Assessing Officer in the quantum proceedings.

Written by Miss Lucy from the judgment below, not taken from a headnote.

Judgment

As delivered

IN THE INCOME TAX APPELLATE TRIBUNALHYDERABAD BENCHES "B" : HYDERABADBEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBERANDSMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBERM.A.No. 173/Hyd/2014Arising out ofITA.No.750/Hyd/2013 - Assessment Year 2008-2009

ACIT, Central Circle 3(2) M/s. Netravati Greenfields (Erstwhile ACIT, CC-9) vs. P. Ltd., Hyderabad Hyderabad. PAN AACCN4101C (Applicant) (Respondent)

For Revenue : Mr. Rajat Mitra For Assessee : Mr. K.C. Devdas

Date of Hearing : 30.01.2015 Date of Pronouncement : 04.02.2015

ORDER

PER B. RAMAKOTAIAH, A.M.

This miscellaneous application under section 254(2) of the Income Tax Act, 1961 was preferred by Revenue on the order of the ITAT 'B' Bench, Hyderabad in ITA.No.750/Hyd/2013 dated 09.07.2014.

2. The issue in the appeal preferred by assessee was on invoking of jurisdiction by the Ld. CIT under section 263 of the I.T. Act. In the course of assessment, A.O. has noted that assessee has claimed interest at 18% by filing suit before the City Civil Court, Secunderabad and accordingly, brought to tax interest as acrued on the outstanding advance at the end of the year. This order of A.O. was subject matter of appeal separately. In the meantime, Ld. CIT noticed that total advance made by assessee was at Rs.34.83 crores and A.O. has 2 MA.No.173/Hyd/2014 in ITA.No.750/Hyd/2013 M/s. Netravathi Green Fields (P) Ltd., Hyderabad.

excluded an amount of Rs. 1 crore which was repaid during the year. Accordingly, he invoked jurisdiction under section 263 and directed the A.O. to consider the amount of Rs.34.83 crores for the purpose of calculation of interest. The ITAT on appeal by assessee, relying on the orders of the Coordinate Bench held that the very levy of interest is subject matter of appeal and so the Ld. CIT could not have invoked the jurisdiction under section 263. While setting aside the order of CIT under section 263, the ITAT however, has given an option to the A.O. to examine the principle as well as interest as directed by the ITAT in the quantum appeal.

3. Revenue preferred the present M.A. requesting the ITAT to give a finding on the amount of Rs. 1 crore which was not considered in the Coordinate Bench decision. Since the amount of Rs.1 crore repaid is not part of civil suit, it is requested that ITAT should give a clear direction about taxability of interest on Rs. 1 crore which was not disputed before the City Civil Court.

4. After considering the rival contentions, we are of the opinion that the M.A. preferred by the Revenue is not warranted. The issue before the ITAT was whether Ld. CIT could have invoked the jurisdiction under section 263. It was noticed that at the time of advance there is no understanding that interest will be levied. Therefore, A.O. could not have considered levy of interest on the amount repaid during the year. Apart from that, the very basis of accrual of interest itself was disputed. Therefore, the Ld. CIT could not have invoked jurisdiction under section 263. Under these circumstances, the order was set aside. However, the ITAT also gave an option to the A.O. to examine principle as well as interest in the 3 MA.No.173/Hyd/2014 in ITA.No.750/Hyd/2013 M/s. Netravathi Green Fields (P) Ltd., Hyderabad.

quantum appeals. As far as amount of Rs. 1 crore is concerned, the order of Ld. CIT invoking jurisdiction was set aside. As far as the principle amount on which interest is to be considered, it was already left open to the A.O. to be considered in the year of receipt of interest as per directions of Court. In view of the above, we are of the opinion that the petition is misconceived. This sort of application do invite levy of cost on the Assessing Officer. However, we refrain in doing so. With these observations, Revenue application is dismissed.

5. In the result, miscellaneous application of the Revenue is dismissed.

Order pronounced in the open Court on 04.02.2015.

Sd/- Sd/- (ASHA VIJAYARAGHAVAN) (B.RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER

Hyderabad, Dated 04th February, 2015

VBP/-

Copy to

1. Asst. Commissioner of Income Tax, Central Circle 3(2), (Erstwhile ACIT, Central Circle 9), Hyderabad.

2. M/s. Netravati Greenfields P. Ltd., R.K. Residency, H.No.8-3-229/D/32, 3rd Floor, Venkatagiri, Yousufguda, Hyderabad.

3. CIT (Central), 7th Floor, Aayakar Bhavan, Basheerbagh, Hyderabad

4. Addl. CIT, C.R.-3, Hyderabad

5. D.R. "B" Bench, ITAT, Hyderabad.

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