KRISHNAPATNAM PORT COMPANY LIMITED,HYDERABAD vs. DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-1(1), HYDERABAD
What did the Tribunal hold?
For assessment years 2010-11 and 2011-12, the Tribunal quashed the assessments under section 153A as the regular assessments were not pending at the time of search and no incriminating material was found. For assessment years 2012-13 and 2013-14, the issue of interest income eligibility for 80IA deduction was restored to the Assessing Officer for fresh examination.
What were the facts?
The assessee's appeals relate to assessment years 2010-11 to 2013-14, involving proceedings under sections 143(3), 153A, and 263 of the Income Tax Act. The Assessing Officer disallowed 80IA deduction and other claims, which were confirmed by the CIT(A).
What were the issues?
Whether section 153A proceedings are valid for unabated assessments without incriminating material, and whether interest income is eligible for 80IA deduction.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Cases cited in this judgment(5)Show listHide list
Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.
- CIT v. Kabul Chawla3,235 citing380 ITR 573 · 2016 · HC · Read judgment
- Malabar Industrial Co. Ltd. v. CIT2,943 citing243 ITR 83 · 2000 · SC · Read judgment
- E.N. Gopakumar v. CIT428 citing390 ITR 131 · 2016 · HC · Read judgment
- CIT v. Raj Kumar Arora253 citing367 ITR 517 · 2014 · HC
- CIT v. Continental Warehousing Corporation39 citing374 ITR 64 · 2015 · HC
Income Tax Appellate Tribunal, HYDERABAD ‘ A ‘ BENCH, HYDERABAD.
Before: SHRI S.S. GODARA & SHRI L. P. SAHU
per section 153A(1) second proviso or not. Learned CIT-DR fails to dispute the clinching statutory provision i.e. 143(2) second proviso envisages time limit of six months from the end of the relevant assessment year coming to 30.09.2011 and 30.09.2012 had already expired before the date of search on 14.12.2012 (supra). No assessment in these two assessment years could be held to be pending which could be taken as “abated”. And also that the assessee had raised all the corresponding claims in regular computation while filing the foregoing regular returns. We thus quote CIT Vs. Kabul Chawla (2016) 380 ITR 573 (Delhi); CIT Vs. Salasar Stock Broking Ltd. (Cal. H C in GA 1929/2016) dt.24.8.2016, CIT Vs. Continental Warehousing Coporation (2015) 374 ITR 64 (Bom) that section 153A proceedings in such instance of unabated assessment could only be initiated in case if any incriminating material is found or seized during the course of search. We have not come across any such incriminating material relied upon by the learned lower authorities in A.Ys 2010-11 & 2011-12. We thus decline the Revenue’s argument quoting EN Gopa Kumar Vs. CIT (2016) 390 ITR 131 Rajkumar Arora 367 ITR 517 (All) to hold that the impugned assessments are not sustainable in law since not based on any incriminating material found or seized during the course of search. The same stands quashed in the former twin assessment years 2010-11 and 2011-12. The assessee's corresponding appeals and 1084/Hyd/2017 are accepted on the forgoing legal issue thereby rendering all other pleadings on merit being rendered infructuous.
We next advert to the assessee's corresponding section 263 appeals & 900/Hyd/2017 pertaining to these assessment years 2010-11 and 2011-12 wherein the learned PCIT has exercised its revision jurisdiction thereby terming the Assessing Officer’s assessment dt.31.3.2015 as erroneous ones causing prejudice to interest of the Revenue. We keep in mind the fact that the said assessments have already been quashed in assessee's foregoing appeals in preceding paragraphs and hold that the learned PCIT revision direction forming subject matter of adjudication have no legs to stand. The same also are also accepted in the very terms therefore.
We next advert to assessee's appeals ITA 1085 & 1086/Hyd/2017 for the A.Ys 2012-13 and 2013-14’s “abated” assessments. Its sole identical substantive grievance is that the learned lower authorities have erred in law and on facts in treating the interest income(s) in these twin assessment years as income from “other” sources than eligible for section 80IA deduction as business income. We prima facie notice that the assessee’s income from other sources also included dividend from mutual funds and rental receipts, etc. There is no indication at all in the learned lower authorities’ orders as to whether the assessee had proved the corresponding receipt to have been “derived” from the eligible undertaking(s) or not. Faced with this situation, we deem it appropriate to restore the instant identical issue back to the Assessing Officer to be examined afresh subject to the condition that it shall be the duty and responsibility of the tax payer only to prove the foregoing clinching direct nexus between its interest and other income derived from the eligible undertaking within three effective opportunities of hearing. We are partly accepted for statistical purposes since no other ground has been pressed before us.
We are now left with the assessee's appeal for Assessment Year 2012-13. The same pertains to the exercise of the PCIT’s revision jurisdiction holding the corresponding assessment dt.31.3.2015 as an erroneous one causing prejudice to the interest of Revenue on the ground that the Assessing Officer had failed to compute 115JB section MAT qua assessee's provision for bad and doubtful debts of Rs.1968.10 lakhs as per Expln.(1)(i) of the Act. Learned counsel submitted before us that the assessee had very well made simultaneous reduction from the loans and advances on the assets side of the Balance Sheet which amounted to write of of the said debts not hit by the foregoing statutory provision. Mr. Afzal quoted hon’ble Gujarat high court’s Full Bench decision in CIT Vs. Vodafone Essar Gujarat Limited dt.4.8.2017. We find no merit in the assessee's foregoing argument since it has not placed on record the corresponding books of account suggesting corresponding simultaneous reduction of the loans and apex court landmark decision in Malabar Industrial Company Ltd. Vs. CIT 243 ITR 83 (SC) and hold that the learned PCIT has rightly exercised its 263 revision jurisdiction in the given facts and circumstances of the case.
The same stand confirmed. The assessee's instant appeal fails.
To sum up, assessee's appeals 1084, 899 & 900/Hyd/2017 are allowed. Its next twin appeals ITA Nos.1085 & 1086/Hyd/2017 are allowed for statistical purposes and ITA No.901/Hyd/2017 is dismissed. Ordered accordingly. A copy of this common order be placed in the respective files.
Order pronounced in the open court on 22nd July, 2021.
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