DCIT, COIMBATORE vs. BILT INDUSTRIAL PACKAGING CO. LTD., METTUPALAYAM

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ITA 1984/CHNY/2015Status: DisposedITAT Chennai17 June 2016AY 2011-123 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted that a related appeal for the same assessee and assessment year was already remitted to the Assessing Officer. Therefore, the Revenue's appeal was also remitted to the Assessing Officer for fresh consideration.

What were the facts?

The Revenue appealed against the CIT(A)'s order which allowed the assessee's appeal on an addition of Rs. 9,40,60,914/-. The CIT(A) held this amount pertained to investments by group companies and not cessation of liability under Section 41(1).

What were the issues?

Whether the amount of Rs. 9,40,60,914/- constituted cessation of liability under Section 41(1) or was an investment by group companies. The procedural aspect of a related appeal being remitted was also a key factor.

Which sections of the Income-tax Act were involved?

Section 41(1),Section 143(3),Section 250

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Income Tax Appellate Tribunal, ‘A’ BENCH, CHENNAI

Before: SHRI CHANDRA POOJARI & SHRI G. PAVAN KUMAR

For Respondent: Shri. Suresh Balani, C.A

आदेश / O R D E R PER G. PAVAN KUMAR, JUDICIAL MEMBER:

1.

The appeal filed by the Revenue is directed against order of the Commissioner of Income-tax (Appeals)-1, Coimbatore in appeal No. 438A/13-14, dated 15.06.2015 for the assessment year 2011-2012 passed u/s.143(3) and 250 of the Income Tax Act, 1961 (herein after referred to as ‘the Act’).

The Revenue has raised the following grounds:- 2. ‘’ 2.The Id.CIT(A)-I, has erred in allowing the assessee's appeal

ITA No.1984/Mds/2015. :- 2 -: on the addition of Rs.9,40,60,914/- holding that this amount pertains to investment made by the assessee's group companies viz., M/s. Ballapur Industries Limited and M/s.BILT Paper Holdings Ltd., and it does not amount to cessation of liability uls.41(1) of the LT. Act,1961.

3.

The Id.CIT(A)-I, failed to consider the Hon'ble Supreme Court's decision in the case of CIT vs. T.V. Sundaram Iyengar & Sons Ltd., cited in [1996] 88 taxman 429 (SC) wherein it was held that an amount received in the course of a trading transaction, even though it is not taxable in the year of receipt as being of capital character, amount changes its character when the amount becomes the assessee's own money because of limitation or by any other statutory or contractual right and such amount should be treated as income of the assessee.

4. The Id.CIT(A)-I, failed to note that although the amount received originally was capital in nature, since the amount remained unclaimed with the assessee from the year 2004-05 onwards, it becomes time barred and the Assessing Officer has rightly invoked the provisions of section 41 (1) of the IT. Act,1961.

5.

For these and other grounds that may be adduced at the time of hearing, the order of the Id. CIT(A), may be cancelled and that of Assessing Officer be restored’’. At the time of hearing, the ld. Departmental Representative 3.

argued that the Commissioner of Income Tax (Appeals) erred in partly allowing the assessee appeal mentioning the amount of �9,40,60,914/- cannot be made as an addition on cessation of liability u/sec. 41(1) of the Act as the investments made by the group companies and prayed for setting aside the order of Commissioner of Income Tax (Appeals) and restore the Assessing Officer order.

4.

Contra, the ld. Authorised Representative brought to the knowledge of the Bench that the assessee’s appeal in dated 26.05.2016 for the assessment year 2011- . :- 3 -: 12 was disposed off by remitting the disputed issue to the file of the ld. Assessing Officer and filed a copy of the Tribunal order. When the Bench, questioned the ld. Authorised Representative why the clubbing petition was not filed, there was no conceiving answer received.

We, considering the apparent facts and material on record, 5. since we have remitted the assessee’s appeal to the file of the ld. Assessing Officer, we considered it appropriate to remit the Revenue appeal to the file of the ld. Assessing Officer for fresh consideration.

In the result, the appeal of the Revenue in ITA No. 6. 1984/Mds/2015 is allowed for statistical purpose. Order pronounced on Friday, the 17th day of June, 2016, at Chennai.

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