Income Tax Appellate Tribunal - Chennai
Sivagami Holdings Private Limited, ... vs Dcit, Chennai on 14 March, 2018
आयकर अपील य अ धकरण, 'सी' यायपीठ, चे नई।
IN THE INCOME TAX APPELLATE TRIBUNAL
'C' BENCH: CHENNAI
ी जॉज माथन, या यक सद य एवं
ी एस जयरामन, लेखा सद य के सम%
BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.1322/Chny/2016 नधारण वष /Assessment Year: 2004-05 M/s.Sivagami Holdings Pvt. Ltd., Vs. The Asst. Commissioner-
202, Anna Salai, of Income Tax, Chennai-600 002. Company Circle-VI(3), Chennai-600 034.
[PAN: AAECS 3279 A] (अपीलाथ'/Appellant) (()यथ'/Respondent) आयकर अपील सं./ITA Nos.1419, 1420 & 1422/Chny/2016 नधारण वष /Assessment Years: 2004-05, 2007-08 & 2011-12 The Dy. Commissioner of- Vs. M/s.Sivagami Holdings-
Income Tax, Pvt. Ltd., Corporate Circle-6(2), 202, Anna Salai, Aayakar Bhavan, New Block, Chennai-600 002. 7th Floor, 121, M.G.Road, Chennai-600 034. [PAN: AAECS 3279 A] (अपीलाथ'/Appellant) (()यथ'/Respondent)
Cross-Objection Nos.91, 92 & 93/Chny/2016 (in ITA Nos.1419, 1420 & 1422/Chny/2016) नधारण वष /Assessment Years: 2004-05, 2007-08 & 2011-12 M/s.Sivagami Holdings Pvt. Ltd., Vs. The Dy. Commissioner-
202, Anna Salai, of Income Tax, Chennai-600 002. Company Circle-VI(2), Aayakar Bhavan, New Block, [PAN: AAECS 3279 A] 7th Floor, 121, M.G.Road, Chennai-600 034.
(अपीलाथ'/Appellant) (()यथ'/Respondent) ITA No.1322/Chny/2016 ITA Nos.1419, 1420 & 1422/Chny/2016 CO Nos.91, 92 & 93/Chny/2016 (in ITA Nos.1419, 1420 & 1422/Chny/2016) :- 2 -:
Assessee by : Shri R.Rajasekaran, CA &
Shri S.Thyagarajan, CA
Department by : Shri N.Madhavan, ACIT
सुनवाई क+ तार ख/Date of Hearing : 14.03.2018
घोषणा क+ तार ख /
: 14.03.2018
Date of Pronouncement
आदे श / O R D E R
PER BENCH:
ITA No.1322/Chny/2016 is an appeal filed by the assessee & ITA
No.1419/Chny/2016 is an appeal filed by the Revenue against the Order of Commissioner of Income Tax (Appeals)-15, Chennai, in ITA No.198/CIT(A)-15/2013-14 dated 25.02.2016 for the AY 2004-05. 2.0 CO No.91/Chny/2016 is a Cross-Objection filed by the assessee in the Revenue's appeal No.1419/Chny/2016 for the AY 2004-05. 3.0 ITA No.1420/Chny/2016 is an appeal filed by the Revenue & CO No.92/Chny/2016 is a Cross-Objection filed by the assessee in the Revenue's appeal in ITA No.1420/Chny/2016 against the order of the Commissioner of Income Tax (Appeals)-15, Chennai, in ITA No.215/CIT(A)-15/2013-14 dated 25.02.2016 for the AY 2007-08. 4.0 ITA No.1422/Chny/2016 is an appeal filed by the Revenue & CO No.93/Chny/2016 is a Cross-Objection filed by the assessee in the ITA No.1322/Chny/2016 ITA Nos.1419, 1420 & 1422/Chny/2016 CO Nos.91, 92 & 93/Chny/2016 (in ITA Nos.1419, 1420 & 1422/Chny/2016) :- 3 -:
Revenue's appeal in ITA No.1422/Chny/2016 against the order of the Commissioner of Income Tax (Appeals)-15, Chennai, in ITA No.45/CIT(A)- 15/2014-15 dated 25.02.2016 for the AY 2011-12.
5.0 Shri N. Madhavan, ACIT, represented on behalf of the Revenue and Shri R.Rajasekaran, CA & Shri S.Thyagarajan, CA, represented on behalf of the assessee.
6.0 As all the appeals and Cross-Objections are related to the same assessee and involved the same issues, they are being disposed off by this common order.
ITA No.1322/Chny/2016 -Assessee's appeal - for the AY 2004-05: 7.0 The assessee has challenged the re-opening of the assessment by issuance of notice u/s.148 of the IT Act, 1961. It was submitted by the Ld.AR that the assessee company was incorporated on 10.10.2008 on the demerger of the company known as M/s.M.Ct.M Corporation Pvt. Ltd., and M/s.M.Ct.M Global Pvt. Ltd. w.e.f. 01.04.1999 in accordance with the order of the Hon'ble Madras High Court dated 10.02.1999. It was a submission that the assessee has filed its return of income for the relevant Assessment Year on 31.10.2004 admitting a loss of Rs.15,67,810/-. The return was processed u/s.143(1) on 22.09.2005. Subsequently, notices u/s.148 dated 02.04.2007 was issued and served on the assessee. The ITA No.1322/Chny/2016 ITA Nos.1419, 1420 & 1422/Chny/2016 CO Nos.91, 92 & 93/Chny/2016 (in ITA Nos.1419, 1420 & 1422/Chny/2016) :- 4 -:
Ld.AR drew our attention to the reasons recorded for the purpose of re- opening at Page No.102 of the Paper Book, the same reads as follows:
GOVERNMENT OF INDIA INCOME TAX DEPARTMENT OFFICE OF THE ASSISTANT COMMISSIONER OF INCOME TAX COMPANY CIRCLE VI(3) 7TH FLOOR NEW BLOCK, ROOM NO. 706, 121, MAHATMA GANDHI ROAD, CHENNAI-34 Sl-87/2004-05 Dated: 02.01.2008 To The Principal Officer, M/s. Sivagami Holdings Pvt. Ltd., 202, Anna Salai, Chennai-600 002.
Sir, Sub: Income Tax Assessment - Asst Year 2004-05 -
Notice u/s.148 dated 02.04.2007 - Reg.
Ref: Your letter dated 07.04.2007 filed on 16.04.2007 $$$ Please refer to the above.
2. Vide your letter cited you had requested reasons for reopening the assessment and the same is furnished below:
"The assessee has claimed Malaysian (foreign) income claimed as exempt in India as per ADT between Malaysia & India. However, it is noticed from the P & L Account that the income which the assessee claims as exempt is earned outside Malaysia and the same is exempt under the Malaysian Income Tax Act. Therefore, the same income, which is exempt in Malaysia, does not come under ADT and the income which is chargeable to tax in either of the contracting country is only exempt under ADT. Therefore, the foreign income has to be taxed in India. Therefore, income of Rs.251,55,324/- has escaped assessment within the meaning of Sec. 147 r.w.s.
148."
Yours faithfully, Sd/-
[R. SAMPATH KUMAR] Assistant Commissioner of income-tax Company Circle VI(3), Chennai 7.1 It was a submission that under identical circumstances, the Co- ordinate Bench of this Tribunal in the assessee's own case for the AYs 2000-01, 2001-02, 2002-03 & 2005-06 in ITA Nos.956 to 959/Mds/2009 ITA No.1322/Chny/2016 ITA Nos.1419, 1420 & 1422/Chny/2016 CO Nos.91, 92 & 93/Chny/2016 (in ITA Nos.1419, 1420 & 1422/Chny/2016) :- 5 -:
vide an order dated 31.05.2011, has held that the reasons recorded were erroneous and consequently, the notices issued u/s.148 was not valid in law. It was a submission that the reasons recorded for those years had been extracted by the Co-ordinate Bench of this Tribunal in the assessee's own case in Para No.36 of its Order. It was a submission that the reasons being pari-materia and the reasons having been held to be erroneous, the re-opening of the assessment in the assessee's case for the relevant Assessment Year was also liable to be cancelled.
7.2 In reply, the Ld.DR vehemently supported the order of the AO & the Ld.CIT(A). It was a submission that in Page No.5 of the order of the Ld.CIT(A) the issue of the re-opening had been held against the assessee in so far as the facts in each case was different and cannot be applied blindly.
7.3 We have considered the rival submissions.
7.4 A perusal of the reasons recorded for the relevant Assessment Year clearly shows that the same is in pari-materia with the reasons recorded for the earlier Assessment Years in the assessee's own case. A perusal of the decision of the Co-ordinate Bench of this Tribunal clearly shows that the issue has been held in favour of the assessee in Para No.52 of the order of the Co-ordinate Bench of this Tribunal in the assessee's own case. ITA No.1322/Chny/2016
ITA Nos.1419, 1420 & 1422/Chny/2016 CO Nos.91, 92 & 93/Chny/2016 (in ITA Nos.1419, 1420 & 1422/Chny/2016) :- 6 -:
This being so, respectfully following the decision of the Co-ordinate Bench of this Tribunal in the assessee's own case, the re-opening of the assessment to be bad in law and the consequential assessment is held to be annulled.
7.5 In the result, the appeal filed by the assessee in ITA No.1322/Chny/2016 stands allowed.
ITA No.1419/Chny/2016 - Revenue's appeal - for the AY 2004-05: 8.0 As we have allowed the assessee's appeal by quashing the notice u/s.148, the appeal filed by the Revenue in ITA No.1419/Chny/2016 stands dismissed as infructuous.
CO No.91/Chny/2016 - Assessee's appeal - for the AY 2004-05:
9.0 As we have already allowed the assessee's appeal in respect of the issue of re-opening in ITA No.1322/Chny/2016, the Cross-Objection filed by the assessee in CO No.91/Chny/2016 stands allowed. ITA No.1420/Chny/2016 - Revenue's appeal - for the AY 2007-08
& CO No.92/Chny/2016 - Assessee's appeal - for the AY 2007-08:
10.0 In regard to Revenue's appeal in ITA No.1420/Chny/2016 for the AY 2007-08, it was submitted by the Ld.DR that the issue was against the relief granted to the assessee on merits. It was submitted by the Ld.DR ITA No.1322/Chny/2016 ITA Nos.1419, 1420 & 1422/Chny/2016 CO Nos.91, 92 & 93/Chny/2016 (in ITA Nos.1419, 1420 & 1422/Chny/2016) :- 7 -:
that the assessee is registered as a Non-Banking Finance Company and carries on its business of investments in Chennai. It was a submission that the assessee carries out its investment operations through its PE in Kuala Lampur, Malaysia. It was a submission that the AO on the ground that the management of the assessee company is in India held that the income of the assessee in respect of its Malaysian entity was liable to be taxed in India. It was a submission that the Ld.CIT(A) had relied upon the decision of the Co-ordinate Bench of this Tribunal in the assessee's own case for the AYs 2000-01, 2001-02, 2002-03 & 2005-06 referred to supra, had held that the income of the Malaysian Branch of the assessee cannot be brought to tax in India. It was a submission that the order of the Ld.CIT(A) was liable to be reversed.
10.1 In reply, the Ld.AR vehemently supported the order of the Ld.CIT(A).
10.2 It was a submission that the issue is squarely covered by the decision of the Co-ordinate Bench of this Tribunal in the assessee's own case, wherein, the Co-ordinate Bench has held that the income of the Malaysian Branch of the assessee company is income earned in Malaysia and by virtue of DTAA that income is liable for taxation only in Malaysia and therefore, the same cannot be brought to tax in India. ITA No.1322/Chny/2016
ITA Nos.1419, 1420 & 1422/Chny/2016 CO Nos.91, 92 & 93/Chny/2016 (in ITA Nos.1419, 1420 & 1422/Chny/2016) :- 8 -:
10.3 We have considered the rival submissions.
10.4 As it is noticed that the issue in the Revenue's appeal is squarely covered by the decision of the Co-ordinate Bench of this Tribunal in the assessee's own case, respectfully following the decision of Co-ordinate Bench of this Tribunal, the findings of the Ld.CIT(A) stands confirmed. As we have already dismissed the Revenue's appeal and the assessee's Cross-Objection is only in support of the order of the Ld.CIT(A), the same stands allowed.
10.5 In the result, the Revenue's appeal in ITA No.1420/Chny/2016 stands dismissed and the Cross-Objection filed by the assessee in CO No.92/Chny/2016 is allowed.
ITA No.1422/Chny/2016 - Revenue's appeal - for the AY 2011-12: 11.0 In regard to Revenue's appeal in ITA No.1422/Chny/2016 and the assessee's Cross-Objection in CO No.93/Chny/2016, it was submitted that the Revenue's appeal was identical to the Revenue's appeal in ITA No.1420/Chny/2016 for the AY 2007-08.
11.1 As we have already held that the issue on merits as to whether the income of the Malaysian Branch of the assessee is liable to be taxed only in Malaysia and not in India, respectfully following the decision of Co- ITA No.1322/Chny/2016
ITA Nos.1419, 1420 & 1422/Chny/2016 CO Nos.91, 92 & 93/Chny/2016 (in ITA Nos.1419, 1420 & 1422/Chny/2016) :- 9 -:
ordinate Bench of this Tribunal and as it is noticed that the Ld.CIT(A) has followed the decision of the Co-ordinate Bench of this Tribunal in the assessee's own case for the AYs 2000-01, 2001-02, 2002-03 & 2005-06, referred to supra, the findings of the Ld.CIT(A) stands confirmed and consequently, the Revenue's appeal stands dismissed. 11.2 In the result, the Revenue's appeal in ITA No.1422/Chny/2016 stands dismissed CO No.93/Chny/2016 - Assessee's appeal - for the AY 2011-12:
12.0 Ground Nos.1 & 8 are general in nature which do not required any adjudication.
12.1 In regard to Ground Nos.2 to 4, it was submitted that the issue was against the disallowance made u/s.14A of the Act. No substantial argument has been placed in respect of the same and consequently, the said grounds are dismissed.
12.2 In regard to Ground No.5, it was submitted by the Ld.AR that the assessee has challenged the action of the Ld.CIT(A) in not granting the relief available to the assessee under the provisions of Sec.72 of the Act. 12.3 We have considered the rival submissions. ITA No.1322/Chny/2016
ITA Nos.1419, 1420 & 1422/Chny/2016 CO Nos.91, 92 & 93/Chny/2016 (in ITA Nos.1419, 1420 & 1422/Chny/2016) :- 10 -:
12.4 As it is noticed that the returned income is 'NIL' and the provisions of Sec.72 is in respect of the carry forward of the business losses and as there is no income against which the carry forward business losses can be set off the grounds become infructuous.
12.5 In regard to Ground Nos.6 & 7, it was a submission that the issue was against the levy of interest u/s.234D of the Act. As it is noticed that the levy of interest u/s.234D is consequential in nature, we find no reason to interfere in the same.
12.6 In the result, Cross-Objection filed by the assessee in CO No.93/Chny/2016 is partly allowed.
Order pronounced in the Open Court on March 14, 2018, at Chennai.
Sd/- Sd/-
(एस जयरामन) (जॉज माथन)
(S. JAYARAMAN) (GEORGE MATHAN)
लेखा सद य/ACCOUNTANT MEMBER या यक सद य/JUDICIAL MEMBER
चे नई/Chennai,
0दनांक/Dated: March 14, 2018.
TLN
आदे श क+ ( त1ल2प अ3े2षत/Copy to:
1. अपीलाथ'/Appellant 4. आयकर आयु4त/CIT
2. ()यथ'/Respondent 5. 2वभागीय ( त न ध/DR
3. आयकर आयु4त (अपील)/CIT(A) 6. गाड फाईल/GF