Income Tax Appellate Tribunal - Pune
Assistant Commissioner Of Income Tax vs Kripa Chemicals (P) Ltd. on 6 December, 2000
Equivalent citations: [2002]82ITD449(PUNE)
ORDER
B.L. Chhibber, A.M.
1. When the Departmental appeal came up for hearing, Shri P.V. Kulkarni, the learned Departmental Representative sought permission to withdraw the appeal. Permission is accordingly granted and the appeal is dismissed.
2. In the result, the appeal is dismissed as withdrawn.
Cross-objection
3. In the cross-objection, the assessee has raised five objections. Objections No. 2, 3 and 4 have been withdrawn by the learned counsel and objection No. 5 is general in nature and calls for no comments. The only objection No. 1 survives for adjudication which reads as under:
"On the facts and in the circumstances of the case, the learned CIT(A) has erred in law and on merit, in excluding income from interest and dividend while computing deduction under Section 80HHA and 80-I."
4. Shri P.V. Kulkarni, the learned Departmental Representative, raised a preliminary objection that when the Department has withdrawn the appeal, the cross-objection does not survive. Accordingly, it should be dismissed as infructuous.
5. Shri M.K. Kulkarni, the learned counsel for the assessee, submitted that a cross-objection is like an appeal and notwithstanding the fact that the Revenue has withdrawn the appeal, the cross-objection survives for adjudication. In support of his contentions, he relied upon the judgment of the Hon'ble Supreme Court in the case of Superintending Engineer and Ors. v. B. Subba Reddy 1999 AIR SCW 1479.
6. After hearing both the sides, we overrule the preliminary objection raised by the Revenue in view of the aforesaid judgment of the Supreme Court wherein it has been held as under :
"Appeal is substantive right. It is a creation of the statute. Right to appeal does not exist unless it is specifically conferred. Cross-objection is like an appeal. It has all the trappings of an appeal. It is filed in the form of memorandum and the provisions of Rule 1 of Order 41 of the Code, so far as these relate to the form and contents of the memorandum of appeal apply to cross-objection as well. Court-fee is payable on cross-objection like that on the memorandum of appeal. Provisions relating to appeals by indigent person also apply to cross-objection. Even where the appeal is withdrawn or is dismissed for default, cross objection may nevertheless be heard and determined. Respondent even though he has not appealed may support the decree on any other ground but if wants to modify it, he has to file cross-objection to the decree which objections he could have taken earlier by filing an appeal. Time for filing objection which is in the nature of appeal is extended by one month after service of notice on him of the day fixed for hearing the appeal. This time could also be extended by the Court like in appeal. Cross-objection is nothing but an appeal, a cross-appeal at that. It may be that the respondent wanted to give quietus to whole litigation by his accepting the judgment and decree or order even if it was partly against his interest. When, however, the other party challenged the same by filing an appeal statute gave the respondent a second chance to file an appeal by way of cross-objection if he still felt aggrieved by the judgment and decree and order."
Accordingly, we admit the cross-objection and proceed to adjudicate upon cross-objection No. 1 which has been pressed by the assessee. We find that a similar issue came up for consideration before us in the assessee's appeal relating to asst. yr. 1990-91 in ITA No. 1160/Pn/92, wherein we restored the issue to the file of the AO with following remarks :
"After considering the rival submissions, we find that the issue is covered by the decision of this Bench in the case of Jagdish Electronics Ltd. wherein it has been held that if the fixed deposits are made as a commercial expediency, then the interest earned on such FDRs would be business income on which deduction under Section 80-I would be allowable. Following the said decision, we set aside the orders of the CIT(A) on this issue and restore the matter to the file of the AO, who shall, after giving reasonable opportunity of being heard to the assessee, determine the factual aspect whether the FDRs were purchased by way of commercial expediency or not. If the assessee is found to have purchased the FDRs with a view to maintain the overdraft facility with the bank, then such interest income would be considered by him as business income allowable for deduction under Section 80HHA and 80-I. As far as the income from dividend is concerned, the order of CIT(A) is upheld."
Following the aforesaid observations of this Tribunal, we restore the issue to the file of the AO who shall, after giving a reasonable opportunity of being heard to the assessee, determine the factual aspect whether the FDRs were purchased by way of commercial expediency or not and further adjudicate upon the issue in accordance with our observations reproduced supra.
7. In the result, Revenue's appeal is dismissed and the cross-objection of the assessee is allowed in part for statistical purposes.