Income Tax Appellate Tribunal - Mumbai
Ito 1(1)(4), Mumbai vs Gas & Power Investment Co. Ltd, Mumbai on 3 January, 2018
आयकर अपीलीय अिधकरण, अिधकरण, मुब ं ई "आई " खंडपीठ Income-tax Appellate Tribunal "I"Bench Mumbai सव ी राजे , लेखा सद य एवं रिवश सूद, याियक सद य Before S/Sh. Rajendra,Accountant Member & Ravish Sood, Judicial Member आयकर अपील सं./I.T.A./3128/Mum/2015, िनधा रण वष /Assessment Year: 2010-11 Income tax Officer-1(1)(4) M/s. Gas & Power Investment Co. Ltd. Room No.531 A/579, Aayakar Bhavan, Asian Building, Ground Floor, 17, M.K. Road, Mumbai-400 020. Vs. R.Kamani Marg, Ballard Estate Mumbai-400 001.
PAN:AACCG 3843 J
(अपीलाथ /Appellant) ( यथ / Respondent)
Revenue by: Shri Anadi Varma-CIT-DR
Assessee by: None
सुनवाई क तारीख / Date of Hearing: 09/11/2017
घोषणा क तारीख / Date of Pronouncement: 03/01/ 2018
आयकर अिधिनयम ,1961 क धारा 254(1) के अ
तग त आदे श
Order u/s.254(1)of the Income-tax Act,1961(Act ).
लेखा सद य,
सद य राजे
के अनुसार/
ार PER RAJENDRA, AM-
Challenging the order dated 20/01/2015 of CIT(A)-2, Mumbai the Assessing Officer (A.O.) has filed the present appeal.The assessee is a special purpose vehicle,a deemed Govt. company as per section 619 of the Companies Act. It was promoted by Consortium of banks. It was registered as NBFC with RBI.It is engaged in the business of settlement of claims of off-shore stakeholders of Dabhol Power Company,it filed its return of income on 24/09/2010 declaring total Loss at Rs.7.57 Lakhs.The AO completed the assessment ,on 30/03/2013, u/s.143(3) of the Act,determining its income at Rs.35.99 crores.
2.As per the records,on 04/10/2017 the matter was adjourned to a next day.The Authorised Representative(AR)of the assessee was directed to furnish the details of interest payment. When the AR did not appear before the Bench, the Bench directed that necessary details of payment had to be filed positively on the next date of hearing.The matter was accordingly adjourned to 08/11/2017.Earlier, this matter was adjourned twice,on 23.01.2017 and 26.04. 2017,at the request of the assessee.On 08/11/2011 none appeared on behalf of the assessee. The matter was adjourned to 09/11/2017.On 09/11/2017 none appeared before us nor any application for adjournment was filed.Therefore,we are deciding the matter on the basis of available material.
3.Effective Ground of appeal is deleting the disallowance of payment of interest of Rs.35, 99,47,470/-.The assessee is a special purpose vehicle,a deemed Govt. company as per section 619 of the Companies Act. It was promoted by Consortium of banks. It was registered as 3128/Mum/2015- M/s.Gas & Power Investment CompanyLtd.
NBFC with RBI.During the assessment proceedings,it had issued debentures of Rs.1309.30 crores by raising loans from FI.s and placed them with the LIC of India. It was claimed that it had settled the dues by financing Ratnagiri Gas and Power P. Ltd.(RGPPL).The only source of income of the assessee was interest received from RGPPL .He observed that the assessee had received total interest of Rs.175.24 crores from its loans and advances as well as FDR.s,that it had claimed interest expenses of Rs.21.93 crores against secured loans and interest,that it had claimed administrative and operating expenses of Rs.41.60 lakhs for the year,that there was reassessment for AY.2006-07 wherein the AO disallowed an amount of Rs.9.13 crores u/s.43B(e).The AO,while completing the assessment for that year 2006-07, directed the assessee to furnish proof of actual payment of interest debited to P&L account supported by a bank statement duly highlighting the transactions.He also directed assessee to explain as to why the same should not be disallowed u/s. 43B(e) r.w. Explanation 3D to the said section,as the amount in question was not actually paid within the prescribed time limit.After examining the available material,the AO held that what was claimed to be payment of interest on loan was payment of restructured loan,that the assessee had not paid interest on loan,that the interest was converted into loan . Considering the above facts of the AY.2006-07,the AO directed the assessee to furnish the details of the interest payments and to explain as to why similar disallowance should not be made for the year under consideration also.As per the AO,the assessee did not file any specific reply in that regard and relied upon the submission made during the assessment proceedings for AY.2006-07.After considering the books of account of the assessee the AO observed that entire liability was towards loan that no separate interest liability existed ,that accrued interest had been converted to further loan liability,that the assessee had paid interest of Rs.21,93,36,406/-. He held that the assessee had not paid the interest as envisaged by cl.(d)
(e)of sec. 43B.Finally,he made disallowance of Rs.35.82 crores .
4.Aggrieved by the order of the AO,the assessee preferred an appeal before the First Appellate Authority(FAA)and made elaborate submissions.After considering the available material,he held that the financial data and the written submissions of the assessee prove that the interest was paid by the assessee on funded term loans,that interest was paid before the due date of filing of return of income. As per the FAA the assessee has furnished evidence in that regard. Referring to Circular No.7 of 2006 , dated 17/07/2006 he held that the case of the assessee was covered by section 43B(d)(e) of the Act. Finally, he deleted the addition made by AO.
23128/Mum/2015- M/s.Gas & Power Investment CompanyLtd.
5. During the course of hearing before us, the DR stated that the AO had made disallowance of Rs.33.14 crores u/s. 43B(d) on account of payment to LIC, that he had disallowed Rs.2.67 crores u/s.43B(e) on account of alleged interest paid to scheduled banks, that he had held that no interest liability existed which was discharged by the assessee for the year under consideration, that it was payment of restructured loan, that there was no separate recognition of the principal loan amount and interest liability in the balance sheet, that the FAA had allowed the appeal of the assessee. As stated earlier none appeared on behalf of the assessee.
6.We find that the Tribunal had directed the assessee to file details of interest payment to decide the issue. But till the passing of this order, the assessee has not filed any detail that could prove that the stand taken by the AO was factually incorrect. We do not know how the FAA arrived at the conclusion, that the payment made by the assessee under the head interest expenditure was relatable to loans and not about the restructured loans.We agree with the argument of DR that the order of the FAA was non-speaking and very cryptic.We are unaware of the reasons as to why the assessee did not file details of interest payments to prove his case.Therefore, in our opinion the matter should be investigated and verified further.So,we restore back the issue to the file of the FAA to decide the issue afresh. He is directed to pass a speaking and detailed order after affording a reasonable opportunity to the assessee.The assessee should file the details of interest payments before him and should prove that payments made by it is allowable as per provisions of the Act. Partly allowing the appeal of the AO, we decide effective Ground of appeal in his favour.
As a result,appeal filed by AO stands partly allowed.
फलतःिनधा रती अिधकारी ारा दािखल क गई अपील अंशतः मंजूर क जाती है.
Order pronounced in the open court on 3rd January, 2018.
आदेश क घोषणा खुले यायालय म दनांक 03 जनवरी, 2018 को क गई ।
Sd/- Sd/-
(रिवश सूद /Ravish Sood) (राजे / RAJENDRA)
याियक सद य / JUDICIAL MEMBER लेखा सद य / ACCOUNTANT MEMBER
मुंबई Mumbai; दनांक/Dated :03.01.2018.
Jv.Sr.PS.
आदेश क ितिलिप अ ेिषत/Copy of the Order forwarded to :
1.Appellant /अपीलाथ 2. Respondent / यथ
3.The concerned CIT(A)/संब अपीलीय आयकर आयु , 4.The concerned CIT /संब आयकर आयु
5.DR " I " Bench, ITAT, Mumbai /िवभागीय ितिनिध, आई खंडपीठ,आ.अिध.मुंबई
6.Guard File/गाड फाईल स या िपत ित //True Copy// आदेशानुसार/ BY ORDER, उप/सहायक पंजीकार Dy./Asst. Registrar आयकर अपीलीय अिधकरण, मुंबई /ITAT, Mumbai.
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