Commissioner Of Income Tax Chennai v. M/S.apex Agencies, Pottipati Plaza, Ii Floor

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 09.12.2014 CORAM THE HONOURABLE MR.JUSTICE R.SUDHAKARANDTHE HONOURABLE MR.JUSTICE R.KARUPPIAH Tax Case (Appeal) No.273 of 2014 Commissioner of Income TaxChennai. ...Appellant/RespondentVs. M/s.Apex Agencies,Pottipati Plaza, II Floor,No.77, Nungambakkam High Road,Chennai - 600 034. ...Respondent/Appellant APPEAL under Section 260A of the Income Tax Act against theorder dated 20.7.2011 made in I.T.A.No.372/Mds/2010 on the file ofthe Income Tax Appellate Tribunal, Chennai 'B' Bench appeal againstthe Appellate order dated 29.01.2010 made in ITA No. 634/07-08 by theCommissioner of Income Tax (Appeals)-XII Chennai - 600 034, againstthe assessment order dated 31.12.2007 under section 143 (3) of theIncome Tax Act 1961 by the Assistant Commissioner of Income TaxCircle XV, Chennai. For Appellant : Mr.J.NarayanasamyStanding Counsel for Income Tax For Respondent: Mr.N.V.Balaji J U D G M E N T (Delivered by R.SUDHAKAR,J.) This Tax Case (Appeal) is filed by the Revenue as against theorder of the Income Tax Appellate Tribunal raising the followingsubstantial question of law: “ Whether on the facts and in the circumstances ofthe case, the Appellate Tribunal was right in merelyremitting the issue of disallowance of interest andfinance charges, back to the assessing officer for freshconsideration without considering the issue on meritswhile disposing the appeal?" 2. The assessment in this case relates to the assessment yearhttps://hcservices.ecourts.gov.in/hcservices/ 2005-06. The appellant is a trader in batteries, torch lights andbulbs etc. For the assessment year in question, the assessee filedreturns admitting income of Rs.19,27,960/-. While completing thescrutiny assessment, the Assessing Officer made an addition ofRs.12,86,106/- disallowing the interest expenditure as not relatingto the assessee's business. Aggrieved by the said order of theAssessing Officer, the assessee preferred an appeal before theCommissioner of Income Tax (Appeals), who after following theassessee's own case in respect of the previous assessment years,confirmed the order of assessment. Aggrieved by the said order, theassessee once again went before the Income Tax Appellate Tribunal. 3. The Tribunal relying upon its decision in respect of thevery same assessee for the previous assessment years, allowed theappeal filed by the assessee. For better clarity, the relevantportion of the order of the Tribunal reads as follows:"6. We have perused the orders and heard the rivalcontentions. There is no dispute that the disallowance ofinterest on finance charges was confirmed by ld. CIT(Appeals) relying on his predecessor's order in assessee'sown case for assessment years 2000-01, 2001-02 and 2003-04.Vide order dated 24th September, 2011 in MiscellaneousPetition Nos.89, 159 & 160/Mds/2010 filed by the Revenue,this Tribunal had refused to interfere with its earlierorders quashing the assessments done for assessment years2000-01, 2001-02 and 2003-04. In fact, in the order on theMiscellaneous Petition mentioned supra, the Tribunal hasreproduced its earlier order quashing the assessments forthose years. Learned D.R. agreed that A.O. had relied onhis orders of earlier years mentioned above for makingdisallowance for the impugned assessment year also.Therefore, in our opinion, the matter requires a re-visit bythe A.O., since the earlier orders which were relied onhaving been quashed. Therefore, we set aside the orders ofthe authorities below and remit the issue regardingdisallowance made on the interest debited by the assessee inits Profit and Loss account, back to the Assessing Officerfor fresh consideration in accordance with law. Needless tosay, assessee has to be given proper opportunity forexplaining its case." 4. Aggrieved by this order of the Tribunal, the Revenue isbefore this Court. 4. Aggrieved by this order of the Tribunal, the Revenue isbefore this Court. 5. Learned Standing Counsel appearing for the Revenue submitsthat the Tribunal following its earlier order in respect of the verysame assessee for the previous assessment years allowed the appealfiled by the assessee. In that earlier order, the Tribunal has notconsidered the issue on merits, but on the ground of limitation, theTribunal dismissed the appeal filed by the Revenue. Hence, the order https://hcservices.ecourts.gov.in/hcservices/ of the Tribunal is not sustainable as one covering the issue in thisappeal. 6. Heard Mr.J.Narayanasamy, learned standing counsel appearingfor the Revenue and Mr.N.V.Balaji, learned counsel appearing for theassessee and perused the materials placed before this Court. 7. The main issue in this case is whether the interest andfinance charges are an allowable deduction. This issue was already asubject matter of appeal before the Tribunal. The Tribunal inrespect of the assessment years 2000-01, 2001-02 and 2003-04dismissed the appeals filed by the Revenue on the ground oflimitation and not on merits. In such view of the matter, theTribunal has misdirected itself to hold that the assessments inrespect of the previous years were quashed and answered the issue infavour of the assessee. We therefore, set aside the order of theTribunal and remand the matter back to the Tribunal for deciding thematter afresh on merits. In the result, this Tax Case (Appeal) is allowed by way ofremand. No costs.Sd/-Deputy Registrar(J) //True Copy// Sub Assistant RegistrarslTo 1. The Assistant Registrar,The Income Tax Appellate Tribunal, Besant Nagar, Chennai - 600 090. 2. The Commissioner of Income Tax (Appeals), XII, Chennai - 600 034. 3. The Assistant Commissioner of Income Tax, Circle XV, Chennai - 600 034. 4. The Secretary,Board of Direct Taxes, New Delhi. 1 CC to Mr.J.Narayanasamy, Advocate SR.No. 59967 1 CC to Mr.N.V.Balaji, Advocate SR.No. 59946Tax Case (Appeal) No.273 of 2014CNR (CO)PSI (19.12.2014) https://hcservices.ecourts.gov.in/hcservices/