Commissioner Of Income Tax,Kolkata-Iii v. M/S. Vivada Inland Waterways Ltd

OD-3 ITAT/11/2011IA No.GA/1/2011 (Old No.GA/76/2011)IA No.GA/2/2011 (Old No.GA/77/2011) IN THE HIGH COURT AT CALCUTTASpecial Jurisdiction (Income Tax)ORIGINAL SIDE COMMISSIONER OF INCOME TAX,KOLKATA-III -Versus- M/S. VIVADA INLAND WATERWAYS LTD. Appearance:Ms. Smita Das De, Adv....for the appellant. Ms. Swapna Das, Adv.Mr. Siddhartha Das, Adv....for the respondent. BEFORE: The Hon’ble JUSTICE T.S. SIVAGNANAM -And- The Hon’ble JUSTICE HIRANMAY BHATTACHARYYA Date : 6[th] June, 2022. The Court : This appeal filed by the revenue underSection 260A of the Income Tax Act, 1961 (the ‘Act’ for brevity)is directed against the order dated 18[th] December, 2009 passed bythe Income Tax Appellate Tribunal, “C” Bench, Kolkata in ITANo.1193/Kol/2009 for the assessment year 2001-02. The revenue has raised for the following substantialquestion of law for consideration: i)Whether on the facts and circumstances of the casethe Ld. Tribunal erred in holding that the interestsubsidy amounting to Rs.212.08 lacs should be deemedas income u/s. 41(1) of the Income Tax Act andthough accrued in the Assessment year 2001-02 willbe charged in the Assessment Year 2002-03, inspiteof the respondent following the mercantile system ofaccounting?” We have heard Ms. Smita Das De, learned standing counselappearing for the appellant/revenue and Ms. Swapna Das and Mr.Siddhartha Das, learned Advocates for the respondent/assessee.There is a delay of 257 days in filing the appeal. Anaffidavit-in-opposition has been filed by the respondent/assesseesubmitting that there is absolutely no reason given for theinordinate delay. The Hon’ble Division Bench which heard thematter on earlier occasion had condoned the delay subject topayment of costs vide order dated 9[th] March, 2011. It is not indispute that the cost has not been paid by the department.Nevertheless, we have heard the learned standing counsel for theappellant on the merits of the matter as well as the learnedcounsel for the appearing for the respondent/assessee. Weexercise the discretion and condone the delay so that the appealcan be disposed of. Accordingly, the application for condonationof delay (GA No.76/2011) is allowed and the delay in filing theappeal is condoned. We have perused the order passed by the tribunal which isimpugned before us and we find that the tribunal has approved thefactual finding recorded by the Commissioner of Income Tax(Appeals). The matter pertains to the applicability of theprovisions of Section 41(1) of the Act. The tribunal aftertaking note of the facts has dismissed the appeal filed by therevenue and the following finding has been rendered by thetribunal: “From the above it is evident that the letteris written by IWAI to IDBI. In this letter, IWAI hasconveyed the sanction of payment of interest subsidyamounting to Rs.2,12,07,878/- to IDBI in respect of loangranted to M/s. Vidada Inland Waterways Ltd. i.e. theassessee. The C.I.T.(A) in his order has arrived at thefinding that the subsidy was given by IWAI to IDBI andnot the assessee. The correspondence between IDBI andIWAI for claim of subsidy as well as grant of subsidysupports the finding of the CIT (A). The IDBI made theclaim of subsidy from IWAI and the interest subsidy wasgranted to IDBI, of course IDBI has to pass on the sameto M/s. Vivada inlan d Waterways Ltd., i.e. theassessee. Now as per agreement between the assessee andIDBI, the loan was sanctioned on an interest rate of 21%per annum. From time to time, IDBI debited theassessee’s account with the interest calculated @21%.The assessee also debited the same in its books ofaccount and claimed the expenditure thereof. When thesubsidy is granted to IDBI by IWAI, it credited to theaccount of the assessee on 18/4/2001. When the amount is credited to the account of the assessee, it was theremission of the liability of the interest which wasalready claimed as a deduction in the earlier years and,therefore, the C.I.T. (A) rightly held that theprovision of Sec.41(1) would be applicable when there isactual remission or cessation of liability and which wasduring the accounting year relevant to assessment year2002-03 and not in the year under consideration. In viewof the above, we entirely agree with the order of theC.I.T.(A) on this point as well. Accordingly, theRevenue’s appeal as well as grounds no. 1 to 4 of theassessee’s cross-objection are rejected.” From the above finding rendered by the tribunal we notethat the matter is entirely factual and the tribunal whileapproving the factual finding recorded by the CIT(A) has alsotaken note of the facts and re-appreciated the same and dismissedthe appeal filed by the revenue. Thus, we find that there is noquestion of law much less substantial question of law arising forconsideration in this appeal. Accordingly, the appeal (ITAT/11/2011) stands dismissed.Consequently, the connected application for stay (GA/77/2011) alsostands closed. (T.S. SIVAGNANAM, J.) (HIRANMAY BHATTACHARYYA, J.) S.Das /As