Ii. Whether, On The Facts And Circumstancesof The Case And In Law, The Tribunal Was Legallyjustified In Not Appreciating The Principle Laiddown In The Case Of C v. Abhishek Industriesltd., [Reported In 286 Itr 1 (P&H)] Whiledeleting The Interest Disallowance?

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED : 23.02.2021CORAM THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAMandTHE HONOURABLE MS.JUSTICE R.N.MANJULA T.C.A.No.465 of 2019 Principal Commissioner of Income TaxCentral 1,No.108, Nungambakkam High Road,Chennai-600 034... Appellant/Respondent-vs- M/s.TVH Energy Resources Pvt. Ltd.,No.16/17, 3[rd] Cross Street,TVH Novella, RA Puram, Chennai-600 028.PAN: AAC CT 8802 G PAN: AAC CT 8802 G.. Respondent/AppellantAppeal under Section 260A of the Income Tax Act, 1961againsttheorderdated08.11.2018,madeinI.T.A.No.3183/Chny/2017 on the file of the Income Tax AppellateTribunal 'D' Bench, Chennai for the assessment year 2012-13filed against the order of Commisioner of Income Tax (Appeals)-18,Chennai 34 in ITA.NO.39/15-16 Dated 22.09.2017 preferredagainst the order of Assessment for the Year 2012-2013 PANNO.AACCT8802G Dated 31.02.2015 passed by the Deputy Commisionerof Income Tax central circle1(2),Chennai 34. For Appellant:Mr.T.R.Senthil Kumar,Senior Standing Counselassisted by Ms.K.G.Usha Rani,Junior Standing CounselFor Respondent :Mr.G.BaskarJUDGMENT (Judgment of the Court was delivered by T.S.Sivagnanam, J.) This appeal by the Revenue, filed under Section 260A of theIncome Tax Act, 1961 (hereinafter referred to as “the Act”), isdirected against the order dated 08.11.2018, made inI.T.A.No.3183/Chny/2017 passed the Income Tax Appellate Tribunal'D' Bench, Chennai (for brevity “the Tribunal”) for theassessment year 2012-13. 2.The appeal was admitted on 16.07.2019, on the followingsubstantial questions of law:-“i. Whether the Tribunal is correct in lawin deleting the enhancement of addition by the https://hcservices.ecourts.gov.in/hcservices/ CIT(A) on account of the assessee divertinginterest bearing funds to its sister concernwithout charging interest by holding that onlyif interest bearing funds are deployed outsidethe business of the assessee without recoveringinterest, such additions can be made withoutgiving any finding as to the business purpose ofthe assessee in diverting such interest bearingfunds? ii. Whether, on the facts and circumstancesof the case and in law, the Tribunal was legallyjustified in not appreciating the principle laiddown in the case of CIT vs. Abhishek IndustriesLtd., [reported in 286 ITR 1 (P&H)] whiledeleting the interest disallowance? iii. Whether the Tribunal was correct in lawin deleting the addition of Rs.7,60,22,100/-made under Section 69C of the Act withoutfollowing its earlier decision in the assessee'sown case for the earlier assessment year 2011-12wherein the case was remitted back to theAssessing Officer for re-adjudication? andiv. Whether the Tribunal was legally rightin not appreciating the ratio of the Hon'bleSupreme Court's decision in the case ofRadhasoami Satsung vs. CIT [reported in 193 ITR321] to the effect that where a fundamentalaspect permeating through the differentassessment years has been found as a fact oneway or the other and parties have allowed thatposition to be sustained by not challenging theorder, it would not be at all appropriate toallow the position to be changed in a subsequentyear?” 3.Heard Mr.T.R.Senthil Kumar, learned Senior StandingCounsel assisted by Ms.K.G.Usha Rani, learned Junior StandingCounsel for the appellant/Revenue and Mr.G.Baskar, learnedcounsel for the respondent/assessee. 4.It may not be necessary for this Court to examine thefactual position, in the light of the subsequent development.After the appeal was disposed of by the Tribunal by the impugnedorder dated 08.11.2018, the Revenue filed miscellaneous petitionin M.P.No.94/Chny/2019 before the Tribunal on the ground thatthe figures adopted by the Tribunal in respect of share capitalwere incorrect and thereby, the working of non-interest bearingfunds is also incorrect. Pointing out the above, the Revenueprayed for fresh adjudication of the matter. 3.Heard Mr.T.R.Senthil Kumar, learned Senior StandingCounsel assisted by Ms.K.G.Usha Rani, learned Junior StandingCounsel for the appellant/Revenue and Mr.G.Baskar, learnedcounsel for the respondent/assessee. 4.It may not be necessary for this Court to examine thefactual position, in the light of the subsequent development.After the appeal was disposed of by the Tribunal by the impugnedorder dated 08.11.2018, the Revenue filed miscellaneous petitionin M.P.No.94/Chny/2019 before the Tribunal on the ground thatthe figures adopted by the Tribunal in respect of share capitalwere incorrect and thereby, the working of non-interest bearingfunds is also incorrect. Pointing out the above, the Revenueprayed for fresh adjudication of the matter. 5.The Tribunal heard the Revenue as well as the assessee andby order dated 30.08.2019, allowed the miscellaneous petitionfiled by the Revenue and remitted the matter back to the file ofthe Assessing Officer with specific observations. The operativeportion of the order reads as follows:- “6.Admittedly, the assessee has advancedonly Rs.74,59,89,006/-. The assessee had non-interest bearing funds of Rs.70.18 crores, whichincludes share capital at Rs.52.10 crores andreserves & surplus of Rs.18.08 crores. Byfiling detailed written submissions by the ld.Counsel for the assessee, both parties have dulyagreed that the interest bearing fund advancedto sister concern was only Rs.4.41 crores [74.59crores - 70.18 crores]. Accordingly, interestdisallowance has to be made on the amount ofRs.4.41 crores. Thus, we remit the matter backto the file of the Assessing Officer todetermine the interest only. Accordingly, theorder of the Tribunal stands rectified.” 6.We are informed by Mr.G.Baskar, learned counsel for theassessee that the assessee has accepted the order passed by theTribunal dated 30.08.2019, and the assessee has not preferredany appeal. 7.In the light of the above, there would not be anynecessity to answer the substantial questions of law framed forconsideration in this appeal. //True Copy// Sub Assistant Registrar abrToTHE INCOME TAX APPELLATE TRIBUNAL 'D' BENCH, CHENNAI.2.PRINCIPAL COMMISSIONER OF INCOME TAXCENTRAL 1,NO.108, NUNGAMBAKKAM HIGH ROAD,CHENNAI-600 034. https://hcservices.ecourts.gov.in/hcservices/