Itta/49/2012 Of Commissioner Of Income Tax-Iii v. M/S Shriram Chits Private Ltd

IN THE HIGH COURT FOR THE STATE OF [TELANGAT.IA]AT HYDERABAD TUESDAY, THE SEVENTH DAY OF NOVEMBERTWO THOUSAND AND TWENTYTHREE PRESENT THE HON'BLE SRI JUSTICE P.SAM KOSHYANDTHE HON'BLE SRI JUSTICE N.TUKARAMJI l.T.T.A.Nos:403 of 201 0 : 49 and 346 ot 2O12: 141,458 and [563 ]of [2013:]154.460.648 of0 14: 423 ot 2O15: 612 of2016 and[98 ]of [20'l ][7] l.T.T.A.No.403 of 2010 lncome Tax Tribunal Appeal Under Section 260-A of the lncome Tax Act, [1961]arising out of the order of the lncome-Tax Appellate Tribunal, [Hyderabad ]Bench [' ][B']Hyderabad in ITA No.1160/ Hydl 2O04, dated 31-08-2007 Assessment Year [2001-]2002 Wefefied against the Order of the Commissioner of [lncome ]Tax [(Appeals)-lV,]Hyderabad Appeal No.89/AC-3(1yC|T(A)-|V/2OO4-OS dated:27-09-2004, [preferred]against the Order of the Assistant Commissioner of lncome Tax 3('l), [Hyderabad]PAN/GIR No.AAFCS49 1 6D I S-1 22, dated 31 {3{004. BETWEEN: The Commissloner of lncome Tax{ll, lT Towers, Masab Tank, Hyderabad. ...Appellant AND M/s. Shriram Chits (P) Ltd., 478, lll Floor, Anand Estates, Opp: lndian Bank,Liberty Road, Hyderabad - 29. ...Respondent Counsel for the Appellant: Mr. J.V. PRASAD, Sr. SC FOR lT DEPARTMENTCounsel for the Respondent: Mr. SIVARAMA},I t.T.T.A.No.49 ot 2012 lncome Tax Tribunar Appear Under seclion 260-4 of the rnmme Tax Act, 1961arising out of the order of the lncome Tax Appellate Tribunal, Hyderabad Bench , B ,Hyderabad in ITA No.720l Hyd/ 2010, dated 11{3-201 1 Assessment year 2oor -2008 preferred against the Order of the Commissioner of lncome Tax (Appeals)_lv,Hyderabad preferred against the order of the Additional commissioner of lncome_Tax Range - 3, Hyderabad Appeal No.156/Addt.CtT_3/CtT (AltV/2009-10, dated 27-11-2009. BETWEEN: The Commissioner of lncome Tax-lll, lT Towers, A.C.Guards, Hyderabad ...Appellant AND Jt{/s. [ptrlaq ][Chits (P) Ltd., ][478, ][ilt ][Ftoor, ][Anand ][Esrates, ]Opp: tndian Bank,Liberty Road, Hyderabad - 29. ...Respondent Counsel for the Appellant: Mr. J.V. pRASAD, Sr. SC FOR tT DEPARTMENTCounsel for the Respondent: Mr. SIVARAMAN l.T.T.ANo.3462012 lncome Tax Tribunal Appeal under section 260-A of the rncome Tax Act, 1961arising out of the order of the lncome Tax Appellate Tribunal, Hyderabad Bench , B ,arising out of the order of the lncome Tax Appellate Tribunal, Hyderabad Bench , B ,Hyderabad in lrA No.852/ Hytt/ 2008, dated 30{4-2010 Assessment year 2oo4-2005 prefened against the Order of the Commissioner of lncome Tax (Appeals)_lV,2005 prefened against the Order of the Commissioner of lncome Tax (Appeals)_lV,Hvderabad in Appear No.o499/Dc-3(1ycrr(A)-rv/2003-o7 dated 22-02-2008Appear No.o499/Dc-3(1ycrr(A)-rv/2003-o7 dated 22-02-2008preferred against the order of the Deputy commissioner of rncome-Tax circre-3(1),Hyderabad PAN/G|R No. / SH_1 5 dated 29_12_2006. BETWEEN: The Commissioner of lncome Tax-lll, lT Towers, A_C.Guards, Hyderabad ...Appellant AND M/s. Shriram Chits (P)Ltd.,478, lfl Floor, Anand Estates, Opp: lMian Bank,Liberty Road, Hyderabad - 29. ...Respondent Counsel for the Appellant: Mr. J.V. PRASAD, Sr. SC FOR lT DEPARTMENTCounsel for the Respondent: Mr. SIVARAMAN l.T.T.ANo.'|41 of 2013 lncome Tax Tribunal Appeal Under Section 260-4 of the lncome Tax Act, 1961arising out of the order of the lncome Tax Appellate Tribunal, Hyderabad Bench ' B 'Hyderabad in ITA No.153/ Hydl 2007, dated 30-04-2010 Assessment Year 2OO2-2003 preferred against the Order of the Cornmissioner of lncome Tax (Appeals)-lV,Hyderabad in Appeal No.0290/DC-3(1yC.l.T.(A)-lV/2006-07 dated 30-11-2006preferred against the Order of the Deputy Commissioner of lncome-Tax Circle-3(1),Hyderabad PAN/Gl R No.AAFCS491 6D I 5-122 dated'1 6-05-2005. BETWEEN: The Commissioner of lncome Tax-lll, lT Towers, A.C.Guards, Hyderabad. ...Appellant AND Counsel for the Appellant: Mr. J.V. PRASAD, Sr. SC FOR lT DEPARTMENTCounsel for the Respondent: Mr. SIVARAMAN l.T.T.ANo.'|41 of 2013 lncome Tax Tribunal Appeal Under Section 260-4 of the lncome Tax Act, 1961arising out of the order of the lncome Tax Appellate Tribunal, Hyderabad Bench ' B 'Hyderabad in ITA No.153/ Hydl 2007, dated 30-04-2010 Assessment Year 2OO2-2003 preferred against the Order of the Cornmissioner of lncome Tax (Appeals)-lV,Hyderabad in Appeal No.0290/DC-3(1yC.l.T.(A)-lV/2006-07 dated 30-11-2006preferred against the Order of the Deputy Commissioner of lncome-Tax Circle-3(1),Hyderabad PAN/Gl R No.AAFCS491 6D I 5-122 dated'1 6-05-2005. BETWEEN: The Commissioner of lncome Tax-lll, lT Towers, A.C.Guards, Hyderabad. ...Appellant AND M/s. Shriram Chits (P) Ltd.,478,lll F.loor, Anand Estates, Opp: lndian Bank,Liberty Road, Hyderabad - 29. ...Respondent Counsel for the Appellant: Mr. J.V. PRASAD, Sr. SC FOR lT DEPARTMENTCounsel for the Respondent: Mr. SIVARAMAN l.T.T.A.No.458 of 2013 lncome Tax Tribunal Appeal Under Section 260-A of the lncome Tax Act, 1961arising out of the order of the lncome Tax Appellate Tribunal, Hyderabad Bench ' B 'Hyderabad in ITA No.390/ Hydl 2012, dated 24-08-2012 Assessment Year 2008-2009 [preferred ]against the Order of the Commissioner of lncome Tax (Appeals)-lV,arising out of the order of the lncome Tax Appellate Tribunal, Hyderabad Bench ' B 'Hyderabad in ITA No.390/ Hydl 2012, dated 24-08-2012 Assessment Year 2008-2009 [preferred ]against the Order of the Commissioner of lncome Tax (Appeals)-lV,Hyderabad in Appeal No.3s4/Addl.ClT R-3/C|T(A)-|V/10-1 1 dated 3O-12-2O11 : 1 tJ I preferred against the Order of the Additional Commissioner of lncome Tax Range-3,Hyderabad PAN/GIR No. / SH-1 5 dated 24-12-2010. BETWEEN: . The Commissioner of lncome TaxJll, lT Towers, A.C.Guards, Hyderabad. ...Appellant AND M/s. Sri Ram Chits Private Limited, No-44, Sarojini Devi Road, Secunderabad. ...Respondent Counsel for the Appellant: Mr. J.V. PRASAD, Sr. SC FOR lT DEPARTMENTCounsel for the Respondent: Mr. SIVARAMAN !-T.T.A.No.563 of ft13 lncome Tax Tribunal Appeal Under Section 260-A of the lncome Tax Act, 1961arising out of the order of the lncome Tax Appellate Tribunal, Hyderabad Bench ' B 'Hyderabad in ITA No.975/ Hydl 2012, dated ['12-10-2012 ]Assessment [year ]2OOg-2010 preferred against the Order of the Commissioner of lncome Tax (Appeals)-lV,Hyderabad in Appeal No.21o/JCIT 3( l yClT(A)-lV/2Ol 1-12 dated 3O-O3-2O12preferred against the Order of the Joint Commissioner of lncome Tax (OSD) Range-3(1), Hyderabad PAN/GIR No. i SH-15 dated 23-11-2011. BETWEEN:The Commissioner of lncome Tax-lll, lT Towers, A.C.Guards, Hyderabad. ...Appellant ANDM/s. Sri Ram Chits Private Limited3-6-478, 3'd Floor, Anand Estates, Opp: lndianBank, Liberty Road, Himayathnagar, Hyderabad - 500 029. ...Respondent Counsel for the Appellant: Mr. J.V. PRASAD, Sr. SC FOR tT DEPARTMENTCounsel for the Respondent: Mr. SIVARAMAN t, tIIII II t iI l.T.T.A.No.154 of 2014 lncome Tax Tribunal Appeal UMer Section 260-A of the lncome Tax Act, 1961arising out of the order of the lncome Tax Appellate Tribunal, Hyderabad Berrch ' A'Hyderabad in ITA No.651/HYD|2O12, dated 05-04-2013 Assessment Year 2OO9-2010 preferred against the Order of the Commissioner of lncome Tax (Appeals)-lV,Hyderabad in Appeal No.21OIJCIT 3(1yClT(A)-lV/2011-'12 dated N-03-2O12Hyderabad in ITA No.651/HYD|2O12, dated 05-04-2013 Assessment Year 2OO9-2010 preferred against the Order of the Commissioner of lncome Tax (Appeals)-lV,Hyderabad in Appeal No.21OIJCIT 3(1yClT(A)-lV/2011-'12 dated N-03-2O12preferred against the Order of the Joint Commissioner of lncome Tax (OSD) Range-3(1), Hyderabad PAN/GIR No.AAFCS4S16D / SH-15 dated 23-11-2011.3(1), Hyderabad PAN/GIR No.AAFCS4S16D / SH-15 dated 23-11-2011. Between: i' The Commissioner of lncome Tax-lll, lT Towers, A.C.Guards, Hyderabad. ...Appellant AND Between: i' The Commissioner of lncome Tax-lll, lT Towers, A.C.Guards, Hyderabad. ...Appellant AND M/s. Sri Ram Chits Private Limited, 3-6-478, 3'd Floor, Anand Estates, Opp:lndian Bank, Liberty Road, Himayathnagar, Hyderabad - 500 029. ...Respondent Counsel for the Appellant: Mr. J.V. PRASAD, Sr. SC FOR lT DEPARTMEiITCounsel for the Respondent: Mr. SIVARAMAN l.T.T.A.No.460 of 2014 lncome Tax Tribunal Appeal Under Section 260-4 of the lncome Tax Act, ['1961]arising out of the order of the lncome Tax Appellate Tribunal, Hyderabad Bench 'A'Hyderabad in ITA No.1049 l{ydl 2O13, dated 06-12-2013 Assessment Year 2O10-2011 prcfefted against the Order of the Commissioner of lncome Tax (Appeals)-lV,Hyderabad in Appeal No.208/DC-3( 1)lClT(A)-lVl12-13 dated 10-05-2013 preferredagainst the Order of the Deputy Commissioner of lncome Tax Circle-3(1),Hyderabad PAN/GIR No. / SH-1 5 dated 07 -12-2012. Between: The Commissioner of lncome Tax-lll, lT Towers, A.C.Guards, Hyderabad. ..AppellanURespondent : 1 ! ;IiIIiI I I I AND M/s. Sriram Chits Private Limited,3'd Floor, Anand Estates, Opp: lndian Bank,Liberty Road, Himayathnagar, Hyderabad - 500 029. ...RespondenUAppellant Counsel for the Appellant: Mr. J.V. PRASAD, Sr. SC FOR lT DEPARTMENTCounsel for the Respondent: Mr. SIVARAMANl.T.T.ANo.648 ot 2O14 lncome Tax Tribunal Appeal Under Section 260-4 of the lncome Tax Act, 1961,arising out of the order of the lncome Tax Appellate Tribunal, Hyderabad Bench [, ]A Hyderabad in ITA No.1142l Hydl 2013, dated 06-12-2013 Assessment year 20.t0-2011 preferred against the Order of the Commissioner of lncome Tax (Appeals)-lV,Hyderabad in Appeal No.208/DC-3(1)/ClT(A)-lV/12-13 dated ['10-05-2013 ]preferredagainst the Order of the Deputy Commissioner of lncome Tax Circle-3(1),Hyderabad PAN/GIR No. / SH-l5 dated 07-12-2O12. Between: '' The Commissioner of lncome Tax-lll, lT Towers, A.C.Guards, Hyderabad. ...AppellanURespondent AND M/s. Sriram Chits Private Limited, 3d Floor, Anand Estates, Opp: lndian Bank,Liberty Road, Himayathnagar, Hyderabad - 500 029. ...RespondenUAppellant Counsel for the Appellant: Mr. J.V. PRASAD, Sr. SC FOR lT DEPARTMENTCounsel for the Respondent: Mr. SIVARAMAN .T A.No.423 of 2015 lncome Tax Tribunal Appeal Under Section 260-A of the lnmme Tax Act, 1961arising out of the order of the tncome Tax Appellate Tribunal, Hyderabad Bench 'A,Hyderabad in ITA No.809/ Hydl 2O14, dated 29-10-20.14 Assessment yeat 2011-2O12 preferred against the Order of the Commissioner of lncome Tax (Appeals)-lV,Hyderabad in Appeal No.437lDC-3( 1)/CtT(A)-tV/13-i 4 dated 15-04-2O14 preferred against the Order of [the ][Depr.rty ][Commissioner ][of ][lncome ][Tax ][Circle-3(1)']Hyderabad PAN/GI [R No.AAFCSz+9 16D ][dated ][2a41 ][-2O ][1 ][4.] Between: Pr. Commissioner of [lncome ][Tax-lll, ][lT Towers, ][A.C'Guards, ][Hyderabad'] ...AppellanUResponde [nt] AND M/s. Shriram [Chits Private Limited, ][36478, ][3d ][Floor, Anand EsIates, Opp:] inOian Bank, Liberty [Road, Himayathnagar, Hyderabad ]- [500 ][029'] il.l. I "ResPondenUAPPellant i 'Counsel for the Appellant: Mr. J.V. PRASAD, [Sr. ] [lT DEPARTMENT] i iCounsel for the Respondent: [Mr. ] I.T.T.ANo.612 of [2016] lncome Tax Tribunal [Appeal Under Section 260-A ][of the ][lncome Tax ][Act, ][1961]arising out of [the ][order ][of ][the ][lncome ][Tax Appellate ][Tribunal, ][Hyderabad ][Bench ' ][B']in ITA [No.152 ][lHydt 2007, ][dated ][30{4-2010 ][Assessment ][Year ][2003-]Hyderabad 2004 [preferred against ][the Order of the Commissioner ][of ][lncome ][Tax ][(Appeals)-lV']HyderabadinAppealNo.olSg/Addl.CIT-3/C|T(A)-|V/2008{9dated13-03-2009preferred against the order [of ]the [Additional commissioner of ][lncome ][Tax ][Range ][-3,]Hyderabad [R No.AAFCS491 ][6D ][/SH-1 ][5 ][dated 29-09-2008'] I !. I Between: 1II Commissioner of [lncome ][Tax-lll, ][lT Towers, ][A.C'Guards, ][Hyderabad] i iCounsel for the Respondent: [Mr. ] I.T.T.ANo.612 of [2016] lncome Tax Tribunal [Appeal Under Section 260-A ][of the ][lncome Tax ][Act, ][1961]arising out of [the ][order ][of ][the ][lncome ][Tax Appellate ][Tribunal, ][Hyderabad ][Bench ' ][B']in ITA [No.152 ][lHydt 2007, ][dated ][30{4-2010 ][Assessment ][Year ][2003-]Hyderabad 2004 [preferred against ][the Order of the Commissioner ][of ][lncome ][Tax ][(Appeals)-lV']HyderabadinAppealNo.olSg/Addl.CIT-3/C|T(A)-|V/2008{9dated13-03-2009preferred against the order [of ]the [Additional commissioner of ][lncome ][Tax ][Range ][-3,]Hyderabad [R No.AAFCS491 ][6D ][/SH-1 ][5 ][dated 29-09-2008'] I !. I Between: 1II Commissioner of [lncome ][Tax-lll, ][lT Towers, ][A.C'Guards, ][Hyderabad] ...Arpellant AND liil/s. Sri Ram Chits [Private Limited, 3-6-478, ][lll ][Floor, Anand Estates, Liberty]Road, Hyderabad - [500 ][029.]Road, Hyderabad - [500 ][029.] ...Respondent Counsel for the Appellant: [Mr. ][J'V. ][PRASAD, ][Sr' ] [lT ] Counsel for the Respondent: [Mr. SIVARAMAN] l.T.T.ANo.98 ot 2017 lncome Tax Tribunal Appeal Under Section 260-4 of the lncome Tax Act, [.1961]arising out of the order of the lncome Tax Appellate Tribunal, Hyderabad Bench [, ]A ,Hyderabad in lrA No.l187/ Hydl 2o1s, dated 08-08-2016 Assessment yeat 2012-2013 preferred against the Order of the Commissioner of lncome Tax (Appeals)_3,2013 preferred against the Order of the Commissioner of lncome Tax (Appeals)_3,Hyderabad in Appeal No: ITA.No.142SlClT(A)-3,Hyd/14-15 dated 28-07 _2015preferred against the order of the Deputy commissioner of lncome Tax circle-3( 1),Hyderabad PAN/G I R No.AAFCS4g 1 6 D dated 3 1 -1 2-201 4.Hyderabad PAN/G I R No.AAFCS4g 1 6 D dated 3 1 -1 2-201 4. Between: Commissioner of lncome Tax-lll, IT Towers, A.C.Guards, Hyderabad. ...Appellant AND M/s. Sri Ram Chits Private-Limited, 3-6-428, lll Floor, Anand Estates, LibertyRoad, Hyderabad - 500 029.Road, Hyderabad - 500 029. ...Respondent Counsel for the Appellant: Mr. J.V. PRASAD, Sr. SC FOR lT DEPARTMENTCounsel for the Respondent: Mr. SIVARAMANThe Court delivered the following: COMMON JUDGMENT THE I{ON'BLE SRI JUSTICE P.SAM KOSI{Y AND THE HON'BLE SRI JUSTICE N.TUKARAMJI I.T.T.A. Nos.403 of 2010. 49. 346 of 2012.141. 458. 563 of2013.154.460 648 of 2014 423 of 2015 612 of20I6 and 98 of2017 COMMON JUDGMENT:(per Hon'ble Sri Justice p.SAM KOSHy) Heard Mr. J.V.Prasad, learned Senior Standing Counsel for theappellants and Mr.Sivaraman, learned counsel lor the respondent.Perused the material available on record. 2. These are appeals which were admitted by the Division Bench ofthis High Court on the following substantial quesrion of [aw:this High Court on the following substantial quesrion of [aw: [. Whether on the facts and in the circurnstancesof the case, when the assessee did not satisly theconditions under Sections 36(1)(vii) read wirhSection 36(2) of the Act with regard to his ctaim ofbad debts, whether the finding of the Tribunaldismissing the appeal preferred by the Revenue andupholding the claim of the assessee in toto, issustainable in law?of the case, when the assessee did not satisly theconditions under Sections 36(1)(vii) read wirhSection 36(2) of the Act with regard to his ctaim ofbad debts, whether the finding of the Tribunaldismissing the appeal preferred by the Revenue andupholding the claim of the assessee in toto, issustainable in law? 2. Whether the finding of the Tribunal upholdingthe claim of the assessee with regard to royaltypayments without considering the collcurr€utreasons of the authorities is sustainable in law?the claim of the assessee with regard to royaltypayments without considering the collcurr€utreasons of the authorities is sustainable in law? i. Whether the finding of the Tribunal upholdingthe claim of the assess€e with regard to"comnrission on removed clrits" rvithoutthe claim of the assess€e with regard to"comnrission on removed clrits" rvithout 2. Whether the finding of the Tribunal upholdingthe claim of the assessee with regard to royaltypayments without considering the collcurr€utreasons of the authorities is sustainable in law?the claim of the assessee with regard to royaltypayments without considering the collcurr€utreasons of the authorities is sustainable in law? i. Whether the finding of the Tribunal upholdingthe claim of the assess€e with regard to"comnrission on removed clrits" rvithoutthe claim of the assess€e with regard to"comnrission on removed clrits" rvithout appreciating the [conculrent ][reasoning ][of ][the]department is sustainable [in ][law?] 3. Today, when [the ][matters rvere ][taken ][up for ][hearing, ][the ][leamed]counsel for the appetlant [produced before the ][couft ][an ][order ][passed ][by]the Division Bench of [this ][very ][High Courl ][on identical ][set ][of ][appeals]by the Revenue which stood [decided on 09.06.2023. ][The ][leading ][case]being ITTA.No.307 of [2005 and other ][connected ][appeals, wherein,]these very substantial [question ]of [larv ][framed ][were ][extensively]considered by the Division [Bench ][of ][this ][[{igh ][Court ][and ][has ][rejected]the appeal of the Revenue [answering ][thc ][questions ][of ][law ][in ][favour ][of]the assessee. 4. Given the fact that [the ][matter already ][stands ][decided ][by ][the]Division Bench of this [very High ][Court ][in ][thc ][aloresaid batch ][matters]which stood decided on 09.06.2023, [we ][are ][inclined ][to ][endorse the]same view. Moreover, this [Bench ][again ][on ][02.11.2023 ][had ][the]occasion of considering [the ][similar ][appeals ][of ][the ][Revenue ][i'e',]ITTA.Nos.614 and 630 of [2018, ][wherein' ][we ][had ][already ][endorsed ][the]view rendered by the [Division'Bcnch ][in ][tT-l'A.Nos.307 ][of ][2005 ][and]batch, decided on 09.06.202-1. i I .: 1 5. In view of the same, the instant appeals also in the light of the decision rendered by the Division Bench of this High Court on09.06.2023 stands dismissed with the questions of law being answered in favour of the assessee. Thus, all the appeals lait and are accordinglyrejected. 6. As a sequel, miscellaneous applications pending if any, shall stand closed. No order as to costs. SD/- B.S. CHIRANJEEVIJOINT REGISTFAR//Lr/SECTION OFFICER //TRUE COPY// To,1. The lncome Tax [Appellate ][Tribunal, Hyderabad ][Bench ][' ][A' ][Hyderabad]1. The lncome Tax [Appellate ][Tribunal, Hyderabad ][Bench ][' ][A' ][Hyderabad] 2. The lncome Tax [Appellate ][Tribunal, Hyderabad ][Bench ][' B ][' ][Hyderabad] 3. The Commissioner [of lncome Tax ][(Appeals)-lV, ][Hyderabad.] 4. The Commissioner of [lncome ][Tax ][(Appeals)-3, ][Hyderabad.] 5. The Deputy Commissioner [of ][lncome ][Tax ][Circle-3(1 ]), [Hyderabad'] 6. The Additional [Commissioner of ][lncome ][Tax Range -3, Hyderabad.] 7. The Joint Commissioner [of ][lncome ][Tax ][(OSD) ][Range-3(1 ][), Hyderabad]-4. One CC tO MT. J.V. [PRASAD, ] IOPUC]-4. One CC tO MT. J.V. [PRASAD, ] IOPUC] 9, One CC to [Mr. ][SIVARAIvIAN, ][Advocate ] 1O.One CC to [SRI VEDULA SRINIVAS, ][Advocate ] i t.Two CD Copies kam KMS HIGH COURT PSK, J&$NTR, J-tDATED: 0711112023,!: [r]Il! {[r{E][ srai€],JoBJlr2m i,L*+OES PATS PATPAT COMMON JUDGMENTOES PATS PATPATilTTA.Nos.403 of 2010; 49 and 346 of 2012: 141.458./ 563 of 2013154 460648 of 2014 423 of 2015 612Iof2016and98 of2017/ THESE APPEALS ARE REJECTED \?$1rb