Itta/607/2013 Of The Commissioner Of Income Tax-Iv v. M/S. Nsl Power Infratech Limited

IN THE HIGH COURT OF JUDICATURE, ANDHRAPRADESH AT HYDERABAD THRUSDAY, THE NINETEENTH DAY OFDECEMBERTWO THOUSAND AND THIRTEEN PRESENT THE HON’BLE THE CHIEF JUSTICESRI KALYAN JYOTI SEN GUPTA AND THE HON'BLE SRI JUSTICE SANJAY KUMAR I.T.T.A. No.607 OF 2013 Between: The Commissioner of Income Tax-IV,Hyderabad. ..... Appellant AND M/s. NSL Power Infratech Limited, Opp: ICICI Bank, 8-2-684/2/A, Road No.12, Banjara Hills,Hyderabad .....Respondent The Court made the following : JUDGMENT:(per the Hon’ble the Chief Justice Sri K.J. Sengupta) This appeal is sought to be preferred against thejudgment and order of the learned Tribunal dated24.01.2013 in relation to the assessment year 2006-2007 on the following suggested question of law: Whether in the facts and circumstances of the case and inlaw, the Hon’ble ITAT is correct in concluding that assesseehas not derived any interest income from M/s. AdarshDevelopers Private Limited and thereby setting aside the orderof the CIT under Sec. 263 of the Income Tax Act, 1961,without appreciating that interest income had accrued to theassessee in terms of the agreement dated 19.03.2005 enteredinto by the assessee with Adarsh Developer Private Limited? We have heard Mr. J.V. Prasad, learned counsel forthe appellant and gone through the impugned judgment andorder of the learned Tribunal. Learned Tribunal has partlyallowed the appeal preferred by the assessee on facts. It isbetter to quote the language of the learned Tribunal. It readsas follows: “…After hearing both the parties and perusingthe record, we find that the company’s entireunsecured loan to Embassy got converted into sharecapital of Saphire all by virtue of the aforesaid writtenagreements and not any oral understanding. It appearsthat the company has not derived any interest fromM/s. Adarsh Developers Pvt. Ltd. As such, no interesthas been provided in the company’s books on theunsecured loan advanced to M/s. Adarsh DevelopersPvt. Ltd. Further, it is clear from the agreement that theunsecured loan shall carry a coupon rate of 4% perannum for the first quarter of the investment andthereafter, the company will reset the same to suchhigher level as may be mutually agreed among theshareholders. The word ‘shall’ only indicates that thereis no certainty and in this case the company has notderived any interest from M/s. Adarsh Developers Pvt.Ltd. We are, therefore, of the opinion that the order ofCIT is to be set aside and the assessee’s ground ofappeal on this issue is to be allowed. We orderaccordingly. In view of the aforesaid fact-finding, there is no scope to decide further by this court. The decision on law dependsupon the fact-finding. We found that the fact-finding arrivedat by the learned Tribunal matches with the provision of law.We do not need to decide anything further. Accordingly, wedismiss the appeal. No costs. As a sequel to the dismissal of the appeal, all thepending interim applications shall stand closed. ______________________ Kalyan Jyoti Sengupta, CJ. December 19, 2013MAS ______________ Sanjay Kumar, J.