M/S.estra Enterprises Pvt. Ltd.,Chennai-19 v. The Assistant Commissioner Of Income Tax (Osd), Corporaterange-2, Chennai-34

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 17.12.2020 CORAM THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAMandTHE HONOURABLE MRS.JUSTICE V.BHAVANI SUBBAROYAN Tax Case Appeal Nos.361 & 362 of 2019& CMP.Nos.12328 & 12337 of 2019 M/s.Estra Enterprises Pvt. Ltd.,Chennai-19...Appellant inboth TCAs Vs The Assistant Commissioner of Income Tax (OSD), CorporateRange-2, Chennai-34....Respondentin both TCAs APPEALS under Section 260A of the Income Tax Act, 1961against the common order dated 27.3.2019 passed by the IncomeTax Appellate Tribunal, Madras 'C' Bench, Chennai made inI.T.A.Nos.2950 and 2951/Chny/2018 respectively for theassessment years 2013-14 and 2014-15. Appeals against the order dated 28/09/2018 passed by theAppellate Tribunal, The Income Tax Appellate Tribunal 'C' Bench,Chennai, made in Appeal No. 2950 of 2018, 2951 of 2018 againstthe order dated 22.08.2018 passed by the Commissioner of IncomeTax (Appeals)-6, Income Tax Department, Chennai, made inITA.No.584/CIT(A)-4/2016-17 and ITA.No.389/CIT (A)-6/2016-17against the order made in PAN.No. for the AssessmentYear 2013—14, 2014-15 against the Assessment order dated30.03.2016, 20/12/2016 passed by the Assistant Commissioner ofIncome Tax (OSD), Chennai made in PAN.No. for theAssessment Year 2013-14, 2014-15. For Appellant : Mr.M.SwaroopFor Respondent: Mr.Karthik Ranganathan, SC COMMON JUDGMENT(Judgment was delivered by T.S.SIVAGNANAM,J) These appeals have been filed by the assessee under Section260A of the Income Tax Act, 1961 ('the Act' for brevity)challenging the common order dated 27.3.2019 made in https://hcservices.ecourts.gov.in/hcservices/ I.T.A.Nos.2950 and 2951/ Chny/2018 on the file of the Income TaxAppellate Tribunal, Chennai, 'C' Bench ('the Tribunal' forbrevity) respectively for the assessment years 2013-14 and 2014-15. 2. The above appeals were admitted on 18.6.2019 on thefollowing substantial questions of law: “i. Whether the Income Tax AppellateTribunal erred in treating the sum ofRs.3,83,09,717/- and Rs.11,05,61,946/- beinginterest income earned by the appellantduring the project stage as 'income fromother sources ? ii. Whether the Income Tax AppellateTribunal erred in not considering the factthat interest income had direct nexus withthe expenditure related to the project,which has been capitalized ? iii. Whether the Income Tax AppellateTribunal erred in not following the judicialdiscipline that if the income earned isdirectly attributable to the projectexpenditure capitalized, such income can becapitalized as relatable expenditure ? iv. Whether the Income Tax AppellateTribunal erred in passing the impugned orderby wrongly invoking Section 145(3) of theAct when the essential ingredients were notsatisfied ? Andv. Whether the Income Tax AppellateTribunal erred in not following theaccounting standards and the guidance notesissued by the ICAI in holding income earnedduringpre-commencementofcommercialoperations and directly related to theproject need to be adjusted with the relatedproject expenditure?” 3. We have heard Mr.M.Swaroop, learned counsel appearingfor the appellant/assessee and Mr.Karthik Ranganathan, learnedStanding Counsel appearing for the respondent/Revenue. 4. The learned counsel on behalf of the appellant/assesseesubmitsthattheassesseealreadyfiledthedeclaration/undertaking under the Vivad Se Vishwas Scheme on15.9.2020 and is awaiting orders to be passed in Form No.3. 5. In the light of the subsequent event, the CompetentAuthority shall process the applications/declarations inaccordance with the Direct Tax Vivad Se Vishwas Act, 2020 (Act 3of 2020) and pass appropriate orders as expeditiously as https://hcservices.ecourts.gov.in/hcservices/ 3. We have heard Mr.M.Swaroop, learned counsel appearingfor the appellant/assessee and Mr.Karthik Ranganathan, learnedStanding Counsel appearing for the respondent/Revenue. 4. The learned counsel on behalf of the appellant/assesseesubmitsthattheassesseealreadyfiledthedeclaration/undertaking under the Vivad Se Vishwas Scheme on15.9.2020 and is awaiting orders to be passed in Form No.3. 5. In the light of the subsequent event, the CompetentAuthority shall process the applications/declarations inaccordance with the Direct Tax Vivad Se Vishwas Act, 2020 (Act 3of 2020) and pass appropriate orders as expeditiously as https://hcservices.ecourts.gov.in/hcservices/ possible. The assessee is given liberty to restore these appealsin the event the ultimate decision to be taken on thedeclarations filed by the assessee under Section 4 of the saidAct is not in favour of the assessee. If such a prayer is made,the Registry shall entertain the prayer without insisting uponany applications to be filed for condonation of delay inrestoration of the appeals and on such request made by theassessee by filing miscellaneous petitions for restoration, theRegistry shall place such petitions before the appropriateDivision Bench for orders. 6. The tax case appeals stand disposed of with theaforementioned liberty. Consequently, the substantial questionsof law framed are left open. No costs. Consequently, theconnected CMPs are closed. Sd/- Assistant Registrar //True Copy// To Sub Assistant Registrar 1.The Income Tax Appellate Tribunal, 'C' Bench, Chennai. 2.The Assistant Commissioner of Income Tax (OSD), Corporate Range-2, Chennai-34. 3.The Commissioner of Income Tax (Appeals)-6, Chennai. 4.The Deputy Commissioner (Appeals) of Income Tax, Chennai. Chennai. 5.The Commissioner of Income Tax (Appeals), Chennai. Chennai. Copy ToThe Sub Assistant Registrar,Main (AE),High Court, Madras. RS RLD(CO)GN(19/01/2021) TCA.Nos.361 & 362 of 2019and CMP.Nos.12328 & 12337 of 2019 https://hcservices.ecourts.gov.in/hcservices/