Pr. Commissioner Of Income Tax-7 v. Rajdarbar Heritage Venture Ltd. (Formerlyknown As Global Heritage Venture Ltd

$~S-53&54 IN THE HIGH COURT OF DELHI AT NEW DELHI +ITA 376/2022 PR. COMMISSIONER OF INCOME TAX-7..... AppellantThrough:Mr.Puneet Rai, Sr.Standing Counselwith Ms.Adeeba Mujahid, Jr.StandingCounselandMr.NikhilJain,Advocate. versus RAJDARBAR HERITAGE VENTURE LTD. (FORMERLYKNOWN AS GLOBAL HERITAGE VENTURE LTD.) ..... Respondent Through:None. +ITA 377/2022 PR. COMMISSIONER OF INCOME TAX-7..... AppellantThrough:Mr.Puneet Rai, Sr.Standing Counselwith Ms.Adeeba Mujahid, Jr.StandingCounselandMr.NikhilJain,Advocate. versus RAJDARBAR HERITAGE VENTURE LTD. (FORMERLYKNOWN AS GLOBAL HERITAGE VENTURE LTD.) ..... Respondent Through:None. Date of Decision: 06[[th]]October, 2022 %Date of Decision: 06[[th]]CORAM:HON'BLE MR. JUSTICE MANMOHANHON'BLE MS. JUSTICE MANMEET PRITAM SINGH ARORA J U D G M E N T MANMOHAN, J (Oral): CM APPL.43152/2022 in ITA 376/2022 (Exemption)CM APPL.43154/2022 in ITA 377/2022 (Exemption) 1.Allowed, subject to all just exceptions. 2.Accordingly, the applications stand disposed of.CM APPL.43153/2022 in ITA 376/2022CM APPL.43155/2022 in ITA 377/2022 3.Keeping in view the averments in the applications, the delay in filingthe present appeals is condoned. 4.Accordingly, the applications stand disposed of.ITA 376/2022ITA 377/2022 5.Present Income Tax Appeals have been filed challenging the commonImpugned Order dated 5[th]October, 2020 passed by the Income TaxAppellate Tribunal (‘ITAT’) in ITA Nos.262/Agra/2016 and 387/Agra/2017for the Assessment Years 2012-13 & 2013-14. 6.Learned Counsel for the Appellant states that the ITAT has erred indeleting the additions of Rs.8,57,25,871/- & Rs.16,15,54,801/- for theAssessment Years 2012-13 & 2013-14 respectively made by the AssessingOfficer, ignoring the fact that the FDR is in the name of the Assessee andinterest has accrued and been credited in the name of the Assessee only andthe share of the disputed parties in the interest will arise only after paymentof due taxes. 7.Learned counsel for the appellant emphasizes that the dispute betweenthe parties was with regard to 100 crores, whereas the amount deposited wasin excess of Rs.190 crores. He also states that under the final settlement agreement dated 20[th]January, 2015 between the Assessee Company and M/sPramerica ASPF II Cyprus Holding Ltd. Assessee Company paid Rs.70crore to M/s Pramerica ASPF II Cyprus Holding Ltd. from the FDR amountand that this agreement was accepted by the Delhi High Court Mediationand Conciliation Centre on 8[th]April, 2015, pursuant to which a final orderdated 9[th]April 2015 was passed by this Court. 8.Having perused the paperbook, this Court finds that in the presentcases, the FDRs were made in the name of the respondent-assessee by virtueof a consensual order dated 7[th]October, 2021 passed by the ArbitralTribunal comprising three retired judges. The relevant portion of the saidorder is reproduced hereinbelow:- “The Ld. Counsel for the parties have agreed and requested for thefollowing agreement of theirs being taken on record:-following agreement of theirs being taken on record:- 8.Having perused the paperbook, this Court finds that in the presentcases, the FDRs were made in the name of the respondent-assessee by virtueof a consensual order dated 7[th]October, 2021 passed by the ArbitralTribunal comprising three retired judges. The relevant portion of the saidorder is reproduced hereinbelow:- “The Ld. Counsel for the parties have agreed and requested for thefollowing agreement of theirs being taken on record:-following agreement of theirs being taken on record:- (i)That the amount of Rs.1,90,25,12,694.09 which is lying incurrent account with Punjab National Bank in Tribunal’sBank Account No.2254002100017121 may be convertedinto a Fixed Deposit in the name of the Respondentcompany i.e. Global Heritage Venture Ltd. The fixeddeposit shall be for a period of 60/61 days. This is beingdone solely for the consideration that the amount may earninterest. The interest would go with the deposit or bedistributed between the parties as the Tribunal may direct.current account with Punjab National Bank in Tribunal’sBank Account No.2254002100017121 may be convertedinto a Fixed Deposit in the name of the Respondentcompany i.e. Global Heritage Venture Ltd. The fixeddeposit shall be for a period of 60/61 days. This is beingdone solely for the consideration that the amount may earninterest. The interest would go with the deposit or bedistributed between the parties as the Tribunal may direct.(ii)That such deposit shall be subject to the followingconditions:-conditions:- a) The FDR shall soon on being ready would behanded over to the Presiding Arbitrator and shallremain in his custody unless otherwise ordered bythe Tribunal.handed over to the Presiding Arbitrator and shallremain in his custody unless otherwise ordered bythe Tribunal. b) Though the FDR is in the name of the Respondentcompany, but the Bank holding the fixed depositshall note that the amount of FDR is not to bereleased nor to be made available for ‘use in anymanner whatsoever except by prior permission ofcompany, but the Bank holding the fixed depositshall note that the amount of FDR is not to bereleased nor to be made available for ‘use in anymanner whatsoever except by prior permission of the Tribunal or unless otherwise directed by theTribunal.” 9.Consequently, this Court in agreement with the finding of the twoAppellate Authorities below that till the final award was passed by theArbitral Tribunal determining the ownership of the fixed deposits andinterest, it could not be said that the interest income had crystallized in therespondent’s hands and the same cannot be held to be income of therespondent-assessee under Section 5(1) of the Income Tax Act, 1961 (‘theAct’). 10.Accordingly, no substantial question of law arises for consideration inthe present appeals and the same are dismissed. MANMOHAN, J OCTOBER 6, 2022TS MANMEET PRITAM SINGH ARORA, J