Interest u/s. 234D of the Income Tax Act

IN THE INCOME TAX APPELLATE TRIBUNAL
KOLKATA ‘A’ BENCH, KOLKATA

 (Before Sri J. Sudhakar Reddy, Accountant Member & Sri Aby T. Varkey, Judicial Member)

I.T.A. Nos. 1937 & 1938/Kol/2019
Assessment Years: 2005-06 & 2006-07

M/s. G.S. Atwal & Co. (Engg.) Pvt. Ltd.................Appellant
[PAN: AABCG 0816 E]

Vs.

DCIT, Circle-11(1), Kolkata...........................Respondent

Appearances by:
Sh. Soumitra Choudhury, Adv., appeared on behalf of the Assessee.
Sh. Dhrubajyoti Ray, JCIT, appeared on behalf of the Revenue.

Date of concluding the hearing : May 06th, 2021
Date of pronouncing the order : June 18th, 2021

ORDER

Per J. Sudhakar Reddy, AM:

Both these appeals are filed by the assessee directed against the Common order of the Learned Commissioner of Income Tax (Appeals)-20, Kolkata [hereinafter the “CIT(A)”], passed u/s 250 of the Income Tax Act, 1961 (hereinafter the ‘Act’), dated 06.06.2019 for the Assessment Years 2005-06 & 2006-07. As the issues arising in both these appeals are common and as the facts are identical, for the sake of convenience, they are heard together and disposed off by way of this common order.

2. The facts in brief are as follows:

That the return for the Assessment Year 2005-06 was filed on 05.10.2005 disclosing a total income of Rs. 719,24,787/-. The return was duly processed u/s. 143(1) and the case was selected for scrutiny and passed the order u/s. 143(3) on 28.11.2006 wherein assessed income Rs.756,14,140/-.

That the assessee Company has worked for HSCL in Libya in 1984. That due to some dispute the assessee company has approached the Arbitrators and the original Arbitration Award was passed on 28.11.1998 wherein the Ld. Arbitrators have awarded amounting to 2250000 Libyn Dinar.

That the Decree was passed on 20.6.2005 which was modified on 31.8.2005 and as per the modified Decree the assessee Company was awarded interest from 28.11.1998 to 19.6.2005 amounting to Rs.9,17,67,244/-. 

That against the said Decree HSCL went to the HonTile Calcutta High Court and the assessee Company was awarded further interest from 20.6.2005 to 31.3.2008 amounting to Rs. 1,40,57,779/-. The total interest awarded to the assessee Company Rs. 10,58,25,023/-. The Hon’ble Calcutta High court has passed the order on 17.4.2008 wherein they have asked HSCL to pay Rs.1.5 crore from the month of May, 2008 in twelve equal instalment, totalling at Rs. 18,50,00,000/-. The assessee Company has offered Rs.7,78,13,692/- in the Profit & Loss a/c. The assessee has not offered interest income on Arbitration Award amounting to Rs. 10,58,25,030/- which is not related to assessment year 2009-10.

That in the CIT(A) order for the assessment year 2009-10 has deleted the addition. The department has also preferred an appeal before I.T.A.T. against the said CIT(A)’s order on the same set of facts.

That the A.O. has passed the order u/s. 154/143(3) on 16.09.2013 and on the same set of facts the A.O. has passed the order u/s. 148 on 09.10.2013.

That the A.O. has issued a notice u/s. 148 on 9.10.2013 which was served on the assessee on 17.10.2013. The A.O. has passed the reassessment order u/s. 147/143 dated 19.12.2013 without reasonable opportunity of hearing although the assessment will be barred by limitation on 31.03.2015, as the total interest awarded ,of Rs. 10,58,25,030/- to be divided equally in 10 assessment year i.e. Rs. 105,82,503/- for the assessment year 2005-06.

That the basis for reopening the assessment u/s. 148 by the A.O. after a lapse of 7 years and the interest has accrued only when the Hon’ble Court verdict was delivered on 17.04.2008, therefore, no court order passed in the said assessment year, thus the reopening itself is bad in law and should be quashed.

That the A.O. has estimated the addition at Rs. 105,82,503/- on account of interest from
arbitration at Rs. 105,82,503/- is void and illegal.

That the A.O. was wrong in not allowing additional depreciation u/s. 32(1)(iia) amounting to Rs.91,17,497/-, although the assessee Company was involved in production of an article, therefore, the assessee Company was entitled to additional depreciation u/s. 32(1)(iia) amounting to Rs. 91,17,497/- and the A.O. was disallowed the said amount without any specific reason which is baseless.

To know more in details find the attachment file