Madras High Court
M/S.Penta Media Graphics Ltd vs The Assistant Commissioner Of Income ... on 21 October, 2024
Bench: R.Suresh Kumar, C.Saravanan
T.C.A.No.124 of 2015
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 21.10.2024
CORAM
THE HON'BLE MR.JUSTICE R.SURESH KUMAR
AND
THE HON'BLE MR.JUSTICE C.SARAVANAN
Tax Case Appeal No.124 of 2015
and M.P.No.1 of 2015
M/s.Penta Media Graphics Ltd
(Formerly Pentafour Software and
Exports Ltd.,) 'Taurus', No.25
First Main Road, Kodambakkam
Chennai 600 024. ... Appellant
Vs.
The Assistant Commissioner of Income Tax
Company Circle V(2)
121, Nungambakkam High Road
Chennai 600 034. ... Respondent
Tax Case Appeal filed under Section 260A of the Income Tax Act, 1961
against the order of the Income Tax Appellate Tribunal, Madras 'A'.Bench,
Chennai, dated 17.01.2012 in I.T.A.No.958/Mds/2011.
For Appellant : Mr.G.Baskar
For Respondent : Mr.J.Narayanaswamy
Senior Standing Counsel
JUDGMENT
(Delivered by R.SURESH KUMAR,J.)
This appeal has been admitted on the following substantial questions of
law :
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1. Whether on the facts and in the circumstances of the
case, the Income Tax Appellate Tribunal is right in law
in not holding that the order of revision u/s.263 of the
Act dated 24.03.2011 is wholly barred by limitation?
2. Whether on the facts and in the circumstances of the
case, the Income Tax Appellate Tribunal is right in law
in confirming that the Commissioner of Income Tax Act
to pass the impugned order dated 24.03.2011?
3. Whether on the facts and in the circumstances of the
case, the Income Tax Appellate Tribunal is right in law
in confirming the order of revision u/s.263 of the Act of
the allowability of interest payment amounting to
Rs.335.76 lakhs?
2. This appeal relates to the assessment year 2003-04. Initially, the order
of assessment was passed in favour of the assessee with regard to the revenue
expenditure claimed by way of paying interest for the loan which has been taken
on behalf of the assessee company from Global Trust Bank in order to utilize the
same for launching an employees Welfare Scheme called ESOP by which shares
would be given to the employees.
3. Ultimately, because the share prices have increased, the employees
opted out from the Scheme and therefore the Scheme could not be worked out.
Hence, the money which was lying with the assessee company by way of share
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application money had been utilized by the assessee company in its business. At
one point of time, which relates to the assessment year 2003-04, the loan for a
sum of Rs.27,98,00,000/- itself has been taken over by the assessee Company
and therefore, in order to make the payment of interest to the bank, whatever
expenditure that had been incurred by the assessee company during the
assessment year 2003-04 which was claimed as revenue expenditure, has in fact
been allowed by the assessing authority in its assessment order dated
01.12.2023 and subsequently in the order under Section 147 on 31.12.2008.
4. However, this was found to be against the interest of the Revenue by
the Commissioner of Income Tax [CIT]. Therefore, he invoked his revisional
power under Section 263 of the Income Tax Act and passed an order on
24.03.2011 reversing the assessment order and remitting the matter back to the
assessing officer to re-look into the matter.
5. As against the said order under Section 263 of the Act, the assessee
preferred an appeal before the Income Tax Appellate Tribunal and during the
pendency of the appeal before the Tribunal, the assessing authority, in
pursuance of the CIT order under Section 263 of the Act, passed a fresh
assessment order on 15.12.2011, reversing the claim made by the assessee for
allowing the payment of money towards the interest as revenue expenditure.
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6. Aggrieved over the said order passed by the assessing authority dated
15.12.2011, the assessee preferred an appeal once again before the CIT (A). In
the meanwhile, the Income Tax Appellate Tribunal, by an order dated
17.01.2012, disposed of the appeal filed against the CIT order under Section 263
of the Act dated 24.03.2011, where the jurisdiction has been confirmed.
7. The said appeal filed by the assessee against the assessment order
dated 15.12.2011 before the CIT(A) was decided in favour of the Revenue and
against the assessee by an order dated 31.03.2015. Aggrieved over the same,
the assessee preferred further appeal to the Income Tax Appellate Tribunal,
where also it has been confirmed by the Tribunal by an order dated 29.07.2022.
Therefore, the assessing officer had once again passed a fresh assessment order
on 24.01.2024 against the assessee and in favour of the Revenue. That was
again appealed by the assessee in the latest appeal filed before the CIT (A),
where the appeal is still pending.
8. On the basis of these factual matrix, now virtually the issue is pending
before the CIT(A) in the latest appeal filed by the assessee against the latest
assessment order dated 24.01.2024. Therefore, those aspects cannot be gone
into in this appeal before us.
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9. Insofar as the other ground raised by the appellant in this appeal with
regard to the limitation is concerned, since the learned Standing Counsel for the
Revenue has produced the show cause notice dated 17.12.2008 wherein the
reason for re-assessment has been clearly stated, the question of raising the
limitation point does not arise, which in fact has been fairly conceded by the
learned counsel for the appellant / assessee. Therefore, the first question of law
raised in this appeal need not be answered and the same has been accepted by
the assessee. The other questions of law viz., 2 and 3 cannot be gone into at
this stage in view of the aforesaid factual matrix viz., currently the appeal is
pending with CIT(A), let the appeal be decided on merits and in accordance with
law and thereafter it is open to the parties to agitate the issue depending upon
the outcome of the appeal before the CIT(A).
10. With the above observations, this Tax Case Appeal stands dismissed.
No costs. Consequently, connected miscellaneous petition is closed.
(R.S.K.,J.) (C.S.N.,J.)
21.10.2024
NCS : Yes/No
Index : Yes/No
KST
To
The Income Tax Appellate Tribunal, 'A' Bench, Chennai.
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R.SURESH KUMAR, J.
AND
C.SARAVANAN, J.
KST
21.10.2024
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