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TMI Blog2019 (7) TMI 926X X X X Extracts X X X X X X X X Extracts X X X X ..... days and an application for condonation of delay is filed. In the application filed initially for the condonation of delay, the Revenue had stated that the assessment order u/s 143(3) r.w.s. 144C of the Act was passed on 27.03.2014 and aggrieved by the same, the assessee filed an appeal before the CIT (A) which was disposed off vide order dated 16.06.2014 along with the appeal of the assessee. He submitted that the order of the CIT (A) was received in the office of the CIT (IT & TP) Hyderabad on 25.08.2014 and that the due date of filing of appeal before the ITAT was 25.10.2014. It is also submitted that the AO had recommended for filing of further appeal before the ITAT and accordingly directions u/s 253(2) of the Act were issued vide orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and on 26.12.2017 he filed detailed explanation for filing the appeal with a delay. The learned Counsel for the assessee wanted to go through and sought time and accordingly the matter was adjourned till today. 4. The learned DR relied upon the submissions made by the AO i.e. Dy. CIT-I(IT&TP) vide letter dated 28.11.2018 stating that the relevant CIT i.e. Dy. DIT was holding three charges during the relevant period and also that the file had got misplaced due to cadre restructuring of the I.T. Department and movement of files from one office to other. He, therefore, prayed that the delay of 1159 days be condoned and appeal be disposed of on merit. 5. The learned Counsel for the assessee, on the other hand, placed reliance upon the deci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only with an intent to the anticipated benefit for Revenue due to substantial tax effect arising in the year 2014-15. 6. Having regard to the rival contentions and the material on record, we find that in the case before us, the Revenue is explaining, the cadre restructuring in the Department and also holding of different charges by the Dy.CIT (IT) during the relevant period, as a reasonable cause for misplacement of the files and retracing after a period of two years necessitating the filing of the appeal with a delay of 1159 days. We find that the fact of the case before the Hon'ble Supreme Court in the case of Union of India vs. Vidarbha Veneer Industries (Supra) are slightly different as in that case, the petitioners could not giv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Coming to the merits of the case, we find that the assessee had made investments in debentures of related parties and had made investments in debentures of Watermarke Residency Private Ltd and had received interest on the investment which was admitted as interest income under the head "income from other sources". As per the details furnished by the assessee company, the debentures issued by the subsidiaries carried interest rate of 15.75%. During the assessment proceedings the assessee was asked to justify the interest @ 15.75% charged on the investments in debentures of the two subsidiaries. 8. In response, the assessee filed a note wherein it was stated that the Board had decided the rate of interest at 15.75%. The assessee also furnish ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the surcharge or education cess. Aggrieved, the Revenue is in appeal before us by raising the following grounds of appeal: "1. The order of the Ld. CIT(A) is erroneous on facts and in law. 2. The Ld. CIT(A) erred in holding that the rate of interest of 15.75% paid by the assessee in respect of debentures of its associate concern M/s Watermarke Residency Private Ltd, represents arms length rate of interest and there is not justification for applying the provisions of Article 11 (7) of the India Cyprus OT AA for treating part of the interest payment as excessive and assessing it as other income liable for tax at 40%. 3. The LO. CIT(A) erred in admitting additional evidences furnished by the assessee during the appellate proceeding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ht to have followed the decision of the Hon'ble High Court of Uttarrakhand in the case of CIT vs. Arthusa Offshore Co 169 Taxman 484 and the decision of the Authority for Advance Ruling in the case of Air Ports Authority of India in Re 299 ITR 102 and held that surcharge and education cess are to be levied in addition to the rate of tax specified in the DT AA for the relevant income. 8. Any other grounds that may be urged at the time of hearing". 10. We find that the assessee had filed additional details before the CIT (A) but the CIT(A) has not called for any remand report from the AO but has accepted the assessee's contention. Though the powers of the CIT (A) are co-terminous with the AO, the CIT (A) has failed to verify the deta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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